Exhibit 10.1

 

 

RECEIVABLES PURCHASE AGREEMENT

 

dated as of August 7, 2008

 

among

 

TRIUMPH RECEIVABLES, LLC,
as Seller

 

TRIUMPH GROUP, INC.,
as Servicer

 

THE VARIOUS PURCHASER GROUPS FROM TIME TO TIME PARTY HERETO,

 

and

 

PNC BANK, NATIONAL ASSOCIATION,
as Administrator

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE I

 

AMOUNTS AND TERMS OF THE PURCHASES

 

 

 

 

Section 1.1

Purchase Facility

1

 

 

 

Section 1.2

Making Purchases

2

 

 

 

Section 1.3

Purchased Interest Computation

4

 

 

 

Section 1.4

Settlement Procedures

4

 

 

 

Section 1.5

Fees

8

 

 

 

Section 1.6

Payments and Computations, Etc

9

 

 

 

Section 1.7

Increased Costs

9

 

 

 

Section 1.8

Requirements of Law

10

 

 

 

Section 1.9

Funding Losses

11

 

 

 

Section 1.10

Taxes

11

 

 

 

Section 1.11

Inability to Determine Euro-Rate

12

 

 

 

Section 1.12

Notice of Purchaser Termination Date

13

 

 

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS

 

 

 

 

Section 2.1

Representations and Warranties; Covenants

13

 

 

 

Section 2.2

Termination Events

13

 

 

 

ARTICLE III

 

INDEMNIFICATION

 

 

 

 

Section 3.1

Indemnities by the Seller

14

 

 

 

Section 3.2

Indemnities by the Servicer

15

 

 

 

ARTICLE IV

 

ADMINISTRATION AND COLLECTIONS

 

 

 

 

Section 4.1

Appointment of the Servicer

16

 

 

 

Section 4.2

Duties of the Servicer

17

 

 

 

Section 4.3

Lock-Box Account Arrangements

18

 

 

 

Section 4.4

Enforcement Rights

19

 

 

 

Section 4.5

Responsibilities of the Seller

20

 

 

 

Section 4.6

Servicing Fee

20

 

 

 

ARTICLE V

 

THE AGENTS

 

 

 

 

Section 5.1

Appointment and Authorization

20

 

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Page

 

 

 

Section 5.2

Delegation of Duties

21

 

 

 

Section 5.3

Exculpatory Provisions

21

 

 

 

Section 5.4

Reliance by Agents

22

 

 

 

Section 5.5

Notice of Termination Events

23

 

 

 

Section 5.6

Non-Reliance on Administrator, Purchaser Agents and Other Purchasers

23

 

 

 

Section 5.7

Purchasers, Administrator, Purchaser Agents and Affiliates

23

 

 

 

Section 5.8

Indemnification

23

 

 

 

Section 5.9

Successor Administrator

24

 

 

 

ARTICLE VI

 

MISCELLANEOUS

 

 

 

 

Section 6.1

Amendments, Etc

24

 

 

 

Section 6.2

Notices, Etc

25

 

 

 

Section 6.3

Successors and Assigns; Participations; Assignments

25

 

 

 

Section 6.4

Costs, Expenses and Taxes

27

 

 

 

Section 6.5

No Proceedings; Limitation on Payments

28

 

 

 

Section 6.6

GOVERNING LAW AND JURISDICTION

28

 

 

 

Section 6.7

Confidentiality

29

 

 

 

Section 6.8

Execution in Counterparts

29

 

 

 

Section 6.9

Survival of Termination

29

 

 

 

Section 6.10

WAIVER OF JURY TRIAL

29

 

 

 

Section 6.11

Sharing of Recoveries

30

 

 

 

Section 6.12

Right of Setoff

30

 

 

 

Section 6.13

Entire Agreement

30

 

 

 

Section 6.14

Headings

30

 

 

 

Section 6.15

Purchaser Groups’ Liabilities

30

 

 

 

Section 6.16

Call Option

31

 

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EXHIBIT I

 

Definitions

 

 

 

EXHIBIT II

 

Conditions of Purchases

 

 

 

EXHIBIT III

 

Representations and Warranties

 

 

 

EXHIBIT IV

 

Covenants

 

 

 

EXHIBIT V

 

Termination Events

 

 

 

SCHEDULE I

 

Credit and Collection Policy

 

 

 

SCHEDULE II

 

Lock-Box Banks and Lock-Box Accounts

 

 

 

SCHEDULE III

 

Actions/Suits

 

 

 

SCHEDULE IV

 

Liens

 

 

 

ANNEX A

 

Form of Information Package

 

 

 

ANNEX B

 

Form of Purchase Notice

 

 

 

ANNEX C

 

Form of Assumption Agreement

 

 

 

ANNEX D

 

Form of Transfer Supplement

 

 

 

ANNEX E

 

Form of Paydown Notice

 

 

 

ANNEX F

 

Form of Compliance Certificate

 

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This RECEIVABLES PURCHASE AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”) is entered into as of
August 7, 2008, among TRIUMPH RECEIVABLES, LLC, a Delaware limited liability
company, as seller (the “Seller”), TRIUMPH GROUP, INC., a Delaware corporation
(“Triumph”), as initial servicer (in such capacity, together with its successors
and permitted assigns in such capacity, the “Servicer”), THE VARIOUS PURCHASERS
AND PURCHASER AGENTS FROM TIME TO TIME PARTY HERETO, and PNC BANK, NATIONAL
ASSOCIATION, as Administrator for each Purchaser Group (in such capacity, the
“Administrator”).

 

PRELIMINARY STATEMENTS.  Certain terms that are capitalized and used throughout
this Agreement are defined in Exhibit I.  References in the Exhibits hereto to
the “Agreement” refer to this Agreement, as amended, restated, supplemented or
otherwise modified from time to time.

 

The Seller desires to sell, transfer and assign an undivided variable percentage
interest in a pool of receivables, and the Purchasers desire to acquire such
undivided variable percentage interest, as such percentage interest shall be
adjusted from time to time based upon, in part, reinvestment payments that are
made by such Purchasers.

 

In consideration of the mutual agreements, provisions and covenants contained
herein, the sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:

 

ARTICLE I

AMOUNTS AND TERMS OF THE PURCHASES

 

Section 1.1                                      Purchase Facility.

 

(a)                                  On the terms and subject to the conditions
hereof, the Seller may, from time to time before the Facility Termination Date,
ratably (based on the aggregate Commitments of the Related Committed Purchasers
in their respective Purchaser Groups) request that the Conduit Purchasers, or,
only if a Conduit Purchaser denies such request or is unable to fund, ratably
request that the Related Committed Purchasers, make purchases of and
reinvestments in undivided percentage ownership interests with regard to the
Purchased Interest from the Seller from time to time from the date hereof to the
earlier of the Facility Termination Date and the Purchaser Termination Date with
respect to such Purchase Group.  Subject to Section 1.4(b), concerning
reinvestments, at no time will a Conduit Purchaser have any obligation to make a
purchase.  Each Related Committed Purchaser severally hereby agrees, on the
terms and subject to the conditions hereof, to make purchases of undivided
percentage ownership interests with regard to the Purchased Interest from the
Seller before the Facility Termination Date or, if earlier, the Purchaser
Termination Date with respect to such Related Committed Purchaser, based on the
applicable Purchaser Group’s Ratable Share of each purchase requested pursuant
to Section 1.2(a) (each a “Purchase”) (and, in the case of each Related
Committed Purchaser, its Commitment Percentage of its Purchaser Group’s Ratable
Share of such Purchase); provided, however, that under no circumstances shall
any Purchaser make any Purchase or reinvestment hereunder if, after giving
effect to such Purchase or reinvestment (i) such Purchaser’s aggregate

 

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Capital would exceed its Commitment, (ii) the Aggregate Capital would (after
giving effect to all Purchases and reinvestments on such date) exceed the
Purchase Limit or (iii) the Purchased Interest would exceed 100%.

 

(b)                                 The Seller may, upon 30 days’ prior written
notice to the Administrator and each Purchaser Agent, reduce the unused portion
of the Purchase Limit in whole or in part (but not below the amount which would
cause the Group Capital of any Purchaser Group to exceed its Group Commitment
(after giving effect to such reduction)); provided that each partial reduction
shall be in the amount of at least $5,000,000, or an integral multiple of
$1,000,000 in excess thereof and unless terminated in whole, the Purchase Limit
shall, on and after August 29, 2008, in no event be reduced below $75,000,000
(it being understood that the Purchased Interest shall not exceed 100%).  Such
reduction shall, unless otherwise agreed to in writing by the Seller, the
Administrator and each Purchaser Agent be applied ratably to reduce the Group
Commitment of each Purchaser Group.

 

Section 1.2                                      Making Purchases.  (a)  Each
Purchase (but not reinvestment) hereunder may be made on any day upon the
Seller’s irrevocable written notice in the form of Annex B (each, a “Purchase
Notice”) delivered to the Administrator and each Purchaser Agent, in accordance
with Section 6.2 (which notice must be received by the Administrator and each
Purchaser Agent before 2:00 p.m., New York City time) at least two Business Days
before the requested Purchase Date, which notice shall specify: (A) the amount
requested to be paid to the Seller (such amount, which shall not be less than
$1,000,000 or such lesser amount as agreed to by the Administrator and the
Majority Purchaser Agents) and shall be in integral multiples of $100,000, in
each case with respect to each Purchaser Group, (B) the date of such Purchase
(which shall be a Business Day) and (C) the pro forma calculation of the
Purchased Interest after giving effect to the increase in the Aggregate Capital.

 

(b)                                 On the date of each Purchase (but not
reinvestment) of undivided percentage ownership interests with regard to the
Purchased Interest hereunder, each applicable Purchaser shall, upon satisfaction
of the applicable conditions set forth in Exhibit II, make available to the
Seller in same day funds, at PNC Bank, National Association, account number
1019825269 (or such other account as may be so designated in writing by the
Seller to the Administrator and each Purchaser Agent) an amount equal to the
portion of Capital relating to the undivided percentage ownership interest then
being funded by such Purchaser.

 

(c)                                  Effective on the date of each Purchase
pursuant to this Section 1.2 and each reinvestment pursuant to Section 1.4, the
Seller hereby sells and assigns to the Administrator for the benefit of the
Purchasers (ratably, according to each such Purchaser’s Capital) an undivided
percentage ownership interest in: (i) each Pool Receivable then existing,
(ii) all Related Security with respect to such Pool Receivables, and (iii) all
Collections with respect to, and other proceeds of, such Pool Receivables and
Related Security.

 

(d)                                 To secure all of the Seller’s obligations
(monetary or otherwise) under this Agreement and the other Transaction Documents
to which it is a party, whether now or hereafter existing or arising, due or to
become due, direct or indirect, absolute or contingent, the Seller hereby grants
to the Administrator, for the benefit of the Purchasers, a security interest in
all of the Seller’s right, title and interest (including any undivided interest
of the Seller) in, to and

 

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under all of the following, whether now or hereafter owned, existing or arising:
(i) all Pool Receivables, (ii) all Related Security with respect to such Pool
Receivables, (iii) all Collections with respect to such Pool Receivables,
(iv) the Lock-Box Accounts and all amounts on deposit therein, and all
certificates and instruments, if any, from time to time evidencing such Lock-Box
Accounts and amounts on deposit therein, (v) all rights (but none of the
obligations) of the Seller under the Sale Agreement, (vi) all proceeds of, and
all amounts received or receivable under any or all of, the foregoing and
(vii) all of its other property (collectively, the “Pool Assets”).  The Seller
hereby authorizes the Administrator to file financing statements describing the
collateral covered thereby as “all of the debtor’s personal property or assets”
or words to that effect, notwithstanding that such wording may be broader in
scope than the collateral described in this Agreement.  The Administrator, for
the benefit of the Purchasers, shall have, with respect to the Pool Assets, and
in addition to all the other rights and remedies available to the Administrator
and the Purchasers, all the rights and remedies of a secured party under any
applicable UCC.

 

(e)                                  The Seller may, with the written consent of
the Administrator and each Purchaser Agent, add additional Persons as Purchasers
(either to an existing Purchaser Group or by creating new Purchaser Groups) or
cause an existing Purchaser to increase its Commitment in connection with a
corresponding increase in the Purchase Limit; provided, however, that the
Commitment of any Purchaser may only be increased with the prior written consent
of such Purchaser.  Each new Purchaser (or Purchaser Group) shall become a party
hereto, by executing and delivering to the Administrator and the Seller, an
Assumption Agreement in the form of Annex C hereto (which Assumption Agreement
shall, in the case of any new Purchaser or Purchasers, be executed by each
Person in such new Purchaser’s Purchaser Group).

 

(f)                                    Each Related Committed Purchaser’s
obligation hereunder shall be several, such that the failure of any Related
Committed Purchaser to make a payment in connection with any Purchase hereunder
shall not relieve any other Related Committed Purchaser of its obligation
hereunder to make payment for any Purchase.  Further, in the event any Related
Committed Purchaser fails to satisfy its obligation to make a Purchase as
required hereunder, upon receipt of notice of such failure from the Seller or
the Administrator (or any relevant Purchaser Agent), subject to the limitations
set forth herein, the non-defaulting Related Committed Purchasers in such
defaulting Related Committed Purchaser’s Purchaser Group shall purchase the
defaulting Related Committed Purchaser’s Commitment Percentage of the related
Purchase pro rata in proportion to their relative Commitment Percentages
(determined without regard to the Commitment Percentage of the defaulting
Related Committed Purchaser; it being understood that a defaulting Related
Committed Purchaser’s Commitment Percentage of any Purchase shall be first put
to the Related Committed Purchasers in such defaulting Related Committed
Purchaser’s Purchaser Group and thereafter if there are no other Related
Committed Purchasers in such Purchaser Group or if such other Related Committed
Purchasers are also defaulting Related Committed Purchasers, then such
defaulting Related Committed Purchaser’s Commitment Percentage of such Purchase
shall be put to each other Purchaser Group ratably and applied in accordance
with this paragraph (f)).  Notwithstanding anything in this paragraph (f) to the
contrary, no Related Committed Purchaser shall be required to make a Purchase
pursuant to this paragraph for an amount which would cause the aggregate Capital
of such Related Committed Purchaser (after giving effect to such Purchase) to
exceed its Commitment.

 

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Section 1.3                                      Purchased Interest
Computation.  The Purchased Interest shall be initially computed on the Closing
Date.  Thereafter, until the Facility Termination Date, such Purchased Interest
shall be automatically recomputed (or deemed to be recomputed) on each Business
Day other than a Termination Day.  From and after the occurrence of any
Termination Day, the Purchased Interest shall be deemed to be 100%.  The
Purchased Interest shall become zero when the Aggregate Capital thereof and
Aggregate Discount thereon shall have been paid in full, all the amounts owed by
the Seller and the Servicer hereunder to each Purchaser, the Administrator and
any other Indemnified Party or Affected Person that are then due and payable are
paid in full, and the Servicer shall have received the accrued Servicing Fee
thereon.

 

Section 1.4                                      Settlement Procedures.

 

(a)                                  The collection of the Pool Receivables
shall be administered by the Servicer in accordance with this Agreement and
applicable regulatory law.  The Seller shall provide to the Servicer on a timely
basis all information needed for such administration, including notice of the
occurrence of any Termination Day and current computations of the Purchased
Interest.

 

(b)                                 The Servicer shall, on each day on which
Collections of Pool Receivables are received (or deemed received) by the Seller
or the Servicer:

 

(i)                                     set aside and hold in trust (and shall,
at the request of the Administrator, segregate in a separate account approved by
the Administrator) for the benefit of each Purchaser Group, out of such
Collections, first, an amount equal to the Aggregate Discount accrued through
such day for each Portion of Capital and not previously set aside, second, an
amount equal to the fees set forth in each Purchaser Group Fee Letter accrued
and unpaid through such day, and third, to the extent funds are available
therefor, an amount equal to the aggregate Purchasers’ Share of the Servicing
Fee accrued through such day and not previously set aside,

 

(ii)                                  subject to Section 1.4(f), if such day is
not a Termination Day, remit to the Seller, ratably, on behalf of each Purchaser
Group, the remainder of such Collections.  Such remainder shall, to the extent
representing a return on the Aggregate Capital, ratably, according to each
Purchaser’s Capital, be automatically reinvested in Pool Receivables, and in the
Related Security, Collections and other proceeds with respect thereto; provided,
however, that if the Purchased Interest would exceed 100%, then the Servicer
shall not reinvest, but shall set aside and hold in trust for the benefit of the
Purchasers (and shall, at the request of the Administrator, segregate in a
separate account approved by the Administrator) a portion of such Collections
that, together with the other Collections set aside pursuant to this paragraph,
shall equal the amount necessary to reduce the Purchased Interest to 100%, which
amount shall be deposited ratably to each Purchaser Agent’s account (for the
benefit of its related Purchasers) on the next Settlement Date in accordance
with Section 1.4(c); provided, further, that (x) in the case of any Purchaser
that is a Conduit Purchaser, if such Conduit Purchaser has provided notice (a
“Declining Notice”) to its Purchaser Agent, the Administrator, and the Servicer
that such Purchaser (a “Declining Conduit Purchaser”) no longer wishes
Collections with respect to any Portion of Capital funded or maintained by such
Conduit Purchaser to be reinvested pursuant to this clause (ii), and (y) in the
case of any Purchaser with respect to

 

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which the Purchaser Termination Date has occurred (an “Exiting Purchaser”) then
in either case (x) or (y), above, such Collections shall not be reinvested and
shall instead be held in trust for the benefit of such Purchaser and applied in
accordance with clause (iii), below.

 

(iii)                               if such day is a Termination Day (or any day
following the provision of a Declining Notice or the occurrence of the Purchaser
Termination Date with respect to any Purchaser), set aside, segregate and hold
in trust (and shall, at the request of the Administrator, segregate in a
separate account approved by the Administrator) for the benefit of each
Purchaser Group the entire remainder of the Collections (or in the case of a
Declining Conduit Purchaser or an Exiting Purchaser an amount equal to such
Declining Conduit Purchaser’s or Exiting Purchaser’s ratable share of such
Collections based on its Capital; provided, that solely for the purpose of
determining such Declining Conduit Purchaser’s or Exiting Purchaser’s ratable
share of such Collections, such Declining Conduit Purchaser’s or Exiting
Purchaser’s Capital shall be deemed to remain constant from the date of the
provision of a Declining Notice or the occurrence of the Purchaser Termination
Date with respect to such Purchaser, as the case may be, until the date such
Declining Conduit Purchaser’s or Exiting Purchaser’s Capital has been paid in
full; it being understood that if such day is also a Termination Day, such
Declining Conduit Purchaser’s or Exiting Purchaser’s Capital shall be
recalculated taking into account amounts received by such Purchaser in respect
of this parenthetical and thereafter Collections shall be set aside for such
Purchaser ratably in respect of its Capital (as recalculated)); provided, that
if amounts are set aside and held in trust on any Termination Day (or any day
following the provision of a Declining Notice or the occurrence of the Purchaser
Termination Date with respect to any Purchaser) and, thereafter, the conditions
set forth in Section 2 of Exhibit II or giving rise to the related Facility
Termination Date are satisfied or cured or waived by the Majority Purchaser
Agents (or in the case of a Declining Notice or the occurrence of the Purchaser
Termination Date with respect to any Purchaser, such Declining Notice or
occurrence of the Purchaser Termination Date with respect to such Purchaser, as
the case may be, has been revoked by the related Declining Conduit Purchaser or
waived by the related Exiting Purchaser, as the case may be, and written notice
thereof has been provided to the Administrator, the related Purchaser Agent and
the Servicer), such previously set-aside amounts shall, to the extent
representing a return on Aggregate Capital (or the Capital of the Declining
Conduit Purchaser or Exiting Purchaser, as the case may be) and ratably in
accordance with each Purchaser’s Capital, be reinvested in accordance with
clause (ii) on the day of such subsequent satisfaction, cure or waiver of
conditions or revocation of Declining Notice or waiver of such Purchaser
Termination Date, as the case may be, and

 

(iv)                              release to the Seller (subject to
Section 1.4(f)) for its own account any Collections in excess, if any, of:
(x) amounts required to be reinvested in accordance with clause (ii) or the
proviso to clause (iii) plus (y) the amounts that are required to be set aside
pursuant to clause (i), the proviso to clause (ii) and clause (iii) plus (z) the
Seller’s Share of the Servicing Fee accrued and unpaid through such day and all
reasonable and appropriate out-of-pocket costs and expenses of the Servicer for
servicing, collecting and administering the Pool Receivables.

 

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(c)                                  The Servicer shall, in accordance with the
priorities set forth in Section 1.4(d), below, deposit into each applicable
Purchaser Agent’s account (or such other account designated by such applicable
Purchaser or its Purchaser Agent), on each Settlement Date in the case of
Collections held for each Purchaser with respect to such Purchaser’s
Portion(s) of Capital pursuant to clause (b)(i) or paragraph (f), plus the
amount of Collections then held for the related Purchasers pursuant to clauses
(b)(ii) and (iii) of this Section 1.4; provided, that if Triumph or an Affiliate
thereof is the Servicer, such day is not a Termination Day and the Administrator
has not notified Triumph (or such Affiliate) that such right is revoked, Triumph
(or such Affiliate) may retain the portion of the Collections set aside pursuant
to clause (b)(i) that represents the aggregate Purchasers’ Share of the
Servicing Fee.

 

(d)                                 The Servicer shall distribute the amounts
described (and at the times set forth) in Section 1.4(c), as follows:

 

(i)                                     if such distribution occurs on a day
that is not a Termination Day, first to each Purchaser Agent ratably according
to the Discount accrued during the Yield Period ending on the Settlement Date on
which such Discount is distributed (for the benefit of the relevant Purchasers
within such Purchaser Agent’s Purchaser Group) in payment in full of all accrued
and unpaid Discount and Fees (other than Servicing Fees) with respect to each
Portion of Capital maintained by such Purchasers; it being understood that each
Purchaser Agent shall distribute such amounts to the Purchasers within its
Purchaser Group ratably according to Discount, and second, if the Servicer has
set aside amounts in respect of the Purchasers’ Share of the Servicing Fee
pursuant to clause (b)(i) and has not retained such amounts pursuant to
paragraph (c), to the Servicer’s own account (payable in arrears on each
Settlement Date) in payment in full of the aggregate of the Purchasers’ Share of
accrued Servicing Fees so set aside, and

 

(ii)                                  if such distribution occurs on a
Termination Day, first if Triumph or an Affiliate thereof is not the Servicer,
to the Servicer’s own account in payment in full of the Purchasers’ Share of all
accrued Servicing Fees, second to each Purchaser Agent ratably (based on the
aggregate accrued and unpaid Discount and Fees (other than Servicing Fees)
payable to all Purchasers at such time) (for the benefit of the relevant
Purchasers within such Purchaser Agent’s Purchaser Group) in payment in full of
all accrued Discount with respect to each Portion of Capital funded or
maintained by the Purchasers within such Purchaser Agent’s Purchaser Group,
third to each Purchaser Agent ratably according to the aggregate of the Capital
of each Purchaser in each such Purchaser Agent’s Purchaser Group (for the
benefit of the relevant Purchasers within such Purchaser Agent’s Purchaser
Group) in payment in full of each Purchaser’s Capital (or, if such day is not a
Termination Day, the amount necessary to reduce the Purchased Interest to 100%);
it being understood that each Purchaser Agent shall distribute the amounts
described in the first and second clauses of this Section 1.4(d)(ii) to the
Purchasers within its Purchaser Group ratably according to Discount and Capital,
respectively, fourth, if the Aggregate Capital and accrued Aggregate Discount
with respect to each Portion of Capital for all Purchaser Groups have been
reduced to zero, and the Purchasers’ Share of all accrued Servicing Fees payable
to the Servicer (if other than Triumph or an Affiliate thereof) have been paid
in full, to each Purchaser Group ratably, based on the amounts then due and
payable to each (for the benefit of the

 

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Purchasers within such Purchaser Group), the Administrator and any other
Indemnified Party or Affected Person in payment in full of any other amounts
then due and payable thereto by the Seller or Servicer hereunder and, fifth, to
the Servicer’s own account (if the Servicer is Triumph or an Affiliate thereof)
in payment in full of the aggregate of the Purchasers’ Share of all accrued
Servicing Fees.

 

After the Aggregate Capital, Aggregate Discount, fees payable pursuant to each
Purchaser Group Fee Letter and Servicing Fees with respect to the Purchased
Interest, and any other amounts payable by the Seller and the Servicer to each
Purchaser Group, the Administrator or any other Indemnified Party or Affected
Person hereunder, have been paid in full, all additional Collections with
respect to the Purchased Interest shall be paid to the Seller for its own
account.

 

(e)                                  For the purposes of this Section 1.4:

 

(i)                                     if on any day the Outstanding Balance of
any Pool Receivable is reduced or adjusted as a result of any defective,
rejected, returned, repossessed or foreclosed goods or services, or any
revision, cancellation, allowance, rebate, discount or other adjustment made by
the Seller or any Affiliate of the Seller, or the Servicer or any Affiliate of
the Servicer, or any setoff or dispute between the Seller or any Affiliate of
the Seller, or the Servicer or any Affiliate of the Servicer and an Obligor, the
Seller shall be deemed to have received on such day a Collection of such Pool
Receivable in the amount of such reduction or adjustment and shall immediately
pay any and all such amounts in respect thereof to a Lock-Box Account for the
benefit of the Purchasers and their assigns and for application pursuant to this
Section 1.4;

 

(ii)                                  if on any day any of the representations
or warranties in Sections 1(j) or 3(a) of Exhibit III is not true with respect
to any Pool Receivable, the Seller shall be deemed to have received on such day
a Collection of such Pool Receivable in full and shall immediately pay any and
all such amounts to a Lock-Box Account (or as otherwise directed by the
Administrator at such time) for the benefit of the Purchasers and their assigns
and for application pursuant to this Section 1.4 (Collections deemed to have
been received pursuant to clause (i) or (ii) of this paragraph (e) are
hereinafter sometimes referred to as “Deemed Collections”);

 

(iii)                               except as otherwise required by applicable
law or the relevant Contract, all Collections received from an Obligor of any
Receivable shall be applied to the Receivables of such Obligor in the order of
the age of such Receivables, starting with the oldest such Receivable, unless
such Obligor designates in writing its payment for application to specific
Receivables; and

 

(iv)                              if and to the extent the Administrator, any
Purchaser Agent or any Purchaser shall be required for any reason to pay over to
an Obligor (or any trustee, receiver, custodian or similar official in any
Insolvency Proceeding) any amount received by it hereunder, such amount shall be
deemed not to have been so received by such Person but rather to have been
retained by the Seller and, accordingly, such Person shall have a claim against
the Seller for such amount, payable when and to the extent that any distribution
from or on behalf of such Obligor is made in respect thereof.

 

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(f)                                    If at any time the Seller shall wish to
cause the reduction of Aggregate Capital (but not to commence the liquidation,
or reduction to zero, of the entire Aggregate Capital) the Seller may do so as
follows:

 

(i)                                     the Seller shall give the Administrator,
each Purchaser Agent and the Servicer written notice in the form of Annex E
(each, a “Paydown Notice”) (A) at least two Business Days prior to the date of
such reduction for any reduction of the Aggregate Capital less than or equal to
$20,000,000 (or such greater amount as agreed to by the Administrator and the
Majority Purchaser Agents) and (B) at least five Business Days prior to the date
of such reduction for any reduction of the Aggregate Capital greater than
$20,000,000, and each such Paydown Notice shall include, among other things, the
amount of such proposed reduction and the proposed date on which such reduction
will commence;

 

(ii)                                  on the proposed date of the commencement
of such reduction and on each day thereafter, the Servicer shall cause
Collections not to be reinvested until the amount thereof not so reinvested
shall equal the desired amount of reduction; and

 

(iii)                               the Servicer shall hold such Collections in
trust for the benefit of each Purchaser ratably according to its Capital, for
payment to each such Purchaser (or its related Purchaser Agent for the benefit
of such Purchaser) on the next Settlement Date (or such other date as agreed to
by the Administrator) with respect to any Portions of Capital maintained by such
Purchaser immediately following the related current Yield Period, and the
Aggregate Capital (together with the Capital of any related Purchaser) shall be
deemed reduced in the amount to be paid to such Purchaser (or its related
Purchaser Agent for the benefit of such Purchaser) only when in fact finally so
paid;

 

provided, that:

 

(A)                              the amount of any such reduction shall be not
less than $1,000,000 or an integral multiple of $100,000 in excess thereof (to
be applied pro rata in accordance with the Aggregate Capital outstanding) and,
on and after August 29, 2008, the entire Aggregate Capital after giving effect
to such reduction shall be not less than $75,000,000 and the Purchased Interest
shall not exceed 100%; and

 

(B)                                with respect to any Portion of Capital, the
Seller shall choose a reduction amount, and the date of commencement thereof, so
that to the extent practicable such reduction shall commence and conclude in the
same Yield Period.

 

Section 1.5                                      Fees.  The Seller shall pay to
each Purchaser Agent for the benefit of the Purchasers and Liquidity Providers
in the related Purchaser Group in accordance with the provisions set forth in
Section 1.4(d) certain fees in the amounts and on the dates set forth in one or
more fee letter agreements, dated the Closing Date (or dated the date any such
Purchaser and member of its related Purchaser Group become a party hereto
pursuant to an Assumption Agreement, a Transfer Supplement or otherwise),
between the Seller and the applicable Purchaser Agent, respectively, (as any
such fee letter agreement may be amended, restated, supplemented or otherwise
modified from time to time, each, a “Purchaser Group Fee Letter”)

 

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and each of the Purchaser Group Fee Letters may be referred to collectively as,
the “Fee Letters”).

 

Section 1.6                                      Payments and Computations, Etc.

 

(a)                                  All amounts to be paid or deposited by the
Seller or the Servicer hereunder or under any other Transaction Document shall
be made without reduction for offset or counterclaim and shall be paid or
deposited no later than 2:00 p.m. (New York City time) on the day when due in
same day funds to the account for each Purchaser maintained by the applicable
Purchaser Agent (or such other account as may be designated from time to time by
such Purchaser Agent to the Seller and the Servicer).  All amounts received
after 2:00 p.m. (New York City time) will be deemed to have been received on the
next Business Day.

 

(b)                                 The Seller or the Servicer, as the case may
be, shall, to the extent permitted by law, pay interest on any amount not paid
or deposited by the Seller or the Servicer, as the case may be, when due
hereunder, at an interest rate equal to 2.0% per annum above the Base Rate,
payable on demand.

 

(c)                                  All computations of interest under
paragraph (b) and all computations of Discount, Fees and other amounts hereunder
shall be made on the basis of a year of 360 (or 365 or 366, as applicable, with
respect to Discount or other amounts calculated by reference to the Base Rate)
days for the actual number of days elapsed.  Whenever any payment or deposit to
be made hereunder shall be due on a day other than a Business Day, such payment
or deposit shall be made on the next Business Day and such extension of time
shall be included in the computation of such payment or deposit.

 

Section 1.7                                      Increased Costs.  (a)  If,
after the date hereof, the Administrator, any Purchaser, Purchaser Agent,
Liquidity Provider or Program Support Provider or any of their respective
Affiliates (each an “Affected Person”) determines that the existence of or
compliance with: (i) FIN 46 and Subsequent Statements and Interpretations,
(ii) any law, rule, regulation (including any applicable law, rule or regulation
regarding capital adequacy), generally accepted accounting principle or any
change therein or in the interpretation or application thereof, or (iii) any
request, guideline or directive from any central bank or other Governmental
Authority (whether or not having the force of law) affecting or that would
affect the amount of capital required or expected to be maintained by such
Affected Person, and such Affected Person determines that the amount of such
capital is increased by or based upon the existence of any commitment to make
Purchases of (or otherwise to maintain the investment in) Pool Receivables or
any related liquidity facility, credit enhancement facility and other
commitments of the same type, then, upon demand by such Affected Person (with a
copy to the Administrator), the Seller shall promptly pay such Affected Person,
from time to time as specified by such Affected Person, additional amounts
sufficient to compensate such Affected Person for both increased costs and
maintenance of bargained for yield in the light of such circumstances, to the
extent that such Affected Person determines such increase in capital to be
allocable to the existence of any of such commitments.  A certificate as to such
amounts submitted to the Seller and the Administrator by an authorized officer
of such Affected Person shall be conclusive and binding for all purposes.

 

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(b)                                 If, after the date hereof, due to either:
(i) FIN 46 and Subsequent Statements and Interpretations, (ii) the introduction
of or any change in or in the interpretation of any law, regulation or rule or
(iii) compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Affected Person of agreeing to purchase or
purchasing, or maintaining the ownership of, the Purchased Interest (or its
portion thereof) in respect of which Discount is computed by reference to the
Euro-Rate, then, upon demand by such Affected Person, the Seller shall promptly
pay to such Affected Person, from time to time as specified by such Affected
Person, additional amounts sufficient to compensate such Affected Person for
both increased costs and maintenance of bargained for yield.  A certificate as
to such amounts submitted to the Seller and the Administrator by an authorized
officer of such Affected Person shall be conclusive and binding for all
purposes.

 

For the avoidance of doubt, any increase in cost and/or reduction in yield
caused by regulatory capital allocation adjustments due to Financial Accounting
Standards Board’s Interpretation 46 (revised December 2003) Consolidation of
Variable Interest Entities and Interpretation of Accounting Research Bulletin
No. 51 (or any future statement or interpretation issued by the Financial
Accounting Standards Board or any successor thereto) (collectively, the “FIN 46
and Subsequent Statements and Interpretations”) shall be covered by this
Section 1.7.

 

Section 1.8                                      Requirements of Law.  (a)  If,
after the date hereof, any Affected Person determines that (i) the introduction
of or any change in or in the interpretation of any law, rule or regulation
after the date hereof, or (ii) compliance with any request, guideline or
directive from any central bank or other Governmental Authority (whether or not
having the force of law) made after the date hereof:

 

(i)                                     does or shall subject such Affected
Person to any increase in the Purchased Interest (or its portion thereof) or in
the amount of Capital relating thereto,

 

(ii)                                  does or shall impose, modify or hold
applicable any reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the account
of, Purchases, advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Affected Person that are not
otherwise included in the determination of the Euro-Rate hereunder,

 

and the result of any of the foregoing is: (1) to increase the cost to such
Affected Person of agreeing to purchase or purchasing or maintaining the
ownership of undivided percentage ownership interests with regard to the
Purchased Interest (or interests therein) or any Portion of Capital, or (2) to
reduce any amount receivable hereunder (whether directly or indirectly), then,
in any such case, upon demand by such Affected Person, the Seller shall promptly
pay to such Affected Person additional amounts necessary to compensate such
Affected Person for such additional cost or reduced amount receivable.  All such
amounts shall be payable as incurred.

 

(b)                                 If an Affected Person requests compensation
under this Section 1.8, a certificate describing in reasonable detail such
amounts and the basis for such Affected Person’s demand for such amounts shall
be submitted to the Seller and the applicable Purchaser Agent by such Affected
Person and shall be conclusive and binding for all purposes, absent manifest
error.

 

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Section 1.9                                      Funding Losses.  (a)  The
Seller shall compensate each Affected Person, upon written request by such
Person for all losses, expenses and liabilities (including any interest paid by
such Affected Person to lenders of funds borrowed by it to fund or maintain any
Portion of Capital hereunder at an interest rate determined by reference to the
Euro-Rate and any loss sustained by such Person in connection with the
re-employment of such funds), which such Affected Person may sustain with
respect to funding or maintaining such Portion of Capital at the Euro-Rate if,
for any reason, after the applicable request by the Seller to fund or maintain
such Portion of Capital at an interest rate determined by reference to the
Euro-Rate, such funding or maintenance does not occur on a date specified
therefor.

 

(b)                                 If an Affected Person requests compensation
under this Section 1.9, a certificate describing in reasonable detail such
amounts and the basis for such Affected Person’s demand for such amounts shall
be submitted to the Seller and the applicable Purchaser Agent by such Affected
Person and shall be conclusive and binding for all purposes.

 

Section 1.10                                Taxes.  (a) The Seller agrees that:

 

(i)                                     Any and all payments by the Seller under
this Agreement and any other Transaction Document shall be made free and clear
of and without deduction for any Taxes or Other Taxes; provided, however that
such payments shall exclude overall income or franchise taxes, in either case,
imposed on the Person receiving such payment by the Seller hereunder by the
jurisdiction under whose laws such Person is organized, the jurisdiction of such
Person’s principal place of business or the jurisdiction in which such Person
holds its undivided percentage ownership interest in the Purchased Interest, or
any political subdivision thereof (all such Taxes other than those referred to
in the proviso above shall hereinafter be referred to as “Indemnified Taxes”). 
If the Seller shall be required by law to deduct any Indemnified Taxes from or
in respect of any sum payable hereunder to any Purchaser, any Liquidity
Provider, Program Support Provider or the Administrator, then the sum payable
shall be increased by the amount necessary to yield to such Person (after
payment of all Taxes) an amount equal to the sum it would have received had no
such deductions been made.

 

(ii)                                  Whenever any Indemnified Taxes are payable
by the Seller, as promptly as possible thereafter, the Seller shall send to the
Administrator for its own account or for the account of any Purchaser or any
Liquidity Provider or other Program Support Provider, as the case may be, a
certified copy of an original official receipt showing payment thereof or such
other evidence of such payment as may be available to the Seller and acceptable
to the taxing authorities having jurisdiction over such Person.  If the Seller
fails to pay any Indemnified Taxes when due to the appropriate taxing authority
or fails to remit to the Administrator the required receipts or other required
documentary evidence, the Seller shall indemnify the Administrator and/or any
other Affected Person, as applicable, for any incremental Taxes, interest or
penalties that may become payable by such party as a result of any such failure.

 

(b)                                 The Seller shall indemnify each Affected
Person within ten days after written demand therefor, for the full amount of any
Indemnified Taxes paid by such Affected Party on or with respect to any payment
by or on account of any obligation of the Seller hereunder

 

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(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 1.10) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  None of Sections 1.7, 1.8, 3.1, 3.2 or 6.4(a) shall
apply to Taxes, which shall be governed exclusively by this Section 1.10.

 

(c)                                  If an Affected Person determines, in its
sole discretion, that it has received a refund or credit of any Taxes or Other
Taxes as to which it has been indemnified by the Seller, it shall pay over such
refund or credit to the Seller (but only to the extent of indemnity payments
made, or additional amounts paid, by the Seller under this Section 1.10 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of such Affected Person and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund net of any applicable Taxes payable in respect of such interest);
provided, that the Seller, upon the request of such Affected Person, agrees to
repay the amount paid over to the Seller (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to such Affected Person
in the event such Affected Person is required to repay such refund to such
Governmental Authority.  This Section 1.10 shall not be construed to require any
Affected Person to make available its tax returns (or any other information
relating to its Taxes which it deems confidential) to the Seller or any other
Person.

 

(d)                                 If an Affected Person requests
indemnification or repayment under this Section 1.10, a certificate describing
in reasonable detail such amounts and the basis for such Affected Person’s
demand for such amounts shall be submitted to the Seller and the applicable
Purchaser Agent by such Affected Person and shall be conclusive and binding for
all purposes, absent manifest error.

 

Section 1.11                                Inability to Determine Euro-Rate. 
(a)  If the Administrator (or any Purchaser Agent) determines before the first
day of any Yield Period (which determination shall be final and conclusive)
that, by reason of circumstances affecting the interbank eurodollar market
generally (i) deposits in dollars (in the relevant amounts for such Yield
Period) are not being offered to banks in the interbank eurodollar market for
such Yield Period, (ii) adequate means do not exist for ascertaining the
Euro-Rate for such Yield Period or (iii) the Euro Rate does not accurately
reflect the cost to any Purchaser (as determined by the related Purchaser or the
applicable Purchaser Agent) of maintaining any Portion of Capital during such
Yield Period, then the Administrator shall give notice thereof to the Seller. 
Thereafter, until the Administrator or such Purchaser Agent notifies the Seller
that the circumstances giving rise to such suspension no longer exist, (a) no
Portion of Capital shall be funded at the Alternate Rate determined by reference
to the Euro-Rate and (b) the Discount for any outstanding Portions of Capital
then funded at the Alternate Rate determined by reference to the Euro-Rate
shall, on the last day of the then current Yield Period, be converted to the
Alternate Rate determined by reference to the Base Rate.

 

(b)                                 If, on or before the first day of any Yield
Period, the Administrator shall have been notified by any Purchaser, Purchaser
Agent or Liquidity Provider that such Person has determined (which determination
shall be final and conclusive) that, any enactment, promulgation or adoption of
or any change after the date hereof in any applicable law, rule or regulation,
or any change in the interpretation or administration thereof by a governmental

 

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authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Person with any guideline, request
or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for such
Person to fund or maintain any Portion of Capital at the Alternate Rate
determined by reference to the Euro-Rate, the Administrator shall notify the
Seller thereof.  Upon receipt of such notice, until the Administrator notifies
the Seller that the circumstances giving rise to such determination no longer
apply, (a) no Portion of Capital shall be funded at the Alternate Rate
determined by reference to the Euro-Rate and (b) the Discount for any
outstanding Portions of Capital then funded at the Alternate Rate determined by
reference to the Euro-Rate shall be converted to the Alternate Rate determined
by reference to the Base Rate either (i) on the last day of the then current
Yield Period if such Person may lawfully continue to maintain such Portion of
Capital at the Alternate Rate determined by reference to the Euro-Rate to such
day, or (ii) immediately, if such Person may not lawfully continue to maintain
such Portion of Capital at the Alternate Rate determined by reference to the
Euro-Rate to such day.

 

Section 1.12                                Notice of Purchaser Termination
Date.  Each Purchaser Agent agrees to give the Seller, the Servicer and the
Administrator written notice of the decision by the Liquidity Providers under
the Liquidity Agreement related to the Conduit Purchaser in such Purchaser
Agent’s Purchaser Group regarding the extension of the then current scheduled
commitment expiration date under such Liquidity Agreement at least 90 days’
prior to such scheduled commitment expiration date.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES; COVENANTS;
TERMINATION EVENTS

 

Section 2.1                                      Representations and Warranties;
Covenants.  Each of the Seller and the Servicer hereby makes the representations
and warranties, and hereby agrees to perform and observe the covenants,
applicable to it set forth in Exhibits III and IV, respectively.

 

Section 2.2                                      Termination Events.  If any of
the Termination Events set forth in Exhibit V shall occur, the Administrator may
(with the consent of the Majority Purchaser Agents) or shall (at the direction
of the Majority Purchaser Agents), by notice to the Seller, declare the Facility
Termination Date to have occurred (in which case the Facility Termination Date
shall be deemed to have occurred); provided, that automatically upon the
occurrence of any event (without any requirement for the passage of time or the
giving of notice) described in paragraph (e) of Exhibit V, the Facility
Termination Date shall occur.  Upon any such declaration, occurrence or deemed
occurrence of the Facility Termination Date, the Administrator, each Purchaser
Agent and each Purchaser shall have, in addition to the rights and remedies that
they may have under this Agreement, all other rights and remedies provided after
default under the UCC and under other applicable law, which rights and remedies
shall be cumulative.

 

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ARTICLE III

INDEMNIFICATION

 

Section 3.1                                      Indemnities by the Seller. 
Without limiting any other rights any such Person may have hereunder or under
applicable law, the Seller hereby agrees to indemnify and hold harmless the
Administrator, each Purchaser Agent, each Liquidity Provider, each Program
Support Provider and each Purchaser and their respective officers, directors,
agents and employees (each an “Indemnified Party”) from and against any and all
damages, losses, claims, liabilities, penalties, costs and expenses (including
Attorney Costs) (all of the foregoing collectively, the “Indemnified Amounts”)
at any time imposed on or incurred by any Indemnified Party arising out of or
otherwise relating to any Transaction Document, the transactions contemplated
thereby or the acquisition of any portion of the Purchased Interest, or any
action taken or omitted by any of the Indemnified Parties (including any action
taken by the Administrator as attorney in fact for the Seller or any Originator
hereunder or under any other Transaction Document), whether arising by reason of
the acts to be performed by the Seller hereunder or otherwise, excluding only
Indemnified Amounts to the extent (a) a final judgment of a court of competent
jurisdiction holds such Indemnified Amounts resulted from gross negligence or
willful misconduct of the Indemnified Party seeking indemnification, (b) the
financial inability to pay of the Obligor and for which reimbursement would
constitute recourse to any Originator, Triumph, the Seller or the Servicer for
uncollectible Receivables or (c) such Indemnified Amounts constitute Taxes
(which shall be governed by Section 1.10); provided, however that nothing
contained in this sentence shall limit the liability of the Seller or the
Servicer or limit the recourse of any Indemnified Party to the Seller or the
Servicer for any amounts otherwise specifically provided to be paid by the
Seller or the Servicer hereunder.  Without limiting the foregoing
indemnification, but subject to the limitations set forth in clauses (a),
(b) and (c) of the previous sentence, the Seller shall indemnify each
Indemnified Party for Indemnified Amounts (including losses in respect of
uncollectible Receivables, regardless, for purposes of these specific matters,
of whether reimbursement therefor would constitute recourse to the Seller or the
Servicer) to the extent relating to or resulting from:

 

(i)                                     the failure of any Receivable included
in the calculation of the Net Receivables Pool Balance as an Eligible Receivable
to be an Eligible Receivable;

 

(ii)                                  any representation or warranty or
statement made or deemed made by the Seller (or any employee, officer or agent
of the Seller) under or in connection with this Agreement, any Transaction
Document, any Information Package or any other information or report delivered
by or on behalf of the Seller pursuant hereto, which shall have been false or
incorrect in any material respect when made or deemed made;

 

(iii)                               the failure by the Seller to comply with any
applicable law, rule or regulation related to any Receivable or related
Contract, or the nonconformity of any Receivable or related Contract with any
such applicable law, rule or regulation;

 

(iv)                              the failure of the Seller to vest and maintain
vested in the Administrator, for the benefit of the Purchasers, a first-priority
perfected ownership or security interest in the Purchased Interest and the
property conveyed hereunder, free and clear of any Adverse Claim other than the
Judgment Lien;

 

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(v)                                 any commingling by the Seller or the
Servicer of funds to which the Administrator, any Purchaser Agent or any
Purchaser is entitled hereunder with any other funds of the Seller or any
Originator;

 

(vi)                              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
Receivables in, or purporting to be in, the Receivables Pool and the other Pool
Assets, whether at the time of any Purchase or at any other time;

 

(vii)                           any failure of a Lock-Box Bank to comply with
the terms of the applicable Lock-Box Agreement;

 

(viii)                        any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Receivable, or any other claim resulting from the sale or lease of goods or the
rendering of services related to such Receivable or the furnishing or failure to
furnish any such goods or services or other similar claim or defense not arising
from the financial inability of any Obligor to pay undisputed indebtedness;

 

(ix)                                any failure of the Seller (or any of its
Affiliates acting as Servicer or Sub-Servicer) to perform its duties or
obligations in accordance with the provisions of this Agreement, any Contract or
any other Transaction Document to which it is a party;

 

(x)                                   any action taken by the Administrator as
attorney in fact for the Seller or any Originator pursuant to this Agreement or
any other Transaction Document;

 

(xi)                                any reduction in Capital as a result of the
distribution of Collections pursuant to Section 1.4(d), if all or a portion of
such distributions shall thereafter be rescinded or otherwise must be returned
for any reason; or

 

(xii)                             any environmental liability claim, products
liability claim or personal injury or property damage suit or other similar or
related claim or action of whatever sort, arising out of or in connection with
any Receivable or any other suit, claim or action of whatever sort relating to
any of the Transaction Documents.

 

Section 3.2                                      Indemnities by the Servicer. 
Without limiting any other rights that any Indemnified Party may have hereunder
or under applicable law, the Servicer hereby agrees to indemnify and hold
harmless each Indemnified Party from and against any and all Indemnified Amounts
arising out of or resulting from (whether directly or indirectly): (a) the
failure of any information contained in any Information Package, as of the date
such Information Package is delivered pursuant to Sections 1(a)(ii) and
2(a)(iv) of Exhibit IV to be true and correct, or the failure of any other
information provided to such Indemnified Party by, or on behalf of, the Servicer
to be true and correct in all material respects, (b) the failure of any
representation, warranty or statement made or deemed made by the Servicer (or
any of its officers) under or in connection with this Agreement or any other
Transaction Document to which it is a party, to have been true and correct as of
the date made or deemed made, (c) the failure by the Servicer to comply with any
applicable law, rule or regulation with respect to any Pool Receivable or the

 

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related Contract, (d) any dispute, claim, offset or defense of the Obligor to
the payment of any Receivable in, or purporting to be in, the Receivables Pool
resulting from or related to the collection activities with respect to such
Receivable or (e) any failure of the Servicer to perform its duties or
obligations in accordance with the provisions hereof or any other Transaction
Document to which it is a party; excluding only such amounts to the extent a
final judgment of a court of competent jurisdiction holds that such amounts
resulted from gross negligence or willful misconduct of the Indemnified Party
seeking indemnification; provided, however that nothing contained in this
sentence shall limit the liability of Seller or the Servicer or limit the
recourse of any Indemnified Party to the Seller or the Servicer for any amounts
otherwise specifically provided to be paid by the Seller or the Servicer
hereunder.

 

ARTICLE IV

ADMINISTRATION AND COLLECTIONS

 

Section 4.1                                      Appointment of the Servicer.

 

(a)                                  The servicing, administering and collection
of the Pool Receivables shall be conducted by the Person so designated from time
to time as the Servicer in accordance with this Section 4.1.  Until the
Administrator gives notice to Triumph (in accordance with this Section 4.1) of
the designation of a new Servicer, Triumph is hereby designated as, and hereby
agrees to perform the duties and obligations of, the Servicer pursuant to the
terms hereof.  Upon the occurrence of a Termination Event, the Administrator may
(with the consent of the Majority Purchaser Agents) or shall (at the direction
of the Majority Purchaser Agents) designate as Servicer any Person (including
itself) to succeed Triumph or any successor Servicer, on the condition in each
case that any such Person so designated shall agree to perform the duties and
obligations of the Servicer pursuant to the terms hereof.

 

(b)                                 Upon the designation of a successor Servicer
as set forth in paragraph (a), Triumph agrees that it will terminate its
activities as Servicer hereunder in a manner that the Administrator determines
will facilitate the transition of the performance of such activities to the new
Servicer, and Triumph shall cooperate with and assist such new Servicer.  In
connection with such cooperation, Triumph shall, upon request by the
Administrator: (i) assemble all of the records (including all Contracts)
necessary or desirable to collect the Pool Receivables and the Related Security
and transfer such records to the successor Servicer, (ii) transfer or license to
the successor Servicer the use of all licenses, hardware or software necessary
or desirable to collect the Pool Receivables and the Related Security, and make
the same available to the Administrator or its designee (for the benefit of the
Purchasers), at a place selected by the Administrator, and (iii) segregate all
cash, checks and other instruments received by it from time to time constituting
Collections in a manner reasonably acceptable to the Administrator and, promptly
upon receipt, remit all such cash, checks and instruments, duly endorsed or with
duly executed instruments of transfer, to the Administrator or its designee.

 

(c)                                  Triumph acknowledges that, in making their
decision to execute and deliver this Agreement, the Administrator and each
member in each Purchaser Group have relied on Triumph’s agreement to act as
Servicer hereunder.  Accordingly, Triumph agrees that it will not voluntarily
resign as Servicer.

 

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(d)                                 The Servicer may delegate its duties and
obligations hereunder to any subservicer (each a “Sub-Servicer”); provided,
that, in each such delegation: (i) such Sub-Servicer shall have agreed in
writing to perform the duties and obligations of the Servicer pursuant to the
terms hereof, (ii) the Servicer shall remain liable for the performance of the
duties and obligations so delegated, (iii) the Seller, the Administrator and
each member of each Purchaser Group shall have the right to look solely to the
Servicer for performance, and (iv) the terms of any agreement with any
Sub-Servicer shall provide that the Administrator may terminate such agreement
upon the termination of the Servicer hereunder by giving notice of its desire to
terminate such agreement to the Servicer (and the Servicer shall provide
appropriate notice to each such Sub-Servicer); provided, however, that if any
such delegation is to any Person other than an Originator or an Affiliate of
Triumph, the Administrator and the Majority Purchaser Agents shall have
consented in writing in advance to such delegation.

 

(e)                                  At any time following the occurrence and
during the continuation of a Termination Event, the Administrator may request
the Servicer to, and upon such request the Servicer shall: (i) assemble all of
the records reasonably necessary or desirable to collect the Pool Receivables
and the Related Security, and transfer or license to a successor Servicer,
except to the extent prohibited by applicable law, licenses or other agreement,
the use of all software necessary or desirable to collect the Pool Receivables
and the Related Security, and make the same available to the Administrator or
its designee (for the benefit of the Purchasers), except to the extent
prohibited by applicable law, licenses or other agreement, at a place selected
by the Administrator, and (ii) segregate all cash, checks and other instruments
received by it from time to time constituting Collections in a manner reasonably
acceptable to the Administrator and, promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed instruments of
transfer, to the Administrator or its designee.

 

Section 4.2                                      Duties of the Servicer.

 

(a)                                  The Servicer shall take or cause to be
taken all such action as may be necessary or advisable to administer and collect
each Pool Receivable from time to time, all in accordance with this Agreement
and all applicable laws, rules and regulations, with reasonable care and
diligence, and in accordance with the applicable Credit and Collection Policy. 
The Servicer shall set aside for the accounts of the Seller and the Purchasers
the amount of Collections to which each is entitled in accordance with Article I
hereof.  The Servicer may, in accordance with the applicable Credit and
Collection Policy, take such action, including extensions, amendments,
modifications, waivers or restructurings of Pool Receivables and the related
Contracts (each such action, a “Modification”), as the Servicer may reasonably
determine to be appropriate to maximize Collections thereof or reflect
adjustments permitted under the Credit and Collection Policies; provided,
however, that for the purposes of this Agreement: (i) no Modification shall
change the number of days such Pool Receivable has remained unpaid from the date
of the original due date related to such Pool Receivable, (ii) no Modification
shall alter the status of such Pool Receivable as a Delinquent Receivable or a
Defaulted Receivable under this Agreement or limit the rights of any Purchaser,
Purchaser Agent or the Administrator under this Agreement and (iii) if a
Termination Event or Unmatured Termination Event has occurred and is continuing
and Triumph or an Affiliate thereof is serving as the Servicer, Triumph or such
Affiliate may make a Modification only upon prior approval of the
Administrator.  The Seller shall deliver to the Servicer and the Servicer shall
hold for the benefit of the Seller and the

 

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Administrator (individually and for the benefit of the Purchasers, in accordance
with their respective interests), all records and documents (including computer
tapes or disks) with respect to each Pool Receivable.  Notwithstanding anything
to the contrary contained herein, if a Termination Event has occurred and is
continuing, the Administrator (with the consent of the Majority Purchaser
Agents) may direct the Servicer (whether the Service is Triumph or any other
Person) to commence or settle any legal action to enforce collection of any Pool
Receivable or to foreclose upon or repossess any Related Security.

 

(b)                                 The Servicer shall, as soon as practicable
following actual receipt of collected funds, turn over to the Seller the
collections of any indebtedness to which the Seller is entitled that is not a
Pool Receivable, less, if Triumph or an Affiliate thereof is not the Servicer,
all reasonable and appropriate out-of-pocket costs and expenses of such Servicer
of servicing, collecting and administering such collections.  The Servicer, if
other than Triumph or an Affiliate thereof, shall, as soon as practicable upon
demand, deliver to the Seller all records in its possession that evidence or
relate to any indebtedness to which the Seller is entitled that is not a Pool
Receivable, and copies of records in its possession that evidence or relate to
any indebtedness that is a Pool Receivable.

 

(c)                                  The Servicer’s obligations hereunder shall
terminate on the later of: (i) the Facility Termination Date and (ii) the date
on which all amounts required to be paid to the Purchaser Agents, each
Purchaser, the Administrator and any other Indemnified Party or Affected Person
hereunder shall have been paid in full.

 

After such termination, if Triumph or an Affiliate thereof was not the Servicer
on the date of such termination, the Servicer shall promptly deliver to the
Seller all books, records and related materials that the Seller previously
provided to the Servicer, or that have been obtained by the Servicer, in
connection with this Agreement.

 

Section 4.3                                      Lock-Box Account Arrangements. 
Prior to the Closing Date, the Seller shall have entered into Lock-Box
Agreements with all of the Lock-Box Banks and delivered counterparts of each to
the Administrator.  Upon the occurrence of a Termination Event, the
Administrator may (with the consent of the Majority Purchaser Agents) or shall
(upon the direction of the Majority Purchaser Agents) at any time thereafter
give notice to each Lock-Box Bank that the Administrator is exercising its
rights under the Lock-Box Agreements to do any or all of the following: (a) to
have the exclusive control of the Lock-Box Accounts transferred to the
Administrator (for the benefit of the Purchasers) and to exercise exclusive
dominion and control over the funds deposited therein, (b) to have the
Collections that are sent to the respective Lock-Box Accounts redirected
pursuant to the Administrator’s instructions rather than deposited in the
applicable Lock-Box Account, and (c) to take any or all other actions permitted
under the applicable Lock-Box Agreement.  The Seller hereby agrees that if the
Administrator gives such notice to a Lock-Box Bank that the Administrator is
exercising its rights under the related Lock-Box Agreement pursuant to clause
(a) above, the Administrator shall have exclusive control (for the benefit of
the Purchasers) of the proceeds (including Collections) of all Pool Receivables
and the Seller hereby further agrees to take any other action that the
Administrator or any Purchaser Agent may reasonably request to transfer such
control.  Any proceeds of Pool Receivables received by the Seller or the
Servicer thereafter shall be sent immediately to, or as otherwise instructed by,
the Administrator.  The parties hereto hereby acknowledge that if at any time
the

 

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Administrator takes control of any Lock-Box Account, the Administrator shall not
have any rights to the funds therein in excess of the unpaid amounts due to the
Administrator, any member of any Purchaser Group, any Indemnified Party or
Affected Person or any other Person hereunder, and the Administrator shall
distribute or cause to be distributed such funds in accordance with
Section 4.2(b) and Article I (in each case as if such funds were held by the
Servicer thereunder).

 

Section 4.4                                      Enforcement Rights.

 

(a)                                  At any time following the occurrence of a
Termination Event:

 

(i)                                     the Administrator may direct the
Obligors that payment of all amounts payable under any Pool Receivable is to be
made directly to the Administrator or its designee;

 

(ii)                                  the Administrator may instruct the Seller
or the Servicer to give notice of the Purchaser Groups’ interest in Pool
Receivables to each Obligor, which notice shall direct that payments be made
directly to the Administrator or its designee on behalf of such Purchaser
Groups), and the Seller or the Servicer, as the case may be, shall give such
notice at the expense of the Seller or the Servicer, as the case may be;
provided, that if the Seller or the Servicer, as the case may, fails to so
promptly notify each Obligor, the Administrator (at the Seller’s or the
Servicer’s, as the case may be, expense) may so notify the Obligors,

 

(iii)                               the Administrator may request the Servicer
to, and upon such request the Servicer shall: (A) assemble all of the records
necessary or desirable to collect the Pool Receivables and the Related Security,
and transfer or license to a successor Servicer the use of all software
necessary or desirable to collect the Pool Receivables and the Related Security,
and make the same available to the Administrator or its designee (for the
benefit of the Purchasers) at a place selected by the Administrator, and
(B) segregate all cash, checks and other instruments received by it from time to
time constituting Collections in a manner acceptable to the Administrator and,
promptly upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Administrator or
its designee; and

 

(iv)                              the Administrator may collect any amounts due
from any Originator under the Sale Agreement.

 

(b)                                 The Seller hereby authorizes the
Administrator (on behalf of each Purchaser Group), and irrevocably appoints the
Administrator as its attorney-in-fact with full power of substitution and with
full authority in the place and stead of the Seller, which appointment is
coupled with an interest, to take any and all steps in the name of the Seller
and on behalf of the Seller necessary or desirable, in the determination of the
Administrator, after the occurrence of a Termination Event, to collect any and
all amounts or portions thereof due under any and all Pool Assets, including
endorsing the name of the Seller on checks and other instruments representing
Collections and enforcing such Pool Assets.  Notwithstanding anything to the
contrary contained in this subsection, none of the powers conferred upon such
attorney-in-fact pursuant to the

 

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preceding sentence shall subject such attorney-in-fact to any liability if any
action taken by it shall prove to be inadequate or invalid, nor shall they
confer any obligations upon such attorney-in-fact in any manner whatsoever.

 

Section 4.5                                      Responsibilities of the Seller.

 

(a)                                  Anything herein to the contrary
notwithstanding, the Seller shall: (i) perform all of its obligations, if any,
under the Contracts related to the Pool Receivables to the same extent as if
interests in such Pool Receivables had not been transferred hereunder, and the
exercise by the Administrator, the Purchaser Agents or the Purchasers of their
respective rights hereunder shall not relieve the Seller from such obligations,
and (ii) pay when due any taxes, including any sales taxes payable in connection
with the Pool Receivables and their creation and satisfaction.  The
Administrator, the Purchaser Agents or any of the Purchasers shall not have any
obligation or liability with respect to any Pool Asset, nor shall any of them be
obligated to perform any of the obligations of the Seller, Servicer, Triumph or
the Originators thereunder.

 

(b)                                 Triumph hereby irrevocably agrees that if at
any time it shall cease to be the Servicer hereunder, it shall act (if the
then-current Servicer so requests) as the data-processing agent of the Servicer
and, in such capacity, Triumph shall conduct the data-processing functions of
the administration of the Receivables and the Collections thereon in
substantially the same way that Triumph conducted such data-processing functions
while it acted as the Servicer.

 

Section 4.6                                      Servicing Fee.  (a)  Subject to
paragraph (b), the Servicer shall be paid a fee (the “Servicing Fee”) equal to
1.00% per annum (the “Servicing Fee Rate”) of the average aggregate Outstanding
Balance of the Pool Receivables.  The Purchasers’ Share of such fee shall be
paid through the distributions contemplated by Section 1.4(d), and the Seller’s
Share of such fee shall be paid directly by the Seller.

 

(b)                                 If the Servicer ceases to be Triumph or an
Affiliate thereof, the servicing fee shall be the greater of: (i) the amount
calculated pursuant to paragraph (a), and (ii) an alternative amount specified
by the successor Servicer not to exceed 105% of the aggregate reasonable costs
and expenses incurred by such successor Servicer in connection with the
performance of its obligations as Servicer.

 

ARTICLE V

THE AGENTS

 

Section 5.1                                      Appointment and Authorization. 
(a)  Each Purchaser and Purchaser Agent hereby irrevocably designates and
appoints PNC Bank, National Association, as the “Administrator” hereunder and
authorizes the Administrator to take such actions and to exercise such powers as
are delegated to the Administrator hereby and to exercise such other powers as
are reasonably incidental thereto.  The Administrator shall hold, in its name,
for the benefit of each Purchaser, ratably, the Purchased Interest.  The
Administrator shall not have any duties other than those expressly set forth
herein or any fiduciary relationship with any Purchaser or Purchaser Agent, and
no implied obligations or liabilities shall be read into this Agreement, or
otherwise exist, against the Administrator.  The Administrator does not assume,
nor shall it be

 

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deemed to have assumed, any obligation to, or relationship of trust or agency
with, the Seller or Servicer.  Notwithstanding any provision of this Agreement
or any other Transaction Document to the contrary, in no event shall the
Administrator ever be required to take any action which exposes the
Administrator to personal liability or which is contrary to the provision of any
Transaction Document or applicable law.

 

(b)                                 Each Purchaser hereby irrevocably designates
and appoints the respective institution identified as the Purchaser Agent for
such Purchaser’s Purchaser Group on the signature pages hereto or in the
Assumption Agreement or Transfer Supplement pursuant to which such Purchaser
becomes a party hereto, and each authorizes such Purchaser Agent to take such
action on its behalf under the provisions of this Agreement and to exercise such
powers and perform such duties as are expressly delegated to such Purchaser
Agent by the terms of this Agreement, if any, together with such other powers as
are reasonably incidental thereto.  Notwithstanding any provision to the
contrary elsewhere in this Agreement, no Purchaser Agent shall have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser or other Purchaser Agent or the Administrator,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of such Purchaser Agent shall be read into this
Agreement or otherwise exist against such Purchaser Agent.

 

(c)                                  Except as otherwise specifically provided
in this Agreement, the provisions of this Article V are solely for the benefit
of the Purchaser Agents, the Administrator and the Purchasers, and none of the
Seller or Servicer shall have any rights as a third-party beneficiary or
otherwise under any of the provisions of this Article V.  Furthermore, no
Purchaser shall have any rights as a third-party beneficiary or otherwise under
any of the provisions hereof in respect of a Purchaser Agent which is not the
Purchaser Agent for such Purchaser.

 

(d)                                 In performing its functions and duties
hereunder, the Administrator shall act solely as the agent of the Purchasers and
the Purchaser Agents and does not assume nor shall be deemed to have assumed any
obligation or relationship of trust or agency with or for the Seller or Servicer
or any of their successors and assigns.  In performing its functions and duties
hereunder, each Purchaser Agent shall act solely as the agent of its respective
Purchaser and does not assume nor shall be deemed to have assumed any obligation
or relationship of trust or agency with or for the Seller, the Servicer, any
other Purchaser, any other Purchaser Agent or the Administrator, or any of their
respective successors and assigns.

 

Section 5.2                                      Delegation of Duties.  The
Administrator may execute any of its duties through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties.  The Administrator shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.

 

Section 5.3                                      Exculpatory Provisions.  None
of the Purchaser Agents, the Administrator or any of their respective directors,
officers, agents or employees shall be liable for any action taken or omitted
(i) with the consent or at the direction of the Majority Purchaser Agents (or in
the case of any Purchaser Agent, the Purchasers within its Purchaser Group that
have a majority of the aggregate Commitment of such Purchaser Group) or (ii) in
the absence of such Person’s gross negligence or willful misconduct.  The
Administrator shall not be responsible to any

 

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Purchaser, Purchaser Agent or other Person for (i) any recitals,
representations, warranties or other statements made by the Seller, the
Servicer, any Originator or any of their Affiliates, (ii) the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any Transaction
Document, (iii) any failure of the Seller, the Servicer, any Originator or any
of their Affiliates to perform any obligation hereunder or under the other
Transaction Documents to which it is a party (or under any Contract), or
(iv) the satisfaction of any condition specified in Exhibit II.  The
Administrator shall not have any obligation to any Purchaser or Purchaser Agent
to ascertain or inquire about the observance or performance of any agreement
contained in any Transaction Document or to inspect the properties, books or
records of the Seller, the Servicer, any Originator or any of their respective
Affiliates.

 

Section 5.4                                      Reliance by Agents.  (a)  Each
Purchaser Agent and the Administrator shall in all cases be entitled to rely,
and shall be fully protected in relying, upon any document or other writing or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person and upon advice and statements of legal
counsel (including counsel to the Seller), independent accountants and other
experts selected by the Administrator.  Each Purchaser Agent and the
Administrator shall in all cases be fully justified in failing or refusing to
take any action under any Transaction Document unless it shall first receive
such advice or concurrence of the Majority Purchaser Agents (or in the case of
any Purchaser Agent, the Purchasers within its Purchaser Group that have a
majority of the aggregate Commitment of such Purchaser Group), and assurance of
its indemnification, as it deems appropriate.

 

(b)                                 The Administrator shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Majority Purchaser Agents or the Purchaser
Agents, and such request and any action taken or failure to act pursuant thereto
shall be binding upon all Purchasers, the Administrator and Purchaser Agents.

 

(c)                                  The Purchasers within each Purchaser Group
with a majority of the Commitment of such Purchaser Group shall be entitled to
request or direct the related Purchaser Agent to take action, or refrain from
taking action, under this Agreement on behalf of such Purchasers.  Such
Purchaser Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of
such Majority Purchaser Agents, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all of such Purchaser Agent’s
Purchasers.

 

(d)                                 Unless otherwise advised in writing by a
Purchaser Agent or by any Purchaser on whose behalf such Purchaser Agent is
purportedly acting, each party to this Agreement may assume that (i) such
Purchaser Agent is acting for the benefit of each of the Purchasers in respect
of which such Purchaser Agent is identified as being the “Purchaser Agent” in
the definition of “Purchaser Agent” hereto, as well as for the benefit of each
assignee or other transferee from any such Person, and (ii) each action taken by
such Purchaser Agent has been duly authorized and approved by all necessary
action on the part of the Purchasers on whose behalf it is purportedly acting. 
Each Purchaser Agent and its Purchaser(s) shall agree amongst themselves as to
the circumstances and procedures for removal, resignation and replacement of
such Purchaser Agent.

 

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Section 5.5                                      Notice of Termination Events. 
Neither any Purchaser Agent nor the Administrator shall be deemed to have
knowledge or notice of the occurrence of any Termination Event or Unmatured
Termination Event unless such Administrator has received notice from any
Purchaser, Purchaser Agent, the Servicer or the Seller stating that a
Termination Event or an Unmatured Termination Event has occurred hereunder and
describing such Termination Event or Unmatured Termination Event.  In the event
that the Administrator receives such a notice, it shall promptly give notice
thereof to each Purchaser Agent whereupon each such Purchaser Agent shall
promptly give notice thereof to its related Purchasers.  In the event that a
Purchaser Agent receives such a notice (other than from the Administrator), it
shall promptly give notice thereof to the Administrator.  The Administrator
shall take such action concerning a Termination Event or an Unmatured
Termination Event as may be directed by the Majority Purchaser Agents unless
such action otherwise requires the consent of all Purchasers), but until the
Administrator receives such directions, the Administrator may (but shall not be
obligated to) take such action, or refrain from taking such action, as the
Administrator deems advisable and in the best interests of the Purchasers and
the Purchaser Agents.

 

Section 5.6                                      Non-Reliance on Administrator,
Purchaser Agents and Other Purchasers.  Each Purchaser expressly acknowledges
that none of the Administrator, the Purchaser Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Administrator, or
any Purchaser Agent hereafter taken, including any review of the affairs of the
Seller, Triumph, the Servicer or any Originator, shall be deemed to constitute
any representation or warranty by the Administrator or such Purchaser Agent, as
applicable.  Each Purchaser represents and warrants to the Administrator and the
Purchaser Agents that, independently and without reliance upon the
Administrator, Purchaser Agents or any other Purchaser and based on such
documents and information as it has deemed appropriate, it has made and will
continue to make its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions and
creditworthiness of the Seller, Triumph, the Servicer or the Originators, and
the Receivables and its own decision to enter into this Agreement and to take,
or omit, action under any Transaction Document.  Except for items specifically
required to be delivered hereunder, the Administrator shall not have any duty or
responsibility to provide any Purchaser Agent with any information concerning
the Seller, Triumph, the Servicer or the Originators or any of their Affiliates
that comes into the possession of the Administrator or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.

 

Section 5.7                                      Purchasers, Administrator,
Purchaser Agents and Affiliates.  Each of the Administrator, the Purchasers and
the Purchaser Agents and any of their respective Affiliates may extend credit
to, accept deposits from and generally engage in any kind of banking, trust,
debt, equity or other business with the Seller, Triumph, the Servicer or any
Originator or any of their Affiliates.  With respect to the acquisition of the
Eligible Receivables pursuant to this Agreement, each of the Purchaser Agents
and the Administrator shall have the same rights and powers under this Agreement
as any Purchaser and may exercise the same as though it were not such an agent,
and the terms “Purchaser” and “Purchasers” shall include, to the extent
applicable, each of the Purchaser Agents and the Administrator in their
individual capacities.

 

Section 5.8                                      Indemnification.  Each Related
Committed Purchaser shall indemnify and hold harmless the Administrator (but
solely in its capacity as Administrator) and its officers,

 

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directors, employees, representatives and agents (to the extent not reimbursed
by the Seller, the Servicer or any Originator and without limiting the
obligation of the Seller, the Servicer, or any Originator to do so), ratably
(based on its Commitment) from and against any and all liabilities, obligations,
losses, damages, penalties, judgments, settlements, costs, expenses and
disbursements of any kind whatsoever (including in connection with any
investigative or threatened proceeding, whether or not the Administrator or such
Person shall be designated a party thereto) that may at any time be imposed on,
incurred by or asserted against the Administrator or such Person as a result of,
or related to, any of the transactions contemplated by the Transaction Documents
or the execution, delivery or performance of the Transaction Documents or any
other document furnished in connection therewith (but excluding any such
liabilities, obligations, losses, damages, penalties, judgments, settlements,
costs, expenses or disbursements resulting solely from the gross negligence or
willful misconduct of the Administrator or such Person as finally determined by
a court of competent jurisdiction).

 

Section 5.9                                      Successor Administrator.  The
Administrator may, upon at least five (5) days’ notice to the Seller, each
Purchaser and Purchaser Agent, resign as Administrator.  Such resignation shall
not become effective until a successor Administrator is appointed by the
Majority Purchaser Agents and has accepted such appointment.  Upon such
acceptance of its appointment as Administrator hereunder by a successor
Administrator, such successor Administrator shall succeed to and become vested
with all the rights and duties of the retiring Administrator, and the retiring
Administrator shall be discharged from its duties and obligations under the
Transaction Documents.  After any retiring Administrator’s resignation
hereunder, the provisions of Sections 3.1 and 3.2 and this Article V shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
the Administrator.

 

ARTICLE VI

MISCELLANEOUS

 

Section 6.1                                      Amendments, Etc.  No amendment
or waiver of any provision of this Agreement or any other Transaction Document,
or consent to any departure by the Seller or the Servicer therefrom, shall be
effective unless in a writing signed by the Administrator and the Majority
Purchaser Agents, and, in the case of any amendment, by the other parties
thereto; and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that, to the extent required by the securitization program of any
Conduit Purchaser, no such material amendment shall be effective until the
Rating Agency Condition shall have been satisfied with respect thereto;
provided, further that no amendment to the definition of “Concentration
Percentage” shall be effective until the Rating Agency Condition shall have been
satisfied with respect thereto; provided, further that no such amendment or
waiver shall, without the consent of each affected Purchaser, (A) extend the
date of any payment or deposit of Collections by the Seller or the Servicer,
(B) reduce the rate or extend the time of payment of Discount, (C) reduce any
fees payable to the Administrator, any Purchaser Agent or any Purchaser pursuant
to the applicable Purchaser Group Fee Letter, (D) change the amount of Capital
of any Purchaser, any Purchaser’s pro rata share of the Purchased Interest or
any Related Committed Purchaser’s Commitment, (E) amend, modify or waive any
provision of the definition of “Majority Purchaser Agents” or this Section 6.1,
(F) consent to or permit the assignment or transfer by the Seller of any of its
rights and obligations

 

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under this Agreement, (G) change the definition of “Eligible Receivable,” “Loss
Reserve,” “Loss Reserve Percentage,” “Designated Ineligible Receivable,”
“Dilution Reserve,” “Dilution Reserve Percentage,” “Yield Reserve,” “Dilution
Component Reserve” or “Termination Event”, 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.  No failure on the part of the
Purchasers, the Purchaser Agents or the Administrator 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 6.2                                      Notices, Etc.  All notices and
other communications provided for hereunder shall, unless otherwise stated
herein, be in writing (including facsimile and email communications) and shall
be personally delivered or sent by facsimile or email, or by overnight mail, to
the intended party at the mailing or email address or facsimile number of such
party set forth under its name on the signature pages hereof (or in any other
document or agreement pursuant to which it is or became a party hereto), or at
such other address or facsimile number as shall be designated by such party in a
written notice to the other parties hereto.  All such notices and communications
shall be effective (i) if delivered by overnight mail, when received, and
(ii) if transmitted by facsimile or email, when sent, receipt confirmed by
telephone or electronic means.

 

Section 6.3                                      Successors and Assigns;
Participations; Assignments.

 

(a)                                  Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.  Except as otherwise provided herein, neither
the Seller nor the Servicer may assign or transfer any of its rights or delegate
any of its duties hereunder or under any Transaction Document without the prior
consent of the Administrator and the Purchaser Agents.

 

(b)                                 Participations.  Except as otherwise
specifically provided herein, any Purchaser may sell to one or more Persons
(each, a “Participant”) participating interests in the interests of such
Purchaser hereunder; provided, however, that no Purchaser shall grant any
participation under which the Participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Transaction Document. 
Such Purchaser shall remain solely responsible for performing its obligations
hereunder, and the Seller, each Purchaser Agent and the Administrator shall
continue to deal solely and directly with such Purchaser in connection with such
Purchaser’s rights and obligations hereunder.  A Purchaser shall not agree with
a Participant to restrict such Purchaser’s right to agree to any amendment
hereto.

 

(c)                                  Assignments by Related Committed
Purchasers.  Any Related Committed Purchaser may assign to one or more Persons
(each, a “Purchasing Related Committed Purchaser”), acceptable to (i) the
Administrator and the related Purchaser Agent, in its sole discretion if such
assignee is an Affiliate of any member of an existing Purchaser Group and (ii) 
solely with respect to any assignee that is not an Affiliate of a member of an
existing Purchaser Group, the Administrator and the related Purchaser Agent and,
so long as no Termination Event has occurred, the Seller (such consent not to be
unreasonably withheld), any portion of its Commitment pursuant to a supplement
hereto, substantially in the form of Annex D with any

 

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changes as have been approved by the parties thereto (each, a “Transfer
Supplement”), executed by each such Purchasing Related Committed Purchaser, such
selling Related Committed Purchaser, such related Purchaser Agent and the
Administrator.  Any such assignment by a Related Committed Purchaser cannot be
for an amount less than $20,000,000.  Upon (i) the execution of the Transfer
Supplement, (ii) delivery of an executed copy thereof to the Seller, such
related Purchaser Agent and the Administrator and (iii) payment by the
Purchasing Related Committed Purchaser to the selling Related Committed
Purchaser of the agreed purchase price, if any, such selling Related Committed
Purchaser shall be released from its obligations hereunder to the extent of such
assignment and such Purchasing Related Committed Purchaser shall for all
purposes be a Related Committed Purchaser party hereto and shall have all the
rights and obligations of a Related Committed Purchaser hereunder to the same
extent as if it were an original party hereto.  The amount of the Commitment of
the selling Related Committed Purchaser allocable to such Purchasing Related
Committed Purchaser shall be equal to the amount of the Commitment of the
selling Related Committed Purchaser transferred regardless of the purchase
price, if any, paid therefor.  The Transfer Supplement shall be an amendment
hereof only to the extent necessary to reflect the addition of such Purchasing
Related Committed Purchaser as a “Related Committed Purchaser” and any resulting
adjustment of the selling Related Committed Purchaser’s Commitment.

 

(d)                                 Assignments to Liquidity Providers and other
Program Support Providers.  Any Conduit Purchaser may at any time grant to one
or more of its Liquidity Providers or other Program Support Providers,
participating interests in its portion of the Purchased Interest.  In the event
of any such grant by such Conduit Purchaser of a participating interest to a
Liquidity Provider or other Program Support Provider, such Conduit Purchaser
shall remain responsible for the performance of its obligations hereunder.  The
Seller agrees that each Liquidity Provider and Program Support Provider of any
Conduit Purchaser hereunder shall be entitled to the benefits of Section 1.7.

 

(e)                                  Other Assignment by Conduit Purchasers. 
Each party hereto agrees and consents (i) to any Conduit Purchaser’s assignment,
participation, grant of security interests in or other transfers of any portion
of, or any of its beneficial interest in, the Purchased Interest (or portion
thereof), including without limitation to any collateral agent in connection
with its commercial paper program and (ii) to the complete assignment by any
Conduit Purchaser of all of its rights and obligations hereunder to any other
Person, and upon such assignment such Conduit Purchaser shall be released from
all obligations and duties, if any, hereunder; provided, however, that such
Conduit Purchaser may not, without the prior consent of its Related Committed
Purchasers, make any such transfer of its rights hereunder unless the assignee
(i) is principally engaged in the purchase of assets similar to the assets being
purchased hereunder, (ii) has as its Purchaser Agent the Purchaser Agent of the
assigning Conduit Purchaser and (iii) issues commercial paper or other Notes
with credit ratings substantially comparable to the ratings of the assigning
Conduit Purchaser.  Any assigning Conduit Purchaser shall deliver to any
assignee a Transfer Supplement with any changes as have been approved by the
parties thereto, duly executed by such Conduit Purchaser, assigning any portion
of its interest in the Purchased Interest to its assignee.  Such Conduit
Purchaser shall promptly (i) notify each of the other parties hereto of such
assignment and (ii) take all further action that the assignee reasonably
requests in order to evidence the assignee’s right, title and interest in such
interest in the Purchased Interest and to enable the assignee to exercise or
enforce any rights of such Conduit

 

26

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Purchaser hereunder.  Upon the assignment of any portion of its interest in the
Purchased Interest, the assignee shall have all of the rights hereunder with
respect to such interest (except that the Discount therefor shall thereafter
accrue at the rate, determined with respect to the assigning Conduit Purchaser
unless the Seller, the related Purchaser Agent and the assignee shall have
agreed upon a different Discount).

 

(f)                                    Opinions of Counsel.  If required by the
Administrator or the applicable Purchaser Agent or to maintain the ratings of
any Conduit Purchaser, each Transfer Supplement must be accompanied by an
opinion of counsel of the assignee as to such matters as the Administrator or
such Purchaser Agent may reasonably request.

 

Section 6.4                                      Costs, Expenses and Taxes. 
(a)  By way of clarification, and not of limitation of Sections 1.7 or 3.1, the
Seller shall pay to the Administrator, each Liquidity Agent, each Purchaser
Agent and each member of each Purchaser Group on demand all costs and expenses
in connection with (i) the preparation, execution, delivery and administration
(including amendments or waivers of any provision) of this Agreement or the
other Transaction Documents and other documents to be delivered hereunder and
thereunder, (ii) the sale of the Purchased Interest (or any portion thereof)
from the Seller to the Purchasers hereunder, (iii) the perfection (and
continuation) of the Administrator’s rights in the Receivables, Collections and
other Pool Assets, (iii) the enforcement by the Administrator, any Purchaser
Agent or any member of any Purchaser Group of the obligations of the Seller, the
Servicer or the Originators under the Transaction Documents or of any Obligor
under a Receivable and (iv) the maintenance by the Administrator of the Lock-Box
Accounts (and any related lock-box or post office box), including Attorney Costs
of legal counsel for the Administrator and any member of any Purchaser Group
relating to any of the foregoing or to advising the Administrator, any member of
any Purchaser Group, any related Liquidity Provider or any other related Program
Support Provider about its rights and remedies under any Transaction Document or
any other document, agreement or instrument related thereto and all costs and
out-of-pocket expenses (including Attorney Costs) of the Administrator, each
Purchaser Agent and each Purchaser in connection with the enforcement or
administration of the Transaction Documents or any other document, agreement or
instrument related thereto.  The Seller shall reimburse the Administrator and
each Purchaser Agent for the cost of such Person’s auditors auditing the books,
records and procedures of the Seller or the Servicer and the cost of such
Person’s due diligence.  The Seller shall reimburse each Conduit Purchaser on
demand for all reasonable costs and expenses incurred by such Conduit Purchaser
in connection with the Transaction Documents or the transactions contemplated
thereby, including certain costs related to the Rating Agencies and reasonable
fees and out of pocket expenses of counsel of the Administrator and each member
of any Purchaser Group for advice relating to such Conduit Purchaser’s operation
in connection with the transactions contemplated by the Transaction Documents.

 

(b)                                 In addition, the Seller shall pay on demand
any and all stamp, franchise and other taxes and fees payable in connection with
the execution, delivery, filing and recording of this Agreement or the other
documents or agreements to be delivered hereunder, and agrees to save each
Indemnified Party and Affected Person harmless from and against any liabilities
with respect to or resulting from any delay in paying or omission to pay such
taxes and fees.

 

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Section 6.5                                      No Proceedings; Limitation on
Payments.  (a)  Each of the Seller, Triumph, the Servicer, the Administrator,
the Purchaser Agents, the Purchasers, each assignee of the Purchased Interest or
any interest therein, and each Person that enters into a commitment to purchase
the Purchased Interest or interests therein, hereby covenants and agrees that it
will not institute against, or join any other Person in instituting against, any
Conduit Purchaser any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, for one year and one day after the latest maturing
Note issued by such Conduit Purchaser is paid in full. The provisions of this
paragraph shall survive any termination of this Agreement.  Each party hereto
agrees that it will not institute against, or join any Person in instituting
against, the Seller any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any federal or state bankruptcy or similar law, for
one year and one day after which all indebtedness and other obligations of the
Seller hereunder and under each other Transaction Document shall have been paid
in full; provided that, if a Termination Event has occurred and is continuing,
the Administrator may take any such action with the prior written consent of the
Majority Purchaser Agents.

 

(b)                                 Notwithstanding any provisions contained in
this Agreement to the contrary, no Conduit Purchaser shall or shall be obligated
to, pay any amount, if any, payable by it pursuant to this Agreement or any
other Transaction Document unless (i) such Conduit Purchaser has received funds
which may be used to make such payment and which funds are not required to repay
the Notes when due and (ii) after giving effect to such payment, either (x) such
Conduit Purchaser could issue Notes to refinance all outstanding Notes (assuming
such outstanding Notes matured at such time) in accordance with the program
documents governing such Conduit Purchaser’s securitization program or (y) all
Notes are paid in full.  Any amount which such Conduit Purchaser does not pay
pursuant to the operation of the preceding sentence shall not constitute a claim
(as defined in §101 of the Bankruptcy Code) against or company obligation of
such Conduit Purchaser for any such insufficiency unless and until such Conduit
Purchaser satisfies the provisions of clauses (i) and (ii) above.  The
provisions of this paragraph shall survive any termination of this Agreement.

 

Section 6.6                                      GOVERNING LAW AND JURISDICTION.

 

(a)                                  THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO ANY OTHERWISE APPLICABLE CONFLICTS OF LAW PRINCIPLES (OTHER THAN
SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK) EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF A SECURITY
INTEREST OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

(b)                                 ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK; AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, TO THE

 

28

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NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO.  EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY NEW YORK LAW.

 

Section 6.7                                      Confidentiality.  Unless
otherwise required by applicable law (including any disclosure required by the
Exchange Act, except with respect to any Fee Letter), each of the Seller and the
Servicer agrees to maintain the confidentiality of this Agreement and the other
Transaction Documents (and all drafts thereof) in communications with third
parties and otherwise; provided, that this Agreement may be disclosed (a) to
third parties to the extent such disclosure is made pursuant to a written
agreement of confidentiality in form and substance reasonably satisfactory to
the Administrator and each Purchaser Agent and (b) to the Seller’s and
Servicer’s legal counsel and auditors if they agree to hold it confidential. 
Unless otherwise required by applicable law, rules or regulations, the Purchaser
Agents and the Purchasers agree to maintain the confidentiality of non-public
financial information regarding the Seller, the Servicer and the Originators;
provided, that such information may be disclosed (i) to third parties to the
extent such disclosure is made pursuant to a written agreement of
confidentiality in form and substance reasonably satisfactory to the Servicer,
(ii) to legal counsel and auditors of the Purchasers, the Purchaser Agents or
the Administrator if they agree to hold it confidential, (iii) to the rating
agencies rating the Notes of any Conduit Purchaser, (iv) to any Program Support
Provider or potential Program Support Provider (if such potential Program
Support Provider agrees to hold it confidential), (v) to any placement agency
placing the Notes, and (vi) to any regulatory authorities having jurisdiction
over the Administrator, the Purchaser Agents, any Purchaser, any Program Support
Provider or any Liquidity Provider.

 

Section 6.8                                      Execution in Counterparts. 
This Agreement may be executed in any number of 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.

 

Section 6.9                                      Survival of Termination.  The
provisions of Sections 1.7, 1.9, 1.10, 3.1, 3.2, 6.4, 6.5, 6.6, 6.7, 6.10 and
6.15 shall survive any termination of this Agreement.

 

Section 6.10                                WAIVER OF JURY TRIAL.  EACH OF THE
PARTIES HERETO WAIVES THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY IN ANY ACTION, PROCEEDING OR OTHER LITIGATION
OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE.  EACH OF THE
PARTIES HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES
HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT

 

29

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TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF.  THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT.

 

Section 6.11                                Sharing of Recoveries.  Each
Purchaser agrees that if it receives any recovery, through set-off, judicial
action or otherwise, on any amount payable or recoverable hereunder in a greater
proportion than should have been received hereunder or otherwise inconsistent
with the provisions hereof, then the recipient of such recovery shall purchase
for cash an interest in amounts owing to the other Purchasers (as return of
Capital or otherwise), without representation or warranty except for the
representation and warranty that such interest is being sold by each such other
Purchaser free and clear of any Adverse Claim created or granted by such other
Purchaser, in the amount necessary to create proportional participation by the
Purchaser in such recovery.  If all or any portion of such amount is thereafter
recovered from the recipient, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.

 

Section 6.12                                Right of Setoff.  Each Purchaser is
hereby authorized (in addition to any other rights it may have) at any time
after the occurrence of a Termination Event to setoff, appropriate and apply
(without presentment, demand, protest or other notice which are hereby expressly
waived) any deposits and any other indebtedness held or owing by such Purchaser
(including by any branches or agencies of such Purchaser) to, or for the account
of, the Seller against amounts owing by the Seller hereunder (even if contingent
or unmatured).

 

Section 6.13                                Entire Agreement.  This Agreement
and the other Transaction Documents embody the entire agreement and
understanding between the parties hereto, and supersede all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.

 

Section 6.14                                Headings.  The captions and headings
of this Agreement and any Exhibit, Schedule or Annex hereto are for convenience
of reference only and shall not affect the interpretation hereof or thereof.

 

Section 6.15                                Purchaser Groups’ Liabilities.  The
obligations of each Purchaser Agent and each Purchaser under the Transaction
Documents are solely the corporate obligations of such Person.  Except with
respect to any claim arising out of the willful misconduct or gross negligence
of the Administrator, any Purchaser Agent or any Purchaser, no claim may be made
by the Seller or the Servicer or any other Person against the Administrator, any
Purchaser Agent or any Purchaser 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 other Transaction Document, or any act,
omission or event occurring in connection therewith; and each of Seller and
Servicer 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.

 

30

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Section 6.16                                Call Option.  The Seller shall have
the right to repurchase the Purchased Interest from the Purchasers on any
Settlement Date on the terms hereinafter set forth in this Section 6.16.  The
Seller shall give the Administrator and each Purchaser Agent at least ten
(10) Business Days’ prior written notice of such repurchase and upon payment of
the repurchase price for the Purchased Interest, as hereinafter provided, the
Purchasers shall be deemed to have reconveyed the Purchased Interest to the
Seller without recourse, representation or warranty except for a representation
from the related Purchasers that the Purchased Interest assigned is (or
concurrently with the Administrator’s receipt of such repurchase price shall
become) free of any lien, security interest or other charge or encumbrance
created by the Purchasers.  The Seller shall pay such repurchase price for the
Purchased Interest in immediately available funds to the Administrator in an
amount equal to the sum of (i) the aggregate of the Discount accrued for each
Portion of Capital for the Purchasers accrued to and including the repurchase
date, (ii) the Capital for the Purchasers, (iii) the amounts payable pursuant to
each of Sections 1.5, 1.7, 1.8 and 1.9 and Article III of which the Seller has
notice) related to the Purchased Interest accrued to and including the
repurchase date, (iv) all other obligations that are then due and payable and
(v) if Triumph is not the Servicer, the Purchasers’ Share of the Servicing Fee
allocated to the Purchased Interest that has accrued to and including the
repurchase date.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.

 

 

TRIUMPH RECEIVABLES, LLC, as Seller

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

Address:

 

 

 

1550 Liberty Ridge

 

Suite 100

 

Wayne, PA 19087

 

 

 

Attention:

 

Telephone:

 

Facsimile:

 

 

 

 

 

TRIUMPH GROUP, INC., individually and as
Servicer

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

Address:

 

 

 

 

 

1550 Liberty Ridge

 

Suite 100

 

Wayne, PA 19087

 

 

 

Attention:

 

Telephone:

 

Facsimile:

 

S-1

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THE PURCHASER GROUPS:

 

 

 

PNC BANK, NATIONAL ASSOCIATION, as
Purchaser Agent for the Market Street Purchaser
Group

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

Address:

PNC Bank, National Association

 

 

One PNC Plaza

 

 

249 Fifth Avenue

 

 

Pittsburgh, Pennsylvania 15222-2707

 

 

 

 

Attention:

William Falcon

 

Telephone:

(412) 762-5442

 

Facsimile:

(412) 762-9184

 

S-2

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MARKET STREET FUNDING LLC,

 

as Related Committed Purchaser

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

Address:

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

 

 

6525 Morrison Blvd., Suite 318

 

 

Charlotte, North Carolina 28211

 

 

 

 

Attention:

Douglas K. Johnson

 

Telephone:

(704) 365-0569

 

Facsimile:

(704) 365-1362

 

 

 

Commitment: $125,000,000

 

 

 

 

 

MARKET STREET FUNDING LLC,

 

as Conduit Purchaser

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

Address:

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

 

 

6525 Morrison Blvd., Suite 318

 

 

Charlotte, North Carolina 28211

 

 

 

 

Attention:

Douglas K. Johnson

 

Telephone:

(704) 365-0569

 

Facsimile:

(704) 365-1362

 

S-3

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PNC BANK, NATIONAL ASSOCIATION, as
Administrator

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

Address:

PNC Bank, National Association

 

 

One PNC Plaza

 

 

249 Fifth Avenue

 

 

Pittsburgh, Pennsylvania 15222-2707

 

 

 

 

Attention:

William Falcon

 

Telephone:

(412) 762-5442

 

Facsimile:

(412) 762-9184

 

S-4

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EXHIBIT I
DEFINITIONS

 

As used in this Agreement (including its Exhibits, Schedules and Annexes), each
of the following terms shall have the following meaning (such meaning to be
equally applicable to both the singular and plural forms of the terms defined).
Unless otherwise indicated, all Section, Annex, Exhibit and Schedule references
in this Exhibit are to Sections of and Annexes, Exhibits and Schedules to this
Agreement.

 

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

 

“Adverse Claim” means a lien, security interest or other charge or encumbrance,
or any other type of preferential arrangement; it being understood that any
thereof in favor of the Administrator (for the benefit of the Purchasers) shall
not constitute an Adverse Claim.

 

“Affected Person” has the meaning set forth in Section 1.7 of this Agreement.

 

“Affiliate” means, as to any Person: (a) any Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person, or (b) who is a director or officer: (i) of such Person or (ii) of
any Person described in clause (a), except that, in the case of each Conduit
Purchaser, Affiliate shall mean the holder of its capital stock or membership
interest, as the case may be.  For purposes of this definition, control of a
Person shall mean the power, direct or indirect: (x) to vote 25% or more of the
securities having ordinary voting power for the election of directors of such
Person, or (y) to direct or cause the direction of the management and policies
of such Person, in either case whether by ownership of securities, contract,
proxy or otherwise.

 

“Aggregate Capital” means the amount paid to the Seller in respect of the
Purchased Interest or portion thereof by each Purchaser pursuant to this
Agreement, as reduced from time to time by Collections distributed and applied
on account of such Aggregate Capital pursuant to Section 1.4(d) of this
Agreement; provided, that if such Aggregate Capital shall have been reduced by
any distribution, and thereafter all or a portion of such distribution is
rescinded or must otherwise be returned for any reason, such Aggregate Capital
shall be increased by the amount of such rescinded or returned distribution as
though it had not been made.

 

“Aggregate Discount” at any time, means the sum of the aggregate for each
Purchaser of the accrued and unpaid Discount with respect to each such
Purchaser’s Capital at such time.

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Alternate Rate” for any Yield Period for any Capital (or portion thereof)
funded by any Purchaser other than through the issuance of Notes, means an
interest rate per annum equal to: (a) 2.0% per annum above the Euro-Rate for
such Yield Period, or, in the sole discretion of the applicable Purchaser Agent
(b) the Base Rate for such Yield Period; provided, however, that the “Alternate
Rate” for any day while a Termination Event exists shall be an interest rate
equal to 2.0% per annum above the Base Rate in effect on such day.

 

I-1

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“Assumption Agreement” means an agreement substantially in the form set forth in
Annex C to this Agreement.

 

“Attorney Costs” means and includes all reasonable fees, costs and disbursements
of any law firm or other external counsel, the reasonable allocated cost of
internal legal services and all reasonable disbursements of internal counsel.

 

“Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11
U.S.C. § 101, et seq.), as amended from time to time.

 

“Bankruptcy Opinion” means each opinion of Ballard Spahr Andrews & Ingersoll,
LLP regarding true sale and substantive consolidation matters delivered to the
Administrator and each Purchaser Group (including, without limitation, such
opinion delivered on the Closing Date).

 

“Base Rate” means, for any day, a fluctuating interest rate per annum as shall
be in effect from time to time, which rate shall be at all times equal to the
higher of:

 

                                               
(a)                                  the rate of interest in effect for such day
as publicly announced from time to time by the Administrator as its “reference
rate”.  Such “reference rate” is set by the Administrator based upon various
factors, including the Administrator’s costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above or below such announced rate,
and

 

                                               
(b)                                 0.50% per annum above the latest Federal
Funds Rate.

 

“BBA” means the British Bankers’ Association.

 

“Business Day” means any day (other than a Saturday or Sunday) on which:
(a) banks are not authorized or required to close in Pittsburgh, Pennsylvania,
or New York City, New York, and (b) if this definition of “Business Day” is
utilized in connection with the Euro-Rate, dealings are carried out in the
London interbank market.

 

“Capital” means with respect to any Purchaser the amount paid to the Seller by
such Purchaser pursuant to this Agreement, as reduced from time to time by
Collections distributed and applied on account of such Capital pursuant to
Section 1.4(d) of this Agreement; provided, that if such Capital shall have been
reduced by any distribution and thereafter all or a portion of such distribution
is rescinded or must otherwise be returned for any reason, such Capital shall be
increased by the amount of such rescinded or returned distribution as though it
had not been made.

 

“Change in Control” means (i) that Triumph ceases to own, directly or
indirectly, (a) 100% of the voting equity interests of the Seller free and clear
of all Adverse Claims unless the Administrator and the Majority Purchaser Agents
provide prior written consent with respect thereto or (b) a majority of the
voting equity interests of any Originator or (ii) the acquisition by any Person,
or two or more Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act) of 20% or more of the outstanding voting stock of Triumph.

 

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“Closing Date” means August 7, 2008.

 

“Collections” means, with respect to any Pool Receivable: (a) all funds that are
received by any Originator, Triumph, the Seller or the Servicer in payment of
any amounts owed in respect of such Receivable (including purchase price,
finance charges, interest and all other charges), or applied to amounts owed in
respect of such Receivable (including insurance payments and net proceeds of the
sale or other disposition of repossessed goods or other collateral or property
of the related Obligor or any other Person directly or indirectly liable for the
payment of such Pool Receivable and available to be applied thereon), (b) all
Deemed Collections and (c) all other proceeds of such Pool Receivable.

 

“Commitment” means, with respect to each Related Committed Purchaser, the
maximum aggregate amount which such Purchaser is obligated to pay hereunder on
account of any Purchase, as set forth below its signature to this Agreement or
in the Assumption Agreement or Transfer Supplement pursuant to which it became a
Purchaser, as such amount may be modified in connection with any subsequent
assignment pursuant to Section 6.3(c) or in connection with a change in the
Purchase Limit pursuant to Section 1.1(b).

 

“Commitment Percentage” means, for each Related Committed Purchaser in a
Purchaser Group, such Related Committed Purchaser’s Commitment divided by the
total of all Commitments of all Related Committed Purchasers in such Purchaser
Group.

 

“Company Note” has the meaning set forth in Section 3.1 of the Sale Agreement.

 

“Concentration Percentage” means, at any time, (a) for any Special Obligor, 25%,
(b) for any Group A Obligor, 12%, (c) for any Group B Obligor, 10%, (d) for any
Group C Obligor, 8% and (e) for any Group D Obligor, 5%; provided, that the
Administrator may, in its sole discretion, increase the “Concentration
Percentage” for any particular Obligor; provided, further, that the
Administrator may, in its sole discretion, at any time thereafter, upon 5
Business Days’ written notice to the Seller and the Servicer, decrease the then
applicable “Concentration Percentage” of any such Obligor which has been
increased pursuant to the proviso above to a percentage satisfactory to it at
such time, which such decrease shall not result in the applicable “Concentration
Percentage” being lower than the related “Concentration Percentage” set forth in
clauses (b), (c), (d) or (e) above.

 

“Concentration Reserve” means, at any time, the product of (a) the Capital at
such time, multiplied by (b)(i) the Concentration Reserve Percentage divided by
(ii) 1 minus the Concentration Reserve Percentage.

 

“Concentration Reserve Percentage” means at any time, the (a) largest of the
following: (i) the sum of the four (4) largest Group D Obligor Receivables
balances (up to the Concentration Percentage for each Obligor), (ii) the sum of
the two (2) largest Group C Obligor Receivables balances (up to the
Concentration Percentage for each Obligor), (iii) the largest Group B Obligor
Receivables balance (up to the Concentration Percentage for each Obligor), and
(iv) the largest Group A Obligor Receivables balance (up to the Concentration
Percentage for such Obligor), divided by (b) the aggregate Outstanding Balance
of all Eligible Receivables.

 

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 “Conduit Purchasers” means each commercial paper conduit that is a party to
this Agreement, as a purchaser, or that becomes a party to this Agreement, as a
purchaser pursuant to an Assumption Agreement or Transfer Supplement.

 

“Contract” means, with respect to any Receivable, any and all contracts,
instruments, agreements, leases, invoices, notes or other writings pursuant to
which such Receivable arises or that evidence such Receivable or under which an
Obligor becomes or is obligated to make payment in respect of such Receivable.

 

“CP Rate” means, for any Conduit Purchaser and for any Yield Period for any
Portion of Capital (a) the per annum rate equivalent to the weighted average
cost (as determined by the applicable Purchaser Agent and which shall include
commissions of placement agents and dealers, incremental carrying costs incurred
with respect to Notes of such Person maturing on dates other than those on which
corresponding funds are received by such Conduit Purchaser, other borrowings by
such Conduit Purchaser (other than under any Program Support Agreement) and any
other costs associated with the issuance of Notes) of or related to the issuance
of Notes that are allocated, in whole or in part, by the applicable Purchaser
Agent to fund or maintain such Portion of Capital (and which may be also
allocated in part to the funding of other assets of such Conduit Purchaser);
provided, however, that if any component of such rate is a discount rate, in
calculating the “CP Rate” for such Portion of Capital for such Yield Period, the
applicable Purchaser Agent shall for such component use the rate resulting from
converting such discount rate to an interest bearing equivalent rate per annum;
provided, further, that notwithstanding anything in this Agreement or the other
Transaction Documents to the contrary, the Seller agrees that any amounts
payable to the Purchasers in respect of Discount for any Yield Period with
respect to any Portion of Capital funded by such Purchaser at the CP Rate shall
include an amount equal to the portion of the face amount of the outstanding
Notes issued to fund or maintain such Portion of Capital that corresponds to the
portion of the proceeds of such Notes that was used to pay the interest
component of maturing Notes issued to fund or maintain such Portion of Capital,
to the extent that such Purchaser had not received payments of interest in
respect of such interest component prior to the maturity date of such maturing
Notes (for purposes of the foregoing, the “interest component” of Notes equals
the excess of the face amount thereof over the net proceeds received by such
Purchaser from the issuance of Notes, except that if such Notes are issued on an
interest-bearing basis its “interest component” will equal the amount of
interest accruing on such Notes through maturity) or (b) any other rate
designated as the “CP Rate” for such Conduit Purchaser in an Assumption
Agreement or Transfer Supplement pursuant to which such Person becomes a party
as a Conduit Purchaser to this Agreement, or any other writing or agreement
provided by such Conduit Purchaser to the Seller, the Servicer and the
applicable Purchaser Agent from time to time.  The “CP Rate” for any day while a
Termination Event or an Unmatured Termination Event exists shall be an interest
rate equal to 2.0% per annum above the Base Rate as in effect on such day.

 

“Credit and Collection Policy” means, as the context may require, those
receivables credit and collection policies and practices of each Originator and
of Triumph in effect on the date of this Agreement and described in Schedule I
to this Agreement, as modified in compliance with this Agreement.

 

“Cut-off Date” has the meaning set forth in Section 1.1(a) of the Sale
Agreement.

 

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“Days’ Sales Outstanding” means, for any calendar month, an amount computed as
of the last day of such calendar month equal to: (a) the average of the
Outstanding Balance of all Pool Receivables as of the last day of each of the
three most recent calendar months ended on the last day of such calendar month
divided by (b)(i) the aggregate credit sales made by the Originators during the
three calendar months ended on the last day of such calendar month divided by
(ii) 90.

 

“Debt” means: (a) indebtedness for borrowed money, (b) obligations evidenced by
bonds, debentures, notes or other similar instruments, (c) obligations to pay
the deferred purchase price of property or services, (d) obligations as lessee
under leases that shall have been or should be, in accordance with GAAP,
recorded as capital leases, and (e) obligations under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clauses
(a) through (d).

 

“Declining Conduit Purchaser” has the meaning set forth in Section 1.4(b)(ii) of
this Agreement.

 

“Declining Notice” has the meaning set forth in Section 1.4(b)(ii) of this
Agreement.

 

“Deemed Collections” has the meaning set forth in Section 1.4(e)(ii) of this
Agreement.

 

“Default Ratio” means the ratio (expressed as a percentage and rounded to the
nearest 1/100 of 1%) computed as of the last day of each calendar month by
dividing: (a) the aggregate Outstanding Balance of all Pool Receivables that
became Defaulted Receivables (excluding, solely for purposes of calculating the
Default Ratio in clauses (i) and (ii) of paragraph (f) of Exhibit V to this
Agreement, Designated Ineligible Receivables) during such calendar month (other
than Receivables that became Defaulted Receivables as a result of an Event of
Bankruptcy with respect to the Obligor thereof during such month), by (b) the
aggregate credit sales made by the Originator during the calendar month that is
6 calendar months before such calendar month.

 

“Defaulted Receivable” means a Receivable:

 

                                               
(a)                                  as to which any payment, or part thereof,
remains unpaid for more than 150 days from the original due date for such
payment, or

 

                                               
(b)                                 without duplication (i) as to which an Event
of Bankruptcy shall have occurred with respect to the Obligor thereof or any
other Person obligated thereon or owning any Related Security with respect
thereto, or (ii) that has been written off the Seller’s books as uncollectible.

 

“Delinquency Ratio” means the ratio (expressed as a percentage and rounded to
the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the
last day of each calendar month by dividing: (a) the aggregate Outstanding
Balance of all Pool Receivables that were Delinquent Receivables on such day
(excluding Designated Ineligible Receivables) by (b) the aggregate Outstanding
Balance of all Pool Receivables on such day (excluding Designated Ineligible
Receivables).

 

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

 

“Designated Ineligible Receivable” means a Receivable due from any Obligor which
is identified by the Servicer on the Information Package for the then most
recent calendar month as a Receivable not generally representative of the other
Pool Receivables; provided, that, at no time shall the aggregate Outstanding
Balance of all Designated Ineligible Receivables exceed 10% of the aggregate
Outstanding Balance of all Pool Receivables.  Once designated as such, a
Designated Ineligible Receivable will continue to be a Designated Ineligible
Receivable until retired or paid in full.

 

“Dilution Component Reserve” means at any time, the product of (a) the Aggregate
Capital, and (b)(i) the Dilution Component Reserve Percentage, divided by (ii) 1
minus the Dilution Component Reserve Percentage.

 

“Dilution Component Reserve Percentage” means, at any time, the product of
(a) the Twelve-Month Average Dilution Ratio multiplied by (b) the Dilution
Horizon.

 

“Dilution Horizon” means, for any calendar month, the ratio (expressed as a
percentage and rounded to the nearest 1/100th of 1%) computed as of the last day
of such calendar month of: (a) the sum of (x) the aggregate credit sales made by
all the Originators during the most recent calendar month and (y) the product of
(A) 50% and (B) the aggregate credit sales made by all Originators during the
second most recent calendar month, to (b) the Net Receivables Pool Balance at
the last day of such calendar month.

 

“Dilution Ratio” means the ratio (expressed as a percentage and rounded to the
nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as of the
last day of each calendar month by dividing: (a) the aggregate amount of
payments made or owed by the Seller pursuant to Section 1.4(e)(i) of this
Agreement during such calendar month by (b) the aggregate credit sales made by
all the Originators during the calendar month that is one month prior to such
calendar month.

 

“Dilution Reserve” means, on any day, an amount equal to: (a) the Aggregate
Capital at the close of business of the Servicer on such day multiplied by
(b) (i) the Dilution Reserve Percentage on such day, divided by (ii) 100% minus
the Dilution Reserve Percentage on such day.

 

“Dilution Reserve Percentage” means on any date, the product of (a) the Dilution
Horizon multiplied by (b) the sum of (i) 2 times the Twelve-Month Average
Dilution Ratio and (ii) the Dilution Spike Factor.

 

“Dilution Spike Factor” means, for any calendar month, the product of a) the
positive difference, if any, between:  (i) the highest Dilution Ratio for any
calendar month during the twelve most recent calendar months and (ii) the
Twelve-Month Average Dilution Ratio for such twelve months and (b) (i) the
highest Dilution Ratio for any calendar month during the twelve most recent
calendar months, divided by (ii) the Twelve-Month Average Dilution Ratio for
such twelve months.

 

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“Discount” means with respect to any Purchaser:

 

(a)                                  for any Portion of Capital for any Yield
Period with respect to any Purchaser to the extent such Portion of Capital will
be funded by such Purchaser during such Yield Period through the issuance of
Notes:

 

CPR x C x ED/360 + YPF

 

(b)                                 for any Portion of Capital for any Yield
Period with respect to any Purchaser to the extent such Portion of Capital will
not be funded by such Purchaser during such Yield Period through the issuance of
Notes:

 

AR x C x ED/Year + YPF

 

where:

 

AR                              =              the Alternate Rate for such
Portion of Capital for such Yield Period with respect to such Purchaser,

 

C                                        =              the Capital with respect
to such Portion of Capital during such Yield Period with respect to such
Purchaser,

 

CPR                         =              the CP Rate for the Portion of
Capital for such Yield Period with respect to such Purchaser,

 

ED                                =              the actual number of days
during such Yield Period,

 

Year                        =              if such Portion of Capital is funded
based upon: (i) the Euro-Rate, 360 days, and (ii) the Base Rate, 365 or 366
days, as applicable, and

 

YPF                          =              the Yield Protection Fee, if any,
for the Portion of Capital for such Yield Period with respect to such Purchaser;

 

provided, that no provision of this Agreement shall require the payment or
permit the collection of Discount in excess of the maximum permitted by
applicable law; and provided further, that Discount for any Portion of Capital
shall not be considered paid by any distribution to the extent that at any time
all or a portion of such distribution is rescinded or must otherwise be returned
for any reason.

 

“Eligible Foreign Obligor” means an Obligor which is organized under the laws of
any country (other than the United States) that has a long-term foreign currency
rating of at least “A” by Standard & Poor’s and “A2” by Moody’s.

 

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

 

(a)                                  the Obligor of which (i) is (x) organized
under the laws of any State of the United States or is qualified to do business
in any State of the United States, (y) an

 

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Eligible Foreign Obligor or (z) a government or a governmental subdivision or
department, affiliate or agency, (ii) is not subject to any action of the type
described in paragraph (e) of Exhibit V to this Agreement, and (iii) is not an
Affiliate of Triumph or any Affiliate of any Originator;

 

                                               
(b)                                 that is denominated and payable only in U.S.
dollars in the United States, and the Obligor with respect to which has been
instructed in writing by the Servicer, the Seller, the applicable Originator or
the applicable Sub-Servicer, if any, in accordance with Sections 1(f) and
2(f) of Exhibit IV to remit Collections in respect thereof to a Lock-Box Account
in the United States,

 

                                               
(c)                                  that does not have a stated maturity which
is more than 90 days after the original invoice date of such Receivable,

 

                                               
(d)                                 that arises under a duly authorized Contract
for the sale and delivery of goods and services in the ordinary course of an
Originator’s business,

 

                                               
(e)                                  that arises under a duly authorized
Contract that is in full force and effect and that is a legal, valid and binding
obligation of the related Obligor, enforceable against such Obligor in
accordance with its terms,

 

                                               
(f)                                    that conforms in all material respects
with all applicable laws, rulings and regulations in effect and the transfer of
which does not violate any applicable law, rule or regulation in effect,

 

                                               
(g)                                 that is not the subject of any default,
dispute, offset, hold back defense, Adverse Claim, litigation or other claim
(other than the Judgment Lien solely in respect of a Receivable originated by
Triumph Composite Systems, Inc.),

 

                                               
(h)                                 that satisfies all applicable requirements
of the applicable Credit and Collection Policy,

 

                                               
(i)                                     that has not been modified, waived or
restructured since its creation, except as permitted pursuant to Section 4.2 of
this Agreement,

 

                                               
(j)                                     in which the Seller owns good and
marketable title, free and clear of any Adverse Claims (other than the Judgment
Lien solely in respect of a Receivable originated by Triumph Composite
Systems, Inc.), and that is freely assignable by the Seller (including without
any consent of the related Obligor) and the representations and warranties with
respect to such Receivable set forth in Sections (3)(a), (b) and (c) of
Exhibit III are true at such time,

 

                                               
(k)                                  for which the Administrator (for the
benefit of each Purchaser) shall have a valid and enforceable undivided
percentage ownership or security interest, to the extent of the Purchased
Interest, and a valid and enforceable first-priority perfected security interest
therein and in the Related Security and Collections with respect thereto, in
each case free and clear of any Adverse Claim (other than the Judgment Lien
solely in respect of a Receivable originated by Triumph Composite
Systems, Inc.),

 

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(l)                                     that constitutes an “account” each as
defined in the UCC and that is not evidenced by instruments or chattel paper,

 

                                               
(m)                               that is not a Defaulted Receivable, a
Delinquent Receivable or a Designated Ineligible Receivable,

 

                                               
(n)                                 for which none of the Originator thereof,
the Seller or the Servicer has established any offset arrangements with the
related Obligor,

 

                                               
(o)                                 for which Defaulted Receivables of the
related Obligor do not exceed 50% of the Outstanding Balance of all such
Obligor’s Receivables,

 

                                               
(p)                                 that represents amounts that are earned and
payable by the Obligor that are not subject to the performance of additional
services or the delivery of additional products or goods by the Originator
thereof, and

 

                                               
(q)                                 that was created in the United States by an
Originator that is organized under the laws of any State of the United States.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to time. 
References to sections of ERISA also refer to any successor sections.

 

“ERISA Affiliate” means: (a) any corporation that is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Internal Revenue Code) as the Seller, any Originator or Triumph, (b) a trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Internal Revenue Code) with the Seller, any Originator
or Triumph, or (c) a member of the same affiliated service group (within the
meaning of Section 414(m) of the Internal Revenue Code) as the Seller, any
Originator, any corporation described in clause (a) or any trade or business
described in clause (b).

 

“Euro-Rate” means with respect to any Yield Period, the interest rate per annum
determined by the Administrator by dividing (the resulting quotient rounded
upwards, if necessary, to the nearest 1/100th of 1% per annum) (i) the rate per
annum equal to the London interbank market offered rate for U.S. dollars quoted
by the BBA as set forth on page 3750 of the Dow Jones Markets Service (formerly
known as Telerate) (or on any successor or substitute page of such service, or
any successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrator from time to time for purposes of providing
quotations of interest rates applicable to dollar deposits in the London
interbank market) at or about 11:00 a.m. (London time) on the Business Day which
is two (2) Business Days prior to the first day of such Yield Period for an
amount comparable to the Portion of Capital to be funded at the Alternate Rate
determined by reference to the Euro-Rate during such Yield Period by (ii) a
number equal to 1.00 minus the Euro-Rate Reserve Percentage.  The Euro-Rate may
also be expressed by the following formula:

 

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Average of London interbank offered rates quoted by BBA

 

as shown on Dow Jones Markets Service display page 3750

 

or appropriate successor

Euro-Rate =

 

 

 

 

 

1.00 - Euro-Rate Reserve Percentage

 

 

where “Euro-Rate Reserve Percentage” means, the maximum effective percentage in
effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including without limitation, supplemental, marginal, and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
“Eurocurrency Liabilities”).  The Euro-Rate shall be adjusted with respect to
any Portion of Capital funded at the Alternate Rate determined by reference to
the Euro-Rate that is outstanding on the effective date of any change in the
Euro-Rate Reserve Percentage as of such effective date The applicable Purchaser
Agent shall give prompt notice to the Seller of the Euro-Rate as determined or
adjusted in accordance herewith (which determination shall be conclusive absent
manifest error).

 

“Event of Bankruptcy” means (a) any case, action or proceeding before any court
or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors or (b) any general assignment for the benefit of creditors of a Person
or any composition, marshalling of assets for creditors of a Person, or other
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; in each of cases (a) and (b) undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.

 

“Excess Concentration” means, without duplication, the sum of the following
amounts:

 

(i)                                     the amount by which the Outstanding
Balance of Eligible Receivables of each Obligor then in the Receivables Pool
exceeds an amount equal to: (a) the Concentration Percentage for such Obligor
multiplied by (b) the aggregate Outstanding Balance of all Eligible Receivables
then in the Receivables Pool;

 

(ii)                                  the amount by which the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivable Pool, the
Obligor of which is an Eligible Foreign Obligor, exceeds 20% of the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivables Pool;

 

(iii)                               the amount by which the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivable Pool, the
Obligor of which is an Eligible Foreign Obligor which resides in the Largest
Foreign Country, exceeds 8.5% of the aggregate Outstanding Balance of all
Eligible Receivables then in the Receivables Pool;

 

(iv)                              the amount by which the aggregate Outstanding
Balance of all Eligible Receivables then in the Receivable Pool, the Obligor of
which is an Eligible Foreign Obligor which resides in any country other than the
Largest Foreign Country, exceeds 3.5% of the aggregate Outstanding Balance of
all Eligible Receivables then in the Receivables Pool;

 

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(v)                                 the amount by which the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivables Pool
with stated maturities which are more than 30 days but less than or equal to 60
days after the original invoice date of such Receivable exceeds 30% of the
aggregate Outstanding Balance of all Eligible Receivables then in the
Receivables Pool;

 

(vi)                              the amount by which the aggregate Outstanding
Balance of all Eligible Receivables then in the Receivables Pool with stated
maturities which are more than 60 days but less than or equal to 90 days after
the original invoice date of such Receivable exceeds 7.5% of the aggregate
Outstanding Balance of all Eligible Receivables then in the Receivables Pool;

 

(vii)                           the amount by which the aggregate Outstanding
Balance of all Eligible Receivables then in the Receivables Pool the Obligor of
which is a Government Entity exceeds 5% of the aggregate Outstanding Balance of
all Eligible Receivables then in the Receivables Pool; and

 

(viii)                        the amount by which the aggregate Outstanding
Balance of all Eligible Receivables then in the Receivables Pool the Obligor of
which is a Canadian resident exceeds 6% of the aggregate Outstanding Balance of
all Eligible Receivables then in the Receivables Pool.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded Receivable” means any indebtedness and other obligations owed to the
Seller (as the assignee of the related Originator) or any such related
Originator by, or any right of such Originator to payment from or on behalf of:

 

(a)  United Technologies Corp., as the Excluded Receivable Obligor, where
Triumph Gear Systems - Macomb, Inc. is the Originator, which indebtedness is
sold to Citibank, N.A. pursuant to that certain Supplier Agreement, dated as of
June 16, 2004, between Triumph Gear Systems - Macomb, Inc. (f/k/a ACR
Industries, Inc.) and Citibank, N.A.;

 

(b)  Honeywell International Inc., as the Excluded Receivable Obligor, where:

 

(i)  Triumph Gear Systems - Macomb, Inc. is the Originator, which indebtedness
is sold to GE Capital pursuant to that certain Purchase Agreement, dated
September 29, 1995 (as amended on December 11, 2006), between Triumph Gear
Systems - Macomb, Inc. and GE Capital;

 

(ii)  Triumph Engineered Solutions, Inc. is the Originator, which indebtedness
is sold to GE Capital pursuant to that certain Purchase Agreement, dated
January 25, 1999, between Triumph Engineered Solutions, Inc. and GE Capital; or

 

(iii)  Triumph Thermal Systems, Inc. is the Originator, which indebtedness is
sold to GE Capital pursuant to that certain Purchase Agreement, dated April 11,
2007, between Triumph Thermal Systems, Inc. and GE Capital,

 

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(c)  United Technologies Corp. or Sikorsky Aircraft Corporation, as the Excluded
Receivable Obligor, where Triumph Fabrications - Hot Springs, Inc. is the
Originator, which indebtedness is sold to Citibank, N.A. pursuant Supplier
Member Agreement, dated as of January 23, 2004, among Triumph Fabrications - Hot
Springs, Inc., Citibank, N.A. and Orbian Corp.; or

 

(d)  General Electric Company, its divisions, business units and/or affiliates
(each, a “GE Business”), as the Excluded Receivable Obligor(s), where Triumph
Gear Systems - Macomb, Inc. is the Originator, which indebtedness is sold to GE
Capital pursuant to each of the purchase orders and purchase requests made from
time to time by any GE Business, by Triumph Gear Systems - Macomb, Inc. for the
benefit of GE Capital;

 

in each case whether constituting an account, chattel paper, payment intangible,
instrument or general intangible, in each instance arising in connection with
the sale of goods or the rendering of services, and includes, without
limitation, the obligation to pay any finance charges, fees and other charges
with respect thereto.

 

“Excluded Receivable Obligor” means, with respect to any Excluded Receivable,
the Person obligated to make payments relating to such Excluded Receivable.

 

“Exiting Purchaser” has the meaning set forth in Section 1.4(b)(ii) of this
Agreement.

 

“Facility Termination Date” means, the earliest to occur of: (a) August 7, 2013,
(b) the date determined pursuant to Section 2.2 of this Agreement, (c) the date
which is 60 days after the date on which the Administrator and each Purchaser
Agent has received written notice from the Seller of its election to terminate
the Purchase Facility and (d) the Seller shall fail to cause the amendment or
modification of any Transaction Document or related opinion as required by
Moody’s or Standard and Poor’s, and such failure shall continue for 30 days
after such amendment or modification is initially requested.

 

“Federal Funds Rate” means, for any day, the per annum rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, “H.15(519)”) for such day opposite the caption “Federal Funds
(Effective).”  If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m.  Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the “Composite 3:30 p.m.
Quotations”) for such day under the caption “Federal Funds Effective Rate.”  If
on any relevant day the appropriate rate is not yet published in either
H.15(519) or the Composite 3:30 p.m.  Quotations, the rate for such day will be
the arithmetic mean as determined by the Administrator of the rates for the last
transaction in overnight Federal funds arranged before 9:00 a.m. (New York City
time) on that day by each of three leading brokers of Federal funds transactions
in New York City selected by the Administrator.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

 

“Fee Letters” has the meaning set forth in Section 1.5 of this Agreement.

 

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“Fees” means the fees payable by the Seller to each member of each Purchaser
Group pursuant to the applicable Purchaser Group Fee Letter.

 

“FIN 46 and Subsequent Statements and Interpretations” has the meaning set forth
in Section 1.7 of this Agreement.

 

“GAAP” means the generally accepted accounting principles and practices in the
United States, consistently applied.

 

“GE Capital” means General Electric Capital Corporation.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including any court, and any Person owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

 

“Governmental Entity” means a federal agency, branch, or other governmental
entity or authority of the United States or a state agency, branch, or
governmental entity or authority of any state in the United States.

 

“Group A Obligor” means any Obligor with a short-term rating of at least:
(a) “A-1” by Standard & Poor’s, or if such Obligor does not have a short-term
rating from Standard & Poor’s, a rating of “A+” or better by Standard & Poor’s
on its long-term senior unsecured and uncredit-enhanced debt securities, and
(b) “P1” by Moody’s, or if such Obligor does not have a short-term rating from
Moody’s, “Al” or better by Moody’s on its long-term senior unsecured and
uncredit-enhanced debt securities.

 

“Group B Obligor” means any Obligor, other than a Group A Obligor, with a
short-term rating of at least: (a) “A-2” by Standard & Poor’s, or if such
Obligor does not have a short-term rating from Standard & Poor’s, a rating of
“BBB” to “A” by Standard & Poor’s on its long-term senior unsecured and
uncredit-enhanced debt securities, and (b) “P2” by Moody’s, or if such Obligor
does not have a short-term rating from Moody’s, “Baa2” to “A2” by Moody’s on its
long-term senior unsecured and uncredit-enhanced debt securities.

 

“Group C Obligor” means any Obligor, other than a Group A Obligor or a Group B
Obligor, with a short-term rating of at least: (a) “A-3” by Standard & Poor’s,
or if such Obligor does not have a short-term rating from Standard & Poor’s, a
rating of “BBB-” by Standard & Poor’s on its long-term senior unsecured and
uncredit-enhanced debt securities, and (b) “P3” by Moody’s, or if such Obligor
does not have a short-term rating from Moody’s, “Baa3” by Moody’s on its
long-term senior unsecured and uncredit-enhanced debt securities.

 

“Group D Obligor” means any Obligor that is not a Group A Obligor, a Group B
Obligor, a Group C Obligor or a Special Obligor.

 

“Group Commitment” means with respect to any Purchaser Group the aggregate of
the Commitments of each Purchaser within such Purchaser Group.

 

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“Group Capital” means with respect to any Purchaser Group, an amount equal to
the aggregate of all Capital of the Purchasers within such Purchaser Group.

 

“Indemnified Amounts” has the meaning set forth in Section 3.1 of this
Agreement.

 

“Indemnified Party” has the meaning set forth in Section 3.1 of this Agreement.

 

“Indemnified Taxes” has the meaning set forth in Section 1.10 of this Agreement.

 

“Independent Director” has the meaning set forth in Section 3(c) of Exhibit IV
to this Agreement.

 

“Information Package” means each report, in substantially the form of Annex A to
this Agreement, furnished by or on behalf of the Servicer to the Administrator
and each Purchaser Agent pursuant to this Agreement.

 

“Insolvency Proceeding” means: (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other similar arrangement in
respect of its creditors generally or any substantial portion of its creditors,
in each case undertaken under U.S. Federal, state or foreign law, including the
Bankruptcy Code.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.  References
to sections of the Internal Revenue Code also refer to any successor sections.

 

“Judgment Lien” means that certain judgment lien against Triumph Composite
Systems, Inc. in favor of Charlotte G. Reves referencing case # 08-9-04293-6,
dated May 20, 2008, which is on file in Spokane County, Washington, so long as
the aggregate liability with respect to such judgment (including attorney’s fees
of the plaintiff) does not exceed $250,000.

 

“Largest Foreign Country” means, on any date of determination, the country where
Eligible Foreign Obligors reside with the largest aggregate Outstanding Balance
of Eligible Receivables; provided, however, that such country shall be The
United Kingdom or Germany.

 

“Liquidity Agent” means each of the banks acting as agent for the various
Liquidity Providers under each Liquidity Agreement.

 

“Liquidity Agreement” means any agreement entered into in connection with this
Agreement pursuant to which a Liquidity Provider agrees to make purchases or
advances to, or purchase assets from, any Conduit Purchaser in order to provide
liquidity for such Conduit Purchaser’s Purchases.

 

“Liquidity Provider” means each bank or other financial institution that
provides liquidity support to any Conduit Purchaser pursuant to the terms of a
Liquidity Agreement.

 

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“Lock-Box Account” means each account and post office box listed on Schedule II
to this Agreement and maintained at a bank, postal institution or other
financial institution acting as a Lock-Box Bank pursuant to a Lock-Box Agreement
for the purpose of receiving Collections.

 

“Lock-Box Agreement” means an agreement, among the Seller, the Servicer, the
Administrator and a Lock-Box Bank, governing the terms of the related Lock-Box
Accounts.

 

“Lock-Box Bank” means any of the banks, postal institutions or other financial
institutions holding one or more Lock-Box Accounts.

 

“Loss Reserve” means, on any date, an amount equal to: (a) the Aggregate Capital
at the close of business of the Servicer on such date multiplied by (b)(i) the
Loss Reserve Percentage on such date divided by (ii) 1, minus the Loss Reserve
Percentage on such date.

 

“Loss Reserve Percentage” means, on any date, (i) the product of (A) 2 times the
highest average of the Default Ratios for any three consecutive calendar months
during the twelve most recent calendar months multiplied by (B) the sum of
(X) the aggregate credit sales made by all Originators during the five most
recent calendar months, and (Y) the Weighted Average Credit Percentage,
multiplied by the aggregate credit sales made by all Originators during the
sixth most recent calendar month, divided by (ii) the Net Receivables Pool
Balance as of such date.

 

“Majority Purchaser Agents” means, at any time, the Purchaser Agents which in
their related Purchaser Group have Related Committed Purchasers whose
Commitments aggregate more than 50% of the aggregate of the Commitments of all
Related Committed Purchasers in all Purchaser Groups; provided, however, that so
long as any one Related Committed Purchaser’s Commitment is greater than 50% of
the aggregate Commitments and there is more than one Purchaser Group, then
“Majority Purchaser Agents” shall mean a minimum of two Purchaser Agents which
in their related Purchaser Group have Related Committed Purchasers whose
Commitments aggregate more than 50% of the aggregate Commitment of all Related
Committed Purchasers in all Purchaser Groups.

 

“Material Adverse Effect” means, relative to any Person with respect to any
event or circumstance, a material adverse effect on:

 

(a)                                  the assets, operations, business or
financial condition of such Person,

 

(b)                                 the ability of any of such Person to perform
its obligations under this Agreement or any other Transaction Document to which
it is a party,

 

(c)                                  the validity or enforceability of any of
the Transaction Documents, or the validity, enforceability or collectibility of
the Pool Receivables, or

 

(d)                                 the status, perfection, enforceability or
priority of the Administrator’s, any Purchaser’s or the Seller’s interest in the
Pool Assets.

 

“Modification” has the meaning set forth in Section 4.2(a) of this Agreement.

 

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

 

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“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA.

 

“Net Receivables Pool Balance” means, at any time: (a) the Outstanding Balance
of Eligible Receivables then in the Receivables Pool minus (b) the Excess
Concentration.

 

“Notes” means short-term promissory notes issued, or to be issued, by any
Conduit Purchaser to fund its investments in accounts receivable or other
financial assets.

 

“Obligor” means, with respect to any Receivable, the Person obligated to make
payments pursuant to the Contract relating to such Receivable.

 

“Originator” means each Person from time to time party to the Sale Agreement as
an Originator.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Transaction Document.

 

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

 

“Participant” has the meaning set forth in Section 6.3(b) of this Agreement.

 

“Paydown Notice” has the meaning set forth in Section 1.4(f) of this Agreement.

 

“Performance Guaranty” means the Performance Guaranty, dated as of the date
hereof, by Triumph, as performance guarantor, in favor of the Administrator for
the benefit of the Purchasers and Purchaser Agents, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

 

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

 

“PNC” means PNC Bank, National Association.

 

“Pool Assets” has the meaning set forth in Section 1.2(d) of this Agreement.

 

“Pool Receivable” means a Receivable in the Receivables Pool.

 

“Portion of Capital” means, with respect to any Purchaser and its related
Capital, the portion of such Capital being funded or maintained by such
Purchaser by reference to a particular interest rate basis.

 

“Program Support Agreement” means and includes any Liquidity Agreement and any
other agreement entered into by any Program Support Provider providing for:
(a) the issuance of

 

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one or more letters of credit for the account of any Conduit Purchaser, (b) the
issuance of one or more surety bonds for which the such Conduit Purchaser is
obligated to reimburse the applicable Program Support Provider for any drawings
thereunder, (c) the sale by such Conduit Purchaser to any Program Support
Provider of the Purchased Interest (or portions thereof) maintained by such
Conduit Purchaser and/or (d) the making of loans and/or other extensions of
credit to any Conduit Purchaser in connection with such Conduit Purchaser’s
securitization program contemplated in this Agreement, together with any letter
of credit, surety bond or other instrument issued thereunder.

 

“Program Support Provider” means and includes with respect to each Conduit
Purchaser any Liquidity Provider and any other Person (other than any customer
of such Conduit Purchaser) now or hereafter extending credit or having a
commitment to extend credit to or for the account of, or to make purchases from,
such Conduit Purchaser pursuant to any Program Support Agreement.

 

“Purchase” has the meaning set forth in Section 1.1(a) of this Agreement.

 

“Purchase and Sale Indemnified Amounts” has the meaning set forth in Section 9.1
of the Sale Agreement.

 

“Purchase and Sale Indemnified Party” has the meaning set forth in Section 9.1
of the Sale Agreement.

 

“Purchase and Sale Termination Date” has the meaning set forth in Section 1.4 of
the Sale Agreement.

 

“Purchase and Sale Termination Event” has the meaning set forth in Section 8.1
of the Sale Agreement.

 

“Purchase Date” means the date of which a Purchase or a reinvestment is made
pursuant to this Agreement.

 

“Purchase Facility” has the meaning set forth in Section 1.1 of the Sale
Agreement.

 

“Purchase Limit” means $125,000,000, as such amount may be reduced pursuant to
Section 1.1(b) of this Agreement or otherwise in connection with any Exiting
Purchaser.  References to the unused portion of the Purchase Limit shall mean,
at any time, the Purchase Limit minus the then outstanding Aggregate Capital.

 

“Purchase Notice” has the meaning set forth in Section 1.2(a) to this Agreement.

 

“Purchase Price” has the meaning set forth in Section 2.2 of the Sale Agreement.

 

“Purchased Interest” means, at any time, the undivided percentage ownership
interest in: (a) each and every Pool Receivable now existing or hereafter
arising, (b) all Related Security with respect to such Pool Receivables and
(c) all Collections with respect to, and other proceeds of, such Pool
Receivables and Related Security.  Such undivided percentage interest shall be
computed as:

 

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Aggregate Capital + Total Reserves
Net Receivables Pool Balance

 

The Purchased Interest shall be determined from time to time pursuant to
Section 1.3 of this Agreement.

 

“Purchaser” means each Conduit Purchaser and/or each Related Committed
Purchaser, as applicable.

 

“Purchaser Agent” means each Person acting as agent on behalf of a Purchaser
Group and designated as a Purchaser Agent for such Purchaser Group on the
signature pages to this Agreement or any other Person who becomes a party to
this Agreement as a Purchaser Agent pursuant to an Assumption Agreement or a
Transfer Supplement.

 

“Purchaser Group” means, for each Conduit Purchaser, such Conduit Purchaser, its
Related Committed Purchasers (if any) and its related Purchaser Agent.

 

“Purchaser Group Fee Letter” has the meaning set forth in Section 1.5 of this
Agreement.

 

“Purchaser Termination Date” means, with respect to any Purchaser, the earlier
to occur of: (a) the Facility Termination Date and (b) the then current
scheduled expiration of the commitments of the applicable Liquidity Provider for
the Conduit Purchaser that is a member of such Purchaser’s Purchaser Group under
the related Liquidity Agreement (such date as extended as described hereafter in
the proviso to this clause (b), the “Extended Date”), provided, that if the
commitments of the applicable Liquidity Provider for the Conduit Purchaser that
is a member of such Purchaser’s Purchaser Group are extended under the related
Liquidity Agreement, such date shall be automatically extended on the then
current Extended Date for an additional period of not more than 364 days, which
date the Seller shall be notified of by the related Purchaser Agent.

 

“Purchasers’ Share” of any amount, at any time, means such amount multiplied by
the Purchased Interest at such time.

 

“Purchasing Related Committed Purchaser” has the meaning set forth in
Section 6.3(c) of this Agreement.

 

“Ratable Share” means, for each Purchaser Group, such Purchaser Group’s
aggregate Commitments divided by the aggregate Commitments of all Purchaser
Groups.

 

“Rating Agency” means each of Standard & Poor’s and Moody’s.

 

“Rating Agency Condition” means, when applicable, with respect to any material
event or occurrence, receipt by the Administrator (or the applicable Purchaser
Agent) of written confirmation from each of Standard & Poor’s and Moody’s
(and/or each other rating agency then rating the Notes of the applicable Conduit
Purchaser) that such event or occurrence shall not cause the rating on the then
outstanding Notes of any applicable Purchaser to be downgraded or withdrawn.

 

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“Receivable” means any indebtedness and other obligations owed to any
Originator, Triumph or the Seller or any right of the Seller, Triumph or any
Originator to payment from or on behalf of an Obligor, whether constituting an
account, chattel paper, payment intangible, instrument or general intangible, in
each instance arising in connection with the sale of goods or the rendering of
services, and includes, without limitation, the obligation to pay any finance
charges, fees and other charges with respect thereto.  Excluded Receivables
shall not constitute Receivables.  Indebtedness and other obligations arising
from any one transaction, including, without limitation, indebtedness and other
obligations represented by an individual invoice or agreement, shall constitute
a Receivable separate from a Receivable consisting of the indebtedness and other
obligations arising from any other transaction.

 

“Receivables Pool” means, at any time, all of the then outstanding Receivables
purchased by the Seller pursuant to the Sale Agreement prior to the Facility
Termination Date.

 

“Related Committed Purchaser” means each Person listed as such (and its
respective Commitment) for each Conduit Purchaser as set forth on the signature
pages of this Agreement or in any Assumption Agreement or Transfer Supplement.

 

“Related Rights” has the meaning set forth in Section 1.1 of the Sale Agreement.

 

“Related Security” means, with respect to any Receivable:

 

(a)                                  all of the Seller’s, the applicable
Originator’s and Triumph’s interest in any goods (including returned goods), and
documentation of title evidencing the shipment or storage of any goods
(including returned goods), the sale of which gave rise to such Receivable,

 

(b)                                 all instruments and chattel paper that may
evidence such Receivable,

 

(c)                                  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 Contract related to such Receivable or
otherwise, together with all UCC financing statements or similar filings
relating thereto,

 

(d)                                 solely to the extent applicable to such
Receivable, all of the Seller’s, the applicable Originator’s and Triumph’s
rights, interests and claims under the Contracts relating to such Receivable,
and all guaranties, indemnities, insurance and other agreements (including the
related Contract) or arrangements of whatever character from time to time
supporting or securing payment of such Receivable or otherwise relating to such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, and

 

(e)                                  all of the Seller’s rights, interests and
claims under the Sale Agreement and the other Transaction Documents.

 

“Reportable Event” has the meaning set forth in Section 4043(c) of ERISA.

 

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“Restricted Payments” has the meaning set forth in Section 1(n) of Exhibit IV to
the Agreement.

 

“Sale Agreement” means the Purchase and Sale Agreement, dated as of the date
hereof, among the Seller, the Originators and Triumph, as Servicer, as the same
may be amended, amended and restated, supplemented or otherwise modified from
time to time.

 

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

 

“Seller’s Share” of any amount means the greater of: (a) $0 and (b) such amount
minus the product of (i) such amount multiplied by (ii) the Purchased Interest.

 

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

 

“Servicing Fee” shall mean the fee referred to in Section 4.6 of this Agreement.

 

“Servicing Fee Rate” shall have the meaning set forth in Section 4.6 of this
Agreement.

 

“Settlement Date” means the 24th day of each calendar month (or if such day is
not a Business Day, the next occurring Business Day) provided, however, that on
and after the occurrence and during the continuation of any Termination Event,
the Settlement Date shall be the date selected as such by the Administrator from
time to time (it being understood that the Administrator may select such
Settlement Date to occur as frequently as daily or, in the absence of any such
selection, the date which would be the Settlement Date pursuant to this
definition).

 

“Special Obligor” means The Boeing Company or any Affiliate thereof, only for so
long as (i) The Boeing Company maintains a short-term rating of at least “A-1”
from Standard & Poor’s and “P-1” by Moody’s and (ii) less than 50% of the
aggregate Outstanding Balance of all Receivables the Obligor of which is The
Boeing Company or any Affiliate thereof, constitute Defaulted Receivables (it
being understood and agreed that if at any time the conditions set forth in both
clauses (i) and (ii) above are not satisfied, each such Person shall no longer
be a Special Obligor).

 

“Standard & Poor’s” means Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc.

 

“Sub-Servicer” has the meaning set forth in Section 4.1(d) of this Agreement.

 

“Subsidiary” means, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such entity are
at the time owned, or management of which is otherwise controlled: (a) by such
Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and
one or more Subsidiaries of such Person.

 

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“Tangible Net Worth” means, with respect to any Person, (i) the total assets of
such Person, minus (ii) the total liabilities of such Person, minus (iii) the
intangible assets of such Person, each as determined in accordance with GAAP.

 

“Taxes” means, with respect to any Person, any and all present or future taxes,
charges, fees, levies or other assessments (including income, gross receipts,
profits, withholding, excise, property, sales, use, license, occupation and
franchise taxes and including any related interest, penalties or other
additions) imposed by any jurisdiction or taxing authority (whether foreign or
domestic) under the laws of which such Person is organized.

 

“Termination Day” means: (a) each day on which the conditions set forth in
Section 2 of Exhibit II to this Agreement are not satisfied or (b) each day that
occurs on or after the Facility Termination Date.

 

“Termination Event” has the meaning specified in Exhibit V to this Agreement.

 

“Total Reserves” means, at any time the greater of (a) the sum of (i) the
Dilution Reserve, (ii) the Loss Reserve and (iii) the Yield Reserve and (b) the
sum of (i) the Concentration Reserve and (ii) the Dilution Component Reserve.

 

“Transaction Documents” means this Agreement, the Lock-Box Agreements, each
Purchaser Group Fee Letter, the Sale Agreement, the Performance Guaranty and all
other certificates, instruments, reports, notices, agreements and documents
executed or delivered under or in connection with this Agreement, in each case
as the same may be amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof.

 

“Transfer Supplement” has the meaning set forth in Section 6.3(c) of this
Agreement.

 

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

 

“Twelve-Month Average Dilution Ratio” means, as of any date, the arithmetic
average of the Dilution Ratios for the twelve most recent calendar months.

 

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

 

“United States” means the United States of America.

 

“Unmatured Termination Event” means an event that, with the giving of notice or
lapse of time, or both, would constitute a Termination Event.

 

“Weighted Average Credit Percentage”  means, on any date of determination, the
greater of (a) 0% and (b) the percentage determined pursuant to the following
formula:

 

100% x  WACT – 30

                                                30

 

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where:

 

WACT = the Weighted Average Credit Terms as of the most recent calendar month.

 

“Weighted Average Credit Terms” means, for any calendar month, the weighted
average of the stated maturities of all Receivables in the Receivable Pool
during such calendar month (excluding Delinquent Receivables and Receivables
with stated maturities greater than 90 days).

 

“Yield Period” means (a) with respect to any Portion of Capital funded by the
issuance of Notes, (i) initially the period commencing on (and including) the
date of the initial Purchase or funding of such Portion of Capital and ending on
(but not including) the next occurring Settlement Date, and (ii) thereafter,
each period commencing on (and including) the first day after the last day of
the immediately preceding Yield Period for such Portion of Capital and ending on
(but not including) the next occurring Settlement Date; and (b) with respect to
any Portion of Capital not funded by the issuance of Notes, (i) initially the
period commencing on (and including) the date of the initial Purchase or funding
of such Portion of Capital and ending such number of days later (including a
period of one day) as the Administrator shall select, and (ii) thereafter, each
period commencing on the last day of the immediately preceding Yield Period for
such Portion of Capital and ending such number of days later (including a period
of one day) as the Seller shall select; provided, that

 

(i)                                     any Yield Period (other than of one day)
which would otherwise end on a day which is not a Business Day shall be extended
to the next succeeding Business Day; provided, however, if Discount in respect
of such Yield Period is computed by reference to the Euro-Rate, and such Yield
Period would otherwise end on a day which is not a Business Day, and there is no
subsequent Business Day in the same calendar month as such day, such Yield
Period shall end on the next preceding Business Day;

 

(ii)                                  in the case of any Yield Period of one
day, (A) if such Yield Period is the initial Yield Period for a Purchase
hereunder (other than a reinvestment), such Yield Period shall be the day of
such Purchase; (B) any subsequently occurring Yield Period which is one day
shall, if the immediately preceding Yield Period is more than one day, be the
last day of such immediately preceding Yield Period, and, if the immediately
preceding Yield Period is one day, be the day next following such immediately
preceding Yield Period; and (C) if such Yield Period occurs on a day immediately
preceding a day which is not a Business Day, such Yield Period shall be extended
to the next succeeding Business Day; and

 

(iii)                               in the case of any Yield Period for any
Portion of Capital which commences before the Facility Termination Date and
would otherwise end on a date occurring after the Facility Termination Date,
such Yield Period shall end on such Facility Termination Date and the duration
of each Yield Period which commences on or after the Facility Termination Date
shall be of such duration as shall be selected by the Administrator.

 

“Yield Protection Fee” means, for any Yield Period, with respect to any Portion
of Capital, to the extent that (i) any payments are made by the Seller to the
related Purchaser in

 

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respect of such Capital hereunder prior to the applicable maturity date of any
Notes or other instruments or obligations used or incurred by such Purchaser to
fund or maintain such Portion of Capital or (ii) any failure by the Seller to
borrow, continue or prepay any Portion of Capital on the date specified in any
Purchase Notice delivered pursuant to Section 1.2 of this Agreement occurs, the
amount, if any, by which: (a) the additional Discount related to such Portion of
Capital that would have accrued through the maturity date of such Notes or other
instruments on the portion thereof for which payments were received from the
Seller (or with respect to which the Seller failed to borrow such amounts),
exceeds (b) the income, if any, received by such Purchaser from investing the
proceeds so received in respect of such Portion of Capital, as determined by the
applicable Purchaser Agent, which determination shall be binding and conclusive
for all purposes, absent manifest error.

 

“Yield Reserve” means, at any time the sum of (a) all accrued and unpaid
Discount at such time, plus (b) the following amount:

 

{(BR + SFR) x 1.5(DSO) x Aggregate Capital}

       360

 

where:

 

BR                                =                                         the
Base Rate in effect at such time,

 

DSO                       =                                         the Days’
Sales Outstanding, and

 

SFR                          =                                         Servicing
Fee Rate.

 

Other Terms.  All accounting terms not specifically defined herein shall be
construed in accordance with GAAP.  All terms used in Article 9 of the UCC in
the State of New York, and not specifically defined herein, are used herein as
defined in such Article 9.  Unless the context otherwise requires, “or” means
“and/or,” and “including” (and with correlative meaning “include” and
“includes”) means including without limiting the generality of any description
preceding such term.

 

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EXHIBIT II

 

CONDITIONS OF PURCHASES

 

1.                                       Conditions Precedent to Initial
Purchase.  The initial Purchase under this Agreement is subject to the following
conditions precedent that the Administrator and each Purchaser Agent shall have
received on or before the date of such Purchase, each in form and substance
(including the date thereof) satisfactory to the Administrator and each
Purchaser Agent:

 

(a)                                  A counterpart of this Agreement and the
other Transaction Documents executed by the parties thereto.

 

(b)                                 Certified copies of: (i) the resolutions of
the board of directors of each of the Seller, the Originators and the Servicer
authorizing the execution, delivery and performance by the Seller, such
Originator and the Servicer, as the case may be, of this Agreement and the other
Transaction Documents to which it is a party; (ii) all documents evidencing
other necessary limited liability company or corporate action and governmental
approvals, if any, with respect to this Agreement and the other Transaction
Documents and (iii) the organizational documents of the Seller, each Originator
and the Servicer.

 

(c)                                  A certificate of the Secretary or Assistant
Secretary of the Seller, the Originators and the Servicer certifying the names
and true signatures of its officers who are authorized to sign this Agreement
and the other Transaction Documents.  Until the Administrator and each Purchaser
Agent receives a subsequent incumbency certificate from the Seller, an
Originator or the Servicer, as the case may be, the Administrator and each
Purchaser Agent shall be entitled to rely on the last such certificate delivered
to it by the Seller, such Originator or the Servicer, as the case may be.

 

(d)                                 Acknowledgment copies, or time stamped
receipt copies, of proper financing statements, duly filed on or before the
Closing Date under the UCC of all jurisdictions that the Administrator may deem
necessary or desirable in order to perfect the interests of the Seller and the
Administrator (on behalf of each Purchasers) contemplated by this Agreement and
the Sale Agreement.

 

(e)                                  Acknowledgment copies, or time-stamped
receipt copies, of proper financing statements, if any, necessary to release all
security interests and other rights of any Person in the Receivables, Contracts
or Related Security previously granted by the Originators or the Seller.

 

(f)                                    Completed UCC search reports from all
applicable jurisdictions, dated on or shortly before the Closing Date, listing
the financing statements filed in all applicable jurisdictions, that name the
Originators or the Seller as debtor, together with copies of such other
financing statements, and similar search reports with respect to judgment liens,
federal tax liens and liens of the Pension Benefit Guaranty Corporation in such
jurisdictions, as the Administrator may request, showing no Adverse Claims on
any Pool Assets (other than (i) those which have been released as described in
the preceding clause (e) and (ii) the Judgment Lien solely in respect of
Receivables originated by Triumph Composite Systems, Inc.).

 

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(g)                                 Favorable opinions, addressed to each Rating
Agency, the Administrator, each Purchaser, each Purchaser Agent and each
Liquidity Provider in form and substance satisfactory to the Administrator and
each Purchaser Agent, of Ballard Spahr Andrews & Ingersoll, LLP, Friday,
Eldridge & Clark, LLP, Miller, Canfield, Paddock and Stone, P.L.C., Stinson
Morrison Hecker LLP and in-house counsel to Triumph, counsel for Seller, certain
Originators and the Servicer, covering such matters as the Administrator may
reasonably request, including, without limitation, organizational and
enforceability matters and certain bankruptcy matters, and certain UCC
perfection and priority matters.

 

(h)                                 Satisfactory results of a review, field
examination and audit (performed by representatives of the Administrator) of the
Servicer’s collection, operating and reporting systems, the Credit and
Collection Policy of each Originator, historical receivables data and accounts,
including satisfactory results of a review of the Servicer’s operating
location(s) and satisfactory review and approval of the Eligible Receivables in
existence on the date of the Closing Date.

 

(i)                                     A pro forma Information Package
representing the performance of the Receivables Pool for the calendar month
before closing.

 

(j)                                     Evidence of payment by the Seller of all
accrued and unpaid fees (including those contemplated by each Purchaser Group
Fee Letter), costs and expenses to the extent then due and payable on the date
thereof, including any such costs, fees and expenses arising under or referenced
in Section 6.4 of this Agreement and the applicable Purchaser Group Fee Letters.

 

(k)                                  Good standing certificates with respect to
each of the Seller, the Originators and the Servicer issued by the Secretary of
State (or similar official) of the state of each such Person’s organization.

 

(l)                                     A computer file containing all
information with respect to the Receivables as the Administrator or any
Purchaser Agent may request.

 

(m)                               To the extent required by each Conduit
Purchaser’s commercial paper program, letters from each of the rating agencies
then rating the Notes confirming the rating of such Notes after giving effect to
the transaction contemplated by this Agreement.

 

(n)                                 Such other approvals, opinions, agreements,
instruments or documents as the Administrator or any Purchaser Agent may
request.

 

2.                                       Conditions Precedent to All Purchases
and Reinvestments.  Each Purchase (including the initial Purchase) and each
reinvestment shall be subject to the further conditions precedent that:

 

(a)                                  in the case of each Purchase, the Servicer
shall have delivered to the Administrator and each Purchaser Agent on or before
such Purchase, in form and substance satisfactory to the Administrator and each
Purchaser Agent, the most recent Information Package to reflect the level of the
Aggregate Capital and related reserves after such Purchase; and

 

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(b)                                 on the date of such Purchase or reinvestment
the following statements shall be true (and acceptance of the proceeds of such
Purchase or reinvestment shall be deemed a representation and warranty by the
Seller that such statements are then true):

 

(i)                                     the representations and warranties
contained in Exhibit III to this Agreement are true and correct in all material
respects on and as of the date of such Purchase or reinvestment as though made
on and as of such date except for representations and warranties which apply as
to an earlier date (in which case such representations and warranties shall be
true and correct as of such earlier date);

 

(ii)                                  no event has occurred and is continuing,
or would result from such Purchase, that constitutes a Termination Event or an
Unmatured Termination Event;

 

(iii)                               the Aggregate Capital, after giving effect
to any such Purchase or reinvestment shall not be greater than the Purchase
Limit, and the Purchased Interest shall not exceed 100%; and

 

(iv)                              the Facility Termination Date has not
occurred.

 

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EXHIBIT III

REPRESENTATIONS AND WARRANTIES

 

1.                                       Representations and Warranties of the
Seller.  The Seller represents and warrants to the Administrator, each Purchaser
Agent and each Purchaser as of the date of execution of this Agreement that:

 

(a)                                  Existence and Power.  The Seller is a
limited liability company duly organized, validly existing and in good standing
under the laws of Delaware, and has all organizational power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in which its business is conducted.

 

(b)                                 Company and Governmental Authorization,
Contravention.  The execution, delivery and performance by the Seller of this
Agreement and each other Transaction Document to which it is a party are within
the Seller’s organizational powers, have been duly authorized by all necessary
organizational action, require no action by or in respect of, or filing with
(other than the filing of UCC financing statements and continuation statements),
any governmental body, agency or official, and, do not contravene, or constitute
a default under, any provision of applicable law or regulation or of the
operating agreement of the Seller or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Seller or result in the
creation or imposition of any lien (other than liens in favor of the
Administrator for the benefit of the Purchasers) on assets of the Seller.

 

(c)                                  Binding Effect of Agreement.  This
Agreement and each other Transaction Document to which it is a party constitutes
the legal, valid and binding obligation of the Seller enforceable against the
Seller in accordance with its respective terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity, regardless of whether enforceability is considered in a
proceeding in equity or at law.

 

(d)                                 Accuracy of Information.  All information
heretofore furnished by the Seller to the Administrator or any Purchaser Agent
pursuant to or in connection with this Agreement or any other Transaction
Document is, and all such information hereafter furnished by the Seller to the
Administrator or any Purchaser Agent in writing pursuant to this Agreement or
any Transaction Document will be, true and accurate in all material respects on
the date such information is stated or certified.

 

(e)                                  Actions, Suits.  There are no actions,
suits or proceedings pending or, to the best of the Seller’s knowledge,
threatened against or affecting the Seller or its properties, in or before any
court, arbitrator or other body.

 

(f)                                    Accuracy of Exhibits; Lock-Box
Arrangements.  The names and addresses of all the Lock-Box Banks together with
the account numbers of the Lock-Box Accounts at such Lock-Box Banks, are
specified in Schedule II to this Agreement (or at such other Lock-Box Banks
and/or with such other Lock-Box Accounts as have been notified to the
Administrator), and all Lock-Box Accounts are subject to Lock-Box Agreements. 
All information on each Exhibit, Schedule or Annex to this Agreement or the
other Transaction Documents (as updated by the

 

III-1

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Seller from time to time) is true and complete in all material respects.  The
Seller has delivered a copy of all Lock-Box Agreements to the Administrator. 
The Seller has not granted any interest in any Lock-Box Account (or any related
lock-box or post office box) to any Person other than the Administrator and,
upon delivery to a Lock-Box Bank of the related Lock-Box Agreement, the
Administrator will have control of the Lock-Box Account at such Lock-Box Bank.

 

(g)                                 No Material Adverse Effect.  Since the date
of formation of Seller as set forth in its certificate of formation, there has
been no Material Adverse Effect with respect to the Seller.

 

(h)                                 Names and Location.  The Seller has not used
any company names, trade names or assumed names other than its name set forth on
the signature pages of this Agreement.  The Seller is “located” (as such term is
defined in the applicable UCC) in Delaware.  The office where the Seller keeps
its records concerning the Receivables is at the address set forth below its
signature to this Agreement.

 

(i)                                     Margin Stock.  The Seller is not engaged
in the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulations T, U and X, as issued by the
Board of Governors of the Federal Reserve System), and no proceeds of any
Purchase will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock.

 

(j)                                     Eligible Receivables.  Each Pool
Receivable included as an Eligible Receivable in the calculation of the Net
Receivables Pool Balance is an Eligible Receivable.

 

(k)                                  Credit and Collection Policy.  The Seller
has complied in all material respects with the Credit and Collection Policy of
each Originator with regard to each Receivable originated by such Originator.

 

(l)                                     Investment Company Act.  The Seller is
not an “investment company,” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended.

 

(m)                               Ordinary Course of Business.  Each remittance
of Collections by or on behalf of the Seller or pursuant to the Transaction
Documents and any related accounts of any amounts owing hereunder in respect of
the Purchases will have been (i) in payment of a debt incurred by the Seller in
the ordinary course of business or financial affairs of the Seller and (ii) made
in the ordinary course of business or financial affairs of the Seller.

 

(n)                                 Bankruptcy Opinion.  The statements
contained in Part 1 of the Bankruptcy Opinion are, in each case, true and
correct with respect to itself.

 

2.                                       Representations and Warranties of the
Servicer.  The Servicer represents and warrants to the Administrator, each
Purchaser Agent and each Purchaser as of the date of execution of this Agreement
that:

 

(a)                                  Existence and Power.  The Servicer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of its organization, and has all company power and all governmental
licenses, authorizations, consents and approvals required to carry on

 

III-2

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its business in each jurisdiction in which its business is conducted to the
extent material to the operating of its business.

 

(b)                                 Company and Governmental Authorization,
Contravention.  The execution, delivery and performance by the Servicer of this
Agreement and each other Transaction Document to which it is a party are within
the Servicer’s organizational powers, have been duly authorized by all necessary
organizational action, require no action by or in respect of, or filing with,
any governmental body, agency or official, and 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 the Servicer or of any judgment,
injunction, order or decree or agreement or other material instrument binding
upon the Servicer or result in the creation or imposition of any lien on assets
of the Servicer or any of its Subsidiaries.

 

(c)                                  Binding Effect of Agreement.  This
Agreement and each other Transaction Document to which it is a party constitutes
the legal, valid and binding obligation of the Servicer enforceable against the
Servicer in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity, regardless of whether enforceability is considered in a
proceeding in equity or at law.

 

(d)                                 Accuracy of Information.  All information
heretofore furnished by the Servicer to the Administrator or any Purchaser Agent
in writing pursuant to or in connection with this Agreement or any other
Transaction Document is, and all such information hereafter furnished by the
Servicer to the Administrator or any Purchaser Agent in writing pursuant to this
Agreement or any other Transaction Document will be, true and accurate in all
material respects on the date such information is stated or certified.

 

(e)                                  Actions, Suits.  Except as set forth in
Schedule III, there are no actions, suits or proceedings pending or, to the best
of the Servicer’s knowledge, threatened against or affecting the Servicer or any
of its Affiliates or their respective properties, in or before any court,
arbitrator or other body, which could reasonably be expected to have a Material
Adverse Effect upon the ability of the Servicer (or such Affiliate) to perform
its obligations under this Agreement or any other Transaction Document to which
it is a party.

 

(f)                                    Credit and Collection Policy.  The
Servicer and the applicable Originator has complied in all material respects
with the Credit and Collection Policy of such Originator with regard to each
Receivable originated by such Originator.

 

(g)                                 Investment Company Act.  The Servicer is not
an “investment company,” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as amended.

 

(h)                                 Bankruptcy Opinion.  The statements
contained in Part 1 of the Bankruptcy Opinion are, in each case, true and
correct with respect to itself.

 

3.                                       Representations, Warranties and
Agreements Relating to the Security Interest.  The Seller hereby makes the
following representations, warranties and agreements with respect to the
Receivables and Related Security:

 

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(a)                                  The Receivables.

 

(i)                                     Creation.  This Agreement creates a
valid and continuing security interest (as defined in the applicable UCC) in the
Receivables included in the Receivables Pool in favor of the Administrator (for
the benefit of the Purchasers), which security interest is prior to all other
Adverse Claims (other than the Judgment Lien solely in respect of Receivables
originated by Triumph Composite Systems, Inc.), and is enforceable as such as
against creditors of and purchasers from the Seller.

 

(ii)                                  Nature of Receivables.  The Receivables
included in the Receivables Pool constitute either “accounts” or “general
intangibles” within the meaning of the applicable UCC.

 

(iii)                               Ownership of Receivables.  The Seller owns
and has good and marketable title to the Receivables included in the Receivables
Pool and Related Security free and clear of any Adverse Claim (other than the
Judgment Lien solely in respect of Receivables originated by Triumph Composite
Systems, Inc.).

 

(iv)                              Perfection and Related Security.  The Seller
has caused (and will cause each Originator to cause), within one day after the
Closing Date, the filing of all appropriate financing statements in the proper
filing office in the appropriate jurisdictions under applicable law in order to
perfect the sale of the Receivables and Related Security from such Originator to
the Seller pursuant to the Sale Agreement, and the sale and security interest
therein from the Seller to the Administrator under this Agreement, to the extent
that such collateral constitutes “accounts” or “general intangibles.”

 

(b)                                 The Lock-Box Accounts.

 

(i)                                     Nature of Account.  Each Lock-Box
Account constitutes a “deposit account” within the meaning of the applicable
UCC.

 

(ii)                                  Ownership.  The Seller owns and has good
and marketable title to the Lock-Box Accounts free and clear of any Adverse
Claim.

 

(iii)                               Perfection.  The Seller has delivered to the
Administrator a fully executed Lock-Box Agreement relating to each Lock-Box
Account, pursuant to which each applicable Lock-Box Bank, respectively, has
agreed to comply with all instructions originated by the Administrator (on
behalf of the Purchasers) directing the disposition of funds in such Lock-Box
Account without further consent by the Seller or the Servicer.

 

(c)                                  Priority.

 

(i)                                     Other than (A) the transfer of the
Receivables to the Seller and the Administrator under the Sale Agreement and
this Agreement, respectively, and/or (B) the security interest granted to the
Seller and the Administrator pursuant to the Sale Agreement and this Agreement,
respectively, neither the Seller nor any Originator has pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Receivables
transferred or purported to be transferred under the Transaction Documents,

 

III-4

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the Lock-Box Accounts or any subaccount thereof, except for any such pledge,
grant or other conveyance which has been released or terminated.  Neither the
Seller nor any Originator has authorized the filing of, or is aware of any
financing statements against either the Seller or such Originator that include a
description of Receivables transferred or purported to be transferred under the
Transaction Documents, the Lock-Box Accounts or any subaccount thereof, other
than any financing statement (A) relating to the sale thereof by such Originator
to the Seller under the Sale Agreement, (B) relating to the security interest
granted to the Administrator under this Agreement, or (C) that has been released
or terminated.

 

(ii)                                  There are no (x) judgment, ERISA or tax
lien filings against the Seller, (y) judgment or ERISA lien filings against the
Servicer or any Originator (other than as set forth on Schedule IV), or (z) tax
lien filings against the Servicer or any Originator.

 

(iii)                               The Lock-Box Accounts are not in the name of
any person other than the Seller or the Administrator.  Neither the Seller nor
the Servicer has consented to any bank maintaining such account to comply with
instructions of any person other than the Administrator, the Seller or the
Servicer.

 

(d)                                 Survival of Supplemental Representations.
 Notwithstanding any other provision of this Agreement or any other Transaction
Document, the representations contained in this Section shall be continuing, and
remain in full force and effect until such time as the Purchased Interest and
all other obligations under this Agreement have been finally and fully paid and
performed.

 

(e)                                  Servicer to Maintain Perfection and
Priority.  In order to evidence the interests of the Administrator under this
Agreement, the Servicer shall, from time to time take such action, or execute
and deliver such instruments as may be necessary (including, without limitation,
such actions as are reasonably requested by the Administrator or any Purchaser
Agent) to maintain and perfect, as a first-priority perfected security interest,
the Administrator’s security interest in the Receivables, Related Security and
Collections.  The Servicer shall, from time to time and within the time limits
established by law, prepare and present to the Administrator for the
Administrator’s authorization and approval, all financing statements, amendments
or continuations, or other filings necessary to continue, maintain and perfect
the Administrator’s security interest as a first-priority interest.  The
Administrator’s approval of such filings shall authorize the Servicer to file
such financing statements under the UCC without the signature of the Seller, any
Originator or the Administrator where allowed by applicable law. 
Notwithstanding anything else in the Transaction Documents to the contrary, the
Servicer shall not have any authority to file a termination, partial
termination, release, partial release, or any amendment that deletes the name of
a debtor or excludes collateral of any such financing statements, without the
prior written consent of the Administrator and each Purchaser Agent.

 

(g)                                 Collections.  If made in accordance with the
terms of this Agreement, each remittance of Collections by the Seller to the
Purchasers hereunder will have been (i) in payment of a debt incurred by the
Seller in the ordinary course of business or financial affairs of the Seller and
(ii) made in the ordinary course of business or financial affairs of the Seller.

 

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4.                                       Reaffirmation of Representations and
Warranties.  On the date of each Purchase and/or reinvestment hereunder, and on
the date each Information Package or other report is delivered to the
Administrator, any Purchaser Agent or any Purchaser hereunder, the Seller and
the Servicer shall each be deemed to have certified that (i) all representations
and warranties of the Seller and the Servicer, as applicable, described in this
Exhibit III, as from time to time amended in accordance with the terms hereof,
are true and correct in all material respects on and as of such day as though
made on and as of such day, except for representations and warranties which
apply as to an earlier date (in which case such representations and warranties
shall be true and correct as of such date), (ii) no event has occurred and is
continuing, or would result from such Purchase or reinvestment, that constitutes
a Termination Event or an Unmatured Termination Event.

 

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EXHIBIT IV

 

COVENANTS

 

1.                                       Covenants of the Seller.  At all times
from the date hereof until the latest of the Facility Termination Date, the date
on which no Capital of or Discount in respect of the Purchased Interest shall be
outstanding, or the date all other amounts owed by the Seller under this
Agreement to any Purchaser, Purchaser Agent, the Administrator and any other
Indemnified Party or Affected Person shall be paid in full:

 

(a)                                  Financial Reporting.  The Seller will
maintain a system of accounting established and administered in accordance with
GAAP as in effect in the appropriate jurisdiction, and the Seller (or the
Servicer on its behalf) shall furnish to the Administrator and each Purchaser
Agent:

 

(i)                                     Annual Reporting.  Promptly upon
completion and in no event later than 120 days after the close of each fiscal
year of the Seller, annual unaudited financial statements of the Seller
certified by a designated financial or other officer of the Seller.

 

(ii)                                  Information Packages.  As soon as
available and in any event not later than two Business Days prior to each
Settlement Date, an Information Package as of the most recently completed
calendar month.

 

(iii)                               Other Information.  Such other information
(including non-financial information) as the Administrator may from time to time
reasonably request.

 

(b)                                 Notices.  The Seller will notify the
Administrator and each Purchaser Agent in writing of any of the following events
promptly upon (but in no event later than three Business Days after) a financial
or other officer learning of the occurrence thereof, with such notice describing
the same, and if applicable, the steps being taken by the Person(s) affected
with respect thereto:

 

(i)                                     Notice of Termination Events or
Unmatured Termination Events.  The occurrence of any Termination Event or
Unmatured Termination Event together with a statement of the chief financial
officer or chief accounting officer of the Seller setting forth details of such
Termination Event or such Unmatured Termination Event and any action which the
Seller proposes to take with respect thereto.

 

(ii)                                  Representations and Warranties.  The
failure of any representation or warranty to be true in any material respect
when made or deemed made with respect to the Receivables included in the
Receivables Pool.

 

(iii)                               Litigation.  The institution of any
litigation, arbitration proceeding or governmental proceeding which could have a
Material Adverse Effect with respect to the Seller.

 

(iv)                              Adverse Claim.  (A) Any Person shall obtain an
Adverse Claim upon the Pool Receivables or Collections with respect thereto,
(B) any Person other than the Seller, the Servicer or the Administrator shall
obtain any rights or direct any action with

 

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respect to any Lock-Box Account (or related lock-box or post office box) or
(C) any Obligor shall receive any change in payment instructions with respect to
any Pool Receivable(s) from a Person other than the Servicer, Triumph, an
Originator or the Administrator.

 

(v)                                 ERISA and Other Claims.  (A) Upon the
occurrence of a Reportable Event, such that the Seller or any ERISA Affiliate is
required to file a report or notice with the Internal Revenue Service, the
Pension Benefit Guaranty Corporation or the U.S. Department of Labor, that could
result in the imposition of liability on the Seller and/or any such Affiliate,
(B) upon the receipt of notice of a filing of a report or notice of a Reportable
Event from any of the foregoing entities or a Multiemployer Plan that could
result in the imposition of liability on the Seller and/or any such Affiliate,
(C) upon the withdrawal by either the Seller or any ERISA Affiliate from a
Multiemployer Plan in either a complete withdrawal or a partial withdrawal that
results in or is reasonably likely to result in the imposition of a liability
with respect to the Seller and/or any such Affiliate, or (D) upon the claim of a
Multiemployer Plan against the Seller or any ERISA Affiliate with respect to a
failure of Seller or any ERISA Affiliate to make contributions to such
Multiemployer Plan.

 

(c)                                  Conduct of Business.  The Seller will do
all things necessary to remain duly organized, validly existing and in good
standing as a domestic organization in its jurisdiction of organization and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.

 

(d)                                 Compliance with Laws.  The Seller will
comply with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject.

 

(e)                                  Furnishing of Information and Inspection of
Receivables.  The Seller will furnish to the Administrator and each Purchaser
Agent from time to time such information with respect to the Pool Receivables as
the Administrator or such Purchaser Agent may request.  The Seller will, (i) at
the Seller’s expense, at any time and from time to time during regular business
hours with reasonable prior written notice, subject to Section 6.7, permit the
Administrator or any Purchaser Agent, or their respective agents or
representatives, (A) to examine and make copies of and abstracts from all books
and records relating to the Pool Receivables or other Pool Assets and (B) to
visit the offices and properties of the Seller for the purpose of examining such
books and records, and to discuss matters relating to the Pool Receivables,
other Pool Assets or the Seller’s performance hereunder or under the other
Transaction Documents to which it is a party with any of the officers,
directors, employees or independent public accountants of the Seller (provided
that representatives of the Seller are present during such discussions) having
knowledge of such matters and (ii) without limiting the provisions of clause
(i) above, from time to time during regular business hours, at the Seller’s
expense, upon reasonable prior written notice from the Administrator and the
Purchaser Agents, permit certified public accountants or other auditors
acceptable to the Administrator to conduct a review of its books and records
with respect to the Pool Receivables.

 

(f)                                    Payments on Receivables, Accounts.  The
Seller will, and will cause each Originator to, at all times instruct all
Obligors to deliver payments on the Pool Receivables to a

 

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Lock-Box Account.  If any such payments or other Collections are received by the
Seller or an Originator, it shall hold such payments in trust for the benefit of
the Administrator and the Purchasers and promptly (but in any event within two
Business Days after receipt) remit such funds into a Lock-Box Account.  The
Seller will not permit funds other than Collections on Pool Receivables and
other Pool Assets to be deposited into any Lock-Box Account.  If such funds are
nevertheless deposited into any Lock-Box Account, the Seller will promptly
identify such funds for segregation.  The Seller will not, and will not permit
the Servicer, any Originator or other Person to, commingle Collections or other
funds to which the Administrator, any Purchaser Agent or any Purchaser is
entitled with any other funds.  The Seller shall only add, and shall only permit
an Originator to add, a Lock-Box Bank (or the related lock-box or post office
box), or Lock-Box Account to those listed on Schedule II to this Agreement, if
the Administrator has received notice of such addition, a copy of any new
Lock-Box Agreement and an executed and acknowledged copy of a Lock-Box Agreement
in form and substance acceptable to the Administrator from any such new Lock-Box
Bank.  The Seller shall only terminate a Lock-Box Bank or close a Lock-Box
Account (or the related lock-box or post office box), upon 30 days’ advance
notice to and with the prior written consent of the Administrator.

 

(g)                                 Sales, Liens, etc.  Except as otherwise
provided herein, the Seller will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon (including, without limitation, the filing of any financing
statement) or with respect to, any Pool Receivable or other Pool Asset, or
assign any right to receive income in respect thereof.

 

(h)                                 Extension or Amendment of Pool Receivables. 
Except as the Servicer is otherwise permitted in Section 4.2 of this Agreement,
the Seller will not extend, amend or otherwise modify the terms of any Pool
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto, without the prior written consent of the Administrator and the
Majority Purchaser Agents.  The Seller shall at its expense, timely and fully
perform and comply with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to the Pool
Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy with regard to each Receivable and the related
Contract.

 

(i)                                     Change in Business.  The Seller will not
(i) make any change in the character of its business, which change could impair
the collectibility of any Pool Receivable or (ii) make any change in any Credit
and Collection Policy that would reasonably be expected to materially adversely
affect the collectibility of the Pool Receivables, the enforceability of any
related Contract or its ability to perform its obligations under the related
Contract or the Transaction Documents, in the case of either (i) or (ii) above,
without the prior written consent of the Administrator and the Majority
Purchaser Agents.  The Seller shall not make any change in any Credit and
Collection Policy without giving prior written notice thereof to the
Administrator and each Purchaser Agent.

 

(j)                                     Fundamental Changes.  The Seller shall
not, without the prior written consent of the Administrator and the Majority
Purchaser Agents, permit itself (i) to merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter

 

IV-3

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acquired) to, any Person or (ii) to be owned by any Person other than Triumph. 
The Seller shall provide the Administrator with at least 30 days’ prior written
notice before making any change in the Seller’s name or location or making any
other change in the Seller’s identity or structure that could impair or
otherwise render any UCC financing statement filed in connection with this
Agreement “seriously misleading” as such term (or similar term) is used in the
applicable UCC; each notice to the Administrator and the Purchaser Agents
pursuant to this sentence shall set forth the applicable change and the proposed
effective date thereof.  The Seller will also maintain and implement (or cause
the Servicer to maintain and implement) administrative and operating procedures
(including an ability to recreate records evidencing Pool Receivables and
related Contracts in the event of the destruction of the originals thereof), and
keep and maintain (or cause the Servicer to keep and maintain) all documents,
books, records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of all Pool Receivables (including
records adequate to permit the daily identification of each Pool Receivable and
all Collections of and adjustments to each existing Pool Receivable).

 

(k)                                  Change in Payment Instructions to
Obligors.  The Seller shall not add to, replace or terminate any of the Lock-Box
Accounts (or any related lock-box or post office box) listed in Schedule II
hereto or make any change in its (or their) instructions to the Obligors
regarding payments to be made to the Lock-Box Accounts (or any related lock-box
or post office box), unless the Administrator and each Purchaser Agent shall
have received (x) prior written notice of such addition, termination or change
and (y) signed and acknowledged Lock-Box Agreements with respect to such new
Lock-Box Accounts (or any related lock-box or post office box).

 

(l)                                     Ownership Interest, Etc.  The Seller
shall (and shall cause the Servicer to) (i) at its expense, take all action
necessary or desirable to establish and maintain a valid and enforceable
undivided percentage ownership or security interest, to the extent of the
Purchased Interest, in the Pool Receivables, the Related Security and
Collections with respect thereto, and (ii) at its expense, in order to evidence
the interests of the Administrator under this Agreement, from time to time take
such action, or execute and deliver such instruments as may be necessary to
maintain and perfect, as a first-priority security interest, the Administrator’s
security interest in the Receivables, Related Security and Collections.  The
Seller shall at its expense, from time to time and within the time limits
established by law, prepare and present to the Administrator for the
Administrator’s authorization and approval, all financing statements, amendments
or  continuations, or other filings necessary to continue, maintain and perfect
the Administrator’s security interest as a first-priority security interest. 
The Administrator’s approval of such filings shall authorize the Seller to file
such financing statements under the UCC without the signature of the Seller, any
Originator or the Administrator where allowed by applicable law. 
Notwithstanding anything else in the Transaction Documents to the contrary, the
Seller shall not have any authority to file a termination, partial termination,
release, partial release, or any amendment that deletes the name of a debtor or
excludes collateral of any such financing statements, except with respect to any
Person that ceases to be an Originator, without the prior written consent of the
Administrator.

 

(m)                               Certain Agreements.  The Seller will not
amend, modify, waive, revoke or terminate (or permit or cause any change to) any
Transaction Document to which it is a party (except in accordance with the terms
of such Transaction Document) or any provision of the Seller’s organizational
documents which requires the consent of the Independent Director.

 

IV-4

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(n)                                 Restricted Payments.  (i) Except pursuant to
clause (ii) below, the Seller will not: (A) purchase or redeem any shares of its
capital stock or membership interests, (B) declare or pay any dividend or
distribution or set aside any funds for any such purpose, (C) prepay, purchase
or redeem any Debt, (D) lend or advance any funds or (E) repay any loans or
advances to, for or from any of its Affiliates (the amounts described in clauses
(A) through (E) being referred to as “Restricted Payments”).

 

(ii)                                  Subject to the limitations set forth in
clause (iii) below, the Seller may make Restricted Payments so long as such
Restricted Payments are made only in one or more of the following ways: (A) the
Seller may make cash payments (including prepayments) on the Company Notes in
accordance with their respective terms, and (B) if no amounts are then
outstanding under any Company Note, the Seller may declare and pay dividends or
make distributions.

 

(iii)                               The Seller may make Restricted Payments only
out of the funds, if any, it receives pursuant to Sections 1.4(b)(ii) and (iv),
1.4(c) and 1.4(d) of this Agreement.  Furthermore, the Seller shall not pay,
make or declare: (A) any dividend if, after giving effect thereto, the Tangible
Net Worth of the Seller would be less than $12,500,000, or (B) any Restricted
Payment (including any dividend) if, after giving effect thereto, any
Termination Event or Unmatured Termination Event shall have occurred and be
continuing.

 

(o)                                 Other Business.  The Seller will not:
(i) engage in any business other than the transactions contemplated by the
Transaction Documents, (ii) create, incur or permit to exist any Debt of any
kind (or cause or permit to be issued for its account any letters of credit or
bankers’ acceptances) other than pursuant to this Agreement or the Company
Notes, or (iii) form any Subsidiary or make any investments in any other Person;
provided, however, that the Seller shall be permitted to incur obligations to
the extent necessary for the day-to-day operations of the Seller (such as
expenses for stationery, audits, maintenance of legal status, etc.).

 

(p)                                 Use of Seller’s Share of Collections.  The
Seller shall apply the Seller’s Share of Collections to make payments in the
following order of priority: (i) the payment of its expenses (including all
obligations then due and payable to the Purchasers, the Purchaser Agents and the
Administrator under this Agreement and under the Purchaser Group Fee Letters),
(ii) the payment of accrued and unpaid interest on the Company Note and
(iii) other legal and valid limited liability company purposes.

 

(q)                                 Tangible Net Worth.  The Seller will not
permit its Tangible Net Worth, at any time, to be less than $12,500,000.

 

(r)                                    Bankruptcy Opinion.  The Seller shall
comply with all covenants and obligations assumed to be complied with by it in
the Bankruptcy Opinion as if such covenants and obligations were set forth
herein.

 

2.                                       Covenants of the Servicer.  At all
times from the date hereof until the latest of the Facility Termination Date,
the date on which no Capital of or Discount in respect of the Purchased Interest
shall be outstanding or the date all other amounts owed by the Seller or the

 

IV-5

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Servicer under this Agreement to any Purchaser, Purchaser Agent, the
Administrator and any other Indemnified Party or Affected Person shall be paid
in full:

 

(a)                                  Reporting.  The Servicer shall furnish to
the Administrator and each Purchaser Agent:

 

(i)  Compliance Certificates.  So long as Triumph is the Servicer, together with
the financial information required to be delivered to the Administrator and each
Purchaser Agent pursuant to Section 7(g) of the Performance Guaranty, if any, a
compliance certificate in the form of Annex F attached hereto signed by its
chief executive officer, president or chief financial officer solely in their
capacities as officers of the Servicer stating, among other things, that no
Termination Event or Unmatured Termination Event exists, or if any Termination
Event or Unmatured Termination Event exists, stating the nature and status
thereof.

 

(ii)  Information Packages.  As soon as available and in any event not later
than four Business Days prior to each Settlement Date, an Information Package as
of the most recently completed calendar month.

 

(iii)  Other Information.  Such other information (including non-financial
information) as the Administrator or any Purchaser Agent may from time to time
reasonably request.

 

(b)                                 Notices.  The Servicer will notify the
Administrator and each Purchaser Agent in writing of any of the following events
promptly upon (but in no event later than three Business Days after) a financial
or other officer learning of the occurrence thereof, with such notice describing
the same, and if applicable, the steps being taken by the Person(s) affected
with respect thereto:

 

(i)                                     Notice of Termination Events or
Unmatured Termination Events.  The occurrence of any Termination Event or
Unmatured Termination Event together with a statement of the chief financial
officer or chief accounting officer of the Servicer setting forth details of
such Termination Event or such Unmatured Termination Event and any action which
the Servicer proposes to take with respect thereto.

 

(ii)                                  Representations and Warranties.  The
failure of any representation or warranty to be true (when made or deemed made)
in any material respect with respect to the Pool Receivables.

 

(iii)                               Litigation.  The institution of any
litigation, arbitration proceeding or governmental proceeding which could have a
Material Adverse Effect with respect to the Servicer.

 

(iv)                              Adverse Claim.  (A) Any Person shall obtain an
Adverse Claim upon the Pool Receivables or Collections with respect thereto
(other than the creditor related to the Judgment Lien solely in respect of
Receivables originated by Triumph Composite Systems, Inc.), (B) any Person other
than the Seller, the Servicer or the Administrator shall obtain any rights or
direct any action with respect to any Lock-Box Account (or

 

IV-6

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related lock-box or post office box) or (C) any Obligor shall receive any change
in payment instructions with respect to Pool Receivable(s) from a Person other
than the Servicer, Triumph, an Originator or the Administrator.

 

(v)                                 ERISA and Other Claims.  (A) Upon the
occurrence of a Reportable Event, such that the Servicer or any ERISA Affiliate
is required to file a report or notice with the Internal Revenue Service, the
Pension Benefit Guaranty Corporation or the U.S. Department of Labor, that could
result in the imposition of liability on the Servicer and/or any such Affiliate,
(B) upon the receipt of notice of a filing of a report or notice of a Reportable
Event from any of the foregoing entities or a Multiemployer Plan that could
result in the imposition of liability on the Servicer and/or any such Affiliate,
(C) upon the withdrawal by either the Servicer or any ERISA Affiliate from a
Multiemployer Plan in either a complete withdrawal or a partial withdrawal that
results in or is reasonably likely to result in the imposition of a liability
with respect to the Servicer and/or any such Affiliate, or (D) upon the claim of
a Multiemployer Plan against the Servicer or any ERISA Affiliate with respect to
a failure of Servicer or any ERISA Affiliate to make contributions to such
Multiemployer Plan.

 

(c)                                  Conduct of Business.  The Servicer will
(i) carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted and
(ii) do all things necessary to remain duly incorporated, validly existing and
in good standing as a domestic corporation in its jurisdiction of incorporation
and (iii) maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.

 

(d)                                 Compliance with Laws.  The Servicer will
comply with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject.

 

(e)                                  Furnishing of Information and Inspection of
Receivables.  The Servicer will furnish to the Administrator and each Purchaser
Agent from time to time such information with respect to the Pool Receivables as
the Administrator or such Purchaser Agent may reasonably request.  The Servicer
will, at the Servicer’s expense, at any time and from time to time during
regular business hours with prior written notice (i) permit the Administrator or
any Purchaser Agent, or their respective agents or representatives, (A) to
examine and make copies of and abstracts from all books and records relating to
the Pool Receivables or other Pool Assets and (B) to visit the offices and
properties of the Servicer for the purpose of examining such books and records,
and to discuss matters relating to the Pool Receivables, other Pool Assets or
the Servicer’s performance hereunder or under the other Transaction Documents to
which it is a party with any of the officers, directors, employees or
independent certified public accountants of the Servicer (provided that
representatives of the Servicer are present during such discussions) having
knowledge of such matters and (ii) without limiting the provisions of clause
(i) above, during regular business hours, at the Servicer’s expense, upon
reasonable prior written notice from the Administrator, permit certified public
accountants or other auditors acceptable to the Administrator and the Purchaser
Agents to conduct, a review of its books and records with respect to the Pool
Receivables.

 

(f)                                    Payments on Receivables, Accounts.  The
Servicer will at all times instruct all Obligors to deliver payments on the Pool
Receivables to a Lock-Box Account.  If any such

 

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payments or other Collections are received by the Servicer, it shall hold such
payments in trust for the benefit of the Administrator and the Purchasers and
promptly (but in any event within two Business Days after receipt) remit such
funds into a Lock-Box Account.  The Servicer will not permit funds other than
Collections on Pool Receivables and other Pool Assets to be deposited into any
Lock-Box Account.  If such funds are nevertheless deposited into any Lock-Box
Account, the Servicer will promptly identify such funds for segregation.  The
Servicer will not commingle Collections or other funds to which the
Administrator, any Purchaser Agent or any Purchaser is entitled with any other
funds.  The Servicer shall only add, a Lock-Box Bank (or the related lock-box or
post office box), or Lock-Box Account to those listed on Schedule II to this
Agreement, if the Administrator has received notice of such addition, a copy of
any new Lock-Box Agreement and an executed and acknowledged copy of a Lock-Box
Agreement in form and substance acceptable to the Administrator from any such
new Lock-Box Bank.  The Servicer shall only terminate a Lock-Box Bank or close a
Lock-Box Account (or the related lock-box or post office box), upon 30 days’
advance notice to and with the prior written consent of the Administrator.

 

(g)                                 Extension or Amendment of Pool Receivables. 
Except as the Servicer is otherwise permitted in Section 4.2 of this Agreement,
the Servicer will not extend, amend or otherwise modify the terms of any Pool
Receivable, or amend, modify or waive any term or condition of any Contract
related thereto, without the prior written consent of the Administrator and the
Majority Purchaser Agents.  The Servicer shall at its expense, timely and fully
perform and comply with all material provisions, covenants and other promises
required to be observed by it under the Contracts related to the Pool
Receivables, and timely and fully comply in all material respects with the
Credit and Collection Policy with regard to each Pool Receivable  and the
related Contract.

 

(h)                                 Change in Business.  The Servicer will not
(i) make any change in the character of its business, which change could impair
the collectibility of any Pool Receivable or (ii) make any change in any Credit
and Collection Policy that would reasonably be expected to materially adversely
affect the collectibility of the Pool Receivables, the enforceability of any
related Contract or its ability to perform its obligations under the related
Contract or the Transaction Documents, in the case of either (i) or (ii) above,
without the prior written consent of the Administrator and the Majority
Purchaser Agents.  The Servicer shall not make any written change in any Credit
and Collection Policy without giving prior written notice thereof to the
Administrator and each Purchaser Agent.

 

(i)                                     Records.  The Servicer will maintain and
implement administrative and operating procedures (including an ability to
recreate records evidencing Pool Receivables and related Contracts in the event
of the destruction of the originals thereof), and keep and maintain all
documents, books, records, computer tapes and disks and other information
reasonably necessary or advisable for the collection of all Pool Receivables
(including records adequate to permit the daily identification of each Pool
Receivable and all Collections of and adjustments to each existing Pool
Receivable).

 

(j)                                     Change in Payment Instructions to
Obligors.  The Servicer shall not add to, replace or terminate any of the
Lock-Box Accounts (or any related lock-box or post office box) listed in
Schedule II hereto or make any change in its instructions to the Obligors
regarding

 

IV-8

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payments to be made to the Lock-Box Accounts (or any related lock-box or post
office box), unless the Administrator and each Purchaser Agent shall have
received (x) prior written notice of such addition, termination or change and
(y) signed and acknowledged Lock-Box Agreements with respect to such new
Lock-Box Accounts (or any related lock-box or post office box).

 

(k)                                  Ownership Interest, Etc.  The Servicer
shall, at its expense, take all action necessary or desirable to establish and
maintain a valid and enforceable undivided percentage ownership or security
interest, to the extent of the Purchased Interest, in the Pool Receivables, the
Related Security and Collections with respect thereto, and a first-priority
perfected security interest in the Pool Assets, in each case free and clear of
any Adverse Claim (other than the Judgment Lien solely in respect of Receivables
originated by Triumph Composite Systems, Inc.) in favor of the Administrator (on
behalf of the Purchasers), including taking such action to perfect, protect or
more fully evidence the interest of the Administrator (on behalf of the
Purchasers) as the Administrator or any Purchaser Agent, may reasonably request.

 

(l)                                     Bankruptcy Opinion.  The Servicer shall
comply with all covenants and obligations assumed to be complied with by it in
the Bankruptcy Opinion as if such covenants and obligations were set forth
herein.

 

(m)                               Judgment Lien.   Until the Judgment Lien is
satisfied in full, the Servicer shall cause Triumph Composite Systems, Inc., as
Originator, to set aside and maintain adequate reserves therefor.  Upon the full
satisfaction of the Judgment Lien, the Servicer shall cause Triumph Composite
Systems, Inc. to promptly take all steps necessary to cause all filings in
respect of the Judgment Lien to be released.

 

3.                                       Separate Existence.  Each of the Seller
and the Servicer hereby acknowledges that the Purchasers, the Purchaser Agents
and the Administrator are entering into the transactions contemplated by this
Agreement and the other Transaction Documents in reliance upon the Seller’s
identity as a legal entity separate from Triumph, the Originators and their
respective Affiliates.  Therefore, from and after the date hereof, each of the
Seller and the Servicer shall take all steps specifically required by this
Agreement or reasonably required by the Administrator or any Purchaser Agent to
continue the Seller’s identity as a separate legal entity and to make it
apparent to third Persons that the Seller is an entity with assets and
liabilities distinct from those of Triumph, any Originator, the Servicer and any
other Person, and is not a division of Triumph, any Originator, the Servicer or
any other Person.  Without limiting the generality of the foregoing and in
addition to and consistent with the other covenants set forth herein, each of
the Seller and the Servicer shall take such actions as shall be required in
order that:

 

(a)                                  The Seller will be a limited liability
company whose primary activities are restricted in its operating agreement to:
(i) purchasing or otherwise acquiring from the Originators or Triumph, owning,
holding, granting security interests or selling interests in Pool Assets,
(ii) entering into agreements for the selling and servicing of the Receivables
Pool and (iii) conducting such other activities as it deems necessary or
appropriate to carry out its primary activities;

 

IV-9

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(b)                                 The Seller shall not engage in any business
or activity, or incur any indebtedness or liability (including, without
limitation, any assumption or guaranty of any obligation of Triumph, any
Originator, the Servicer or any Affiliate thereof), other than as expressly
permitted by the Transaction Documents;

 

(c)                                  Not less than one member of the Seller’s
board of directors (the “Independent Director”) shall be a natural person
(A) who is not at the time of initial appointment and has not been at any time
during the five (5) years preceding such appointment: (1) an equityholder,
director, officer, employee, member, manager (other than an independent
manager), attorney or partner of Triumph, Seller, Servicer or any of their
Affiliates; (2) a customer of, supplier to or other person who derives more than
1% of its purchases or revenues from its activities with Triumph, Seller,
Servicer or any of their Affiliates; (3) a person or other entity controlling,
controlled by or under common control with any such equity holder, partner,
member, manager, customer, supplier or other person; or (4) a member of the
immediate family of any such equity holder, director, officer, employee, member,
manager, partner, customer, supplier or other person and (B) who has (1) prior
experience as an independent director for a corporation or an independent
director or independent manager of a limited liability company whose charter
documents required the unanimous consent of all independent directors or
independent managers thereof before such corporation or limited liability
company could consent to the institution of bankruptcy or insolvency proceedings
against it or could file a petition seeking relief under any applicable federal
or state law relating to bankruptcy and (2) at least three years of employment
experience with one or more entities that provide, in the ordinary course of
their respective businesses, advisory, management or placement services to
issuers of securitization or structured finance instruments, agreements or
securities.  Under this clause (c), the term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of
management, policies or activities of a Person, whether through ownership of
voting securities, by contract or otherwise.  The operating agreement of the
Seller shall provide that: (A) the Seller’s board of directors shall not
approve, or take any other action to cause the filing of, a voluntary bankruptcy
petition with respect to the Seller unless the Independent Director shall
approve the taking of such action in writing before the taking of such action,
and (B) such provision cannot be amended without the prior written consent of
the Independent Director;

 

(d)                                 The Independent Director shall not at any
time serve as a trustee in bankruptcy for the Seller, Triumph, any Originator,
the Servicer or any of their respective Affiliates;

 

(e)                                  The Seller shall conduct its affairs in
accordance with its organizational documents and observe all necessary,
appropriate and customary limited liability company formalities, including, but
not limited to, holding all regular and special members’ and board of directors’
meetings appropriate to authorize all limited liability company action, keeping
separate and accurate minutes of its meetings, passing all resolutions or
consents necessary to authorize actions taken or to be taken, and maintaining
accurate and separate books, records and accounts, including, but not limited
to, payroll and intercompany transaction accounts;

 

(f)                                    Any employee, consultant or agent of the
Seller will be compensated from the Seller’s funds for services provided to the
Seller, and to the extent that Seller shares the same officers or other
employees as Triumph, the Servicer or any Originator (or any other Affiliate
thereof), the salaries and expenses relating to providing benefits to such
officers and other

 

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employees shall be fairly allocated among such entities, and each such entity
shall bear its fair share of the salary and benefit costs associated with such
common officers and employees.  The Seller will not engage any agents other than
its attorneys, auditors and other professionals, and a servicer and any other
agent contemplated by the Transaction Documents for the Receivables Pool, which
servicer will be fully compensated for its services by payment of the Servicing
Fee, and a manager, which manager will be fully compensated from the Seller’s
funds;

 

(g)                                 The Seller will contract with the Servicer
to perform for the Seller all operations required on a daily basis to service
the Receivables Pool.  The Seller will pay the Servicer the Servicing Fee
pursuant hereto.  The Seller will not incur any material indirect or overhead
expenses for items shared with Triumph, the Servicer or any Originator (or any
other Affiliate thereof) that are not reflected in the Servicing Fee.  To the
extent, if any, that the Seller (or any Affiliate thereof) shares items of
expenses not reflected in the Servicing Fee or the manager’s fee, such as legal,
auditing and other professional services, such expenses will be allocated to the
extent practical on the basis of actual use or the value of services rendered,
and otherwise on a basis reasonably related to the actual use or the value of
services rendered; it being understood that Triumph, in its capacity as
Servicer, shall pay all expenses relating to the preparation, negotiation,
execution and delivery of the Transaction Documents, including legal, agency and
other fees;

 

(h)                                 The Seller’s operating expenses will not be
paid by Triumph, the Servicer or any Originator or any Affiliate thereof;

 

(i)                                     The Seller will have its own separate
stationery;

 

(j)                                     The Seller’s books and records will be
maintained separately from those of Triumph, the Servicer, each Originator and
any other Affiliate thereof and in a manner such that it will not be difficult
or costly to segregate, ascertain or otherwise identify the assets and
liabilities of Seller;

 

(k)                                  All financial statements of Triumph, the
Servicer or any Originator or any Affiliate thereof that are consolidated to
include Seller will disclose that (i) the Seller is a separate legal entity with
its own separate creditors who will be entitled, upon its liquidation, to be
satisfied out of the Seller’s assets prior to any assets or value in the Seller
becoming available to the Seller’s equity holders and (ii) the assets of the
Seller are not available to pay creditors of Triumph, the Servicer or the
Originators or any other Affiliates of Triumph, the Servicer or the Originators;

 

(l)                                     The Seller’s assets will be maintained
in a manner that facilitates their identification and segregation from those of
Triumph, the Servicer, the Originators or any Affiliates thereof;

 

(m)                               The Seller will observe limited liability
company formalities in its dealings with Triumph, the Servicer, the Originators
or any Affiliates thereof, and funds or other assets of the Seller will not be
commingled with those of Triumph, the Servicer, the Originators or any
Affiliates thereof except as permitted by this Agreement in connection with
servicing the Pool Receivables.  The Seller shall not maintain joint bank
accounts or other depository accounts to

 

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which Triumph or any Affiliate thereof (other than Triumph in its capacity as
the Servicer) has independent access.  The Seller is not named, and has not
entered into any agreement to be named, directly or indirectly, as a direct or
contingent beneficiary or loss payee on any insurance policy with respect to any
loss relating to the property of Triumph, the Originators or any Subsidiaries or
other Affiliates thereof.  The Seller will pay to the appropriate Affiliate the
marginal increase or, in the absence of such increase, the market amount of its
portion of the premium payable with respect to any insurance policy that covers
the Seller and such Affiliate;

 

(n)                                 The Seller will maintain arm’s-length
relationships with Triumph, the Servicer, the Originators (and any Affiliates
thereof).  Any Person that renders or otherwise furnishes services to the Seller
will be compensated by the Seller at market rates for such services it renders
or otherwise furnishes to the Seller.  Neither the Seller on the one hand, nor
Triumph, the Servicer or any Originator, on the other hand, will be or will hold
itself out to be responsible for the debts of the other or the decisions or
actions respecting the daily business and affairs of the other.  The Seller,
Triumph, the Servicer and the Originators will promptly correct any known
misrepresentation with respect to the foregoing, and they will not operate or
purport to operate as an integrated single economic unit with respect to each
other or in their dealing with any other entity;

 

(o)                                 The Seller shall have a separate area from
Triumph, the Servicer and each Originator for its business (which may be located
at the same address as such entities) and to the extent that any other such
entity has offices in the same location, there shall be a fair and appropriate
allocation of overhead costs between them, and each shall bear its fair share of
such expenses; and

 

(p)                                 To the extent not already covered in
paragraphs (a) through (o) above, Seller shall comply and/or act in accordance
with the provisions of Section 6.4 of the Sale Agreement.

 

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EXHIBIT V

 

TERMINATION EVENTS

 

Each of the following shall be a “Termination Event”:

 

(a)           (i)  the Seller, Triumph, any Originator or the Servicer shall
fail to perform or observe any term, covenant or agreement under this Agreement
or any other Transaction Document, except as otherwise provided herein, such
failure shall, solely to the extent capable of cure, continue for 15 days after
the earlier of any such Person’s knowledge or notice thereof or (ii) the Seller,
Triumph, any Originator or the Servicer shall fail to make when due any payment
or deposit to be made by it under this Agreement or any other Transaction
Document and such failure shall remain unremedied for two Business Days after
the earlier of any such Person’s knowledge or notice thereof;

 

(b)           any representation or warranty made or deemed made by the Seller,
any Originator or the Servicer (or any of their respective officers) under or in
connection with this Agreement or any other Transaction Document, or any
information or report delivered by the Seller or the Servicer or any Originator
pursuant to this Agreement or any other Transaction Document, shall fail to have
been true or correct in any material respect when made or deemed made or
delivered and shall remain incorrect or untrue for 10 days after knowledge or
notice thereof (if the representation or warranty is of a type that is capable
of being cured);

 

(c)           the Seller or the Servicer shall fail to deliver any Information
Package when due pursuant to this Agreement, and such failure shall remain
unremedied for five Business Days after the earlier of such Person’s knowledge
or notice thereof;

 

(d)           this Agreement or any Purchase or reinvestment pursuant to this
Agreement shall for any reason: (i) cease to create, or the Purchased Interest
shall for any reason cease to be, a valid and enforceable first-priority
perfected undivided percentage ownership or security interest in favor of the
Administrator (for the benefit of the Purchasers) in each Pool Receivable, the
Related Security and Collections with respect thereto, free and clear of any
Adverse Claim (other than the Judgment Lien solely in respect of Receivables
originated by Triumph Composite Systems, Inc.), or (ii) cease to create with
respect to the Pool Assets in favor of the Administrator (for the benefit of the
Purchasers), or the interest of the Administrator (for the benefit of the
Purchasers) with respect to such Pool Assets shall cease to be, a valid and
enforceable first-priority perfected security interest, free and clear of any
Adverse Claim (other than the Judgment Lien solely in respect of Receivables
originated by Triumph Composite Systems, Inc.);

 

(e)           the Seller, Triumph, the Servicer or any Originator shall
generally not pay its debts as such debts become due, shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against the
Seller, Triumph, the Servicer or any Originator seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any

 

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substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 60 days, or any of the actions
sought in such proceeding (including the entry of an order for relief against,
or the appointment of a receiver, trustee, custodian or other similar official
for, it or for any substantial part of its property) shall occur; or the Seller,
Triumph, the Servicer or any Originator shall take any corporate action to
authorize any of the actions set forth above in this paragraph;

 

(f)            (i) the (A) Default Ratio shall exceed 3.5% or (B) Delinquency
Ratio shall exceed 15.0%, (ii) the average for three consecutive calendar months
of: (A) the Default Ratio shall exceed 2.5%, (B) the Delinquency Ratio shall
exceed 13.0%, or (C) the Dilution Ratio shall exceed 3.0% or (iii) Days’ Sales
Outstanding exceeds 65 days;

 

(g)           a Change in Control shall occur;

 

(h)           the Purchased Interest shall exceed 100% for two consecutive
Business Days;

 

(i)            (i)  Triumph or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any of its Debt that is outstanding in a
principal amount of at least $10,000,000 in the aggregate when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement, mortgage, indenture
or instrument relating to such Debt (whether or not such failure shall have been
waived under the related agreement), or (ii) any other event shall occur or
condition shall exist under any agreement, mortgage, indenture or instrument
relating to any such Debt and shall continue after the applicable grace period,
if any, specified in such agreement, mortgage, indenture or instrument (whether
or not such failure shall have been waived under the related agreement), if the
effect of such event or condition is to give the applicable debtholders the
right (whether acted upon or not) to accelerate the maturity of such Debt, or
(iii) any such Debt shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to repay, redeem, purchase or defease such
Debt shall be required to be made, in each case before the stated maturity
thereof;

 

(j)            the occurrence of any event that results in or is reasonably
likely to result in either the Internal Revenue Service or the Pension Benefit
Guaranty Corporation filing one or more notices of lien asserting a claim or
claims pursuant to the Internal Revenue Code, or ERISA, as applicable, against
the assets of Seller, Triumph, any Originator or any ERISA Affiliate

 

(k)           a Purchase and Sale Termination Event shall have occurred; or

 

(l)            Triumph shall fail to perform in any material respect any of its
obligations under the Performance Guaranty.

 

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