EX-10.3



 








Exhibit 10.3




AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT




Dated as of May 10, 2006




among




RPM FUNDING CORPORATION, as Seller,




RPM INTERNATIONAL INC., as Servicer,




VICTORY RECEIVABLES CORPORATION,




VARIABLE FUNDING CAPITAL COMPANY LLC,




THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., CHICAGO BRANCH,




 




THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as Victory Agent,




and




WACHOVIA BANK, NATIONAL ASSOCIATION, individually, as VFCC Agent and as Administrative Agent





 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I. PURCHASE ARRANGEMENTS	 	2
	 
	 	 	 	 
	Section 1.1
	 	Purchase Facility	 	2
	Section 1.2
	 	Increases	 	3
	Section 1.3
	 	Decreases	 	3
	Section 1.4
	 	Payment Requirements	 	3
	Section 1.5
	 	Extension of each Conduit's Liquidity Termination Date	 	4
	 
	 	 	 	 
	ARTICLE II. PAYMENTS AND COLLECTIONS	 	5
	 
	 	 	 	 
	Section 2.1
	 	Payments	 	5
	Section 2.2
	 	Collections Prior to Amortization	 	5
	Section 2.3
	 	Collections Following Amortization	 	6
	Section 2.4
	 	Application of Collections	 	6
	Section 2.5
	 	Payment Rescission	 	7
	Section 2.6
	 	Maximum Purchaser Interests	 	7
	Section 2.7
	 	Clean Up Call	 	7
	 
	 	 	 	 
	ARTICLE III. CONDUIT FUNDING	 	8
	 
	 	 	 	 
	Section 3.1
	 	CP Costs	 	8
	Section 3.2
	 	CP Costs Payments	 	8
	Section 3.3
	 	Calculation of CP Costs	 	8
	 
	 	 	 	 
	ARTICLE IV. LIQUIDITY BANK FUNDING	 	8
	 
	 	 	 	 
	Section 4.1
	 	Liquidity Bank Funding	 	8
	Section 4.2
	 	Yield Payments	 	8
	Section 4.3
	 	Selection and Continuation of Tranche Periods	 	8
	Section 4.4
	 	Liquidity Bank Discount Rates	 	9
	Section 4.5
	 	Suspension of the LIBO Rate	 	9
	 
	 	 	 	 
	ARTICLE V. REPRESENTATIONS AND WARRANTIES	 	10
	 
	 	 	 	 
	Section 5.1
	 	Representations and Warranties of Seller	 	10
	Section 5.2
	 	Liquidity Bank Representations and Warranties	 	13
	 
	 	 	 	 
	ARTICLE VI. CONDITIONS OF PURCHASES	 	14
	 
	 	 	 	 
	Section 6.1
	 	Conditions Precedent to Initial Incremental Purchase	 	14
	Section 6.2
	 	Conditions Precedent to All Purchases and Reinvestments	 	14
	 
	 	 	 	 
	ARTICLE VII. COVENANTS	 	15
	 
	 	 	 	 
	Section 7.1
	 	Affirmative Covenants of the Seller Parties	 	15
	Section 7.2
	 	Negative Covenants of the Seller Parties	 	23
	 
	 	 	 	 
	ARTICLE VIII. ADMINISTRATION AND COLLECTION	 	24
	 
	 	 	 	 
	Section 8.1
	 	Designation of Servicer	 	24
	Section 8.2
	 	Duties of Servicer	 	25
	Section 8.3
	 	Collection Notices	 	26
	Section 8.4
	 	Responsibilities of Seller	 	27
	Section 8.5
	 	Reports	 	27
	Section 8.6
	 	Servicing Fees	 	27
	 
	 	 	 	 
	ARTICLE IX. AMORTIZATION EVENTS	 	27
	 
	 	 	 	 
	Section 9.1
	 	Amortization Events	 	27






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	Section 9.2
	 	Remedies	 	30
	 
	 	 	 	 
	ARTICLE X. INDEMNIFICATION	 	30
	 
	 	 	 	 
	Section 10.1
	 	Indemnities by the Seller	 	30
	Section 10.2
	 	Indemnities by the Servicer	 	33
	Section 10.3
	 	Increased Cost and Reduced Return	 	34
	Section 10.4
	 	Other Costs and Expenses	 	35
	 
	 	 	 	 
	ARTICLE XI. THE AGENTS	 	35
	 
	 	 	 	 
	Section 11.1
	 	Appointment	 	35
	Section 11.2
	 	Delegation of Duties	 	36
	Section 11.3
	 	Exculpatory Provisions	 	36
	Section 11.4
	 	Reliance by Agents	 	37
	Section 11.5
	 	Notice of Amortization Events	 	38
	Section 11.6
	 	Non-Reliance on Agents and Other Purchasers	 	38
	Section 11.7
	 	Indemnification of Agents	 	39
	Section 11.8
	 	Agents in their Individual Capacities	 	39
	Section 11.9
	 	Successor Administrative Agent	 	39
	Section 11.10
	 	Agents’ Conflict Waivers	 	40
	Section 11.11
	 	UCC Filings	 	40
	 
	 	 	 	 
	ARTICLE XII. ASSIGNMENTS; PARTICIPATIONS	 	41
	 
	 	 	 	 
	Section 12.1
	 	Assignments	 	41
	Section 12.2
	 	Participations	 	42
	 
	 	 	 	 
	ARTICLE XIII. [RESERVED]	 	42
	 
	 	 	 	 
	ARTICLE XIV. MISCELLANEOUS	 	42
	 
	 	 	 	 
	Section 14.1
	 	Waivers and Amendments	 	42
	Section 14.2
	 	Notices	 	43
	Section 14.3
	 	Ratable Payments	 	44
	Section 14.4
	 	Protection of Purchaser Interests	 	44
	Section 14.5
	 	Confidentiality	 	45
	Section 14.6
	 	Bankruptcy Petition	 	45
	Section 14.7
	 	Limitation of Liability	 	45
	Section 14.8
	 	CHOICE OF LAW	 	46
	Section 14.9
	 	CONSENT TO JURISDICTION	 	46
	Section 14.10
	 	WAIVER OF JURY TRIAL	 	46
	Section 14.11
	 	Integration; Binding Effect; Survival of Terms	 	47
	Section 14.12
	 	Counterparts; Severability; Section References	 	47
	Section 14.13
	 	Characterization	 	47






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Exhibits and Schedules




	 	 	 
	Exhibit I

	 	Definitions
	 
	 	 
	Exhibit II

	 	Form of Purchase Notice
	 
	 	 
	Exhibit III

	 	Places of Business of the Seller Parties; Locations of
Records; Federal Employer and Organizational Identification
Numbers
	 
	 	 
	Exhibit IV

	 	Names of Collection Banks; Collection Accounts
	 
	 	 
	Exhibit V

	 	Form of Compliance Certificate
	 
	 	 
	Exhibit VI

	 	Form of Collection Account Agreement
	 
	 	 
	Exhibit VII

	 	Form of Assignment Agreement
	 
	 	 
	Exhibit VIII

	 	Credit and Collection Policy
	 
	 	 
	Exhibit IX

	 	Form of Contract(s)
	 
	 	 
	Exhibit X

	 	Form of Monthly Report
	 
	 	 
	Exhibit XI

	 	Form of Performance Undertaking
	 
	 	 
	Schedule A

	 	Commitments
	 
	 	 
	Schedule B

	 	Closing Documents






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AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT




          THIS AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT dated as of May 10, 2006, is among:





    (a) RPM Funding Corporation, a Delaware corporation (“Seller”),




    (b) RPM International Inc., a Delaware corporation (“RPM-Delaware”), as initial
Servicer,




    (c) Victory Receivables Corporation, a Delaware corporation (“Victory” or a “Conduit”),
and Variable Funding Capital Company LLC, a Delaware corporation (“VFCC” or a “Conduit”),




    (d) The Bank of Tokyo-Mitsubishi UFJ, Ltd., Chicago Branch (“BTMU-Chicago”), and its
assigns (collectively, the “Victory Liquidity Banks” and, together with Victory, the
“Victory Group”), and Wachovia Bank, National Association (“Wachovia”), and its assigns
(collectively, the “VFCC Liquidity Banks” and, together with VFCC, the “VFCC Group”),




    (e) The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch (“BTMU-NY”), in its
capacity as agent for the Victory Group (the “Victory Agent” or a “Co-Agent”), and Wachovia
Bank, National Association, a national banking association, in its capacity as agent for the
VFCC Group (the “VFCC Agent” or a “Co-Agent”), and




    (f) Wachovia Bank, National Association, in its capacity as administrative agent for
the Victory Group, the VFCC Group and each Co-Agent (in such capacity, together with its
successors and assigns, the “Administrative Agent” and, together with each of the Co-Agents,
the “Agents”).



Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the meanings
assigned to such terms in Exhibit I.




PRELIMINARY STATEMENTS





    Seller, RPM-Delaware, VFCC and Wachovia are parties to a Receivables Purchase Agreement
dated as of June 6, 2002, as heretofore amended from time to time (the “Existing
Agreement”), and Victory, BTMU-Chicago and BTMU-NY wish to become parties thereto.
Accordingly, the parties hereto agree to amend and restate the Existing Agreement on the
terms and subject to the conditions hereinafter set forth.




    Seller desires to transfer and assign Purchaser Interests to the Purchasers from time
to time.




    Each of the Conduits may, in its absolute and sole discretion, purchase its Percentage
of each Purchaser Interest from Seller from time to time.



 









 






    In the event that either Conduit declines to make any such purchase, its Liquidity
Banks shall make such purchase.




    The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch has been requested and is
willing to act as Victory Agent on behalf of the Victory Group in accordance with the terms
hereof.




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



ARTICLE I.




PURCHASE ARRANGEMENTS




          Section 1.1 Purchase Facility.





    (a) On the terms and subject to the conditions set forth in this Agreement, Seller may
from time to time prior to the Facility Termination Date, sell Purchaser Interests to the
Purchasers by delivering (or causing Servicer to deliver, on Seller’s behalf) a Purchase
Notice to the Co-Agents in accordance with Section 1.2. Upon receipt of a copy of each
Purchase Notice from Seller or Servicer, each of the Co-Agents shall determine whether its
Conduit will purchase its Percentage of such Purchaser Interest, and




         (i) in the event that Victory elects not to make any such purchase of its
Percentage, the Victory Agent shall promptly notify Seller and the Victory Liquidity
Banks of such fact, whereupon each of the Victory Liquidity Banks severally agrees
to purchase its Ratable Share of such Percentage, on the terms and subject to the
conditions hereof, provided that at no time may the aggregate Capital of the Victory
Group at any one time outstanding exceed the lesser of (A) the aggregate amount of
the Victory Liquidity Banks’ Commitments hereunder, and (B) Victory’s Percentage of
the Net Receivables Balance (such lesser amount, the “Victory Allocation Limit”)
less Aggregate Reserves; and




         (ii) in the event that VFCC elects not to make any such purchase of its
Percentage, the VFCC Agent shall promptly notify Seller and each of the VFCC
Liquidity Banks of such fact, whereupon each of the VFCC Liquidity Banks severally
agrees to purchase its Ratable Share of such Percentage, on the terms and subject to
the conditions hereof, provided that at no time may the aggregate Capital of the
VFCC Group at any one time outstanding exceed the lesser of (A) the aggregate amount
of the VFCC Liquidity Banks’ Commitments hereunder, and (B) VFCC’s Percentage of the
Net Receivables Balance (such lesser amount, the “VFCC Allocation Limit”) less
Aggregate Reserves.




In no event shall the Aggregate Capital outstanding hereunder exceed the lesser of (1) the
Purchase Limit and (2) the Net Receivables Balance less Aggregate Reserves. All



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Liquidity Banks’ Commitments to Seller under this Agreement shall terminate on the Facility
Termination Date.




    (b) Seller may, upon at least 10 Business Days’ notice to the Agents, terminate in
whole or reduce in part, ratably between the VFCC Group and the Victory Group in accordance
with their respective Percentages (and within each Group, ratably among the Liquidity Banks
that are members thereof in accordance with their respective Ratable Shares), the unused
portion of the Purchase Limit; provided that each partial reduction of the Purchase Limit
shall be in an aggregate amount equal to $10,000,000 or a larger integral multiple of
$1,000,000.



          Section 1.2 Increases. Seller (or Servicer, on Seller’s behalf) shall provide each of
the Co-Agents with at least two (2) Business Days’ prior notice in a form set forth as Exhibit II
hereto of each Incremental Purchase (a “Purchase Notice”). Each Purchase Notice shall be subject
to Section 6.2 hereof and, except as set forth below, shall be irrevocable and shall specify the
requested Purchase Price (which shall not be less than $3,000,000) and date of purchase (which, in
the case of any Incremental Purchase (after the initial Incremental Purchase hereunder), shall only
be on a Settlement Date) and, in the case of an Incremental Purchase to be funded by either
Conduit’s Liquidity Banks, the requested Discount Rate and Tranche Period. Following receipt of a
Purchase Notice, each Co-Agent will determine whether its Conduit agrees to make its purchase. If
either Conduit declines to make a proposed purchase, the Incremental Purchase of that Conduit’s
Percentage of such Purchaser Interest will be made by such Conduit’s Liquidity Banks while the
other Conduit’s Percentage of such Purchaser Interest will be purchased by such other Conduit. On
the date of each Incremental Purchase, upon satisfaction of the applicable conditions precedent set
forth in Article VI, each of the Conduits or its Liquidity Banks, as applicable, shall deposit to
the Facility Account, in immediately available funds, no later than 2:00 p.m. (New York time), an
amount equal to (i) in the case of a Conduit, its Percentage of the Purchase Price of the Purchaser
Interest then being purchased or (ii) in the case of a Liquidity Bank, such Liquidity Bank’s
Ratable Share of its Conduit’s Percentage of the Purchase Price of the Purchaser Interest then
being purchased.




          Section 1.3 Decreases. Seller (or Servicer, on Seller’s behalf) shall provide each of
the Co-Agents with prior written notice in conformity with the Required Notice Period (each, a
“Reduction Notice”) of any proposed reduction of Aggregate Capital. Such Reduction Notice shall
designate (i) the date (the “Proposed Reduction Date”) upon which any such reduction of Aggregate
Capital shall occur (which date shall give effect to the applicable Required Notice Period), (ii)
the amount of Aggregate Capital to be reduced (the “Aggregate Reduction”), (iii) each Group’s
Percentage of such Aggregate Reduction, which shall be applied ratably to the Purchaser Interests
of the Conduit and Liquidity Banks in such Group in accordance with the amount of Capital (if any)
owing to such Conduit, on the one hand, and the amount of Capital (if any) owing to such Liquidity
Banks (ratably, based on their respective Ratable Shares), on the other hand. Only one (1)
Reduction Notice shall be outstanding at any time.




          Section 1.4 Payment Requirements. All amounts to be paid or deposited by any Seller
Party pursuant to any provision of this Agreement shall be paid or deposited in accordance with the
terms hereof no later than 12:00 noon (New York time) on the day when due in immediately available
funds, and if not received before 12:00 noon (New York time) shall be deemed to be


3









 






received on the next succeeding Business Day. If such amounts are payable to the Victory Agent or to a member of
the Victory Group, they shall be paid to Corporate Trust & Agency Services account no. ******** at
Deutsche Bank Trust Company Americas in New York, New York, ABA No. ***-***-***, Reference:
Victory Receivables/RPM Funding Corporation, until otherwise notified by the Victory Agent (the
“Victory Group Account”). If such amounts are payable to the Administrative Agent, the VFCC Agent
or to a member of the VFCC Group, they shall be paid to account no. #************* at Wachovia
Bank, National Association, in Charlotte, NC, ABA No. #*** *** ***, Reference: VFCC/RPM Funding
Corporation, until otherwise notified by the VFCC Agent (the “VFCC Group Account”). All
computations of Yield, per annum fees calculated as part of any CP Costs, per annum fees hereunder
and per annum fees under the Fee Letter shall be made on the basis of a year of 360 days for the
actual number of days elapsed. If any amount hereunder shall be payable on a day which is not a
Business Day, such amount shall be payable on the next succeeding Business Day.




          Section 1.5 Extension of each Conduit’s Liquidity Termination Date. Provided that no
Amortization Event or Potential Amortization Event has occurred, the Seller (or Servicer, on
Seller’s behalf) may request an extension of each Conduit’s Liquidity Termination Date by
submitting a request for an extension (each, an “Extension Request”) to the Co-Agents no more than
120 days and not less than 30 days prior to the Conduits’ then current Liquidity Termination Date.
Upon receipt of such an Extension Request, the VFCC Agent shall notify the VFCC Group, and the
Victory Agent shall notify the Victory Group, of the contents thereof and shall request each member
of its respective Group to approve the Extension Request. Each Purchaser approving the Extension
Request shall deliver its written approval to its Co-Agent no later than thirty (30) days after the
request (the “Response Date”), whereupon such Co-Agent shall notify the Administrative Agent, the
other Co-Agent and the Seller within one Business Day thereafter as to whether all members of such
Co-Agent’s Group have approved the Extension Request. If all members of the VFCC Group and all
members of the Victory Group have approved the Extension Request by the Response Date, each
Conduit’s Liquidity Termination Date shall be extended to the date which is 364 days from the
earlier to occur of the Response Date or the Administrative Agent’s receipt of notice from each of
the Co-Agents that their respective Groups have unanimously approved the requested extension (such
earlier date, the “Extension Date”). If the members of either Group do not unanimously agree to an
Extension Request, the Seller (or Servicer, on Seller’s behalf) shall have the right to require the
members of such Group to assign all, but not less than all, of their Commitments (as applicable)
and all, but not less than all, of their outstanding Obligations (as applicable) by entering into
written assignment(s) with one or more Eligible Assignees (who shall, unless an Amortization Event
or Potential Amortization Event shall exist and be continuing, be acceptable to RPM-Delaware, which
consent shall not be unreasonably withheld or delayed) not later than the 10th Business Day after
such Eligible Assignee(s) are identified. Each such assignment to an Eligible Assignee (including,
if agreed by the members of the other Group, to the members of the other Group) shall become effective on the Business Day following execution and delivery of
the applicable written assignment; provided that the assigning Purchasers receive payment in full
of their Obligations (it being understood that any breakage costs, expenses or other amounts which
would be owing to such Purchaser pursuant to any indemnification provision hereof shall be payable
by the Seller).




4









 








ARTICLE II.




PAYMENTS AND COLLECTIONS




          Section 2.1 Payments. Notwithstanding any limitation on recourse contained in this
Agreement, Seller (or Servicer, on Seller’s behalf) shall immediately remit to each of the
Co-Agents when due, for the account of the relevant Purchaser or Purchasers in its Group, on a full
recourse basis, all of the following (collectively, the
“Obligations”):





    (i) such fees as set forth in the Fee Letter (which fees shall be sufficient to pay all
fees owing to the Liquidity Banks),




    (ii) all CP Costs,




    (iii) all amounts payable as Yield,




    (iv) all amounts payable as Deemed Collections (which shall be immediately due and
payable by Seller and applied to reduce outstanding Aggregate Capital hereunder in
accordance with Sections 2.2 and 2.3 hereof),




    (v) all amounts required pursuant to Section 2.6,




    (vi) all amounts payable pursuant to Article X, if any,




    (vii) all Servicer costs and expenses, including the Servicing Fee, in connection with
servicing, administering and collecting the Receivables,




    (viii) all Broken Funding Costs, and




    (ix) all Default Fees.


If Seller fails to pay any of the Obligations when due, Seller agrees to pay, on demand, the
Default Fee in respect thereof until paid. Notwithstanding the foregoing, no provision of this
Agreement or the Fee Letter shall require the payment or permit the collection of any amounts
hereunder in excess of the maximum permitted by applicable law. If at any time Seller receives any
Collections or is deemed to receive any Collections, Seller (or Servicer, on Seller’s behalf) shall
immediately pay such Collections or Deemed Collections to the Servicer for application in
accordance with the terms and conditions hereof and, at all times prior to such payment, such
Collections or Deemed Collections shall be held in trust by Seller for the exclusive benefit of the
Purchasers and the Agents.




          Section 2.2 Collections Prior to Amortization. Prior to the Amortization Date, any
Collections and/or Deemed Collections received by the Servicer shall be set aside and held in trust
by the Servicer for the payment of any accrued and unpaid Aggregate Unpaids or for a Reinvestment
as provided in this Section 2.2. If on any Business Day prior to the Amortization Date, any
Collections are received by the Servicer after payment of any Obligations that are then due and
owing, Seller hereby requests and the Purchasers hereby agree to make, simultaneously with such
receipt, a reinvestment (each, a “Reinvestment”) with that portion of the balance of


5









 








each and every Collection received by the Servicer that is part of any Purchaser Interest, such that after giving
effect to such Reinvestment, the amount of Capital of such Purchaser Interest immediately after
such receipt and corresponding Reinvestment shall be equal to the amount of Capital immediately
prior to such receipt. On each Settlement Date prior to the occurrence of the Amortization Date,
the Servicer shall remit to the VFCC Group’s Account and the Victory Group’s Account each Group’s
respective Percentage of the amounts set aside during the preceding Settlement Period that have not
been subject to a Reinvestment and apply such amounts (if not previously paid in accordance with
Section 2.1) to reduce the Obligations. Once such Obligations shall be reduced to zero, any
additional Collections received by the Servicer (i) if applicable, shall be remitted to the VFCC
Group’s Account and the Victory Group’s Account no later than 12:00 noon (New York time) to the
extent required to fund the Groups’ respective Percentages of any Aggregate Reduction on such
Settlement Date and (ii) any balance remaining thereafter shall be remitted from the Servicer to
Seller on such Settlement Date.




          Section 2.3 Collections Following Amortization. On the Amortization Date and on each
day thereafter, the Servicer shall set aside and hold in trust, for the holders of each Purchaser
Interest, all Collections received on such day and an additional amount of the Seller’s funds for
the payment of any accrued and unpaid Obligations owed by Seller and not previously paid by Seller
in accordance with Section 2.1. On and after the Amortization Date, the Servicer shall, at any
time upon the request from time to time by (or pursuant to standing instructions from) any Agent
(i) remit to the VFCC Group’s Account and the Victory Group’s Account the Groups’ respective
Percentages of the amounts set aside pursuant to the preceding sentence, and (ii) apply such
amounts to reduce the applicable Group’s Capital associated with each such Purchaser Interest and
any other Aggregate Unpaids.




          Section 2.4 Application of Collections. If there shall be insufficient funds on
deposit for the Servicer to distribute funds in payment in full of the aforementioned amounts
pursuant to Section 2.2 or 2.3 (as applicable), the Servicer shall distribute funds:





    first, to the payment of the Servicer’s reasonably and properly documented
out-of-pocket costs and expenses in connection with servicing, administering and collecting
the Receivables, including the Servicing Fee, if RPM-Delaware or one of its Affiliates
is not then acting as the Servicer,




    second, to the reimbursement of the Administrative Agent’s costs of collection and
enforcement of this Agreement,




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




    fourth, for the ratable payment of all other unpaid Obligations, provided that to the
extent such Obligations relate to the payment of Servicer costs and expenses, including the
Servicing Fee, when RPM-Delaware or one of its Affiliates is acting as the Servicer, such
costs and expenses will not be paid until after the payment in full of all other
Obligations,



6








 






    fifth, unless the Amortization Date has occurred or a Reduction Notice has been
delivered, to the making of a Reinvestment,




    sixth, to the ratable reduction of the Aggregate Capital, and




    seventh, after the Aggregate Unpaids have been indefeasibly reduced to zero, to Seller.


Collections applied to the payment of Aggregate Unpaids shall be distributed in accordance with the
aforementioned provisions, and, giving effect to each of the priorities set forth above in this
Section 2.4, shall be shared ratably (within each priority) among the Agents and the Purchasers in
accordance with the amount of such Aggregate Unpaids owing to each of them in respect of each such
priority.




          Section 2.5 Payment Rescission. No payment of any of the Aggregate Unpaids shall be
considered paid or applied hereunder to the extent that, at any time, all or any portion of such
payment or application is rescinded by application of law or judicial authority, or must otherwise
be returned or refunded for any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly pay to the applicable
Co-Agent (for application to the Person or Persons who suffered such rescission, return or refund)
the full amount thereof, plus the Default Fee from the date of any such rescission, return or
refunding.




          Section 2.6 Maximum Purchaser Interests. Seller shall ensure that the Purchaser
Interests of the Purchasers shall at no time exceed in the aggregate 100%. If the aggregate of the
Purchaser Interests of the Purchasers exceeds 100%, Seller shall pay to each of the Co-Agents
within two (2) Business Days its respective Percentage of an amount to be applied to reduce the
aggregate Capital outstanding from the members of its Group (as allocated by such Co-Agent), such
that after giving effect to such payment, the aggregate of the Purchaser Interests equals or is
less than 100%.




          Section 2.7 Clean Up Call. In addition to Seller’s rights pursuant to Section 1.3,
Seller shall have the right (after providing written notice to the Agents in accordance with the
Required Notice Period), at any time following the reduction of the Aggregate Capital to a level
that is less than 20.0% of the original Purchase Limit, to repurchase from the Purchasers all, but
not less than all, of the then outstanding Purchaser Interests. The purchase price in respect
thereof shall be an amount equal to the Aggregate Unpaids through the date of such repurchase,
payable in immediately available funds. Such repurchase shall be without representation, warranty
or recourse of any kind by, on the part of, or against any Purchaser or any Agent except for a
representation and warranty that the reconveyance to Seller is being made free and clear of any
Adverse Claim created by any Agent or any Purchaser.




7









 








ARTICLE III.




CONDUIT FUNDING




          Section 3.1 CP Costs. Seller shall pay CP Costs with respect to the Capital
associated with each Purchaser Interest of a Conduit for each day that any Capital in respect of
such Purchaser Interest is outstanding. Each Purchaser Interest funded substantially with Pooled
Commercial Paper will accrue CP Costs each day on a pro rata basis, based upon the percentage share
the Capital in respect of such Purchaser Interest represents in relation to all assets held by such
Conduit and funded substantially with related Pooled Commercial Paper




          Section 3.2 CP Costs Payments. On each Settlement Date, Seller shall pay to each of
the Co-Agents (for the benefit of its Conduit) an aggregate amount equal to all accrued and unpaid
CP Costs in respect of the Capital associated with all Purchaser Interests of such Conduit for the
immediately preceding Accrual Period in accordance with Article II.




          Section 3.3 Calculation of CP Costs. Not later than the 3rd Business Day immediately
preceding each Settlement Date, each Conduit shall calculate the aggregate amount of CP Costs
allocated to the Capital of its Purchaser Interests for the applicable Accrual Period and shall
notify Seller in writing of such aggregate amount.




ARTICLE IV.




LIQUIDITY BANK FUNDING




          Section 4.1 Liquidity Bank Funding. Each Purchaser Interest of either Conduit’s Liquidity Banks shall accrue Yield for each day
during its Tranche Period at either the LIBO Rate or the Prime Rate in accordance with the terms
and conditions hereof. Until Seller gives notice to the applicable Co-Agent of another Discount
Rate in accordance with Section 4.4, the initial Discount Rate for any Purchaser Interest
transferred by a Conduit to its Liquidity Banks pursuant to the terms and conditions of its
Liquidity Agreement shall be the Prime Rate. If either Conduit’s Liquidity Banks acquire by
assignment from such Conduit any Purchaser Interest pursuant to the applicable Liquidity Agreement,
each Purchaser Interest so assigned shall each be deemed to have a new Tranche Period commencing on
the date of any such assignment.




          Section 4.2 Yield Payments. On the Settlement Date for each Purchaser Interest of a
Conduit’s Liquidity Banks, Seller shall pay to the applicable Co-Agent (for the ratable benefit of
the Liquidity Banks in its Group) an aggregate amount equal to the accrued and unpaid Yield for the
entire Tranche Period of each such Purchaser Interest in accordance with Article II.




          Section 4.3 Selection and Continuation of Tranche Periods.





    (a) Seller (or Servicer, on Seller’s behalf) shall from time to time request Tranche
Periods for the Purchaser Interests of the Liquidity Banks in such Co-Agent’s Group,
provided that if at any time such Liquidity Banks shall have a Purchaser Interest, Seller
shall always request Tranche Periods such that at least one Tranche Period shall end on the
date specified in clause (A) of the definition of Settlement Date.



8









 






    (b) Seller, Servicer (on Seller’s behalf) or the applicable Co-Agent, upon notice to
and consent by the other received at least three (3) Business Days prior to the end of a
Tranche Period (the “Terminating Tranche”) for any Purchaser Interest, may, effective on the
last day of the Terminating Tranche: (i) divide any such Purchaser Interest into multiple
Purchaser Interests, (ii) combine any such Purchaser Interest with one or more other
Purchaser Interests that have a Terminating Tranche ending on the same day as such
Terminating Tranche or (iii) combine any such Purchaser Interest with a new Purchaser
Interest to be purchased on the day such Terminating Tranche ends, provided that in no event
may a Purchaser Interest of a Conduit be combined with a Purchaser Interest of its Liquidity
Banks.



          Section 4.4 Liquidity Bank Discount Rates. Seller may select the LIBO Rate or the
Prime Rate for each Purchaser Interest of either Conduit’s Liquidity Banks. Seller shall by 12:00
noon (New York time): (i) at least three (3) Business Days prior to the expiration of any
Terminating Tranche with respect to which the LIBO Rate is being requested as a new Discount Rate
and (ii) at least one (1) Business Day prior to the expiration of any Terminating Tranche with
respect to which the Prime Rate is being requested as a new Discount Rate, give the applicable
Co-Agent irrevocable notice of the new Discount Rate for the Purchaser Interest associated with
such Terminating Tranche. Until Seller gives notice to the applicable Co-Agent of another Discount
Rate, the initial Discount Rate for any Purchaser Interest transferred to the Liquidity Banks in its Group pursuant to the terms
and conditions of the applicable Liquidity Agreement shall be the Prime Rate.




          Section 4.5 Suspension of the LIBO Rate




               (a) If any Liquidity Bank notifies the applicable Co-Agent that it has determined that funding
its Ratable Share of the Purchaser Interests of the Liquidity Banks in its Group at a LIBO Rate
would violate any applicable law, rule, regulation, or directive of any governmental or regulatory
authority, whether or not having the force of law, or that (i) deposits of a type and maturity
appropriate to match fund its Purchaser Interests at such LIBO Rate are not available or (ii) such
LIBO Rate does not accurately reflect the cost of acquiring or maintaining a Purchaser Interest at
such LIBO Rate, then such Co-Agent shall suspend the availability of such LIBO Rate for its Group
and require Seller to select the Prime Rate for any Purchaser Interest of its Group accruing Yield
at such LIBO Rate.



               (b) If less than all of the Liquidity Banks in a Group give a notice to their applicable
Co-Agent pursuant to Section 4.5(a), each Liquidity Bank which gave such a notice shall be obliged,
at the request of Seller, the applicable Conduit or the applicable Co-Agent, to assign all of its
rights and obligations hereunder to (i) another Liquidity Bank or (ii) another funding entity
reasonably acceptable to the applicable Conduit and Seller and willing to participate in this
Agreement through the Liquidity Termination Date in the place of such notifying Liquidity Bank;
provided that (i) the notifying Liquidity Bank receives payment in full, pursuant to an Assignment
Agreement, of an amount equal to such notifying Liquidity Bank’s Ratable Share of the Capital and
Yield owing to all of the Liquidity Banks in its Group and all accrued but unpaid fees and other
costs and expenses payable in respect of its Ratable Share of the Purchaser Interests of such
Liquidity Banks, and (ii) the replacement Liquidity Bank otherwise satisfies the requirements of
Section 12.1(b).



9









 





ARTICLE V.




REPRESENTATIONS AND WARRANTIES




          Section 5.1 Representations and Warranties of Seller . Seller hereby represents and
warrants to the Agents and the Purchasers, as to itself, as of the date hereof and as of the date
of each Incremental Purchase and the date of each Reinvestment that:





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




    (b) Power and Authority; Due Authorization, Execution and Delivery. The
execution and delivery by Seller of this Agreement and each other Transaction Document to
which it is a party, the performance of its obligations hereunder and thereunder and the use
of the proceeds of purchases made hereunder, are within its corporate powers and authority
and have been duly authorized by all necessary corporate action on its part. This Agreement
and each other Transaction Document to which Seller Party is a party has been duly executed
and delivered by Seller.




    (c) No Conflict. The execution and delivery by Seller of this Agreement and
each other Transaction Document to which it is a party, and the performance of its
obligations hereunder and thereunder do not contravene or violate (i) its certificate or
articles of incorporation or by-laws, (ii) any law, rule or regulation applicable to it,
(iii) any restrictions under any agreement, contract or instrument to which it is a party or
by which it or any of its property is bound, or (iv) any order, writ, judgment, award,
injunction or decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of Seller (except as created
hereunder) except, in any case, where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect; and no transaction contemplated hereby
requires compliance with any bulk sales act or similar law.




    (d) Governmental Authorization. Other than the filing of the financing
statements required hereunder, no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is required for the
due execution and delivery by Seller of this Agreement and each other Transaction Document
to which it is a party and the performance of its obligations hereunder and thereunder.




    (e) Actions, Suits. Seller represents and warrants that (i) there are no
actions, suits or proceedings pending, or to the best of Seller’s knowledge, threatened,
against or affecting Seller, or any of its properties, in or before any court, arbitrator or
other body, that could reasonably be expected to have a Material Adverse Effect, and (ii)
Seller is not in default with respect to any order of any court, arbitrator or governmental
body.



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




    (g) Accuracy of Information. Seller represents and warrants that all
information heretofore furnished by Seller or by any Responsible Officer of an Originator to
any of the Agents or Purchasers for purposes of or in connection with this Agreement, any of
the other Transaction Documents or any transaction contemplated hereby or thereby is, and
all such information hereafter furnished by Seller or any such Responsible Officer to any of
the Agents or Purchasers will be, true and accurate in every material respect on the date
such information is stated or certified and does not and will not contain any material
misstatement of fact or omit to state a material fact or any fact necessary to make the
statements contained therein not misleading. Servicer represents and warrants that each
Monthly Report completed and compiled by it accurately aggregates the information received
by it from the Originators and correctly computes the ratios and concentrations set forth
therein based upon such aggregates.




    (h) Use of Proceeds. Seller represents and warrants that it will not use the
proceeds of any purchase hereunder (i) for a purpose that violates, or would be inconsistent
with, Regulation T, U or X promulgated by the Board of Governors of the Federal Reserve
System from time to time or (ii) to acquire any security in any transaction which is subject
to Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.




    (i) Good Title. Seller represents and warrants that immediately prior to each
purchase hereunder, Seller shall be the legal and beneficial owner of the Receivables and
Related Security with respect thereto, free and clear of any Adverse Claim, except as
created by the Transaction Documents. Seller represents and warrants that there have been
duly filed all financing statements or other similar instruments or documents necessary
under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Seller’s
ownership or security interest in each Receivable, its Collections and the Related Security.




    (j) Perfection. Seller represents and warrants that this Agreement, together
with the filing of the financing statements contemplated hereby, is effective to, and shall,
upon each purchase hereunder, transfer to the Administrative Agent for the benefit of the
relevant Purchaser or Purchasers (and the Administrative Agent for the benefit of such
Purchaser or Purchasers shall acquire from Seller) a valid and perfected first priority
undivided percentage ownership or security interest in each Receivable existing or hereafter
arising and in the Related Security and Collections with respect thereto, free and clear of
any Adverse Claim, except as created by the Transactions Documents. Seller represents and
warrants that there have been duly filed all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of



11









 






all appropriate jurisdictions to perfect the Administrative Agent’s (on behalf of the Purchasers) ownership
or security interest in the Receivables, the Related Security and the Collections.




    (k) Places of Business and Locations of Records. The principal places of
business and chief executive office of Seller and the offices where it keeps all of its
Records are located at the address(es) listed on Exhibit III or such other locations of
which the Agents have been notified in accordance with Section 7.2(a) in jurisdictions where
all action required by Section 14.4(a) has been taken and completed. Seller’s Federal
Employer Identification Number and Organizational Identification Number are correctly set
forth on Exhibit III.




    (l) Collections. Each of the Seller Parties represents and warrants that the
conditions and requirements set forth in Section 7.1(j) and Section 8.2 have at all times
been satisfied and duly performed. Seller represents and warrants that the names and
addresses of all Collection Banks, together with the account numbers of the Collection
Accounts of Seller at each Collection Bank and the post office box number of each Lock-Box,
are listed on Exhibit IV. Seller represents and warrants that Seller has not granted any
Person, other than the Administrative Agent as contemplated by this Agreement, dominion and
control of any Lock-Box or Collection Account, or the right to take dominion and control of
any such Lock-Box or Collection Account at a future time or upon the occurrence of a future
event. Notwithstanding the foregoing, Seller confirms that it has granted the Servicer a
right of access to the Lock-Boxes and Collection Accounts to the extent permitted in the
Collection Account Agreements.




    (m) Material Adverse Effect. Seller represents and warrants that since May 31,
2005, no event has occurred that would have a Material Adverse Effect.




    (n) Names. In the past five (5) years, Seller has not used any corporate
names, trade names or assumed names other than the name in which it has executed this
Agreement.




    (o) Ownership of Seller. Seller represents and warrants that RPM-Delaware and
the Originators, collectively, own, directly or indirectly, 100% of the issued and
outstanding capital stock of all classes of Seller, free and clear of any Adverse Claim.
Seller represents and warrants that such capital stock is validly issued, fully paid and
nonassessable, and that there are no options, warrants or other rights to acquire securities
of Seller.




    (p) Not a Holding Company or an Investment Company. Seller is not a “holding
company” or a “subsidiary holding company” of a “holding company” within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or any successor statute. Seller is
not an “investment company” within the meaning of the Investment Company Act of 1940, as
amended, or any successor statute.




    (q) Compliance with Law. Seller has complied in all respects with all
applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which



12









 






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




    (r) Compliance with Credit and Collection Policy. Seller has complied in all
material respects with the Credit and Collection Policy with regard to each Receivable and
the related Contract, and has not made any material change to such Credit and Collection
Policy, except such material change as to which the Agents have been notified in accordance
with Section 4.1(a)(vii) of the Receivables Sale Agreement.




    (s) Payments to Applicable Originator. With respect to each Receivable
transferred to Seller under the Receivables Sale Agreement, Seller has given reasonably
equivalent value to the applicable Originator in consideration therefor and such transfer
was not made for or on account of an antecedent debt. No transfer by any Originator of any
Receivable under the Receivables Sale Agreement is or may be voidable under any section of
the Bankruptcy Reform Act of 1978 (11 U.S.C. §§ 101 et seq.), as amended.




    (t) Enforceability of Contracts. Seller represents and warrants that each
Contract with respect to each Eligible Receivable is effective to create, and has created, a
legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of
the Eligible Receivable created thereunder and any accrued interest thereon, enforceable
against the Obligor in accordance with its terms, except as such enforcement may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors’ rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).




    (u) Eligible Receivables. Seller represents and warrants that each Receivable
included in the Net Receivables Balance as an Eligible Receivable was an Eligible Receivable
on the date so included.




    (v) Net Receivables Balance. Seller represents and warrants that Seller has
determined that, immediately after giving effect to each purchase hereunder, the Net
Receivables Balance is at least equal to the sum of (i) the Aggregate Capital, plus (ii) the
Aggregate Reserves.




    (w) Accounting. The manner in which Seller accounts for the transactions
contemplated by this Agreement and the Receivables Sale Agreement does not jeopardize the
true sale analysis.



          Section 5.2 Liquidity Bank Representations and Warranties. Each Liquidity Bank hereby
represents and warrants to the applicable Co-Agent and the applicable Conduit that:




13









 









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




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




    (c) Governmental Authorization. No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or regulatory body is
required for the due execution and delivery by such Liquidity Bank of this Agreement and the
performance of its obligations hereunder.




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



ARTICLE VI.




CONDITIONS OF PURCHASES




          Section 6.1 Conditions Precedent to Initial Incremental Purchase. The initial
Incremental Purchase of a Purchaser Interest under this Agreement is subject to the conditions
precedent that (a) the Administrative Agent shall have received on or before the date of such
purchase those documents listed on Schedule B, and (b) each of the Agents shall have received all
fees and expenses required to be paid on such date pursuant to the terms of this Agreement and the
applicable Fee Letter.




          Section 6.2 Conditions Precedent to All Purchases and Reinvestments. Each purchase of
a Purchaser Interest and each Reinvestment shall be subject to the further conditions precedent
that (a) in the case of each such purchase or Reinvestment: (i) the Servicer shall have delivered
to the Co-Agents on or prior to the date of such purchase, in form and substance satisfactory to
each of the Co-Agents, all Monthly Reports as and when due under Section 8.5 and (ii) upon either
Co-Agent’s reasonable request, the Servicer shall have delivered to the Co-Agents at least three
(3) days prior to such purchase or Reinvestment an interim Monthly Report showing the amount of
Eligible Receivables; (b) the Facility Termination Date shall not have occurred; (c) the Agents
shall have received such other approvals, opinions or documents as it may reasonably




14









 







request and (d) on the date of each such Incremental Purchase or Reinvestment, the following statements shall
be true (and acceptance of the proceeds of such Incremental Purchase or Reinvestment shall be
deemed a representation and warranty by Seller that such statements are then true):





         (i) the representations and warranties set forth in Section 5.1 are true and
correct on and as of the date of such Incremental Purchase or Reinvestment as though
made on and as of such date; provided, however, that so long as the RPM-Delaware
Credit Agreement does not require the datedown as of each borrowing date of the
absence of material adverse change representation thereunder, the representation
contained in Section 5.1(m) of this Agreement need only be true as of the date of
the initial Purchase hereunder;




         (ii) no event has occurred and is continuing, or would result from such
Incremental Purchase or Reinvestment, that will constitute an Amortization Event,
and no event has occurred and is continuing, or would result from such Incremental
Purchase or Reinvestment, that would constitute a Potential Amortization Event; and




         (iii) the Aggregate Capital does not exceed the Purchase Limit and the
aggregate Purchaser Interests do not exceed 100%.


It is expressly understood that each Reinvestment shall, unless otherwise directed by any Agent or
Purchaser, occur automatically on each day that the Servicer shall receive any Collections without
the requirement that any further action be taken on the part of any Person and notwithstanding the
failure of Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions precedent in
respect of any Reinvestment shall give rise to a right of each Co-Agent, which right may be
exercised at any time on demand of such Co-Agent, to rescind the related purchase and direct Seller
to pay to the Co-Agents for the benefit of the Purchasers in their respective Group’s their
respective Percentages of the Collections prior to the Amortization Date that shall have been
applied to the affected Reinvestment.




ARTICLE VII.




COVENANTS




          Section 7.1 Affirmative Covenants of the Seller Parties. Until the date on which the
Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance
with its terms:




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




         (i) Annual Reporting. As soon as available and in any event within 90 days
after the end of each fiscal year of RPM-Delaware, (A) the audited annual


15









 






financial
statements of RPM-Delaware required to be delivered under Section 4.1(a)(i) of
the Receivables Sale Agreement, together with (B) comparable unaudited annual financial
statements of Seller.




         (ii) Quarterly Reporting. As soon as available and in any event within 60 days
after the end of each fiscal quarter of RPM-Delaware, (A) the quarterly financial statements
of RPM-Delaware required to be delivered under Section 4.1(a)(ii) of the Receivables
Sale Agreement, together with (B) comparable unaudited quarterly financial statements of
Seller.




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




         (iv) Shareholders Statements and Reports. Promptly upon the furnishing thereof
to the shareholders of RPM-Delaware, copies of all financial statements, reports and proxy
statements so furnished.




         (v) S.E.C. Filings. Promptly upon the filing thereof, copies of all
registration statements (other than any registration statements on Form S-8 or its
equivalent) and any reports which RPM-Delaware files with the Securities and Exchange
Commission.




         (vi) Copies of Notices. Promptly upon its receipt of any notice, request for
consent, financial statements, certification, report or other communication under or in
connection with any Transaction Document from any Originator, the Performance Guarantor or
any Collection Bank, copies of the same.




         (vii) Other Information. Promptly, from time to time, such other information,
documents, records or reports relating to the Receivables or the financial condition,
operations, prospects or business of such Seller Party as any of the Agents may from time to
time reasonably request in order to protect the interests of the Agents and the Purchasers
under or as contemplated by this Agreement.



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




         (i) Amortization Events or Potential Amortization Events. The occurrence of
each Amortization Event and each Potential Amortization Event, by a statement of an
Authorized Officer of such Seller Party.




         (ii) Judgment and Proceedings. (A) (1) The entry of any judgment or decree
against the Servicer or any of its respective Subsidiaries if the aggregate amount of all
judgments and decrees then outstanding against the Servicer and its Subsidiaries exceeds $35,000,000 after
deducting (a) the amount with respect to which the Servicer or any such Subsidiary is
insured and with respect to which the insurer has acknowledged 


16









 






responsibility, and (b) the
amount for which the Servicer or any such Subsidiary is
otherwise indemnified if the terms of such indemnification are satisfactory to the Agents, and (2) the institution of any
litigation, arbitration proceeding or governmental proceeding against the Servicer which,
individually or in the aggregate, could reasonably be expected to have a Material Adverse
Effect; and (B) the entry of any judgment or decree or the institution of any litigation,
arbitration proceeding or governmental proceeding against Seller.




         (iii) Material Adverse Effect. The occurrence of any event or condition that
has had, or could reasonably be expected to have, a Material Adverse Effect.




         (iv) Defaults Under Other Agreements. The occurrence of a default or an event
of default under any other financing arrangement relating to a line of credit or
Indebtedness in excess of $5 million in aggregate principal amount pursuant to which such
Originator is a debtor or an obligor.




         (v) Termination Date. The occurrence of the “Termination Date” under and as
defined in the Receivables Sale Agreement.




         (vi) Downgrade of Performance Guarantor. Any downgrade in the rating of any
Indebtedness of Performance Guarantor by Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc., or by Moody’s Investors Service, Inc., setting forth the Indebtedness
affected and the nature of such change.



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



               (d) Audits. Such Seller Party will furnish to the Agents from time to time such
information with respect to it and the Receivables as any of the Agents may reasonably request.
Such Seller Party will, from time to time during regular business hours as requested by any of the Agents
upon reasonable notice and at the sole cost of such Seller Party, permit each of the Agents, or its
agents or representatives (and shall cause each Originator to permit each of the Agents or its
agents or representatives): (i) to examine and make copies of and abstracts from all Records in
the possession or under the control of such Person relating to the Receivables and the Related
Security, including, without limitation, the related Contracts, and (ii) to visit the offices and
properties of such Person for the purpose of examining such materials described in clause (i)
above, and to discuss matters relating to such Person’s financial condition or the Receivables and
the Related Security or any Person’s performance under any of the Transaction Documents or any
Person’s performance under the Contracts and, in each case, with any of the officers or employees
of Seller or the Servicer having knowledge of such matters (each of the foregoing 


17









 




examinations and
visits, a “Review”); provided, however, that, except in connection with an
 Extension Request, so long as no Amortization Event or Potential Amortization Event has occurred, the Seller Parties
shall only be responsible for the costs and expenses of one (1) Review in any one calendar year.




               (e) Keeping and Marking of Records and Books.




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




         (ii) Servicer will (and will cause each Originator to) (A) on or prior to the
date hereof, mark its master data processing records and other books and records
relating to the Purchaser Interests with a legend, acceptable to the Agents,
describing the Purchaser Interests and (B) upon the request of any of the Agents
following the occurrence of an Amortization Event, deliver to the Administrative
Agent all invoices included in the Contracts (including, without limitation, all
multiple originals of any such invoice) relating to the Receivables.



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



               (g) Performance and Enforcement of Receivables Sale Agreement and Performance
Undertaking. Seller will, and will require each of the Originators to, perform each of their respective
obligations and undertakings under and pursuant to the Receivables Sale Agreement, will purchase
Receivables thereunder in strict compliance with the terms thereof and will vigorously enforce the
rights and remedies accorded to Seller under the Receivables Sale Agreement. Seller will take all
actions to perfect and enforce its rights and interests (and the rights and interests of the Agents
and the Purchasers as assignees of Seller) under the Receivables Sale Agreement as any Agent may
from time to time reasonably request, including, without limitation, making claims to which it may
be entitled under any indemnity, reimbursement or similar provision contained in the Receivables
Sale Agreement. In addition, Seller will vigorously enforce the rights and remedies accorded to
Seller under the Performance Undertaking.



               (h) Ownership. Seller will (or will cause each Originator to) take all necessary
action to (i) vest legal and equitable title to the Receivables, the Related Security and the



18









 




Collections
purchased under the Receivables Sale Agreement irrevocably in Seller, free and clear
of any Adverse Claims other than Adverse Claims in favor of the Administrative Agent and the
Purchasers (including, without limitation, the filing of all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all appropriate
jurisdictions to perfect Seller’s interest in such Receivables, Related Security and Collections
and such other action to perfect, protect or more fully evidence the interest of Seller therein as
any Agent may reasonably request), and (ii) establish and maintain, in favor of the Administrative
Agent, for the benefit of the Purchasers, a valid and perfected first priority undivided percentage
ownership interest (and/or a valid and perfected first priority security interest) in all
Receivables, Related Security and Collections to the full extent contemplated herein, free and
clear of any Adverse Claims other than Adverse Claims in favor of the Administrative Agent for the
benefit of the Purchasers (including, without limitation, the filing of all financing statements or
other similar instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect the Administrative Agent’s (for the benefit of the Purchasers)
interest in such Receivables, Related Security and Collections and such other action to perfect,
protect or more fully evidence the interest of the Administrative Agent for the benefit of the
Purchasers as any Agent may reasonably request).




               (i) Purchasers’ Reliance. Seller acknowledges that the Agents and the Purchasers are
entering into the transactions contemplated by this Agreement in reliance upon Seller’s identity as
a legal entity that is separate from the Norwegian Company, each of the Originators, the
Performance Guarantor and their respective other Affiliates (collectively, the “RPM Group”).
Therefore, from and after the date of execution and delivery of this Agreement, Seller shall take
all reasonable steps, including, without limitation, all steps that any Agent or Purchaser may from
time to time reasonably request, to maintain Seller’s identity as a separate legal entity and to
make it manifest to third parties that Seller is an entity with assets and liabilities distinct
from those of the members of the RPM Group thereof and not just a division thereof. Without
limiting the generality of the foregoing and in addition to the other covenants set forth herein,
Seller will:




                    (A) conduct its own business in its own name and require that all
full-time employees of Seller, if any, identify themselves as such and not
as employees of any member of the RPM Group (including, without limitation,
by means of providing appropriate employees with business or identification
cards identifying such employees as Seller’s employees);




                    (B) compensate all employees, consultants and agents directly, from
Seller’s own funds, for services provided to Seller by such employees,
consultants and agents and, to the extent any employee, consultant or agent
of Seller is also an employee, consultant or agent of a member of the RPM
Group, allocate the compensation of such employee, consultant or agent
between Seller and the members of the RPM Group on a basis that reflects the
services rendered to Seller and the RPM Group;




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



19









 






                    (D) have separate stationery, invoices and checks in its own name;




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




                    (F) at all times have a Board of Directors consisting of not less than
three members, at least one member of which is an Independent Director;




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




                    (H) maintain Seller’s books and records separate from those of the
members of the RPM Group and otherwise readily identifiable as its own
assets rather than assets of a member of the RPM Group;




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




                    (J) except as herein specifically otherwise provided, maintain the
funds or other assets of Seller separate from, and not commingled with,
those of the members of the RPM Group and only maintain bank accounts or
other depository accounts to which Seller alone is the account party, into
which Seller alone (or Servicer, on Seller’s behalf) makes deposits and from
which Seller alone (or Servicer, on Seller’s behalf, or the Administrative
Agent hereunder) has the power to make withdrawals;




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



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                    (L) operate its business and activities such that: it does not engage
in any business or activity of any kind, or enter into any transaction or
indenture, mortgage, instrument, agreement, contract, lease or other
undertaking, other than the transactions contemplated and authorized by this
Agreement and the Receivables Sale Agreement; and does not create, incur,
guarantee, assume or suffer to exist any indebtedness or other liabilities,
whether direct or contingent, other than (1) as a result of the endorsement
of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business, (2) the incurrence of obligations under
this Agreement, (3) the incurrence of obligations, as expressly contemplated
in the Receivables Sale Agreement, to make payment to Originators thereunder
for the purchase of Receivables from Originators under the Receivables Sale
Agreement, and (4) the incurrence of operating expenses in the ordinary
course of business of the type otherwise contemplated by this Agreement;




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




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




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




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



21









 






                    (Q) maintain its investment in the Norwegian Company at a level not to
exceed 5% of the Norwegian Company’s outstanding voting Equity Interests;
and




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



               (j) Collections. Such Seller Party will cause (1) all proceeds from all Lock-Boxes to
be directly deposited by a Collection Bank into a Collection Account and (2) each Lock-Box and
Collection Account to be subject at all times to a Collection Account Agreement that is in full
force and effect. In the event any payments relating to Receivables are remitted directly to
Seller or any Affiliate of Seller, Seller will remit (or will cause all such payments to be
remitted) directly to a Collection Bank and deposited into a Collection Account within two (2)
Business Days following receipt thereof, and, at all times prior to such remittance, Seller will
itself hold or, if applicable, will cause such payments to be held in trust for the exclusive
benefit of the Agents and the Purchasers. Seller will maintain exclusive ownership, dominion and
control (subject to the terms of this Agreement) of each Lock-Box and Collection Account and shall
not grant the right to take dominion and control of any Lock-Box or Collection Account at a future
time or upon the occurrence of a future event to any Person, except to the Administrative Agent as
contemplated by this Agreement and except that Seller may authorize the Servicer to make deposits
to and withdrawals from the Collection Accounts prior to delivery of the Collection Notices.



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



               (l) Insurance. Seller will maintain in effect, or cause to be maintained in effect,
at Seller’s own expense, such casualty and liability insurance as Seller shall deem appropriate in
its good faith business judgment.



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



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          Section 7.2 Negative Covenants of the Seller Parties. Until the date on which the
Aggregate Unpaids have been indefeasibly paid in full and this Agreement terminates in accordance
with its terms:




               (a) Name Change, Offices and Records. Seller will not change its name, identity or
legal structure (within the meaning of Section 9-507(c) of any applicable enactment of the UCC) or
relocate its chief executive office or any office where Records are kept unless it shall have: (i)
given the Agents at least forty-five (45) days’ prior written notice thereof and (ii) delivered to
the Administrative Agent all financing statements, instruments and other documents reasonably
requested by any of the Agents in connection with such change or relocation.



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



               (c) Modifications to Contracts and Credit and Collection Policy. No Seller Party
will, and will not permit any Originator to, make any change to the Credit and Collection Policy
that could adversely affect the collectibility of the Receivables or decrease the credit quality of
any newly created Receivables. Except as provided in Section 8.2(d), no Seller Party will,
or will permit any Originator to, extend, amend or otherwise modify the terms of any Receivable or
any Contract related thereto in any material respect other than in accordance with the Credit and
Collection Policy.



               (d) Sales, Liens. Seller will not sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse
Claim upon (including, without limitation, the filing of any financing statement) or with respect
to, any Receivable, Related Security or Collections, or upon or with respect to any Contract under
which any Receivable arises, or any Lock-Box or Collection Account, or assign any right to receive
income with respect thereto (other than, in each case, the creation of the interests therein in
favor of the Administrative Agent and the Purchasers provided for herein), and Seller will defend
the right, title and interest of the Agents and the Purchasers in, to and under any of the
foregoing property, against all claims of third parties claiming through or under Seller or any
Originator.



               (e) Net Receivables Balance. At no time prior to the Amortization Date shall Seller
permit the Net Receivables Balance to be less than an amount equal to the sum of (i) the Aggregate
Capital plus (ii) the Aggregate Reserves.



               (f) Termination Date Determination. Seller will not designate the Termination Date
(as defined in the Receivables Sale Agreement), or send any written notice to any



23









 




Originator in respect thereof, without the prior written consent of the Agents, except with respect to the
occurrence of such Termination Date arising pursuant to Section 5.1(d) of the Receivables Sale
Agreement.




               (g) Restricted Junior Payments. From and after the occurrence of any Amortization
Event, Seller will not make any Restricted Junior Payment if, after giving effect thereto, Seller
would fail to meet its obligations set forth in Section 7.2(e).



               (h) Seller Indebtedness. Seller will not incur or permit to exist any Indebtedness or
liability on account of deposits except: (i) the Obligations, (ii) the Subordinated Loans (as
defined in the Receivables Sale Agreement), and (iii) other current accounts payable arising in the
ordinary course of business and not overdue.



               (i) Prohibition on Additional Negative Pledges. Seller will not (and will not authorize any Originator to) enter into or assume any
agreement (other than this Agreement and the other Transaction Documents) prohibiting the creation
or assumption of any Adverse Claim upon the Receivables, Collections or Related Security except as
contemplated by the Transaction Documents, or otherwise prohibiting or restricting any transaction
contemplated hereby or by the other Transaction Documents. Seller will not (and will not authorize
any Originator to) enter into or assume any agreement creating any Adverse Claim upon the
Subordinated Notes (as defined in the Receivables Sale Agreement).



ARTICLE VIII.




ADMINISTRATION AND COLLECTION




          Section 8.1 Designation of Servicer.





         (a) The servicing, administration and collection of the Receivables shall be conducted
by such Person (the “Servicer”) so designated from time to time in accordance with this
Section 8.1. RPM-Delaware is hereby designated as, and hereby agrees to perform the duties
and obligations of, the Servicer pursuant to the terms of this Agreement. At any time after
the occurrence of an Amortization Event, the Agents may at any time designate as Servicer
any Person to succeed RPM-Delaware or any successor Servicer.




         (b) RPM-Delaware may delegate, and RPM-Delaware hereby advises the Purchasers and the
Agents that it has delegated, to the Originators, as sub-servicers of the Servicer, certain
of its duties and responsibilities as Servicer hereunder in respect of the Receivables
originated by such Originators. Without the prior written consent of the Co-Agents, the
Servicer shall not be permitted to delegate any of its duties or responsibilities as
Servicer to any Person other than (i) Seller, (ii) the Originators, and (iii) with respect
to certain Charged-Off Receivables, outside collection agencies in accordance with its
customary practices, except as permitted in Section 8.1(a). Seller shall not be permitted
to further delegate to any other Person any of the duties or responsibilities of Servicer
delegated to it by RPM-Delaware. If at any time following the occurrence of an Amortization
Event, the Co-Agents shall designate as Servicer any Person other than



24









 






RPM-Delaware, all duties and responsibilities theretofore delegated by RPM-Delaware to Seller or any
Originator may, at the discretion of any of the Agents, be terminated forthwith on notice
given by any Agent to the other Agents, RPM-Delaware and to Seller.




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



          Section 8.2 Duties of Servicer.





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




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




         (c) The Servicer shall administer the Collections in accordance with the procedures
described herein and in Article II. The Servicer shall set aside and hold in trust for the
account of Seller and the Purchasers their respective shares of the Collections (or such
funds or other assets arising therefrom) in accordance with Article II. The Servicer shall,
upon the request of any Agent, segregate, in a manner acceptable to the Agents, all cash,
checks and other instruments received by it from time to time constituting Collections from
the general funds of the Servicer or Seller prior to the remittance thereof in accordance
with Article II. If the Servicer shall be required to segregate Collections pursuant to the
preceding sentence, the Servicer shall segregate and



25









 






deposit with a bank designated by the Administrative Agent such allocable share of Collections of Receivables set aside for the
Purchasers on the first Business Day following receipt by the Servicer of such Collections,
duly endorsed or with duly executed instruments of transfer.




         (d) The Servicer may, in accordance with the Credit and Collection Policy, extend the
maturity of any Receivable or adjust the Outstanding Balance of any Receivable as the
Servicer determines to be appropriate to maximize Collections thereof; provided, however,
that such extension or adjustment shall not alter the status of such Receivable as a
Delinquent Receivable, Defaulted Receivable or Charged-Off Receivable or limit the rights of
the Agents or the Purchasers under this Agreement. Notwithstanding anything to the contrary
contained herein, the Administrative Agent shall have the absolute and unlimited right to direct the Servicer to commence or settle any legal action with
respect to any Receivable or to foreclose upon or repossess any Related Security.




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




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



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




26









 








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




          Section 8.5 Reports. The Servicer shall compile and complete the following reports
based on information received by it from the Originators under the Receivables Sale Agreement and
forward to the Agents (i) on the 15th day of each month or if such date is not a
Business Day, the next Business Day (the “Monthly Reporting Date”), and at such times as any Agent
shall request, a Monthly Report and (ii) at such times as any Agent shall reasonably request, a
listing by Obligor of all Receivables together with an aging of such Receivables.




          Section 8.6 Servicing Fees. In consideration of RPM-Delaware’s agreement to act as
Servicer hereunder, the Purchasers hereby agree that, so long as RPM-Delaware shall continue to
perform as Servicer hereunder, Seller shall pay over to RPM-Delaware a fee (the “Servicing Fee”) on
the first calendar day of each month, in arrears for the immediately preceding month, equal to 1%
per annum of the average aggregate Outstanding Balance of all Receivables during such period, as
compensation for its servicing activities.




ARTICLE IX.




AMORTIZATION EVENTS




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





         (a) Any Seller Party shall fail to make any payment or deposit required under this
Agreement or any other Transaction Document to which it is a party on or within one (1)
Business Day after the date on which the same is required to be made.




         (b) Any Seller Party shall fail to perform or observe any covenant contained in any
provision of Section 7.2 (other than Section 7.2(c)) or Section 8.5.




         (c) Any Seller Party shall fail to perform or observe any other covenant, agreement or
other obligation hereunder (other than as referred to in another paragraph of this
Section 9.1) or any other Transaction Document to which it is a party and such
failure shall continue for three (3) consecutive Business Days following the earlier to
occur of (i) notice from any Agent of such non-performance or non-observance, or (ii) the
date on which a Responsible Officer of such Seller Party otherwise becomes aware of such
non-performance or non-observance.




         (d) Any representation, warranty, certification or statement made by any Seller Party
in this Agreement, any other Transaction Document or in any other document required to be
delivered pursuant hereto or thereto shall prove to have been incorrect when made or deemed
made in any material respect and is not cured within five (5)



27









 






Business Days following the earlier to occur of (i) notice from any Agent of such
inaccuracy or (ii) the date on which a Responsible Officer of such Seller Party
otherwise becomes aware of such inaccuracy; provided that the materiality threshold in this
subsection shall not be applicable with respect to any representation or warranty which
itself contains a materiality threshold although the five (5) Business Day cure period shall
continue to apply.




         (e) (i) Seller shall default in the payment when due of any principal or of or interest
on any Indebtedness, or any event or condition shall occur which results in the acceleration
of the maturity of any such Indebtedness; or (ii) any Originator shall default, or the
Performance Guarantor or any of its Subsidiaries (other than an Originator or Seller) shall
default, in the payment when due of any principal or of or interest on any Material
Indebtedness; or any event or condition shall occur which results in the acceleration of the
maturity of any such Material Indebtedness.




         (f) (i) Any Seller Party, any Originator or any Significant Subsidiary (as defined in
the RPM Credit Agreement) shall generally not pay its debts as such debts become due or
shall admit in writing its inability to pay its debts generally or shall make a general
assignment for the benefit of creditors; or (ii) any proceeding shall be instituted by or
against any Seller Party, any Originator or any Significant Subsidiary seeking to adjudicate
it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee or other similar official for it
or any substantial part of its property or (iii) any Seller Party, any Originator or any
Significant Subsidiary shall take any corporate action to authorize any of the actions set
forth in clauses (i) or (ii) above in this subsection (f).




         (g) Seller shall fail to comply with the terms of Section 2.6 hereof.




         (h) As at the end of any calendar month:




         (i) the average of the Dilution Ratios for the three months then most
recently ended shall exceed 5.5%;




         (ii) the average of the Delinquency Ratios for the three months then
most recently ended shall exceed 2.75%; or




         (iii) the average of the Past Due Ratios for the three months then most
recently ended shall exceed 7.5%.




         (i) A Change of Control shall occur.




         (j) (i) One or more final judgments for the payment of money shall be entered against
Seller or (ii) one or more final judgments for the payment of money in an amount in excess
of $35,000,000, individually or in the aggregate, shall be entered against the Servicer on
claims not covered by insurance or as to which the insurance carrier has



28









 






denied its responsibility, and such judgment shall continue unsatisfied and in effect for thirty (30)
consecutive days without a stay of execution.




         (k) Either (i) the “Termination Date” under and as defined in the Receivables Sale
Agreement shall occur with respect to any Originator or (ii) any Originator shall for any
reason cease to transfer, or cease to have the legal capacity to transfer, or otherwise be
incapable of transferring Receivables to Seller under the Receivables Sale Agreement,
provided, however, that upon 30 days’ prior written notice, an Originator may cease to sell
or contribute Receivables to the Seller under the Receivables Sale Agreement without causing
an Amortization Event under this Agreement if (1) such Originator has consolidated or merged
with or into another Originator, or (2) to the extent that (a) Aggregate Capital plus
Aggregate Reserves continue to be equal to or less than the Net Receivables Balance after
such Originator ceases to sell or contribute, (b) RPM-Delaware and the remaining Originators
agree to such modified transaction terms which may be requested by the Agents as being
necessary to maintain an implied rating equivalent to the implied rating of the facility
evidenced by this Agreement prior to such Originator ceasing to sell or contribute, as
determined in the exercise of the Agents’ reasonable credit judgment, including to (I)
establish the Dilution Ratio, Delinquency Ratio and Past Due Ratio for this Agreement after
such Originator ceases to sell or contribute which shall be set and calculated consistent
with the methodology used to set and calculate such ratios prior to such Originator ceasing
to sell or contribute, (II) establish Concentration Limits and Aggregate Reserves (such
Aggregate Reserves to be structured to an “A” level using Standard & Poor’s, a division of
The McGraw-Hill Companies, Inc. ‘s trade receivables securitization methodology) for the
facility evidenced by this Agreement after such Originator ceases to sell or contribute
which shall be set and calculated consistent with such methodology prior to such
Originator’s ceasing to sell or contribute and (III) establish standards for items (ii)-(v)
of the definition of “Eligible Receivable” which are consistent with those required for the
Facility prior to such Originator’s ceasing to sell or contribute and are based on the
Receivables of the remaining Originators, and (c) no Amortization Event or Potential
Amortization Event shall exist after such Originator shall cease to sell or contribute.




         (l) This Agreement shall terminate in whole or in part (except in accordance with its
terms), or shall cease to be effective or to be the legally valid, binding and enforceable
obligation of Seller, or any Obligor shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability, or the Administrative Agent for
the benefit of the Purchasers shall cease to have a valid and perfected first priority
security interest in the Receivables, the Related Security and the Collections with respect
thereto and the Collection Accounts.




         (m) The Performance Guarantor shall fail to pay, upon demand, any amount required to be
paid by it under the Performance Undertaking, or the Performance Undertaking shall cease to
be effective or to be the legally valid, binding and enforceable obligation of RPM-Delaware,
or RPM-Delaware shall directly or indirectly contest in any manner such effectiveness,
validity, binding nature or enforceability.



29









 






         (n) RPM-Delaware shall permit the Indebtedness of RPM-Delaware and its Subsidiaries,
determined on a consolidated basis, on any date to exceed 65% of the sum of such
Indebtedness and consolidated shareholders’ equity of RPM-Delaware and its consolidated
Subsidiaries on such date.




         (o) RPM-Delaware shall permit the ratio, calculated as at the end of each fiscal
quarter ending after the date of this Agreement for the four fiscal quarters then ended, of
EBITDA for such period to Interest Expense for such period to be less than 3.5:1.0.



          Section 9.2 Remedies. Upon the occurrence and during the continuation of an
Amortization Event, the Administrative Agent may, and upon the direction of either of the
Co-Agents, shall, take any of the following actions: (i) replace the Person then acting as
Servicer, (ii) declare the Amortization Date to have occurred, whereupon the Amortization Date
shall forthwith occur, without demand, protest or further notice of any kind, all of which are
hereby expressly waived by each Seller Party; provided, however, that upon the occurrence of an
Amortization Event described in Section 9.1(f)(ii), or of an actual or deemed entry of an order for
relief with respect to any Seller Party under the Federal Bankruptcy Code, the Amortization Date
shall automatically occur, without demand, protest or any notice of any kind, all of which are
hereby expressly waived by each Seller Party, (iii) to the fullest extent permitted by applicable
law, declare that the Default Fee shall accrue with respect to any of the Aggregate Unpaids
outstanding at such time, (iv) deliver the Collection Notices to the Collection Banks, and (v)
notify Obligors of the Purchasers’ interest in the Receivables. The aforementioned rights and
remedies shall be without limitation, and shall be in addition to all other rights and remedies of
the Agents and the Purchasers otherwise available under any other provision of this Agreement, by
operation of law, at equity or otherwise, all of which are hereby expressly preserved, including,
without limitation, all rights and remedies provided under the UCC, all of which rights shall be
cumulative.




ARTICLE X.




INDEMNIFICATION




          Section 10.1 Indemnities by the Seller. Without limiting any other rights that any
Agent or any Purchaser may have hereunder or under applicable law, Seller hereby agrees to
indemnify (and pay upon demand to) each of the Agents, the Purchasers and their respective assigns,
officers, directors, agents and employees (each an “Indemnified Party") from and against any and
all damages, losses, claims, taxes, liabilities, costs, expenses and for all other amounts payable,
including reasonable attorneys’ fees (which attorneys may be employees of such Agent or such
Purchaser) and disbursements (all of the foregoing being collectively referred to as “Indemnified
Amounts") awarded against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by a Purchaser of an interest in the
Receivables excluding, however, in all of the foregoing instances:




               (a) Indemnified Amounts to the extent a final judgment of a court of competent jurisdiction
holds that such Indemnified Amounts resulted from gross negligence or willful misconduct on the
part of the Indemnified Party seeking indemnification;



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



               (c) taxes imposed by the jurisdiction in which such Indemnified Party’s principal executive
office is located, on or measured by the overall net income of such Indemnified Party to the extent
that the computation of such taxes is consistent with the characterization for income tax purposes
of the acquisition by the Purchasers of Purchaser Interests as a loan or loans by the Purchasers to
Seller secured by the Receivables, the Related Security, the Collection Accounts and the
Collections;


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





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




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




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




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




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



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




             (vii) any investigation, litigation or proceeding related to or arising from
this Agreement or any other Transaction Document, the transactions contemplated
hereby, the use of the proceeds of an Incremental Purchase or a Reinvestment, the
ownership of the Purchaser Interests or any other investigation, litigation or
proceeding relating to any Seller Party or any Originator in which any Indemnified
Party becomes involved as a result of any of the transactions contemplated hereby;




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




             (ix) any Amortization Event described in Section 9.1(f);




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




             (xi) any failure to vest and maintain vested in the Administrative Agent for
the benefit of the Purchasers, or to transfer to the Administrative Agent for the
benefit of the Purchasers, legal and equitable title to, and ownership of, a first
priority perfected undivided percentage ownership interest (to the extent of the
Purchaser Interests contemplated hereunder) or security interest in the Receivables,
the Related Security and the Collections, free and clear of any Adverse Claim
(except as created by the Transaction Documents);




             (xii) the failure to have filed, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivable, the Related
Security and Collections with respect thereto, and the proceeds of any thereof,
whether at the time of any Incremental Purchase or Reinvestment or at any subsequent
time;




             (xiii) any action or omission by any Seller Party which reduces or impairs the
rights of the Agents or the Purchasers with respect to any Receivable or the value
of any such Receivable;



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             (xiv) any attempt by any Person to void any Incremental Purchase or
Reinvestment hereunder under statutory provisions or common law or equitable action;
and




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



          Section 10.2 Indemnities by the Servicer. Without limiting any other rights that any
Agent or any Purchaser may have hereunder or under applicable law, Servicer hereby agrees to
indemnify (and pay upon demand to) each Indemnified Party from and against any and all damages,
losses, claims, taxes, liabilities, costs, expenses and for all other amounts payable, including
reasonable attorneys’ fees (which attorneys may be employees of such Agent or such Purchaser) and
disbursements (all of the foregoing being collectively referred to as “Servicer Indemnified
Amounts") awarded against or incurred by any of them arising out of or as a result of Servicer’s
failure to duly and punctually perform its obligations under this Agreement excluding, however, in
all of the foregoing instances:




               (a) Servicer Indemnified Amounts to the extent a final judgment of a court of competent
jurisdiction holds that such Servicer Indemnified Amounts resulted from gross negligence or willful
misconduct on the part of the Indemnified Party seeking indemnification; and



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


provided, however, that nothing contained in this sentence shall limit the liability of Servicer or
limit the recourse of the Purchasers to Servicer for Collections received by the Servicer and
required to be remitted by it under the terms of this Agreement. Without limiting the generality
of the foregoing indemnification, Servicer shall indemnify the Indemnified Parties for Servicer
Indemnified Amounts (including, without limitation, losses in respect of uncollectible receivables,
regardless of whether reimbursement therefor would constitute recourse to the Servicer) relating to
or resulting from:





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




             (ii) the failure by Servicer to comply with any applicable law, rule or
regulation with respect to the collection of any Receivable or Related Security;




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



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             (iv) the commingling by the Servicer of Collections of Receivables or funds or
other assets arising therefrom at any time with other funds;




             (v) any investigation, litigation or proceeding relating to Servicer in which
any Indemnified Party becomes involved as a result of any of the transactions
contemplated hereby;




             (vi) any Amortization Event of the described in Section 9.1(f) with respect to
Servicer; and




             (vii) any action or omission by Servicer relating to its obligations hereunder
which reduces or impairs the rights of the Agents or the Purchasers with respect to
any Receivable or the value of any such Receivable.



          Section 10.3 Increased Cost and Reduced Return. If after the date hereof, any Funding
Source shall be charged any fee, expense or increased cost on account of the adoption of any
applicable law, rule or regulation (including any applicable law, rule or regulation regarding
capital adequacy), any accounting principles or any change in any of the foregoing, or any change
in the interpretation or administration thereof by the Financial Accounting Standards Board
(“FASB”), any governmental authority, any central bank or any comparable agency charged with the
interpretation or administration thereof, or compliance with any request or directive (whether or
not having the force of law) of any such authority or agency (a “Regulatory Change”): (i) that
subjects any Funding Source to any charge or withholding on or with respect to any Funding
Agreement or a Funding Source’s obligations under a Funding Agreement, or on or with respect to the
Receivables, or changes the basis of taxation of payments to any Funding Source of any amounts
payable under any Funding Agreement (except for changes in the rate of tax on the overall net
income of a Funding Source or taxes excluded by Section 10.1) or (ii) that imposes,
modifies or deems applicable any reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of a Funding Source, or credit
extended by a Funding Source pursuant to a Funding Agreement or (iii) that imposes any other
condition the result of which is to increase the cost to a Funding Source of performing its
obligations under a Funding Agreement, or to reduce the rate of return on a Funding Source’s
capital as a consequence of its obligations under a Funding Agreement, or to reduce the amount of
any sum received or receivable by a Funding Source under a Funding Agreement or to require any
payment calculated by reference to the amount of interests or loans held or interest received by
it, then, upon demand by the applicable Co-Agent, Seller shall pay to such Co-Agent, for the
benefit of the relevant Funding Source, such amounts charged to such Funding Source or such amounts
to otherwise compensate such Funding Source for such increased cost or such reduction.
Notwithstanding the foregoing, no Funding Source that is not organized under the laws of the United
States of America, or a state thereof, shall be entitled to reimbursement or compensation hereunder
unless and until it has delivered to the Seller two (2) duly completed and signed originals of
United States Internal Revenue Service Form W-8BEN or W-8ECI, as applicable, certifying in either case that such
Funding Source is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes. For the avoidance of doubt, if the issuance
of FASB Interpretation No. 46, or any other change in accounting standards or the issuance of any
other pronouncement, release or interpretation, causes or requires the consolidation of all or a
portion of the assets and liabilities




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of any Conduit or Seller with the assets and liabilities of any of the Agents, any Financial Institution or any other Funding Source, such event shall
constitute a circumstance on which such Funding Source may base a claim for reimbursement under
this Section.




          Section 10.4 Other Costs and Expenses. Subject to the limitations set forth in the
Fee Letter, Seller shall pay to the Agents and Conduits on demand all costs and out-of-pocket
expenses in connection with the preparation, execution, delivery and administration of this
Agreement, the transactions contemplated hereby and the other documents to be delivered hereunder,
including without limitation, the cost of Conduit’s auditors auditing the books, records and
procedures of Seller, reasonable fees and out-of-pocket expenses of legal counsel for Conduits and
the Agents (which such counsel may be employees of a Conduit or an Agent) with respect thereto and
with respect to advising Conduits and the Agents as to their respective rights and remedies under
this Agreement. Seller shall pay to the Agents on demand any and all costs and expenses of the
Agents and the Purchasers, if any, including reasonable counsel fees and expenses in connection
with the enforcement of this Agreement and the other documents delivered hereunder and in
connection with any restructuring or workout of this Agreement or such documents, or the
administration of this Agreement following an Amortization Event.




ARTICLE XI.




THE AGENTS




          Section 11.1 Appointment.




               (a) Each Purchaser and Co-Agent hereby irrevocably designates and appoints Wachovia Bank,
National Association, as Administrative Agent hereunder, and authorizes the Administrative Agent to
take such action on its behalf under the provisions of the Transaction Documents and to exercise
such powers and perform such duties as are expressly delegated to the Administrative Agent by the
terms of the Transaction Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Purchaser or Co-Agent, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on the part of the
Administrative Agent shall be read into this Agreement or otherwise exist against the
Administrative Agent.



               (b) Each of VFCC and the VFCC Liquidity Banks hereby irrevocably designates and appoints
Wachovia Bank, National Association as its Co-Agent hereunder, and authorizes such Co-Agent to take
such action on its behalf under the provisions of this Agreement, the VFCC Fee Letter and the VFCC Liquidity Agreement and to exercise such powers and perform such
duties as are expressly delegated to such Co-Agent by the terms of this Agreement, if any, together
with such other powers as are reasonably incidental thereto. Each of Victory and the Victory
Liquidity Banks hereby irrevocably designates and appoints The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
New York Branch, as its Co-Agent hereunder, and authorizes such Co-Agent to take such action on its
behalf under the provisions of this Agreement, the Victory Fee Letter and the Victory Liquidity
Agreement and to exercise such powers and perform such duties as are expressly delegated to such
Co-Agent by the terms of this Agreement, if any, together with



35









 




such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Fee Letter or the Liquidity Agreements, no Co-Agent shall have any duties or responsibilities,
except those expressly set forth herein , or any fiduciary relationship with any Purchaser,
Liquidity Bank or other Agent, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of such Co-Agent shall be read into this Agreement, the Fee
Letter or the Liquidity Agreements or otherwise exist against such Co-Agent.




               (c) The provisions of this Article XI are solely for the benefit of the Agents and the
Purchasers, and neither of the Seller Parties shall have any rights as a third-party beneficiary or
otherwise under any of the provisions of this Article XI, except that this Article XI shall not
affect any obligations which any Agent or any Purchaser may have to either of the Seller Parties
under the other provisions of this Agreement. Furthermore, no Purchaser or Liquidity Bank shall
have any rights as a third-party beneficiary or otherwise under any of the provisions hereof in
respect of a Co-Agent which is not the Co-Agent for such Person.



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



          Section 11.2 Delegation of Duties. Each Agent may execute any of its duties under the
applicable Transaction Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. No Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.




          Section 11.3 Exculpatory Provisions. No Agent nor any of its directors, officers,
agents or employees shall be (i) liable for any action lawfully taken or omitted to be taken by it
or them or any Person described in Section 11.2 under or in connection with the Transaction
Documents (except for its, their or such Person’s own bad faith, gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Purchasers or other agents for any
recitals, statements, representations or warranties made by the Seller contained in any Transaction Document or in any certificate,
report, statement or other document referred to or provided for in, or received under or in
connection with, any Transaction Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other document furnished in connection
herewith, or for any failure of either of the Seller Parties to perform its respective obligations
hereunder, or for the satisfaction of any condition specified in Article VI, except receipt of
items required to be delivered to such Agent. No Agent shall be under any obligation to any
Purchaser, Liquidity Bank or other Agent to ascertain or to inquire as to the observance or
performance of any of the agreements or covenants contained in, or conditions of, any Transaction
Document, or to inspect the properties, books or records of the




36









 







Seller Parties. This Section 11.3 is intended solely to govern the relationship between each Agent, on the one hand, and the
Purchasers and their respective Liquidity Banks, on the other.




          Section 11.4 Reliance by Agents.




               (a) Each Agent shall in all cases be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Seller Parties), independent accountants and other experts selected by
such Agent. Each Agent shall in all cases be fully justified in failing or refusing to take any
action under this Agreement or any other document furnished in connection herewith unless it shall
first receive such advice or concurrence of (i) in the case of the Administrative Agent, each of
the Co-Agents (except where another provision of this Agreement specifically authorizes the
Administrative Agent to take action based on the instructions of either of the Co-Agents) or (ii)
in the case of a Co-Agent, such of its Purchasers and Liquidity Banks, as it shall determine to be
appropriate under the relevant circumstances, or it shall first be indemnified to its satisfaction
by its Constituent Liquidity Banks against any and all liability, cost and expense which may be
incurred by it by reason of taking or continuing to take any such action.



               (b) Any action taken by the Administrative Agent in accordance with Section 11.4(a) shall be
binding upon all Purchasers and Agents.



               (c) Each Co-Agent shall determine with its Conduit and, as applicable, its Liquidity Banks,
the number of such Persons which shall be required to request or direct such Co-Agent to take
action, or refrain from taking action, under this Agreement on behalf of such Persons and whether
any consent of the rating agencies who rate such Conduit’s Commercial Paper is required (such
Persons and, if applicable, rating agencies, a “Voting Block”). Such Co-Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement in accordance with
a request of its appropriate Voting Block, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of such Co-Agent’s Constituents.



               (d) Unless otherwise advised in writing by a Co-Agent or by any Purchaser or Liquidity Bank on
whose behalf such Co-Agent is purportedly acting, each party to this Agreement may assume that (i)
such Co-Agent is acting for the benefit of each of its Constituent Purchasers and, as applicable, Liquidity Banks, as well as for the benefit of each permitted
assignee from any such Person, and (ii) each action taken by such Co-Agent has been duly authorized
and approved by all necessary action on the part of its Voting Block. Each Conduit (or, with the
consent of all other Purchasers then existing, any other Purchaser) shall have the right to
designate a new Co-Agent (which may be itself) to act on its behalf and on behalf of its assignees
and transferees for purposes of this Agreement by giving to the Agents and the Seller Parties
written notice thereof signed by such Purchaser(s) and the newly designated Co-Agent. Such notice
shall be effective when receipt thereof is acknowledged by the retiring Co-Agent and the Seller
Parties, which acknowledgments shall not be withheld or unreasonably delayed, and thereafter the
party named as such therein shall be Co-Agent for such Purchasers
under this



37









 




Agreement. Each Co-Agent and its Purchasers and Liquidity Banks shall agree amongst themselves as to the
circumstances and procedures for removal and resignation of such Co-Agent.




          Section 11.5 Notice of Amortization Events. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Amortization Event or Potential Amortization Event
unless such Agent has received notice from another Agent, a Purchaser, a Liquidity Bank or a Seller
Party referring to this Agreement, stating that an Amortization Event or Potential Amortization
Event has occurred hereunder and describing such Amortization Event or Potential Amortization
Event. In the event that any of the Agents receives such a notice, it shall promptly give notice
thereof to the other Agents for distribution, in the case of a Co-Agent, to the members of its
Group. The Administrative Agent shall take such action with respect to such Amortization Event or
Potential Amortization Event as shall be directed by either of the Co-Agents.




          Section 11.6 Non-Reliance on Agents and Other Purchasers. Each of the Purchasers
expressly acknowledges that no Agent, nor any of such Agent’s officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that
no act by any Agent hereafter taken, including, without limitation, any review of the affairs of
the Seller Parties, shall be deemed to constitute any representation or warranty by such Agent.
Each of the Purchasers also represents and warrants to the Agents and the other Purchasers that it
has, independently and without reliance upon any such Person (or any of their Affiliates) and based
on such documents and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, prospects, financial and other conditions
and creditworthiness of the Seller Parties and made its own decision to enter into this Agreement.
Each of the Purchasers also represents that it will, independently and without reliance upon any
Agent or any other Liquidity Bank or Purchaser, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property, prospects, financial and
other condition and creditworthiness of the Seller Parties. None of the Agents or the Purchasers,
nor any of their respective Affiliates, shall have any duty or responsibility to provide any party
to this Agreement with any credit or other information concerning the business, operations,
property, prospects, financial and other condition or creditworthiness of the Seller Parties which
may come into the possession of such Person or any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates, except that each of the Co-Agents shall promptly distribute to its
related Conduit (and, as applicable, its Liquidity Banks), copies of financial and other
information expressly provided to such Co-Agent by either of the Seller Parties pursuant to this
Agreement for distribution to the Agents and/or Purchasers.




38









 








          Section 11.7 Indemnification of Agents.




               (a) Each Liquidity Bank agrees to indemnify the Administrative Agent and its officers,
directors, employees, representatives and agents (to the extent not reimbursed by the Seller
Parties and without limiting the obligation of the Seller Parties to do so), ratably in accordance
with their respective Percentages or Capital, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for the Administrative Agent or such Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened, whether or not the
Administrative Agent in its capacity as Administrative Agent or such Person shall be designated a
party thereto) that may at any time be imposed on, incurred by or asserted against the
Administrative Agent or such Person as a result of, or arising out of, or in any way related to or
by reason of, any of the transactions contemplated hereunder or the execution, delivery or
performance of this Agreement or any other document furnished in connection herewith (but excluding
any such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the bad faith, gross negligence or willful
misconduct of the Administrative Agent or such Person as finally determined by a court of competent
jurisdiction).



               (b) Each Liquidity Bank agrees to indemnify its Co-Agent and such Co-Agent’s officers,
directors, employees, representatives and agents (to the extent not reimbursed by the Seller and
without limiting the obligation of the Seller to do so), ratably in accordance with their
respective Percentages or Purchaser Interests, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for such Co-Agent or such Person in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not such Co-Agent in its
capacity as Co-Agent or such Person shall be designated a party thereto) that may at any time be
imposed on, incurred by or asserted against such Co-Agent or such Person as a result of, or arising
out of, or in any way related to or by reason of, any of the transactions contemplated hereunder or
the execution, delivery or performance of this Agreement or any other document furnished in
connection herewith (but excluding any such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely from the bad faith,
gross negligence or willful misconduct of such Co-Agent or such Person as finally determined by a
court of competent jurisdiction).



          Section 11.8 Agents in their Individual Capacities. Each of the Agents in its
individual capacity and its affiliates may make loans to, accept deposits from and generally engage
in any kind of business with the Seller Parties and their Affiliates as though such Agent were not an Agent hereunder. With respect to its
Purchaser Interests, if any, pursuant to this Agreement, each Agent shall have the same rights and
powers under this Agreement as any Purchaser and may exercise the same as though it were not an
Agent, and the terms “Purchaser” and “Purchasers” shall include each of the Agents in their
individual capacities.




          Section 11.9 Successor Administrative Agent. The Administrative Agent, upon five (5)
days’ notice to the Seller Parties, the Purchasers and the Co-Agents, may voluntarily resign and




39









 







may be removed at any time, with or without cause, by both Co-Agents, whereupon BTMU-NY shall
become the successor Administrative Agent; provided, however, that Wachovia shall not voluntarily
resign as the Administrative Agent so long as any of the VFCC Liquidity Banks’ respective
Commitments remain in effect or VFCC has any outstanding Purchaser Interests hereunder. Upon
resignation or replacement of any Administrative Agent in accordance with this Section 11.9, the
retiring Administrative Agent shall execute such UCC-3 assignments and amendments, and assignments
and amendments of the Transaction Documents, as may be necessary to give effect to its replacement
by a successor Administrative Agent. After any retiring Administrative Agent’s resignation
hereunder as Administrative Agent, the provisions of Article X and this Article XI shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement.




          Section 11.10 Agents’ Conflict Waivers.




               (a) Wachovia or one of its Affiliates acts, or may in the future act, (i) as administrative
agent for VFCC, (ii) as issuing and paying agent for VFCC’s Commercial Paper Notes, (iii) to
provide credit or liquidity enhancement for the timely payment for VFCC’s Commercial Paper Notes
and (iv) to provide other services from time to time for VFCC (collectively, the “Wachovia Roles”).
Without limiting the generality of Sections 11.1 and 11.8, each Agent, Purchaser and Liquidity
Bank hereby acknowledges and consents to any and all Wachovia Roles and agrees that in connection
with any Wachovia Role, Wachovia or such Affiliate may take, or refrain from taking, any action
which it, in its discretion, deems appropriate, including, without limitation, in its role as
administrative agent for VFCC, the giving of notice to VFCC’s Liquidity Banks of a mandatory
purchase pursuant to VFCC’s Liquidity Agreement, and hereby acknowledges that neither Wachovia nor
any of its Affiliates has any fiduciary duties hereunder to any Purchaser (other than VFCC) or to
any of VFCC’s Liquidity Banks arising out of any Wachovia Roles.



               (b) BTMU-NY, BTMU-Chicago or one of their Affiliates acts, or may in the future act, (i) as
administrative agent for Victory, (ii) as issuing and paying agent for Victory’s Commercial Paper,
(iii) to provide credit or liquidity enhancement for the timely payment for Victory’s Commercial
Paper and (iv) to provide other services from time to time for Victory (collectively, the “BTMU
Roles”). Without limiting the generality of Sections 11.1 and 11.8, each of the Agents and the
Purchasers hereby acknowledges and consents to any and all BTMU Roles and agrees that in connection
with any BTMU Role, BTMU-NY, BTMU-Chicago, or such Affiliate may take, or refrain from taking, any
action which it, in its discretion, deems appropriate, including, without limitation, in its role
as administrative agent for Victory, the giving of notice to Victory’s Liquidity Banks of a mandatory purchase pursuant to Victory’s
Liquidity Agreement, and hereby acknowledges that neither BTMU-NY, BTMU-Chicago nor any of their
Affiliates has any fiduciary duties hereunder to any Purchaser (other than Victory) or to any of
Victory’s Liquidity Banks arising out of any BTMU Roles.



          Section 11.11 UCC Filings. Each of the Purchasers hereby expressly recognizes and
agrees that the Administrative Agent may be designated as the secured party of record on the
various UCC filings required to be made under this Agreement and the party entitled to amend,
release and terminate the UCC filings under the Receivable Sale Agreement in order to perfect their
respective interests in the Receivables, Collections and Related Security, that such




40









 







designation shall be for administrative convenience only in creating a record or nominee holder to take certain
actions hereunder on behalf of the Purchasers and that such listing will not affect in any way the
status of the Purchasers as the true parties in interest with respect to the Purchaser Interests.
In addition, such listing shall impose no duties on the Administrative Agent other than those
expressly and specifically undertaken in accordance with this Article XI.




ARTICLE XII.




ASSIGNMENTS; PARTICIPATIONS




          Section 12.1 Assignments.





               (a) Each of the parties hereto hereby agrees and consents to the complete or partial
assignment by a Conduit of all or any portion of its rights under, interest in, title to and
obligations under this Agreement to such Conduit’s Liquidity Banks pursuant to its Liquidity
Agreement or to any other Person, and upon such assignment, such Conduit shall be released
from its obligations so assigned. Further, each of the parties hereto hereby agrees that
any assignee of a Conduit of this Agreement or all or any of the Purchaser Interests of such
Conduit shall have all of the rights and benefits under this Agreement as if the term
“Conduit” explicitly referred to such party, and no such assignment shall in any way impair
the rights and benefits of such Conduit hereunder. Neither Seller nor the Servicer shall
have the right to assign its rights or obligations under this Agreement.




               (b) Any Liquidity Bank may at any time and from time to time assign to one or more
Persons (“Purchasing Liquidity Banks”) all or any part of its rights and obligations under
this Agreement and the applicable Liquidity Agreement pursuant to an assignment agreement,
substantially in the form set forth in Exhibit VII hereto (the “Assignment Agreement”)
executed by such Purchasing Liquidity Bank and such selling Liquidity Bank. The consent of
the applicable Conduit shall be required prior to the effectiveness of any such assignment,
and prior to the occurrence of an Amortization Event, the consent of the Seller (which
consent shall not be unreasonably withheld or delayed) shall also be required prior to the
effectiveness of any such assignment other than to an existing Liquidity Bank. Each
assignee of a Liquidity Bank must (i) have a short-term debt rating of A-1 or better (or,
solely for VFCC so long as its Commercial Paper shall have an A-1+ rating, A-1+) by Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc. and P-1 by Moody’s Investor Service, Inc. and (ii) agree to deliver to the
applicable Co-Agent, promptly following any request therefor by such Co-Agent or its
Conduit, an enforceability opinion in form and substance satisfactory to such Co-Agent and
Conduit. Upon delivery of the executed Assignment Agreement to such Co-Agent, such selling
Liquidity Bank shall be released from its obligations hereunder and under the applicable
Liquidity Agreement to the extent of such assignment. Thereafter the Purchasing Liquidity
Bank shall for all purposes be a Liquidity Bank party to this Agreement and shall have all
the rights and obligations of a Liquidity Bank under this Agreement and the applicable
Liquidity Agreement to the same extent as if it were an original party hereto and thereto,
and no further consent or action by Seller, the Purchasers or the Agents shall be required.



41









 






               (c) Each of the Liquidity Banks agrees that in the event that it shall cease to have a
short-term debt rating of A-1 (or, solely for VFCC so long as its Commercial Paper shall
have an A-1+ rating, A-1+) or better by Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc. and P-1 by Moody’s Investor Service, Inc. (an “Affected Liquidity Bank”),
such Affected Liquidity Bank shall be obliged, at the request of the applicable Conduit or
Co-Agent, to assign all of its rights and obligations hereunder and under the applicable
Liquidity Agreement to (x) another Liquidity Bank or (y) another funding entity nominated by
such Co-Agent and acceptable to such Conduit, and willing to participate in this Agreement
and the applicable Liquidity Agreement through the applicable Liquidity Termination Date in
the place of such Affected Liquidity Bank; provided that the Affected Liquidity Bank
receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such
Liquidity Bank’s Pro Rata Share of the Aggregate Capital and Yield owing to the Liquidity
Banks and all accrued but unpaid fees and other costs and expenses payable in respect of its
Pro Rata Share of the Purchaser Interests of the Liquidity Banks.



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




ARTICLE XIII.




[RESERVED].




ARTICLE XIV.




MISCELLANEOUS




          Section 14.1 Waivers and Amendments.





               (a) No failure or delay on the part of any Agent or any Purchaser in exercising any
power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or remedy preclude any other further
exercise thereof or the exercise of any other power, right or remedy. The rights and
remedies herein provided shall be cumulative and nonexclusive of any rights or



42









 






remedies provided by law. Any waiver of this Agreement shall be effective only in the specific
instance and for the specific purpose for which given.




               (b) No provision of this Agreement may be amended, supplemented, modified or waived
except in writing in accordance with the provisions of this Section 14.1(b). Each of the
Conduits, Seller and the Agents may enter into written modifications or waivers of any
provisions of this Agreement, provided, however, that no such modification or waiver shall:




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




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


Notwithstanding the foregoing, (i) without the consent of the Liquidity Banks, but with the consent
of Seller, the Agents may amend this Agreement solely to add additional Persons as
Liquidity Banks hereunder and (ii) the Agents and Conduits may enter into amendments to modify any
of the terms or provisions of Article XI, Article XII, or Section 14.13 of this Agreement without
the consent of Seller, provided that such amendment has no negative impact upon Seller. Any
modification or waiver made in accordance with this Section 14.1 shall apply to each of the
Purchasers equally and shall be binding upon Seller, the Purchasers and the Agents.




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




43









 







hereby authorizes the Co-Agents to effect purchases and Tranche Period and Discount Rate selections
based on telephonic notices made by any Person whom the Administrative Agent in good faith believes
to be acting on behalf of Seller. Seller agrees to deliver promptly to the Administrative Agent a
written confirmation of each telephonic notice signed by an authorized officer of Seller; provided,
however, the absence of such confirmation shall not affect the validity of such notice. If the
written confirmation differs from the action taken by the Administrative Agent, the records of the
Administrative Agent shall govern absent manifest error.




          Section 14.3 Ratable Payments. If any Purchaser, whether by setoff or otherwise, has
payment made to it with respect to any portion of the Aggregate Unpaids owing to such Purchaser
(other than payments received pursuant to Section 10.3 or 10.4) in a greater proportion than that
received by any other Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or warranty a portion
of such Aggregate Unpaids held by the other Purchasers so that after such purchase each Purchaser
will hold its ratable proportion of such Aggregate Unpaids; provided that if all or any portion of
such excess amount is thereafter recovered from such Purchaser, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without interest.




          Section 14.4 Protection of Purchaser Interests.





               (a) Seller agrees that from time to time, at its expense, it will promptly execute and
deliver all instruments and documents, and take all actions, that may be necessary or
desirable, or that the Administrative Agent may request, to perfect, protect or more fully
evidence the Purchaser Interests, or to enable the Administrative Agent or the Purchasers to
exercise and enforce their rights and remedies hereunder. At any time after the occurrence
of an Amortization Event, the Administrative Agent may, or the Administrative Agent may
direct Seller or the Servicer to, notify the Obligors of Receivables, at Seller’s expense, of the ownership or security interests of the
Purchasers under this Agreement and may also direct that payments of all amounts due or that
become due under any or all Receivables be made directly to the Administrative Agent or its
designee. Seller or the Servicer (as applicable) shall, at any Purchaser’s request,
withhold the identity of such Purchaser in any such notification.




               (b) If any Seller Party fails to perform any of its obligations hereunder, the
Administrative Agent or any Purchaser may (but shall not be required to) perform, or cause
performance of, such obligations, and the Administrative Agent’s or such Purchaser’s costs
and expenses incurred in connection therewith shall be payable by Seller as provided in
Section 10.4. Each Seller Party irrevocably authorizes the Administrative Agent at any time
and from time to time in the sole discretion of the Administrative Agent, and appoints the
Administrative Agent as its attorney-in-fact, to act on behalf of such Seller Party (i) to
execute on behalf of Seller as debtor and to file financing statements necessary or
desirable in the Administrative Agent’s sole discretion to perfect and to maintain the
perfection and priority of the interest of the Purchasers in the Receivables and (ii) to
file a carbon, photographic or other reproduction of this Agreement or any financing
statement with respect to the Receivables as a financing



44









 






statement in such offices as the Administrative Agent in its sole discretion deems necessary or desirable to perfect and to
maintain the perfection and priority of the interests of the Purchasers in the Receivables.
This appointment is coupled with an interest and is irrevocable.



          Section 14.5 Confidentiality.





               (a) Each of the parties hereto shall maintain and shall cause each of its employees and
officers to maintain the confidentiality of the Fee Letter and the other confidential or
proprietary information with respect to the Originators, the Agents, the Purchasers and
their respective businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that such party
and its directors, officers and employees may disclose such information (i) to such party’s
external accountants, attorneys, investors, potential investors and credit enhancers and the
agents or advisors of such Persons and (ii) as required by any applicable law, regulation or
order of any judicial or administrative proceeding provided that each party shall use
commercially reasonable efforts to ensure, to the extent permitted given the circumstances,
that any such information which is so disclosed is kept confidential.




               (b) Anything herein to the contrary notwithstanding, each Originator hereby consents to
the disclosure of any nonpublic information with respect to it (i) to each of the Agents and
Purchasers, (ii) to any prospective or actual assignee or participant of any of the Agents
or Purchasers, and (iii) to any rating agency, Commercial Paper dealer or provider of a
surety, guaranty or credit or liquidity enhancement to a Conduit or any entity organized for
the purpose of purchasing, or making loans secured by, financial assets for which either of
the Co-Agents acts as the administrative agent or administrator and to any officers,
directors, employees, outside accountants, advisors and attorneys of any of the foregoing,
provided each such Person is advised of the confidential nature of such information and, in
the case of a Person described in clause (ii) above, agrees to be bound by the provisions of this Section 14.5. In addition, the Agents and the
Purchasers may disclose any such nonpublic information pursuant to any law, rule,
regulation, direction, request or order of any judicial, administrative or regulatory
authority or proceedings (whether or not having the force or effect of law) although each of
them shall use commercially reasonable efforts to ensure, to the extent permitted given the
circumstances, that any such information which is so disclosed is kept confidential.



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




          Section 14.7 Limitation of Liability. Except with respect to any claim arising out of
the willful misconduct or gross negligence of any Agent or any Purchaser, no claim may be made by
any Seller Party or any other Person against any Agent or Purchaser or their respective Affiliates,
directors, officers, employees, attorneys or agents for any special, indirect, consequential or




45









 







punitive damages in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and each Seller Party hereby waives, releases, and
agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.




          Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW
WHICH SHALL APPLY HERETO) EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE ADMINISTRATIVE AGENT’S OR
PURCHASERS’ OWNERSHIP OF OR SECURITY INTEREST IN THE RECEIVABLES AND RELATED SECURITY OR REMEDIES
HEREUNDER IN RESPECT THEREOF ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK.




          Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT SITTING IN THE BOROUGH
OF MANHATTAN, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL LIMIT THE RIGHT OF ANY AGENT OR ANY PURCHASER TO BRING PROCEEDINGS AGAINST ANY SELLER
PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST
ANY AGENT OR ANY PURCHASER OR ANY AFFILIATE OF ANY AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR
ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A
COURT IN THE BOROUGH OF MANHATTAN, NEW YORK.




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




46









 








          Section 14.11 Integration; Binding Effect; Survival of Terms.





               (a) This Agreement and each other Transaction Document contain the final and complete
integration of all prior expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the entire agreement among the parties hereto with
respect to the subject matter hereof superseding all prior oral or written understandings.




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



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




          Section 14.13 Characterization.





               (a) It is the intention of the parties hereto that each purchase hereunder shall
constitute and be treated as an absolute and irrevocable sale, which purchase shall provide
the applicable Purchaser with the full benefits of ownership of the applicable Purchaser
Interest. Except as specifically provided in this Agreement, each sale of a Purchaser
Interest hereunder is made without recourse to Seller; provided, however, that (i) Seller
shall be liable to each of the Purchasers and Agents for all representations, warranties,
covenants and indemnities made by Seller pursuant to the terms of this Agreement, and (ii)
such sale does not constitute and is not intended to result in an assumption by any
Purchaser or Agent or any assignee thereof of any obligation of Seller or any Originator or
any other Person arising in connection with the Receivables, the Related Security, or the
related Contracts, or any other obligations of Seller or any Originator.




               (b) In addition to any ownership interest which the Administrative Agent may from time
to time acquire pursuant hereto, Seller hereby grants to the Administrative Agent for the
ratable benefit of the Purchasers a valid and perfected security interest in all



47









 






of Seller’s right, title and interest in, to and under all Receivables now existing or hereafter
arising, the Collections, each Lock-Box, each Collection Account, all Related Security, all
other rights and payments relating to such Receivables, and all proceeds of any thereof
prior to all other liens on and security interests therein to secure the prompt and complete
payment of the Aggregate Unpaids. The Administrative Agent and the Purchasers shall have,
in addition to the rights and remedies that they may have under this Agreement, all other
rights and remedies provided to a secured creditor under the UCC and other applicable law,
which rights and remedies shall be cumulative.




48










 








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




	 	 	 	 	 
	RPM FUNDING CORPORATION, as Seller
	 
	 	 	 	 
	By:	 	/s/ P. Kelly Tompkins
	 	 	 
	Name:	 	P. Kelly Tompkins

	Title:	 	Vice President and Secretary
	 
	 	 	 	 
	Address:
	 
	 	 	 	 
	 	 	RPM Funding Corporation

	 	 	2628 Pearl Road, Suite 100

	 	 	Medina, Ohio 44258

	 	 	Attention: Treasurer

	 

	 	Phone:
	 	(330) 273-8837

	 

	 	Fax:
	 	(330) 225-6574






	 	 	 	 	 
	RPM INTERNATIONAL INC., as Servicer
	 
	 	 	 	 
	By:	 	/s/ P. Kelly Tompkins
	 	 	 
	Name:	 	P. Kelly Tompkins
	Title:	 	Senior Vice President, General Counsel
and Secretary
	 
	 	 	 	 
	Address:
	 
	 	 	 	 
	 	 	RPM International Inc.

	 	 	2628 Pearl Road

	 	 	P.O. Box 777

	 	 	Medina, Ohio 44258

	 	 	Attention: Treasurer

	 

	 	Phone:
	 	(330) 273-8837

	 

	 	Fax:
	 	(330) 225-6574






49









 






	 	 	 	 	 	 	 
	VICTORY RECEIVABLES CORPORATION
	 
	 	 	 	 	 	 
	By:	 	/s/ R. Douglas Donaldson
	 	 	 
	Name:	 	R. Douglas Donaldson

	Title:	 	Treasurer
	 
	 	 	 	 	 	 
	Address:
	 	 	 	 
	 	 	Victory Receivables Corporation
	 	 	c/o The Bank of Tokyo-Mitsubishi UFJ, Ltd.
	 	 	1251 Avenue of the Americas
	 	 	New York, NY 10020
	 

	 	Attention: Kristy Yee
	 	and
	 	John Donoghue
	 

	 	Phone: (212) 782-4913

	 	 	 	Phone: (212) 782-4537

	 

	 	Fax: (212) 782-6842

	 	 	 	Fax: (212) 782-6448

	 
	 	 	 	 	 	 
	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as Victory Agent
	 
	 	 	 	 	 	 
	By:	 	/s/ Aditya Reddy
	 	 	 
	Name:	 	Aditya Reddy

	Title:

	 	VP	 	 	 	 
	 
	 	 	 	 	 	 
	Address:
	 	 	 	 
	 	 	The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch
	 	 	1251 Avenue of the Americas
	 	 	New York, NY 10020
	 

	 	Attention: Kristy Yee
	 	and
	 	John Donoghue

	 

	 	Phone: (212) 782-4913

	 	 	 	Phone: (212) 782-4537

	 

	 	Fax: (212) 782-6842

	 	 	 	Fax: (212) 782-6448







50









 






	 	 	 	 	 
	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., CHICAGO BRANCH
	 
	 	 	 	 
	By:	 	/s/ Tsuguyuki Umene
	 	 	 
	Name:	 	Tsuguyuki Umene
	Title:	 	Deputy General Manager
	 
	 	 	 	 
	Address:
	 
	 	 	 	 
	 	 	Send all notices to BTMU-NY






51









 






	 	 	 	 	 	 	 
	VARIABLE FUNDING CAPITAL COMPANY LLC
	 
	 	 	 	 	 	 
	By: Wachovia Capital Markets, LLC, attorney-in fact
	 
	 	 	 	 	 	 
	By:	 	/s/ Douglas R. Wilson, Sr.	 
	 	 	 	 
	Name:	 	Douglas R. Wilson, Sr.	 
	Title:	 	Vice President	 
	 
	 	 	 	 	 	 
	Address:	 	Variable Funding Capital Company LLC
	 	 	 	 	c/o Wachovia Capital Markets, LLC
	 	 	 	 	301 S. College St.
	 	 	 	 	FLR TW 16 NC0171
	 	 	 	 	Charlotte, NC 28288
	 

	 	 	 	Attention:
	Douglas R. Wilson Sr.
	 

	 	 	 	Phone:
	(704) 374-2520
	 

	 	 	 	Fax:
	(704) 383-9579






52









 






	 	 	 	 	 	 	 
	WACHOVIA BANK, NATIONAL ASSOCIATION, individually, as VFCC Agent and as Administrative Agent
	 
	 	 	 	 	 	 
	By:	 	/s/ Michael J. Landry	 
	 	 	 	 
	Name:	 	Michael J. Landry	 
	Title:	 	Vice President	 
	 
	 	 	 	 	 	 
	Address:	 	Wachovia Bank, National Association
	 	 	 	 	171 17th Street, N.W., 4th Floor
	 	 	 	 	Mail-stop GA4524
	 	 	 	 	Atlanta, GA 30363
	 

	 	 	 	Attention:	Michael Landry
	 

	 	 	 	Phone:	(404) 214-6388
	 

	 	 	 	Fax:	(404) 214-5481







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EXHIBIT I




DEFINITIONS




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



     “Accrual Period” means each calendar month, provided that the initial Accrual Period hereunder
means the period from (and including) the date of the initial purchase hereunder to (and including)
the last day of the calendar month thereafter.



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



     “Adjusted Eligible Receivables” means the aggregate Outstanding Balance of Eligible
Receivables less (i) the Cash Discount Exposure Factor; (ii) the Contractual Rebate Accruals; (iii)
the aggregate Outstanding Balance of all State Government Receivables in excess of 3% of the
aggregate Outstanding Balance of all Receivables; (iv) the aggregate Outstanding Balance of all
other Government Receivables in excess of 5% of the aggregate Outstanding Balance of all
Receivables; (v) the aggregate Outstanding Balance of all Canadian Receivables in excess of 3% of
the aggregate Outstanding Balance of all Receivables; (vi) the aggregate Outstanding Balance of all
Foreign Receivables in excess of 3% of the aggregate Outstanding Balance of all Receivables; (vii)
the aggregate Outstanding Balance of all Eligible Receivables which by their terms are due 62-91
days after the date of invoice in excess of 15% of the aggregate Outstanding Balance of all
Receivables; and (viii) the aggregate Outstanding Balance of all Eligible Receivables which by
their terms are due 92-121 days after the date of invoice in excess of 3% of the aggregate
Outstanding Balance of all Receivables; provided, however, that either of the Co-Agents may, upon
not less than five Business Days’ notice to Seller and the other Co-Agent, decrease or eliminate
any of the percentages specified in clauses (iii)-(viii) of this definition.



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



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



     “Affected Liquidity Bank” has the meaning specified in Section 12.1(c).



     “Affiliate” means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with, such Person or any
Subsidiary of such Person. A Person shall be deemed to control another Person if the controlling
Person owns 10% or more of any class of voting securities of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the



54









 







management or policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.



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



     “Aggregate Capital” means, on any date of determination, the aggregate amount of Capital of
all Purchaser Interests outstanding on such date.



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



     “Aggregate Reserves” means the Aggregate Reserve Percentage multiplied by the Net Receivables
Balance.



     “Aggregate Reserve Percentage” means, on any date of determination, the sum of the Loss
Reserve, the Yield Reserve and the Dilution Reserve.



     “Aggregate Unpaids” means, at any time, an amount equal to the sum of all Aggregate Capital
and unpaid Obligations (whether due or accrued) at such time.



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



     “Amortization Date” means the earliest to occur of (i) the day on which any of the conditions
precedent set forth in Section 6.2 are not satisfied, (ii) the Business Day immediately prior to
the occurrence of an Amortization Event set forth in Section 9.1(f)(ii), (iii) the Business Day
specified in a written notice from any Agent following the occurrence of any other Amortization
Event, and (iv) the date which is 30 days after the Co-Agents’ receipt of written notice from
Seller that it wishes to terminate the facility evidenced by this Agreement.



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



     “Applicable Margin” means the sum of (a) 0.25% per annum, plus (b) the “Applicable Margin”
from time to time in effect for “Eurodollar Committed Loans” under the RPM Credit Agreement.



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



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



     “BTMU-Chicago” has the meaning specified in the preamble to this Agreement.



     “BTMU-NY” has the meaning specified in the preamble to this Agreement.



     “Broken Funding Costs” means for any Purchaser Interest which: (i) has its Capital reduced
without compliance by Seller with the notice requirements hereunder or (ii) does not become subject
to an Aggregate Reduction following the delivery of any Reduction Notice or (iii) is assigned under
a Liquidity Agreement or terminated prior to the date on which it was



55









 







originally scheduled to end; an amount equal to the excess, if any, of (A) the CP Costs or
Yield (as applicable) that would have accrued during the remainder of the Tranche Periods or the
tranche periods for Commercial Paper determined by the applicable Co-Agent to relate to such
Purchaser Interest (as applicable) subsequent to the date of such reduction, assignment or
termination (or in respect of clause (ii) above, the date such Aggregate Reduction was designated
to occur pursuant to the Reduction Notice) of the Capital of such Purchaser Interest if such
reduction, assignment or termination had not occurred or such Reduction Notice had not been
delivered, over (B) the sum of (x) to the extent all or a portion of such Capital is allocated to
another Purchaser Interest, the amount of CP Costs or Yield actually accrued during the remainder
of such period on such Capital for the new Purchaser Interest, and (y) to the extent such Capital
is not allocated to another Purchaser Interest, the income, if any, actually received during the
remainder of such period by the holder of such Purchaser Interest from investing the portion of
such Capital not so allocated. In the event that the amount referred to in clause (B) exceeds the
amount referred to in clause (A), the relevant Purchaser or Purchasers agree to pay to Seller the
amount of such excess. All Broken Funding Costs shall be due and payable hereunder upon written
demand.



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



     “Calculation Period” means a calendar month.



     “Canadian Receivable” means a Receivable as to which the Obligor (a) if a natural person, is a
resident of Canada, and (b) if a corporation or other business entity, is organized under the laws
of and/or maintains its chief executive office in Canada.



     “Capital” of any Purchaser Interest means, at any time, (A) the Purchase Price of such
Purchaser Interest, minus (B) the sum of the aggregate amount of Collections and other payments
received by the Administrative Agent which in each case are applied to reduce such Capital in
accordance with the terms and conditions of this Agreement; provided that such Capital shall be
restored (in accordance with Section 2.5) in the amount of any Collections or other payments so
received and applied if at any time the distribution of such Collections or payments are rescinded,
returned or refunded for any reason.



     “Capital Lease Obligations” means, as to any Person, the obligations of such Person to pay
rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or
personal property to the extent such obligations are required to be classified and accounted for as
a capital lease on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board) and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP (including such Statement No. 13).



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     “Cash Discount Exposure Factor” means 1.5% multiplied by the aggregate Outstanding Balance of
all Receivables less than 31 days past due.



     “Change of Control” has the meaning set forth in the Receivables Sale Agreement.



     “Charged-Off Receivable” means a Receivable: (i) as to which the Obligor thereof has taken any
action, or suffered any event to occur, of the type described in Section 9.1(f) (as if references
to Seller Party therein refer to such Obligor); (ii) as to which the Obligor thereof, if a natural
person, is deceased, (iii) which, consistent with the Credit and Collection Policy, would be
written off Seller’s books as uncollectible, or (iv) which has been identified by Seller as
uncollectible.



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



     “Collection Account Agreement” means an agreement among an Originator, Seller, the
Administrative Agent and a Collection Bank perfecting the Administrative Agent’s security interest
in one or more Collection Accounts.



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



     “Collection Notice” means a notice, in substantially the form attached to any Collection
Account Agreement from the Administrative Agent to a Collection Bank, terminating the Seller
Parties’ rights to access, or give instructions with respect to, any Collection Account.



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



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



     “Commitment” means, for each Liquidity Bank, the commitment of such Liquidity Bank to purchase
Purchaser Interests from (i) Seller and (ii) Conduit, in an amount not to exceed (i) in the
aggregate, the amount set forth opposite such Liquidity Bank’s name on Schedule A to this
Agreement, as such amount may be modified in accordance with the terms hereof and (ii) with respect
to any individual purchase hereunder, its Pro Rata Share of the Purchase Price therefor.



     “Concentration Limit” means, at any time, for any Obligor and its Affiliates, considered as if
they were one and the same Obligor, the percentage of Adjusted Eligible Receivables set forth in
the table below opposite such Obligor’s applicable short-term unsecured debt ratings Moody’s (or in
the absence thereof, the equivalent long term unsecured senior debt



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ratings), or such other amount (a “Special Concentration Limit”) for such Obligor designated
by the Co-Agents:




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Allowable % of
	Short-Term	 	Long-Term S&P	 	Short-Term	 	Long-Term	 	Adjusted Eligible
	S&P Rating	 	Rating	 	Moody’s Rating	 	Moody’s Rating	 	Receivables
	A-1+

	 	AAA
	 	P-1
	 	Aaa
	 	 	12	%
	 
	 	 	 	 	 	 	 	 	 	 
	A-1

	 	AA+, AA, AA- or A+
	 	P-1
	 	Aa1, Aa2, Aa3 or A1
	 	 	10	%
	 
	 	 	 	 	 	 	 	 	 	 
	A-2

	 	A, A- or BBB+
	 	P-2
	 	A2, A3 or Baa1
	 	 	6	%
	 
	 	 	 	 	 	 	 	 	 	 
	A-3

	 	BBB or BBB-
	 	P-3
	 	Baa2 or Baa3
	 	 	4.5	%
	 
	 	 	 	 	 	 	 	 	 	 
	Below A-3 or Not
Rated by either S&P
or Moody’s

	 	Below BBB- or Not
Rated by either S&P
or Moody’s
	 	Below P-3 or Not
Rated by either S&P
or Moody’s
	 	Below Baa3 or Not
Rated by either S&P
or Moody’s
	 	 	3	%





; provided, however, that (a) if any Obligor has a split rating, the applicable rating will be the
lower of the two, (b) if any Obligor is not rated by either S&P or Moody’s, the applicable
Concentration Limit shall be the one set forth in the last line of the table above, and (c) either
of the Co-Agents may, upon not less than five Business Days’ notice to Seller, cancel any Special
Concentration Limit. As of the date hereof, (x) the Special Concentration Limit for The Home
Depot, Inc. and its Affiliates is 30% of Adjusted Eligible Receivables; (y) the Special
Concentration Limit for Ace Hardware and its Affiliates is 4% of Adjusted Eligible Receivables, and
(z) the Special Concentration Limit for Lowe’s Companies, Inc. and its Affiliates is 12% of
Adjusted Eligible Receivables.




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



     “Constituents” means, as to either Co-Agent, the Conduit represented by it as specified in the
preamble to this Agreement, and each of such Conduit’s Liquidity Banks, and the term “Constituent”
when used as an adjective shall have a correlative meaning.



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



     “Contractual Rebate Accrual” means, with respect to any Receivable on any date of
determination, the ending balance of all accounting accruals or reserves for potential volume
rebates, seasonal and other promotional discounts, advertising and other cooperative subsidies, or
similar contractual credits booked with respect to such Receivable.



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



     “Credit and Collection Policy” means the Originators’ credit and collection policies and
practices relating to Contracts and Receivables existing on the date hereof and summarized in
Exhibit VIII hereto, as modified from time to time in accordance with this Agreement.



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



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



     “Deemed Collections” means the aggregate of all amounts Seller shall have been deemed to have
received as a Collection of a Receivable. Seller shall be deemed to have received a Collection in
full of a Receivable if at any time any of the representations or warranties in Article V are no
longer true with respect to any Receivable. If (i) the Outstanding Balance of any Receivable is
either (x) reduced as a result of any defective or rejected goods or services, any discount or any
adjustment or otherwise by Seller (other than cash Collections on account of the Receivables) or
(y) reduced or canceled as a result of a setoff in respect of any claim by any Person (whether such
claim arises out of the same or a related transaction or an unrelated transaction), Seller shall be
deemed to have received a Collection of such Receivable to the extent of such reduction or
cancellation.



     “Default Fee” means with respect to any amount due and payable by Seller in respect of any
Aggregate Unpaids, an amount equal to interest on any such unpaid Aggregate Unpaids at a rate per
annum equal to 2% above the Prime Rate.



59









 





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



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



     “Defaulted Receivable” means a Receivable as to which any payment, or part thereof, remains
unpaid for 91 days or more from the original due date for such payment.



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



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



     “Designated Obligor” means an Obligor indicated by any of the Agents to Seller in writing.



     “Dilution Horizon Ratio” means, as of any Cut-off Date, a ratio (expressed as a decimal),
computed by dividing (a) the sum of (i) the aggregate sales generated by the Originators during the
two Calculation Periods ending on such Cut-Off Date, plus 50% of the aggregate sales generated by
the Originators during the Calculation Period ending three months prior to such Cut-Off Date by (b)
the Net Receivables Balance as of such Cut-Off Date.



     “Dilution Ratio” means, as of any Cut-Off Date, a ratio (expressed as a percentage), computed
by dividing (a) the total amount of Dilutions during the Calculation Period ending on such Cut-Off
Date, by (b) the aggregate sales generated by the Originators during the Calculation Period that
ended two Cut-Off Dates prior to such Cut-Off Date.



     “Dilution Reserve” means, for any Calculation Period, the greater of (i) 8% or (ii) the
product (expressed as a percentage) of:




    (a) the sum of (i) two (2) times the Adjusted Dilution Ratio as of the Cutoff Date for
such Calculation Period, plus (ii) the Dilution Volatility Component as of the Cutoff Date
for such Calculation Period, times




    (b) the Dilution Horizon Ratio as of the Cutoff Date for such Calculation Period.



     “Dilution Volatility Component” means the product (expressed as a percentage) of (i) the
difference between (a) the highest three (3)-month rolling average Dilution Ratio over the past 12
Calculation Periods and (b) the Adjusted Dilution Ratio, and (ii) a fraction, the



60









 







numerator of which is equal to the amount calculated in (i)(a) of this definition and the
denominator of which is equal to the amount calculated in (i)(b) of this definition.



     “Dilutions” means, at any time, the aggregate amount of reductions or cancellations described
in clause (i) of the definition of “Deemed Collections” other than those for which a Contractual
Rebate Accrual has been booked.



     “Discount Rate” means, the LIBO Rate or the Prime Rate, as applicable, with respect to each
Purchaser Interest of the Liquidity Banks.



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



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



     “EBITDA” means, for any period, determined on a consolidated basis for RPM-Delaware and its
Subsidiaries, net operating income of RPM-Delaware and its Subsidiaries (calculated before
provision for income taxes, interest expense, extraordinary items, income attributable to equity in
Affiliates and all amounts attributable to depreciation and amortization) for such period.



     “Eligible Assignee” means (a) any “bankruptcy remote” special purpose entity which is
administered by Wachovia or BTMU-NY (or any Affiliate of the foregoing) that is in the business of
acquiring or financing receivables, securities and/or other financial assets and which issues
commercial paper notes that are rated at least A-1 by S&P and P-1 by Moody’s, (b) any Qualifying
Liquidity Bank having a combined capital and surplus of at least $250,000,000, or (c) any
Downgraded Liquidity Bank whose liquidity commitment has been fully drawn by the applicable Conduit
or its Co-Agent and funded into a collateral account.



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




     (i) the Obligor of which (a) if a natural person, is a resident of the United
States, Puerto Rico or Canada or, if a corporation or other business organization,
is organized under the laws of the United States, Puerto Rico, Canada or any
political subdivision of the foregoing and has its chief executive office in the
United States, Puerto Rico or Canada; (b) is not an Affiliate of any of the parties
hereto; and (c) is not a Designated Obligor;




     (ii) the Obligor of which is not the Obligor of any Charged-Off Receivable,




     (iii) which is not a Charged-Off Receivable or a Defaulted Receivable,




     (iv) which is not owing from an Obligor as to which more than 25% of the
aggregate Outstanding Balance of all Receivables owing from such Obligor are
Delinquent Receivables or Defaulted Receivables,



61









 






     (v) which by its terms is due and payable on or within 121 days of the original
billing date therefor and has not had its payment terms extended,




     (vi) which is an “account” within the meaning of Section 9-102 of the UCC of
all applicable jurisdictions,




     (vii) which is denominated and payable only in United States dollars in the
United States,




     (viii) which arises under a Contract in substantially the form of one of the
form contracts set forth on Exhibit IX hereto or otherwise approved by the Co-Agents
in writing, which, together with such Receivable, is in full force and effect and
constitutes the legal, valid and binding obligation of the related Obligor
enforceable against such Obligor in accordance with its terms subject to no offset,
counterclaim or other defense,




     (ix) which arises under a Contract which (A) does not require the Obligor under
such Contract to consent to the transfer, sale or assignment of the rights and
duties of the applicable Originator or any of its assignees under such Contract and
(B) does not contain a confidentiality provision that purports to restrict the
ability of any Purchaser to exercise its rights under this Agreement, including,
without limitation, its right to review the Contract,




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




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




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




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




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




     (xv) as to which a Co-Agent has not notified Seller that such Co-Agent has
determined in the exercise of its commercially reasonable credit judgment that such
Receivable or class of Receivables is not acceptable as an Eligible



62









 







Receivable, including, without limitation, because such Receivable arises under
a Contract that is not acceptable to such Co-Agent,




     (xvi) which is not subject to (A) any right of rescission or set-off, or (B)
any currently asserted counterclaim or other defense (including defenses arising out
of violations of usury laws) of the applicable Obligor against any Originator or any
other Adverse Claim, and the Obligor thereon holds no right as against any
Originator to cause any Originator to repurchase the goods or merchandise the sale
of which shall have given rise to such Receivable (except with respect to sale
discounts effected pursuant to the Contract, or defective goods returned in
accordance with the terms of the Contract); provided, however, that if such dispute,
offset, counterclaim or defense affects only a portion of the Outstanding Balance of
such Receivable, then such Receivable may be deemed an Eligible Receivable to the
extent of the portion of such Outstanding Balance which is not so affected, and
provided, further, that Receivables of any Obligor which has any accounts payable by
the applicable Originator or by a wholly-owned Subsidiary of such Originator (thus
giving rise to a potential offset against such Receivables) may be treated as
Eligible Receivables to the extent that the Obligor of such Receivables has agreed
pursuant to a written agreement in form and substance satisfactory to the Agents,
that such Receivables shall not be subject to such offset,




     (xvii) as to which the applicable Originator has satisfied and fully performed
all obligations on its part with respect to such Receivable required to be fulfilled
by it, and no further action is required to be performed by any Person with respect
thereto other than payment thereon by the applicable Obligor, and




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



     “Equity Interests” means, with respect to any Person, any and all shares, interests,
participations or other equivalents, including membership interests (however designated, whether
voting or non-voting), of capital of such Person, including, if such Person is a partnership,
partnership interests (whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of, or distributions of
assets of, such partnership, whether outstanding on the date hereof or issued after the date of
this Agreement.



     “Existing Agreement” has the meaning set forth in the preliminary statements of this
Agreement.



     “Extension Request” has the meaning set forth in Section 1.5 of this Agreement.



63









 





     “Facility Account” means RPM Funding Corporation Collection Account #********* at National
City Bank, 1900 East Ninth St., Cleveland, Ohio 44114, ABA #*********.



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



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



     “Fee Letter” means that certain Fee Letter dated as of May 10, 2006 by and between Seller and
the Agents, as the same may be amended, restated or otherwise modified from time to time (which Fee
Letter supersedes and replaces all fee letters referenced in the Existing Agreement).



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



     “Foreign Receivable” means a Receivable (other than a Canadian Receivable) as to which the
Obligor (a) if a natural person, is not a resident of the United States of America, and (b) if a
corporation or other business entity, is organized under the laws of and/or maintains its chief
executive office in a jurisdiction other than the United States of America.



     “Funding Agreement” means this Agreement and any agreement or instrument executed by any
Funding Source with or for the benefit of Conduit.



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



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



     “Government Receivable” means a Receivable as to which the Obligor is a government or a
governmental subdivision or agency.



     “Group” means the VFCC Group or the Victory Group.



     “Guaranteed” has the meaning ascribed thereto in the definition of “Guaranty” in the RPM
Credit Agreement.



     “Incremental Purchase” means a purchase of a Purchaser Interest which increases the total
outstanding Aggregate Capital hereunder.



     “Indebtedness” means, as to any Person (determined without duplication): (i) indebtedness of
such Person for borrowed money (whether by loan or the issuance and sale of debt securities) or for
the deferred purchase or acquisition price of property or services other than accounts payable
(other than for borrowed money) incurred in the ordinary course of such



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Person’s business, (ii) obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for the account of such
Person (whether or not such obligations are contingent); (iii) Capital Lease Obligations of such
Person; (iv) obligations of such Person to redeem or otherwise retire shares of capital stock of
such Person; (v) indebtedness of others of the type described in clause (i), (ii), (iii) or (iv)
above secured by a lien on the property of such Person, whether or not the respective obligation so
secured has been assumed by such Person; and (vi) indebtedness of others of the type described in
clause (i), (ii), (iii) or (iv) above Guaranteed by such Person.



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



     “Interest Expense” means, for any period, the sum (determined without duplication) of the
aggregate amount of interest accruing during such period on Indebtedness of RPM-Delaware and its
Subsidiaries (on a consolidated basis), including the interest portion of payments under Capital
Lease Obligations and any capitalized interest, and excluding amortization of debt discount and
expense.



     “LIBO Rate” means the rate per annum equal to the sum of (i) (a) the applicable British
Bankers’ Association Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters
Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first day of the relevant
Tranche Period, and having a maturity equal to such Tranche Period, provided that, (i) if Reuters
Screen FRBD is not available to the Administrative Agent for any reason, the applicable LIBO Rate
for the relevant Tranche Period shall instead be the applicable British Bankers’ Association
Interest Settlement Rate for deposits in U.S. dollars as reported by any other generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days prior to the first
day of such Tranche Period, and having a maturity equal to such Tranche Period, and (ii) if no such
British Bankers’ Association Interest Settlement Rate is available to the Administrative Agent, the
applicable LIBO Rate for the relevant Tranche Period shall instead be the rate determined by each
Co-Agent to be the rate at which such Co-Agent offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Tranche Period, in the approximate amount to be funded
at the LIBO Rate and having a maturity equal to such Tranche Period, divided by (b) one minus the
maximum aggregate reserve requirement (including all basic, supplemental, marginal or other
reserves) which is imposed against the Administrative Agent in respect of Eurocurrency liabilities,
as defined in Regulation D of the Board of Governors of the Federal Reserve System as in effect
from time to time (expressed as a decimal), applicable to such Tranche Period plus (ii) the
Applicable Margin per annum. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16
of 1%.



     “Liquidity Agreements” means the Victory Liquidity Agreement and VFCC Liquidity Agreement.



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     “Liquidity Banks” means, collectively, the VFCC Liquidity Banks and the Victory Liquidity
Banks.



     “Liquidity Termination Date” means May 7, 2009.



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



     “Loss Reserve” means, for any Calculation Period, the greater of (i) 12% and (ii) the product
(expressed as a percentage) of (a) 2.0, times (b) the highest three-month rolling average Default
Ratio during the 12 Calculation Periods ending on the immediately preceding Cut-Off Date, times (c)
the Default Horizon Ratio as of the immediately preceding Cut-Off Date.



     “Material Adverse Effect” means a material adverse effect on (i) the financial condition or
operations of Seller or RPM-Delaware and any of its subsidiaries, taken as a whole, (ii) the
ability of Seller to perform its obligations under this Agreement or (at any time RPM-Delaware is
acting as Servicer or Performance Guarantor), the ability of the Servicer or the Performance
Guarantor to perform its obligations under this Agreement or the Performance Undertaking, as the
case may be, (iii) the legality, validity or enforceability of this Agreement or any other
Transaction Document, (iv) any Purchaser’s interest in the Receivables generally or in any
significant portion of the Receivables, the Related Security or the Collections with respect
thereto, or (v) the collectibility of the Receivables generally or of any material portion of the
Receivables.



     “Material Indebtedness” means (a) with respect to the Performance Guarantor and its
Subsidiaries (other than the Originators), Indebtedness in excess of $20 million in aggregate
principal amount and (b) with respect to any Originator, Indebtedness in excess of $10 million in
aggregate principal amount.



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



     “Monthly Reporting Date” shall have the meaning set forth in Section 8.5.



     “Net Receivables Balance” means, at any time, Adjusted Eligible Receivables at such time
reduced by the aggregate amount by which (a) the difference of (i) the Outstanding Balance of all
Eligible Receivables of each Obligor and its Affiliates minus (ii) the Cash Discount Exposure
Factor and Contractual Rebate Accrual attributable to such Obligor and its Affiliates exceeds (b)
the Concentration Limit for such Obligor.



     “Norwegian Company” means Carboline Norge A/S , a Norwegian corporation.



     “Obligations” shall have the meaning set forth in Section 2.1.



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



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     “Organic Document” means, relative to any Person, its certificate of incorporation, its
by-laws, its partnership agreement, its memorandum and articles of association, its limited
liability company agreement and/or operating agreement, share designations or similar organization
documents and all shareholder agreements, voting trusts and similar arrangements applicable to any
of its authorized Equity Interests.



     “Originator” has the meaning specified in the Receivables Sale Agreement.



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



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



     “Past Due Ratio” means, at any time, the following quotient (expressed as a percentage): (a)
the sum (without duplication) of Defaulted Receivables and Charged-Off Receivables at such time,
divided by (b) the aggregate Outstanding Balance of all Receivables.



     “Percentage” means (a) 45% as to Victory, and (b) 55% as to VFCC.



     “Performance Guarantor” means RPM-Delaware and its successors.



     “Performance Undertaking” means that certain Amended and Restated Performance Undertaking,
dated as of May 10, 2006, by Performance Guarantor in favor of Seller, substantially in the form of
Exhibit XI, as the same may be amended, restated or otherwise modified from time to time.



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



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



     “Potential Amortization Event” means an event which, with the passage of any applicable cure
period or the giving of notice, or both, would constitute an Amortization Event.



     “Prime Rate” means, as to either Group, a rate per annum equal to the prime rate of interest
announced from time to time by the applicable Co-Agent or its parent (which is not necessarily the
lowest rate charged to any customer), changing when and as said prime rate changes.



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



     “Purchase Limit” means $125,000,000.



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



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     “Purchase Price” means, with respect to any Incremental Purchase of a Purchaser Interest, the
amount paid to Seller for such Purchaser Interest which shall not exceed the least of (i) the
amount requested by Seller in the applicable Purchase Notice, (ii) the unused portion of the
Purchase Limit on the applicable purchase date and (iii) the excess, if any, of the Net Receivables
Balance (less the Aggregate Reserves) on the applicable purchase date over the aggregate
outstanding amount of Aggregate Capital determined as of the date of the most recent Monthly
Report, taking into account such proposed Incremental Purchase.



     “Purchasers” means, collectively, the Conduits and the Liquidity Banks.



     “Purchaser Interest” means, at any time, an undivided percentage interest (computed as set
forth below) associated with a designated amount of Capital, selected pursuant to the terms and
conditions hereof in (i) each Receivable arising prior to the time of the most recent computation
or recomputation of such undivided interest, (ii) all Related Security with respect to each such
Receivable, and (iii) all Collections with respect to, and other proceeds of, each such Receivable.
Each such undivided percentage interest shall equal:



	 	 	 	 	 
	 

	 	C
	 	 
	 

	 	 	 	 
	 

	 	NRB — AR	 	 






	 	 	 
	where:
	 	 
	 
	 	 
	C

	 	= the Capital of such Purchaser Interest.
	 
	 	 
	AR

	 	= the Aggregate Reserves.
	 
	 	 
	NRB

	 	= the Net Receivables Balance.





Such undivided percentage interest shall be initially computed on its date of purchase.
Thereafter, until the Amortization Date, each Purchaser Interest shall be automatically recomputed
(or deemed to be recomputed) on each day prior to the Amortization Date. The variable percentage
represented by any Purchaser Interest as computed (or deemed recomputed) as of the close of the
business day immediately preceding the Amortization Date shall remain constant at all times
thereafter.




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



     “Qualifying Liquidity Bank” means a Liquidity Bank with a rating of its short-term securities
equal to or higher than (i) A-1 by S&P and (ii) P-1 by Moody’s.



     “Ratable Share” means with respect to any Liquidity Bank, the ratio which its Commitment bears
to the sum of the Commitments of all Liquidity Banks for the same Conduit.



     “Receivable” means any “Receivable” under and as defined in the Receivables Sale Agreement in
which Seller now has or hereafter acquires any right, title or interest. Indebtedness and other
rights and obligations arising from any one transaction, including, without limitation,
indebtedness and other rights and obligations represented by an individual invoice, shall
constitute a Receivable separate from a Receivable consisting of the indebtedness



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and other rights and obligations arising from any other transaction; provided that any
indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a
Receivable regardless of whether the account debtor or Seller treats such indebtedness, rights or
obligations as a separate payment obligation.



     “Receivables Sale Agreement” means that certain Receivables Sale Agreement, dated as of June
6, 2002, between Originators and Seller, as the same may be amended, restated or otherwise modified
from time to time.



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



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



     “Regulatory Change” has the meaning set forth in Section 10.3.



     “Reinvestment” has the meaning set forth in Section 2.2.



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



     (i) all “Related Security” under and as defined in the Receivables Sale Agreement in which
Seller now has or hereafter acquires any right, title or interest,



     (ii) all of Seller’s right, title and interest in, to and under the Receivables Sale Agreement
in respect of such Receivable and all of Seller’s right, title and interest in, to and under the
Performance Undertaking, and



     (iii) all proceeds of any of the foregoing.



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



	 	 	 
	Aggregate Reduction	 	Required Notice Period
	 
	 	 
	< $100,000,000

	 	two Business Days
	 
	 	 
	$100,000,000 to $125,000,000

	 	five Business Days






     “Response Date” has the meaning set forth in Section 1.5 of this Agreement.



     “Responsible Officer” means, with respect to any Person, each of the following officers (if
applicable) of such Person (or anyone performing substantially the same functions as the following
officers typically perform): any of such Person’s Senior Officers, or such Person’s assistant
treasurer, credit manager or controller.



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     “Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect,
on account of any shares of any class of capital stock of Seller now or hereafter outstanding,
except a dividend payable solely in shares of that class of stock or in any junior class of stock
of Seller, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of capital stock of Seller
now or hereafter outstanding, (iii) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with respect to the
Subordinated Loans (as defined in the Receivables Sale Agreement), (iv) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of capital stock of Seller now or hereafter
outstanding, and (v) any payment of management fees by Seller (except for reasonable management
fees to an Originator or its Affiliates in reimbursement of actual management services performed).



     “RPM Credit Agreement” means that certain Credit Agreement dated as of November 19, 2004, as
amended, restated or replaced from time to time, among RPM-Delaware and certain of its Affiliates,
the lenders from time to time party thereto, Keybank National Association, as joint lead arranger,
joint book runner and syndication agent, Wachovia, as co-documentation agent, and National City
Bank, as swing-line lender, letter of credit issuer and administrative agent.



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



     “Seller Parties” means, collectively, (a) Seller, and (b) at any time that RPM-Delaware is
acting as Servicer or Performance Guarantor, RPM-Delaware.



     “Senior Officer” shall mean the chief executive officer, president, chief financial officer or
vice president-treasurer of the Performance Guarantor.



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



     “Servicing Fee” has the meaning set forth in Section 8.6.



     “Settlement Date” means (A) two (2) business days after each Monthly Reporting Date, and (B)
the last day of the relevant Tranche Period in respect of each Purchaser Interest of the Liquidity
Banks.



     “Settlement Period” means (A) in respect of each Purchaser Interest of Conduit, the
immediately preceding Accrual Period, and (B) in respect of each Purchaser Interest of the
Liquidity Banks, the entire Tranche Period of such Purchaser Interest.



     “State Government Receivable” means a Receivable as to which the Obligor is a state government
or a state governmental subdivision or agency in the United States of America.



     “Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding securities
having ordinary voting power of which shall at the time be owned or



70









 







controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by
such Person and one or more of its Subsidiaries, or (ii) any partnership, association, limited
liability company, joint venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a
Subsidiary of Servicer.



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



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



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



     (b) if Yield for such Purchaser Interest is calculated on the basis of the Prime Rate, a
period commencing on a Business Day selected by Seller, provided that no such period shall exceed
one month.


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




     “Transaction Documents” means, collectively, this Agreement, each Purchase Notice, the
Receivables Sale Agreement, each Collection Account Agreement, the Performance Undertaking, the Fee
Letter, the Liquidity Agreements, the Subordinated Notes (as defined in the Receivables Sale
Agreement) and all other instruments, documents and agreements required to be executed and
delivered pursuant hereto.



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



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



     “VFCC Allocation Limit” has the meaning set forth in Section 1.1(a).



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



     “VFCC Group Account” has the meaning set forth in Section 1.4.



     “VFCC Liquidity Agreement” means any liquidity purchase agreement or similar agreement now or
hereafter entered into among VFCC, the VFCC Agent, and the VFCC Liquidity Banks for the purpose of
directly or directly providing liquidity to VFCC in connection with this Agreement, as the same may
be amended, restated, supplemented, replaced or otherwise modified from time to time.



     “VFCC Liquidity Bank(s)” has the meaning set forth in the preamble to this Agreement.



     “Victory” has the meaning provided in the preamble of this Agreement.



     “Victory Agent” has the meaning provided in the preamble of this Agreement.



     “Victory Allocation Limit” has the meaning set forth in Section 1.1(a).



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



     “Victory Group Account” has the meaning set forth in Section 1.4.



     “Victory Liquidity Agreement” means any liquidity purchase agreement or similar agreement now
or hereafter entered into among Victory, the Victory Agent, and the Victory Liquidity Banks for the
purpose of directly or directly providing liquidity to Victory in connection with this Agreement,
as the same may be amended, restated, supplemented, replaced or otherwise modified from time to
time.



     “Victory Liquidity Bank(s)” has the meaning set forth in the preamble to this Agreement.



     “Yield” means for each respective Tranche Period relating to Purchaser Interests of the
Liquidity Banks, an amount equal to the product of the applicable Discount Rate for each Purchaser
Interest multiplied by the Capital of such Purchaser Interest for each day elapsed during such
Tranche Period, annualized on a 360 day basis.



     “Yield Reserve” means for any Calculation Period, the greater of (A) 1.5% or (B) the product
(expressed as a percentage) of (i) the sum of (a) 1.0% plus (b) the product of 1.5 times the Prime
Rate as of the immediately preceding Cut-Off Date times (ii) a fraction, the numerator of which is
the highest Days Sales Outstanding for the most recent 12 Calculation Periods and the denominator
of which is 360.



     All accounting terms not specifically defined herein shall be construed in accordance with
GAAP. All terms used in Article 9 of the UCC in the State of New York, and not specifically
defined herein, are used herein as defined in such Article 9.




72