**Exhibit10.1**

 

**FORM OFACCOUNT PURCHASE AGREEMENT**

**TO BEEXECUTED BY CERTAIN SUBSIDIARIES OF**

**BROADWINDENERGY, INC.**

 

This Account Purchase Agreement is dated as of September 28,2010, is entered into between WellsFargo Bank, National Association (together with its successors and assigns, “WFBC”),acting through its Wells Fargo Business Credit operating division, and[                                                    ](the “Customer”).  The Customer and WFBCagree as follows:

 

**Article 1.Purpose of Agreement**

 

1.01        **Purposeof Agreement**.  The Customerdesires to sell, transfer and assign to WFBC an undivided ownership interest inall of the Customer’s right, title and interest in certain of its Accounts, allRelated Rights with respect thereto and all proceeds of the foregoing and WFBCdesires to purchase such undivided ownership interest in all of the Customer’sright, title and interest in such Accounts, all Related Rights with respectthereto and all proceeds of the foregoing on the terms and conditions set forthherein.  The purchase of Accounts andRelated Rights hereunder shall be full recourse and shall be on anon-notification of assignment basis except upon the occurrence and during thecontinuation of an Event of Termination. The purpose of this Agreement is commercial in nature and not forhousehold, family or personal use.  Termswhich are not defined herein shall have the meaning set forth in the UniformCommercial Code as adopted in the State of Colorado.  The Customer acknowledges and agrees thatWFBC has not made any representations or warranties concerning the tax,accounting or legal characteristics of the transaction set forth herein and inthe Related Documents and that the Customer has obtained and relied upon suchtax, accounting and legal advice from its own experts concerning suchtransaction as it deems appropriate.

 

**Article 2.Definitions**

 

2.01        **“AcceptableAccount”** means an Account, in an amount equal to the aggregate faceamount of such Account, net of any credits or allowances of any nature, which (a) conformsto the representations, warranties and terms set forth herein and (b) isnot an Unacceptable Account as defined below.

 

2.02        **“Account”**means any right of payment of the net amount for goods sold, orleased and delivered or services rendered in the ordinary course of theCustomer’s business which is not evidenced by an instrument or chattel paper.

 

2.03        **“AccountDebtor”** means the Customer’s customer or any other Person owingmoney to the Customer with respect to an Account.

 

2.04        **“Affiliate”** means (a) any Person that directly, orindirectly through one or more intermediaries, controls another Person (as usedin this Section 2.04, a **“ControllingPerson”**) or 

 

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(b) anyPerson which is controlled by or is under common control with a ControllingPerson.  As used herein, the term “control” means possession, directly orindirectly, of the power to vote ten percent (10%) or more of any class ofvoting securities of a Person or to direct or cause the direction of themanagement or policies of a Person, whether through the ownership of votingsecurities, by contract or otherwise.

 

2.05        **“AffiliateAccount Purchase Agreements”** means (a) the Account Purchase Agreement byand between Tower Tech and WFBC, (b) the Account Purchase Agreement by andbetween Brad Foote and WFBC, (c) the Account Purchase Agreement by andbetween Energy Maintenance Service and WFBC, and (d) the Account PurchaseAgreement by and between Badger Transport and WFBC, each dated as of the datehereof and each as amended or otherwise modified.

 

2.06        **“AffiliateCustomer”** means any Person, other than WFBC, party to an AffiliateAccount Purchase Agreement.

 

2.07        **“AggregateFacility Maximum”**means$10,000,000.

 

2.08        **“Agreement”** means this Account Purchase Agreement.

 

2.09        **“Assignmentand Schedule of Accounts”** means the Assignment and Schedule of Accounts, a form of which isattached hereto as Exhibit A, as the form may be revised from time to timeby WFBC in its sole discretion by notice to Customer.

 

2.10        **“Badger Transport”**means Badger Transport, Inc., a Wisconsincorporation.

 

**“Brad Foote”**meansBrad Foote Gear Works, Inc., an Illinois corporation.

 

2.11        **“BroadwindEnergy”**means Broadwind Energy, Inc.,a Delaware corporation.

 

2.12        **“BusinessDay”** means a day onwhich the Federal Reserve Bank of New York is open for business.

 

2.13        **“Changeof Control”**means the occurrence of any of the following events:

 

(a)           Any Person or “group” (as such termis used in Sections 13(d) and 14(d) of the SecuritiesExchange Act of 1934) who does not have an ownership interest in theCustomer on the Closing Date is or becomes the “beneficial owner” (asdefined in Rules 13d-3 and 13d-5 under the Securities Exchange Actof 1934, except that any such Person, entity or group will be deemed tohave “beneficial ownership” of all securities that such Person, entity or grouphas the right to acquire, whether such right is exercisable immediately or onlyafter the passage of time), directly or indirectly, of more than twentypercent (20%) of the voting power of all classes of ownership of theCustomer; provided that WFBC must be notified of all owners with 20% orgreater ownership and of any individual with 10% ownership who is a familymember of another owner; or

 

(b)           During any consecutive two-yearperiod, individuals who at the beginning of such period constituted the boardof directors of the Customer (together with any new directors whose 

 

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election to such board ofdirectors, or whose nomination for election by the shareholders of theCustomer, was approved by a vote of at least two-thirds of the directors thenin office who were either directors at the beginning of such period or whoseelection or nomination for election was previously so approved) cease for anyreason to constitute a majority of the board of directors of the Customer thenin office.

 

2.14        **“ClosingDate”** means September 29, 2010.

 

2.15        **“Collateral”**shall mean all of the following property of the Customer whether now owned orexisting or hereafter created or acquired or arising, or in which the Customernow has or hereafter acquires any rights, and wheresoever located:  (a) allof the Purchased Accounts****and allof the Related Rights, together with: (b) all cash proceeds of thePurchased Accounts; (c) all related chattel paper (including electronicchattel paper); (d) all related commercial tort claims; (e) allrelated documents (including warehouse receipts, bills of lading, and otherdocuments of title); (f) all related general intangibles (including (i) paymentintangibles and (ii) all other choses in action, causes of action,actions, suits, and other legal proceedings of any kind, but excludingintellectual property); (g) all related instruments; (h) all relatedinvestment property; (i) all related letters of credit and letter ofcredit rights; (j) all related supporting obligations; (k) theCollected Reserve Account and all monies and other things of value contained inthe Collected Reserve Account or any of the Customer’s blocked accounts,lockbox accounts or collateral accounts established with or for the benefit ofWFBC for purposes of this Agreement, and all items in any lockbox establishedwith or for the benefit of WFBC for purposes of this Agreement; (l) allRecords and all other tangible and electronic books and records pertaining toany of the foregoing (including all mail and electronic mail); (m) allamendments, modifications, products, replacements, and substitutions to any ofthe foregoing; (n) all collateral subject to the Lien of any RelatedDocument; (o) all money and other assets of the Customer that now orhereafter come into the possession, custody, or control of WFBC; and (p) allproceeds (including cash, insurance and condemnation proceeds) pertaining toany of the foregoing.  The term “related”as used in this definition means related to the Purchased Accounts.

 

2.16        **“CollectedReserve Account”**means the internal general ledger account to and from which from time to timecredits, debits and disbursements will be made in accordance with thisAgreement.

 

2.17        **“****Confidential Information****”** shall have the meaning set forth in Section 11.17.

 

2.18        **“Creditand Collection Policy”** means the Customer’s credit, collection andadministration policies and procedures relating to the Accounts (including thePurchased Accounts) and the Related Rights, certain parameters of which are setforth in that certain document entitled “Broadwind Energy, Inc.Authorization Matrix (as of January 1, 2010), a copy of which has beenprovided to, and approved by, WFBC, as such policies and procedures may beamended in compliance with Section 6.02.

 

2.19        **“EnergyMaintenance Service”**means EnergyMaintenance Service, LLC, a Delaware limited liability company.

 

2.20        **“Eventof Termination”** shall have the meaning set forth in Article 9.

 

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2.21        **“FacilityMaximum”** means, subject to the availability of Acceptable Accounts,$10,000,000 less the aggregate Outstanding Balance (as defined in theapplicable Affiliate Account Purchase Agreement) of all Purchased Accounts (asdefined in the applicable Affiliate Account Purchase Agreement) under theAffiliate Account Purchase Agreements.

 

2.22        **“FeeRatio”** means, for acertain period, a fraction, the numerator of which is the aggregate PurchasedAmount on the last day of such period and the denominator of which is the sumof the aggregate Purchased Amount on the last day of such period plus theaggregate Purchased Amount (as defined in each Affiliate Account PurchaseAgreement) under each Affiliate Account Purchase Agreement on the last day ofsuch period; provided, however, that if such calculation results in the FeeRatio being zero or if the aggregate Purchased Amount on the last day of suchperiod is zero for any Affiliate Customer, then the Fee Ratio shall mean, forthe applicable period, a fraction, the numerator of which is one (1) andthe denominator of which is the sum of the number of Affiliate Account PurchaseAgreements in full force and effect on the last day of such period plus one(1).

 

2.23        **“FinalTermination Date”** shall have the meaning set forth in Section 11.26.

 

2.24        **“FormerPlan”** means anyemployee benefit plan in respect of which the Customer or a Subsidiary hasengaged in a transaction described in Section 4069 or Section 4212(c) ofERISA.

 

2.25        **“Guarantor”**means Broadwind Energy, Badger Transport, Brad Foote, Energy MaintenanceService, Tower Tech and****everyother Person now or in the future who agrees to guaranty the obligations of theCustomer to WFBC.

 

2.26        **“Guaranty”**means each guaranty of Customer’s obligations to WFBC executed by a Guarantorin favor of WFBC.

 

2.27        **“IndemnifiedLiabilities”** shall have the meaning set forth in Section 11.07(a).

 

2.28        **“Indemnitees”**shall have the meaning set forth in Section 11.07(a).

 

2.29        **“Insolvency”** means, with respect to any MultiemployerPlan, the condition that such Plan is insolvent within the meaning of Section 4245of ERISA.

 

2.30        **“InsolvencyProceeding”** means any proceeding under Title 11 of the United StatesCode or under the Bankruptcy and Insolvency Act (Canada) or the CompaniesCreditors Arrangement Act (Canada), any general assignment for the benefit ofcreditors, any proceeding instituted by or against a Person seekingliquidation, winding up, reorganization, arrangement, adjustment, protection,relief or composition of it or its debts under any law relating to bankruptcy,insolvency, reorganization or relief of debtors, or any proceeding seeking theentry of an order for relief by the appointment of a receiver, trustee,custodian or similar official for its or a substantial part of its property.

 

2.31        **“LIBOR”**means, as of aselected date, the rate per annum (rounded upward, if necessary, to the nearestwhole 1/16th of onepercent (1.0%)) determined pursuant to the following formula:

 

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| **LIBOR =** | **Base LIBOR**                      | ** ** |
|-------------|-------------------------------------|------------|
|        | **100% - LIBOR Reserve Percentage** | ** ** |

 

(a)           **“Base LIBOR”** means the rate per annum for United StatesDollar deposits quoted by Wells Fargo Bank, N.A. for the purpose of calculatingthe effective floating interest rate for loans that reference Daily Three MonthLIBOR as the Inter-Bank Market Offered Rate in effect from time to time forthree (3) month delivery of funds in amounts approximately equal to theprincipal amount of such loans.

 

(b)           **“Daily Three Month LIBOR”** means, for any day, the rate of interest equal to LIBOR then in effectfor delivery for a three (3) month period.  When interest isdetermined in relation to Daily Three Month LIBOR, each change in the interestrate shall become effective each Business Day that WFBC determines thatDaily Three Month LIBOR has changed.

 

(c)           **“LIBOR Reserve Percentage”** means the reserve percentage prescribed by the Board of Governors of theFederal Reserve System (or any successor) for “Eurocurrency Liabilities” (asdefined in Regulation D of the Federal Reserve Board, as amended), adjusted byWFBC for expected changes in such reserve percentage during the term of thisAgreement.

 

The Customer understands and agrees that WFBC maybase its quotation of the Inter-Bank Market Offered Rate upon such offers orother market indicators of the Inter-Bank Market as WFBC in its discretiondeems appropriate, including the rate offered for U.S. Dollar deposits on theLondon Inter-Bank Market.  WFBC’s determination of LIBOR shall beconclusive, absent manifest error.

 

2.32        **“Lien”** means any security interest, assignment(whether absolute or by way of security), mortgage, deed of trust, pledge, lien(statutory or otherwise), charge, encumbrance, title retention agreement oranalogous instrument or device, including without limitation the interest ofeach lessor under any capitalized lease and the interest of any bondsman underany payment or performance bond, in, of or on any assets or properties of aperson or entity, whether now owned or subsequently acquired and whetherarising by agreement or operation of law.

 

2.33        **“MaterialAdverse Effect”**means any effect upon the business, operations, property or financial or othercondition of Broadwind Energy and its Subsidiaries, taken as a whole, which, inthe sole determination of WFBC, materially adversely affects (a) theinterest of WFBC in the Purchased Accounts, the Related Rights or theCollateral, (b) the collectibility and enforceability of the PurchasedAccounts, the Related Rights or the Collateral or WFBC’s rights thereunder or (c) theability of Broadwind Energy and its Subsidiaries, taken as a whole, to performtheir obligations under this Agreement or any of the Related Documents.

 

2.34        **“MultiemployerPlan”** means a Planwhich is a multiemployer plan as defined in Section 4001(a)(3) ofERISA.

 

2.35        **“OtherTaxes”** shall have themeaning set forth in Section 11.20(b).

 

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2.36        **“OutstandingBalance”** means, for any Purchased Account, the total amount due andpayable by the Account Debtor for goods or services rendered by the Customer inrespect of such Purchased Account, after reduction for any payments, discounts,credits, rebates, allowances, reserves, incentives, penalties or otherreductions or similar adjustments, as determined by WFBC in it sole discretion.

 

2.37        **“Participant”**shall have the meaning set forth in Section 11.02.

 

2.38        **“PBGC”**means the PensionBenefit Guaranty Corporation established pursuant to Subtitle A of Title IV ofERISA (or any successor thereto).

 

2.39        **“PermittedLien”** and **“Permitted Liens”** shall have the meaning set forth inSection 6.11.

 

2.40        **“Person”**means any individual, corporation, partnership, joint venture, limitedliability company, association, joint stock company, trust, unincorporatedorganization or government or any agency or political subdivision of agovernmental entity.

 

2.41        **“Plan”**means, at aparticular time, any employee benefit plan which is covered by ERISA and inrespect of which the Customer or a Subsidiary is an “employer” as defined in Section 3(5) ofERISA.

 

2.42        **“PurchaseLimit”** means the limit WFBC sets from time to time in its solediscretion establishing the maximum gross face amount of Purchased Accounts which areapproved as Acceptable Accounts at any given time owed by a particular AccountDebtor.

 

2.43        **“PurchasePrice”** means, for anyPurchased Account and the Related Rights with respect thereto, an amount equalto 80% of the gross face amount of such Purchased Account, less any chargeswith respect to such Purchased Account and less any amount of any tradediscounts, credits or allowances, or any other reductions or adjustments tosuch Purchased Account taken by the Account Debtor.****This percentagemay be adjusted by WFBC at any time at WFBC’s sole discretion.

 

2.44        **“PurchasedAccount”**and **“Purchased Accounts”** shall have the meanings set forth in Section 3.01(a).

 

2.45        **“PurchasedAmount”** means, at anytime, an amount equal to (a) the aggregate Purchase Price, minus (b) theaggregate amount paid to WFBC hereunder on account of Purchased Accounts andRelated Rights, net of all fees, interest, expenses and costs hereunder.

 

2.46        **“Records”**means all tangible and electronic books, records, reports and other documentsand information (including hard copies of all data maintained in databases ofthe Customer on tapes, disks and punch cards) maintained in respect of thePurchased Accounts, the Related Rights, the Collateral and the Account Debtors.

 

2.47        **“RelatedDocument”** means any agreement, document, exhibit, notice or otherwritten communication to which the Customer is a party or which has at any timebeen delivered by or 

 

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onbehalf of the Customer to WFBC in connection with this Agreement, includingeach Guaranty.

 

2.48        **“RelatedRights”** shall have the meaning set forth in Section 3.01.

 

2.49        **“RelatedSecurity”**means, with respect to the Purchased Accounts, (a) all Liens, and allproperty subject thereto, from time to time purporting to secure payment of anyPurchased Account, including any security deposit, whether pursuant to anyrelated agreement or otherwise; (b) all of Customer’s right, title andinterest in, to and under all guarantees, indemnities, letters of credit,insurance policies (and proceeds and premium refunds thereof) and otheragreements or arrangements of whatsoever character from time to time supportingor securing payment of any Purchased Account, whether pursuant to the related agreementor otherwise; (c) all related Records; and (d) all proceeds of orrelating to the foregoing and any Purchased Account.

 

2.50        **“Reorganization”** means with respect to any Multiemployer Plan,the condition that such plan is in reorganization within the meaning of Section 4241of ERISA.

 

2.51        **“ReportableEvent”** means any of theevents set forth in Section 4043(c) of ERISA, other than those eventsas to which the thirty day notice period is waived underPBGC Reg. § 2615 or any successor regulation thereto.

 

2.52        **“RepurchasePrice”** means, for anyPurchased Account and the Related Rights with respect thereto, (a) thelesser of (i) the Purchase Price related to such Purchased Account and theRelated Rights with respect thereto and (ii) the Outstanding Balance ofsuch Purchased Account, plus (b) all fees, costs or expenses associatedwith the repurchase or collection of such Purchased Account and the RelatedRights with respect thereto.

 

2.53        **“SingleEmployer Plan”**means any Plan which is covered by Title IV of ERISA, but which is not aMultiemployer Plan.

 

2.54        **“Subsidiary”**means, as to any Person, any corporation or other entity of which securities orother ownership interests having ordinary voting power to elect a majority ofthe board of directors or other persons performing similar functions are at thetime directly or indirectly owned by such Person; unless otherwise specified, **“Subsidiary”** means a Subsidiary of theCustomer.

 

2.55        **“Taxes”** shall have the meaning set forth in Section 11.20(a).

 

2.56        **“TerminationDate”** means the earliest of (a) September 29,2013, (b) the date theCustomer terminates this Agreement pursuant to Section 3.11, (c) the date on which an Event of Terminationdescribed in Section 9.01(d) occurs, or (d) during thecontinuation of an Event of Termination, the date on which WFBC exercises itsright to cease purchasing Accounts.

 

2.57        **“TowerTech”**means Tower Tech Systems Inc., a Wisconsin corporation.

 

2.58        **“UnacceptableAccount”** means any Account which is not acceptable in WFBC’s sole discretionincluding the following:

 

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(a)           Accounts unpaid one hundred twenty(120) days or more after the invoice date;

 

(b)           Accounts owed by any unit ofgovernment, whether foreign or domestic (provided, however, that UnacceptableAccounts shall not include that portion of Accounts owed by such units ofgovernment for which the Customer has provided evidence satisfactory to WFBCthat (i) WFBC has a first priority perfected security interest in suchAccounts and (ii) such Accounts may be enforced by WFBC directly againstsuch unit of government under all applicable laws);

 

(c)           Accounts not payable in United StatesDollars;

 

(d)           Any Account which is not an “account”or “payment intangible” within the meaning of Article 9 of the UniformCommercial Code of all applicable jurisdictions;

 

(e)           Any Account which (i) does notarise under a contract which is in full force and effect, (ii) does notconstitute the legal, valid and binding obligation of the related AccountDebtor enforceable against such Account Debtor in accordance with its terms, (iii) issubject to counterclaim, defense or other Lien (other than Permitted Liens), or(iv) is an executory contract or unexpired lease within the meaning of Section 365of the Bankruptcy Code;

 

(f)            Any Account which arises under acontract which (i) does not contain an obligation to pay a specified sumof money or is subject to contingencies, (ii) requires the Account Debtorunder such contract to consent to the sale, transfer or assignment of therights to payment under such contract (except to the extent such requirement ismade ineffective by Uniform Commercial Code Section 9-406), (iii) limitsor restricts the sale, transfer or assignment (whether absolutely or by way ofsecurity) of such contract, or (iv) contains a confidentiality provisionthat purports to restrict WFBC’s exercise of rights under this Agreement,including the right to review such contract;

 

(g)           Any Account which, in whole or inpart, contravenes any law, rule or regulation applicable thereto(including those relating to usury, truth in lending, fair credit billing, faircredit reporting, equal credit opportunity, fair debt collection practices andprivacy), which contravention would reasonably be expected to have a MaterialAdverse Effect;

 

(h)           Accounts owed by an Account Debtorwhich (i) is not acceptable to WFBC or (ii) is located outside theUnited States or Canada;

 

(i)            Accounts owed by an Account Debtorthat is insolvent, the subject of an Insolvency Proceeding or has ceased doingbusiness;

 

(j)            Accounts owed by an owner,shareholder, Subsidiary, Affiliate, officer or employee of the Customer;

 

(k)           Accounts not beneficially or legallyowned by the Customer immediately prior to purchase by WFBC;

 

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(l)            Accounts which representindebtedness of an Account Debtor that constitutes an illegal, invalid orunenforceable obligation of such Account Debtor to pay the amount thereof onthe maturity date stated therein;

 

(m)          Accounts which, upon purchase by WFBC,are not subject to a duly perfected Lien in WFBC’s favor or which are subjectto any Lien in favor of any Person other than WFBC, including any payment orperformance bond;

 

(n)           Accounts that have been restructured,extended, amended or modified prior to purchase by WFBC (to the extent notpreviously disclosed by Customer to WFBC) or at any time after purchase byWFBC;

 

(o)           Except to the extent made ineffectiveby Uniform Commercial Code Section 9-406, any Account whose sale, transferor assignment (whether absolutely or by way of security) is limited orrestricted by the terms of the contract evidencing or relating to such Account(unless such limitation or restriction has been complied with and WFBC issatisfied in its sole discretion that the sale, transfer or assignment of suchAccount hereunder is valid and effective);

 

(p)           That portion of Accounts thatconstitutes freight fees, allowances, finance charges, service charges or salesor excise taxes;

 

(q)           Accounts that have been invoiced,paid or partially paid in advance of the full delivery and acceptance of goodsor the performance and acceptance of services or in advance of the submissionof such Accounts to WFBC (provided that WFBC, in its sole discretion, may agreeto purchase some or all of the portion of an Account not partially paid inadvance);

 

(r)            Any Account which (i) does notsatisfy in all material respects all applicable requirements of the Credit andCollection Policy or (ii) was not generated in the ordinary course of theCustomer’s business;

 

(s)            Any Account as to which not all ofthe related invoices have been made available to WFBC in a form acceptable toWFBC, and which are not included in an Assignment and Schedule of Accountsacceptable to WFBC in its sole discretion prior to the proposed purchase ofsuch Accounts;

 

(t)            Any Account which is subject to anyasserted reduction (including any reduction on account of any offsettingaccount payable of the related Account Debtor or the Customer to an AccountDebtor or any reduction on account of any application of a deposit or advancepayment made to the Customer), cancellation, rebate or refund, deduction,withholding, discount or any dispute, offset, counterclaim, Lien or defensewhatsoever; provided that an Account that is subject only in part to any of theforegoing but otherwise qualifies as an Acceptable Account (as determined byWFBC in its sole discretion) shall be an Acceptable Account to the extent notsubject to reduction, cancellation, refund, rebate, deduction, withholding,discount, dispute, offset, counterclaim, Lien or other defense;

 

(u)           Accounts which would cause thePurchase Limit for such Account Debtor to be exceeded;

 

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(v)           Accounts which would cause thePurchased Amount to exceed the Facility Maximum; and

 

(w)          Accounts, or portions thereof, thatfail to conform to the representations and warranties contained herein or areotherwise deemed unacceptable by WFBC in its sole discretion.

 

2.59        “**UniformCommercial Code**” means the Uniform Commercial Code as in effect fromtime to time in the State of Colorado; provided, however, to the extent the lawof any other state or other jurisdiction applies to the attachment, perfection,priority or enforcement of any Lien granted to WFBC in any of the Collateral, **“Uniform Commercial Code”** means the UniformCommercial Code as in effect in such other state or jurisdiction for purposesof the provisions hereof relating to such attachment, perfection, priority orenforcement of a Lien in such Collateral. To the extent this Agreement defines the term “Collateral” by referenceto terms used in the Uniform Commercial Code, each of such terms shall have thebroadest meaning given to such terms under the Uniform Commercial Code as ineffect in any state or other jurisdiction.

 

2.60        **“UnusedFee”** shall have themeaning set forth in Section 3.08(b).

 

2.61        **“WellsReceivers”**shallhave the meaning set forth in Section 11.17.

 

2.62        **“WFBCDiscount”** means, with respect to each Purchased Account and theRelated Rights with respect thereto, an amount equal to the lesser of (i) thesum of LIBOR plus three and three-quarters of one percent (3.75%) per annum, or(ii) the lawful maximum, if any, in effect from time to time for advancesto customers of the type, in the amount, for the purposes and otherwise of thekind herein contemplated.  Upon theoccurrence and during the continuation of an Event of Termination, with respectto each Purchased Account and the Related Rights with respect thereto, the WFBCDiscount shall be equal to the sum of LIBOR plus six and three-quarters of onepercent (6.75%) per annum, or such lesser amount as WFBC in its sole discretionmay determine (but in no event shall such fee be more than the lawful maximum,if any, in effect from time to time for advances of the type, in the amount,for the purposes and otherwise of the kind herein contemplated).  The WFBC Discount shall be calculated on thebasis of a 360-day year for the actual number of days elapsed.

 

2.63        **“WFBCDiscount Fee”**shall have the meaning set forth in Section 3.08(c).

 

**Article 3.Purchase and Assignment of Accounts**

 

3.01        **Purchaseand Assignment of Accounts**. Pursuant to the terms herein and in consideration for amounts paid tothe Customer on the date hereof as well as amounts paid to the Customer duringthe term hereof, the Customer hereby agrees to sell, transfer and assign toWFBC, with recourse, as absolute owner, and WFBC hereby agrees to purchase fromthe Customer, during the period from the Closing Date to but excluding theTermination Date, as of the date of each delivery of each Assignment andSchedule of Accounts acceptable to WFBC in its sole discretion, all of theCustomer’s right, title and interest in and to the following:

 

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(a)           Each Acceptable Account presented bythe Customer on or after September 28, 2010****to, but excluding, the Termination Date which isoffered for sale, transfer and assignment by the Customer pursuant to anAssignment and Schedule of Accounts delivered to WFBC by the Customer andaccepted by WFBC in its sole discretion (collectively,the “Purchased Accounts” and each, a “Purchased Account”);

 

(b)           All rights of action (including allrights of stoppage in transit, replevin, repossession, reclamation,setoff, detinue, repurchase and all other rights of action of a consignor,consignee, unpaid vendor, mechanic, artisan or other lienor) accrued or toaccrue on each Purchased Account, including full power to collect, sue for,compromise, assign, in whole or in part, or in any other manner enforcecollection thereof in the Customer’s name or otherwise;

 

(c)           All right, title and interest of theCustomer in and to the Records, the Related Security, all agreements, documentsor instruments relating to the Purchased Accounts and the proceeds thereof, andall deposits and other security for the obligation of any Person under orrelating to the Purchased Accounts, in each case whether presently existing orhereafter arising, now owned or hereafter acquired;

 

(d)           All inventory and goods relating to,or which by sale have resulted in, Purchased Accounts, including all returnedinventory and goods; and

 

(e)           All proceeds of the foregoing in anyform (collectively, with the assets described in Section 3.01(b), Section 3.01(c),and Section 3.01(d), the “Related Rights”).

 

The foregoing sales, transfers and assignments donot constitute, and are not intended to result in, an assumption by WFBC of anyliability or obligation of the Customer or any other Person in connection withthe Purchased Accounts, the Related Rights or under any agreement or instrumentrelating thereto.

 

3.02        **Approval**.  WFBC shall not purchasean Account and the Related Rights with respect thereto unless such Account isfirst submitted to WFBC by the Customer for approval.  WFBC is notobligated to buy from the Customer any Account and the Related Rights withrespect thereto that WFBC does not deem acceptable in its sole discretion.

 

3.03        **RequiredForms**. When the Customer offers an Account and the Related Rights with respect theretoto WFBC for sale, transfer and assignment, WFBC shall receive (a) anAssignment and Schedule of Accounts, in a form satisfactory to WFBC in its solediscretion and signed by an authorized representative of the Customer, (b) anoriginal invoice or an electronic equivalent thereof, either of which must bein a form acceptable to WFBC in its sole discretion, (c) a copy of thebill of lading if applicable, (d) proof of delivery, (e) contract,purchase order, or purchase order number which corresponds with such invoice,as appropriate to the business of the Customer, and (f) any other documentwhich WFBC may require.

 

3.04        **Purchase**.  Upon approval and acceptance by WFBCof an Account and the Related Rights with respect thereto for the sale,transfer and assignment to WFBC of such Account and such Related Rights, WFBCshall purchase and the Customer shall sell, transfer and assign to WFBC suchAccount andsuch Related Rights.

 

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3.05        **PurchasePrice**. As consideration for the sale, transfer and assignment to WFBC of an Accountand the Related Rights with respect thereto, WFBC shall pay to the Customer thePurchase Price for such Account and such Related Rights on the terms andconditions as stated herein.

 

3.06        **Paymentof Purchase Price**.  Upon the sale, transfer and assignment of an Account and theRelated Rights with respect thereto to WFBC, and receipt of all documents andforms described in Section 3.03 and upon fulfillment of all applicableconditions precedent to such sale, transfer and assignment as more fully setforth herein, WFBC shall pay the Purchase Price for such Purchased Account andsuch Related Rights to the Customer as follows, as determined by WFBC in itssole discretion:  (i) WFBC shall paysuch Purchase Price to the Customer or to any third party at the Customer’swritten direction to WFBC, or (ii) WFBC shall advance such Purchase Priceto the Collected Reserve Account.

 

3.07        **Repurchaseof Accounts**.  The Customershall (a) repurchase any and all Purchased Accounts and the Related Rightswith respect thereto, whether disputed or undisputed, as may be requested byWFBC, from time to time in its sole discretion, and (b) pay within three (3) BusinessDays after demand the Repurchase Price for such Purchased Accounts and theRelated Rights with respect thereto. WFBC may demand that the Customer repurchase a Purchased Account:  (a) which remains unpaid one hundredtwenty (120) days after its invoice date, (b) which is owed by an AccountDebtor who has filed, or has had filed against it, an Insolvency Proceeding, or(c) with respect to which there has been any breach of representation orwarranty set forth in Article 5.  Inany event where repurchase is required under this Agreement, WFBC, at itsdiscretion, may charge the Repurchase Price to the Customer’s Collected ReserveAccount which may create a deficit balance in the Collected Reserve Account.

 

3.08        **Fees**.

 

(a)           **Facility Fee**.  The Customer shall pay WFBC a fully earned annual facility feeequal to (i) $25,000, payable on the Closing Date and (ii) $100,000times the Fee Ratio for such year, payable on each anniversary of the ClosingDate until the Final Termination Date.

 

(b)           **Unused Fee. **From the Closing Date to and including the Final Termination Date, theCustomer shall pay WFBC an unused fee (the “Unused Fee”) in the amount of (i) forty-twoone thousandths of one percent (0.042%) per annum, times (ii) the resultof (A) the Aggregate Facility Maximum less (B) the aggregate averagedaily Purchased Amount during such month plus the aggregate average dailyPurchased Amount (as defined in each Affiliate Account Purchase Agreement)under each Affiliate Account Purchase Agreement during such month, times (iii) theFee Ratio for such month, which Unused Fee shall be payable monthly in arrearson the fifteenth (15th) day of each month and on the Final Termination Date.

 

(c)           **WFBC Discount Fee**.  The Customer shall pay WFBC a fully earned fee equal to theproduct of the WFBC Discount multiplied by the aggregate Outstanding Balance ofthe Purchased Accounts (the “WFBC Discount Fee”).  The WFBC Discount Feeshall accrue daily and shall be due and payable in arrears on the first day ofeach month and on the Final Termination Date.

 

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(d)           **Audit Fees**.  The Customer shall pay WFBC, on demand, audit fees in connectionwith any audits or inspections conducted by WFBC of the Purchased Accounts, theRelated Rights, the Collateral or the Customer’s operations or business, at therates established from time to time by WFBC as its audit fees, together withall actual out of pocket costs and expenses incurred in conducting any suchaudit or inspection.

 

(e)           **TerminationFee.**  If the Termination Dateoccurs on or before September 29, 2013 pursuant to Section 3.11,the Customer shall pay WFBC on the Termination Date a fully earned terminationfee equal to:  (i) three percent(3%) of the Facility Maximum, if this Agreement is terminated on or before thefirst anniversary of the Closing Date; (ii) two percent (2%) of theFacility Maximum, if this Agreement is terminated after the first anniversaryof the date hereof but on or before the second anniversary of the Closing Date;and (iii) one percent (1%) of the Facility Maximum, if this Agreement isterminated after the second anniversary of the date hereof but on or before thethird anniversary of the Closing Date. Notwithstanding the foregoing, the Customer shall not be required to payany termination fee in the event this Agreement is terminated after the firstanniversary of the date hereof (i) as a result of or in connection withrefinancing or replacement financing with Wells Fargo Bank, NationalAssociation or any affiliate or division of Wells Fargo Bank, NationalAssociation or (ii) by Customer after demand by WFBC for a payment under Section 11.08of this Agreement.

 

3.09        **MandatoryPayments**.  Unless WFBC shall otherwise consent in awritten agreement that sets forth the terms and conditions which WFBC in its discretionmay deem appropriate, if the Purchased Amount is at any time greater than theFacility Maximum, the Customer shall pay to WFBC, upon demand, the amountnecessary to eliminate such excess.  Anysuch payment received by WFBC under this Agreement may be applied to theamounts owing to WFBC from the Customer, in such order and in such amounts asWFBC in its sole discretion may determine from time to time.

 

3.10        **CollectedReserve Account and Reporting and Statement of Account**.

 

(a)           After collection by WFBC of aPurchased Account and the Related Rights with respect thereto, if any, WFBCshall credit the Collected Reserve Account with the amount collected on suchPurchased Account and such Related Rights less: (i) the Purchase Price, and (ii) any fees, expenses or chargesowed to WFBC as more fully described herein. Any fee, charge or other obligation of the Customer under this Agreementor any Related Document may be charged against the Collected Reserve Account inWFBC’s sole discretion.  Provided no Event of Termination has occurred andis continuing, or any event has occurred which with the passage of time ornotice would be an Event of Termination, each Wednesday that is a Business Day,any available balance held in the Collected Reserve shall be released to theCustomer or to any third party, at the Customer’s written direction toWFBC.  Upon the occurrence and during thecontinuation of an Event of Termination, or the continuation of an event whichwith the passage of time or notice would become an Event of Termination, WFBCmay hold any balance in the Collected Reserve Account as Collateral for anyobligations of the Customer to WFBC and WFBC may charge any such obligationsagainst the Collected Reserve Account in its sole discretion.

 

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(b)           On a weekly basis, or as otherwisedetermined by WFBC at its sole discretion, WFBC shall prepare, and makeavailable to the Customer, an accounting of the purchases, collections, andamounts credited to or charged against the Collected Reserve Account duringthat week or other period.  Should such a statement of account indicate adeficit balance, such balance shall be due and payable and the Customer shallwithin three (3) Business Days pay to WFBC the amount of such deficit plusaccrued interest on such deficit balance.  Interest shall accrue on anydeficit balance at the annual rate of ten percent (10%), calculated on a dailybasis, not to exceed the applicable legal limit, from the date due until suchdeficit is paid in full.

 

3.11        **Terminationof this Agreement by Customer**.  TheCustomer may terminate this Agreement at any time if it (a) gives WFBC atleast thirty (30) days advance written notice prior to the proposed TerminationDate and (b) pays WFBC applicable termination fees in accordance with theterms of this Agreement.  If the Customerterminates this Agreement, on such Termination Date, (x) all amounts duehereunder shall be immediately due and payable and (y) the Customer shallrepurchase all outstanding Purchased Accounts and the Related Rights withrespect thereto and immediately pay the Repurchase Price for such PurchasedAccounts and the Related Rights with respect thereto.

 

3.12        **SoleProperty**.  Once WFBC haspurchased an Account, any and all payments from whatever source as to suchPurchased Account are the sole property of WFBC.

 

3.13        **MiscellaneousPayments**.  Should WFBC receivea duplicate payment on a Purchased Account or other payment which is notidentified, WFBC shall carry these sums as open items in its accounting andshall return any duplicate payment to the Account Debtor or apply suchunidentified payment pursuant to the terms hereof upon proper identificationand documentation.

 

3.14        **MisdirectedPayments**. With respect to misdirected payments, whenever any payment on any PurchasedAccount comes into the Customer’s possession, the Customer shall hold suchpayment in trust and safekeeping, as the property of WFBC, and immediately turnover to WFBC such payment in the same form as it was received by the Customerto WFBC. The Customer shall pay a misdirected payment fee in the amount of tenpercent (10%) of the amount of any payment on account of a Purchased Accountwhich has been received by the Customer and not delivered in kind to WFBCwithin five (5) Business Days following the date of receipt by theCustomer.  Further, the Customer shall segregate and hold in trust andsafekeeping, as the property of WFBC, and immediately turn over to WFBC, anygoods or inventory returned to, reclaimed or repossessed by the Customer whichconstitute Related Rights related to a Purchased Account.

 

3.15        **Repaymentof Account Debtor**.  In theevent WFBC is required to repay any Account Debtor for a payment received byWFBC on an Account or Related Right, the amount of the repayment by WFBC shallbe an obligation of the Customer to WFBC whether or not this Agreement has beenterminated.  In the event the Customerreceives a payment from WFBC to which the Customer has no rights, repayment ofthe funds to WFBC is an obligation of the Customer to WFBC whether or not thisAgreement has been terminated.  In eitherevent, if the obligation is not paid upon five (5) Business Days notice ofthe obligation to pay from WFBC to the Customer, WFBC may file a financingstatement in connection with the security interest granted herein (ifnecessary) or otherwise perfect its interest in the Collateral and exercise any

 

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andall rights it has under this Agreement, any Related Document or otherwise tocollect the amounts due.

 

3.16        **HoldHarmless**.  The Customer shallhold WFBC harmless against any Account Debtor ill will arising from WFBC’scollecting or attempting to collect on any Purchased Account and the RelatedRights with respect thereto, provided that WFBC acts in a commerciallyreasonable manner.

 

3.17        **BookEntry**.  The Customer shall,immediately upon sale to WFBC of each Account and the Related Rights withrespect thereto, make proper entries on its books and records disclosing theabsolute sale of such Accounts to WFBC on said books and records and otherdocuments as so directed by WFBC.

 

3.18        **Information**.  In the event WFBC provides financialinformation to the Customer regarding a third party, whether by setting aPurchase Limit, at the request of the Customer or otherwise, the Customerunderstands that WFBC is not making any representations or warranties orexpressing an opinion as to the creditworthiness of any such third party.

 

3.19        **PaymentTerms**.

 

(a)           All accrued and unpaid fees,expenses, default interest, costs and any other amounts due from the Customershall be due and payable (i) on the date set forth herein or, if no dateis set forth herein, upon demand by WFBC, and (ii) on the FinalTermination Date.  Whenever any paymentto be made hereunder shall be stated to be due on a day which is not a BusinessDay, such payment may be made on the next succeeding Business Day, and suchextension of time shall in such case be included in the computation of thefees, expenses, interest, costs and any other amounts due hereunder, as thecase may be.

 

(b)           All amounts to be paid by ordeposited hereunder will be paid or deposited not later than 1:00 p.m.(Denver, Colorado****time) on the day when due in same dayfunds.  All computations of interest andfees shall be calculated for the actual days elapsed based on a 360 day year.

 

(c)           Amounts due to WFBC hereunder shallbe remitted to WFBC in United States Dollars.

 

(d)           The Customer shall pay, as a fullrecourse obligation, all fees, interest, costs and expenses, including allamounts payable under Section 11.07.

 

(e)           The Customer will pay on demand toWFBC interest (before and after default and before and after judgment, withinterest on overdue interest at the same rate) on all amounts not paid to ordeposited when due hereunder (other than amounts due under Section 3.10(b))at a rate equal to LIBOR plus six and three quarters of one percent (6.75%)****per annum calculated daily.

 

(f)            The Customer will make all paymentsrequired to be made by it hereunder without deduction or setoff regardless ofany defense or counterclaim.

 

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(g)           The Customer acknowledges that (i) WFBCmay maintain records of the Purchased Amount, all Purchased Accounts, all proceedsof Collateral and all amounts paid by the Customer to WFBC hereunder, includingall fees, interest, costs and expenses; (ii) such records shall, absentmanifest error, be conclusive evidence thereof and (iii) the failure ofWFBC to maintain any such records shall not limit or otherwise affect theobligations of the Customer or the rights and remedies of WFBC hereunder orunder any Related Document.

 

**Article 4.Conditions Precedent**

 

4.01        **ConditionsPrecedent to Initial Purchase**. Prior to the initial purchase hereunder, the Customer shall deliver toWFBC, unless waived by it, the following documents, in form and substancesatisfactory to WFBC:

 

(a)           an executed copy of this Agreement;

 

(b)           (i) a certificate of an officerof the Customer containing a copy of its certificate of formation and limitedliability company agreement, an appropriate resolution of its managers, and thenames and true signatures of the officers authorized to sign this Agreement andthe Related Documents on its behalf, and (ii) a certificate of an officerof the Customer containing the names and true signatures of the officersauthorized to sign all reports and other submissions under this Agreement andthe Related Documents on its behalf, on which certificates WFBC shall be entitledto conclusively rely until such time as WFBC receives from the Customer areplacement certificate meeting the requirements of this Section 4.01(b)(i) or(ii), as the case may be;

 

(c)           a certificate of status, goodstanding or compliance in respect of the Customer issued by its jurisdiction ofincorporation and a certificate of status, good standing or compliance inrespect of the Customer issued by the appropriate authorities in eachjurisdiction in which the Customer is required to be registered in order toconduct its business, except to the extent that failure to do so would notreasonably be expected to have a Material Adverse Effect;

 

(d)           Certificates of Insurance requiredunder this Agreement, naming WFBC as a certificate holder;

 

(e)           executed copies of all discharges andreleases, if any, necessary to discharge or release all Liens and other rightsor interests of any Person in the Purchased Accounts, the Related Rights or theCollateral previously granted by the Customer, other than Permitted Liens,together with file stamped copies of the relevant UCC-3 financing statements;

 

(f)            current searches of appropriatefiling offices showing that (i) no Liens have been filed and remain ineffect against the Customer with respect to the Collateral except PermittedLiens or Liens held by Persons who have agreed in writing that upon receipt ofproceeds of the initial purchase, they will satisfy, release or terminate suchLiens in a manner satisfactory to WFBC, and (ii) WFBC has duly filed allfinancing statements necessary to perfect its Lien on the Purchased Accounts,the Related Rights and the Collateral to the extent it is capable of beingperfected by filing, and such other similar instruments or documents as may benecessary and, in 

 

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WFBC’s reasonablediscretion, advisable under any applicable statute to perfect, record orprotect WFBC’s interest in the Purchased Accounts, the Related Rights or theCollateral;

 

(g)           payment of all fees due under theterms of this Agreement through the date of the initial purchase and payment ofall expenses incurred by WFBC and through such date and that are required to bepaid by the Customer under this Agreement; and

 

(h)           such other approvals or documents asWFBC in its sole discretion may require.

 

4.02        **ConditionsPrecedent to Subsequent Purchases**. Each subsequent purchase of an Account and the Related Rights withrespect thereto shall be subject to the conditions precedent that, on the dateof such purchase before and after giving effect to such purchase, (a) theCustomer has delivered to WFBC an Assignment and Schedule of Accountsacceptable to WFBC in its sole discretion which includes the Accounts to bepurchased, (b) the representations and warranties of the Customerhereunder are correct on and as of the date of such purchase as though made onand as of such date, except to the extent that such representations andwarranties relate solely to an earlier date and (c) no event has occurredand is continuing, or would result from such purchase, which constitutes anEvent of Termination or would constitute an Event of Termination but for therequirement that notice be given or time elapse or both.

 

**Article 5.The Customer’s Representations and Warranties**

 

The Customer hereby represents and warrants to WFBCas follows and any request by the Customer to sell, transfer and assignAccounts to WFBC will be deemed a representation by the Customer that allrepresentations and warranties in this Article 5 are true, correct andcomplete as of the time of the request, unless they relate exclusively to anearlier date:

 

5.01        **Existenceand Trade Names**.  The Customer is duly organized, validlyexisting and in good standing under the laws of its jurisdiction oforganization and is duly qualified to carry on business in each jurisdiction inwhich the failure to be so qualified could reasonably be expected to have aMaterial Adverse Effect, and the Customer’s trade name(s), all of which aredisclosed on the Customer’s application provided to WFBC, have been properlyfiled and published as required by applicable law.

 

5.02        **CorporatePower and Authority**.  The Customer has all requisite corporatepower and authority to execute and deliver, and to perform all of itsobligations under, this Agreement and all of the Related Documents to which itis a party.

 

5.03        **CorporateAction**.  The Customer has taken all necessarycorporate action to authorize the execution, delivery and performance of thisAgreement and all of the Related Documents to which it is a party.

 

5.04        **Authorization**.  Theexecution, delivery and performance by the Customer of this Agreement and allof the Related Documents to which it is a party have been duly authorized anddo not require the consent or approval of the Customer’s shareholders.

 

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5.05        **BindingEffect**.  This Agreement and all of the RelatedDocuments to which it is a party have been duly executed and delivered by theCustomer and constitute the legally binding obligation of the Customerenforceable against it in accordance with their terms, subject to applicablebankruptcy, reorganization, insolvency, moratorium and other similar lawsaffecting creditors’ rights generally and equitable principles of generalapplication (regardless of whether enforcement is sought in a proceeding at lawor in equity).

 

5.06        **NoContravention; No Consent Required**.  TheCustomer’s execution and delivery of this Agreement or any Related Document towhich it is a party and compliance with their respective terms and conditionswill not (a) result in a violation of the Customer’s [organizationaldocuments] or any resolutions passed by the Customer’s directors orshareholders; (b) result in a violation of any applicable law, rule,regulation, order, judgment, injunction, award or decree; (c) result in abreach of, or constitute a default under, any loan agreement, indenture, trustdeed or any other agreement or instrument to which the Customer is a party orby which it is bound which could reasonably be expected to have a MaterialAdverse Effect; (d) require any approval or consent of, or any notice toor filing with, any governmental authority or agency having jurisdiction exceptsuch as has already been obtained, or (e) result in, or require, the creationor imposition of any Lien (other than Permitted Liens) upon or with respect toany of the Purchased Accounts, Related Rights or Collateral.

 

5.07        **ChiefExecutive Office**.  The Customer’s chief executive office is atthe location(s) set out under the Customer’s name on the signature pages tothis Agreement.  All other places ofbusiness have been disclosed on the application provided to WFBC.

 

5.08        **Solvencyof the Customer**.  The Customer is solvent and is not subject toany Insolvency Proceeding.

 

5.09        **Taxes**.  TheCustomer has made and shall continue to make timely payment and remittance toapplicable governmental authorities of all taxes and other amounts required tobe paid and remitted by the Customer pursuant to applicable law, except (a) for such taxes as may be contested by the Customer ingood faith and for which appropriate reserves have been established asdetermined by WFBC in its sole discretion and (b) for taxes thenon-payment of which would not materially adversely affect the interest of WFBCin the Purchased Accounts, the Related Rights or the Collateral or thecollectibility and enforceability of the Purchased Accounts, the Related Rightsor the Collateral or WFBC’s rights thereunder.

 

5.10        **GoodTitle; No Liens**.  The Customer is, at the time of purchase ofeach Account and the Related Rights with respect thereto by WFBC, the lawfulowner of and has good and undisputed title to such Account and the RelatedRights with respect thereto.  At the timeof purchase, each Account and the Related Rights with respect thereto are freefrom any Liens other than Permitted Liens. To the Customer’s knowledge, each Account offered for sale, transfer andassignment to WFBC is an Acceptable Account.

 

5.11        **Solvencyof Account Debtors**.  To the Customer’s knowledge, each AccountDebtor’s business is solvent at the time each Account of such Account Debtorand the Related Rights with respect thereto are presented to WFBC for purchase.

 

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5.12        **AccountsUndisputed; Transferable**.  Each Account or portionthereof, as the case may be, offered for sale, transfer and assignment to WFBC (a) isan accurate and undisputed statement of indebtedness owed by the applicableAccount Debtor to the Customer for a certain sum which is due and payable inone hundred twenty (120) days or less, or within such term as is agreed to byWFBC and the Customer, and (b) is for a bona fide sale, delivery andacceptance of merchandise or performance of services which have been receivedand finally accepted by such Account Debtor. The Customer has all rights to sell, transfer or assign such Accountsand the Related Rights with respect thereto to WFBC and at the time of purchase(and all other times unless the Customer gives WFBC written notice to thecontrary) such Accounts and the Related Rights with respect thereto are payableby the applicable Account Debtor without offset, deduction or counterclaim.

 

5.13        **NoOwnership; Control of Account Debtors**.  TheCustomer does not own, control or exercise dominion over, in any waywhatsoever, any Account Debtor or the business of any Account Debtor for whomAccounts are to be, or have been, sold by the Customer to WFBC.

 

5.14        **Accuracyof Information**.  All of the Records and all other records,statements or books shown to WFBC by the Customer at anytime, either before orafter the signing of this Agreement, are true and accurate in all materialrespects.

 

5.15        **NoActions; Suits**.  There is no action, suit or proceeding at lawor in equity or by or before any governmental instrumentality or other agencynow pending, or to the knowledge of the Customer, threatened against oraffecting the Customer, which if adversely determined, would have a MaterialAdverse Effect.

 

5.16        **MaterialAdverse Effect**.  Since the date of Broadwind Energy’s mostrecent audited financial statements, there has been no Material Adverse Effect.

 

**Article 6.The Customer’s Covenants**

 

The Customer agrees as follows:

 

6.01        **Compliancewith Governing Documents; Laws**.  TheCustomer will comply in all material respects with its [organizationaldocuments] and all applicable laws, rules, regulations and orders with respectto it, its properties, and all Purchased Accounts and the Related Rights withrespect thereto, and will preserve and maintain its existence, rights,franchises, qualifications, and privileges in the jurisdiction of itsorganization, and qualify and remain qualified in good standing in eachjurisdiction where the failure to be so qualified could result in a MaterialAdverse Effect.

 

6.02        **Compliancewith Account Debtor Agreements**.  TheCustomer will, at its own expense, timely and fully perform and comply with allmaterial provisions, covenants and other promises required to be observed by itunder the agreements with its Account Debtors and under all other agreements related to anyPurchased Accounts or Related Rights, and timely and fully comply in allmaterial respects with the Credit and Collection Policy in regard to eachPurchased Account.  WFBC’s exercise ofany rights hereunder shall not relieve the Customer from such obligations.  The Customer will not make any change in thecharacter of its business that could 

 

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(a) resultin a Material Adverse Effect or (b) result in a Purchased Account becomingan Unacceptable Account.  The Customer will not amend or otherwise modify in any material andadverse manner the Credit and Collection Policy without giving notice to WFBC.

 

6.03        **EnsurePayment of Purchased Accounts; Defend WFBC Title**.  TheCustomer will (a) take all steps reasonably necessary or reasonablyrequested by WFBC to (i) ensure payment of all Purchased Accounts and theRelated Rights with respect thereto by the Account Debtors and (ii) defendthe title of WFBC to each Purchased Account and the Related Rights with respectthereto and the proceeds thereof against the claims of all other Persons and (b) consultwith WFBC with respect to any actions taken pursuant to clause (a) hereof.

 

6.04        **Deliveryof Instruments, etc**.  Upon request by WFBC after theoccurrence and during the continuation of an Event of Termination, the Customerwill promptly deliver to WFBC in pledge all instruments, documents and chattelpaper constituting Collateral or otherwise evidencing any Purchased Account orthe Related Rights with respect thereto, duly endorsed or assigned by theCustomer.

 

6.05        **PaymentInstructions**.  The Customer will not issue any paymentinstructions to any Account Debtor other than in accordance with the terms ofthis Agreement and the Related Documents. The Customer will not alter any electronic or other instruction, code orpassword which could result in payment from an Account Debtor being made to anyPerson other than WFBC.

 

6.06        **ReportingRequirements**.  The Customer will provide to WFBC thefollowing:

 

(a)           assoon as available and in any event within thirty (30) days after the end ofeach month, year-to-date unaudited consolidated and consolidating financialstatements of Broadwind Energy and its Subsidiaries (which may be subject toquarterly adjustments) including a statement of monthly income and a balancesheet of Broadwind Energy and its Subsidiaries, certified by an authorizedofficer of Broadwind Energy;

 

(b)           assoon as available and in any event within****ninety(90) days after Broadwind Energy’s fiscal year end, Broadwind Energy’s and itsSubsidiaries’ audited financial statements prepared by an independent certifiedpublic accountant acceptable to WFBC, which shall include Broadwind Energy’sand each of its Subsidiaries’ balance sheet, income statement, and statement ofretained earnings, prepared, if requested by WFBC, on a consolidated andconsolidating basis.  The annualfinancial statements shall be accompanied by copies of all management lettersprepared by Broadwind Energy’s accountants;

 

(c)           promptlyupon discovery, written notice of any commercial tort claims brought by theCustomer against any Person with respect to a Purchased Account, any RelatedRights or any Collateral, including the name and address of each defendant, asummary of the facts, an estimate of the Customer’s damages, copies of anycomplaint or demand letter submitted by the Customer, and such otherinformation as WFBC may request; and

 

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(d)           suchother information documents, records or reports in respect of the PurchasedAccounts, the Related Rights, the Collateral or the condition or operations,financial or otherwise, of the Customer or any of its Subsidiaries as WFBC mayfrom time to time reasonably request.

 

6.07         **Notationon Invoices**.  If an Event of Termination has occurred andis continuing and at the request of WFBC, the Customer will immediately make anotation on each original invoice (or the electronic equivalent of an invoice)or other such documentation accepted by WFBC for each Purchased Account whichindicates that such Account has been sold, transferred and assigned toWFBC.  Such notation shall read asfollows or as otherwise agreed to by WFBC in writing:

 

This invoice has been sold, transferred and assigned to

and is payable to:

**WELLS FARGO BUSINESS CREDIT**

Dept. 1494

Denver, Colorado  80291-1494

For information call 303/964-7400

 

Wire Instructions:

**WELLS FARGO BANK, N.A.**

San Francisco, CA

ABA# 121000248

Beneficiary:  Wells FargoBusiness Credit

Acct# 6355033300

 

Inaddition, if an Event of Termination has occurred and is continuing and at therequest of WFBC, the Customer will immediately make a notation, in form andsubstance acceptable to WFBC in its sole discretion, on any other form ofdocumentation accepted by WFBC for each Purchased Account and all RelatedRights which indicates that such Purchased Account and Related Rights have beensold, transferred and assigned to WFBC.

 

6.08         **Directionsto Account Debtors**.  On or prior to the date hereof, theCustomer shall have given written directions to each Account Debtor to remitall amounts due in respect of any Account to the address and the wiringinstructions set forth in Section 6.07. All items deposited in the deposit account set forth in Section 6.07shall be subject to final payment.  If any such item is returneduncollected, the Customer agrees to pay WFBC on demand the amount of thatitem.  The Customer agrees to take any action reasonably requested by WFBCto facilitate the foregoing.

 

6.09         **NoInterference**.  The Customer will not under any circumstancesor in any manner whatsoever, interfere with any of WFBC’s rights under thisAgreement.

 

6.10         **NoSale or Assignment**.  For the duration of this Agreement and forany period thereafter as long as any obligation to repurchase or indebtednessunder this Agreement remains owing by the Customer to WFBC, the Customer willnot sell, transfer or assign Acceptable Accounts or any Related Rights to anyparty other than WFBC.

 

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6.11         **PermittedLiens**.  The Customer shall not create, incur or suffer toexist any Lien upon any of the Purchased Accounts, Related Rights orCollateral, as security for any indebtedness, with the exception of thefollowing (each a “Permitted Lien”; collectively, “Permitted Liens”):  (a) Liens in existence on the date ofthis Agreement that are described in Exhibit B; and (b) the Lienscreated by this Agreement or any Related Document.

 

6.12         **NoModification of Invoices**.  Without the prior writtenconsent of WFBC, the Customer will not change or modify the terms of theoriginal invoice with any Account Debtor or the order of payment on Accountssold to WFBC.

 

6.13         **MaterialDisputes**.  The Customer will promptly (but in any eventwithin three (3) Business Days of obtaining knowledge thereof) notify WFBCof (a) any material dispute between the Customer and an Account Debtorthat owes a Purchased Account in which ten percent (10%) of the invoiced amountor more is in dispute, (b) the return or returns by an Account Debtor thatowes a Purchased Account or its Affiliates to the Customer of any product witha fair market value equal to ten percent (10%) of the invoiced amount or morein the aggregate at any one time or (c) any material claim, loss or offsetof any kind against the Customer or WFBC in excess of an amount equal to tenpercent (10%) or more of the invoiced amount asserted by an Account Debtorowing a Purchased Account.  If there isany material dispute between the Customer and an Account Debtor that previouslyowed a Purchased Account, prior to presenting to WFBC for purchase hereunderanother Account owing by such Account Debtor, Customer shall notify WFBC ofsuch dispute.

 

6.14         **Insurance**.  TheCustomer will maintain such insurance covering the Customer’s business or theproperty of the Account Debtors as is customary and adequate for businessessimilar to the business of the Customer in an amount as is sufficient tocompensate for reasonably foreseeable loss, and promptly pay all premiums withrespect to the policies covering such insurance.

 

6.15         **ChiefExecutive Office; Location of Books and Records**.  TheCustomer will notify WFBC in writing prior to any change in the location of anyof its places of business or if the Customer has or intends to acquire anyadditional place of business.  TheCustomer will not change its chief executive office or the office or officeswhere the Customer’s books and records concerning Purchased Accounts and theRelated Rights are kept without thirty (30) days’ prior written notice toWFBC.  The Customer will not remove anyCollateral from the jurisdictions in which the Collateral is located on thedate of this Agreement without the prior written consent of WFBC.

 

6.16         **Notificationof Changes; Additional Trade Names; Dissolution**.  TheCustomer will notify WFBC in writing at least thirty (30) days prior to any (a) proposedchange of the Customer’s legal name, jurisdiction of [incorporation], identity,legal entity, or [corporate] structure, (b) business dissolution, or (c) useof any additional trade name.  TheCustomer will notify WFBC in writing within five (5) Business Days afteran officer of the Customer or any Subsidiary becomes the direct or indirectowner of twenty five percent (25%) or more of the equity interests in theCustomer.

 

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6.17         **Notificationof Legal Proceedings**. No later than three (3) Business Days after discovery, the Customer willnotify WFBC in writing of (a) any litigation or other proceedingbefore any court or governmental agency which seeks a monetary recovery againstthe Customer in excess of **$**250,000or (b) any Insolvency Proceeding against the Customer.

 

6.18         **USAPATRIOT Act**.  The Customer will (i) ensure, and causeeach Subsidiary to ensure, that no equity owner shall be listed on theSpecially Designated Nationals and Blocked Person List or other similar listsmaintained by the Office of Foreign Assets Control, the Department of theTreasury or included in any Executive Orders, (ii) not use or permit theuse of the proceeds of this Agreement or any other financial accommodation fromWFBC to violate any of the foreign asset control regulations of the Office ofForeign Assets Control or other applicable law, (iii) comply, and causeeach Subsidiary to comply, with all applicable Bank Secrecy Act laws andregulations, as amended from time to time, and (iv) otherwise comply withthe USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,2001)) as required by federal law and WFBC’s policies and practices.

 

6.19         **MinimumCash Reserves. **The Customer and its Affiliates will maintain, as of the end of eachmonth and each fiscal year as reflected on reports provided to WFBC under Section 6.06(a) and(b), cash reserves or investments in cash equivalents and/or short-terminvestments in an amount of not less than the lesser of (a) Five Millionand No/100 Dollars ($5,000,000.00) or (b) the sum of Purchased Accountsplus available Acceptable Accounts.

 

**Article 7.Security Interest**

 

7.01         **SecurityInterest/Collateral**.  Asfurther inducement for WFBC to enter into this Agreement, the Customer herebypledges, assigns and grants to WFBC a Lien and security interest in theCollateral as security for the payment and performance of any and allobligations and liabilities whatsoever of the Customer to WFBC under thisAgreement or any Related Document. Following request by WFBC, the Customer shall grant WFBC a Lien and securityinterest in all Collateral consisting of commercial tort claims that it mayhave against any Person.

 

7.02         **SecurityDocuments**.  The Customerauthorizes WFBC, at the Customer’s expense, to file financing statementsdescribing the Purchased Accounts, the Related Rights and the Collateral to perfectWFBC’s Lien in the Purchased Accounts, the Related Rights and the Collateral,and WFBC may describe the Collateral as set forth in Section 2.15 of thisAgreement or describe specific items of Collateral, including commercial tortclaims, as WFBC may consider necessary or useful to perfect WFBC’s Lien in thePurchased Accounts, the Related Rights and the Collateral.  All such financing statements filed beforethe date of this Agreement to perfect such Lien were authorized by theCustomer.  Following the FinalTermination Date, WFBC will, at the Customer’s expense and within the timeperiods required under applicable law, release or terminate any and all filingsor other agreements that perfect its Liens in the Purchased Accounts, theRelated Rights and the Collateral.

 

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**Article 8.**

**OperationalProvisions**

 

8.01         **Powerof Attorney**.** **In order to carry out thisAgreement, the Customer irrevocably appoints WFBC, its successors and eachassignee, and any Person designated by WFBC, its successors or such assignees(which appointment is coupled with an interest) as its attorney in fact, withright of substitution, to:

 

(a)           in order to evidence or protect WFBC’sinterest in the Purchased Accounts, the Related Rights and the Collateral,execute and file, in the Customer’s name and on the Customer’s behalf, suchrecording, financing or similar statements (including any amendments, renewalsand continuation statements) under applicable laws in such jurisdictions where itmay be necessary to validate, perfect or protect WFBC’s interest in any of thePurchased Accounts, the Related Rights and the Collateral;

 

(b)           upon the occurrence and during thecontinuation of an Event of Termination,****strikethrough the Customer’s remittance information on all invoices delivered toAccount Debtors and note WFBC’s remittance information on all invoices;

 

(c)           upon the occurrence and during thecontinuation of an Event of Termination,****atthe expense of the Customer, notify, or cause the Customer to notify, anyAccount Debtor or other Person obligated to pay a Purchased Account that suchright to payment has been sold, transferred and assigned to WFBC and instruct,or cause the Customer to instruct, any Account Debtor or other Person to (i) makeand remit payments due under the Accounts and any Related Rights directly tothe address or wiring instructions set forth in Section 6.07 or (ii) deliverpayments due under the Accounts and any Related Rights to WFBC by wiretransfer, ACH, or other means as WFBC may direct, in each case for deposit tothe Collected Reserve Account or for direct application to the amounts due andowing to WFBC;

 

(d)           upon the occurrence and during thecontinuation of an Event of Termination, at any time after the Customer or WFBCgives notice as set forth in Section 8.01(c) to an Account Debtor orother obligor and with or without notice to the Customer, in WFBC’s name or inthe Customer’s name, (a) demand, sue for, file any claims or take anyaction or institute any proceedings for, collect, give releases for or receiveany money or property at any time payable or receivable on account of orsecuring, any such right to payment, or (b) grant any extension to, makeany compromise or settlement with or otherwise agree to waive, modify, amend orchange the obligations (including collateral obligations) of any such AccountDebtor or other obligor;

 

(e)           endorse the name of the Customer orthe Customer’s trade names on any checks or other evidences of payment that maycome into the possession of WFBC with respect to any Purchased Account, or onany other documents relating to any of the Purchased Accounts, the RelatedRights or the Collateral;

 

(f)            process any payments receiveddirectly by WFBC on a Purchased Account or any Related Rights either bydelivery to the address or wiring instructions set forth in Section 6.07if WFBC so directs or by direct collection and subsequent crediting of theCollected Reserve 

 

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Account, and individuallydeliver any other payment for the benefit of the Customer directly to theCustomer in the form received in accordance with this Agreement;

 

(g)           upon the occurrence and during thecontinuation of an Event of Termination, compromise, prosecute, or defend anyaction, claim or proceeding as to any Purchased Account, any Related Right orany Collateral;

 

(h)           upon the occurrence and during thecontinuation of an Event of Termination, offer a trade discount to any AccountDebtor exclusive of the Customer’s normal business custom with such AccountDebtor;

 

(i)            upon the occurrence and during thecontinuation of an Event of Termination, initiate electronic debit or creditentries through the ACH system to or from the account described in Section 6.07or any deposit account maintained by the Customer in which proceeds of theCollateral are deposited;

 

(j)            upon the occurrence and during thecontinuation of an Event of Termination,****signthe Customer’s name on any notice of assignment or on any notices to Account Debtors;

 

(k)           take any other actions WFBC deemsnecessary or advisable to collect, endorse, negotiate or otherwise realize onthe Purchased Accounts, the Related Rights, the Collateral or any part thereof,any negotiable instrument, or other right of any kind, held or owned by theCustomer and sold, transferred, assigned or delivered to or received by WFBC aspayment on account or otherwise in respect of any of the Purchased Accounts,the Related Rights or the Collateral; and

 

(l)            take any and all actions required(as determined by WFBC in its sole discretion) to enforce WFBC’s rights andremedies hereunder or under any Related Document and to otherwise carry out thepurposes of this Agreement or any Related Document, including exercising any ofthe remedies set forth in this Agreement or any Related Document.

 

Theauthority granted to WFBC under this Section 8.01 shall remain in fullforce and effect until the payment in full of all amounts due and owing toWFBC, the satisfaction of all obligations of the Customer to WFBC hereunder andunder each Related Document and termination of all obligations of WFBChereunder and under each Related Document. WFBC’s performance of such actions shall be taken or not taken in itssole discretion and shall not relieve the Customer from any obligation or cureany default under this Agreement or any Related Document.  The powers of attorney described in this Section 8.01are coupled with an interest and are irrevocable, shall survive the Customer’sdissolution and shall not be affected by the Customer’s insolvency orbankruptcy in any manner.

 

8.02         **Certifications**.  The Secretary or Assistant Secretaryof the Customer shall certify to WFBC the names and signatures of the personswho, on the date hereof, are duly elected, qualified and acting as the officersor agents referred to in the resolutions adopted by the Customer with respectto this Agreement, and the Secretary or Assistant Secretary shall from time totime hereafter, upon a change in the facts so certified, certify to WFBC thenames and signatures of the persons then authorized to sign or to act withinthree Business Days after any such change.  WFBC shall be fully protectedin relying on such certificates and on the obligation 

 

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ofthe Secretary or Assistant Secretary of the Customer to certify to WFBC anychange in any facts so certified.  At all times, there shall be at leasttwo officers or agents authorized to sign or to act under this Agreement andthe Related Documents on behalf of the Customer, and the Customer shall havedelivered to WFBC certificates containing the names and true signatures of eachsuch agent and officer, on which certificates WFBC shall be entitled toconclusively rely.

 

8.03         **License**.  TheCustomer hereby grants to WFBC (but only to the extent of the license rightsthe Customer possesses) a non exclusive, worldwide and royalty free license touse or otherwise exploit all intellectual property rights of the Customer(whether owned or licensed) for the purpose of collecting the PurchasedAccounts and selling, leasing or otherwise disposing of any or all RelatedRights and Collateral during the existence of an Event of Termination.

 

8.04         **Reports**.  In the event the Customer requestsinformation from WFBC regarding the Customer’s account hereunder, such requestsshall be subject to the schedule of fees provided by WFBC which schedule may beadjusted by WFBC from time to time in its discretion.

 

8.05         **AccountVerification**.  WFBC or its agent may, at any time and fromtime to time, send or require the Customer to send requests for verification ofPurchased Accounts (including amounts owed to the Customer) to Account Debtorsand other obligors or, so long as an Event of Termination has occurred and iscontinuing, notices of assignment to Account Debtors and other obligors.

 

8.06         **Booksand Records; Collateral Examination; Inspection; Premises**.  TheCustomer shall hold the Records in trust for WFBC and keep complete andaccurate books and records with respect to the Purchased Accounts, the RelatedRights and the Collateral and the Customer’s business and financial conditionand any other matters that WFBC may request, in accordance with generallyaccepted accounting principles.  TheCustomer shall permit any employee, attorney, accountant or other agent of WFBCto examine and inspect the Related Rights and the Collateral and any propertyof the Customer related to the Purchased Accounts, the Related Rights or theCollateral and to audit, review, make extracts from and copy any of its booksand records (a) at any time during ordinary business hours as long as noEvent of Termination has occurred and is continuing and (b) at any timeduring the continuation of an Event of Termination, and to discuss the Customer’saffairs with any of its directors, managers, officers, employees, owners oragents.  The Customer authorizes allaccountants and other Persons acting as its agent to disclose and deliver toWFBC’s employees, accountants, attorneys and other Persons acting as its agent,at the Customer’s expense, all financial information, books and records, workpapers, management reports and other information in their possession regardingthe Customer.  If WFBC occupies or usesthe premises of the Customer hereunder, WFBC shall not be obligated to pay oraccount for any rent or other compensation for such occupancy or use; provided,however, that if WFBC does pay or account for any rent or other compensationfor such occupancy or use, the Customer shall reimburse WFBC on demand forthe full amount thereof.

 

8.07         **Dutyof Care and Related Matters**.  WFBC’sduty of care with respect to any Purchased Accounts, Related Rights orCollateral in its possession (as imposed by law) will be deemed fulfilled if itexercises reasonable care in physically keeping such Purchased Accounts,Related Rights, or Collateral or in the case of Related Rights and Collateralin the custody or 

 

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possessionof a bailee or other third Person, exercises reasonable care in the selectionof the bailee or third Person, and WFBC need not otherwise preserve, protect,insure or care for such Purchased Accounts, Related Rights or Collateral.  WFBC shall not be obligated to preserverights the Customer may have against prior parties, to liquidate the PurchasedAccounts, the Related Rights and the Collateral at all or in any particularmanner or order or apply the proceeds of the Purchased Accounts, the RelatedRights and the Collateral in any particular order of application.  WFBC has no obligation to clean up or prepareCollateral for sale.  The Customer waivesany right it may have to require WFBC to pursue any third Person for any amountspayable to WFBC by the Customer.

 

8.08         **Noticeof Assignment to Account Debtor**.  TheCustomer shall label its records in a manner reasonably acceptable to giveproper notice of the sale, transfer and assignment of the Purchased Accountsand Related Rights to WFBC.  Nothing inthis Section 8.08 shall however require the Customer, nor permit WFBC, todeliver notice of the sale, transfer or assignment of a Purchased Account andthe Related Rights with respect thereto to the applicable Account Debtor unlessan Event of Termination has occurred and is continuing.  Except as otherwise permitted hereunder orunder any Related Document, WFBC shall not reveal any sale, transfer andassignment of a Purchased Account or the Related Rights with respect thereto tothe applicable Account Debtor without the Customer’s consent, unless an Eventof Termination has occurred and is continuing, or, after notice to theCustomer, in order to comply with applicable law.

 

**Article 9.Events of Termination**

 

9.01         **Eventsof Termination**.  Any one or more of the following shall be anEvent of Termination hereunder (each, an “Event of Termination”):

 

(a)           The Customer shall fail to pay anyindebtedness to WFBC within three (3) Business Days after the same becomesdue or repurchase any Purchased Account within three (3) Business Daysafter required hereunder.

 

(b)           The Customer shall breach (i) anyterm, provision, promise or covenant under this Agreement or any RelatedDocument or (ii) any material term, provision, promise or covenant underany other agreements or contracts between the Customer and WFBC, subject to anyapplicable cure or grace period therein, if any.

 

(c)           Any representation, warranty,certification or statement made, or deemed made by the Customer in, or pursuantto, this Agreement, any Related Document or any other agreements or contracts,between the Customer and WFBC proves to have been incorrect or misleading inany material respect when made or deemed made.

 

(d)           The Customer shall become insolventor unable to pay debts as they mature; the Customer shall make a generalassignment for the benefit of creditors or voluntarily commence any InsolvencyProceeding affecting the Customer; any involuntary Insolvency Proceeding shallbe filed against the Customer and is not dismissed withinsixty (60) days; or any proceedingshall be instituted seeking the entry of an order for relief by the appointmentof a receiver, trustee, custodian or similar official for the Customer or asubstantial part of its property.

 

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(e)           The Customer shall create, incur orsuffer to exist any Lien upon any Purchased Account, Related Rights orCollateral (other than a Permitted Lien) or any levies, attachment, executions,or similar process shall be issued against any Purchased Account, RelatedRights or Collateral.

 

(f)            Any financial statements, profit andloss statements, or schedules, other statements, information or documentsfurnished by the Customer to WFBC are incorrect or misleading in any materialrespect.

 

(g)           (i) Any document or otherinformation submitted by the Customer to WFBC for the purchase of an Account isfraudulent or erroneous (subject to adjustments allowed hereunder), or (ii) theCustomer fails to submit within three (3) Business Days after notice fromWFBC to Customer any document or other information required by WFBC under thisAgreement for the purchase of an Account.

 

(h)           Any Account Debtor shall assert aclaim or offset of any kind against the Customer or WFBC which may have amaterial adverse impact on payment of any Purchased Account or on any RelatedRights and the Customer fails to resolve such claim or offset within ten (10) BusinessDays thereafter.

 

(i)            A Change of Control shall occur.

 

(j)            An Event of Termination (as definedin any Affiliate Account Purchase Agreement) shall occur and be continuing underany Affiliate Account Purchase Agreement.

 

(k)           Any Guarantor of the Customer’sobligations hereunder is in default under its Guaranty or any Guarantorwithdraws, disaffirms or revokes its Guaranty.

 

(l)            (i) The Customer, directly orindirectly, disaffirms or contests in writing the validity or enforceability ofthis Agreement or any Related Document or (ii) this Agreement or anyRelated Document fails to be the enforceable obligation of the Customer.

 

(m)          One or more judgments or decrees shallbe entered against the Customer involving in the aggregate at any time aliability (net of any insurance or indemnity payments actually received inrespect thereof prior to or within sixty (60) days from the entry thereof, orto be received in respect thereof in the event any appeal thereof shall beunsuccessful) equal to or in excess of $250,000 at the time of the entry of themost recent of each such judgment or decree until such judgments or decreeshave been vacated, discharged, stayed or bonded pending appeal; and all suchjudgments or decrees shall not have been vacated, discharged, stayed or bondedpending appeal within sixty (60) days from the entry thereof.

 

(n)           (i) Any Person shall engage inany “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975of the Code) involving any Plan, (ii) any “accumulated funding deficiency”(as defined in Section 302 of ERISA), whether or not waived, shall existwith respect to any Plan or any Lien in favor of the PBGC or a Plan shall ariseon the assets of the Customer or any Subsidiary, (iii) a Reportable Eventshall occur with respect to, or proceedings shall commence to have a trusteeappointed, or a trustee shall be appointed, to administer or to terminate, anySingle Employer Plan, which Reportable Event or 

 

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commencement ofproceedings or appointment of a trustee is reasonably likely to result in thetermination of such Plan for purposes of Title IV of ERISA (other than astandard termination pursuant to Section 4041(b) of ERISA), (iv) anySingle Employer Plan shall terminate for purposes of Title IV of ERISA (otherthan a standard termination pursuant to Section 4041(b) of ERISA), (v) anyof the Customer or any Subsidiary shall, or is reasonably likely to, incur anyliability in connection with a withdrawal from, or the Insolvency orReorganization of, a Multiemployer Plan, (vi) the occurrence or expectedoccurrence of any event or condition which results or is reasonably likely toresult in any of the Customer’s or any Subsidiary’s becoming responsible forany liability in respect of a Former Plan (other than a standard terminationpursuant to Section 4041(b) of ERISA), or (vii) any other eventor condition shall occur or exist with respect to a Plan; and in each case inclauses (i) through (vii) above, such event or condition, togetherwith all other such events or conditions, if any, would be reasonably expectedto result in liability which would have a Material Adverse Effect.

 

**Article 10.Remedies**

 

10.01       **Remedies**.  Upon the occurrence of an Event ofTermination, WFBC may do any one or more of the following:

 

(a)           Accelerate and declare immediatelydue and payable, and charge back, all indebtedness of the Customer to WFBC,whether mature, contingent or otherwise, whereupon all such amounts shallbecome and be forthwith due and payable, without presentment, notice ofdishonor, protest or further notice of any kind, all of which the Customerhereby expressly waives.

 

(b)           Require the Customer to repurchaseany and all Purchased Accounts, including the Related Rights with respectthereto, whether disputed or undisputed, and to pay on demand the RepurchasePrice for those Purchased Accounts, including such Related Rights, as providedherein, and, in the event the Repurchase Price is not paid in full on demand,WFBC or its designee may collect such Purchased Accounts and charge areasonable fee in connection with such collection activities in addition to anyother fees or charges provided for herein.

 

(c)           Cease purchasing any Account underthis Agreement.

 

(d)           Notify, or cause the Customer tonotify, any Account Debtor or other Person obligated to pay a Purchased Accountthat such right to payment has been sold, transferred and assigned to WFBC andinstruct, or cause the Customer to instruct, any Account Debtor or other Personto (i) make and remit payments due under the Purchased Accounts and anyRelated Rights directly to the address or wiring instructions set forth in Section 6.07or (ii) deliver payments due under the Purchased Accounts and any RelatedRights to WFBC by wire transfer, ACH, or other means as WFBC may direct, ineach case for deposit to the Collected Reserve Account or for directapplication to the amounts due and owing to WFBC.

 

(e)           Take possession of any Related Rightsor Collateral, with or without judicial process.

 

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(f)            Settle any disputed PurchasedAccount directly with the Account Debtor for any amount without relieving theCustomer of its obligations with respect to such Purchased Account under thisAgreement, grant extensions and compromise claims, all without prior notice to,or consent of, Customer.

 

(g)           Require the Customer to assemble theRelated Rights and the Collateral and make them available to WFBC at a placedesignated by WFBC.

 

(h)           Enter the Customer’s premises, takepossession of the Related Rights and Collateral, and use such premises (at nocost to WFBC) only to hold, process, sell, use, store, liquidate, realize uponor otherwise dispose of items that are Purchased Accounts, Related Rights orCollateral and for other purposes that WFBC may in good faith deem to berelated or incidental purposes.

 

(i)            Use, solely in connection with anyassembly, disposition or collection of the Purchased Accounts, the RelatedRights or the Collateral, any trademark, trade name, trade style, copyright,patent right or technical process used or utilized by the Customer ingenerating such Purchased Accounts or with respect to such Related Rights orCollateral.

 

(j)            Initiate electronic credit or debitentries through the ACH system to and from the account described in Section 6.07or any deposit account maintained by the Customer wherever located.

 

(k)           Collect from the Customer all amountsdue and owing to WFBC in connection with this Agreement or any RelatedDocument.

 

(l)            Hold the Customer liable for anydeficiency for any amounts due and owing to WFBC.

 

(m)          Cease making reports or accountings tothe Customer as otherwise required by this Agreement.

 

(n)           Exercise and enforce any and allrights and remedies available upon default to a secured party under the UniformCommercial Code, including the right to take possession of the PurchasedAccounts, the Related Rights and the Collateral, or any evidence thereof,proceeding without judicial process or by judicial process (without a priorhearing or notice thereof, which the Customer hereby expressly waives) and theright to sell, lease or otherwise dispose of any or all of the PurchasedAccounts, Related Rights and Collateral (with or without giving any warrantiesas to the Purchased Accounts, Related Rights or Collateral, title to thePurchased Accounts, Related Rights or Collateral or similar warranties).

 

(o)           Require the Customer to hold allproceeds of Collateral separate and apart from its general funds in asegregated trust account for the benefit of WFBC, to invest all such proceedsso held as directed by WFBC and to remit such amounts so held together with anyinterest thereon as directed by WFBC.

 

(p)           Without regard to any waste, adequacyof the security or solvency of the Customer, apply for the appointment of areceiver of the Collateral, to which appointment the 

 

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Customer hereby consents, whetheror not foreclosure proceedings have been commenced and whether or not aforeclosure sale has occurred.

 

(q)           Exercise any other rights andremedies available to the Customer with respect to the Purchased Accounts, theRelated Rights or the Collateral.

 

(r)            Exercise any other rights andremedies available to it by law or agreement.

 

Notwithstandingthe foregoing, upon the occurrence of an Event of Termination described in Section 9.01(d),amounts payable by the Customer to WFBC shall be immediately due and payableautomatically without presentment, demand, protest or notice of any kind.

 

10.02       **Saleof Collateral.**  During the continuation of an Event ofTermination, if WFBC sells any of the Collateral on credit, the amounts payableto WFBC hereunder will be reduced only to the extent of payments actuallyreceived.  If the purchaser fails to payfor any Collateral, WFBC may resell such Collateral and shall apply anyproceeds actually received to the amounts payable by the Customer to WFBC.

 

10.03       **CertainNotices**.  During the continuation of an Event ofTermination, if notice to the Customer of any intended disposition of PurchasedAccounts, Related Rights or Collateral or any other intended action is requiredby law in a particular instance, such notice shall be deemed commerciallyreasonable if given (in the manner specified in Section 11.18) at leastten (10) calendar days before the date of intended disposition or otheraction.

 

**Article 11.Miscellaneous Provisions**

 

11.01       **Bindingon Future Parties**.  ThisAgreement inures to the benefit of and is binding upon the successors andassigns of the parties hereto; provided, however, that the Customer shall notassign its rights hereunder or any interest herein without WFBC’s prior writtenconsent which may be withheld in its sole discretion; and, provided further,however, that (i) so long as no Event of Termination shall have occurredand be continuing, and except in the case of WFBC being merged into anotherentity or a sale of all or substantially all of WFBC’s assets, WFBC shall notassign its rights hereunder or any interest herein with the Customer’s priorwritten consent which consent shall not be unreasonably withheld or delayed,and (ii) in no event shall WFBC assign its rights hereunder or anyinterest herein to a competitor of the Customer.

 

11.02       **Participations**.  WFBC may sell to one or more Persons (otherthan a competitor of the Customer) (each a “Participant”) participatinginterests in the interests of WFBC hereunder. WFBC shall remain solely responsible for performing its obligationshereunder, and the Customer shall continue to deal solely and directly withWFBC in connection with WFBC’s rights and obligations hereunder.  Each Participant shall be entitled to thebenefits of Section 11.07 and shall have the right of setoff through itsparticipation in amounts owing hereunder to the same extent as if it were WFBC.

 

11.03       **CumulativeRights**.  No failure or delayby WFBC in exercising any right, power or remedy under this Agreement, anyRelated Document or any Related Right shall operate as a waiver thereof; norshall any single or partial exercise of any such right, power or remedy 

 

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precludeany other or further exercise thereof or the exercise of any other right, poweror remedy under this Agreement, any Related Document or any Related Right.  The remedies provided herein are cumulativeand not exclusive of any remedies provided by law.

 

11.04       **Setoff**.  WFBC may, at any time and from time to time,in its sole discretion and without demand or notice to anyone, setoff anyliability owed to the Customer by WFBC against any amounts payable to WFBC bythe Customer, whether or not due.

 

11.05       **Waiver**.  WFBC may not waive its rights and remediesunless the waiver is in writing and signed by WFBC.  A waiver by WFBC of a right or remedy underthis Agreement on one occasion is not a waiver of the right or remedy on anysubsequent occasion.

 

11.06       **Failureto Perform**.  If the Customerfails to perform any of its agreements or obligations hereunder or under anyRelated Document or any Related Right, WFBC may (but will not be required to)itself perform, or cause to be performed, such agreement or obligation.

 

11.07       **Indemnity**.

 

(a)           In addition to the payment of expensespursuant to Section 11.19, the Customer shall indemnify, defend and holdharmless WFBC, and any of its participants, parent entities, subsidiaryentities, affiliated entities, successor entities, and all present and futureofficers, directors, employees, attorneys and agents of the foregoing (the “Indemnitees”)from and against any and all liabilities (other than tax liabilities subject toSection 11.20), losses, damages, penalties, judgments, suits, claims,costs and expenses of any kind or nature whatsoever (including the reasonablefees and disbursements of counsel) arising out of or otherwise relating to thisAgreement, any Related Document, the transactions contemplated hereby andthereby, any Purchased Account, any Related Rights, any Collateral, any actiontaken or omitted by any of the Indemnitees, any actions to be performed by theCustomer hereunder or otherwise, or in connection with any of the foregoing,any investigative, administrative or judicial proceedings, whether or not suchIndemnitee shall be designated a party thereto, which may be imposed on,incurred by or asserted against any such Indemnitee, the purchase of Accounts,the use or intended use of the proceeds of the payments made to the Customer,or any of the following (collectively, “Indemnified Liabilities”):

 

(i)            any representation or warranty madeor deemed to be made by the Customer (or any of the Customer’s officers) in orin connection with this Agreement or any Related Document, which was incorrectin any material respect when made or deemed made or delivered;

 

(ii)           the failure of the Customer toperform or observe any of its covenants, duties or obligations hereunder orunder any of the Related Documents;

 

(iii)          the failure by the Customer to complywith any applicable law, rule, regulation, order, injunction, award or decreewith respect to any Purchased Account or Related Rights or the nonconformitythereof with any applicable law, rule, regulation, order, injunction, award ordecree;

 

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(iv)          the return or transfer by WFBC to the Customer of any payments receivedby WFBC pursuant hereto to which WFBC is entitled pursuant to the terms of thisAgreement;

 

(v)           any loss of a perfected Lien or ownership interest (or in the priority ofsuch Lien or ownership interest) as a result of any commingling by the Customerof funds to which WFBC is entitled hereunder with any other funds;

 

(vi)          any dilution, claims, disputes, damages, offsets, penalties, losses ordefenses arising from any Purchased Account or Related Rights or any claims,disputes, offsets or defenses in connection with any merchandise or serviceswhich are the subject of the Related Rights, including any product liabilityclaim or personal injury or property damage suit (provided, however, thatnothing contained in this subsection shall limit the liability of the Customeror limit the recourse of WFBC to the Customer for any amounts otherwisespecifically provided to be paid by the Customer hereunder);

 

(vii)         anyfailure of (a) any agreement with an Account Debtor to contain anenforceable right of assignment and an express right to make information ofsuch Account Debtor available to the Customer’s assignees and their agents; and(b) the Customer to bring such rights to the attention of the relatedAccount Debtor in compliance with applicable law; and

 

(viii)        anyclaims, demands, expenses, loss or damage resulting from or growing out ofhonoring or relying on the signature or other authority (whether or notproperly used) of any officer or person whose name and signature was certifiedpursuant to Section 8.02, or refusing to honor any signature or authoritynot so certified.

 

Notwithstandingthe foregoing, the Customer shall not be obligated to indemnify any Indemniteefor (A) any Indemnified Liability caused directly by the gross negligenceor willful misconduct of such Indemnitee or (B) any overall net incometaxes imposed on such Indemnitee by the jurisdiction under the law of whichsuch Indemnitee is organized or otherwise considered doing business or anypolitical subdivision thereof.

 

(b)           If any investigative, judicial or administrative proceeding arising fromany of the foregoing is brought against any Indemnitee, upon such Indemnitee’srequest, the Customer and counsel, designated by the Customer and satisfactoryto the Indemnitee, will resist and defend such action, suit or proceeding tothe extent and in the manner directed by the Indemnitee, at the Customer’s costand expense.  Each Indemnitee will usecommercially reasonable efforts to cooperate in the defense of any such action,suit or proceeding.  If the foregoingundertaking to indemnify, defend and hold harmless may be held to beunenforceable because it violates any law or public policy, the Customer shallnevertheless make the maximum contribution to the payment and satisfaction ofeach of the Indemnified Liabilities which is permissible under applicable law.

 

(c)           The obligations of the Customer under this Section 11.07 shallsurvive the termination of this Agreement and the discharge of the otherobligations of the Customer hereunder.

 

11.08       **Increased Cost and Reduced Return.**  If theadoption of any applicable law, rule or regulation, or any change therein,or any change in the interpretation or administration thereof by 

 

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anygovernmental authority charged with the interpretation or administrationthereof, or compliance by WFBC with any request or directive (whether or nothaving the force of law) of any such governmental authority, in each caseoccurring after the date of this Agreement, (a) subjects WFBC to anycharge or withholding on or in connection with this Agreement or any RelatedDocument or any Purchased Account, (b) changes the basis of taxation ofpayments to WFBC in respect of any amounts payable under this Agreement or anyRelated Document (except for changes in the rate of tax on the overall netincome before tax of WFBC), (c) imposes, modifies or deems applicable anyreserve, assessment, insurance charge, special deposit or similar requirementagainst assets of, deposits with or for the account of, or any credit extendedby WFBC, (d) has the effect of reducing the rate of return on WFBC’scapital to a level below that which WFBC could have achieved but for suchadoption, change or compliance (taking into consideration WFBC’s policiesconcerning capital adequacy) or (e) imposes any other condition, and theresult of any of the foregoing is (x) to impose a cost on, or increase thecost to WFBC of its purchasing, maintaining or funding any interest acquiredunder this Agreement or any Related Document, (y) to reduce the amount ofany sum received or receivable by, or to reduce the rate of return of WFBCunder this Agreement or any related transaction document or (z) to requireany payment calculated by reference to the amounts received by it hereunder,then, upon demand by WFBC, the Customer shall pay to WFBC (with respect toamounts owed to it) such additional amounts as will compensate WFBC for suchincreased cost or reduction.  Foravoidance of doubt, any interpretation of Accounting Research Bulletin No. 51by the Financial Accounting Standards Board shall constitute an adoption,change, request or directive subject to this Section 11.08.  If WFBC makes any demand under this Section 11.08,the Customer shall have the right to terminate this Agreement within sixty (60)days of the date on which such demand is made without incurring any terminationfee and without any other penalty or premium.

 

11.09       **Choice of Law**.  ThisAgreement shall be governed by and construed in accordance with the substantivelaws (other than conflict laws) of the State of Colorado.

 

11.10       **Invalid Provisions.**  Anyprovision of this Agreement which is prohibited or unenforceable shall be ineffectiveto the extent of such prohibition or unenforceability without invalidating theremaining provisions hereof.

 

11.11       **Entire Agreement**.  ThisAgreement, including all Exhibits hereto, together with the Related Documents,or any other document or agreement described in or related to this Agreement,comprises the complete and integrated agreement of the parties on the subjectmatter of this Agreement and supersedes all prior agreements, whether oral orin writing.  All Exhibits hereto areincorporated into this Agreement and made a part hereof.

 

11.12       **Amendment**.  Except asotherwise provided herein, any amendment, addendum or modification hereto mustbe signed by both parties.

 

11.13       **Further Documents**.  TheCustomer, at its expense, will from time to time execute, deliver, endorse andauthorize the filing of any instruments, documents, conveyances, assignments,security agreements, financing statements, control agreements and otheragreements that WFBC may reasonably request in order to secure, protect, perfector enforce WFBC’s rights under this Agreement, the Related Documents, theRelated Rights or any other 

 

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documentor agreement described in or related to this Agreement or its Lien in thePurchased Accounts, Related Rights and Collateral (but any failure to requestor assure that the Customer executes, delivers, endorses or authorizes thefiling of any such item shall not affect or impair the validity, sufficiency orenforceability of this Agreement, the Related Documents, the Related Rights orany other document or agreement described in or related to this Agreement orWFBC’s Lien in the Purchased Accounts, Related Rights and Collateral,regardless of whether any such item was or was not executed, delivered orendorsed in a similar context or on a prior occasion).

 

11.14       **Retention of Records**.  WFBCshall have no obligation to maintain electronic records or retain anydocuments, schedules, invoices, agings, or other Records delivered to WFBC bythe Customer in connection with this Agreement or the Related Documents or anyother document or agreement described in or related to this Agreement for morethan thirty (30) days after receipt by WFBC.

 

11.15       **Effective**.  ThisAgreement shall become effective when it is executed and delivered by anauthorized officer of each party.  ThisAgreement may be executed in counterparts and each counterpart shall constituteone and the same original.  Manuallyexecuted counterparts of the signature pages of this Agreement and any ofits Exhibits may be delivered by the parties electronically so long astransmitted pages are reproducible on paper medium upon receipt.  Each party is duly authorized to print anyexecuted signature page so received and attach it to this Agreement or arelevant Exhibit, as applicable, whereupon this Agreement or such Exhibit shallbe deemed to have been duly executed and delivered by the transmitting partyand the paper copy of this Agreement or such Exhibit assembled by therecipient with such signature page attached shall be deemed an originalfor all purposes, absent manifest error or bad faith.

 

11.16       **Data Transmission**.  WFBCassumes no responsibility for privacy or security risks as a result of themethod of data transmission selected by the Customer.  WFBC only assumes responsibility for datatransmitted from the Customer once the data is received within WFBC’s internalnetwork.  WFBC assumes no responsibilityfor privacy or security data transmitted from WFBC to the Customer once thedata is dispensed from WFBC’s internal network.

 

11.17       **Confidential Information**.  The Customer agrees that Wells Fargo &Co., and all direct and indirect Subsidiaries of Wells Fargo & Co.,may, among themselves, exchange, discuss or otherwise utilize any and all information(including Confidential Information) they may have in their possessionregarding the Customer and its Affiliates, and the Customer waives any right ofconfidentiality it may have with respect to such exchange of suchinformation.  Except as provided in the preceding sentence, WFBC covenantsand agrees to hold this Agreement and other nonpublic informationregarding the Customer, its Affiliates, and their respective businesses(collectively, “Confidential Information”) in confidence, and agrees not to useand not to disclose any of the contents of, provide any Person with copies of,or use for any purpose not related to the purchases made hereunder, anyConfidential Information other than disclosure to (a) Wells Fargo &Co., any direct or indirect Subsidiaries of Wells Fargo & Co.(including WFBC) or any officers, directors, members, managers, employees oroutside accountants, auditors or attorneys of Wells Fargo & Co. orsuch Subsidiaries (the “Wells Receivers”), (b) any prospective or actualAssignee, syndication parties or participants, (c) any rating agencyof WFBC and (d) governmental authorities with appropriatejurisdiction over WFBC; provided that each such Person is informed ofthe confidential nature of the Confidential Information, and has 

 

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agreedto treat the Confidential Information as confidential in accordance with termsand conditions no less protective than as set forth in this Section. Notwithstanding the above stated obligations, no Person will be liable fordisclosure or use of Confidential Information which (i) was required bylaw, including pursuant to a subpoena or other legal process, (ii) was insuch Person’s possession or known to such Person prior to receipt in connectionwith purchases made hereunder, (iii) is or becomes known to the public(without breach of any obligations hereunder), (iv) is or becomesavailable to such Person from a source, other than a Wells Receiver, which isnot known to such Person to be under an obligation of confidentiality to theCustomer; or (v) is independently developed by such Person without the useof the Confidential Information.  Notwithstanding any provision hereof tothe contrary, WFBC covenants and agrees that it shall not use the name of theCustomer or any Affiliate of the Customer, or any trademarks, trade names orservice marks of the Customer or any Affiliate of the Customer, or quote theopinion of any employee of the Customer or any Affiliate of the Customer, inany advertising or marketing material (including press releases) without firstobtaining the prior written consent of an officer of the Customer or suchAffiliate, as applicable.

 

11.18       **Notices Hereunder**.  Except as otherwise expressly providedherein, all notices, requests, demands and other communications provided forunder this Agreement and the Related Documents shall be in writing and shall be(a) personally delivered, (b) sent by first class United States mail,(c) sent by overnight courier of national reputation for which a receiptis available, (d) transmitted by telecopy, or (e) sent as electronicmail, in each case delivered or sent to the party to whom notice is being givento the business address, telecopier number, or e-mail address set forth belownext to its signature or, as to each party, at such other business address,telecopier number, or e-mail address as it may hereafter designate in writingto the other party pursuant to the terms of this Section 11.18.  All such notices, requests, demands and othercommunications shall be deemed to be an authenticated record communicated orgiven on (w) the date received if personally delivered, (x) fiveBusiness Days after the date deposited in the mail if delivered by mail, (y) thefirst Business Day after the date delivered to the courier if delivered byovernight courier, or (z) the date of transmission if sent by confirmedtelecopy or e-mail before 5:00 p.m. (Chicago time) on a Business Day or ifsent after such time, the next Business Day. All notices, financial information, or other business records sent byany party to this Agreement may be transmitted, sent, or otherwise communicatedvia such medium as the sending party may deem appropriate and commerciallyreasonable; provided, however, that the risk that the confidentiality orprivacy of such notices, financial information, or other business records sentby any party may be compromised shall be borne exclusively by the Customer.

 

11.19       **Costs and Expenses**. Except as is prohibited by law, the Customer agrees to pay on demand allcosts and expenses, including reasonable attorneys’ fees (including in-housecounsel), incurred by WFBC in connection with this Agreement, any other RelatedDocument, the Related Rights and the transactions contemplated hereby andthereby, including all such costs, expenses and fees incurred in connectionwith the negotiation, due diligence, preparation, execution, amendment,modification, administration, performance, collection and enforcement of thisAgreement, the Related Documents, the Related Rights, all obligations of theCustomer hereunder and thereunder and the creation, perfection, protection,satisfaction, foreclosure or enforcement of any security interest grantedhereunder and the collection of any Purchased Account, any Related Right or anyobligation owed by the Customer to WFBC.

 

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11.20       **Taxes**.

 

(a)           Except as otherwise provided in this Section 11.20, any and allpayments made by the Customer hereunder shall be made free and clear andwithout deductions for or on account of any present or future U.S., foreign,federal, provincial, state, municipal, local or other taxes of any kind ornature whatsoever, including any capital, income, sales, excise, business,property, stamp, documentary, customs, imposts, deductions, charges orwithholdings, and all liabilities with respect thereto (excluding taxes thatare imposed on WFBC’s overall net income by any taxing authority) (all suchnon-excluded taxes, levies, imposts, deductions, charges, withholdings andliabilities of any kind or nature whatsoever and interest, penalties andadditions to tax in respect thereof being hereinafter referred to as “Taxes”). If any such withholdings or deductions are so required, (i) the sumpayable hereunder shall be increased as may be necessary so that after allrequired deductions are taken into account (including any required with respectto payments made pursuant to this Section 11.20(a)), WFBC shall receive anamount equal to the sum it would have received had no such deduction been made,(ii) the Customer shall make such deductions and (iii) the Customershall pay the full amount deducted to the appropriate authority beforepenalties attach thereto or interest accrues thereon.  If the Customerpays any such Taxes, it shall deliver official tax receipts evidencing thatpayment or certified copies thereof to WFBC on or before the thirtieth dayafter payment.

 

(b)           In addition, the Customer shall pay any present or future U.S., foreign,federal, provincial, state, municipal, local or other taxes of any kind ornature whatsoever, including any capital, income, sales, excise, business,property, stamp, documentary, customs, imposts, deductions, charges orwithholdings, and all liabilities and interest, penalties and additions to taxin respect thereof  imposed by any taxing authority (other than taxes thatare imposed on WFBC’s overall net income by any taxing authority) that arisesfrom any payment made hereunder, under any Related Document or from any proceedsof any Purchased Account or Related Right or any withholding or deduction by anAccount Debtor (hereinafter referred to as “Other Taxes”).

 

(c)           Except as otherwise provided in this Section 11.20, the Customershall indemnify WFBC for and hold it harmless against the full amount of theTaxes and Other Taxes paid by WFBC on account of any transaction contemplatedby this Agreement or any Related Document or the purchase of the PurchasedAccounts and the Related Rights.

 

11.21       **Limitation**.  In no event shall WFBC be liable tothe Customer for any consequential, incidental, special, punitive, or indirectloss or damage arising out of or related to any provision of this Agreement,including loss of profits or revenue, loss of opportunity or like items of lossor damage except as specifically provided herein regardless of the legal basisfor any such claim and the Customer hereby releases WFBC therefrom.

 

11.22       **Prohibited Rate**.  In noevent shall any interest or fee to be paid hereunder exceed the maximum rate permittedby applicable law.  In the event any suchinterest rate or fee exceeds such maximum rate, such rate shall be adjusteddownward to the highest rate (expressed as a percentage per annum) or fee thatthe parties could validly have agreed to by contract on the date hereof underapplicable law.  It is further agreedthat any excess actually received by WFBC shall be credited against any amountowing hereunder.

 

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11.23       **Jurisdiction**.  Theparties hereby (a) consent to the personal jurisdiction of the state andfederal courts located in the State of Colorado, and any appellate courtfrom which any appeals therefrom are available, in connection with anycontroversy related to this Agreement or any Related Document; (b) waiveany argument that venue in any such forum is not convenient; (c) agreethat any litigation initiated by WFBC or the Customer in connection with thisAgreement or any Related Document may be venued in the state or federal courtslocated in the City and County of Denver, Colorado; and (d) agree that afinal judgment in any such suit, action or proceeding shall be conclusive andmay be enforced in other jurisdictions by suit on the judgment or in any othermanner provided by law.

 

11.24       **Negotiations**.  Theparties agree that this Agreement has been mutually negotiated at arm’s lengthby both of them with benefit of legal counsel and such other advice as theydeemed appropriate and no provision hereof is to be construed more severelyagainst one of the parties than it is to be construed against the other basedon the party responsible for the drafting thereof.

 

11.25       **USA PATRIOT Act Notice**.  WFBChereby notifies the Customer that pursuant to the requirements of the USAPATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,2001)), it is required to obtain, verify and record information that identifiesthe Customer, which information includes the name and address of the Customerand other information that will allow WFBC to identify the Customer inaccordance with the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed intolaw October 26, 2001)).

 

11.26       **Termination**.  ThisAgreement shall terminate on the first date following the Termination Date whenthe Purchased Amount has reduced to zero, all other amounts due to WFBC underthis Agreement and the Related Documents have been indefeasibly paid in full,WFBC has no further obligations hereunder or any Related Document and allobligations of the Customer to WFBC hereunder and under each Related Documenthave been satisfied, in each case as determined by WFBC in its sole discretion(the “Final Termination Date”).

 

11.27       **Terms Generally**.  Definedterms include in the singular number the plural and in the plural number thesingular.  The use of the singular or theplural number shall be deemed to include the use of the other when the contextso requires.  Whenever the contextrequire, any pronoun shall include the corresponding masculine, feminine andneuter forms.  The words “include”, “includes”and “including” shall be deemed to be followed by the phrase “withoutlimitation”.  The word “will” shall beconstrued to have the same meaning and effect as the word “shall”.  Unless the context in which used hereinotherwise clearly requires, “or” has the inclusive meaning represented by thephrase “and/or”.  Unless the contextrequires otherwise, (a) any definition of or reference to any agreement,instrument or other document herein shall be construed as referring to suchagreement, instrument or other document as from time to time amended,supplemented or otherwise modified (subject to any restrictions on suchamendments, supplements or modifications set forth herein), (b) anyreference herein to any Person shall be construed to include such Person’ssuccessors and permitted assigns, (c) the words “herein”, “hereof” and “hereunder”,and words of similar import shall be construed to refer to this Agreement inits entirety and not to any particular provision hereof, (d) allreferences herein to Articles, Sections, subsections, Exhibits, Schedules andthe like shall be construed to refer to Articles, Sections and subsections of,or Exhibits or Schedules attached to, this Agreement unless otherwise expresslyprovided and (e) all references herein to Articles, Sections, subsectionsand 

 

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thelike shall be construed to include therein references to all Sections andsubsections thereof unless otherwise expressly provided.  Article and Section headings inthis Agreement are for reference only and shall not affect the construction ofthis Agreement.  Reference to any law,rule, regulation, order, decree, requirement, policy, guideline, directive orinterpretation means as amended, modified, codified, replaced or reenacted, inwhole or in part, and in effect on the determination date, including rules andregulations promulgated thereunder.  Allaccounting terms not otherwise defined herein have the meanings assigned tothem in accordance with generally accepted accounting principles.

 

**[This space intentionally left blank.]**

 

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11.28       **WAIVER OF JURY TRIAL**.  EACH OFTHE CUSTOMER AND WFBC HEREBY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY INANY ACTION AT LAW OR IN EQUITY OR IN ANY OTHER PROCEEDING BASED ON ORPERTAINING TO THIS AGREEMENT OR ANY RELATED DOCUMENT.

 
| **[                                                      ]** | ** **           | **WELLS  FARGO BANK, NATIONAL ASSOCIATION** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------|---------------------------------------------|
| ** **                                                                                                                                                                                                                                                                                                                                 | ** **           | ** **                                  |
| ** **                                                                                                                                                                                                                                                                                                                                 | ** **           | ** **                                  |
| By:                                                                                                                                                                                                                                                                                                                                        |                 |                                        | By: |   |
| Name:                                                                                                                                                                                                                                                                                                                                      |                 |                                        | Name:  Gina Draudt |
| Its:                                                                                                                                                                                                                                                                                                                                       | Authorized Signatory |                                        | Its: Vice President |

 

TheCustomer and WFBC have executed this Agreement through their authorizedofficers as of the date set forth above.

 
| **Wells  Fargo Bank, National Association**                                                                                                                                                                                                                                                                        |   | **WELLS  FARGO BANK, NATIONAL ASSOCIATION**                                                                                                                                                                                                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| MAC  C7300-060                                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                           |   |
| 1740  Broadway, 6th Floor                                                                                                                                                                                                                                                                                     |   |                                                                                                                                                                                                                                                                                                                           |   |
| Denver,  CO 80274                                                                                                                                                                                                                                                                                                  |   | By:                                                                                                                                                                                                                                                                                                                            |   |
| Telecopier:  (303) 433-2540                                                                                                                                                                                                                                                                                        |   | Name:  Gina Draudt                                                                                                                                                                                                                                                                                                             |
| Attention:  Monica Sorrels                                                                                                                                                                                                                                                                                         |   | Its:  Vice President                                                                                                                                                                                                                                                                                                           |
| Email:  monicasorrels@wellsfargo.com                                                                                                                                                                                                                                                                               |   |                                                                                                                                                                                                                                                                                                                           |   |
|                                                                                                                                                                                                                                                                                                               |   |                                                                                                                                                                                                                                                                                                                           |   |
|                                                                                                                                                                                                                                                                                                               |   |                                                                                                                                                                                                                                                                                                                           |   |
| **[                                                  ]** |   | **[                                                    ]** |
| [Street  Address]                                                                                                                                                                                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                                           |   |
| [City,  State ZIP]                                                                                                                                                                                                                                                                                                 |   | By:                                                                                                                                                                                                                                                                                                                            |   |
| Telecopier:                                                                                                                                                                                                                                                                                                        |   | Name:                                                                                                                                                                                                                                                                                                                          |
| Attention:                                                                                                                                                                                                                                                                                                         |   | Its: Authorized Signatory                                                                                                                                                                                                                                                                                                      |
| Email:                                                                                                                                                                                                                                                                                                             |   |                                                                                                                                                                                                                                                                                                                           |   |
| Federal  Employer ID No.:                                                                                                                                                                                                                                                                                          |   |                                                                                                                                                                                                                                                                                                                           |   |
| Organization  No.:                                                                                                                                                                                                                                                                                                 |   |                                                                                                                                                                                                                                                                                                                           |   |

 

 

Withcopies to:

 

BroadwindEnergy, Inc.

47E. Chicago Ave., Suite 332

Naperville, IL60540

Telecopier:  630-637-8472

Attention:  Stephanie Kushner, CFO

E-mail:  Stephanie.Kushner@bwen.com

Attention:  Mark Henrickson

E-mail:  Mark.Henrickson@bwen.com

 

SignaturePage to Account Purchase Agreement

 

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**Exhibit A**

**To**

**Account Purchase Agreement**

 

**Form of Assignment and Schedule of Accounts**

 

See attached

 

A-1

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**Exhibit B**

**To**

**Account Purchase Agreement**

 

**[Permitted Liens]**

 

B-1

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