Document:

Credit and Security  Agreement

 Exhibit 10(i)A(19) 
  
 CREDIT AND SECURITY AGREEMENT 
  

DATED AS OF SEPTEMBER 2, 2003 
  
 AMONG 
  
 ACUITY ENTERPRISE, INC. AND 
 ACUITY UNLIMITED INC., AS BORROWERS, 
  
 ACUITY LIGHTING GROUP, INC. AND 
 ACUITY SPECIALTY PRODUCTS GROUP, INC., AS SERVICERS, 
  
 BLUE RIDGE ASSET FUNDING CORPORATION, 
  
 THE LIQUIDITY BANKS FROM TIME TO TIME PARTY HERETO 
  
 AND 
  
 WACHOVIA BANK, NATIONAL ASSOCIATION, AS AGENT 
  

 CREDIT AND SECURITY AGREEMENT 
  
 THIS CREDIT AND SECURITY AGREEMENT, dated as of September 2, 2003 is entered into by and among: 
  
 (a) Acuity Enterprise, Inc. (“AEI”),
a Delaware corporation, and Acuity Unlimited, Inc. (“AUI”), a Delaware corporation (each, a “Borrower” and collectively, the “Borrowers”), 
  
 (b) Acuity Specialty Products Group, Inc.
(“ASP”), a Delaware corporation, and Acuity Lighting Group, Inc. (“ALG”), a Delaware corporation, as initial Servicers (the Servicers, together with the Borrowers, the “Loan
Parties” and each, a “Loan Party”), 
  
 (c) The entities listed on Schedule A to this Agreement (together with any of their respective successors and assigns hereunder, the “Liquidity Banks”), 
  
 (d) Blue Ridge Asset Funding Corporation, a Delaware
corporation (“Blue Ridge”), and 
  
 (e) Wachovia Bank, National Association, as agent for the Lenders hereunder or any successor agent hereunder (together with its successors and assigns hereunder, the “Agent”). 
  
 Unless defined elsewhere herein, capitalized terms used in this Agreement shall have the
meanings assigned to such terms in Exhibit I. 
  
 PRELIMINARY STATEMENTS 
  
 Each of the Borrowers desires to borrow from the Lenders from time to time. 
  
 Blue Ridge may, in its absolute and sole discretion, make Advances to the Borrowers, jointly and severally, from time to time. 

 
 In the event that Blue Ridge declines to make any
Advance, the Liquidity Banks shall, at the request of either of the Borrowers, make Advances from time to time. 
  
 Wachovia Bank, National Association has been requested and is willing to act as Agent on behalf of Blue Ridge and the Liquidity Banks in
accordance with the terms hereof. 
  
 ARTICLE I. 

 
 THE ADVANCES 
  
 Section 1.1 Credit Facility. 
  
 (a) Upon the terms and subject to the conditions hereof, from time to time
prior to the Facility Termination Date: 
  
 (i)
Any Borrower may, at its option, request Advances from the Lenders in an aggregate principal amount at any one time outstanding not to exceed such Borrower’s Borrowing Base and provided that the aggregate principal amount of both
Borrowers’ Advances outstanding at any one time shall not exceed the Aggregate Commitment; and 

 (ii) Blue Ridge may, at its option, make the requested Advance, or if Blue Ridge shall
decline to make any Advance, except as otherwise provided in Section 1.2, the Liquidity Banks severally agree to make Loans in an aggregate principal amount equal to the requested Advance. 
  
 Each of the Advances, and all other Obligations, shall be joint and several obligations of
the Borrowers secured by the Collateral as provided in Article XIII. It is the intent of Blue Ridge to fund all Advances by the issuance of Commercial Paper. 
  
 (b) Either or both Borrowers may, at their option, upon at least 5 Business Days’ notice to the Agent, terminate in whole or reduce in part, ratably
among the Liquidity Banks, the unused portion of the Aggregate Commitment; provided that each partial reduction of the Aggregate Commitment shall be in an amount equal to $5,000,000 (or a larger integral multiple of $1,000,000 if in
excess thereof) and shall reduce the Commitments of the Liquidity Banks ratably in accordance with their respective Pro Rata Shares. 
  
 Section 1.2 Increases. The Borrowers (or the Servicers on their behalf) shall provide the Agent with at least two (2) Business Days’ prior
notice in a form set forth as Exhibit II hereto of each requested Advance (each, a “Borrowing Notice”). Each Borrowing Notice shall be subject to Section 6.2 hereof and, except as set forth below, shall be irrevocable and
shall specify the aggregate principal amount requested by the Borrowers (which shall not be less than $1,000,000 or a larger integral multiple of $100,000) and the Borrowing Date (which, in the case of any Advance after the initial Advance
hereunder, shall only be on a Settlement Date) and, in the case of an Advance to be funded by the Liquidity Banks, the requested Interest Rate and Interest Period. Following receipt of a Borrowing Notice, the Agent will determine whether Blue Ridge
agrees to make each requested Advance. If Blue Ridge declines to make a proposed Advance, the applicable Borrower(s) may cancel the Borrowing Notice or, in the absence of such a cancellation, the requested Advance will be made by the Liquidity
Banks. On the date of each Advance, upon satisfaction of the applicable conditions precedent set forth in Article VI, Blue Ridge or the Liquidity Banks, as applicable, shall wire transfer to the applicable Borrower’s account specified in the
applicable Borrowing Notice, in immediately available funds, no later than 2:00 p.m. (New York time), an aggregate amount equal to (i) in the case of Blue Ridge, the principal amount of the requested Advances or (ii) in the case of a Liquidity Bank,
such Liquidity Bank’s Pro Rata Share of the principal amount of the requested Advances. 
  
 Section 1.3 Decreases. Except as provided in Section 1.4, a Borrower shall provide the Agent with prior written notice in conformity with the Required Notice Period (a “Reduction
Notice”) of any proposed reduction of the aggregate principal balance of the Advances outstanding to such Borrower. Such Reduction Notice shall designate (i) the date (the “Proposed Reduction Date”) upon which
any such principal reduction shall occur (which date shall give effect to the applicable Required Notice Period), and (ii) the principal amount owing from such Borrower to be reduced which shall be applied ratably to such Borrower’s Loans from

  

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Blue Ridge and the Liquidity Banks in accordance with the amount of principal (if any) owing by such Borrower to Blue Ridge, on the one hand, and the amount
of principal (if any) owing by such Borrower to the Liquidity Banks (ratably, based on their respective Pro Rata Shares), on the other hand (the “Aggregate Reduction”). Only one (1) Reduction Notice shall be outstanding from
each Borrower at any time. 
  
 Section 1.4 Deemed
Collections; Borrowing Base. 
  
 (a) If on any day:

  
 (i) the Outstanding Balance of any Receivable
is reduced as a result of any defective or rejected goods or services, any cash discount or any other adjustment by any Originator or any Affiliate thereof, or as a result of any tariff or other governmental or regulatory action, or 
  
 (ii) the Outstanding Balance of any Receivable is reduced or
canceled as a result of a setoff in respect of any claim by the Obligor thereof (whether such claim arises out of the same or a related or an unrelated transaction), or 
  
 (iii) the Outstanding Balance of any Receivable is reduced on account of the obligation of any Originator or
any Affiliate thereof to pay to the related Obligor any rebate or refund, or 
  
 (iv) the Outstanding Balance of any Receivable is less than the amount included in calculating the Net Pool Balance for purposes of any Monthly Report (for any reason other than such Receivable becoming a Defaulted
Receivable), or 
  
 (v) any of the
representations or warranties of the applicable Borrower set forth in Section 5.1(i), (j), (q), (r), (s) or (t) were not true when made with respect to any Receivable pledged by such Borrower, 
  
 then, on such day, the applicable Borrower shall be deemed to have received a Collection of
such Receivable (A) in the case of clauses (i)-(iv) above, in the amount of such reduction or cancellation or the difference between the actual Outstanding Balance and the amount included in calculating such Net Pool Balance, as applicable; and (B)
in the case of clause (v) above, in the amount of the Outstanding Balance of such Receivable and, effective as of the date on which the next succeeding Monthly Report is required to be delivered, the Borrowing Base of such Borrower shall be reduced
by the amount of such Deemed Collection. 
  
 (b) Each of the
Borrowers shall ensure that the aggregate principal balance of the Advances outstanding to such Borrower at no time exceeds its Borrowing Base and that the Aggregate Principal outstanding at no time exceeds the Aggregate Commitment. If at any time
the aggregate principal balance of the Advances outstanding to a Borrower exceeds its Borrowing Base, the Borrowers jointly and severally agree pay to the Agent not later than the next succeeding Settlement Date an amount to be applied to reduce
such outstanding principal balance (as allocated by the Agent), such that after giving effect to such payment the aggregate principal balance of the Advances outstanding to such Borrower is less than or equal to its Borrowing Base. If at any time
the Aggregate Principal exceeds the Aggregate Commitment, the 

  

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Borrowers jointly and severally agree pay to the Agent not later than the next succeeding Settlement Date an amount to be applied to reduce Aggregate
Principal (as allocated by the Agent), such that after giving effect to such payment, the Aggregate Principal is less than or equal to the Aggregate Commitment. 
  

Section 1.5 Payment Requirements. All amounts to be paid or deposited by any Loan Party pursuant to any provision of this Agreement shall be
paid or deposited in accordance with the terms hereof no later than 12:00 noon (New York time) on the day when due in immediately available funds, and if not received before 12:00 noon (New York time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Lender, they shall be paid to the Agent’s Account, for the account of such Lender, until otherwise notified by the Agent. Upon notice to the Borrowers, the Agent may debit one or both
Borrowers’ accounts for all amounts due and payable hereunder. All computations of CP Costs, Interest, per annum fees calculated as part of any CP Costs, per annum fees hereunder and per annum fees under the Fee Letter
shall be made on the basis of a year of 360 days for the actual number of days elapsed. If any amount hereunder shall be payable on a day which is not a Business Day, such amount shall be payable on the next succeeding Business Day. 
  
 Section 1.6 Ratable Loans; Funding Mechanics; Liquidity Fundings.

  
 (a) Each Advance hereunder shall consist of one or more Loans
made to a Borrower by Blue Ridge and/or the Liquidity Banks. 
  
 (b) Each Lender funding any Loan shall wire transfer the principal amount of its Loan to the Agent in immediately available funds not later than 12:00 noon (New York City time) on the applicable Borrowing Date and, subject to its receipt of
such Loan proceeds, the Agent shall wire transfer such funds to the applicable Borrower’s account specified in the applicable Borrowing Request not later than 2:00 p.m. (New York City time) on such Borrowing Date. 
  
 (c) While it is the intent of Blue Ridge to fund each requested Advance
through the issuance of its Commercial Paper, the parties acknowledge that if Blue Ridge is unable, or determines in good faith that it is undesirable, to issue Commercial Paper to fund all or any portion of its Loans, or is unable to repay such
Commercial Paper upon the maturity thereof, Blue Ridge may put all or any portion of its Loans to the Liquidity Banks at any time pursuant to the Liquidity Agreement to finance or refinance the necessary portion of its Loans through a Liquidity
Funding to the extent available. The Liquidity Fundings may be Alternate Base Rate Loans or LIBO Rate Loans, or a combination thereof, selected by the Borrowers in accordance with Article IV. Regardless of whether a Liquidity Funding constitutes the
direct funding of a Loan, an assignment of a Loan made by Blue Ridge or the sale of one or more participations in a Loan made by Blue Ridge, each Liquidity Bank participating in a Liquidity Funding shall have the rights of a “Lender”
hereunder with the same force and effect as if it had directly made a Loan to the applicable Borrower in the amount of its Liquidity Funding. 
  
 (d) Nothing herein shall be deemed to commit Blue Ridge to make Loans. 
  

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 ARTICLE II. 
  
 PAYMENTS AND COLLECTIONS 
  
 Section 2.1 Payments. The Borrowers, jointly and severally, hereby promise to pay: 
  
 (a) the Aggregate Principal on and after the Facility
Termination Date as and when Collections are received; 
  
 (b) the fees set forth in the Fee Letter on the dates specified therein; 
  
 (c) all accrued and unpaid Interest on the Alternate Base Rate Loans on each Settlement Date applicable thereto; 
  
 (d) all accrued and unpaid Interest on the LIBO Rate Loans
on the last day of each Interest Period applicable thereto; 
  
 (e) all accrued and unpaid CP Costs on the CP Rate Loans on each Settlement Date; and 
  
 (f) all Broken Funding Costs and Indemnified Amounts upon demand. 
  
 Section 2.2 Collections Prior to Amortization; Repayment of Certain Demand Advances. Without limiting recourse to the
Borrowers for the Obligations under Section 2.1: 
  
 (a)
On each Settlement Date prior to the Amortization Date, each of the Servicers shall deposit to the Agent’s Account, for distribution to the Lenders, a portion of the Collections received by such Servicer during the preceding Settlement Period
(after deduction of its Prior Month’s Percentage of the Servicing Fee) equal to the sum of the following amounts for application to the Obligations in the order specified: 
  
 first, ratably to the payment of all accrued and unpaid CP Costs, Interest and Broken Funding
Costs (if any) that are then due and owing, 
  
 second, ratably to the payment of all accrued and unpaid fees under the Fee Letter (if any) that are then due and owing, 
  
 third, if required under Section 1.3 or 1.4, to the ratable reduction of Aggregate Principal, and 
  
 fourth, for the ratable payment of all other
unpaid Obligations, if any, that are then due and owing. 
  
 The balance, if any,
shall be paid to the Borrowers or otherwise in accordance with the Borrowers’ instructions. Collections applied to the payment of Obligations shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of
the priorities set forth above in this Section 2.2(a), shall be shared ratably (within each priority) among the Agent and the Lenders in accordance with the amount of such Obligations owing to each of them in respect of each such priority.

  

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 (b) If the Collections are insufficient to pay the Servicing Fee and the Obligations specified above on
any Settlement Date, the Borrowers shall make demand upon ALG and/or ASP for repayment of any outstanding Demand Advances in an aggregate amount equal to the lesser of (i) the amount of such shortfall in Collections, and (ii) the aggregate
outstanding principal balance of the Demand Advances, together with all accrued and unpaid interest thereon, and each of ALG and ASP hereby agrees to pay the amount demanded of it to the Agent’s Account on such Settlement Date. 
  
 Section 2.3 Repayment of Demand Advances on the Amortization Date;
Collections Following Amortization. 
  
 (a) On the
Amortization Date, each of ALG and ASP hereby agrees to repay the aggregate outstanding principal balance of all Demand Advances made to it, together with all accrued and unpaid interest thereon, to the Agent’s Account, without demand or notice
of any kind, all of which are hereby expressly waived by each of ALG and ASP. 
  
 (b) Without limiting recourse to the Borrowers for the Obligations under Section 2.1, on the Amortization Date and on each day thereafter, each of the Servicers shall set aside and hold in trust for the Secured
Parties, all Collections received by such Servicer on such day. On and after the Amortization Date, each of the Servicers shall, on each Settlement Date and on each other Business Day specified by the Agent (after deduction of its Prior Month’s
Percentage of the accrued and unpaid Servicing Fee as of such date): (i) remit to the Agent’s Account the amounts set aside pursuant to the preceding two sentences, and (ii) apply such amounts to reduce the Obligations as follows: 

 
 first, to the reimbursement of the
Agent’s actual and reasonable costs of collection and enforcement of this Agreement, 
  
 second, ratably to the payment of all accrued and unpaid CP Costs, Interest and Broken Funding Costs, 
  
 third, ratably to the payment of all accrued
and unpaid fees under the Fee Letter, 
  
 fourth, to the ratable reduction of Aggregate Principal, and 
  
 fifth, for the ratable payment of all other unpaid Obligations. 
  
 After the Obligations have been indefeasibly reduced to zero, all Collections shall be paid
to the Borrowers or otherwise in accordance with the Borrowers’ instructions. Collections applied to the payment of Obligations shall be distributed in accordance with the aforementioned provisions, and, giving effect to each of the priorities
set forth above in this Section 2.3(b), shall be shared ratably (within each priority) among the Agent and the Lenders in accordance with the amount of such Obligations owing to each of them in respect of each such priority. 
  

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 Section 2.4 Payment Rescission. No payment of any of the Obligations shall be considered paid or
applied hereunder to the extent that, at any time, all or any portion of such payment or application is rescinded by application of law or judicial authority, or must otherwise be returned or refunded for any reason. The Borrowers shall remain
jointly and severally obligated for the amount of any payment or application so rescinded, returned or refunded, and shall promptly pay to the Agent (for application to the Person or Persons who suffered such rescission, return or refund) the full
amount thereof, plus Interest on such amount at the Default Rate from the date of any such rescission, return or refunding. 
  
 ARTICLE III. 
  
 BLUE RIDGE FUNDING 
  
 Section 3.1 CP Costs. The Borrowers, jointly and severally, agree to pay CP Costs with respect to the principal balance of each of Blue Ridge’s Loans from time to time outstanding. Each Loan of Blue Ridge
that is funded substantially with Pooled Commercial Paper will accrue CP Costs each day on a pro rata basis, based upon the percentage share that the principal in respect of such Loan represents in relation to all assets held by Blue Ridge and
funded substantially with related Pooled Commercial Paper. 
  
 Section 3.2 Calculation of CP Costs. Not later than the 3rd Business Day immediately preceding each
Monthly Reporting Date, Blue Ridge shall calculate the aggregate amount of CP Costs applicable to its CP Rate Loans for the Calculation Period then most recently ended and shall notify the Borrowers of such aggregate amount. 
  
 Section 3.3 CP Costs Payments. On each Settlement Date, the Borrowers,
jointly and severally, agree to pay to the Agent (for the benefit of Blue Ridge) an aggregate amount equal to all accrued and unpaid CP Costs in respect of the principal associated with all CP Rate Loans for the Calculation Period then most recently
ended in accordance with Article II. 
  
 Section 3.4 Default
Rate. From and after the occurrence and during the continuation of an Amortization Event, all Loans of Blue Ridge shall accrue Interest at the Default Rate and shall cease to be CP Rate Loans. 
  
 ARTICLE IV. 
  
 LIQUIDITY BANK FUNDING 
  
 Section 4.1 Liquidity Bank Funding. Prior to the occurrence of an
Amortization Event, the outstanding principal balance of each Liquidity Funding shall accrue interest for each day during its Interest Period at either the LIBO Rate or the Alternate Base Rate in accordance with the terms and conditions hereof.
Until the applicable Borrower gives notice to the Agent of another Interest Rate in accordance with Section 4.4, the initial Interest Rate for any Loan transferred to the Liquidity Banks by Blue Ridge pursuant to the Liquidity Agreement shall be the
Alternate Base Rate (unless the Default Rate is then applicable). If the Liquidity Banks acquire by assignment from Blue Ridge any Loan pursuant to the Liquidity Agreement, each Loan so assigned shall each be deemed to have an Interest Period
commencing on the date of any such assignment. 
  

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

  
 Section 4.3 Selection and Continuation of Interest
Periods. 
  
 (a) With consultation from (and approval by) the
Agent (which approval shall not be unreasonably withheld or delayed), the applicable Borrower shall from time to time request Interest Periods for the Liquidity Fundings, provided that if at any time any Liquidity Funding is
outstanding, the applicable Borrower shall always request Interest Periods such that at least one Interest Period shall end on the date specified in clause (A) of the definition of Settlement Date. 
  
 (b) A Borrower or the Agent, upon notice to and consent by the other received
at least three (3) Business Days prior to the end of an Interest Period (the “Terminating Tranche”) for any Liquidity Funding, may, effective on the last day of the Terminating Tranche: (i) divide any such Liquidity Funding
into multiple Liquidity Fundings, (ii) combine any such Liquidity Funding with one or more other Liquidity Fundings that have a Terminating Tranche ending on the same day as such Terminating Tranche or (iii) combine any such Liquidity Funding with a
new Liquidity Funding to be made by the Liquidity Banks on the day such Terminating Tranche ends. 
  
 Section 4.4 Liquidity Bank Interest Rates. The applicable Borrower may select the LIBO Rate or the Alternate Base Rate for each Liquidity Funding.
The applicable Borrower shall by 12:00 noon (New York time): (i) at least three (3) Business Days prior to the expiration of any Terminating Tranche with respect to which the LIBO Rate is being requested as a new Interest Rate and (ii) at least one
(1) Business Day prior to the expiration of any Terminating Tranche with respect to which the Alternate Base Rate is being requested as a new Interest Rate, give the Agent irrevocable notice of the new Interest Rate for the Liquidity Funding
associated with such Terminating Tranche. Until the applicable Borrower gives notice to the Agent of another Interest Rate, the initial Interest Rate for any Loan transferred to the Liquidity Banks pursuant to the Liquidity Agreement shall be the
Alternate Base Rate (unless the Default Rate is then applicable). 
  
 Section 4.5 Suspension of the LIBO Rate 
  
 (a)
If any Liquidity Bank notifies the Agent that it has reasonably determined that funding its Pro Rata Share of the Liquidity Fundings at a LIBO Rate would violate any applicable law, rule, regulation, or directive of any governmental or regulatory
authority, whether or not having the force of law, or that (i) deposits of a type and maturity appropriate to match fund its Liquidity Funding at such LIBO Rate are not available or (ii) such LIBO Rate does not accurately reflect the cost of
acquiring or maintaining a Liquidity Funding at such LIBO Rate, then the Agent shall suspend the availability of such LIBO Rate and require the applicable Borrower to select the Alternate Base Rate for any Liquidity Funding accruing Interest at such
LIBO Rate. 
  

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 (b) If less than all of the Liquidity Banks give a notice to the Agent pursuant to Section 4.5(a), each
Liquidity Bank which gave such a notice shall be obliged, at the request of the applicable Borrower, Blue Ridge or the Agent, to assign all of its rights and obligations hereunder to (i) another Liquidity Bank or (ii) another funding entity
nominated by the applicable Borrower or the Agent that is an Eligible Assignee willing to participate in this Agreement through the Liquidity Termination Date in the place of such notifying Liquidity Bank; provided that (i) the
notifying Liquidity Bank receives payment in full, pursuant to an Assignment Agreement, of all Obligations owing to it (whether due or accrued), and (ii) the replacement Liquidity Bank otherwise satisfies the requirements of Section 12.1(b).

  
 Section 4.6 Default Rate. From and after the occurrence
and during the continuation of an Amortization Event, all Liquidity Fundings shall accrue Interest at the Default Rate. 
  
 ARTICLE V. 
  
 REPRESENTATIONS AND WARRANTIES 
  
 Section 5.1 Representations and Warranties of the Loan Parties. Each Loan Party hereby represents and warrants to the Agent and the Lenders, as to itself, as of the date hereof and except for such
representations or warranties that are limited to a certain date or period, as of the date of each Advance and as of each Settlement Date that: 
  
 (a) Existence and Power. Such Loan Party is a corporation duly organized, validly existing and in good standing under the laws of the state
indicated in the preamble to this Agreement, is duly qualified to transact business in every jurisdiction where, by the nature of its business, such qualification is necessary, and where the failure to qualify would have or could reasonably be
expected to cause a Material Adverse Effect, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. 
  
 (b) Power and Authority; Due Authorization, Execution and Delivery.
The execution, delivery and performance by such Loan Party of the Transaction Documents to which it is a party (i) are within such Loan Party’s corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) require no
action by or in respect of or filing with, any governmental body, agency or official, (iv) do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of such Loan
Party or of any agreement, judgment, injunction, order, decree or other instrument binding upon such Loan Party or any of its Subsidiaries, and (v) do not result in the creation or imposition of any Adverse Claim on any asset of such Loan Party
(except as created hereunder). This Agreement and each other Transaction Document to which such Loan Party is a party has been duly executed and delivered by such Loan Party. 
  
 (c) No Bulk Sale. No transaction contemplated hereby requires compliance with any bulk sales act or similar law.

  

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 (d) Governmental Authorization. Other than the filing of the financing statements required
hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by such Loan Party of this Agreement and each other Transaction
Document to which it is a party and the performance of its obligations hereunder and thereunder. 
  
 (e) Actions, Suits. There is no action, suit or proceeding pending, or to the knowledge of such Loan Party overtly threatened in writing, against
or affecting such Loan Party or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official which has had or is likely to have a Material Adverse Effect. 
  
 (f) Binding Effect. This Agreement constitutes and, when executed and
delivered in accordance with this Agreement, each other Transaction Document to which such Loan Party is a party, will constitute valid and binding obligations of such Loan Party enforceable in accordance with their respective terms,
provided that the enforceability hereof and thereof is subject in each case to general principles of equity and to bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights generally and by general
equitable principles. 
  
 (g) Accuracy of Information. All
information heretofore furnished by such Loan Party to the Agent or any of the Lenders for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by such Loan Party to
the Agent or any of the Lenders will be, true and accurate in every material respect or based on reasonable estimates on the date as of which such information is stated or certified. Such Loan Party has disclosed to the Agent in writing any and all
facts known to its Executive Officers which would have or reasonably would be expected to cause a Material Adverse Effect. 
  
 (h) Use of Proceeds. Neither Borrower is engaged principally, or as one of its important activities, in the business of purchasing or carrying any
Margin Stock, and no part of the proceeds of any Advance will be used to purchase or carry any Margin Stock (except to the extent expressly permitted under the proviso to Section 7.1(i)(L)) or to extend credit to others for the purpose of purchasing
or carrying any Margin Stock, or be used for any purpose which violates, or which is inconsistent with, the provisions of Regulation T, U or X. 
  
 (i) Good Title. AUI (i) is the legal and beneficial owner of the Receivables originated by ALG and (ii) is the legal and beneficial owner of the
Related Security with respect thereto or possesses a valid and perfected security interest therein, in each case, free and clear of any Adverse Claim, except for Permitted Encumbrances. There have been duly filed all financing statements or other
similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect AUI’s ownership interest in each such Receivable, its Collections and the Related Security and the Agent’s
security interest therein. AEI (i) is the legal and beneficial owner of the Receivables originated by ASP and (ii) is the legal and beneficial owner of the Related Security with respect thereto or possesses a valid and perfected security interest
therein, in each case, free and clear of any Adverse Claim, except for Permitted Encumbrances. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect AEI’s ownership interest in each such Receivable, its Collections and the Related Security and the Agent’s security interest therein 
  

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 (j) Perfection. This Agreement, together with the filing of the financing statements contemplated
hereby, is effective to create in favor of the Agent, for the benefit of the Lenders, a valid and perfected security interest in all of each Borrower’s right, title and interest in and to each Receivable pledged by it existing and hereafter
arising, together with all Collections and Related Security with respect thereto, in each case, free and clear of any Adverse Claim, except for Permitted Encumbrances. 
  
 (k) Places of Business and Locations of Records. The principal places of business and chief executive office of each
Loan Party and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit III or such other locations of which the Agent has been notified in accordance with Section 7.2(a) in jurisdictions where all
action required by Section 7.2(a) has been taken and completed. Each Borrower’s Federal Employer Identification Number and Organization Identification Number is correctly set forth on Exhibit III. 
  
 (l) Collections. The conditions and requirements set forth in
Section 7.1(j) have at all times been satisfied and duly performed. The names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts at each Collection Bank and the post office box number of each
Lock-Box, are listed on Exhibit IV. Neither Borrower has granted any Person, other than the Agent under Section 8.3 hereof and the Collection Account Agreements dominion and control of any Lock-Box or Collection Account, or the right to take
dominion and control of any such Lock-Box or Collection Account at a future time or upon the occurrence of a future event. 
  
 (m) Material Adverse Effect. During the period July 1, 2003 through and including the date of this Agreement, in the good faith judgment of the
Executive Officers, no event has occurred that has had or could reasonably be expected to have a Material Adverse Effect. 
  
 (n) Names. The name in which each Borrower has executed this Agreement is identical to the name of Borrower as indicated on the public record of
its state of organization which shows Borrower to have been organized. In the past five (5) years, neither Borrower has used any corporate names, trade names or assumed names other than the name in which it has executed this Agreement and as listed
on Exhibit III. 
  
 (o) Not a Holding Company or an
Investment Company. Neither Borrower is 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. Neither Borrower is an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or any successor statute. 
  
 (p) Compliance with Law. Each Borrower has complied in all respects
with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the failure to so comply could not reasonably be expected 

  

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to have a Material Adverse Effect. Each Receivable, together with the Contract related thereto, does not contravene any laws, rules or regulations applicable
thereto (including, without limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy), and no
part of such Contract is in violation of any such law, rule or regulation, except where such contravention or violation could not reasonably be expected to have a Material Adverse Effect. 
  
 (q) Compliance with Credit and Collection Policy. Each Borrower has complied in all material respects with the Credit
and Collection Policy with regard to each Receivable and the related Contract, and has not made any material change to such Credit and Collection Policy, except such material change as to which the Agent has been notified in accordance with
Section _7.1(a). 
  
 (r) Enforceability of
Contracts. Each Contract with respect to each Receivable is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or limiting creditors’ rights
generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). 
  
 (s) Accounting. The manner in which each Borrower accounts for the transactions contemplated by the Receivables Sale Agreement to which it is a
party does not jeopardize the characterization of the transactions contemplated therein as being true sales. 
  
 (t) Eligible Receivables. Each Receivable reflected in any Monthly Report as an Eligible Receivable was an Eligible Receivable on the date of such
Monthly Report. 
  
 (u) Borrowing Limitations. Immediately
after giving effect to each Advance and each settlement on any Settlement Date hereunder, the aggregate principal balance of the Advances outstanding to each Borrower is less than or equal to its Borrowing Base, and the Aggregate Principal
outstanding to both Borrowers is less than or equal to the Aggregate Commitment. 
  
 Section 5.2 Liquidity Bank Representations and Warranties. Each Liquidity Bank hereby represents and warrants to the Agent, Blue Ridge and the Loan Parties that: 
  
 (a) Existence and Power. Such Liquidity Bank is a banking association
duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and has all organizational power to perform its obligations hereunder and under the Liquidity Agreement. 
  
 (b) No Conflict. The execution and delivery by such Liquidity Bank of
this Agreement and the Liquidity Agreement and the performance of its obligations hereunder and thereunder are within its corporate powers, have been duly authorized by all necessary corporate action, do not contravene or violate (i) its certificate
or articles of incorporation or association or by-laws, (ii) any law, rule or regulation applicable to it, (iii) any restrictions under any agreement, contract or instrument to which it is a party or any of its property is bound, or (iv) 

  

 12 

 
any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, and do not result in the creation or imposition of any
Adverse Claim on its assets. This Agreement and the Liquidity Agreement have been duly authorized, executed and delivered by such Liquidity Bank. 
  
 (c) Governmental Authorization. No authorization or approval or other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Liquidity Bank of this Agreement or the Liquidity Agreement and the performance of its obligations hereunder or thereunder. 
  
 (d) Binding Effect. Each of this Agreement and the Liquidity Agreement
constitutes the legal, valid and binding obligation of such Liquidity Bank enforceable against such Liquidity Bank in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws relating to or limiting creditors’ rights generally and by general principles of equity (regardless of whether such enforcement is sought in a proceeding in equity or at law). 
  
 ARTICLE VI. 
  
 CONDITIONS OF ADVANCES 
  
 Section 6.1 Conditions Precedent to Initial Advance. The initial
Advance under this Agreement is subject to the conditions precedent that (a) the Agent shall have received on or before the date of such Advance those documents listed on Schedule A to the Receivables Sale Agreement and those documents listed on
Schedule B to this Agreement, and (b) the Agent shall have received all fees and expenses required to be paid on such date pursuant to the terms of this Agreement and the Fee Letter. 
  
 Section 6.2 Conditions Precedent to All Advances. Each Advance and each rollover or continuation of any Advance shall
be subject to the further conditions precedent that (a) the Servicers shall have delivered to the Agent on or prior to the date thereof, in form and substance satisfactory to the Agent, all Monthly Reports as and when due under Section 8.5; (b) the
Facility Termination Date shall not have occurred; (c) the Agent shall have received such other approvals, opinions or documents as it may reasonably request; and (d) on the date thereof, the following statements shall be true (and acceptance of the
proceeds of such Advance shall be deemed a representation and warranty by each Borrower that such statements are then true): 
  
 (i) the representations and warranties set forth in Section 5.1 are true and correct in all material respects on and as of the date of
such Advance (or such Settlement Date, as the case may be) as though made on and as of such date; 
  
 (ii) no event has occurred and is continuing, or would result from such Advance (or the continuation thereof), that will constitute an
Amortization Event, and no event has occurred and is continuing, or would result from such Advance (or the continuation thereof), that would constitute an Unmatured Amortization Event; and 
  
 (iii) after giving effect to such Advance (or the
continuation thereof), the aggregate principal balance of the Advances outstanding to each of the Borrowers will not exceed its Borrowing Base and the Aggregate Principal outstanding is less than or equal to the Aggregate Commitment. 
  

 13 

 ARTICLE VII. 
  
 COVENANTS 
  
 Section 7.1 Affirmative Covenants of the Loan Parties. Until the Final Payout Date, each Loan Party hereby covenants, as to itself, as set forth
below: 
  
 (a) Financial Reporting. Such Loan Party will
maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish or cause to be furnished to the Agent: 
  
 (i) Annual Reporting. As soon as available and in any event within 90 days (or such longer period as
may be the subject of an extension granted by the Securities and Exchange Commission) after the end of each Fiscal Year, (A) a consolidated balance sheet of the Performance Guarantor and its Consolidated Subsidiaries as of the end of such Fiscal
Year and the related consolidated statements of income, stockholders’ equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous fiscal year, all certified by Ernst & Young, LLP
or other independent public accountants of nationally recognized standing, with such certification to be free of exceptions and qualifications not acceptable to the Agent, and (B) an unaudited balance sheet and income statement for each of the
Borrowers for such Fiscal Year, certified in a manner acceptable to the Agent by such Borrower’s chief financial officer. 
  
 (ii) Quarterly Reporting. As soon as available and in any event within 45 days (or such longer period as may be the subject of an
extension granted by the Securities and Exchange Commission) after the end of each of the first 3 Fiscal Quarters of each Fiscal Year, (A) a consolidated balance sheet of the Performance Guarantor and its Consolidated Subsidiaries as of the end of
such Fiscal Quarter and the related statement of income and statement of cash flows for the portion of the Fiscal Year ended at the end of such Fiscal Quarter, setting forth in each case in comparative form the figures for the corresponding Fiscal
Quarter and the corresponding portion of the previous Fiscal Year, all certified (subject to normal year-end adjustments) as to fairness of presentation, GAAP and consistency by the chief financial officer or the chief accounting officer of the
Performance Guarantor, and (B) an unaudited balance sheet and income statement for each of the Borrowers for such Fiscal Quarter, certified in a manner acceptable to the Agent by such Borrower’s chief financial officer. 
  
 (iii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance certificate in substantially the form of Exhibit V signed by an Authorized Officer of the Performance Guarantor and dated the date of such annual financial statement or such quarterly financial
statement, as the case may be. 
  

 14 

 (iv) Shareholders Statements and Reports. Promptly upon the mailing thereof to the
shareholders of the Performance Guarantor generally, copies of all financial statements, reports and proxy statements so mailed. 
  
 (v) S.E.C. Filings. Promptly upon the filing thereof, copies of all registration statements (other than the exhibits thereto and
any registration statements on Form S-8 or its equivalent) and annual, quarterly or monthly reports which the Performance Guarantor shall have filed with the Securities and Exchange Commission. 
  
 (vi) Copies of Notices. Promptly upon its receipt of
any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Person other than the Agent or Blue Ridge, copies of the same. 
  
 (vii) Change in Credit and Collection Policy. At
least thirty (30) days prior to the effectiveness of any material change in or material amendment to the Credit and Collection Policy, a copy of the Credit and Collection Policy then in effect and a notice (A) indicating such change or amendment,
and (B) if such proposed change or amendment would be reasonably likely to adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables, requesting the Agent’s consent thereto.

  
 (viii) Other Information. Promptly,
from time to time, such other information, documents, records or reports relating to the Receivables or the condition or operations, financial or otherwise, of such Loan Party as the Agent may from time to time reasonably request in order to protect
the interests of the Agent, for the benefit of Blue Ridge, under or as contemplated by this Agreement. 
  
 (b) Notices. Such Loan Party will notify the Agent in writing of any of the following promptly upon learning of the occurrence thereof, describing
the same and, if applicable, the steps being taken with respect thereto: 
  
 (i) Amortization Events or Unmatured Amortization Events. Within one (1) Business Day after any Responsible Officer learns thereof, the occurrence of each Amortization Event and each Unmatured Amortization
Event, by a statement of an Authorized Officer of such Loan Party. 
  
 (ii) Termination Events or Unmatured Termination Events. Within one (1) Business Day after any Responsible Officer learns thereof, the occurrence of each Termination Event and each Unmatured Termination Event,
by a statement of an Authorized Officer of each of ALG and ASP. 
  
 (iii) Defaults Under Other Agreements. Within one (1) Business Day after any Responsible Officer learns thereof, the occurrence of a default or an event of default under any other financing arrangement pursuant
to which any Loan Party is a debtor or an obligor which relates to debt in excess of $25,000,000. 
  

 15 

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

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

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

  

 16 

 
Parent executes and delivers such Uniform Commercial Code financing statements and other documents as the Administrative Agent may reasonably request in
order to maintain the perfection of the interests conveyed under the Transaction Documents and (3) no Amortization Event or Unmatured Amortization Event has occurred and is continued after giving effect to such transaction. 
  
 (d) Audits. Such Loan Party will furnish to the Agent from time to
time such information with respect to it and the Receivables as the Agent may reasonably request. Such Loan Party will, at the sole cost of such Loan Party from time to time upon prior written request of the Agent given (unless an Amortization Event
shall have occurred and be continuing) not less than three (3) Business Days prior to a requested visit, permit the Agent, or its agents or representatives (and shall cause each Originator to permit the Agent or its agents or representatives) during
normal business hours: (i) to examine and make copies of and abstracts from all Records in the possession or under the control of such Person relating to the Collateral, including, without limitation, the related Contracts, and (ii) to visit the
offices and properties of such Person for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to such Person’s financial condition or the Collateral or any Person’s performance under any
of the Transaction Documents or any Person’s performance under the Contracts and, in each case, with any of the officers or employees of the Borrowers or the Servicers having knowledge of such matters (each of the foregoing examinations and
visits, a “Review”); provided, however, that, so long as no Amortization Event has occurred and is continuing, (A) the Loan Parties shall only be responsible for the costs and expenses of one (1) Review in any
one calendar year, and (B) the Agent will not request more than four (4) Reviews in any one calendar year. To the extent that Agent, in the course of any Review, obtains possession of any Proprietary Information pertaining to any Loan Party or any
of its Affiliates, Agent shall handle such information in accordance with the requirements of Section 14.5 hereof. 
  

 17 

 (e) Keeping and Marking of Records and Books. 
  
 (i) The Servicers 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 Servicers will (and will cause each Originator to) give the Agent notice of any material change in the administrative and operating procedures referred to in the previous sentence. 
  
 (ii) Such Loan Party will (and will cause each Originator
to): (A) on or prior to the date hereof, mark its master data processing records and other books and records relating to the Receivables with a legend, acceptable to the Agent, describing the Agent’s security interest in the Collateral and (B)
upon the request of the Agent following the occurrence and during the continuance of an Amortization Event: (x) mark each Contract with a legend describing the Agent’s security interest and (y) deliver to the Agent all Contracts (including,
without limitation, all multiple originals of any such Contract constituting an instrument, a certificated security or chattel paper) relating to the Receivables. 
  
 (f) Compliance with Contracts and Credit and Collection Policy. Such Loan Party will (and will cause each Originator
to) timely and fully (i) perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Contracts related to the Receivables, and (ii) comply in all material respects with the
Credit and Collection Policy in regard to each Receivable and the related Contract. 
  
 (g) Performance and Enforcement of Receivables Sale Agreements. Each Borrower will, and will require each Originator to, perform each of their respective obligations and undertakings under and pursuant to the
Receivables Sale Agreements, will purchase Receivables thereunder in strict compliance with the terms of the applicable Receivables Sale Agreement and will vigorously enforce the rights and remedies accorded to such Borrower under the applicable
Receivables Sale Agreement. Each Borrower will take all actions to perfect and enforce its rights and interests (and the rights and interests of the Agent, as such Borrower’s assignee) under the applicable Receivables Sale Agreement as the
Agent may from time to time reasonably request, including, without limitation, making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in such Receivables Sale Agreement. 
  
 (h) Ownership. Each Borrower will (or will cause the applicable
Originator to) take all necessary action to (i) vest legal and equitable title to the Collateral purchased under the applicable Receivables Sale Agreement irrevocably in such Borrower, free and clear of any Adverse Claims (other than Permitted
Encumbrances) including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect such Borrower’s interest
in such Collateral and such other action to perfect, protect or more fully evidence the interest of such Borrower therein as the Agent may reasonably request), and (ii) establish and maintain, in favor 

  

 18 

 
of the Agent, for the benefit of the Secured Parties, a valid and perfected first priority security interest in all Collateral, free and clear of any Adverse
Claims (other than Permitted Encumbrances), including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect
the Agent’s (for the benefit of the Secured Parties) security interest in the Collateral and such other action to perfect, protect or more fully evidence the interest of the Agent for the benefit of the Secured Parties as the Agent may
reasonably request. 
  
 (i) Reliance. Each Borrower
acknowledges that the Agent and Blue Ridge are entering into the transactions contemplated by this Agreement in reliance upon the Borrowers’ identities as legal entities that are separate from the Originators. Therefore, from and after the date
of execution and delivery of this Agreement, each Borrower shall take all reasonable steps, including, without limitation, all steps that the Agent or Blue Ridge may from time to time reasonably request, to maintain such Borrower’s identity as
a separate legal entity and to make it manifest to third parties that such Borrower is an entity with assets and liabilities distinct from those of each Originator and any Affiliates thereof (other than such Borrowers) and not just a division of any
Originator or any such Affiliate. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, each Borrower will: 
  

(A) conduct its own business in its own name; 
  
 (B) compensate all employees, consultants and agents directly, from such Borrower’s own funds, for services provided to such Borrower by such
employees, consultants and agents and, to the extent any employee, consultant or agent of such Borrower is also an employee, consultant or agent of any Originator or any Affiliate thereof, allocate the compensation of such employee, consultant or
agent between such Borrower and such Originator or such Affiliate, as applicable, on a basis that reflects the services rendered to such Borrower and such Originator or such Affiliate, as applicable; 
  
 (C) clearly identify its offices (by signage or otherwise) as its offices
and, if such office is located in the offices of any Originator, each Borrower shall lease such office at a fair market rent; 
  
 (D) have a separate telephone number, which will be answered only in its name and separate stationery and checks in its own name; 
  
 (E) conduct all transactions with each Originator strictly on an
arm’s-length basis, allocate all overhead expenses (including, without limitation, telephone and other utility charges) for items shared between such Borrower and such Originator on the basis of actual use to the extent practicable and, to the
extent such allocation is not practicable, on a basis reasonably related to actual use; 
  
 (F) at all times have a Board of Directors consisting of three members, at least one member of which is an Independent Director; 
  

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

  

 19 

 (H) maintain such Borrower’s books and records separate from those of each Originator and any
Affiliate thereof and otherwise readily identifiable as its own assets rather than assets of any Originator or any Affiliate thereof; 
  
 (I) prepare its financial statements separately from those of each Originator and insure that any consolidated financial statements of any Originator or
any Affiliate thereof that include such Borrower and that are filed with the Securities and Exchange Commission or any other governmental agency have notes clearly stating that such Borrower is a separate corporate entity and that its assets will be
available first and foremost to satisfy the claims of the creditors of such Borrower; 
  
 (J) except as herein specifically otherwise provided, maintain the funds or other assets of such Borrower separate from, and not commingled with, those of any Originator or any Affiliate thereof and only maintain bank
accounts or other depository accounts to which such Borrower alone is the account party, into which such Borrower alone makes deposits and from which such Borrower alone (or the Agent hereunder) has the power to make withdrawals; 
  
 (K) pay all of such Borrower’s operating expenses from such
Borrower’s own assets (except for certain payments by any Originator or other Persons pursuant to allocation arrangements that comply with the requirements of this Section 7.1(i)); 
  
 (L) operate its business and activities such that: it does not engage in any business or activity of any kind, or enter
into any transaction or indenture, mortgage, instrument, agreement, contract, lease or other undertaking, other than the transactions contemplated and authorized by this Agreement and the Receivables Sale Agreements; 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 Agreements, to make payment to the applicable Originator thereunder for the purchase of
Receivables from such Originator under the applicable Receivables Sale Agreement, and (4) the incurrence of operating expenses in the ordinary course of business of the type otherwise contemplated by this Agreement; 
  
 (M) maintain its corporate charter in conformity with this Agreement, such
that it does not amend, restate, supplement or otherwise modify its Certificate of Incorporation or By-Laws in any respect that would materially impair its ability to comply with the terms or provisions of any of the Transaction Documents,
including, without limitation, Section 7.1(i) of this Agreement; 
  
 (N) maintain the effectiveness of, and continue to perform under the Receivables Sale Agreements, such that it does not amend, restate, supplement, cancel, 

  

 20 

 
terminate or otherwise modify either Receivables Sale Agreement or give any consent, waiver, directive or approval thereunder or waive any default, action,
omission or breach under either Receivables Sale Agreement or otherwise grant any indulgence thereunder, without (in each case) the prior written consent of the Agent; 
  
 (O) maintain its corporate separateness such that it does not merge or consolidate with or into, or convey, transfer, lease
or otherwise dispose of (whether in one transaction or in a series of transactions, and except as otherwise contemplated herein) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all
of the assets of, any Person, nor at any time create, have, acquire, maintain or hold any interest in any Subsidiary. 
  
 (P) maintain at all times the Required Capital Amount (as defined in the applicable Receivables Sale Agreement) and refrain from making any dividend,
distribution, redemption of capital stock or payment of any subordinated indebtedness which would cause the Required Capital Amount to cease to be so maintained; and 
  
 (Q) take such other actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinion
issued by Kilpatrick Stockton LLP, as counsel for the Borrowers, in connection with the closing or initial Advance under this Agreement and relating to substantive consolidation issues, and in the certificates accompanying such opinion, remain true
and correct in all material respects at all times. 
  
 (j)
Collections. Such Loan Party will cause (1) all proceeds from all Lock-Boxes to be directly deposited by a Collection Bank into a Collection Account and (2) each Lock-Box and Collection Account to be subject at all times to a Collection
Account Agreement that is in full force and effect. In the event any payments relating to the Collateral are remitted directly to a Borrower or any Affiliate of a Borrower, such Borrower will remit (or will cause all such payments to be remitted)
directly to a Collection Bank and deposited into a Collection Account within two (2) Business Days following receipt thereof, and, at all times prior to such remittance, such Borrower will itself hold or, if applicable, will cause such payments to
be held in trust for the exclusive benefit of the Agent and Blue Ridge. Each Borrower will maintain exclusive ownership, dominion and control (subject to the terms of this Agreement) of each Lock-Box and Collection Account into which Collections on
the Receivables pledged by it are deposited and shall not grant the right to take dominion and control of any such Lock-Box or Collection Account at a future time or upon the occurrence of a future event to any Person, except to the Agent as
contemplated by this Agreement. 
  
 (k) Taxes. Such Loan
Party will file all material tax returns and reports required by law to be filed by it and will promptly pay all material taxes and governmental charges at any time owing, except any such taxes which are not yet delinquent or are being diligently
contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. Each Borrower will pay when due any taxes payable in connection with the Receivables pledged by it,
exclusive of taxes on or measured by income or gross receipts of the Agent or Blue Ridge. 
  

 21 

 (l) Payment to Applicable Originator. With respect to any Receivable purchased by a Borrower from
any Originator, such sale shall be effected under, and in strict compliance with the terms of, the applicable 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. 
  
 Section 7.2 Negative Covenants of the Loan Parties. Until the Final Payout Date, each Loan Party hereby covenants, as to itself, that: 
  
 (a) Name Change, Offices and Records. Such Loan Party will not change its name, identity or structure (within the meaning of any applicable
enactment of the UCC), relocate its chief executive office at any time while the location of its chief executive office is relevant to perfection of the Agent’s security interest, for the benefit of the Secured Parties, in the Receivables,
Related Security and Collections, or change any office where Records are kept unless it shall have: (i) given the Agent at least ten (10) days’ prior written notice thereof and (ii) delivered to the Agent all financing statements, instruments
and other documents reasonably requested by the Agent in connection with such change or relocation. 
  
 (b) Change in Payment Instructions to Obligors. Except as may be required by the Agent pursuant to Section 8.2(b), such Loan Party will not add or
terminate any bank as a Collection Bank, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box or Collection Account, unless the Agent shall have received, at least ten (10) days before the proposed
effective date therefor, (i) written notice of such addition, termination or change and (ii) with respect to the addition of a Collection Bank or a Collection Account or Lock-Box, an executed Collection Account Agreement with respect to the new
Collection Account or Lock-Box; provided, however, that the Servicers may make changes in instructions to Obligors regarding payments if such new instructions require such Obligor to make payments to another existing Collection
Account. 
  
 (c) Modifications to Contracts and Credit and
Collection Policy. Such Loan Party will not, and will not permit any Originator to, make any material change to the Credit and Collection Policy that could adversely affect the collectibility of the Receivables or decrease the credit quality of
any newly created Receivables. Except as provided in Section 8.2(d), the Servicers will not, and will not permit any Originator to, extend, amend or otherwise modify the terms of any Receivable or any Contract related thereto other than in
accordance with the Credit and Collection Policy. 
  
 (d)
Sales, Liens. Neither Borrower will sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing
of any financing statement) or with respect to, any of the Collateral, or assign any right to receive income with respect thereto (other than Permitted Encumbrances), and each Borrower will defend the right, title and interest of the Secured Parties
in, to and under any of the foregoing property, against all claims of third parties claiming through or under such Borrower or any Originator (other than Permitted Encumbrances). Neither Borrower will create or suffer to exist any mortgage, pledge,
security interest, encumbrance, lien, charge or other similar arrangement on any of its inventory. 
  

 22 

 (e) Use of Proceeds. Neither Borrower will use the proceeds of the Advances for any purpose other
than (i) paying for Receivables and Related Security under and in accordance with the applicable Receivables Sale Agreement, (ii) making Demand Advances to the Originator from whom such Borrower purchased Receivables at any time prior to the
Facility Termination Date while such Originator is acting as a Servicer and no Amortization Event or Unmatured Amortization Event exists and is continuing, (iii) paying its ordinary and necessary operating expenses when and as due, (iv) making
Restricted Junior Payments to the extent permitted under this Agreement. 
  
 (f) Termination Date Determination. Neither Borrower will designate the Termination Date (as defined in the Receivables Sale Agreement to which it is a party), or send any written notice to the applicable
Originator in respect thereof, without the prior written consent of the Agent, except with respect to the occurrence of such Termination Date arising pursuant to Section 5.1(d) of such Receivables Sale Agreement. 
  
 (g) Restricted Junior Payments. Neither Borrower will make any
Restricted Junior Payment if after giving effect thereto, such Borrower’s Net Worth (as defined in the Receivables Sale Agreement to which it is a party) would be less than the Required Capital Amount (as defined in such Receivables Sale
Agreement). 
  
 (h) Borrower Indebtedness. Neither Borrower
will incur or permit to exist any Indebtedness or liability on account of deposits except: (i) the Obligations, and (ii) other current accounts payable arising in the ordinary course of business and not overdue. 
  
 (i) Prohibition on Additional Negative Pledges. No Loan Party will
enter into or assume any agreement (other than this Agreement and the other Transaction Documents) prohibiting the creation or assumption of any Adverse Claim upon the Collateral except as contemplated by the Transaction Documents, or otherwise
prohibiting or restricting any transaction contemplated hereby or by the other Transaction Documents. 
  
 ARTICLE VIII. 
  
 ADMINISTRATION AND COLLECTION 
  
 Section 8.1 Designation of Servicers. 
  
 (a) The
servicing, administration and collection of the Receivables shall be conducted by such Person(s) (each, a “Servicer”) so designated from time to time in accordance with this Section 8.1. Each of ALG and ASP is hereby
designated as, and hereby agrees to perform the duties and obligations of, a Servicer pursuant to the terms of this Agreement with respect to the Receivables originated by it. The Agent may at any time following the occurrence of an Amortization
Event designate as Servicer(s) any Person(s) to succeed ALG and ASP or any successor Servicer(s) provided that the Rating Agency Condition is satisfied. 
  
 (b) Without the prior written consent of the Agent and the Required Liquidity Banks, ALG and ASP shall not be permitted to
delegate any of their duties or responsibilities as Servicers to any Person other than, with respect to certain Defaulted Receivables, outside collection agencies in accordance with its customary practices. 
  

 23 

 (c) Notwithstanding any delegation pursuant to the foregoing subsection (b): (i) ALG and ASP shall be and
remain primarily liable to the Agent and the Lenders for the full and prompt performance of all duties and responsibilities of the Servicers hereunder and (ii) the Agent and the Lenders shall be entitled to deal exclusively with ALG and ASP in
matters relating to the discharge by the Servicers of their duties and responsibilities hereunder. The Agent and the Lenders shall not be required to give notice, demand or other communication to any Person other than ALG, ASP and the Borrowers in
order for communication to the Servicers and their sub-servicers or other delegates with respect thereto to be accomplished. ALG and ASP, at all times that they are the Servicers, shall be responsible for providing any sub-servicer or other delegate
of either of the Servicers with any notice given to the Servicers under this Agreement. 
  
 Section 8.2 Duties of Servicers. 
  
 (a) Each of ALG and ASP, as a Servicer (or their respective successors) shall take or cause to be taken all such actions as may be necessary or advisable to collect each Receivable originated by ALG or ASP, as the case may be, 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 Servicers will instruct all Obligors to pay all Collections directly to a Lock-Box or Collection Account. The
Servicers 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 Servicers, to not constitute Collections or other proceeds of the Receivables or the Related Security, the Servicers shall promptly remit such items to the Person identified to it as being the owner of
such remittances. From and after the date the Agent delivers to any Collection Bank a Collection Notice pursuant to Section 8.3, the Agent may request that the Servicers, and the Servicers thereupon promptly shall instruct all Obligors with respect
to the Receivables, to remit all payments thereon to a new depositary account specified by the Agent and, at all times thereafter, the Borrowers and the Servicers 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 Servicers shall administer the Collections in accordance with the procedures described herein and in Article II. The Servicers shall set aside and
hold in trust for the account of Borrowers and the Lenders their respective shares of the Collections in accordance with Article II. The Servicers shall, upon the request of the Agent, segregate, in a manner acceptable to the Agent, all cash, checks
and other instruments received by it from time to time constituting Collections from the general funds of the Servicers or the Borrowers prior to the remittance thereof in accordance with Article II. If the Servicers shall be required to segregate
Collections pursuant to the preceding sentence, each of the Servicers shall segregate and deposit with a bank designated by the Agent such allocable share of Collections of Receivables set aside for the Lenders on the first Business Day following
receipt by such Servicer of such Collections, duly endorsed or with duly executed instruments of transfer. 
  

 24 

 (d) Each of the Servicers may, in accordance with the Credit and Collection Policy, extend the maturity
of any Receivable for which such Servicer is responsible or adjust the Outstanding Balance of any such Receivable as such Servicer determines to be appropriate to maximize Collections thereof; provided, however, that such extension or
adjustment shall not alter the status of such Receivable as a Delinquent Receivable or Defaulted Receivable or limit the rights of the Agent or the Lenders under this Agreement. Notwithstanding anything to the contrary contained herein, from and
after the occurrence of an Amortization Event, the Agent shall have the absolute and unlimited right to direct the applicable Servicer to commence or settle any legal action with respect to any Receivable or to foreclose upon or repossess any
Related Security; provided that (i) in lieu of commencing any such action or taking other enforcement action, each of the Servicers may, at its option, elect to pay to the Agent an amount equal to the Outstanding Balance of such
Receivable and (ii) no Servicer shall, unless indemnified to its satisfaction by the Lenders, be obligated to commence or take any legal action that is in contravention of applicable law or regulation, or to settle any action that would entail an
admission by any Servicer, Borrower or Originator of legal wrongdoing or culpability or require the payment of damages by any Originator or Servicer to any third party. 
  
 (e) The Servicers shall hold in trust for the Borrowers and the Lenders all Records that (i) evidence or relate to the
Receivables, the related Contracts and Related Security or (ii) are otherwise necessary or desirable to collect the Receivables and shall, as soon as practicable upon demand of the Agent at any time when an Amortization Event exists, deliver or make
available to the Agent all such Records, at a place selected by the Agent. The Servicers shall, as soon as practicable following receipt thereof turn over to the applicable Borrower any cash collections or other cash proceeds received with respect
to Indebtedness not constituting Receivables. The Servicers shall, from time to time at the request of any Lender, furnish to the Lenders (promptly after any such request) a calculation of the amounts set aside for the Lenders pursuant to Article
II. 
  
 (f) Any payment by an Obligor in respect of any
indebtedness owed by it to any Originator or any Borrower shall, except as otherwise specified by such Obligor or otherwise required by contract or law and unless otherwise instructed by the Agent, be applied as a Collection of any Receivable of
such Obligor (starting with the oldest such Receivable) to the extent of any amounts then due and payable thereunder before being applied to any other receivable or other obligation of such Obligor. 
  
 Section 8.3 Collection Notices. The Agent is authorized at any time
after the occurrence and during the continuance of an Amortization Event to date and to deliver to the Collection Banks the Collection Notices. Each of the Borrowers hereby transfers to the Agent for the benefit of the Lenders, effective when the
Agent delivers such notice, the exclusive ownership and control of each Lock-Box and the Collection Accounts. In case any authorized signatory of either Borrower whose signature appears on a Collection Account Agreement shall cease to have such
authority before the delivery of such notice, such Collection Notice shall nevertheless be valid as if such authority had remained in force. Each of the Borrowers hereby authorizes the Agent, and agrees that the Agent shall be entitled (i) at any
time after delivery of the Collection Notices, to endorse such Borrower’s name on checks and other instruments representing Collections, (ii) at any time after the occurrence and during the continuance of an Amortization Event, to enforce the
Receivables, the related Contracts and the Related Security, 

  

 25 

 
and (iii) at any time after the occurrence and during the continuance of an Amortization Event, to take such action as shall be necessary or desirable to
cause all cash, checks and other instruments constituting Collections of Receivables to come into the possession of the Agent rather than Borrower. 
  
 Section 8.4 Responsibilities of Borrowers. Anything herein to the contrary notwithstanding, the exercise by the Agent and the Lenders of their
rights hereunder shall not release any Servicer, any Originator or any Borrower from any of its duties or obligations with respect to any Receivables or under the related Contracts. The Lenders shall have no obligation or liability with respect to
any Receivables or related Contracts, nor shall any of them be obligated to perform the obligations of any Borrower or Originator. 
  
 Section 8.5 Monthly Reports. The Servicers shall prepare and forward to the Agent (i) on each Monthly Reporting Date, a Monthly Report and an
electronic file of the data contained therein and (ii) at such times as the Agent shall request, a listing by Obligor of all Receivables together with an aging of such Receivables; provided, however, that if an Amortization Event shall exist and be
continuing, the Agent may request a Monthly Report be prepared and forwarded to the Agent more frequently than monthly. 
  
 Section 8.6 Servicing Fee. As compensation for each Servicer’s servicing activities on their behalf, the Borrowers hereby jointly and
severally agree to pay each Servicer its Prior Month’s Percentage of the Servicing Fee in arrears on each Settlement Date. Notwithstanding the fact that Sections 2.2 and 2.3 authorize each Servicer to deduct its Prior Month’s Percentage of
the Servicing Fee from Collections, the Borrowers are and shall remain the Persons ultimately responsible for paying the Servicing Fee and other costs of servicing the Receivables. 
  
 ARTICLE IX. 
  
 AMORTIZATION EVENTS 
  
 Section 9.1 Amortization Events. The occurrence of any one or more of the following events shall constitute an Amortization Event: 
  
 (a) Any Loan Party or Performance Guarantor shall fail to make any payment
or deposit required to be made by it under the Transaction Documents when due and, for any such payment or deposit which is not in respect of principal, such failure continues for two (2) consecutive Business Days. 
  
 (b) Any representation, warranty, certification or statement made by
Performance Guarantor or any Loan Party in any Transaction Document to which it is a party or in any other document delivered pursuant thereto shall prove to have been incorrect in any material respect when made or deemed made (it being understood
and agreed that any error or omission which results in the aggregate principal balance of the Advances outstanding to either Borrower exceeding its Borrowing Base or the Aggregate Principal outstanding to exceed the Aggregate Commitment shall per
se constitute a material error). 
  

 26 

 (c) Any Loan Party or Performance Guarantor shall fail to perform or observe any covenant contained in
Section 7.1(b), 7.1(j), 7.2 or 8.5 when due. 
  
 (d) Any Loan
Party or Performance Guarantor shall fail to perform or observe any other term, covenant or agreement hereunder or any other Transaction Document (other than a term, covenant or agreement covered by another clause of this Section 9.1) to which it is
a party and such failure shall continue for and such failure shall not have been cured within 30 days after the earlier to occur of (i) written notice thereof has been given by such Loan Party or Performance Guarantor to Agent or (ii) an Executive
Officer of such Loan Party or Performance Guarantor otherwise becomes aware of any such failure; provided, however, that, except in the case of a failure to perform or observe Section 7.1(a)(vii), such cure period shall be extended for
a period of time, not to exceed an additional 30 days, reasonably sufficient to permit such Loan Party or Performance Guarantor to cure such failure if such failure cannot be cured within the initial 30-day period but reasonably could be expected to
be capable of cure within such additional 30 days, such Loan Party or Performance Guarantor has commenced efforts to cure such failure during the initial 30-day period and such Loan Party or Performance Guarantor is diligently pursuing such cure.

  
 (e) Failure of either Borrower to pay any Debt (other than the
Obligations) when due or the default by either Borrower in the performance of any term, provision or condition contained in any agreement under which any such Debt was created or is governed, the effect of which is to cause, or to permit the holder
or holders of such Debt to cause, such Debt to become due prior to its stated maturity; or any such Debt of either Borrower shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the
date of maturity thereof. 
  
 (f) An Event of Bankruptcy shall
occur with respect to Parent or any of its Material Subsidiaries. 
  
 (g) As at the end of any Calculation Period: 
  
 (i) the three-month rolling average Delinquency Ratio shall exceed 4.25%, 
  
 (ii) the three-month rolling average Default Ratio shall exceed 2.55%, or 
  
 (iii) the three-month rolling average Dilution Ratio shall exceed 8.00%. 
  
 (h) A Change of Control shall occur. 
  
 (i) One or more final judgments for the payment of money in an aggregate
amount of $11,600 or more shall be entered against Borrower. 
  
 (j) The occurrence of any “Termination Event” or of the “Termination Date” (as each of the foregoing is defined in the Receivables Sale Agreements). 
  

 27 

 (k) This Agreement shall terminate in whole or in part (except in accordance with its terms), or shall
cease to be effective or to be the legally valid, binding and enforceable obligation of Borrower, or any Obligor shall directly or indirectly contest in any manner such effectiveness, validity, binding nature or enforceability, or the Agent for the
benefit of Blue Ridge shall cease to have a valid and perfected first priority (except for Permitted Encumbrances) security interest in the Collateral. 
  
 (l) The Internal Revenue Service shall commence enforcement of any federal tax lien under Section 6323 of the Tax Code against any of the Collateral, or
the PBGC shall commence enforcement any lien under Section 4068 of ERISA against any of the Collateral. 
  
 (m) Any event shall occur which materially and adversely impairs (i) the ability of the Originators to originate Receivables of a credit quality that is
at least equal to the credit quality of the Receivables sold or contributed to the applicable Borrower on the date of this Agreement or (ii) the legality, validity or enforceability of this Agreement or any other Transaction Document, (iii) the
Agent’s security interest, for the benefit of the Secured Parties, in the Receivables generally or in any significant portion of the Receivables, the Related Security or the Collections with respect thereto. 
  
 (n) On any Settlement Date, after giving effect to the turnover of
Collections by the Servicers on such date and the application thereof to the Obligations in accordance with this Agreement, the aggregate principal balance of the Advances outstanding to either Borrower shall exceed its Borrowing Base or the
Aggregate Principal shall exceed the Aggregate Commitment. 
  
 (o)
Either of the Performance Undertakings shall cease to be effective or to be the legally valid, binding and enforceable obligation of Performance Guarantor, or Performance Guarantor shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability of its obligations thereunder. 
  
 Section 9.2 Remedies. Upon the occurrence and during the continuation of an Amortization Event, the Agent may, or upon the direction of the Required Liquidity Banks shall, upon notice to the Borrowers and the
Servicers, take any of the following actions: (i) replace each Person then acting as a Servicer (ii) declare the Amortization Date to have occurred, whereupon the Aggregate Commitment shall immediately terminate and the Amortization Date shall
forthwith occur, all without demand, protest or further notice of any kind, all of which are hereby expressly waived by each Loan Party; provided, however, that upon the occurrence of an Event of Bankruptcy with respect to any Loan
Party, the Amortization Date shall automatically occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived by each Loan Party, (iii) deliver the Collection Notices to the Collection Banks, (iv) exercise all
rights and remedies of a secured party upon default under the UCC and other applicable laws, and (v) notify Obligors of the Agent’s security interest in the Receivables and other Collateral. The aforementioned rights and remedies shall be
without limitation, and shall be in addition to all other rights and remedies of the Agent and the Lenders otherwise available under any other provision of this Agreement, by operation of law, at equity or otherwise, all of which are hereby
expressly preserved, including, without limitation, all rights and remedies provided under the UCC, all of which rights shall be cumulative. 
  

 28 

 ARTICLE X. 
  

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

  
 (a) Indemnified Amounts to the extent a final
judgment of a court of competent jurisdiction holds that such Indemnified Amounts resulted from gross negligence or willful misconduct on the part of any Indemnified Party seeking indemnification or by reason of such Indemnified Party’s breach
of its obligations hereunder or other legal duty; 
  
 (b) Indemnified Amounts to the extent the same includes losses in respect of Receivables that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or 
  
 (c) taxes imposed by the jurisdiction in which such
Indemnified Party’s principal executive office is located (including, without limitation, in the case of the Agent or Blue Ridge, the States of North Carolina and Georgia), on or measured by the overall net income of such Indemnified Party to
the extent that the computation of such taxes is consistent with the characterization for income tax purposes of the acquisition by the Lenders of Loans as a loan or loans by the Lenders to the Borrowers secured by the Receivables, the Related
Security, the Collection Accounts and the Collections; 
  
 provided,
however, that nothing contained in this sentence shall limit the liability of any Loan Party or limit the recourse of the Lenders to any Loan Party for amounts otherwise specifically provided to be paid by such Loan Party under the terms of
this Agreement. Without limiting the generality of the foregoing indemnification, the Borrowers, jointly and severally, shall indemnify the Agent and the Lenders for Indemnified Amounts (including, without limitation, losses in respect of
uncollectible receivables, regardless of whether reimbursement therefor would constitute recourse to the Borrowers or the Servicers) relating to or resulting from: 
  
 (i) any representation or warranty made by any Loan Party or any Originator (or any officers of any such Person) under or
in connection with this Agreement, any 

  

 29 

 
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 any
Borrower, Servicer or Originator to comply with any applicable law, rule or regulation with respect to any Receivable or Contract related thereto, or the nonconformity of any Receivable or Contract included therein with any such applicable law, rule
or regulation or any failure of any Originator to keep or perform any of its obligations, express or implied, with respect to any Contract; 
  
 (iii) any failure of any Borrower, Servicer or Originator to perform its duties, covenants or other obligations in accordance with the provisions of this
Agreement or any other Transaction Document; 
  
 (iv) any
products liability, personal injury or damage suit, or other similar claim arising out of or in connection with merchandise, insurance or services that are the subject of any Contract or any Receivable; 
  
 (v) any dispute, claim, offset or defense (other than discharge in
bankruptcy of the Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the related Contract not being a legal, valid and binding obligation of such Obligor enforceable against
it in accordance with its terms), or any other claim resulting from the sale of the merchandise or service related to such Receivable or the furnishing or failure to furnish such merchandise or services; 
  
 (vi) the commingling of Collections of Receivables at any time with other
funds; 
  
 (vii) any investigation, litigation or proceeding
related to or arising from this Agreement or any other Transaction Document, the transactions contemplated hereby, the use of the proceeds of any Advance, the Collateral or any other investigation, litigation or proceeding relating to any Borrower,
Servicer or 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; 
  
 (x) any failure of any Borrower to acquire and maintain legal and equitable title to, and ownership of any of the Collateral from the applicable
Originator, free and clear of any Adverse Claim (other than as created hereunder); or any failure of any Borrower to give reasonably equivalent value to the applicable Originator under the applicable 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; 
  

 30 

 (xi) any failure to vest and maintain vested in the Agent for the benefit of the Lenders, or to transfer
to the Agent for the benefit of the Secured Parties, a valid first priority perfected security interests in the Collateral, free and clear of any Adverse Claim (except as created by the Transaction Documents); 
  
 (xii) the failure to have filed, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Collateral, and the proceeds thereof, whether at the time of any Advance or at any subsequent time;

  
 (xiii) any action or omission by any Loan Party which reduces
or impairs the rights of the Agent or the Lenders with respect to any Collateral or the value of any Collateral (for any reason other than the application of Collections thereto or charge-off of any Receivable as uncollectible); 
  
 (xiv) any attempt by any Person to void any Advance or the Agent’s
security interest in the Collateral under statutory provisions or common law or equitable action; and 
  
 (xv) the failure of any Receivable included in the calculation of the Net Pool Balance as an Eligible Receivable to be an Eligible Receivable at the time
so included. 
  
 Section 10.2 Increased Cost and Reduced
Return. 
  
 (a) If after the date hereof, any Funding Source
shall be charged any fee, expense or increased cost on account of any Regulatory Change: (i) that subjects any Funding Source to any charge or withholding on or with respect to any Funding Agreement or a Funding Source’s obligations under a
Funding Agreement, or on or with respect to the Receivables, or changes the basis of taxation of payments to any Funding Source of any amounts payable under any Funding Agreement (except for changes in the rate of tax on the overall net income of a
Funding Source or taxes excluded by Section 10.1) or (ii) that imposes, modifies or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of a Funding
Source, or credit extended by a Funding Source pursuant to a Funding Agreement or (iii) that imposes any other condition the result of which is to increase the cost to a Funding Source of performing its obligations under a Funding Agreement, or to
reduce the rate of return on a Funding Source’s capital as a consequence of its obligations under a Funding Agreement, or to reduce the amount of any sum received or receivable by a Funding Source under a Funding Agreement or to require any
payment calculated by reference to the amount of interests or loans held or interest received by it, then, upon written demand by the Agent no later than ninety (90) days after the adoption of such Regulatory Change, the Borrowers, jointly and
severally, agree to pay to the Agent, for the benefit of the relevant Funding Source, such amounts charged to such Funding Source or such amounts to otherwise compensate such Funding Source for such increased cost or such reduction. In the event
that the Agent fails to give Borrowers notice within the ninety (90) day time limitation prescribed above, Borrower shall have no obligation to pay such claim for compensation hereunder. Borrowers shall have no obligation to pay any amount with
respect to claims accruing under this Section 10.2(a) prior to the 90th day preceding written demand therefor from Agent. 
  

 31 

 (b) The Agent and each Funding Source agrees, if requested by a Borrower, it will use reasonable efforts
(subject to the overall policy considerations of such Funding Source) to designate an alternate lending office with respect to Loans affected by any of the matters or circumstances prescribed in Section 10.2(a) hereof in order to reduce the
liability of the Borrowers or avoid the results provided thereunder, so long as such designation is not disadvantageous to such Funding Source as determined by such Funding Source, which determination, if made in good faith, shall be conclusive and
binding on all parties hereto. Nothing in this Section 10.2(b) shall affect or postpone any of the obligation of the Borrowers hereunder or any right of any Funding Source hereunder 
  
 Section 10.3 Other Costs and Expenses. The Borrowers, jointly and
severally, agree to pay to the Agent and Blue Ridge on demand all reasonable costs and out-of-pocket expenses actually incurred in connection with the preparation, execution, delivery and administration of this Agreement, the transactions
contemplated hereby and the other documents to be delivered hereunder, including without limitation, the cost of Blue Ridge’s auditors auditing the books, records and procedures of Borrowers, reasonable fees and out-of-pocket expenses of legal
counsel for Blue Ridge and the Agent (which such counsel may be employees of Blue Ridge or the Agent) with respect thereto and with respect to advising Blue Ridge and the Agent as to their respective rights and remedies under this Agreement. The
Borrowers, jointly and severally, agree to pay to the Agent on demand any and all reasonable costs and expenses of the Agent and the Lenders, if any, including reasonable counsel fees and expenses, actually incurred in connection with the amendment,
waiver or enforcement of this Agreement and the other documents delivered hereunder and in connection with any restructuring or workout of this Agreement or such documents, or the administration of this Agreement following an Amortization Event. The
Borrowers, jointly and severally, agree to reimburse Blue Ridge on demand for all other reasonable costs and expenses actually incurred by Blue Ridge (“Other Costs”), including, without limitation, the cost of auditing Blue
Ridge’s books by certified public accountants, the cost of rating the Commercial Paper by independent financial rating agencies, and the reasonable fees and out-of-pocket expenses of counsel for Blue Ridge or any counsel for any shareholder of
Blue Ridge with respect to advising Blue Ridge or such shareholder as to matters relating to Blue Ridge’s operations. 
  
 Section 10.4 Allocations. Blue Ridge shall allocate the liability for (a) increased costs covered by Section 10.2 arising under Funding Agreements
that are not specifically related solely to this Agreement (“Shared Increased Costs”) and (b) Other Costs among Borrowers and other Persons with whom Blue Ridge has entered into agreements to purchase interests in or
finance receivables and other financial assets (“Other Customers”). If any Other Costs are attributable to Borrowers and not attributable to any Other Customer or any Shared Increased Costs are attributable to the facility
evidenced by this Agreement and not to any Other Customers’ facilities, Borrowers shall be solely liable for such Other Costs or Shared Increased Costs. However, if Other Costs or Shared Increased Costs are attributable to Other Customers and
their facilities but not attributable to Borrower or the facility evidenced hereby, such Other Customer shall be solely liable for such Other Costs or Shared Increased Costs, as the case may be. All allocations to be made pursuant to the foregoing
provisions of this Article X shall be made by Blue Ridge in its sole discretion and shall be binding on the Borrowers and the Servicers. 
  

 32 

 ARTICLE XI. 
  
 THE AGENT 
  
 Section 11.1 Authorization and Action. Each Lender hereby designates and appoints Wachovia to act as its agent under the Transaction Documents and
under the Liquidity Agreement, and authorizes the Agent to take such actions as agent on its behalf and to exercise such powers as are delegated to the Agent by the terms of the Liquidity Agreement or the Transaction Documents, together with such
powers as are reasonably incidental thereto. The Agent shall not have any duties or responsibilities, except those expressly set forth in the Liquidity Agreement or in any Transaction Document, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Agent shall be read into the Liquidity Agreement or any Transaction Document or otherwise exist for the Agent. In performing its functions and
duties under the Liquidity Agreement and the Transaction Documents, the Agent shall act solely as agent for the Lenders and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for any Loan
Party or any of such Loan Party’s successors or assigns. The Agent shall not be required to take any action that exposes the Agent to personal liability or that is contrary to the Liquidity Agreement or any Transaction Document or applicable
law. The appointment and authority of the Agent hereunder shall terminate upon the indefeasible payment in full of all Obligations. Each Lender hereby authorizes the Agent to execute each of the UCC financing statements, each Collection Account
Agreement on behalf of such Lender (the terms of which shall be binding on such Lender). 
  
 Section 11.2 Delegation of Duties. The Agent may execute any of its duties under the Liquidity Agreement and each Transaction Document by or through agents or attorneys-in-fact and shall be entitled to advice
of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 
  
 Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with the Liquidity Agreement or any Transaction Document (except for its, their or such
Person’s own gross negligence or willful misconduct), or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party contained in the Liquidity Agreement, any
Transaction Document or any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, any Transaction Document or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of the Liquidity Agreement or any Transaction Document or any other document furnished in connection therewith, or for any failure of any Loan Party to perform its obligations under any Transaction Document, or for the satisfaction of
any condition specified in Article VI, or for the perfection, priority, condition, value or sufficiency of any collateral pledged in connection herewith. The Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance 

  

 33 

 
of any of the agreements or covenants contained in, or conditions of, any Transaction Document, or to inspect the properties, books or records of the Loan
Parties. The Agent shall not be deemed to have knowledge of any Amortization Event or Unmatured Amortization Event unless the Agent has received notice from a Loan Party or a Lender. 
  
 Section 11.4 Reliance by Agent. The Agent shall in all cases be entitled to rely, and shall be fully protected in
relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the
Borrowers), independent accountants and other experts selected by the Agent. The Agent shall in all cases be fully justified in failing or refusing to take any action under the Liquidity Agreement or any Transaction Document unless it shall first
receive such advice or concurrence of Blue Ridge or the Required Liquidity Banks or all of the Lenders, as applicable, as it deems appropriate and it shall first be indemnified to its satisfaction by the Lenders, provided that unless
and until the Agent shall have received such advice, the Agent may take or refrain from taking any action, as the Agent shall deem advisable and in the best interests of the Lenders. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, in accordance with a request of Blue Ridge or the Required Liquidity Banks or all of the Lenders, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.

  
 Section 11.5 Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent, nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Agent hereafter taken,
including, without limitation, any review of the affairs of any Loan Party, shall be deemed to constitute any representation or warranty by the Agent. Each Lender represents and warrants to the Agent that it has and will, independently and without
reliance upon the Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and
creditworthiness of the Borrowers and made its own decision to enter into the Liquidity Agreement, the Transaction Documents and all other documents related thereto. 
  
 Section 11.6 Reimbursement and Indemnification. The Liquidity Banks agree to reimburse and indemnify the Agent and
its officers, directors, employees, representatives and agents ratably according to their Pro Rata Shares, to the extent not paid or reimbursed by the Loan Parties (i) for any amounts for which the Agent, acting in its capacity as Agent, is entitled
to reimbursement by the Loan Parties hereunder and (ii) for any other expenses incurred by the Agent, in its capacity as Agent and acting on behalf of the Lenders, in connection with the administration and enforcement of the Liquidity Agreement and
the Transaction Documents. 
  
 Section 11.7 Agent in its
Individual Capacity. The Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrowers or any Affiliate of the Borrowers as though the Agent were not the Agent hereunder. With
respect to the making of Loans pursuant to this Agreement, the Agent shall have the same rights and powers under the Liquidity Agreement and this Agreement in its individual capacity as any Lender and may exercise the same as though it were not the
Agent, and the terms “Liquidity Bank,” “Lender,” “Liquidity Banks” and “Lenders” shall include the Agent in its individual capacity. 
  

 34 

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

  
 Section 12.1 Assignments. 
  
 (a) Each of the Agent, the Loan Parties and the Liquidity Banks hereby agrees
and consents to the complete or partial assignment by Blue Ridge of all or any portion of its rights under, interest in, title to and obligations under this Agreement to the Liquidity Banks pursuant to the Liquidity Agreement. 
  
 (b) Any Liquidity Bank may at any time and from time to time assign to one or
more Eligible Assignees (each, a “Purchasing Liquidity Bank”) all or any part of its rights and obligations under this Agreement pursuant to an assignment agreement substantially in the form set forth in Exhibit VII hereto
(an “Assignment Agreement”) executed by such Purchasing Liquidity Bank and such selling Liquidity Bank; provided, however, that any assignment of a Liquidity Bank’s rights and obligations hereunder shall
include a pro rata assignment of its rights and obligations under the Liquidity Agreement. The consent of Blue Ridge (and, if no Amortization Event then exists, the Borrowers, which consent shall not be unreasonably withheld or delayed) shall be
required prior to the effectiveness of any such assignment. Each assignee of a Liquidity Bank must (i) be an Eligible Assignee and (ii) agree to deliver to the Agent, promptly following any request therefor by the Agent or Blue Ridge, an
enforceability opinion in form and substance satisfactory to the Agent and Blue Ridge. Upon delivery of an executed Assignment Agreement to the Agent, such selling Liquidity Bank shall be released from its obligations hereunder and under the
Liquidity Agreement to the extent of such 

  

 35 

 
assignment. Thereafter the Purchasing Liquidity Bank shall for all purposes be a Liquidity Bank party to this Agreement and the Liquidity Agreement and shall
have all the rights and obligations of a Liquidity Bank hereunder and thereunder to the same extent as if it were an original party hereto and thereto and no further consent or action by the Borrowers, the Lenders or the Agent shall be required. The
Agent shall give the Borrowers and the Servicers prior notice of each assignment made under this Section. 
  
 (c) Each of the Liquidity Banks agrees that in the event that it shall suffer a Downgrading Event, such Downgraded Liquidity Bank shall be obliged to
notify the Agent, the Borrowers and the Servicers thereof and shall be obliged, at the request of Blue Ridge or the Agent, to (i) collateralize its Commitment and its Liquidity Commitment in a manner acceptable to the Agent, or (ii) assign all of
its rights and obligations hereunder and under the Liquidity Agreement to an Eligible Assignee nominated by the Agent or a Loan Party and acceptable to Blue Ridge (and, if no Amortization Event then exists, the Borrowers, which consent shall not be
unreasonably withheld or delayed) and willing to participate in this Agreement and the Liquidity Agreement through the Liquidity Termination Date in the place of such Downgraded Liquidity Bank; provided that the Downgraded Liquidity
Bank receives payment in full, pursuant to an Assignment Agreement, of an amount equal to such Liquidity Bank’s Pro Rata Share of the Obligations owing to the Liquidity Banks. 
  
 (d) No Loan Party may assign any of its rights or obligations under this Agreement without the prior written consent of the
Agent and each of the Lenders and without satisfying the Rating Agency Condition. 
  
 Section 12.2 Participations. Any Liquidity Bank may, in the ordinary course of its business at any time sell to one or more Persons (each, a “Participant”) participating interests in its
Pro Rata Share of the Aggregate Commitment, its Loans, its Liquidity Commitment or any other interest of such Liquidity Bank hereunder or under the Liquidity Agreement. Notwithstanding any such sale by a Liquidity Bank of a participating interest to
a Participant, such Liquidity Bank’s rights and obligations under this Agreement and the Liquidity Agreement shall remain unchanged, such Liquidity Bank shall remain solely responsible for the performance of its obligations hereunder and under
the Liquidity Agreement, and the Loan Parties, Blue Ridge and the Agent shall continue to deal solely and directly with such Liquidity Bank in connection with such Liquidity Bank’s rights and obligations under this Agreement and the Liquidity
Agreement. Each Liquidity Bank agrees that any agreement between such Liquidity Bank and any such Participant in respect of such participating interest shall not restrict such Liquidity Bank’s right to agree to any amendment, supplement, waiver
or modification to this Agreement, except for any amendment, supplement, waiver or modification described in Section 14.1(b)(i). 
  
 ARTICLE XIII. 
  
 SECURITY INTEREST 
  
 Section 13.1 Grant of Security Interest. To secure the due and punctual payment of the Obligations, whether now or hereafter existing, due or to become due, direct or indirect, or absolute or contingent,
including, without limitation, all Indemnified Amounts, in each case pro 

  

 36 

 
rata according to the respective amounts thereof, each of the Borrowers hereby grants to the Agent, for the benefit of the Secured Parties, a security
interest in, all of such Borrower’s right, title and interest, whether now owned and existing or hereafter arising in and to all of the Receivables, the Related Security, the Collections and all proceeds of the foregoing (collectively, the
“Collateral”). 
  
 Section 13.2
Termination after Final Payout Date. Each of the Secured Parties hereby authorizes the Agent, and the Agent hereby agrees, promptly after the Final Payout Date to deliver to the Borrowers authorization to file such UCC termination statements
as may be necessary to terminate the Agent’s security interest in and Lien upon the Collateral, all at Borrowers’ expense. Upon the Final Payout Date, all right, title and interest of the Agent and the other Secured Parties in and to the
Collateral shall terminate. 
  
 ARTICLE XIV. 
  
 MISCELLANEOUS 
  
 Section 14.1 Waivers and Amendments. 
  
 (a) No failure or delay on the part of the Agent or any Lender in exercising
any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or remedy preclude any other further exercise thereof or the exercise of any other power, right or
remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this Agreement shall be effective only in the specific instance and for the specific purpose for which
given. 
  
 (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). Blue Ridge, the Borrowers and the Agent, at the direction of the Required Liquidity Banks, may enter into written modifications or waivers
of any provisions of this Agreement, provided, however, that no such modification or waiver shall: 
  
 (i) without the consent of each affected Lender, (A) extend the Liquidity Termination Date or the date of any payment or deposit of Collections by the
Borrowers or the Servicers, (B) reduce the rate or extend the time of payment of Interest or any CP Costs (or any component of Interest or CP Costs), (C) reduce any fee payable to the Agent for the benefit of the Lenders, (D) except pursuant to
Article XII hereof, change the amount of the principal of any Lender, any Liquidity Bank’s Pro Rata Share or any Liquidity Bank’s Commitment, (E) amend, modify or waive any provision of the definition of Required Liquidity Banks or this
Section 14.1(b), (F) consent to or permit the assignment or transfer by either of the Borrowers of any of its rights and obligations under this Agreement, (G) change the definition of “Eligible Receivable,” “Loss
Reserve,” “Dilution Reserve,” “Yield Reserve,” “Servicing Reserve,” “Servicing Fee Rate,” “Required Reserve” or “Required Reserve Factor
Floor” or (H) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses (A) through (G) above in a manner that would circumvent the intention of the restrictions set forth in
such clauses; or 
  

 37 

 (ii) without the written consent of the then Agent, amend, modify or waive any provision of this
Agreement if the effect thereof is to affect the rights or duties of such Agent, 
  
 and any material amendment, waiver or other modification of this Agreement shall require satisfaction of the Rating Agency Condition. Notwithstanding the foregoing, (i) without the consent of the Liquidity Banks, but with the
consent of the Borrowers, the Agent may amend this Agreement solely to add additional Persons as Liquidity Banks hereunder and (ii) the Agent, the Required Liquidity Banks and Blue Ridge may enter into amendments to modify any of the terms or
provisions of Article XI, Article XII, Section 14.13 or any other provision of this Agreement without the consent of the Borrowers, provided that such amendment has no negative impact upon the Borrowers. Any modification or waiver made
in accordance with this Section 14.1 shall apply to each of the Lenders equally and shall be binding upon the Borrowers, the Servicers, the Lenders and the Agent. 
  
 Section 14.2 Notices. Except as provided in this Section 14.2, all communications and notices provided for hereunder
shall be in writing (including bank wire, telecopy or electronic facsimile transmission or similar writing) and shall be given to the other parties hereto at their respective addresses or telecopy numbers set forth on the signature pages hereof or
at such other address or telecopy number as such Person may hereafter specify for the purpose of notice to each of the other parties hereto. Each such notice or other communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such communication is deposited in the mail with first class postage prepaid or (iii) if given by any other means, when received at the address specified in this Section 14.2.
Each Borrower hereby authorizes the Agent to effect Advances and Interest Period and Interest Rate selections based on telephonic notices made by any Person whom the Agent in good faith believes to be acting on behalf of such Borrower. Each Borrower
agrees to deliver promptly to the Agent a written confirmation of each telephonic notice signed by an authorized officer of such Borrower; provided, however, the absence of such confirmation shall not affect the validity of such
notice. If the written confirmation differs from the action taken by the Agent, the records of the Agent shall govern absent manifest error. 
  
 Section 14.3 Ratable Payments. If any Lender, whether by setoff or otherwise, has payment made to it with respect to any portion of the Obligations
owing to such Lender (other than payments received pursuant to Section 10.2 or 10.3) in a greater proportion than that received by any other Lender entitled to receive a ratable share of such Obligations, such Lender agrees, promptly upon demand, to
purchase for cash without recourse or warranty a portion of such Obligations held by the other Lenders so that after such purchase each Lender will hold its ratable proportion of such Obligations; provided that if all or any portion of
such excess amount is thereafter recovered from such Lender, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. 
  
 Section 14.4 Protection of Agent’s Security Interest. 
  
 (a) Each Borrower agrees that from time to time, at its expense, it will
promptly deliver and, as applicable, authorize the filing of all instruments and documents, and take all actions, that may be necessary or desirable, or that the Agent may reasonably request, to 

  

 38 

 
perfect, protect or more fully evidence the Agent’s security interest in the Collateral, or to enable the Agent or the Lenders to exercise and enforce
their rights and remedies hereunder. At any time after the occurrence and during the continuation of an Amortization Event, the Agent may, or the Agent may direct the applicable Borrower and/or Servicer to, notify the Obligors of Receivables, at the
Borrowers’ expense, of the security interests of the Agent on behalf of the Lenders under this Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to the Agent or its
designee. The applicable Borrower or Servicer (as applicable) shall, at any Lender’s request, withhold the identity of such Lender in any such notification. 
  
 (b) If any Loan Party fails to perform any of its obligations hereunder, the Agent or any Lender may (but shall not be
required to) perform, or cause performance of, such obligations, and the Agent’s or such Lender’s actual and reasonable costs and expenses incurred in connection therewith shall be payable by the Borrowers as provided in Section 10.3. Each
Loan Party irrevocably authorizes the Agent at any time and from time to time in the sole discretion of the Agent, and appoints the Agent as its attorney-in-fact, to act on behalf of such Loan Party (i) to execute on behalf of each Borrower as
debtor (if execution is required) and to file financing statements necessary or desirable in the Agent’s reasonable opinion to perfect and to maintain the perfection and priority of the interest of the Lenders in the Receivables 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 statement in such offices as the Agent in its reasonable opinion deems necessary or desirable to perfect
and to maintain the perfection and priority of the Agent’s security interest in the Collateral, for the benefit of the Secured Parties. This appointment is coupled with an interest and is irrevocable. 
  
 Section 14.5 Confidentiality. 
  
 (a) Each Loan Party and each Lender shall maintain and shall cause each of
its employees, officers and Affiliates to maintain the confidentiality of the Fee Letter and the other confidential or proprietary information with respect to the Agent and Blue Ridge and their respective businesses obtained by it or them in
connection with the structuring, negotiating and execution of the transactions contemplated herein, except that such Loan Party and such Lender and its officers and employees may disclose such information to such Loan Party’s and such
Lender’s external consultants, accountants and attorneys and as required by any applicable law, rule or regulation or order of any judicial or administrative proceeding or to enforce its rights under the Transaction Documents. 
  
 (b) Unless otherwise agreed to in writing by the Parent, each Lender and the
Agent hereby agrees to keep all Proprietary Information confidential and not to disclose or reveal any Proprietary Information to any Person other than its (or its Affiliates) directors, officers, employees, agents or representatives who reasonably
require such information in connection with their activities concerning this Agreement or the transactions contemplated hereby and to actual or potential Participants or Purchasing Liquidity Banks, and then only upon a confidential basis in any such
case; provided, however, that the Agent or any Lender may disclose Proprietary Information: (i) to the Agent or any other Lender, (ii) to the extent reasonably required in connection with any litigation to which the Agent, any Lender or their
respective Affiliates may be a party, (iii) to the extent reasonably required in connection with the exercise 

  

 39 

 
of any remedy hereunder, (iv) as required by law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or
proceedings (whether or not having the force or effect of law), (v) to its attorneys, accountants or other consultants (but only on a confidential basis), (vi) to bank regulatory authorities or other governmental authorities and (vii) by Blue Ridge
to any rating agency, commercial paper dealer, or provider of a surety, guaranty or credit or liquidity enhancement to Blue Ridge which has agreed in writing to be bound by the provisions of this Section 14.5. 
  
 Section 14.6 Bankruptcy Petition. The Borrowers, the Servicers, the
Agent and each Liquidity Bank hereby covenants and agrees that, prior to the date that is one year and one day after the payment in full of all outstanding senior indebtedness of Blue Ridge, it will not institute against, or join any other Person in
instituting against, Blue Ridge 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 Blue Ridge, the Agent or any Liquidity Bank, no claim may be made by any Loan Party or any other Person against Blue Ridge, the Agent or any Liquidity Bank or their respective Affiliates,
directors, officers, employees, attorneys or agents for any special, indirect, consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in connection therewith; and each Loan Party hereby waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known
or suspected to exist in its favor. 
  
 Section 14.8 CHOICE OF
LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, without regard to the principles of conflicts of laws thereof (except in the case of the other Transaction Documents, to the extent
otherwise expressly stated therein) AND EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE OWNERSHIP INTERESTS OF THE BORROWERS OR THE SECURITY INTERESTS OF THE AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, IN ANY OF THE COLLATERAL IS GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF GEORGIA. 
  
 Section 14.9 CONSENT TO JURISDICTION. EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN FULTON COUNTY, GEORGIA, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH PERSON PURSUANT TO THIS AGREEMENT, AND EACH SUCH PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE 
  

 40 

 
AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY LOAN PARTY AGAINST
THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH LOAN PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN FULTON COUNTY, GEORGIA. 
  
 Section 14.10 WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY LOAN PARTY PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. 
  
 Section 14.11 Integration; Binding Effect; Survival of Terms.

  
 (a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof superseding all
prior oral or written understandings. 
  
 (b) This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns (including any trustee in bankruptcy). This Agreement shall create and constitute the continuing obligations of the parties hereto
in accordance with its terms and shall remain in full force and effect until terminated in accordance with its terms; provided, however, that the rights and remedies with respect to (i) any breach of any representation and warranty
made by any Loan Party pursuant to Article V, (ii) the indemnification and payment provisions of Article X, and Sections 14.5 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. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of a signature page to this Agreement. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Unless otherwise expressly indicated, all references herein to “Article,” “Section,”
“Schedule” or “Exhibit” shall mean articles and sections of, and schedules and exhibits to, this Agreement. 
  

 41 

 Section 14.13 Wachovia Roles. Each of the Liquidity Banks acknowledges that Wachovia acts, or may
in the future act: (i) as administrative agent for Blue Ridge or any Liquidity Bank, (ii) as an issuing and paying agent for the Commercial Paper, (iii) to provide credit or liquidity enhancement for the timely payment for the Commercial Paper,
and/or (iv) to provide other services from time to time for Blue Ridge or any Liquidity Bank (collectively, the “Wachovia Roles”). Without limiting the generality of this Section 14.13, each Liquidity Bank hereby acknowledges
and consents to any and all Wachovia Roles and agrees that in connection with any Wachovia Role, Wachovia may take, or refrain from taking, any action that it, in its discretion, deems appropriate, including, without limitation, in its role as
administrative agent for Blue Ridge, and the giving of notice of a mandatory purchase pursuant to the Liquidity Agreement. 
  
 Section 14.14 Interest. In no event shall the amount of interest, and all charges, amounts or fees contracted for, charged or collected pursuant to
this Agreement or the other Transaction Documents and deemed to be interest under applicable law (collectively, “Interest Amounts” ) exceed the highest rate of interest allowed by applicable law (the “Maximum
Rate”), and in the event any such payment is inadvertently received by Blue Ridge or any Liquidity Bank, then the excess sum (the “Excess”) shall be credited as a payment of principal, unless the relevant
Borrower shall notify the applicable recipient in writing that it elects to have the Excess returned forthwith. It is the express intent hereof that Borrowers not pay and Blue Ridge and the Liquidity Banks not receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may legally be paid by the Borrowers under applicable law. The right to accelerate maturity of any of the Loans does not include the right to accelerate any interest that has not otherwise accrued
on the date of such acceleration, and the Agent and the Liquidity Banks do not intend to collect any unearned interest in the event of any such acceleration. All monies paid to the Agent or the Liquidity Banks hereunder or under any of the other
Transaction Documents, whether at maturity or by prepayment, shall be subject to rebate of unearned interest as and to the extent required by applicable law. By the execution of this Agreement, each Borrower covenants, to the fullest extent
permitted by law, that (i) the credit or return of any Excess shall constitute the acceptance by such Borrower of such Excess, and (ii) such Borrower shall not seek or pursue any other remedy, legal or equitable, against the Agent or any Liquidity
Bank, based in whole or in part upon contracting for charging or receiving any Interest Amounts in excess of the Maximum Rate. For the purpose of determining whether or not any Excess has been contracted for, charged or received by the Agent or any
Liquidity Bank, all interest at any time contracted for, charged or received from such Borrower in connection with this Agreement or any of the other Transaction Documents shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread in equal parts throughout the full term of the Commitments. Each Borrower, the Agent and each Lender shall, to the maximum extent permitted under applicable law, (i) characterize any non-principal payment as an expense, fee or
premium rather than as Interest Amounts and (ii) exclude voluntary prepayments and the effects thereof. The provisions of this Section shall be deemed to be incorporated into each of the other Transaction Documents (whether or not any provision of
this Section is referred to therein). All such Transaction Documents and communications relating to any Interest Amounts owed by the Borrowers and all figures set forth therein shall, for the sole purpose of computing the extent of the obligations
hereunder and under the other Transaction Documents be automatically recomputed by the Borrowers, and by any court considering the same, to give effect to the adjustments or credits required by this Section. 
  

 42 

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

 43 

 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. 
  

	 ACUITY ENTERPRISE, INC.

		
	 By:
	 	 /s/  Vernon J. Nagel

	 Name:
	 	 Vernon J. Nagel

	 Title:
	 	 Executive Vice President and
 Chief Financial Officer

	
	 Address:

	 Acuity Enterprise, Inc.

	 1170 Peachtree Street, Suite 2400

	 Atlanta, Georgia 30309

	
	 Attention: General Counsel

		
	 Phone:
	 	 (404) 853-1015

	 Fax:
	 	 (404) 853-1440

	
	 ACUITY UNLIMITED, INC.

		
	 By:
	 	 /s/  Vernon J. Nagel

	 Name:
	 	Vernon J. Nagel
	 Title:
	 	 Executive Vice President and
 Chief Financial Officer

	
	 Address:

	 Acuity Unlimited, Inc.

	 1170 Peachtree Street, Suite 2400

	 Atlanta, Georgia 30309

	
	 Attention: General Counsel

		
	 Phone:
	 	 (404) 853-1015

	 Fax:
	 	 (404) 853-1440

  

 44 

	 ACUITY LIGHTING GROUP, INC., AS A SERVICER

		
	 By:
	 	 /s/  Vernon J. Nagel

	 Name:
	 	 Vernon J. Nagel

	 Title:
	 	 Executive Vice President, Finance

	
	 Address:

	 Acuity Lighting Group, Inc.

	 1170 Peachtree Street, Suite 2400

	 Atlanta, Georgia 30309

	
	 Attention: Treasurer

		
	 Phone:
	 	 (404) 853-1423

	 Fax:
	 	 (404) 853-1430

  
 ACUITY SPECIALTY PRODUCTS GROUP, INC., AS A SERVICER 
  

		
	 By:
	 	 /s/  Vernon J. Nagel

	 Name:
	 	 Vernon J. Nagel

	 Title:
	 	 Executive Vice President, Finance

	
	 Address:

	 Acuity Specialty Products Group, Inc.

	 1170 Peachtree Street, Suite 2400

	 Atlanta, Georgia 30309

	
	 Attention: Treasurer

		
	 Phone:
	 	 (404) 853-1423

	 Fax:
	 	 (404) 853-1430

  

 45 

 BLUE RIDGE ASSET FUNDING CORPORATION 
  
 BY: WACHOVIA CAPITAL MARKETS, LLC, ITS
ATTORNEY-IN-FACT 
  

	 By:
	 	 /s/  Douglas R. Wilson, Sr.

	 	 	 Name:    Douglas R. Wilson, Sr.

	 	 	 Title:      Vice President

		
	 	 	 Address:

	 	 	 Blue Ridge Asset Funding Corporation

	 	 	 c/o Wachovia Bank, National Association

	 	 	 301 S. College St.,

	 	 	 FLR TRW 10 NC0610

	 	 	 Charlotte, NC 28288-0610

		
	 	 	 Attention: Douglas R. Wilson, Sr.

	 	 	 Phone:  (704) 374-2520

	 	 	 Fax:  (704) 383-9579

		
	 	 	 With a copy to:

		
	 	 	 Blue Ridge Asset Funding Corporation

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

	 	 	 6525 Morrison Blvd., Suite 318

	 	 	 Charlotte, North Carolina 28211

	 	 	 Attention: Douglas K. Johnson

		
	 	 	 Phone:    (704) 365-0569

	 	 	 Fax:         (704) 365-1362

  

 46 

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

	 By:
	 	 /s/  Kenny Karpowicz

	 Name:    Kenny Karpowicz

	 Title:      Vice President

	
	 Address:

	 Wachovia Bank, National Association

	 191 Peachtree Street, 22nd Floor

	 Mail Stop GA-8047

	 Atlanta, Georgia 30303

	 Attention: Kenny Karpowicz

	
	 Phone:    (404) 332-1164

	 Fax:         (404) 332-5152

  

 47 

 EXHIBIT I 
  

DEFINITIONS 
  
 Capitalized terms used and not otherwise defined herein shall have the meanings attributed thereto in the Receivables Sale Agreements (hereinafter
defined). 
  
 In addition, as used in this
Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): 
  
 “Acuity Credit Agreements” means that certain (i) 364-Day Revolving Credit Agreement, dated as of
April 8, 2002, among Performance Guarantor, the other borrowers from time to time parties thereto, Bank One, NA (Main Office Chicago), as Administrative Agent, and Wachovia Bank, National Association, as Syndication Agent, as the same may be
amended, restated or replaced from time to time, and (ii) 3-Year Revolving Credit Agreement, dated as of April 8, 2002, among Performance Guarantor, the other borrowers from time to time parties thereto, Bank One, NA (Main Office Chicago), as
Administrative Agent, and Wachovia Bank, National Association, as Syndication Agent, as the same may be amended, restated or replaced from time to time. 
  
 “Adjusted Dilution Ratio” means, at any time, the rolling average of the Dilution Ratio for the 12
Calculation Periods then most recently ended. 
  
 “Advance” means a borrowing hereunder consisting of the aggregate amount of the several Loans made on the same Borrowing Date. 
  

“Adverse Claim” means a lien, security interest, charge or encumbrance, or other right or claim in, of or on any Person’s
assets or properties in favor of any other Person. 
  
 “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person or any Subsidiary of such Person. A
Person shall be deemed to control another Person if the controlling Person owns 20% or more of any class of voting securities of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management
or policies of the controlled Person, whether through ownership of stock, by contract or otherwise. 
  
 “Agent” has the meaning set forth in the preamble to this Agreement. 
  
 “Agent’s Account” means account #2000010384921 at Wachovia Bank, National Association, ABA
#053000219. 
  
 “Aggregate Commitment”
means, on any date of determination, the aggregate amount of the Liquidity Banks’ Commitments to make Loans hereunder. As of the date hereof, the Aggregate Commitment is $150,000,000. 
  

 48 

 “Aggregate Principal” means, on any date of determination, the aggregate
outstanding principal amount of all Advances (regardless of the applicable Borrower) outstanding on such date. 
  
 “Aggregate Reduction” has the meaning specified in Section 1.3. 
  
 “Agreement” means this Credit and Security Agreement, as it may be amended or modified and in effect
from time to time. 
  
 “Alternate Base
Rate” means for any day, the rate per annum equal to the higher as of such day of (i) the Prime Rate, or (ii) one-half of one percent (0.50%) above the Federal Funds Rate. For purposes of determining the Alternate Base Rate for
any day, changes in the Prime Rate or the Federal Funds Rate shall be effective on the date of each such change. 
  
 “Alternate Base Rate Loan” means a Loan which bears interest at the Alternate Base Rate or the Default Rate. 
  
 “Amortization Date” means the earliest to occur of
(i) the Business Day immediately prior to the occurrence of an Event of Bankruptcy with respect to any Loan Party, (ii) the Business Day specified in a written notice from the Agent following the occurrence and during the continuation of any other
Amortization Event, (iii) the date which is 10 Business Days after the Agent’s receipt of written notice from a Borrower that it wishes to terminate the facility evidenced by this Agreement, and (iv) August 30, 2004. 
  
 “Amortization Event” has the meaning specified in
Article IX. 
  
 “Applicable Margin” means,
for each Interest Period applicable to any Loan for which Interest is calculated on the basis of the LIBO Rate, the greater of the following on the first day of such Interest Period: 
  
 (a) two times the sum of (i) the Usage Fee plus (ii) the Program Fee; or 
  
 (b) the margin then applicable to borrowings under the
Acuity Credit Agreements at a London interbank offered rate or Eurodollar rate, as the case may be (and if more than one such margin is then applicable, the greater of the two applicable margins). 
  
 “Assignment Agreement” has the meaning set forth in
Section 12.1(b). 
  
 “Authorized Officer”
means, with respect to any Person, its president, corporate controller, treasurer or chief financial officer. 
  
 “Blue Ridge” has the meaning set forth in the preamble to this Agreement. 
  
 “Borrower” has the meaning set forth in the preamble
to this Agreement. 
  
 “Borrowing Base”
means, on any date of determination as to either Borrower, the product of (a) such Borrower’s Prior Month’s Percentage, multiplied by (b) the Net Pool Balance 

  

 49 

 
as of the last day of the period covered by the most recent Monthly Report, minus the Required Reserve as of the last day of the period covered
by the most recent Monthly Report, and minus Deemed Collections that have occurred since the most recent Cut-Off Date to the extent that such Deemed Collections exceed the Dilution Reserve, and minus the FX Reserve.

  
 “Borrowing Date” means a Business Day
on which an Advance is made hereunder. 
  
 “Borrowing
Notice” has the meaning set forth in Section 1.2. 
  
 “Broken Funding Costs” means for any CP Rate Loan or LIBO Rate Loan which: (a) in the case of a CP Rate Loan, has its principal reduced without compliance by the applicable Borrower with the notice requirements
hereunder, (b) in the case of a CP Rate Loan or a LIBO Rate Loan, does not become subject to an Aggregate Reduction following the delivery of any Reduction Notice, (c) in the case of a CP Rate Loan, is assigned under the Liquidity Agreement, or (d)
in the case of a LIBO Rate Loan, is terminated or reduced prior to the last day of its Interest Period, an amount equal to the excess, if any, of (i) the CP Costs or Interest (as applicable) that would have accrued during the remainder of the
Interest Periods or the tranche periods for Commercial Paper determined by the Agent to relate to such Loan (as applicable) subsequent to the date of such reduction, assignment or termination (or in respect of clause (b) above, the date such
Aggregate Reduction was designated to occur pursuant to the Reduction Notice) of the principal of such Loan if such reduction, assignment or termination had not occurred or such Reduction Notice had not been delivered, over (ii) the sum of (x) to
the extent all or a portion of such principal is allocated to another Loan, the amount of CP Costs or Interest actually accrued during the remainder of such period on such principal for the new Loan, and (y) to the extent such principal is not
allocated to another Loan, the income, if any, actually received during the remainder of such period by the holder of such Loan from investing the portion of such principal not so allocated. In the event that the amount referred to in clause (B)
exceeds the amount referred to in clause (A), the relevant Lender or Lenders agree to pay to the applicable Borrower the amount of such excess. All Broken Funding Costs shall be due and payable hereunder upon demand. 
  
 “Business Day” means any day on which banks are not
authorized or required to close in New York, New York or Atlanta, Georgia, and The Depository Trust Company of New York is open for business, and, if the applicable Business Day relates to any computation or payment to be made with respect to the
LIBO Rate, any day on which dealings in dollar deposits are carried on in the London interbank market. 
  
 “Calculation Period” means a Fiscal Month. 
  
 “Capital Leases” means leases which are required to be capitalized in accordance with GAAP.

  
 “Change of Control” means (a) a
“Change of Control” under and as defined in either Receivables Sale Agreement shall occur, (b) ALG Georgia ceases to own 100% of the outstanding shares of voting stock of AUI, or (c) ASP ceases to own 100% of the outstanding shares of
voting stock of AEI. 
  

 50 

 “Collateral” has the meaning set forth in Section 13.1. 
  
 “Collection Account” means each concentration
account, depositary account, lock-box account or similar account in which any Collections are collected or deposited and which is listed on Exhibit IV. 
  
 “Collection Account Agreement” means an agreement among one or both Originators, a Borrower, the Agent and a Collection Bank with
respect to a Lock-Box and/or Collection Account, in a form reasonably acceptable to the Loan Parties and the Agent. 
  
 “Collection Bank” means, at any time, any of the banks holding one or more Collection Accounts. 
  
 “Collection Notice” means a notice, in substantially
the form of Annex A to Exhibit VI, from the Agent to a Collection Bank. 
  
 “Collections” means, with respect to any Receivable, all cash collections and other cash proceeds in respect of such Receivable, including, without limitation, all Finance Charges or other related amounts accruing in
respect thereof and all cash proceeds of Related Security with respect to such Receivable. 
  
 “Commercial Paper” means promissory notes of Blue Ridge issued by Blue Ridge in the commercial paper market. 
  
 “Commitment” means, for each Liquidity Bank, the commitment of such Liquidity Bank to make Loans to
the Borrowers hereunder in the event the Blue Ridge elects not to fund any Advance in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Liquidity Bank’s name on Schedule A to this
Agreement. 
  
 “Consolidated Operating
Profits” means, for any period, the Operating Profits of the Parent and its Consolidated Subsidiaries. 
  
 “Consolidated Subsidiary” means at any date any Subsidiary or other entity the accounts of which, in accordance with GAAP, would
be consolidated with those of the Parent in its consolidated financial statements as of such date. 
  
 “Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or application for a letter of credit.

  
 “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. 
  

 51 

 “CP Costs” means, for each day, the sum of (i) discount or interest accrued on
Pooled Commercial Paper on such day, plus (ii) any and all accrued commissions in respect of placement agents and Commercial Paper dealers, and issuing and paying agent fees incurred, in respect of such Pooled Commercial Paper for such day, plus
(iii) other costs associated with funding small or odd-lot amounts with respect to all receivable purchase facilities which are funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income net of expenses received on such day
from investment of collections received under all receivable purchase or financing facilities funded substantially with Pooled Commercial Paper, minus (v) any payment received on such day net of expenses in respect of Broken Funding Costs (or
similar costs) related to the prepayment of any investment of Blue Ridge pursuant to the terms of any receivable purchase or financing facilities funded substantially with Pooled Commercial Paper. In addition to the foregoing costs, if a Borrower
shall request any Advance during any period of time determined by the Agent in its sole discretion to result in incrementally higher CP Costs applicable to such Advance, the principal associated with any such Advance shall, during such period, be
deemed to be funded by Blue Ridge in a special pool (which may include capital associated with other receivable purchase or financing facilities) for purposes of determining such additional CP Costs applicable only to such special pool and charged
each day during such period against such principal. 
  
 “CP Rate Loan” means, for each Loan of Blue Ridge prior to the time, if any, when (i) it is refinanced with a Liquidity Funding pursuant to the Liquidity Agreement, or (ii) the occurrence of an Amortization Event and
the commencement of the accrual of Interest thereon at the Default Rate. 
  
 “Credit and Collection Policy” means each Originator’s credit and collection policies and practices relating to Contracts and Receivables existing on the date hereof and summarized in the
Exhibits to the Receivables Sale Agreements, as modified from time to time in accordance with this Agreement. 
  
 “Cut-Off Date” means the last day of a Calculation Period. 
  
 “Days Sales Outstanding” means, as of any day, an amount equal to the product of (x) 91, multiplied
by (y) the amount obtained by dividing (i) the aggregate outstanding balance of Receivables as of the most recent Cut-Off Date, by (ii) the aggregate amount of Receivables created during the three (3) Calculation Periods including and immediately
preceding such Cut-Off Date. 
  
 “Deemed
Collections” means Collections deemed received by a Borrower under Section 1.4(a). 
  
 “Default Horizon Ratio” means, as of any Cut-Off Date, the ratio (expressed as a decimal) computed by dividing (i) the aggregate
sales generated by the Originators during the 5 Calculation Periods ending on such Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-off Date. 
  
 “Default Rate” means a rate per annum equal to the sum of (i) the Alternate Base Rate plus (ii) 2.00%, changing when and as the
Alternate Base Rate changes. 
  

 52 

 “Default Ratio” means, as of any Cut-Off Date, the ratio (expressed as a
percentage) computed by dividing (x) the total amount of Receivables which became Defaulted Receivables during the Calculation Period that includes such Cut-Off Date, by (y) the aggregate amount of Receivables generated by the Originators during the
Calculation Period occurring 5 months prior to the Calculation Period ending on such Cut-Off Date. 
  
 “Defaulted Receivable” means a Receivable: (i) as to which the Obligor thereof has suffered an Event of Bankruptcy; (ii) which,
consistent with the Credit and Collection Policy, would be written off a Borrower’s books as uncollectible; or (iii) as to which any payment, or part thereof, remains unpaid for 91 days or more from the original due date for such payment.

  
 “Delinquency Ratio” means, at any
time, a percentage equal to (i) the aggregate Outstanding Balance of all Receivables that were Delinquent Receivables at such time divided by (ii) the aggregate Outstanding Balance of all Receivables at such time. 
  
 “Delinquent Receivable” means a Receivable as to
which any payment, or part thereof, remains unpaid for 61-90 days from the original due date for such payment. 
  
 “Demand Advance” means any advance made by a Borrower to ALG or ASP at any time while it is acting as the Servicer, which advance
(a) is payable upon demand, (b) is not evidenced by an instrument, a promissory note, chattel paper or a certificated security, (c) bears interest at a market rate determined by such Borrower and Servicer from time to time, (d) is not subordinated
to any other Debt or obligation of such Servicer, and (e) may not be offset by ALG or ASP against amounts due and owing from either Borrower to it; provided, however, that no Demand Advance may be made after the Facility Termination
Date or on any date prior to the Facility Termination Date on which an Amortization Event or an Unmatured Amortization Event exists and is continuing. 
  
 “Dilution” means the amount of any reduction or cancellation of the Outstanding Balance of a Receivable as described in Section
1.4(a). 
  
 “Dilution Horizon Ratio”
means, as of any Cut-off Date, a ratio (expressed as a decimal), computed by dividing (i) the aggregate sales generated by the Originators during the Calculation Period ending on such Cut-Off Date plus one half of the sales generated by the
Originators in the month prior to such Cut-Off Date, by (ii) the Net Pool Balance as of such Cut-Off Date. 
  
 “Dilution Ratio” means, as of any Cut-Off Date, a ratio (expressed as a percentage), computed by dividing (i) the total amount of
decreases in Outstanding Balances due to Dilutions during the Calculation Period ending on such Cut-Off Date, by (ii) the aggregate dollar amount of Receivables generated by the Originators during the Calculation Period ending 1-month prior to the
Calculation Period ending on such Cut-Off Date. 
  

 53 

 “Dilution Reserve” means, for any Calculation Period, the product (expressed as a
percentage) of: 
  
 (a) the sum of (i) two (2)
times the Adjusted Dilution Ratio as of the immediately preceding Cut-Off Date, plus (ii) the Dilution Volatility Component as of the immediately preceding Cut-Off Date, times 
  
 (b) the Dilution Horizon Ratio as of the immediately
preceding Cut-Off Date. 
  
 “Dilution Volatility
Component” means the product (expressed as a percentage) of (i) the difference between (a) the highest three (3)-month rolling average Dilution Ratio over the past 12 Calculation Periods and (b) the Adjusted Dilution Ratio, and (ii) a
fraction, the numerator of which is equal to the amount calculated in (i)(a) of this definition and the denominator of which is equal to the amount calculated in (i)(b) of this definition. 
  
 “Downgraded Liquidity Bank” means a Liquidity Bank
which has been the subject of a Downgrading Event. 
  
 “Downgrading Event” with respect to any Person means the lowering of the rating with regard to the short-term securities of such Person to below (i) A-1 by S&P, or (ii) P-1 by Moody’s. 
  
 “Eligible Assignee” means a commercial bank having a
combined capital and surplus of at least $250,000,000 with a rating of its (or its parent holding company’s) short-term securities equal to or higher than (i) A-1 by S&P and (ii) P-1 by Moody’s. 
  
 “Eligible Receivable” means, at any time, a
Receivable: 
  
 (i) the Obligor of which (a) if a natural person,
is a resident of the United States or, if a corporation or other business organization, is organized under the laws of the United States or any political subdivision thereof and has its chief executive office in the United States; (b) is not an
Affiliate of any of the Loan Parties; and (c) is not a government or a governmental subdivision or agency; 
  
 (ii) which is not a Defaulted Receivable, 
  
 (iii) which is not owing from an Obligor as to which more than 35% of the aggregate Outstanding Balance of all Receivables owing from such Obligor are
Defaulted Receivables, 
  
 (iv) which was not a Delinquent
Receivable on the date on which it was acquired by Borrower from the applicable Originator, 
  
 (v) which by its terms is due and payable within 60 days of the original billing date therefor and has not had its payment terms extended more than once (except that up to 5% of the aggregate Outstanding Balance of
all Receivables may have terms payable within 61-90 days of the original billing date therefor and up to 4% of the aggregate Outstanding Balance of all Eligible Receivables may arise from progress billings to The Home Depot, Inc. or one of its
Affiliates), 
  

 54 

 (vi) which is an “account” within the meaning of Article 9 of the UCC of all applicable
jurisdictions, 
  
 (vii) which is denominated and payable only in
(A) United States dollars in the United States, or (B) in the case of Receivables on which The Home Depot, Inc. or one of its Affiliates is the Obligor, Canadian dollars in the United States, 
  
 (viii) which arises under a Contract which, together with such Receivable, is
in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor enforceable against such Obligor in accordance with its terms, 
  
 (ix) which arises under a Contract which does not contain a confidentiality provision that purports to restrict the ability
of Blue Ridge to exercise its rights under this Agreement, including, without limitation, its right to review the Contract, 
  
 (x) which arises under a Contract that contains an obligation to pay a specified sum of money, contingent only upon the sale of goods or the provision of
services by the applicable Originator, 
  
 (xi) which, together
with the Contract related thereto, does not contravene any law, rule or regulation applicable thereto (including, without limitation, any law, rule and regulation relating to truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and with respect to which no part of the Contract related thereto is in violation of any such law, rule or regulation, 
  
 (xii) which satisfies all applicable requirements of the Credit and Collection Policy, 
  
 (xiii) which was generated in the ordinary course of the applicable
Originator’s business, 
  
 (xiv) which arises solely from the
sale of goods or the provision of services to the related Obligor by the applicable Originator, and not by any other Person (in whole or in part), 
  
 (xv) which is not subject to any dispute, counterclaim, right of rescission, set-off, counterclaim or any other defense (including defenses arising out of
violations of usury laws) of the applicable Obligor against the applicable Originator or any other Adverse Claim, and the Obligor thereon holds no right as against such Originator to cause such 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 (A) 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 Agent, that such Receivables shall not be subject to such offset, and (B) the Agent, in its
sole discretion, may chose to allow certain disputed receivables to be counted as Eligible Receivables, 
  

 55 

 (xvi) as to which the applicable Originator has satisfied and fully performed all obligations on its part
with respect to such Receivable required to be fulfilled by it, and no further action is required to be performed by any Person with respect thereto other than payment thereon by the applicable Obligor (excluding (A) warranty obligations for which
no claim exists, and (B) progress billings to The Home Depot, Inc. or one of its Affiliates to the extent permitted under clause (v) above), 
  
 (xvii) as to which each of the representations and warranties contained in Sections 5.1(g), (i), (j), (q), (r), (s) and (t) is true and correct, and

  
 (xviii) all right, title and interest to and in which has been
validly transferred by the applicable Originator directly to Borrower under and in accordance with the Receivables Sale Agreement, and Borrower has good and marketable title thereto free and clear of any Adverse Claim (other than Permitted
Encumbrances). 
  
 “Event of Bankruptcy”
shall be deemed to have occurred with respect to a Person if either: 
  
 (a) a case or other proceeding shall be commenced, without the application or consent of such Person, in any court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for such Person or all or substantially all of its assets, or any similar action with respect to such Person
under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and such case or proceeding shall continue undismissed, or unstayed and in effect, for a period of 60 consecutive days; or an order
for relief in respect of such Person shall be entered in an involuntary case under the federal bankruptcy laws or other similar laws now or hereafter in effect; or 
  
 (b) such Person shall commence a voluntary case or other proceeding under any applicable bankruptcy,
insolvency, reorganization, debt arrangement, dissolution or other similar law now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee (other than a trustee under a deed of
trust, indenture or similar instrument), custodian, sequestrator (or other similar official) for, such Person or for any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall be adjudicated
insolvent, or admit in writing its inability to pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors shall vote to implement any of the foregoing. 
  
 “Executive Officer” means any of the chief executive
officer, president, executive vice president or senior vice president of the Parent. 
  
 “Facility Termination Date” means the earlier of (i) the Liquidity Termination Date and (ii) the Amortization Date. 
  

 56 

 “Federal Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as amended and any successor statute thereto. 
  
 “Federal Funds Effective Rate” means, for any period, a fluctuating interest rate per annum for each day during such period equal to (a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York in the Composite
Closing Quotations for U.S. Government Securities; or (b) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 11:30 a.m. (New York time) for such day on such transactions received by
the Agent from three federal funds brokers of recognized standing selected by it. 
  
 “Fee Letter” means that certain letter agreement dated as of September 2, 2003 among Borrowers and the Agent, as it may be amended, restated or otherwise modified and in effect from time to
time. 
  
 “Final Payout Date” means the
date on which all Obligations have been paid in full and the Aggregate Commitment has been terminated. 
  
 “Finance Charges” means, with respect to a Contract, any finance, interest, late payment charges or similar charges owing by an
Obligor pursuant to such Contract. 
  
 “Fiscal
Month” means any fiscal month of the Performance Guarantor. 
  
 “Fiscal Quarter” means any fiscal quarter of the Performance Guarantor. 
  
 “Fiscal Year” means any fiscal year of the Performance Guarantor. 
  
 “Funding Agreement” means (i) this Agreement, (ii) the Liquidity Agreement and (iii) any other
agreement or instrument executed by any Funding Source with or for the benefit of Blue Ridge. 
  
 “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
Blue Ridge. 
  
 “FX Reserve” means, at any
time, an amount equal to 10% of the aggregate Outstanding Balance of all Eligible Receivables on which The Home Depot, Inc. or one of its Affiliates is the Obligor that are denominated in Canadian dollars. 
  
 “GAAP” means generally accepted accounting principles
in effect in the United States of America as of the date of this Agreement. 
  
 “Guarantee” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to secure, purchase or pay (or advance or supply 

  

 57 

 
funds for the purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to provide collateral security, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided that the term Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning. 
  
 “Indebtedness” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii)
all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee under Capital Leases, (v) all obligations of such Person to reimburse any bank or other Person in respect of amounts payable under a banker’s acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation), (vii) all obligations of such Person to reimburse any bank or other Person in respect of amounts paid or to be paid under a letter of credit or similar instrument, (viii)
all Indebtedness of others secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person, and (ix) all Indebtedness of others Guaranteed by such Person. 
  
 “Independent Director” shall mean a member of the
Board of Directors of a Borrower who is not at such time, and has not been at any time during the preceding five (5) years: (A) a director, officer, employee or affiliate of Performance Guarantor, any Originator or any of their respective
Subsidiaries or Affiliates (other than a Borrower), or (B) the beneficial owner (at the time of such individual’s appointment as an Independent Director or at any time thereafter while serving as an Independent Director) of any of the
outstanding common shares of any Borrower, any Originator, or any of their respective Subsidiaries or Affiliates, having general voting rights (excepting immaterial beneficial interests in mutual funds or similar managed investment accounts which in
no case shall exceed 5% of any class of such shares). 
  
 “Initial Cutoff Date” means the Business Day immediately prior to the date hereof. 
  
 “Interest” means for each respective Interest Period relating to Loans of the Liquidity Banks, an amount equal to the product of
the applicable Interest Rate for each Loan multiplied by the principal of such Loan for each day elapsed during such Interest Period, annualized on a 360 day basis. 
  
 “Interest Period” means, with respect to any Loan held by a Liquidity Bank: 
  
 (a) if Interest for such Loan is calculated on the basis of
the LIBO Rate, a period of one, two, three or six months, or such other period as may be mutually agreeable to the Agent and the applicable Borrower, commencing on a Business Day selected by such Borrower or the Agent pursuant to this Agreement.
Such Interest Period shall end on the day in the applicable succeeding calendar month which corresponds 

  

 58 

 
numerically to the beginning day of such Interest Period, provided, however, that if there is no such numerically corresponding day in such
succeeding month, such Interest Period shall end on the last Business Day of such succeeding month; or 
  
 (b) if Interest for such Loan is calculated on the basis of the Alternate Base Rate, a period commencing on a Business Day selected by the
applicable Borrower and agreed to by the Agent, provided that no such period shall exceed one month. 
  
 If any Interest Period would end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided,
however, that in the case of Interest Periods corresponding to the LIBO Rate, if such next succeeding Business Day falls in a new month, such Interest Period shall end on the immediately preceding Business Day. In the case of any Interest
Period for any Loan which commences before the Amortization Date and would otherwise end on a date occurring after the Amortization Date, such Interest Period shall end on the Amortization Date. The duration of each Interest Period which commences
after the Amortization Date shall be of such duration as selected by the Agent. 
  
 “Interest Rate” means, with respect to each Loan of the Liquidity Banks, the LIBO Rate, the Alternate Base Rate or the Default Rate, as applicable. 
  
 “Interest Reserve” means, for any Calculation Period,
the product (expressed as a percentage) of (i) 1.5 times (ii) the Alternate Base Rate as of the immediately preceding Cut-Off Date times (iii) a fraction the numerator of which is the highest Days Sales Outstanding for the most recent
12 Calculation Periods and the denominator of which is 360. 
  
 “Lender” means Blue Ridge and each Liquidity Bank. 
  
 “LIBO Rate” means, for any Interest Period, the rate per annum determined on the basis of the offered rate for deposits in U.S. dollars of amounts equal or comparable to the principal amount of
the related Loan offered for a term comparable to such Interest Period, which rates appear on a Bloomberg L.P. terminal, displayed under the address “US0001M <Index> Q <Go>“ effective as of 11:00 A.M., London time, two
Business Days prior to the first day of such Interest Period, provided that if no such offered rates appear on such page, the LIBO Rate for such Interest Period will be the arithmetic average (rounded upwards, if necessary, to the next
higher 1/100th of 1%) of rates quoted by not less than two major banks in New York, New York, selected by the Agent, at approximately 10:00 a.m.(New York time), two Business Days prior to the first day of such Interest Period, for deposits in U.S.
dollars offered by leading European banks for a period comparable to such Interest Period in an amount comparable to the principal amount of such Loan, divided by (b) one minus the maximum aggregate reserve requirement (including all basic,
supplemental, marginal or other reserves) which is imposed against the Agent in respect of Eurocurrency liabilities, as defined in Regulation D of the Board of Governors of the Federal Reserve System as in effect from time to time (expressed as a
decimal), applicable to such Interest Period plus (ii) the Applicable Margin per annum. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of 1%. 
  
 “LIBO Rate Loan” means a Loan which bears interest at the LIBO Rate. 
  

 59 

 “Lien” shall mean any lien, charge, claim, security interest, mortgage or
encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever. 
  
 “Liquidity Agreement” means that certain Liquidity Asset Purchase Agreement, dated as of September 2, 2003 by and among Blue
Ridge, the Agent and the banks from time to time party thereto, as the same may be amended, restated and/or otherwise modified from time to time in accordance with the terms thereof. 
  
 “Liquidity Banks” has the meaning set forth in the preamble in this Agreement. 
  
 “Liquidity Commitment” means, as to each Liquidity
Bank, its commitment under the Liquidity Agreement (which shall equal 102% of its Commitment hereunder). 
  
 “Liquidity Funding” means (a) a purchase made by any Liquidity Bank pursuant to its Liquidity Commitment of all or any portion of,
or any undivided interest in, a Blue Ridge Loan, or (b) any Loan made by a Liquidity Bank in lieu of Blue Ridge pursuant to Section 1.1. 
  
 “Liquidity Termination Date” means the earlier to occur of the following: 
  
 (a) the date on which the Liquidity Banks’ Liquidity
Commitments expire, cease to be available to Blue Ridge or otherwise cease to be in full force and effect; or 
  
 (b) the date on which a Downgrading Event with respect to a Liquidity Bank shall have occurred and been continuing for not less than 30
days, and either (i) the Downgraded Liquidity Bank shall not have been replaced by an Eligible Assignee pursuant to the Liquidity Agreement, or (ii) the Liquidity Commitment of such Downgraded Liquidity Bank shall not have been funded or
collateralized in such a manner that will avoid a reduction in or withdrawal of the credit rating applied to the Commercial Paper to which such Liquidity Agreement applies by any of the rating agencies then rating such Commercial Paper. 

 
 “Loan” means any loan made by a Lender pursuant to
this Agreement (including, without limitation, any Liquidity Funding). Each Loan shall either be a CP Rate Loan, an Alternate Base Rate Loan or a Eurodollar Rate Loan, selected in accordance with the terms of this Agreement. For purposes of
determining compliance with the Borrowing Bases, each Loan shall be deemed to be made to the Borrower that receives the proceeds thereof even though the Borrowers shall be jointly and severally liable for the repayment thereof. 
  
 “Loan Parties” has the meaning set forth in the
preamble to this Agreement. 
  
 “Lock-Box”
means each locked postal box with respect to which a bank who has executed a Collection Account Agreement has been granted exclusive access for the purpose of retrieving and processing payments made on the Receivables and which is listed on Exhibit
IV. 
  
 “Loss Reserve” means, for any
Calculation Period, the product (expressed as a percentage) of (a) 2.25, 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. 
  

 60 

 “Margin Stock” means “margin stock” as defined in Regulations T, U or
X. 
  
 “Material Adverse
Effect” means a material adverse effect on (i) the financial condition or operations of the Parent and its Subsidiaries taken as a whole, (ii) the ability of any Loan Party to perform its obligations under this Agreement or the
Performance Guarantor to perform its obligations under the Performance Undertaking, (iii) the legality, validity or enforceability of this Agreement or any other Transaction Document, (iv) the Agent’s security interest, for the benefit of the
Secured Parties, in the Receivables generally or in any significant portion of the Receivables, the Related Security or the Collections with respect thereto, or (v) the collectibility of the Receivables generally or of any significant portion of the
Receivables. 
  
 “Material Subsidiary”
means (i) each of the Borrowers, ALG and ASP and (ii) each other Consolidated Subsidiary, now existing or hereinafter established or acquired, that at any time prior to the payment in full of all Aggregate Unpaids under the Credit and Security
Agreement either (x) has or acquires total assets in excess of 10% of Consolidated Total Assets at the end of the most recent Fiscal Quarter, or (y) contributed more than 10% of Consolidated Operating Profits for the 4 most recent Fiscal Quarters
then ended (or, with respect to any Subsidiary which existed during the entire 4 Fiscal Quarter period but was acquired by the Parent during such period, which would have contributed more than 10% of Consolidated Operating Profits for such period
had it been a Subsidiary for the entire period, as determined on a pro forma basis in accordance with GAAP). 
  
 “Monthly Report” means a report, in substantially the form of Exhibit VIII hereto (appropriately completed), furnished by the
Servicers to the Agent pursuant to Section 8.5. 
  
 “Monthly Reporting Date” means the 15th day of each month after the date of this
Agreement (or if any such day is not a Business Day, the next succeeding Business Day thereafter) or such other days of each month as the Agent shall request in connection with Section 8.5 hereof. 
  
 “Moody’s” means Moody’s Investors Service,
Inc. 
  
 “Net Pool Balance” means, at any
time, the aggregate Outstanding Balance of all Eligible Receivables at such time reduced by the aggregate amount by which the Outstanding Balance of all Eligible Receivables of each Obligor and its Affiliates exceeds the Obligor Concentration Limit
for such Obligor. 
  
 “Obligations” means,
at any time, any and all obligations of either of the Loan Parties to any of the Secured Parties arising under or in connection with the Transaction Documents, whether now existing or hereafter arising, due or accrued, absolute or contingent,
including, without limitation, obligations in respect of Aggregate Principal, CP Costs, Interest, fees under the Fee Letter, Broken Funding Costs and Indemnified Amounts. 
  
 “Obligor” means a Person obligated to make payments pursuant to a Contract. 
  

 61 

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

	 S&P Rating

	 	 Moody’s Rating

	 	 Allowable % of
Eligible Receivables

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

  
 ; provided, however,
that (a) if any Obligor has a split rating, the applicable rating will be the lower of the two, (b) if any Obligor is not rated by either S&P or Moody’s, the applicable Obligor Concentration Limit shall be the one set forth in the
last line of the table above, and (c) subject to satisfaction of the Rating Agency Condition and/or an increase in the percentage set forth in clause (a)(i) of the definition of “Required Reserve,” upon Borrower’s
request from time to time, the Agent may agree to a higher percentage of Eligible Receivables for a particular Obligor and its Affiliates (each such higher percentage, a “Special Concentration Limit”), it being understood
that any Special Concentration Limit may be cancelled by the Agent upon not less than five (5) Business Days’ written notice to the Loan Parties. As of the date hereof, the Special Concentration Limit for all Receivables owing from The Home
Depot, Inc. and its Affiliates is 20% of aggregate Outstanding Balance of all Eligible Receivables, provided that not more than 2% of the aggregate Outstanding Balance of the Eligible Receivables owing from such special Obligors are
denominated in Canadian dollars. 
  
 “Operating
Profits” means, as applied to any Person for any period, the sum of (i) net revenues, less (ii) cost of goods and services sold, less (iii) operating expenses (including depreciation and amortization) of such Person for such period, as
determined in accordance with GAAP. 
  
 “Originator” means each of ALG and ASP in its capacity as seller under the Receivables Sale Agreement to which it is a party. 
  

“Outstanding Balance” of any Receivable at any time means the then outstanding principal balance thereof. 
  
 “Participant” has the meaning set forth in Section
12.2. 
  
 “Performance Guarantor” means
Acuity Brands, Inc., a Delaware corporation, and its successors and permitted assigns. 
  

 62 

 “Performance Undertaking” means each Performance Undertaking, dated as of
September 2, 2003, by Performance Guarantor in favor of AEI or AUI, substantially in the form of Exhibit IX, as the same may be amended, restated or otherwise modified from time to time. 
  
 “Permitted Encumbrances” shall mean the following: (a) Liens for taxes or assessments or other
governmental charges not yet due and payable; and (b) Liens created by the Transaction Documents. 
  
 “Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. 
  
 “Pooled Commercial Paper” means Commercial Paper notes of Blue Ridge subject to any particular pooling arrangement by Blue Ridge,
but excluding Commercial Paper issued by Blue Ridge for a tenor and in an amount specifically requested by any Person in connection with any agreement effected by Blue Ridge. 
  
 “Prime Rate” means a rate per annum equal to the prime rate of interest announced from time
to time by Wachovia (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes. 
  
 “Prior Month’s Percentage” means, for any Calculation Period for either ALG or ASP, the ratio (expressed as a percentage), as
of the last day of the Calculation Period then most recently ended, of the Outstanding Balance of all Receivables originated by it to the total Outstanding Balance of all Receivables originated by both. 
  
 “Pro Rata Share” means, for each Liquidity Bank, a
percentage equal to the Commitment of such Liquidity Bank, divided by the Aggregate Commitment. 
  
 “Program Fee” has the meaning set forth in the Fee Letter. 
  
 “Proposed Reduction Date” has the meaning set forth in Section 1.3. 
  
 “Proprietary Information” means all information about
the Performance Guarantor or any of its Subsidiaries which has been furnished to the Agent or any Lender by or on behalf of the Performance Guarantor or any of its Subsidiaries before or after the date hereof or which is obtained by any Lender or
the Agent in the course of any Review made pursuant to Section 7.1(d) of the Agreement; provided, however, that the term “Proprietary Information” does not include information which (x) is or becomes publicly
available (other than as a result of a breach of Section 14.5 of the Agreement), (y) is possessed by or available to the Agent or any Lender on a non-confidential basis prior to its disclosure to the Agent or such Lender by a Borrower or Subsidiary
or (z) becomes available to the Agent or any Lender on a non-confidential basis from a Person which, to the knowledge of the Agent or such Lender, as the case may be, is not bound by a confidentiality agreement with the Performance Guarantor or any
of its Subsidiaries and is not otherwise prohibited from transmitting such information to the Agent or such Lender. In the event the Agent or any Lender is required to disclose any Proprietary Information by virtue of clause (ii) (but only if and to
the extent such disclosure has not been sought by the Agent or any Lender, and if neither the Performance Guarantor nor a 

  

 63 

 
Borrower is a party to such litigation), (iv) or (v) above, to the extent such Lender or the Agent (as the case may be) determines in good faith that it is
permissible by law so to do, it shall promptly notify the Performance Guarantor of same so as to allow the Performance Guarantor or its Subsidiaries to seek a protective order or to take other appropriate action; provided, however,
neither any Lender nor the Agent shall be required to delay compliance with any directive to disclose any such information so as to allow the Performance Guarantor or any of Subsidiaries to effect any such action. 
  
 “Purchasing Liquidity Bank” has the meaning set forth
in Section 12.1(b). 
  
 “Rating Agency
Condition” means that Blue Ridge has received written notice from S&P and Moody’s that an amendment, a change or a waiver to the Liquidity Agreement, this Agreement or the Receivables Sale Agreements, will not result in a
withdrawal or downgrade of the then current ratings on Blue Ridge’s Commercial Paper. 
  
 “Receivable” means each “Receivable” under and as defined in a Receivables Sale Agreement in which either Borrower now has or hereafter acquires any interest. Debt and other rights
and obligations arising from any one transaction, including, without limitation, indebtedness and other rights and obligations represented by an individual invoice, shall constitute a Receivable separate from a Receivable consisting of the
indebtedness and other rights and obligations arising from any other transaction; provided further, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless of whether the
account debtor or the applicable Borrower treats such indebtedness, rights or obligations as a separate payment obligation. 
  
 “Receivables Sale Agreement” means (a) that certain Amended and Restated Receivables Sale and Contribution Agreement, dated as of
September 2, 2003, between ALG and AUI, as the same may be amended, restated or otherwise modified from time to time, or (b) that certain Receivables Sale and Contribution Agreement, dated as of September 2, 2003, between ASP and AEI, 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. 
  
 “Redeemable Preferred Stock” of any Person means any preferred stock issued by such Person which is at any time prior to the
Amortization Date either (i) mandatorily redeemable (by required sinking fund or similar payments or otherwise) or (ii) redeemable at the option of the holder thereof. 
  
 “Reduction Notice” has the meaning set forth in Section 1.3. 
  
 “Regulation T” means Regulation T of the Board of
Governors of the Federal Reserve System, as in effect from time to time, together with all official rulings and interpretations issued thereunder. 
  

 64 

 “Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time, together with all official rulings and interpretations issued thereunder. 
  
 “Regulation X” means Regulation X of the Board of Governors of the Federal Reserve System, as in effect from time to time,
together with all official rulings and interpretations issued thereunder. 
  
 “Regulatory Change” means any change after the date of this Agreement in United States (federal, state or municipal) or foreign laws, regulations (including Regulation D) or accounting
principles or the adoption or making after such date of any interpretations, directives or requests applying to a class of banks (including the Liquidity Banks) of or under any United States (federal, state or municipal) or foreign laws, regulations
(whether or not having the force of law) or accounting principles by any court, governmental or monetary authority, or accounting board or authority (whether or not part of government) charged with the establishment, interpretation or administration
thereof. For the avoidance of doubt, any interpretation of Accounting Research Bulletin No. 51 by the Financial Accounting Standards Board shall constitute a Regulatory Change. 
  
 “Related Security” means all of (i) the “Related Security” under and as defined in each of
the Receivables Sale Agreements, (ii) each Borrower’s right, title and interest in, to and under the Receivables Sale Agreement to which it is a party, (iii) each Borrower’s right, title and interest in and to the Demand Advances made by
it, and (iv) the proceeds of any of the foregoing. 
  
 “Required Liquidity Banks” means, at any time, Liquidity Banks with Commitments in excess of 66- 2/3% of the Aggregate Commitment. 
  
 “Required Notice Period” means the number of days required notice set forth below applicable to the Aggregate Reduction indicated below: 
  

	 Aggregate Reduction

	  	Required Notice Period

	 less than 25% of the then-current
 Aggregate Commitment
	  	2 Business Days
		
	 greater than or equal to 25% but less than 50% of the then-current
 Aggregate Commitment
	  	5 Business Days
		
	 greater than or equal to 50% of the then-current
 Aggregate Commitment
	  	10 Business Days

  

 65 

 “Required Reserve” means, on any day during a Calculation Period, the product of
(a) the greater of (i) the Required Reserve Factor Floor and (ii) the sum of the Loss Reserve, the Interest Reserve, the Dilution Reserve and the Servicing Reserve, times (b) the Net Pool Balance as of the Cut-Off Date immediately preceding such
Calculation Period. 
  
 “Required Reserve Factor
Floor” means, for any Calculation Period, the sum (expressed as a percentage) of (a) 20% plus (b) the product of the Adjusted Dilution Ratio and the Dilution Horizon Ratio, in each case, as of the immediately preceding Cut-Off Date.

  
 “Responsible Officer” means any
Executive Officer as well as any other officer of the Parent who is primarily responsible for the administration of the transactions contemplated by the Transaction Documents. 
  
 “Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect, on
account of any shares of any class of capital stock of a Borrower now or hereafter outstanding, except a dividend payable solely in shares of that class of stock or in any junior class of stock of a Borrower, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of capital stock of a Borrower now or hereafter outstanding, (iii) any payment made to redeem, purchase, repurchase or retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of capital stock of a Borrower now or hereafter outstanding, and (iv) any payment of management fees by a Borrower (except for reasonable
management fees to any Originator or its Affiliates in reimbursement of actual management services performed). 
  
 “S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc. 
  
 “Secured Parties” means the Indemnified Parties.

  
 “Servicer” means at any time the
Person (which may be the Agent) then authorized pursuant to Article VIII to service, administer and collect Receivables. 
  
 “Servicing Fee” means, for each day in a Calculation Period: 
  
 (a) an amount equal to (i) the Servicing Fee Rate (or, at any time while ALG and ASP or one or more of their
Affiliates are the Servicers, such lesser percentage as may be agreed between the Borrowers and the Servicers on an arms’ length basis based on then prevailing market terms for similar services), times (ii) the aggregate
Outstanding Balance of all Receivables at the close of business on the Cut-Off Date immediately preceding such Calculation Period, times (iii) 1/360; or 
  
 (b) on and after the Servicer’s reasonable request made at any time when ALG and ASP or one or more of
their Affiliates are no longer acting as Servicers hereunder, an alternative amount specified by the successor Servicer not exceeding (i) 110% of such Servicer’s reasonable costs and expenses of performing its obligations under this Agreement
during the preceding Calculation Period, divided by (ii) the number of days in the current Calculation Period. 
  

 66 

 “Servicing Fee Rate” means 0.25% per annum (or such higher percentage as
the Agent and the Borrowers may from time to time agree upon based upon then prevailing market conditions). 
  
 “Servicing Reserve” means, for any Calculation Period, the product (expressed as a percentage) of (a) 1.00%, times
(b) a fraction, the numerator of which is the highest Days Sales Outstanding for the most recent 12 Calculation Periods and the denominator of which is 360. 
  
 “Settlement Date” means (A) the 2nd Business Day after each Monthly Reporting Date, and (B) the last day of the relevant Interest Period in respect of each Loan of the Liquidity Banks. 
  
 “Settlement Period” means (A) in respect of each Loan
of Blue Ridge, the immediately preceding Calculation Period, and (B) in respect of each Loan of the Liquidity Banks, the entire Interest Period of such Loan. 
  
 “Subsidiary” means, with respect to any Person, any corporation or other entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person. 
  
 “Tax Code” means the Internal Revenue Code of 1986, as the same may be amended from time to time.

  
 “Termination Date” has the meaning set
forth in Section 2.2. 
  
 “Termination
Percentage” has the meaning set forth in Section 2.2. 
  
 “Terminating Tranche” has the meaning set forth in Section 4.3(b). 
  
 “Transaction Documents” means, collectively, this Agreement, each Borrowing Notice, each Receivables Sale Agreement, each
Collection Account Agreement, the Performance Undertakings, the Fee Letter, and all other instruments, documents and agreements executed and delivered in connection herewith. 
  
 “UCC” means the Uniform Commercial Code as from time to time in effect in the specified
jurisdiction. 
  
 “Unmatured Amortization
Event” means an event which, with the passage of time or the giving of notice, or both, would constitute an Amortization Event. 
  
 “Usage Fee” has the meaning set forth in the Fee Letter. 
  
 “Wachovia” means Wachovia Bank, National Association, in its individual capacity and its capacity as
agent. 
  

 67 

 Unless otherwise specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP, applied on a basis consistent (except for changes concurred in by the
Parent’s independent public accountants or otherwise required by a change in GAAP) with the most recent audited consolidated financial statements of the Parent and its Consolidated Subsidiaries delivered to the Agent unless with respect to any
such change concurred in by the Parent’s independent public accountants or required by GAAP, in determining compliance with any of the provisions of this Agreement or any of the other Transaction Documents: (i) the Parent shall have objected to
determining such compliance on such basis at the time of delivery of such financial statements, or (ii) the Agent shall so object in writing within 30 days after the delivery of such financial statements, in either of which events such calculations
shall be made on a basis consistent with those used in the preparation of the latest financial statements as to which such objection shall not have been made. 
  
 All terms used in Article 9 of the UCC in the State of Georgia, and not specifically defined herein, are used herein
as defined in such Article 9. 
  

 68 

 EXHIBIT II 
  

FORM OF BORROWING NOTICE 
  

  
 ACUITY ENTERPRISE, INC. 
 ACUITY UNLIMITED, INC. 
  
 BORROWING NOTICE 
 dated
                    , 20     
 for Borrowing on                     , 20     
  
 Wachovia Bank, National Association, as Agent 
 191 Peachtree Street, 22nd Floor 
 Mail Stop GA-8047 
 Atlanta, Georgia 30303 
 Attention: Kenny Karpowicz 
  
 Phone: (404) 332-1164 
 Fax: (404) 332-5152 
  
 Ladies and Gentlemen: 
  
 Reference is made to the
Credit and Security Agreement dated as of September 2, 2003 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among Acuity Enterprise, Inc. (“AEI”
or a “Borrower”), Acuity Unlimited, Inc. (“AUI” or a “Borrower”), Acuity Lighting Group, Inc. and Acuity Specialty Products Group, Inc. as initial Servicers, Blue Ridge
Asset Funding Corporation, and Wachovia Bank, National Association, individually and as Agent. Capitalized terms defined in the Credit Agreement are used herein with the same meanings. 
  
 1. Each of the [Servicers, on behalf of the] Borrowers hereby certifies, represents and warrants to the Agent
and the Lenders that on and as of the Borrowing Date (as hereinafter defined): 
  
 (a) all applicable conditions precedent set forth in Article VI of the Credit Agreement have been satisfied; 
  
 (b) each of its representations and warranties contained in
Section 5.1 of the Credit Agreement will be true and correct, in all material respects, as if made on and as of the Borrowing Date; 
  

 69 

 (c) no event will have occurred and is continuing, or would result from the requested
Advance, that constitutes an Amortization Event or Unmatured Amortization Event; 
  
 (d) the Facility Termination Date has not occurred; and 
  
 (e) after giving effect to the Advances requested below, the aggregate principal balance of the Advances
outstanding to each Borrower will not exceed its Borrowing Base and the Aggregate Principal outstanding will not exceed the Aggregate Commitment. 
  
 2. The [Servicers, on behalf of the] Borrowers hereby request that Blue Ridge (or its Liquidity Banks) make Advances on
                , 20     (the “Borrowing Date”) as follows: 
  
 (a) Aggregate Amount of Advances:
$             of which $             is to be funded to AEI and
$             is to be funded to AUI 
  
 (b) If the Advances are not funded by Blue Ridge, [Servicers on behalf of the] Borrowers request that the Liquidity Banks
make Alternate Base Rate Loans that convert into LIBO Rate Loans with an Interest Period of              months on the third Business Day after the Borrowing Date). 
  
 3. Please disburse the proceeds of the Loans as follows: 
  
 [Apply
$             to payment of principal and interest of existing Loans to [specify applicable Borrower’s name] due on the Borrowing Date]. [Apply
$             to payment of fees due on the Borrowing Date]. [Wire transfer $             to account
no.              at              Bank, in [city, state], ABA No.
            , Reference:             , and
$             to account no.              at
             Bank, in [city, state], ABA No.             , Reference:
             ]. 
  
 IN WITNESS WHEREOF, each of the [Servicers, on behalf of the] Borrowers has caused this Borrowing Request to be executed and delivered as of this
             day of             ,             .

  

	[ACUITY LIGHTING GROUP, INC. and ACUITY SPECIALTY PRODUCTS GROUP, INC., AS SERVICERS, on behalf of] ACUITY UNLIMITED, INC. and ACUITY ENTERPRISE,
INC., AS BORROWERS
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 70 

 EXHIBIT III 
  
 PLACES OF BUSINESS OF THE LOAN PARTIES; LOCATIONS OF RECORDS; 
  
 FEDERAL EMPLOYER AND ORGANIZATIONAL IDENTIFICATION NUMBER(S);

  
 PRIOR NAMES 
  
 Places of Business: 
  
 1170 Peachtree Street, Suite 2400 
 Atlanta, Georgia 30309 
  
 Locations of Records: 
  
 1170 Peachtree Street, Suite 2400 
 Atlanta,
Georgia 30309 
  
 One Lithonia Way 
 Conyers, Georgia 30012 
  
 Highway 41 North 
 Emerson, Georgia 30137

  
 1310 Seaboard Industrial Blvd. 
 Atlanta, Georgia 30318 
  
 214 Oakwood Avenue 
 Newark, Ohio 43055

  
 Federal Employer Identification Numbers: 
  
 ALG    #58-2633371 
 ASP    #58-2633373 
 AUI    #58-2616706 
 AEI    #31-1825290 
  
 Organizational Identification Numbers: 
  
 ALG    #3409762 
 ASP    #3409123 
 AUI    #3384145 
 AEI    #3680055 
  
 Prior Legal Names, Trade and Assumed Names of Borrowers: AUI was previously
known as NSI Funding, Inc. and L & C Funding, Inc. 
  

 71 

 EXHIBIT IV 
  

NAMES OF COLLECTION BANKS; LOCK-BOXES & COLLECTION ACCOUNTS 
  

	 LOCK-BOX

	  	 RELATED COLLECTION ACCOUNT

	  
 P.O. Box
945786
 Atlanta, GA 30392-5786
	  	 Name of Current Account Holder:
 Account Number:
 Bank Name:
 ABA Number:
 Contact Person:
 Contact’s Tel:
 Contact’s Fax:
	  	 Enforcer Products, a division of ASP
 Lockbox #945786, DDA#2079900422649
 Wachovia Bank of Georgia
 061000227
 Tracie Greene
 800-590-7868
 404-332-6898

			
	 n/a
	  	 Name of Current Account Holder:
 Account Number:
 Bank Name:
 ABA Number:
 Contact Person:
 Contact’s Tel:
 Contact’s Fax:
	  	 Zep Manufacturing, a division of ASP
 2079900421190
 Wachovia Bank of Georgia
 061000227
 Tracie Greene
 800-590-7868
 404-332-6898

			
	  
 P.O. Box
530737
 Atlanta, GA 30353-0737
  
 P.O. Box CH10697
 Palatine, IL 60055-0697
  
 Dept. LA21294
 Pasadena, CA 91185-1294
  
 Dept. 0905
 P.O. Box 120001
 Dallas, TX 75312-0905
  
 Box 382012
 Pittsburgh, PA 15250-8012
  
 Box 382156
 Pittsburgh, PA 15250-8156
	  	 Name of Current Account Holder:
 Account Number:
 Bank Name:
 ABA Number:
 Contact Person:
 Contact’s Tel:
 Contact’s Fax:
	  	 Zep Manufacturing, a division of ASP
 0373309
 Mellon Bank, Pittsburgh, PA
 043000261
 Edith Rickle
 412-234-6563
 412-209-6082

			
	  
 P.O. Box
12118
 Atlanta, GA 30384
	  	 Name of Current Account Holder:
 Account Number:
 Bank Name:
 ABA Number:
 Contact Person:
 Contact’s Tel:
 Contact’s Fax:
	  	 Enforcer Products, a division of ASP
 Lockbox #12118, DDA #3751911681
 Bank of America
 111000012
 Louvenia Parker
 404-607-5441
 404-532-3404

  

 72 

	 LOCK-BOX

	  	 RELATED COLLECTION ACCOUNT

	  
 P.O. Box
100863
 Atlanta, GA 30384
	  	 Name of Current Account Holder:
 Account Number:
 Bank Name:
 ABA Number:
 Contact Person:
 Contact’s Tel:
 Contact’s Fax:
	  	 Lithonia Lighting, a division of ALG
 Lockbox #100863, DDA#3750249781
 Bank of America
 111000012
 Louvenia Parker
 404-607-5441
 404-532-3404

			
	  
 P.O. Box
360305
 Pittsburgh, PA 15251
  
 Dept. LA 21025
 Pasadena, CA 91185-1025
	  	 Name of Current Account Holder:
 Account Number:
 Bank Name:
 ABA Number:
 Contact Person:
 Contact’s Tel:
 Contact’s Fax:
	  	 Lithonia Lighting, a division of ALG
 DDA#1911121
 Mellon Bank, Pittsburgh PA
 043000261
 Edith Rickle
 412-234-6563
 412-209-6082

			
	  
 P.O. Box
8060
 Philadelphia, PA 19175-8060
	  	 Name of Current Account Holder:
 Account Number:
 Bank Name:
 ABA Number:
 Contact Person:
 Contact’s Tel:
 Contact’s Fax:
	  	 Holophane Corporation, a division of ALG
 DDA#2280923
 Mellon Bank, Pittsburgh PA
 043000261
 Edith Rickle
 412-234-6563
 412-209-6082

  

 73 

 EXHIBIT V 
  

FORM OF COMPLIANCE CERTIFICATE 
  
 To: Wachovia Bank, National Association, as Agent 
  
 This Compliance Certificate is furnished pursuant to that certain Credit and Security Agreement dated as of September 2, 2003 among Acuity Enterprise,
Inc. (“AEI” or a “Borrower”), Acuity Unlimited, Inc. (“AUI” or a “Borrower”), Acuity Lighting Group, Inc. and Acuity Specialty Products Group, Inc. as
initial Servicers, Blue Ridge Asset Funding Corporation, and Wachovia Bank, National Association, individually and as Agent (the “Agreement”). 
  
 THE UNDERSIGNED HEREBY CERTIFIES IN HIS OR HER REPRESENTATIVE CAPACITY ON BEHALF OF PERFORMANCE GUARANTOR
THAT: 
  
 1. I am the duly elected
                     of             . 
  
 2. I have reviewed the terms of the Agreement and I have made, or have caused
to be made under my supervision, a detailed review of the transactions and conditions of Performance Guarantor and its Subsidiaries during the accounting period covered by the attached financial statements. 
  
 3. The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes an Amortization Event or Unmatured Amortization Event, as each such term is defined under the Agreement, during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Certificate[, except as set forth in paragraph 5 below]. 
  
 4. Schedule I attached hereto sets forth financial data and computations evidencing the compliance with certain covenants of the Agreement, all of which
data and computations are true, complete and correct. 
  
 [5. Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which
             has taken, is taking, or proposes to take with respect to each such condition or event:
                            ] 
  

 74 

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

	 	 	 By:
	 	  

	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

 75 

 SCHEDULE I TO COMPLIANCE CERTIFICATE 
  
 A. Schedule of Compliance as of     
            , 200   with Section      of the Agreement. Unless otherwise defined herein, the terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement. 
  
 This
schedule relates to the month ended:                      
  

 76 

 EXHIBIT VI 
  

[intentionally omitted] 
  

 77 

 EXHIBIT VII 
  
 FORM OF ASSIGNMENT AGREEMENT 
  

THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”) is entered into as of the      day of
            ,     , by and between
                     (“Assignor”) and
                     (“Assignee”). 
  
 PRELIMINARY STATEMENTS 
  
 A. This Assignment Agreement is being executed and delivered in accordance with Section 12.1(b) of that certain Credit and Security Agreement dated as of
September 2, 2003 by and among Acuity Enterprise, Inc. (“AEI” or a “Borrower”), Acuity Unlimited, Inc. (“AUI” or a “Borrower”), Acuity Lighting Group,
Inc. and Acuity Specialty Products Group, Inc. as initial Servicers, Blue Ridge Asset Funding Corporation, and Wachovia Bank, National Association, as Agent, and the Liquidity Banks party thereto (as amended, modified or restated from time to time,
the “Credit and Security Agreement”) and that certain Liquidity Asset Purchase Agreement dated as of September 2, 2003 by and among Blue Ridge, the Liquidity Banks from time to time party thereto and Wachovia Bank, National
Association, as Agent (as amended, modified or restated from time to time, the “Liquidity Agreement”). Capitalized terms used and not otherwise defined herein are used with the meanings set forth or incorporated by reference
in the Credit and Security Agreement. 
  
 B. Assignor is a
Liquidity Bank party to the Credit and Security Agreement and the Liquidity Agreement, and Assignee wishes to become a Liquidity Bank thereunder; and 
  
 C. Assignor is selling and assigning to Assignee an undivided             % (the
“Transferred Percentage”) interest in all of Assignor’s rights and obligations under the Transaction Documents and the Liquidity Agreement, including, without limitation, Assignor’s Commitment, Assignor’s
Liquidity Commitment and (if applicable) Assignor’s Loans to each Borrower as set forth herein. 
  
 AGREEMENT 
  
 The parties hereto hereby agree as follows: 
  
 1. The
sale, transfer and assignment effected by this Assignment Agreement shall become effective (the “Effective Date”) two (2) Business Days (or such other date selected by the Agent in its sole discretion) following the date on
which a notice substantially in the form of Schedule II to this Assignment Agreement (“Effective Notice”) is delivered by the Agent to Blue Ridge, Borrowers, Servicers, Assignor and Assignee. From and after the Effective
Date, Assignee shall be a Liquidity Bank party to the Credit and Security Agreement for all purposes thereof as if Assignee were an original party thereto and Assignee agrees to be bound by all of the terms and provisions contained therein.

  
 2. If Assignor has no outstanding principal under the Credit
and Security Agreement or the Liquidity Agreement, on the Effective Date, Assignor shall be deemed to have 

  

 78 

 
hereby transferred and assigned to Assignee, without recourse, representation or warranty (except as provided in paragraph 6 below), and the Assignee shall
be deemed to have hereby irrevocably taken, received and assumed from Assignor, the Transferred Percentage of Assignor’s Commitment and Liquidity Commitment and all rights and obligations associated therewith under the terms of the Credit and
Security Agreement and the Liquidity Agreement, including, without limitation, the Transferred Percentage of Assignor’s future funding obligations under the Credit and Security Agreement and the Liquidity Agreement. 
  
 3. If Assignor has any outstanding principal under the Credit and Security
Agreement and Liquidity Agreement, at or before 12:00 noon, local time of Assignor, on the Effective Date Assignee shall pay to Assignor, in immediately available funds, an amount equal to the sum of (i) the Transferred Percentage of the outstanding
principal of Assignor’s Loans and, without duplication, Assignor’s Percentage Interests (as defined in the Liquidity Agreement) (such amount, being hereinafter referred to as the “Assignee’s Principal”); (ii)
all accrued but unpaid (whether or not then due) Interest attributable to Assignee’s Principal; and (iii) accruing but unpaid fees and other costs and expenses payable in respect of Assignee’s Principal for the period commencing upon each
date such unpaid amounts commence accruing, to and including the Effective Date (the “Assignee’s Acquisition Cost”); whereupon, Assignor shall be deemed to have sold, transferred and assigned to Assignee, without
recourse, representation or warranty (except as provided in paragraph 6 below), and Assignee shall be deemed to have hereby irrevocably taken, received and assumed from Assignor, the Transferred Percentage of Assignor’s Commitment, Liquidity
Commitment, Loans (if applicable) and Percentage Interests (if applicable) and all related rights and obligations under the Transaction Documents and the Liquidity Agreement, including, without limitation, the Transferred Percentage of
Assignor’s future funding obligations under the Credit and Security Agreement and the Liquidity Agreement. 
  
 4. Concurrently with the execution and delivery hereof, Assignor will provide to Assignee copies of all documents requested by Assignee which were
delivered to Assignor pursuant to the Credit and Security Agreement or the Liquidity Agreement. 
  
 5. Each of the parties to this Assignment Agreement agrees that at any time and from time to time upon the written request of any other party, it will
execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Assignment Agreement. 
  
 6. By executing and delivering this Assignment Agreement, Assignor and Assignee confirm to and agree with each other, the
Agent and the Liquidity Banks as follows: (a) other than the representation and warranty that it has not created any Adverse Claim upon any interest being transferred hereunder, Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations made by any other Person in or in connection with any of the Transaction Documents or the Liquidity Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of Assignee, the Credit and Security Agreement, the Liquidity Agreement or any other instrument or document furnished pursuant thereto or the perfection, priority, condition, value or sufficiency of any Collateral;
(b) Assignor makes no representation or warranty and assumes no responsibility with respect to the financial condition of either Borrower, any Obligor, any Affiliate of either 

  

 79 

 
Borrower or the performance or observance by either Borrower, any Obligor, any Affiliate of either Borrower of any of their respective obligations under the
Transaction Documents or any other instrument or document furnished pursuant thereto or in connection therewith; (c) Assignee confirms that it has received a copy of each of the Transaction Documents and the Liquidity Agreement, and other documents
and information as it has requested and deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (d) Assignee will, independently and without reliance upon the Agent, Blue Ridge, Borrowers or any other
Liquidity Bank or Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Transaction Documents and the Liquidity Agreement; (e)
Assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Transaction Documents and the Liquidity Agreement as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (f) Assignee agrees that it will perform in accordance with their terms all of the obligations which, by the terms of the Liquidity Agreement, the Credit and Security Agreement and the other
Transaction Documents, are required to be performed by it as a Liquidity Bank or, when applicable, as a Lender. 
  
 7. Each party hereto represents and warrants to and agrees with the Agent that it is aware of and will comply with the provisions of the Credit and
Security Agreement, including, without limitation, Sections 14.5 and 14.6 thereof. 
  
 8. Schedule I hereto sets forth the revised Commitment and Liquidity Commitment of Assignor and the Commitment and Liquidity Commitment of Assignee, as well as administrative information with respect to Assignee.

  
 9. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 
  
 10. Assignee hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all senior indebtedness for borrowed money of Blue Ridge, it will not institute against, or join any other Person in
instituting against, Blue Ridge 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. 
  

 80 

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

	 [ASSIGNOR]

		
	 By:
	 	  

	 Title:
	 	 
	
	 [ASSIGNEE]

		
	 By:
	 	  

	 Title:
	 	 

  

 81 

 SCHEDULE I TO ASSIGNMENT AGREEMENT 
  
 LIST OF LENDING OFFICES, ADDRESSES 
 FOR NOTICES AND COMMITMENT AMOUNTS 
  
 Date:             ,          
  

Transferred Percentage:             % 
  

	 	 	A-1

	 	A-2

	 	B-1

	 	B-2

	 	C-1

	 	C-2

	Assignor

	 	 Commitment
 (prior to
 giving effect
 to the
 Assignment
 Agreement)

	 	 Commitment
 (after giving
 effect to the
 Assignment
 Agreement)

	 	 Outstanding
 principal (if
 any)

	 	 Ratable Share
 of
 Outstanding
 principal

	 	 Liquidity
 Commitment
 (prior to
 giving effect
 to the
 Assignment
 Agreement)

	 	 Liquidity
 Commitment
 (after giving
 effect to the
 Assignment
 Agreement)

	 	 	 	 	 	 	 	 	 	 	 	 	 

  

	 	 	A-1

	 	A-2

	 	B-1

	 	B-2

	 	C-1

	 	C-2

	Assignee

	 	 Commitment
 (prior to
 giving effect
 to the
 Assignment
 Agreement)

	 	 Commitment
 (after giving
 effect to the
 Assignment
 Agreement)

	 	 Outstanding
 principal (if
 any)

	 	 Ratable Share
 of
 Outstanding
 principal

	 	 Liquidity
 Commitment
 (prior to
 giving effect
 to the
 Assignment
 Agreement)

	 	 Liquidity
 Commitment
 (after giving
 effect to the
 Assignment
 Agreement)

	 	 	 	 	 	 	 	 	 	 	 	 	 

  

	Address for Notices
	  

	  

	 Attention:

	 Phone:

	 Fax:

  

 82 

 SCHEDULE II TO ASSIGNMENT AGREEMENT 
  
 EFFECTIVE NOTICE 
  

	 TO:
	 	                                       
                                        
                ,
	 	 Assignor

	 	 	                                       
                                        
                 
	 	 
	 	 	                                       
                                        
                 
	 	 
	 	 	                                       
                                        
                 
	 	 
			
	 TO:
	 	                                       
                                        
                ,
	 	 Assignee

	 	 	                                       
                                        
                 
	 	 
	 	 	                                       
                                        
                 
	 	 
	 	 	                                       
                                        
                 
	 	 

  
 The undersigned, as
Agent under the Credit and Security Agreement dated as of September 2, 2003 by and among Acuity Enterprise, Inc. and Acuity Unlimited, Inc., as Borrowers, Acuity Lighting Group, Inc. and Acuity Specialty Products Group, Inc., as initial Servicers,
Blue Ridge Asset Funding Corporation, Wachovia Bank, National Association, as Agent, and the Liquidity Banks party thereto, hereby acknowledges receipt of executed counterparts of a completed Assignment Agreement dated as of
            , 200     between             , as Assignor, and
            , as Assignee. Terms defined in such Assignment Agreement are used herein as therein defined. 
  
 1. Pursuant to such Assignment Agreement, you are advised that the Effective Date will be
            ,         . 
  
 2. Each of the undersigned hereby consents to the Assignment Agreement as required by Section 12.1(b) of the Credit and Security Agreement. 
  
 [3. Pursuant to such Assignment Agreement, the Assignee is required to
pay $             to Assignor at or before 12:00 noon (local time of Assignor) on the Effective Date in immediately available funds.] 
  

	 Very truly yours,

	
	 WACHOVIA BANK, NATIONAL ASSOCIATION, as
 Agent

		
	 By:
	 	  

	 Title:
	 	  

  

 83 

	 BLUE RIDGE ASSET FUNDING CORPORATION

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

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

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

	ACUITY UNLIMITED, INC.
		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

	
	ACUITY ENTERPRISE, INC.
		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:]****

  
  

 84 

 EXHIBIT VIII 
  
 FORM OF MONTHLY REPORT 
  
 [attached] 
  

 85 

 Acuity Enterprise, Inc. and Acuity Unlimited, Inc. 
 For the Month Ended: 
  
 (Page 1) 
 ($) 
  

	 I . Portfolio Information
	  	 	  	 
				
	 	  	 1.      Beginning of Month Balance: (Total A/R Outstanding)
	  	 	  	               

				
	 	  	 2.      Gross Sales:
	  	 	  	               

				
	 	  	 3.      Deduct:
	  	 	  	 
	 	  	 	  	 a. Total Collections:
	  	 	  	               

	 	  	 	  	 b. Dilution
	  	 	  	               

	 	  	 	  	 c. Write Offs
	  	 	  	               

	 	  	 Add:
	  	 	  	 	  	 
	 	  	 	  	 d. Debits/Chargebacks
	  	 	  	               

	 	  	 	  	 e. Holophane Rollforward Adjustments
	  	 	  	               

					
	 	  	 4.      
	  	 	  	 	  	 
	 	  	 a. Calculated Ending A/R Balance [(1) + (2)—(3 a,b,c)+(3d)]:
	  	 	  	               

	 	  	 b. Reported Ending A/R Balance
	  	 	  	               

	 	  	 c. Difference (If any)
	  	 	  	               

				
	 	  	 5.      Deduct:
	  	 	  	 
					
	 	  	 	  	 a. Defaulted Receivables
	  	               
	  	 
					
	 	  	 	  	 b. Government
	  	               
	  	 
					
	 	  	 	  	 c. Foreign
	  	               
	  	 
					
	 	  	 	  	 d. Contra or intercompany
	  	               
	  	 
					
	 	  	 	  	 e. Bankrupt
	  	               
	  	 
					
	 	  	 	  	 f. Ineligible Terms > 60 days (5% carve-out of 90 terms)
	  	               
	  	 
					
	 	  	 	  	 g. Other Ineligibles (Cross - aged, Installment, unapplied credits)
	  	               
	  	 
					
	 	  	 	  	 H. Total Ineligibles
	  	               
	  	 
	 	  	 6.      Eligible Receivables [(4 b)—(5.h.)]:
	  	 	  	               

	 	  	 7.      Deduct: Excess Home Depot Progress Billed Receivables
	  	 	  	               

	 	  	 8.      Deduct: Excess Concentration:
	  	 	  	               

	 	  	 9.      Net Pool Balance [(6) - (7)]:
	  	 	  	               

  

	10.	  	 Aging
 Schedule:

	  	 Current
 Month

	  	%

	  	 One Month
 Prior

	  	 Two Months
 Prior

	  	 Three Months
 Prior

	 	  	 	  	 	  	 	  	 	  	 	  	 
	 a.
	  	 Current
	  	 	  	 %
	  	 	  	 	  	 
	 b.
	  	 1-30 Days Past Due
	  	 	  	 %
	  	 	  	 	  	 
	 c.
	  	 31-60 Days Past Due
	  	 	  	 %
	  	 	  	 	  	 
	 d.
	  	 61-90 Days Past Due
	  	 	  	 %
	  	 	  	 	  	 
	 e.
	  	 91-120 Days Past Due
	  	 	  	 %
	  	 	  	 	  	 
	 f.
	  	 120+Days Past Due
	  	 	  	 %
	  	 	  	 	  	 
	 g.
	  	 Total:
	  	 	  	 %
	  	 	  	 	  	 

  

 86 

 Acuity Enterprise, Inc. and Acuity Unlimited, Inc. 
 For the Month Ended: 
  
 (Page 2) 
 ($) 
  

	 II. Calculations Reflecting Current Activity
	  	 	  	 
				
	 	  	 11. Proceeds
	  	 	  	                   
	 	  	 12. Required Reserve %
	  	 	  	                   
	 	  	 13. Required Reserve [(8) x (11)]:
	  	 	  	                   
	 	  	 14. F/X reserve for Home Depot Canadian $ billed in the U.S.
	  	 	  	                   
	 	  	 15. Funding Availability- Total
	  	 	  	                   
	 	  	 16. Acuity Lighting Group Funding Availability (Acuity Unlimited)
	  	 	  	                   
	 	  	 17. Acuity Specialty Products Funding Availability (Acuity Enterprise)
	  	 	  	                   
			
	 III. Compliance
	  	 	  	 
				
	 	  	 18. Asset Interest [(10) + (12) / (8)] < 100% :
	  	In Compliance	  	                   
				
	 	  	 19. 3M Avg. Delinquency Ratio
	  	In Compliance	  	                   
				
	 	  	 20. 3M Avg. Default Ratio
	  	In Compliance	  	                   
				
	 	  	 21. 3M Avg. Dilution Ratio
	  	In Compliance	  	                   
				
	 	  	 22. Facility Limit [(12)<= $150,000,000
	  	In Compliance	  	 

  

 87 

 Acuity Enterprise, Inc. and Acuity Unlimited, Inc. 
 For the Month Ended: 
  
 (Page 3) 
 ($) 
  
 IV. Excess Concentration: (Calculation) 
  
 Eligible Receivables 
  

	Allowable Percentage

	 	 	 Max. Allowable B

	  	Credit Rating

	5.0	%	 	 	  	NR/NR
	5.0	%	 	 	  	A3/P3
	6.0	%	 	 	  	A1/P2
	8.0	%	 	 	  	A1/P1
	10.0	%	 	 	  	A1+/P1

  

	 	  	 Largest
 Obligors

	  	 Short-Term
 Debt Rating

	  	 Allowable
 Percentage

	  	 Total
 Receivables

	  	 Allowable
 Receivables

	  	 Excess
 Receivables

	 1
	  	 	  	 	  	 	  	 	  	 	  	 
	 	

	 2
	  	 	  	 	  	 	  	 	  	 	  	 
	 	

	 3
	  	 	  	 	  	 	  	 	  	 	  	 
	 	

	 4
	  	 	  	 	  	 	  	 	  	 	  	 
	 	

	 5
	  	 	  	 	  	 	  	 	  	 	  	 
	 	

	 6
	  	 	  	 	  	 	  	 	  	 	  	 
	 	

	 7
	  	 	  	 	  	 	  	 	  	 	  	 
	 	

	 8
	  	 	  	 	  	 	  	 	  	 	  	 
	 	

	 9
	  	 	  	 	  	 	  	 	  	 	  	 
	 	

	 10
	  	 	  	 	  	 	  	 	  	 	  	 
	 	

	 	  	 	  	 	  	 	  	 	  	 	  	 
	 	 	 	 	 	 	 	

	 	  	 	  	 	  	 	  	 	  	 	  	 
	 	 	 	 	 	 	 	

  
 The undersigned hereby represents and
warrants that the foregoing is a true and accurate accounting in all material respects with respect to outstanding receivables as of XXX (the “Report Date”) in accordance with the Credit and Security Agreement dated September 2, 2003 (it
being understood that any error, inaccuracy or omission in the foregoing that, when corrected, reveals that the Aggregate Principal exceeded the Borrowing Limit as of the Report Date shall constitute a material error or inaccuracy herein) and that
all representations and warranties related to such Agreement are restated and reaffirmed. 
  

	 Signed:
	 	  

	  	 	  	 Date:
	 	  

	 Title:
	 	  

	  	 	  	 	 	 

  

 88 

 EXHIBIT IX 
  

[FORM OF] PERFORMANCE UNDERTAKING 
  
 THIS PERFORMANCE UNDERTAKING (this “Undertaking”), dated as of September 2, 2003, is executed by Acuity Brands, Inc., a
Delaware corporation (the “Performance Guarantor”) in favor of [Acuity Enterprise, Inc./Acuity Unlimited, Inc.], a Delaware corporation (together with its successors and assigns,
“Recipient”). 
  
 RECITALS

  

	1.	[Acuity Specialty Products Group, Inc./ Acuity Lighting Group, Inc.], a Delaware corporation (“Originator”), and Recipient are parties
to [a/an Amended and Restated] Receivables Sale and Contribution Agreement, dated as of September 2, 2003 (as amended, restated or otherwise modified from time to time, the “Sale and Contribution
Agreement”), pursuant to which Originator, subject to the terms and conditions contained therein, is selling its right, title and interest in its accounts receivable and certain related assets to Recipient. 

  

	2.	Recipient intends to finance its purchases under the Sale and Contribution Agreement in part by borrowing under a Credit and Security Agreement dated as of September 2, 2003 (as the
same may from time to time hereafter be amended, supplemented, restated or otherwise modified, the “Credit and Security Agreement” and, together with the Sale and Contribution Agreement, the
“Agreements”) among Recipient, as Borrower, Acuity Specialty Products Group, Inc. and Acuity Lighting Group, Inc., as initial servicers (in such capacity, collectively, the “Initial Servicers”), Blue
Ridge Asset Funding Corporation (“Blue Ridge”), the banks and other financial institutions from time to time party thereto as “Liquidity Banks” (together with Blue Ridge, the “Lenders”) and
Wachovia Bank, National Association or any successor agent appointed pursuant to the terms of the Credit and Security Agreement, as agent for the Lenders (in such capacity, the “Agent”). 

  

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

  

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

  

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

  

 89 

 AGREEMENT 
  

NOW, THEREFORE, Performance Guarantor hereby agrees as follows: 
  
 Section 1. Definitions. Capitalized terms used herein and not defined herein shall the respective meanings assigned
thereto in the Agreements. In addition: 
  
 “Guaranteed Obligations” means, collectively, (a) all covenants, agreements, terms, conditions and indemnities to be performed and observed by Originator as seller and contributor under the Sale and Contribution
Agreement, including, without limitation, the due and punctual payment of all sums which are or may become due and owing by Originator in its capacity as a seller or seller and contributor under the Sale and Contribution Agreement, whether for fees,
expenses (including actual and reasonable counsel fees), indemnified amounts or otherwise, whether upon any termination or for any other reason, and (b) all Servicing-Related Obligations. 
  
 “Servicing Related Obligations”
means all covenants, agreements, terms, conditions and indemnities to be performed and observed by either or both of the Initial Servicers in their capacities as such under the Credit and Security Agreement. 
  
 Section 2. Guaranty of Performance of Guaranteed Obligations.
Performance Guarantor hereby guarantees to Recipient, the full and punctual payment and performance by Originator and the Initial Servicers of their respective Guaranteed Obligations. This Undertaking is an absolute, unconditional and continuing
guaranty of the full and punctual performance of all Guaranteed Obligations and is in no way conditioned upon any requirement that Recipient first attempt to collect any amounts owing by Originator or either Initial Servicer, as the case may be, to
Recipient, the Agent or Blue Ridge from any other Person or resort to any collateral security, any balance of any deposit account or credit on the books of Recipient, the Agent or Blue Ridge in favor of Originator, either of the Initial Servicers or
any other Person or other means of obtaining payment. Should Originator or either of the Initial Servicers default in the payment or performance of any of its Guaranteed Obligations, Recipient (or its assigns) may cause the immediate performance by
Performance Guarantor of such Guaranteed Obligations and cause any such payment Guaranteed Obligations to become forthwith due and payable to Recipient (or its assigns), without demand or notice of any nature (other than as expressly provided
herein), all of which are hereby expressly waived by Performance Guarantor. Notwithstanding the foregoing, this Undertaking is not a guarantee of the payment or collection of any of the Receivables or the Loans, and Performance Guarantor shall not
be responsible for any Guaranteed Obligations to the extent the failure to perform such Guaranteed Obligations by Originator or either of the Initial Servicers results from Receivables being uncollectible on account of the insolvency, bankruptcy or
lack of creditworthiness of the related Obligor; provided that nothing herein shall relieve Originator or either of the Initial Servicers from performing in full its Guaranteed Obligations under the Agreements or Performance Guarantor
of its undertaking hereunder with respect to the full performance of such duties. 
  
 Section 3. Performance Guarantor’s Further Agreements to Pay. Performance Guarantor further agrees, as the principal obligor and not as a guarantor only, to pay to Recipient (and its assigns), forthwith
upon demand in funds immediately available to Recipient, all reasonable costs and expenses (including court costs and reasonable legal expenses) actually 

  

 90 

 
incurred or expended by Recipient in connection with enforcement of the Guaranteed Obligations and/or this Undertaking, together with interest on amounts not
paid by Performance Guarantor under this Undertaking within two Business Days after such amounts become due until payment, at a rate of interest (computed for the actual number of days elapsed based on a 360 day year) equal to the Prime Rate plus 2%
per annum, such rate of interest changing when and as the Prime Rate changes. 
  
 Section 4. Waivers by Performance Guarantor. Performance Guarantor waives notice of acceptance of this Undertaking, notice of any action taken or omitted by Recipient (or its assigns) in reliance on this
Undertaking, and any requirement that Recipient (or its assigns) be diligent or prompt in making demands under this Undertaking, giving notice of any Termination Event, Amortization Event, other default or omission by Originator or either of the
Initial Servicers or asserting any other rights of Recipient under this Undertaking. Performance Guarantor warrants that it has adequate means to obtain from Originator and each of the Initial Servicers, on a continuing basis, information concerning
the financial condition of such Person, and that it is not relying on Recipient to provide such information, now or in the future. Performance Guarantor also irrevocably waives all defenses (i) that at any time may be available in respect of the
Guaranteed Obligations by virtue of any statute of limitations, valuation, stay, moratorium law or other similar law now or hereafter in effect or (ii) that arise under the law of suretyship, including impairment of collateral. Recipient (and its
assigns) shall be at liberty, without giving notice to or obtaining the assent of Performance Guarantor and without relieving Performance Guarantor of any liability under this Undertaking, to deal with Originator and each of the Initial Servicers
and with each other party who now is or after the date hereof becomes liable in any manner for any of the Guaranteed Obligations, in such manner as Recipient in its sole discretion deems fit, and to this end Performance Guarantor agrees that the
validity and enforceability of this Undertaking, including without limitation, the provisions of Section 7 hereof, shall not be impaired or affected by any of the following: (a) any extension, modification or renewal of, or indulgence with respect
to, or substitutions for, the Guaranteed Obligations or any part thereof or any agreement relating thereto at any time; (b) any failure or omission to enforce any right, power or remedy with respect to the Guaranteed Obligations or any part thereof
or any agreement relating thereto, or any collateral securing the Guaranteed Obligations or any part thereof; (c) any waiver of any right, power or remedy or of any Termination Event, Amortization Event, or default with respect to the Guaranteed
Obligations or any part thereof or any agreement relating thereto; (d) any release, surrender, compromise, settlement, waiver, subordination or modification, with or without consideration, of any other obligation of any person or entity with respect
to the Guaranteed Obligations or any part thereof; (e) the enforceability or validity of the Guaranteed Obligations or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto or with respect to the
Guaranteed Obligations or any part thereof; (f) the application of payments received from any source to the payment of any payment obligations of Originator or either of the Initial Servicers or any part thereof or amounts which are not covered by
this Undertaking even though Recipient (or its assigns) might lawfully have elected to apply such payments to any part or all of the payment obligations of such Person or to amounts which are not covered by this Undertaking; (g) the existence of any
claim, setoff or other rights which Performance Guarantor may have at any time against Originator or either of the Initial Servicers in connection herewith or any unrelated transaction; (h) any assignment or transfer of the Guaranteed Obligations or
any part thereof; or (i) any failure on the part of Originator or either of the Initial Servicers to perform or comply 

  

 91 

 
with any term of the Agreements or any other document executed in connection therewith or delivered thereunder, all whether or not Performance Guarantor
shall have had notice or knowledge of any act or omission referred to in the foregoing clauses (a) through (i) of this Section 4. 
  
 Section 5. Unenforceability of Guaranteed Obligations Against Originator and Initial Servicers. Notwithstanding (a) any change of ownership of
Performance Guarantor, Originator or either of the Initial Servicers or the insolvency, bankruptcy or any other change in the legal status of Originator or either of the Initial Servicers; (b) the change in or the imposition of any law, decree,
regulation or other governmental act which does or might impair, delay or in any way affect the validity, enforceability or the payment when due of the Guaranteed Obligations (unless the same shall be applicable to the Performance Guarantor); (c)
the failure of Originator, either of the Initial Servicers or Performance Guarantor to maintain in full force, validity or effect or to obtain or renew when required all governmental and other approvals, licenses or consents required in connection
with the Guaranteed Obligations or this Undertaking, or to take any other action required in connection with the performance of all obligations pursuant to the Guaranteed Obligations or this Undertaking; or (d) if any of the moneys included in the
Guaranteed Obligations have become irrecoverable from Originator or either of the Initial Servicers for any other reason other than final payment in full of the payment obligations in accordance with their terms or lawful setoff of claims against
the Purchasers, this Undertaking shall nevertheless be binding on Performance Guarantor. This Undertaking shall be in addition to any other guaranty or other security for the Guaranteed Obligations, and it shall not be rendered unenforceable by the
invalidity of any such other guaranty or security. In the event that acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of Originator or either of the Initial
Servicers or for any other reason with respect to Originator or either of the Initial Servicers, all such amounts then due and owing with respect to the Guaranteed Obligations under the terms of the Agreements, or any other agreement evidencing,
securing or otherwise executed in connection with the Guaranteed Obligations, shall be immediately due and payable by Performance Guarantor. 
  
 Section 6. Representations and Warranties. Performance Guarantor hereby represents and warrants to Recipient and its assigns that (a) Performance
Guarantor is a corporation duly organized, validly existing and in good standing under the laws of Delaware and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business
as now conducted, and (b) this Undertaking has been duly executed and delivered by Performance Guarantor and constitutes its legally valid and binding obligation, enforceable against Performance Guarantor in accordance with its terms,
provided that the enforceability hereof is subject to general principles of equity and to bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles.

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

  

 92 

 
against Originator or either of the Initial Servicers and all contractual, statutory or legal or equitable rights of contribution, reimbursement,
indemnification and similar rights and “claims” (as that term is defined in the United States Bankruptcy Code) which Performance Guarantor might now have or hereafter acquire against Originator or either of the Initial Servicers that arise
from the existence or performance of Performance Guarantor’s obligations hereunder, (c) will not claim any setoff, recoupment or counterclaim against Originator or either of the Initial Servicers in respect of any liability of Performance
Guarantor to such Originator and (d) waives any benefit of and any right to participate in any collateral security which may be held by Beneficiaries, the Agent or Blue Ridge. 
  
 Section 8. Termination of Performance Undertaking. Performance Guarantor’s obligations hereunder shall continue
in full force and effect until all Obligations are finally paid and satisfied in full and the Credit and Security Agreement is terminated, provided that this Undertaking shall continue to be effective or shall be reinstated, as the
case may be, if at any time payment or other satisfaction of any of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the bankruptcy, insolvency, or reorganization of Originator or either of the Initial Servicers
or otherwise, as though such payment had not been made or other satisfaction occurred, whether or not Recipient (or its assigns) is in possession of this Undertaking. No invalidity, irregularity or unenforceability by reason of the federal
bankruptcy code or any insolvency or other similar law, or any law or order of any government or agency thereof purporting to reduce, amend or otherwise affect the Guaranteed Obligations shall impair, affect, be a defense to or claim against the
obligations of Performance Guarantor under this Undertaking. 
  
 Section 9. Effect of Bankruptcy. This Performance Undertaking shall survive the insolvency of Originator or either of the Initial Servicers and the commencement of any case or proceeding by or against Originator or either of the
Initial Servicers under the federal bankruptcy code or other federal, state or other applicable bankruptcy, insolvency or reorganization statutes. No automatic stay under the federal bankruptcy code with respect to Originator or either of the
Initial Servicers or other federal, state or other applicable bankruptcy, insolvency or reorganization statutes to which Originator or either of the Initial Servicers is subject shall postpone the obligations of Performance Guarantor under this
Undertaking. 
  
 Section 10. Setoff. Regardless of the
other means of obtaining payment of any of the Guaranteed Obligations, Recipient (and its assigns) is hereby authorized at any time and from time to time during the existence of any Amortization Event, without notice to Performance Guarantor (any
such notice being expressly waived by Performance Guarantor) and to the fullest extent permitted by law, to set off and apply any deposits and other sums against the obligations of Performance Guarantor under this Undertaking then past due for more
than two Business Days. 
  
 Section 11. Taxes. All payments
to be made by Performance Guarantor hereunder shall be made free and clear of any deduction or withholding (except for taxes excluded under Section 10.1 of the Credit and Security Agreement). If Performance Guarantor is required by law to make any
deduction or withholding on account of any Taxes or otherwise from any such payment (except for taxes excluded under Section 10.1 of the Credit and Security Agreement), the sum due from it in respect of such payment shall be increased to the extent

  

 93 

 
necessary to ensure that, after the making of such deduction or withholding, Recipient receive a net sum equal to the sum which they would have received had
no deduction or withholding been made. 
  
 Section 12. Further
Assurances. Performance Guarantor agrees that it will from time to time, at the request of Recipient (or its assigns), provide information relating to the business and affairs of Performance Guarantor as Recipient may reasonably request.

  
 Section 13. Successors and Assigns. This Performance
Undertaking shall be binding upon Performance Guarantor, its successors and permitted assigns, and shall inure to the benefit of and be enforceable by Recipient and its successors and assigns. Without limiting the generality of the foregoing
sentence, Recipient may pledge or assign, and hereby notifies Performance Guarantor that it has pledged and assigned, this Performance Undertaking to the Agent, for the benefit of the Lenders, as security for the Obligations, and Performance
Guarantor hereby acknowledges that the Agent may enforce this Performance Undertaking, on behalf of Recipient and the Lenders, with the same force and effect as though the Agent were the Recipient hereunder. Subject to Section 7.1(c)(ii) of the
Credit and Security Agreement, Performance Guarantor may not assign or transfer any of its obligations hereunder without the prior written consent of each of Recipient and the Agent. 
  
 Section 14. Amendments and Waivers. No amendment or waiver of any provision of this Undertaking nor consent to any
departure by Performance Guarantor therefrom shall be effective unless the same shall be in writing and signed by Recipient, the Agent and Performance Guarantor. No failure on the part of Recipient to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. 
  
 Section 15. Notices. All notices and other communications provided for
hereunder shall be made in writing and shall be addressed as follows: if to Performance Guarantor, at the address set forth beneath its signature hereto, and if to Recipient, at the addresses set forth beneath its signature to the Credit and
Security Agreement, or at such other addresses as each of Performance Guarantor or any Recipient may designate in writing to the other. Each such notice or other communication shall be effective (a) if given by telecopy, upon the receipt thereof,
(b) if given by mail, five (5) Business Days after the time such communication is deposited in the mail with first class postage prepaid or (c) if given by any other means, when received at the address specified in this Section 15. 
  
 Section 16. GOVERNING LAW. THIS UNDERTAKING SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF GEORGIA. 
  
 Section 17. CONSENT TO JURISDICTION. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW: (A) EACH OF PERFORMANCE GUARANTOR AND RECIPIENT HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR GEORGIA STATE COURT SITTING IN FULTON COUNTY, GEORGIA IN ANY ACTION OR PROCEEDING 

  

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ARISING OUT OF OR RELATING TO THIS UNDERTAKING, THE AGREEMENTS OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH OR DELIVERED THEREUNDER AND (B) EACH OF
PERFORMANCE GUARANTOR AND RECIPIENT HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. 
  
 Section 18. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF PERFORMANCE GUARANTOR AND RECIPIENT HEREBY WAIVES
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS UNDERTAKING, THE AGREEMENTS OR ANY OTHER DOCUMENT
EXECUTED IN CONNECTION THEREWITH OR DELIVERED THEREUNDER OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER 
  
 Section 19. Bankruptcy Petition. Performance Guarantor hereby covenants and agrees that, prior to the date that is one year and one day after the
payment in full of all outstanding senior indebtedness owed by Blue Ridge, it will not institute against, or join any other Person in instituting against, Blue Ridge any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States or any state of the United States. 
  
 Section 20. Miscellaneous. This Undertaking constitutes the entire agreement of Performance Guarantor with respect to the matters set forth herein.
The rights and remedies herein provided are cumulative and not exclusive of any remedies provided by law or any other agreement, and this Undertaking shall be in addition to any other guaranty of or collateral security for any of the Guaranteed
Obligations. The provisions of this Undertaking are severable, and in any action or proceeding involving any state corporate law, or any state or federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors
generally, if the obligations of Performance Guarantor hereunder would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of Performance Guarantor’s liability under this Undertaking, then,
notwithstanding any other provision of this Undertaking to the contrary, the amount of such liability shall, without any further action by Performance Guarantor or Recipient, be automatically limited and reduced to the highest amount that is valid
and enforceable as determined in such action or proceeding. Any provisions of this Undertaking which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Unless otherwise
specified, references herein to “Section” shall mean a reference to sections of this Undertaking. 
  

 95 

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

	 ACUITY BRANDS, INC., A DELAWARE
 CORPORATION

		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

  

	 Address for Notices:

	
	 1170 Peachtree Street, Suite 2400

	 Atlanta, Georgia 30309

	
	 Attention: Treasurer

		
	 Fax No.:
	 	 (404) 853-1430

	 Telephone No.:
	 	 (404) 853-1423

  

 96 

 SCHEDULE A 
  

COMMITMENTS OF LIQUIDITY BANKS 
  

	 LIQUIDITY BANK

	 	 COMMITMENT

	 Wachovia Bank, National Association
	 	$150,000,000

  

 97 

 SCHEDULE B 
  

DOCUMENTS TO BE DELIVERED TO THE AGENT 
  
 ON OR PRIOR TO THE INITIAL PURCHASE 
  

	I.	Parties. 

  

	          Blue Ridge =	  	Blue Ridge Asset Funding Corporation
	          Wachovia =	  	Wachovia Bank, National Association
	          ABI =	  	Acuity Brands, Inc.
	          ALG =	  	Acuity Lighting Group, Inc.
	          ASP =	  	Acuity Specialty Products Group, Inc.
	          AUI =	  	Acuity Unlimited, Inc. (f/k/a L&C Funding, Inc.)
	          AEI =	  	Acuity Enterprise, Inc.

  

	II.	Anticipated Closing Documents. 

  

	1.	Amended and Restated Receivables Sale Agreement between ALG and AUI 

  

	2.	[New] Receivables Sale Agreement between ASP and AEI. 

  

	3.	Termination Agreement with respect to the existing First-Step Agreement between ALG and ASP. 

  

	4.	Credit and Security Agreement among AUI, AEI, ALG and ASP, as Servicers, Blue Ridge and Wachovia. 

  

	5.	Performance Undertaking by ABI in favor of AUI and AEI. 

  

	6.	Fee Letter among Agent, AEI and AUI. 

  

	7.	A certificate of the [Assistant] Secretary of each of ABI, ALG, ASP, AUI and AEI (collectively, the “Companies”) certifying: 

  
 (a) A copy of the Resolutions of its Board of Directors
authorizing its execution, delivery and performance of the Transaction Documents to which it is a party; 
  
 (b) A copy of its certificate/articles of incorporation (also certified by the Secretary of State of its State of Incorporation on or
within thirty (30) days prior to closing)[, as amended and/or restated through the closing date]; 
  
 (c) A copy of its by-laws, as amended)[, as amended and/or restated through the closing date]; 
  
 (d) A copy of a good standing certificate issued by the
Secretaries of State of (i) its state of incorporation, and (ii), if different, that state where it maintains its principal place of business; and 
  

 i 

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

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

  

	 	•	 	Debtor name: Acuity Lighting Group, Inc. 

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

	 	•	 	Debtor name: Acuity Specialty Products Group, Inc. 

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

	 	•	 	Debtor name: L&C Funding, Inc. 

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

	 	•	 	Debtor name: Acuity Unlimited, Inc. 

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

	 	•	 	Debtor name: Acuity Enterprise, Inc. 

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

	9.	UCC Financing Statements: (a) Amendment to existing ALG financing statements; (b) Delaware UCC-1 for ASP; (c) Delaware UCC-1s for AEI and AUI 

  

	10.	UCC Termination Statement for existing filing between ASP and ALG. 

  

 ii 

	11.	Amended and Restated Collection Account Agreements for each Lock-Box and Collection Account: 

  

	 	•	Bank of America 

  

	 	•	Mellon 

  

	 	•	Wachovia. 

  

	12.	A favorable opinion of inhouse counsel to ABI as to certain matters. 

  

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

  

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

  

	15.	A favorable “true sale” opinion of Kilpatrick Stockton. 

  

	16.	A favorable “nonconsolidation” opinion of Kilpatrick Stockton . 

  

	17.	A Monthly Report as at July 31, 2003 

  

	18.	Liquidity Agreement by and between Blue Ridge and Wachovia. 

  

 iii 

 TABLE OF CONTENTS 
  

	 	  	Page

	 ARTICLE I. THE ADVANCES
	  	1
			
	 Section 1.1
	  	Credit Facility.	  	1
	 Section 1.2
	  	Increases	  	2
	 Section 1.3
	  	Decreases	  	2
	 Section 1.4
	  	Deemed Collections; Borrowing Base.	  	3
	 Section 1.5
	  	Payment Requirements	  	4
	 Section 1.6
	  	Ratable Loans; Funding Mechanics; Liquidity Fundings.	  	4
		
	 ARTICLE II. PAYMENTS AND COLLECTIONS
	  	5
			
	 Section 2.1
	  	Payments	  	5
	 Section 2.2
	  	Collections Prior to Amortization; Repayment of Certain Demand Advances	  	5
	 Section 2.3
	  	Repayment of Demand Advances on the Amortization Date; Collections Following Amortization.	  	6
	 Section 2.4
	  	Payment Rescission	  	7
		
	 ARTICLE III. BLUE RIDGE FUNDING
	  	7
			
	 Section 3.1
	  	CP Costs	  	7
	 Section 3.2
	  	Calculation of CP Costs	  	7
	 Section 3.3
	  	CP Costs Payments	  	7
	 Section 3.4
	  	Default Rate	  	7
		
	 ARTICLE IV. LIQUIDITY BANK FUNDING
	  	8
			
	 Section 4.1
	  	Liquidity Bank Funding	  	8
	 Section 4.2
	  	Interest Payments	  	8
	 Section 4.3
	  	Selection and Continuation of Interest Periods.	  	8
	 Section 4.4
	  	Liquidity Bank Interest Rates	  	8
	 Section 4.5
	  	Suspension of the LIBO Rate	  	8
	 Section 4.6
	  	Default Rate	  	9
		
	 ARTICLE V. REPRESENTATIONS AND WARRANTIES
	  	9
			
	 Section 5.1
	  	Representations and Warranties of the Loan Parties	  	9
	 Section 5.2
	  	Liquidity Bank Representations and Warranties	  	13
		
	 ARTICLE VI. CONDITIONS OF ADVANCES
	  	13
			
	 Section 6.1
	  	Conditions Precedent to Initial Advance	  	13
	 Section 6.2
	  	Conditions Precedent to All Advances	  	13
		
	 ARTICLE VII. COVENANTS
	  	14
			
	 Section 7.1
	  	Affirmative Covenants of the Loan Parties	  	14
	 Section 7.2
	  	Negative Covenants of the Loan Parties	  	22
		
	 ARTICLE VIII. ADMINISTRATION AND COLLECTION
	  	23
			
	 Section 8.1
	  	Designation of Servicers.	  	23
	 Section 8.2
	  	Duties of Servicers.	  	24
	 Section 8.3
	  	Collection Notices	  	25
	 Section 8.4
	  	Responsibilities of Borrowers	  	26
	 Section 8.5
	  	Monthly Reports	  	26

  

 iv 

	 Section 8.6
	  	Servicing Fee	  	26
		
	 ARTICLE IX. AMORTIZATION EVENTS
	  	26
			
	 Section 9.1
	  	Amortization Events	  	26
	 Section 9.2
	  	Remedies	  	28
		
	 ARTICLE X. INDEMNIFICATION
	  	29
			
	 Section 10.1
	  	Indemnities by the Loan Parties	  	29
	 Section 10.2
	  	Increased Cost and Reduced Return	  	31
	 Section 10.3
	  	Other Costs and Expenses	  	32
	 Section 10.4
	  	Allocations	  	32
		
	 ARTICLE XI. THE AGENT
	  	33
			
	 Section 11.1
	  	Authorization and Action	  	33
	 Section 11.2
	  	Delegation of Duties	  	33
	 Section 11.3
	  	Exculpatory Provisions	  	33
	 Section 11.4
	  	Reliance by Agent	  	34
	 Section 11.5
	  	Non-Reliance on Agent and Other Lenders	  	34
	 Section 11.6
	  	Reimbursement and Indemnification	  	34
	 Section 11.7
	  	Agent in its Individual Capacity	  	34
	 Section 11.8
	  	Successor Agent	  	35
		
	 ARTICLE XII. ASSIGNMENTS; PARTICIPATIONS
	  	35
			
	 Section 12.1
	  	Assignments.	  	35
	 Section 12.2
	  	Participations	  	36
		
	 ARTICLE XIII. SECURITY INTEREST
	  	36
			
	 Section 13.1
	  	Grant of Security Interest	  	36
	 Section 13.2
	  	Termination after Final Payout Date	  	37
		
	 ARTICLE XIV. MISCELLANEOUS
	  	37
			
	 Section 14.1
	  	Waivers and Amendments.	  	37
	 Section 14.2
	  	Notices	  	38
	 Section 14.3
	  	Ratable Payments	  	38
	 Section 14.4
	  	Protection of Agent’s Security Interest.	  	38
	 Section 14.5
	  	Confidentiality.	  	39
	 Section 14.6
	  	Bankruptcy Petition	  	40
	 Section 14.7
	  	Limitation of Liability	  	40
	 Section 14.8
	  	CHOICE OF LAW	  	40
	 Section 14.9
	  	CONSENT TO JURISDICTION	  	40
	 Section 14.10
	  	WAIVER OF JURY TRIAL	  	41
	 Section 14.11
	  	Integration; Binding Effect; Survival of Terms.	  	41
	 Section 14.12
	  	Counterparts; Severability; Section References	  	41
	 Section 14.13
	  	Wachovia Roles	  	42
	 Section 14.14
	  	Interest	  	42
	 Section 14.15
	  	Source of Funds — ERISA	  	43

  

 v 

 EXHIBITS AND SCHEDULES 
  

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

  

 viReceivables Sale and Contribution  Agreement

 Exhibit 10(i)A(20) 
  
 RECEIVABLES SALE AND CONTRIBUTION AGREEMENT 
  
 DATED AS OF SEPTEMBER 2, 2003 
  

BETWEEN 
  
 ACUITY SPECIALTY PRODUCTS GROUP, INC., 
 AS SELLER, 
  
 AND 
  
 ACUITY ENTERPRISE, INC.,

 AS BUYER 

	 ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE
	  	2
			
	 Section 1.1
	  	 Initial Contribution of Receivables
	  	2
			
	 Section 1.2
	  	 Purchases of Receivables
	  	2
			
	 Section 1.3
	  	 Payment for the Purchases
	  	3
			
	 Section 1.4
	  	 Purchase Price Credit Adjustments
	  	3
			
	 Section 1.5
	  	 Payments and Computations, Etc.
	  	4
			
	 Section 1.6
	  	 Transfer of Records
	  	4
			
	 Section 1.7
	  	 Characterization
	  	5
		
	 ARTICLE II REPRESENTATIONS AND WARRANTIES
	  	5
			
	 Section 2.1
	  	   Representations and Warranties of ASP
	  	5
	 (a)    Existence and Power
	  	5
	 (b)    Power and Authority; Due Authorization, Execution and Delivery
	  	5
	 (c)    No Bulk Sale
	  	6
	 (d)    Governmental Authorization
	  	6
	 (e)    Actions, Suits
	  	6
	 (f)     Binding Effect
	  	6
	 (g)    Accuracy of Information
	  	6
	 (h)    Use of Proceeds
	  	6
	 (i)     Good Title
	  	6
	 (j)     Perfection
	  	7
	 (k)    Places of Business and Locations of Records
	  	7
	 (l)     Collections
	  	7
	 (m)   Material Adverse Effect
	  	7
	 (n)    Names
	  	7
	 (o)    Not a Holding Company or an Investment Company
	  	7
	 (p)    Compliance with Law
	  	7
	 (q)    Compliance with Credit and Collection Policy
	  	8
	 (r)     Payments to ASP
	  	8
	 (s)    Enforceability of Contracts
	  	8
	 (t)     Accounting
	  	8
	 (u)    Eligible Receivables
	  	8
		
	 ARTICLE III CONDITIONS OF PURCHASES
	  	8
			
	 Section 3.1
	  	 Conditions Precedent to the Initial Purchase
	  	8
			
	 Section 3.2
	  	 Conditions Precedent to All Purchases
	  	9
		
	 ARTICLE IV COVENANTS
	  	9
			
	 Section 4.1
	  	   Affirmative Covenants of ASP
	  	9
	 (a)    Financial Reporting
	  	9

  

 i 

	     (i)
	  	     Annual Reporting
	  	9
	     (ii)
	  	     Quarterly Reporting
	  	9
	     (iii)
	  	     Compliance Certificate
	  	10
	     (iv)
	  	     Shareholders Statements and Reports
	  	10
	     (v)
	  	     S.E.C. Filings
	  	10
	     (vi)
	  	     Copies of Notices
	  	10
	     (vii)
	  	     Change in Credit and Collection Policy
	  	10
	     (viii)
	  	     Other Information
	  	10
	 (b)     Notices
	  	10
	     (i)
	  	     Termination Events or Unmatured Termination Events
	  	10
	     (ii)
	  	     Defaults Under Other Agreements
	  	11
	     (iii)
	  	     ERISA Events
	  	11
	 (c)     Compliance with Laws and Preservation of Existence
	  	11
	 (d)     Audits
	  	11
	 (e)     Keeping and Marking of Records and Books
	  	12
	 (f)      Compliance with Contracts and Credit and Collection Policy
	  	12
	 (g)     [Reserved]
	  	12
	 (h)     Ownership
	  	12
	 (i)      Lenders’ Reliance
	  	13
	 (j)      Collections
	  	13
	 (k)     Taxes
	  	13
			
	 Section 4.2
	  	 Negative Covenants of ASP
	  	13
	 (a)     Name Change, Offices and Records
	  	13
	 (b)     Change in Payment Instructions to Obligors
	  	14
	 (c)     Modifications to Contracts and Credit and Collection Policy
	  	14
	 (d)     Sales, Liens
	  	14
	 (e)     Accounting for Purchases
	  	14
		
	 ARTICLE V TERMINATION EVENTS
	  	15
			
	 Section 5.1
	  	 Termination Events
	  	15
			
	 Section 5.2
	  	 Remedies
	  	16
		
	 ARTICLE VI INDEMNIFICATION
	  	17
			
	 Section 6.1
	  	 Indemnities by ASP
	  	17
			
	 Section 6.2
	  	 Other Costs and Expenses
	  	19
		
	 ARTICLE VII MISCELLANEOUS
	  	19
			
	 Section 7.1
	  	 Waivers and Amendments
	  	19
			
	 Section 7.2
	  	 Notices
	  	19
			
	 Section 7.3
	  	 Protection of Ownership Interests of Buyer
	  	20
			
	 Section 7.4
	  	 Confidentiality of Fee Letter
	  	21
			
	 Section 7.5
	  	 Bankruptcy Petition
	  	21

  

 ii 

	 Section 7.6
	  	 Limitation of Liability
	  	21
			
	 Section 7.7
	  	 CHOICE OF LAW
	  	21
			
	 Section 7.8
	  	 CONSENT TO JURISDICTION
	  	22
			
	 Section 7.9
	  	 WAIVER OF JURY TRIAL
	  	22
			
	 Section 7.10
	  	 Integration; Binding Effect; Survival of Terms
	  	22
			
	 Section 7.11
	  	 Counterparts; Severability; Section References
	  	23

  
 EXHIBITS AND SCHEDULES 
  

	 Exhibit I
	  	-	  	 Definitions

			
	 Exhibit II
	  	-	  	 Principal Place of Business; Location(s) of Records; Federal Employer Identification Number; Other Names

			
	 Exhibit III
	  	-	  	 Lock-Boxes; Collection Accounts; Collection Banks

			
	 Exhibit IV
	  	-	  	 Form of Compliance Certificate

			
	 Exhibit V
	  	-	  	 Copy of Credit and Collection Policy

			
	 Exhibit VI
	  	 	  	 Form of Purchase Report

			
	 Schedule A
	  	 	  	 List of Documents to Be Delivered to Buyer Prior to the Initial Purchase

  
  

 iii 

 RECEIVABLES SALE AND CONTRIBUTION AGREEMENT 
  
 THIS RECEIVABLES SALE AND CONTRIBUTION AGREEMENT, dated as of
September 2, 2003, is by and between Acuity Specialty Products Group, Inc., a Delaware corporation (“ASP”), and Acuity Enterprise, Inc., a Delaware corporation (“Buyer”). Unless defined elsewhere
herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I hereto (or, if not defined in Exhibit I hereto, the meaning assigned to such term in Exhibit I to the Credit and Security
Agreement). 
  
 PRELIMINARY STATEMENTS 

 
 ASP now owns, and from time to time hereafter will own,
Receivables. ASP wishes to contribute certain of such Receivables to Buyer’s capital, together with the Related Security and Collections with respect thereto, and Buyer wishes to accept such contribution. ASP wishes to sell and assign all other
Receivables to Buyer, together with the Related Security and Collections with respect thereto, and Buyer wishes to acquire all such Receivables, Related Security and Collections from ASP. 
  
 ASP and Buyer intend the transactions contemplated hereby to
be true sales or other outright conveyances of the Receivables from ASP to Buyer, providing Buyer with the full benefits of ownership of the Receivables, and ASP and Buyer do not intend these transactions to be, or for any purpose to be
characterized as, loans from Buyer to ASP. 
  
 On
the Effective Date, Buyer will borrow and pledge its assets pursuant to that certain Credit and Security Agreement dated as of September 2, 2003 (as the same may from time to time hereafter be amended, supplemented, restated or otherwise modified,
the “Credit and Security Agreement”) among Buyer and Acuity Unlimited, Inc., a Delaware corporation, as Borrowers, ASP and Acuity Lighting Group, Inc., a Delaware corporation, as initial Servicers, Blue Ridge Asset Funding
Corporation (“Blue Ridge”), the banks and other financial institutions from time to time party thereto as “Liquidity Banks” and Wachovia Bank, National Association or any successor agent appointed pursuant to the
terms of the Credit and Security Agreement, as agent for Blue Ridge and such Liquidity Banks (in such capacity, the “Agent”). 
  
 NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements herein contained and other good and
valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 
  

 1 

 ARTICLE I 
 AMOUNTS AND TERMS OF THE PURCHASE 
  
 Section 1.1 Initial Contribution of Receivables. On the Effective Date, ASP does hereby contribute, assign, transfer, set-over and otherwise convey to Buyer, and Buyer does hereby accept from ASP, all Receivables contributed to ASP
on such date by Parent (collectively, the “Initial Contributed Receivables”), together with all Related Security relating thereto and all Collections thereof. 
  
 Section 1.2 Purchases of Receivables. 
  
 (a) Effective on each day on or after the Initial Cutoff Date on which any Receivable (other than an Initial
Contributed Receivable) is created, in consideration for the Purchase Price and upon the terms and subject to the conditions set forth herein, ASP does hereby sell, assign, transfer, set-over and otherwise convey to Buyer, without recourse (except
to the extent expressly provided herein), and Buyer does hereby purchase from ASP, all of ASP’s right, title and interest in and to all Receivables existing as of such date (other than Initial Contributed Receivables), together with all Related
Security relating thereto and all Collections thereof. 
  
 (b) Buyer shall be obligated to pay the Purchase Price for the Receivables purchased hereunder in accordance with Section 1.3. 
  
 (c) It is the intention of the parties hereto that each Purchase of Receivables made hereunder shall constitute a sale, which sale is
absolute and irrevocable and provides Buyer with the full benefits of ownership of the Receivables. Except for the Purchase Price Credits owed pursuant to Section 1.4, each sale of Receivables hereunder is made without recourse to ASP;
provided, however, that (i) ASP shall be liable to Buyer for all representations, warranties, covenants and indemnities made by ASP pursuant to the terms of the Transaction Documents to which ASP is a party, and (ii) such sale does not
constitute and is not intended to result in an assumption by Buyer (or the Agent, as its assignee) of any obligation of ASP or any other Person arising in connection with the Receivables, the related Contracts and/or other Related Security or any
other obligations of ASP. In view of the intention of the parties hereto that each transfer of Receivables made hereunder shall constitute a sale of such Receivables rather than loans secured thereby, ASP agrees that it will, on or prior to the
Effective Date and in accordance with Section 4.1(e)(ii), mark its master data processing records relating to the Receivables with a legend stating that Buyer has purchased the Receivables, together with the associated Related Security and
Collections, and, to the extent that ASP prepares any stand-alone financial statements, to note in such financial statements that the Receivables, together with the associated Related Security and Collections, have been sold to Buyer. 
  

 2 

 Section 1.3 Payment for the Purchases. 
  
 (a) The Purchase Price for each Purchase of Receivables
shall become owing to ASP on the date each such Receivable comes into existence but shall be paid on the next succeeding Settlement Date in the following manner (except that Buyer may, with respect to any such Purchase Price, offset against such
Purchase Price any amounts owed by ASP to Buyer hereunder and which have become due but remain unpaid) and shall be paid to ASP in the manner provided in the following paragraphs (b) and (c): 
  
 first, by delivery of immediately available
funds, to the extent of funds available to Buyer from its borrowings under the Credit and Security Agreement or other cash on hand; and 
  
 second, unless ASP or Buyer has declared the Termination Date to have occurred pursuant to this Agreement, by accepting a
contribution to its capital in an amount equal to the remaining unpaid balance of such Purchase Price. 
  
 (b) From and after the Termination Date, ASP shall not be obligated to (but may, at its option): (i) sell Receivables to Buyer, or (ii)
contribute Receivables to Buyer’s capital pursuant to clause second of Section 1.3(a) unless ASP reasonably determines that the Purchase Price therefor will be satisfied with funds available to Buyer from sales of interests
in the Receivables pursuant to the Credit and Security Agreement, Collections, other cash on hand or otherwise. 
  
 (c) Although the Purchase Price for each Receivable shall be due and payable in full by Buyer to ASP on the date such Receivable came into
existence, settlement of the Purchase Price between Buyer and ASP shall be effected on at least a monthly basis on Settlement Dates with respect to all Receivables coming into existence during the same month (or shorter period, as applicable) and
based on the information contained in the Purchase Report delivered by ASP for the month then most recently ended. Although settlement shall be effected on Settlement Dates, any contribution of capital by ASP to Buyer made pursuant to clause
second of Section 1.3(a) shall be deemed to have occurred and shall be effective as of the last Business Day of the month to which such settlement relates. 
  
 Section 1.4 Purchase Price Credit Adjustments. If on any day: 
  
 (a) the Outstanding Balance of any Receivable is:

  
 (i) reduced as a result of any defective or
rejected or returned goods or services, any discount or any adjustment or otherwise by an Originator (other than as a result of such Receivable’s being charged off for credit reasons or reduced as a result of cash Collections actually
received), 
  

 3 

 (ii) 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), or 
  
 (b) any of the representations and warranties set forth in Section 2.1(c), (h), (i), (j), (l), (q), (r), (s) or the second sentence
of Section 2.1(p) hereof are not true when made or deemed made with respect to any Receivable, 
  
 then, in such event, Buyer shall be entitled to a credit (each, a “Purchase Price Credit”) against the Purchase Price otherwise payable hereunder equal to (x) in the case of a partial
reduction, the amount of such reduction, and (y) in the case of a total reduction or cancellation, the lesser of the Purchase Price paid for and the Outstanding Balance of such Receivable. If such Purchase Price Credit exceeds the aggregate Purchase
Price payable for Receivables coming into existence on any day, then Buyer shall pay the remaining amount of such Purchase Price Credit in cash immediately. 
  
 Section 1.5 Payments and Computations, Etc. All amounts to be paid or deposited by Buyer hereunder shall be paid or deposited in accordance with
the terms hereof on the day when due in immediately available funds to the account of ASP designated from time to time by ASP or as otherwise directed by ASP. In the event that any payment owed by any Person hereunder becomes due on a day that is
not a Business Day, then such payment shall be made on the next succeeding Business Day. If any Person fails to pay any amount hereunder when due, such Person agrees to pay, on demand, the Default Fee in respect thereof until paid in full;
provided, however, that such Default Fee shall not at any time exceed the maximum rate permitted by applicable law. All computations of interest payable hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first but excluding the last day) elapsed. 
  
 Section 1.6 Transfer of Records. 
  
 (a) In connection with each Purchase of Receivables hereunder, ASP hereby sells, transfers, assigns and otherwise conveys to Buyer all of ASP’s right and title to and interest in the Records relating to all
Receivables sold or contributed hereunder, without the need for any further documentation in connection with such Purchase. In connection with such transfer, ASP hereby grants to each of Buyer, the Agent and each Servicer an irrevocable,
non-exclusive license to use, without royalty or payment of any kind, all software used by ASP to account for the Receivables, to the extent necessary to administer the Receivables, whether such software is owned by ASP or is owned by others and
used by ASP under license agreements with respect thereto, provided that should the consent of any licensor of such software be required for the grant of the license described herein, to be effective, ASP hereby agrees that upon the
request of Buyer (or Buyer’s assignee), ASP will use its reasonable efforts to obtain the consent of such third-party licensor. The license granted hereby shall be irrevocable until the indefeasible payment in full of the Aggregate Unpaids, and
shall terminate on the date this Agreement terminates in accordance with its terms. 
  

 4 

 (b) ASP (i) shall take such action reasonably requested by Buyer and/or the Agent (as
Buyer’s assignee), from time to time hereafter, that may be necessary or appropriate to ensure that Buyer and its assigns under the Credit and Security Agreement have an enforceable ownership interest in the Records relating to the Receivables
purchased from ASP hereunder, and (ii) shall use its reasonable efforts to ensure that Buyer, the Agent and each Servicer each has an enforceable right (whether by license or sublicense or otherwise) to use all of the computer software used to
account for the Receivables and/or to recreate such Records. 
  
 Section 1.7 Characterization. If, notwithstanding the intention of the parties expressed in Section 1.2(b), any sale or contribution by ASP to Buyer of Receivables hereunder shall be characterized as a secured loan and not a
sale or such sale shall for any reason be ineffective or unenforceable, then this Agreement shall be deemed to constitute a security agreement under the UCC and other applicable law. For this purpose and without being in derogation of the
parties’ intention that the sale of Receivables hereunder shall constitute a true sale thereof, ASP hereby grants to Buyer a duly perfected security interest in all of ASP’s right, title and interest in, to and under all Receivables now
existing and hereafter arising, all Collections and Related Security with respect thereto, each Lock-Box and Collection Account, all other rights and payments relating to the Receivables and all proceeds of the foregoing to secure the prompt and
complete payment of a loan deemed to have been made in an amount equal to the Purchase Price of the Receivables together with all other obligations of ASP hereunder, which security interest shall be prior to all other Adverse Claims thereto. During
the existence of any Termination Event, Buyer and the Agent (as its assignee) shall have, in addition to the rights and remedies which 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. 
  
 ARTICLE II 
 REPRESENTATIONS AND WARRANTIES 
  

Section 2.1 Representations and Warranties of ASP. ASP hereby represents and warrants to Buyer on the Effective Date and (except for any
representation or warranty that is limited to a specific date or period) on each date on or prior to the Termination Date on which any Receivable comes into existence that: 
  
 (a) Existence and Power. ASP is a corporation duly organized, validly existing and in good standing under the laws
of Georgia, is duly qualified to transact business in every jurisdiction where, by the nature of its business, such qualification is necessary, and where the failure to qualify would have or could reasonably be expected to cause a Material Adverse
Effect, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted. 
  
 (b) Power and Authority; Due Authorization, Execution and Delivery. The execution, delivery and performance by ASP
of the Transaction Documents (i) are within ASP’s corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) require no action by or in respect of or filing with, any governmental body, agency or official,

  

 5 

 
(iv) do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of ASP
or of any agreement, judgment, injunction, order, decree or other instrument binding upon ASP or any of its Subsidiaries, and (v) do not result in the creation or imposition of any Adverse Claim on any asset of ASP (except as created hereunder).
This Agreement and each other Transaction Document to which ASP is a party has been duly executed and delivered by ASP. 
  
 (c) No Bulk Sale. No transaction contemplated hereby requires compliance with any bulk sales act or similar law. 
  
 (d) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution and delivery by ASP 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. There is no action, suit or proceeding pending, or to the knowledge of ASP overtly threatened in writing, against or affecting
ASP or any of its Subsidiaries before any court or arbitrator or any governmental body, agency or official which has or is likely to have a Material Adverse Effect. 
  
 (f) Binding Effect. This Agreement constitutes and, when executed and delivered in accordance with this Agreement,
each other Transaction Document to which ASP is a party, will constitute valid and binding obligations of ASP enforceable in accordance with their respective terms, provided that the enforceability hereof and thereof is subject in each
case to general principles of equity and to bankruptcy, insolvency and similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles. 
  
 (g) Accuracy of Information. All information heretofore furnished by
ASP to Buyer or the Agent, as its assignee for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by ASP to Buyer (or the Agent, as its assignee) will be, true and
accurate in every material respect or based on reasonable estimates on the date as of which such information is stated or certified. ASP has disclosed to Buyer and the Agent in writing any and all facts known to the Executive Officers which would
have or reasonably would be expected to cause a Material Adverse Effect. 
  
 (h) Use of Proceeds. ASP is not engaged principally, or as one of its important activities, in the business of purchasing or carrying any Margin Stock, and no part of the proceeds of any Purchase will be used
to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock, or be used for any purpose which violates, or which is inconsistent with, the provisions of Regulation T, U or X..

  
 (i) Good Title. Immediately prior to each Purchase
hereunder, ASP (i) is the legal and beneficial owner of the Receivables that are the subject of such Purchase and (ii) is the legal and beneficial owner of the Related Security with respect thereto or possesses a valid and perfected security
interest therein, in each case, free and clear of any Adverse Claim, except for Permitted Encumbrances. There have been duly filed all financing statements or other similar instruments or documents necessary under the UCC (or any comparable
law) of all appropriate jurisdictions to perfect ASP’s ownership interest in each Receivable, its Collections and the Related Security. 
  

 6 

 (j) Perfection. This Agreement, together with the filing of the financing statements contemplated
hereby, is effective to transfer to ASP (and ASP shall acquire from ASP) (i) legal and equitable title to, with the right to sell and encumber each Receivable existing and hereafter arising, together with the Collections with respect thereto, and
(ii) all of ASP’s right, title and interest in the Related Security associated with each Receivable, in each case, free and clear of any Adverse Claim, except for Permitted Encumbrances.  
  
 (k) Places of Business and Locations of Records. The principal places
of business and chief executive office of ASP and the offices where it keeps all of its Records are located at the address(es) listed on Exhibit II or such other locations of which ASP has been notified in accordance with Section
4.2(a) in jurisdictions where all action required by Section 4.2(a) has been taken and completed. ASP’s Federal Employer Identification Number is correctly set forth on Exhibit II. 
  
 (l) Collections. The conditions and requirements set forth in
Section 4.1(j) have at all times been satisfied and duly performed. The names and addresses of all Collection Banks, together with the account numbers of the Collection Accounts at each Collection Bank and the post office box number of each
Lock-Box, are listed on Exhibit III. ASP has not granted any Person, other than Buyer (and the Agent, as its assignee) dominion and control of any Lock-Box or Collection Account, or the right to take dominion and control of any such Lock-Box
or Collection Account at a future time or upon the occurrence of a future event. 
  
 (m) Material Adverse Effect. During the period from August 31, 2000 through the Effective Date, in the good faith judgment of the Executive Officers, no event has occurred that has had or could reasonably be
expected to have a Material Adverse Effect. 
  
 (n)
Names. The name in which ASP has executed this Agreement is identical to the name of ASP as indicated on the public record of its state of organization which shows ASP to have been organized. In the past five (5) years, ASP has not used any
corporate names, trade names or assumed names other than the name in which it has executed this Agreement and as listed on Exhibit II. 
  
 (o) Not a Holding Company or an Investment Company. ASP 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. ASP is not an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, or any successor statute. 
  
 (p) Compliance with Law. ASP has complied in all respects with all applicable laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each Receivable, together with the Contract related thereto, does not contravene any laws, rules or regulations applicable thereto (including,
without 

  

 7 

 
limitation, laws, rules and regulations relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy), and no part of such Contract is in violation of any such law, rule or regulation, except where such contravention or violation could not reasonably be expected to have a Material Adverse Effect.

  
 (q) Compliance with Credit and Collection Policy. ASP
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 change to such Credit and Collection Policy, except such material change as to which Buyer (and
the Agent, as its assignee) has been notified in accordance with Section 4.1(a). 
  
 (r) Payments to ASP. With respect to each Receivable transferred to Buyer hereunder, the Purchase Price received by ASP constitutes reasonably
equivalent value in consideration therefor and such transfer was not made for or on account of an antecedent debt. No transfer by ASP of any Receivable hereunder is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C.
§§ 101 et seq.), as amended. 
  
 (s) Enforceability of Contracts. Each Contract with respect to each Receivable is effective to create, and has created, a legal, valid and binding obligation of the related Obligor to pay the Outstanding Balance of the Receivable
created thereunder and any accrued interest thereon, enforceable against the Obligor in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). 
  
 (t) Accounting. The manner in which ASP accounts for the transactions contemplated by this Agreement does not
jeopardize the characterization of the transactions contemplated herein as being true sales. 
  
 (u) Eligible Receivables. Each Receivable reflected in any Purchase Report as an Eligible Receivable was an Eligible Receivable on the date of its
acquisition by Buyer hereunder. 
  
 ARTICLE III 

CONDITIONS OF PURCHASES 
  
 Section 3.1 Conditions Precedent to the Initial Purchase. The initial Purchase is subject to the conditions precedent that (a) Buyer shall have
received on or before the date of such purchase those documents listed on Schedule A, and (b) all of the conditions to the initial advance under the Credit and Security Agreement shall have been satisfied or waived in accordance with the
terms thereof. 
  

 8 

 Section 3.2 Conditions Precedent to All Purchases. Buyer’s obligation to purchase Receivables
after the Effective Date shall be subject to the further conditions precedent that: (a) the Facility Termination Date shall not have occurred under the Credit and Security Agreement; (b) Buyer (and the Agent, as its assignee) shall have received
such other approvals, opinions or documents as it may reasonably request and (c) on the date such Receivable came into existence, the following statements shall be true (and acceptance of the proceeds of any payment for such Receivable shall be
deemed a representation and warranty by ASP that such statements are then true): 
  
 (i) the representations and warranties set forth in Article II are true and correct in all material respects on and as of the date
such Receivable came into existence as though made on and as of such date; provided that the materiality threshold in the preceding clause shall not be applicable with respect to any representation or warranty which itself contains a
materiality threshold; and 
  
 (ii) no event has
occurred and is continuing that will constitute a Termination Event or an Unmatured Termination Event. 
  
 Notwithstanding the foregoing conditions precedent, upon payment of the Purchase Price for any Receivable (whether by payment of cash or capital contributions), title to such Receivable and the Related Security and
Collections with respect thereto shall vest in Buyer, whether or not the conditions precedent to Buyer’s obligation to purchase such Receivable were in fact satisfied. The failure of ASP to satisfy any of the foregoing conditions precedent,
however, shall give rise to a right of Buyer to rescind the related purchase and direct ASP to pay to Buyer an amount equal to the Purchase Price payment that shall have been made with respect to any Receivables related thereto. 
  
 ARTICLE IV 
  
 COVENANTS 
  
 Section 4.1 Affirmative Covenants of ASP. Until the date on which this Agreement terminates in accordance with its terms, ASP hereby covenants as
set forth below: 
  
 (a) Financial Reporting. ASP will
maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish to Buyer (and the Agent, as its assignee): 
  
 (i) Annual Reporting. As soon as available and in any event within
90 days (or such longer period as may be the subject of an extension granted by the Securities and Exchange Commission) after the end of each Fiscal Year, a consolidated balance sheet of the Parent and its Consolidated Subsidiaries as of the end of
such Fiscal Year and the related consolidated statements of income, stockholders’ equity and cash flows for such Fiscal Year, setting forth in each case in comparative form the figures for the previous fiscal year, all certified by Ernst &
Young, LLP or other independent public accountants of nationally recognized standing, with such certification to be free of exceptions and qualifications not acceptable to Buyer and the Agent. 
  
 (ii) Quarterly Reporting. As soon as available and in any event
within 45 days (or such longer period as may be the subject of an extension granted by the Securities and Exchange Commission) after the end of each of the first 3 Fiscal Quarters of each Fiscal Year, a consolidated balance sheet of the Parent and
its Consolidated Subsidiaries as of the end of such Fiscal Quarter and the related statement of income and statement of cash flows for 

  

 9 

 
the portion of the Fiscal Year ended at the end of such Fiscal Quarter, setting forth in each case in comparative form the figures for the corresponding
Fiscal Quarter and the corresponding portion of the previous Fiscal Year, all certified (subject to normal year-end adjustments) as to fairness of presentation, GAAP and consistency by the chief financial officer or the chief accounting officer of
the Parent. 
  
 (iii) Compliance Certificate. Together
with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit IV signed by the chief financial officer or the chief accounting officer of the Parent and dated the date of such annual financial
statement or such quarterly financial statement, as the case may be. 
  
 (iv) Shareholders Statements and Reports. Promptly upon the mailing thereof to the shareholders of the Parent generally, copies of all financial statements, reports and proxy statements so mailed.

  
 (v) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and annual, quarterly or monthly reports which the Parent shall have filed with the Securities and Exchange
Commission. 
  
 (vi) Copies of Notices. Promptly
upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Person other than Buyer, the Agent or Blue Ridge, copies of the
same. 
  
 (vii) Change in Credit and Collection
Policy. At least thirty (30) days prior to the effectiveness of any material change in or material amendment to the Credit and Collection Policy, a copy of the Credit and Collection Policy then in effect and a notice (A) indicating such proposed
change or amendment, and (B) if such proposed change or amendment would be reasonably likely to adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables, requesting Buyer’s (and the
Agent’s, as Buyer’s assignee) consent thereto. 
  
 (viii) Other Information. Promptly, from time to time, such other information, documents, records or reports relating to the Receivables or the condition or operations, financial or otherwise, of the Parent or ASP as Buyer (or
the Agent, as its assignee) may from time to time reasonably request in order to protect the interests of Buyer (and the Agent, as its assignee) under or as contemplated by this Agreement (except such plans or forecasts which have not been made
available by Parent to its creditors). 
  
 (b) Notices.
ASP will notify Buyer (and the Agent, as its assignee) 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) Termination Events or Unmatured Termination Events. Within one
(1) Business Day after learning thereof by any Responsible Officer, the occurrence of each Termination Event and each Unmatured Termination Event, by a statement of an Authorized Officer of ASP. 
  

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 (ii) Defaults Under Other Agreements. Within one (1) Business Day after learning thereof by any
Responsible Officer, the occurrence of a default or an event of default under any other financing arrangement pursuant to which ASP is a debtor or an obligor and which relates to a Debt in excess of $25,000,000. 
  
 (iii) ERISA Events. If and when any member of the Controlled Group
(i) gives or is required to give notice to the PBGC of any “reportable event” (as defined in Section 4043 of ERISA) with respect to any Plan which could reasonably be expected to constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice
of complete or partial withdrawal liability under Title IV of ERISA, a copy of such notice; or (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate or appoint a trustee to administer any Plan, a copy of such notice;
provided, however, that each of the foregoing notices shall not be required to be given unless the reportable event, withdrawal liability, plan termination or trustee appointment involved could reasonably be expected to give rise to a liability of
more than $1,000,000 on the part of the Parent or any of its Subsidiaries. 
  
 (c) Compliance with Laws and Preservation of Existence. ASP 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. ASP will preserve and maintain its legal existence, rights, franchises and privileges in the jurisdiction of its organization, and
qualify and remain qualified in good standing as a foreign entity in each jurisdiction where its business is conducted, except (i) where the failure to so qualify or remain in good standing could not reasonably be expected to have a Material Adverse
Effect and (ii) ASP may merge or consolidate with any other Person to the extent permitted under Section 7.1(c)(ii) of the Credit and Security Agreement. 
  

(d) Audits. ASP will furnish to Buyer (and the Agent, as its assignee) from time to time such information with respect to it and the
Receivables as Buyer (or the Agent) may reasonably request. ASP will, from time to time during regular business hours as requested by Buyer (the Agent as its assignee), upon not less than 3 Business Days’ prior written notice, permit Buyer (and
the Agent, as its assignee) or their respective agents or representatives, (i) to examine and make copies of and abstracts from all Records in the possession or under the control of ASP relating to the Receivables and the Related Security,
including, without limitation, the related Contracts, and (ii) to visit the offices and properties of ASP for the purpose of examining such materials described in clause (i) above, and to discuss matters relating to ASP’s financial condition or
the Receivables and the Related Security or ASP’s performance under any of the Transaction Documents or ASP’s performance under the Contracts and, in each case, with any of the officers or employees of ASP having knowledge of such matters.
To the extent that Buyer (or the Agent, as its assignee), in the course of any such visit or inspection, obtains possession of any Proprietary Information pertaining to ASP or any of its Affiliates, Buyer (or such assign) shall handle such
information in accordance with the requirements of Section 14.5 of the Credit and Security Agreement. 
  

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 (e) Keeping and Marking of Records and Books. 
  
 (i) ASP will 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). ASP will give Buyer (and the Agent, as its assignee) notice of any material change in the administrative and operating procedures referred to in the previous sentence. 
  
 (ii) ASP will (A) on or prior to the Effective Date, mark its master data processing records and other
books and records relating to the Receivables with a legend, acceptable to Buyer (and the Agent, as its assignee), describing Buyer’s ownership interests in the Receivables and further describing the Receivable Interests of the Agent (on behalf
of the Lenders) under the Credit and Security Agreement and (B) upon the request of Buyer (or the Agent, as its assignee) and when a Termination Event is in existence: (x) mark each Contract with a legend describing Buyer’s ownership interests
in the Receivables and further describing the Receivable Interests of the Agent (on behalf of the Lenders) and (y) deliver to Buyer (or the Agent, as its assignee) all Contracts (including, without limitation, all multiple originals of any such
Contract) relating to the Receivables. 
  
 (f) Compliance with
Contracts and Credit and Collection Policy. ASP will 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) [Reserved]. 
  
 (h) Ownership. ASP will take all necessary action to establish and maintain, irrevocably in Buyer, (i) legal and equitable title to the
Receivables and the Collections and (ii) all of ASP’s right, title and interest in the Related Security associated with the Receivables, in each case, free and clear of any Adverse Claims other than Permitted Encumbrances
(including, without limitation, the filing of all financing statements or other similar instruments or documents necessary under the UCC (or any comparable law) of all appropriate jurisdictions to perfect Buyer’s
interest in such Receivables, Related Security and Collections and such other action to perfect, protect or more fully evidence the interest of Buyer as Buyer (or the Agent, as its assignee) may reasonably request). 
  

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 (i) Lenders’ Reliance. ASP acknowledges that the Agent and the Lenders are entering into the
transactions contemplated by the Credit and Security Agreement in reliance upon Buyer’s identity as a legal entity that is separate from ASP and any Affiliates thereof. Therefore, from and after the date of execution and delivery of this
Agreement, ASP will take all reasonable steps including, without limitation, all steps that Buyer or any assignee of Buyer may from time to time reasonably request to maintain Buyer’s identity as a separate legal entity and to make it manifest
to third parties that Buyer is an entity with assets and liabilities distinct from those of ASP and any Affiliates thereof and not just a division of ASP or any such Affiliate. Without limiting the generality of the foregoing and in addition to the
other covenants set forth herein, ASP (i) will not hold itself out to third parties as liable for the debts of Buyer nor purport to own the Receivables and other assets acquired by Buyer, (ii) will take all other actions necessary on its part to
ensure that Buyer is at all times in compliance with the “separateness covenants” set forth in Section 7.1(i) of the Credit and Security Agreement and (iii) will cause all tax liabilities arising in connection with the transactions
contemplated herein or otherwise to be allocated between ASP and Buyer on an arm’s-length basis and in a manner consistent with the procedures set forth in U.S. Treasury Regulations §§1.1502-33(d) and 1.1552-1. 
  
 (j) Collections. ASP 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 ASP or any Affiliate of ASP, ASP 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, ASP will itself hold or, if applicable, will cause such payments to be held in trust for the exclusive benefit of Buyer and its assigns. ASP will transfer exclusive ownership, dominion and control
of each Lock-Box and Collection Account to Buyer and, will 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 Buyer (and the
Agent, as its assignee) as contemplated by this Agreement and the Credit and Security Agreement. 
  
 (k) Taxes. ASP will file all material tax returns and reports required by law to be filed by it and promptly pay all material taxes and
governmental charges at any time owing, except any such taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside
on its books. ASP will pay when due any taxes payable in connection with the Receivables, exclusive of taxes on or measured by income or gross receipts of Buyer and its assigns. 
  
 Section 4.2 Negative Covenants of ASP. Until the date on which this Agreement terminates in accordance with its
terms, ASP hereby covenants that: 
  
 (a) Name Change,
Offices and Records. ASP will not change its (i) state of organization, (ii) name, (iii) identity or structure (within the meaning of Article 9 of any applicable enactment of the UCC) or relocate its chief executive office at any time while the
location of its chief executive office is relevant to perfection of Buyer’s interest in the Receivables or the associated Related Security and Collections, or any office where Records are 

  

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kept unless it shall have: (i) given Buyer (and the Agent, as its assignee) at least ten (10) days’ prior written notice thereof and (ii) delivered to
Buyer (and the Agent, as its assignee) all financing statements, instruments and other documents reasonably requested by Buyer (and the Agent, as its assignee) in connection with such change or relocation. 
  
 (b) Change in Payment Instructions to Obligors. ASP 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 Buyer (and the Agent, as its assignee) 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 ASP 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. ASP will not make any material change to the Credit and Collection Policy that could adversely affect the collectibility of the Receivables or decrease the credit quality of any newly created Receivables. Except
as otherwise permitted in its capacity as a Servicer pursuant to the Credit and Security Agreement, ASP will not extend, amend or otherwise modify the terms of any Receivable or any Contract related thereto other than in accordance with the Credit
and Collection Policy. 
  
 (d) Sales, Liens. ASP
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 Buyer provided for herein and the Permitted Encumbrances), and ASP will defend the right, title and interest of Buyer in, to and under any of the foregoing property, against all claims of
third parties claiming through or under ASP (other than Permitted Encumbrances). 
  
 (e) Accounting for Purchases. ASP will not, and will not permit any Affiliate to, account for or treat (whether in financial statements or otherwise) the transactions contemplated hereby in any manner other
than the sale of the Receivables and the Related Security by ASP to Buyer or in any other respect account for or treat the transactions contemplated hereby in any manner other than as a sale of the Receivables and the Related Security by ASP to
Buyer except to the extent that such transactions are not recognized on account of consolidated financial reporting in accordance with generally accepted accounting principles. 
  

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 ARTICLE V 
 TERMINATION EVENTS 
  
 Section 5.1
Termination Events. The occurrence of any one or more of the following events shall constitute a Termination Event: 
  
 (a) ASP shall fail to make any payment or deposit required to be made by it under the Transaction Documents when due and, for any such
payment or deposit which is not in respect of principal, such failure continues for two (2) consecutive Business Days. 
  
 (b) ASP shall fail to perform or observe any term, covenant or agreement hereunder (other than as referred to in paragraph (a)) or any
other Transaction Document to which it is a party and such failure shall continue for and such failure shall not have been cured within 30 days after the earlier to occur of (i) written notice thereof has been given to ASP by the Buyer or (ii) an
Executive Officer otherwise becomes aware of any such failure; provided, however, that such cure period shall be extended for a period of time, not to exceed an additional 30 days, reasonably sufficient to permit ASP to cure such failure if
such failure cannot be cured within the initial 30-day period but reasonably could be expected to be capable of cure within such additional 30 days, ASP has commenced efforts to cure such failure during the initial 30-day period and ASP is
diligently pursuing such cure. 
  
 (c) Any
representation, warranty, certification or statement made by ASP in this Agreement, any other Transaction Document or in any other document delivered pursuant hereto or thereto shall prove to have been incorrect in any material respect when made or
deemed made; provided that the materiality threshold in the preceding clause shall not be applicable with respect to any representation or warranty which itself contains a materiality threshold. 
  
 (d) An Event of Bankruptcy shall occur with respect to the
Parent or any of its Material Subsidiaries. 
  
 (e) A Change of Control shall occur. 
  
 (f) One or more judgments or orders for the payment of money in an aggregate amount in excess of 10% of Stockholders’ Equity as of the end of the Fiscal Quarter just ended shall be rendered against the Parent, either Originator or the
Buyer and such judgment or order shall continue unsatisfied and unstayed for a period of 30 days. 
  
 (g) Either of the Originators or any Subsidiary shall fail to make any payment in respect of Debt outstanding in an aggregate amount in
excess of $25,000,000 when due or within any applicable grace period. 
  

 15 

 (h) Any event or condition shall occur which results in the acceleration of the maturity
of Debt outstanding of either of the Originators or any Subsidiary in an aggregate amount in excess of $25,000,000 (including, without limitation, any required mandatory prepayment or “put” of such Debt to such Originator or Subsidiary) or
enables (or, with the giving of notice or lapse of time or both, would enable) the holders of such Debt or commitment or any Person acting on such holders’ behalf to accelerate the maturity thereof or terminate any such commitment (including,
without limitation, any required mandatory prepayment or “put” of such Debt to such Originator or Subsidiary). 
  
 (i) The Parent or any member of the Controlled Group shall fail to pay when due any amount in excess of 10% of Stockholders’ Equity
as of the end of the Fiscal Quarter just ended which it shall have become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans shall be filed under Title IV of ERISA by the Parent, any
member of the Controlled Group, any plan administrator or any combination of the foregoing if the amount of liability involved is in excess of 10% of Stockholders’ Equity as of the end of the Fiscal Quarter just ended; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any such Plan or Plans or a proceeding shall be instituted by a fiduciary of any such Plan or Plans to enforce Section 515 or 4219(c)(5)
of ERISA and such proceeding shall not have been dismissed within 30 days thereafter if the amount of liability involved is in excess of 10% of Stockholders’ Equity as of the end of the Fiscal Quarter just ended; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating that any such Plan or Plans must be terminated, if the amount involved is in excess of 10% of Stockholders’ Equity as of the end of the Fiscal Quarter just ended.

  
 (j) A federal tax lien shall be filed against
the Parent, either Originator or Buyer under Section 6323 of the Tax Code or a lien of the PBGC shall be filed against the Parent, either Originator or Buyer under Section 4068 of ERISA and in either case such lien shall remain undischarged for a
period of 25 days after the date of filing if the aggregate amount involved is in excess of 10% of Stockholders’ Equity as of the end of the Fiscal Quarter just ended. 
  
 Section 5.2 Remedies. Upon the occurrence and during the continuation of a Termination Event, Buyer may take any of
the following actions: (i) declare the Termination Date to have occurred, whereupon the Termination Date shall forthwith occur, without demand, protest or further notice of any kind, all of which are hereby expressly waived by ASP; provided,
however, that upon the occurrence of a Termination Event described in Section 5.1(d), or of an actual or deemed entry of an order for relief with respect to ASP under the Federal Bankruptcy Code, the Termination Date shall
automatically occur, without demand, protest or any notice of any kind, all of which are hereby expressly waived by ASP and (ii) to the fullest extent permitted by applicable law, declare that the Default Fee shall accrue with respect to any amounts
then due and owing by ASP to Buyer. The aforementioned rights and remedies shall be without limitation and shall be in addition to all other rights and remedies of Buyer and its assigns 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. 
  

 16 

 ARTICLE VI 
 INDEMNIFICATION 
  
 Section 6.1
Indemnities by ASP. Without limiting any other rights that Buyer may have hereunder or under applicable law, ASP hereby agrees to indemnify (and pay upon demand to) Buyer and its 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 actual and reasonable attorneys’ fees (which attorneys may be
employees of Buyer or any such assign) and disbursements (all of the foregoing being collectively referred to as “Indemnified Amounts”) awarded against or actually incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by Buyer of an interest in the Receivables, excluding, however: 
  
 (a) Indemnified Amounts to the extent such Indemnified Amounts resulted from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification or by reason of such Indemnified Party’s breach of its obligations hereunder or other legal duty; 
  
 (b) Indemnified Amounts to the extent the same includes losses in respect of Receivables that are uncollectible on account of the
insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or 
  
 (c) taxes imposed by the jurisdiction in which such Indemnified Party’s principal executive office is located, 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 Lenders of Receivable Interests under the Credit and Security Agreement as a loan or loans by the Lenders to Buyer secured by, among other
things, the Receivables, the Related Security and the Collections; 
  
 provided, however, that nothing contained in this sentence shall limit the liability of ASP or limit the recourse of Buyer to ASP for amounts otherwise specifically provided to be paid by ASP under the terms of this Agreement.
Without limiting the generality of the foregoing indemnification, but subject in each case to clauses (a), (b) and (c) above, ASP shall indemnify Buyer for Indemnified Amounts relating to or resulting from: 
  
 (i) any representation or warranty made by ASP (or any
officers of ASP) under or in connection with any Purchase Report, this Agreement, any other Transaction Document or any other information or report delivered by ASP pursuant hereto or thereto for which Buyer has not received a Purchase Price Credit
that shall have been false or incorrect when made or deemed made; 
  
 (ii) the failure by ASP, 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 ASP to keep or perform any of its obligations, express or implied, with respect to any Contract; 
  

 17 

 (iii) any failure of ASP to perform its duties, covenants or other obligations in
accordance with the provisions of this Agreement or any other Transaction Document; 
  
 (iv) any products liability, personal injury or damage, suit or other similar claim arising out of or in connection with merchandise,
insurance or services that are the subject of any Contract or any Receivable; 
  
 (v) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Receivable (including, without limitation, a defense based on such Receivable or the
related Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or service related to such Receivable or the
furnishing or failure to furnish such merchandise or services; 
  
 (vi) the commingling of Collections of Receivables at any time with other funds; 
  
 (vii) any investigation, litigation or proceeding related to or arising from this Agreement or any other Transaction Document, the
transactions contemplated hereby, the use of the proceeds of any Purchase hereunder, the ownership of the Receivables or any other investigation, litigation or proceeding relating to ASP in which any Indemnified Party becomes involved as a result of
any of the transactions contemplated hereby except to the extent arising from Buyer’s own gross negligence or willful misconduct; 
  
 (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 Termination Event described in Section 5.1(d); 
  
 (x) [reserved]; 
  
 (xi) any failure to vest and maintain vested in Buyer, or to transfer to Buyer, legal and equitable title to, and ownership of, the
Receivables and the Collections, and all of ASP’s right, title and interest in the Related Security associated with the Receivables, in each case, free and clear of any Adverse Claim; 
  
 (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 Purchase or at any subsequent time; 
  

 18 

 (xiii) any action or omission by ASP which reduces or impairs the rights of Buyer with
respect to any Receivable or the value of any such Receivable (for any reason other than the application of Collections thereto or charge-off of any Receivable as uncollectible) unless the Buyer has received a Purchase Price Credit therefor;

  
 (xiv) any attempt by any Person to void any
Purchase hereunder under statutory provisions or common law or equitable action; and 
  
 (xvi) the failure of any Receivable reflected as an Eligible Receivable on any Purchase Report to be an Eligible Receivable at the time
acquired by Buyer. 
  
 Section 6.2 Other Costs and
Expenses. ASP shall pay to Buyer on demand all reasonable costs and out-of-pocket expenses actually incurred in connection with the preparation, execution, delivery and administration of this Agreement, the transactions contemplated hereby and
the other documents to be delivered hereunder. ASP shall pay to Buyer on demand any and all reasonable costs and expenses of Buyer, if any, including reasonable counsel fees and expenses actually incurred 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 a Termination Event. 
  
 ARTICLE VII 
 MISCELLANEOUS 
  
 Section 7.1 Waivers and Amendments. 
  
 (a) No failure or delay on the part of Buyer (or the Agent, as its assignee) in exercising any power, right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right
or remedy preclude any other further exercise thereof or the exercise of any other power, right or remedy. The rights and remedies herein provided shall be cumulative and nonexclusive of any rights or remedies provided by law. Any waiver of this
Agreement shall be effective only in the specific instance and for the specific purpose for which given. 
  
 (b) No provision of this Agreement may be amended, supplemented, modified or waived except in writing signed by ASP and Buyer and, to the
extent required under the Credit and Security Agreement, the Agent and the Liquidity Banks or the Required Liquidity Banks. Any material amendment, supplement, modification of waiver will required satisfaction of the Rating Agency Condition.

  
 Section 7.2 Notices. 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 (a) if given by
telecopy, upon the receipt thereof, (b) if given by mail, three (3) Business Days after the time such communication is deposited in the mail with first class postage prepaid or (c) if given by any other means, when received at the address specified
in this Section 7.2. 
  

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 Section 7.3 Protection of Ownership Interests of Buyer. 
  
 (a) ASP agrees that from time to time, at its expense, it
will promptly execute (if required), deliver and authorize the filing of all instruments and documents, and take all actions, that may be necessary or desirable, or that Buyer (or the Agent, as its assignee) may reasonably request, to perfect,
protect or more fully evidence the interest of Buyer hereunder and the Receivable Interests, or to enable Buyer (or the Agent, as its assignee) to exercise and enforce their rights and remedies hereunder. At any time when a Termination Event Exists,
Buyer (or the Agent, as its assignee) may, at ASP’s sole cost and expense, direct ASP to notify the Obligors of Receivables of the ownership interests of Buyer 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 Buyer or its designee. 
  
 (b) If ASP fails to perform any of its obligations hereunder, Buyer (or the Agent, as its assignee) may (but shall not be required to)
perform, or cause performance of, such obligations, and Buyer’s (or such assigns’) actual and reasonable costs and expenses incurred in connection therewith shall be payable by ASP as provided in Section 6.2. ASP irrevocably
authorizes Buyer (and its assigns) at any time and from time to time in the sole discretion of Buyer (or the Agent, as its assignee), and appoints Buyer (and its assigns) as its attorney(ies)-in-fact, to act on behalf of ASP (i) to authorize on
behalf of ASP as debtor the filing of financing statements necessary or desirable in Buyer’s (or the Agent, as its assignee’) reasonable opinion to perfect and to maintain the perfection and priority of the interest of Buyer in the
Receivables and associated Related Security and Collections 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 statement in such offices as Buyer
(or the Agent, as its assignee) in their reasonable opinion deem necessary or desirable to perfect and to maintain the perfection and priority of Buyer’s interests in the Receivables. This appointment is coupled with an interest and is
irrevocable. From and after July 1, 2001: (A) ASP hereby authorizes Buyer (and the Agent, as its assignee) to file financing statements and other filing or recording documents with respect to the Receivables and Related Security (including any
amendments thereto, or continuation or termination statements thereof), without the signature or other authorization of ASP, in such form and in such offices as Buyer (or any of its assigns) reasonably determines appropriate to perfect or maintain
the perfection of the ownership or security interests of Buyer (and the Agent, as its assignee) hereunder, (B) ASP acknowledges and agrees that it is not authorized to, and will not, file financing statements or other filing or recording documents
with respect to the Receivables or Related Security (including any amendments thereto, or continuation or termination statements thereof), without the express prior written approval by the Agent (as Buyer’s assignee), consenting to the form and
substance of such filing or recording document, and (C) ASP approves, authorizes and ratifies any filings or recordings made by or on behalf of the Agent (as Buyer’s assign) in connection with the perfection of the ownership or security
interests in favor of Buyer or the Agent (as Buyer’s assign). 
  

 20 

 Section 7.4 Confidentiality of Fee Letter. Each of ASP and Buyer shall maintain and shall cause
each of its employees, officers and advisers to maintain the confidentiality of the Fee Letter, except that Buyer and its officers and employees may disclose such information to Buyer’s external consultants, accountants and attorneys and as
required by any applicable 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) or to the extent necessary to enforce its rights
under the Transaction Documents. 
  
 Section 7.5
Bankruptcy Petition 
  
 (a) ASP and Buyer each
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 Blue Ridge, it will not institute against, or join any other Person in instituting against, Blue
Ridge 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. 
  
 (b) ASP covenants and agrees that, prior to the date that is one year and one day after the payment in full of all
outstanding obligations of Buyer under the Credit and Security Agreement, it will not institute against, or join any other Person in instituting against, Buyer 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 7.6 Limitation of Liability. Except with respect to any claim arising out of the willful misconduct or gross negligence of Blue Ridge, the
Agent or any Liquidity Bank, no claim may be made by ASP or any other Person against Blue Ridge, the Agent or any Liquidity Bank or their respective Affiliates, directors, officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or any act, omission or event occurring in connection
therewith; and ASP 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 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF GEORGIA WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION GOVERN THE PERFECTION, OR THE EFFECT OF PERFECTION OR NONPERFECTION, OF THE OWNERSHIP INTERESTS OR SECURITY
INTERESTS OF ASP OR ANY OF ITS ASSIGNS. 
  

 21 

 Section 7.8 CONSENT TO JURISDICTION. EACH OF ASP AND BUYER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR GEORGIA STATE COURT SITTING IN FULTON COUNTY, GEORGIA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND 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 BUYER (OR THE AGENT, AS ITS ASSIGNEE) TO BRING PROCEEDINGS AGAINST ASP IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ASP AGAINST BUYER (OR ITS
ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ASP PURSUANT TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN
FULTON COUNTY, GEORGIA. 
  
 Section 7.9 WAIVER OF JURY
TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ASP PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. 
  
 Section 7.10 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 ASP, Buyer and their respective successors and permitted assigns (including any trustee in bankruptcy). ASP may not assign any of its rights and obligations hereunder or
any interest herein without the prior written consent of Buyer. Buyer may assign at any time its rights and obligations hereunder and interests herein to any other Person without the consent of ASP. Without limiting the foregoing, ASP acknowledges
that Buyer, pursuant to the Credit and Security Agreement, may assign to the Agent, for the benefit of the Lenders, its rights, remedies, powers and privileges hereunder and that the Agent may further assign such rights, remedies, powers and
privileges to the extent permitted in the Credit and Security Agreement. ASP agrees that the Agent, as the assignee of Buyer, shall, subject to the terms of the Credit and Security Agreement, have the right to enforce this Agreement and to exercise
directly all of Buyer’s rights and remedies under this Agreement (including, without limitation, the right to give or withhold 

  

 22 

 
any consents or approvals of Buyer to be given or withheld hereunder) and ASP agrees to cooperate fully with the Agent in the exercise of such rights and
remedies. 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 ASP pursuant to Article II; (ii) the indemnification and payment provisions of Article VI; and (iii) Section
7.5 shall be continuing and shall survive any termination of this Agreement. 
  
 Section 7.11 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. 
  
 <signature pages follow> 
  

 23 

 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. 
  
  

	 ACUITY SPECIALTY PRODUCTS GROUP,
 INC., A DELAWARE CORPORATION

		
	By:	 	 /s/  Vernon J. Nagel

	Name:	 	Vernon J. Nagel
	Title:	 	Executive Vice President, Finance
	
	Address:
	Acuity Specialty Products Group, Inc.
	1170 Peachtree Street, Suite 2400
	Atlanta, Georgia 30309
	
	Attention: Treasurer
	
	 Fax
No.:                   (404) 853-1430

	Telephone No.:        (404) 853-1423
	
	 ACUITY ENTERPRISE, INC., A DELAWARE
 CORPORATION

		
	By:	 	 /s/  Vernon J. Nagel

	Name:	 	Vernon J. Nagel
	Title:	 	Executive Vice President & C.F.O.
	
	Address:
	
	Acuity Enterprise, Inc.
	1170 Peachtree Street, Suite 2400
	Atlanta, Georgia 30309
	
	Attention: General Counsel
	
	Phone: (404) 853-1440
	Fax:    (404) 853-1015

  

 24 

 Exhibit I 
  

Definitions 
  
 This is Exhibit I to the Agreement (as hereinafter defined). As used in the Agreement and the Exhibits and Schedules thereto, capitalized terms have the
meanings set forth in this Exhibit I (such meanings to be equally applicable to the singular and plural forms thereof). If a capitalized term is used in the Agreement, or any Exhibit or Schedule thereto, and is not otherwise defined therein or
in this Exhibit I, such term shall have the meaning assigned thereto in Exhibit I to the Credit and Security Agreement (hereinafter defined). 
  
 “Agent” has the meaning set forth in the Preliminary Statements to the Agreement. 
  
 “Agreement” means the Receivables Sale and
Contribution Agreement, dated as of September 2, 2003, between ASP and Buyer, as the same may be amended, restated or otherwise modified. 
  
 “ASP” has the meaning set forth in the preamble to the Agreement, and such term shall include such Person’s successors and
permitted assigns. 
  
 “Blue Ridge” has
the meaning set forth in the Preliminary Statements to the Agreement. 
  
 “Buyer” has the meaning set forth in the preamble to the Agreement. 
  
 “Capital Leases” means leases which are required to be capitalized in accordance with GAAP. 
  
 “Change of Control” means (a) the Parent ceases to
own, directly or indirectly, 100% of the outstanding voting stock of each of the Originators and Buyer, or (b) (i) any Person or two or more Persons acting in concert shall have acquired after the Closing Date beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 30% or more of the outstanding shares of the voting stock of the Parent; or (ii) the individuals who, as of the Closing Date, are members
of the Board of the Parent (the “Incumbent Board” ) cease for any reason thereafter to constitute at least 66 2/3% of the Board of the Parent; provided, however, that if the election, or nomination for election by the Parent’s stockholders, of any new director was approved by a vote of at least 66 2/3% of the Incumbent Board, such new director shall, for purposes of this definition, be considered as a member of
the Incumbent Board. 
  
 “Consolidated
Debt” means at any date the Debt of the Parent and its Consolidated Subsidiaries, determined on a consolidated basis as of such date. 
  
 “Consolidated Operating Profits” means, for any period, the Operating Profits of the Parent and its Consolidated Subsidiaries.

  

 25 

 “Consolidated Subsidiary” means at any date any Subsidiary or other entity the
accounts of which, in accordance with GAAP, would be consolidated with those of the Parent in its consolidated financial statements as of such date. 
  
 “Consolidated Total Assets” means, at any time, the total assets of the Parent and its Consolidated Subsidiaries, determined on a
consolidated basis, as set forth or reflected on the most recent consolidated balance sheet of the Parent and its Consolidated Subsidiaries, prepared in accordance with GAAP. 
  
 “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. 
  
 “Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Parent, are
treated as a single employer under Section 414 of the Tax Code. 
  
 “Credit and Collection Policy” means ASP’s credit and collection policies and practices relating to Contracts and Receivables existing on the date of the Agreement and summarized in Exhibit V, as
modified from time to time in accordance with the Agreement. 
  
 “Credit and Security Agreement” has the meaning set forth in the Preliminary Statements to the Agreement. 
  
 “Debt” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee under Capital Leases, (v) all obligations of such Person to reimburse any bank or other Person in respect of amounts payable under a banker’s acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation), (vii) all obligations of such Person to reimburse any bank or other Person in respect of amounts paid or to be paid under a letter of credit or similar instrument, (viii)
all Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person, and (ix) all Debt of others Guaranteed by such Person. 
  
 “Default Fee” means a per annum rate of interest equal to the sum of (i) the Prime Rate,
plus (ii) 2% per annum. 
  
 “Discount
Factor” means a percentage calculated to provide Buyer with a reasonable profit on its investment in the Receivables after taking account of (i) the time value of money based upon the anticipated dates of collection of the Receivables
and the cost to Buyer of financing its investment in the Receivables during such period, (ii) the risk of nonpayment by the Obligors, and (iii) the cost of compensating someone to service and collect the Receivables for Buyer and the Agent, as their
interests may appear. ASP and Buyer may agree from time to time to change the Discount Factor based on changes in one or more of the items affecting the calculation thereof, provided that any change to the Discount Factor shall take
effect as of the commencement of a month, shall apply only prospectively and shall not affect the Purchase Price payment made prior to the month during which ASP and Buyer agree to make such change. 
  

 26 

 “Effective Date” means the later to occur of (a) September 2, 2003, and (b) the
Business Day on which each of the conditions precedent set forth in Sections 3.1 and 3.2 has been satisfied. 
  
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, or any successor law. Any
reference to any provision of ERISA shall also be deemed to be a reference to any successor provision or provisions thereof. 
  
 “Executive Officer” means any of the chief executive officer, president, executive vice president or senior vice president of the
Parent. 
  
 “Fiscal Quarter” means any
fiscal quarter of the Parent. 
  
 “Fiscal
Year” means any fiscal year of the Parent. 
  
 “GAAP” means generally accepted accounting principles applied on a basis consistent with those which are to be used in making the calculations for purposes of determining compliance with the terms of this Agreement.

  
 “Guarantee” by any Person means any
obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to secure, purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part), provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The
term “Guarantee” used as a verb has a corresponding meaning. 
  
 “Initial Contributed Receivables” has the meaning set forth in Section 1.1. 
  
 “Initial Cutoff Date” means the Business Day immediately prior to the Effective Date. 
  
 “Lien” means, with respect to any asset, any
mortgage, deed to secure debt, deed of trust, lien, pledge, charge, security interest, security title, preferential arrangement which has the practical effect of constituting a security interest or encumbrance, or encumbrance or servitude of any
kind in respect of such asset to secure or assure payment of a Debt or a Guarantee, whether by consensual agreement or by operation of statute or other law, or by any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention
agreement relating to such asset. 

  

 27 

 “Material Adverse Effect” means a material adverse effect on (i) the financial
condition or operations of the Parent and its Subsidiaries (taken as a whole), (ii) the ability of ASP to perform its obligations under the Agreement or any other Transaction Document, (iii) the legality, validity or enforceability of the Agreement
or any other Transaction Document, (iv) ASP’s, Buyer’s, the Agent’s or any Lender’s interest in the Receivables generally or in any significant portion of the Receivables, the Related Security or Collections with respect thereto,
or (v) the collectibility of the Receivables generally or of any material portion of the Receivables. 
  
 “Material Subsidiary” means (i) each Originator and Buyer and (ii) each other Consolidated Subsidiary, now existing or hereinafter
established or acquired, that at any time prior to the payment in full of all Aggregate Unpaids under the Credit and Security Agreement either (x) has or acquires total assets in excess of 10% of Consolidated Total Assets at the end of the most
recent Fiscal Quarter, or (y) contributed more than 10% of Consolidated Operating Profits for the 4 most recent Fiscal Quarters then ended (or, with respect to any Subsidiary which existed during the entire 4 Fiscal Quarter period but was acquired
by the Parent during such period, which would have contributed more than 10% of Consolidated Operating Profits for such period had it been a Subsidiary for the entire period, as determined on a pro forma basis in accordance with GAAP). 

 
 “Moody’s” means Moody’s Investor
Service, Inc. 
  
 “Multiemployer Plan”
shall have the meaning set forth in Section 4001(a)(3) of ERISA. 
  
 “Net Income” means, as applied to any Person for any period, the aggregate amount of net income of such Person, after taxes, for such period, as determined in accordance with GAAP. 
  
 “Net Worth” means as of the last Business Day of each
month preceding any date of determination, the excess, if any, of (a) the aggregate Outstanding Balance of the Receivables at such time, over (b) the Aggregate Invested Amount outstanding at such time. 
  
 “Operating Profits” means, as applied to any Person
for any period, the sum of (i) net revenues, less (ii) cost of goods and services sold, less (iii) operating expenses (including depreciation and amortization) of such Person for such period, as determined in accordance with GAAP. 
  
 “Organizational Documents” means, for any Person, the
documents for its formation and organization, which, for example, (a) for a corporation are its corporate charter and bylaws, (b) for a partnership are its certificate of partnership (if applicable) and partnership agreement, (c) for a limited
liability company are its certificate of formation or organization and its operating agreement, regulations or the like and (d) for a trust is the trust agreement, declaration of trust, indenture or bylaws under which it is created. 

  

 28 

 “Original Balance” means, with respect to any Receivable coming into existence
after the Initial Cutoff Date, the Outstanding Balance of such Receivable on the date it was created. 
  
 “Originator” means ASP in its capacity as the seller under this Agreement. 
  
 “Outstanding Balance” of any Receivable at any time
means the then outstanding principal balance thereof. 
  
 “Parent” means Acuity Brands, Inc., a Delaware corporation formerly known as L & C Spinco, Inc., and its successors and permitted assigns. 
  
 “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its
functions under ERISA. 
  
 “Permitted
Encumbrances” shall mean the following: (a) Liens for taxes or assessments or other governmental charges not yet due and payable; and (b) Liens created by the Transaction Documents. 
  
 “Person” means an individual, a corporation, a
partnership, a limited liability company, an unincorporated association, a trust or any other entity or organization, including, but not limited to, a government or political subdivision or an agency or instrumentality thereof. 
  
 “Plan” means at any time an employee pension benefit
plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Tax Code and is either (i) maintained by a member of the Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group is then making or accruing an obligation to make contributions or
has within the preceding 5 plan years made contributions. 
  
 “Proprietary Information” means all information about the Performance Guarantor or any of its Subsidiaries which has been furnished to the Agent or any Lender by or on behalf of the Performance Guarantor or any of
its Subsidiaries before or after the date of the Agreement or which is obtained by any Lender or the Agent in the course of any Review made pursuant to Section 7.1(d) of the Credit and Security Agreement; provided, however, that the
term “Proprietary Information” does not include information which (x) is or becomes publicly available (other than as a result of a breach of Section 14.5 of the Credit and Security Agreement), (y) is possessed by or
available to the Agent or any Lender on a non-confidential basis prior to its disclosure to the Agent or such Lender by either Borrower or Subsidiary or (z) becomes available to the Agent or any Lender on a non-confidential basis from a Person
which, to the knowledge of the Agent or such Lender, as the case may be, is not bound by a confidentiality agreement with the Performance Guarantor or any of its Subsidiaries and is not otherwise prohibited from transmitting such information to the
Agent or such Lender. In the 

  

 29 

 
event the Agent or any Lender is required to disclose any Proprietary Information by virtue of clause (ii) (but only if and to the extent such disclosure has
not been sought by the Agent or any Lender, and if neither the Performance Guarantor nor any Borrower is a party to such litigation), (iv) or (v) above, to the extent such Lender or the Agent (as the case may be) determines in good faith that it is
permissible by law so to do, it shall promptly notify the Performance Guarantor of same so as to allow the Performance Guarantor or its Subsidiaries to seek a protective order or to take other appropriate action; provided, however,
neither any Lender nor the Agent shall be required to delay compliance with any directive to disclose any such information so as to allow the Performance Guarantor or any of Subsidiaries to effect any such action. 
  
 “Purchase” means a purchase pursuant to Section
1.2(a) of the Agreement by Buyer from ASP of Receivables and the Related Security and Collections related thereto, together with all related rights in connection therewith. 
  
 “Purchase Price” means, with respect to the Purchase, the aggregate price to be paid by Buyer to ASP
for such Purchase in accordance with Section 1.3 of the Agreement for the Receivables, Collections and Related Security being sold to Buyer, which price shall equal on any date (i) the product of (x) the Outstanding Balance of such
Receivables on such date, multiplied by (y) one minus the Discount Factor in effect on such date, minus (ii) any Purchase Price Credits to be credited against the Purchase Price otherwise payable in accordance with
Section 1.4 of the Agreement. 
  
 “Purchase
Price Credit” has the meaning set forth in Section 1.4 of the Agreement. 
  
 “Purchase Report” means a monthly report by ASP in substantially the form of Exhibit VI to the Agreement. 
  
 “Receivable” means all indebtedness and other obligations owed to ASP (at the time it arises, and
before giving effect to any transfer or conveyance under the Agreement), including, without limitation, any indebtedness, obligation or interest constituting an account, chattel paper, instrument or general intangible, arising in connection with the
sale of goods or the rendering of services by ASP and further includes, without limitation, the obligation to pay any Finance Charges with respect thereto. 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 and other rights and obligations arising from any other
transaction; provided further, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless of whether the Obligor or Buyer treats such indebtedness, rights or obligations as a
separate payment obligation. 
  
 “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. 
  

 30 

 “Redeemable Preferred Stock” of any Person means any preferred stock issued by
such Person which is at any time prior to the Termination Date either (i) mandatorily redeemable (by required sinking fund or similar payments or otherwise) or (ii) redeemable at the option of the holder thereof. 
  
 “Related Security” means, with respect to any
Receivable: 
  
 (i) all of ASP’s interest in
the inventory and goods (including returned or repossessed inventory or goods), if any, the sale, financing or lease of which by ASP gave rise to such Receivable, and all insurance contracts with respect thereto, 
  
 (ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements and security agreements describing any
collateral securing such Receivable, 
  
 (iii)
all guaranties, letters of credit, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise,

  
 (iv) all service contracts and other
contracts and agreements associated with such Receivable, 
  
 (v) all Records related to such Receivable, 
  
 (vi) all of ASP’s right, title and interest in each Lock-Box and each Collection Account, and 
  
 (vii) all proceeds of any of the foregoing. 
  
 “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC. 
  
 “Required Capital Amount” means, as of any date of determination, an amount equal to the greater of (a) 3% of the Borrowing Limit
under the Credit and Security Agreement, and (b) the product of (i) 1.5 times the product of the Default Ratio times the Default Horizon Ratio, each as determined from the most recent Monthly Report received from the Servicers under the
Credit and Security Agreement, and (ii) the Outstanding Balance of all Receivables as of such date, as determined from the most recent Monthly Report received from the Servicers under the Credit and Security Agreement. 
  

 31 

 “Responsible Officer” means any Executive Officer as well as any other officer of
the Parent who is primarily responsible for the administration of the transactions contemplated by the Transaction Documents. 
  
 “S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc. 
  
 “Settlement Date” has the meaning given to that term
in the Credit and Security Agreement. 
  
 “Stockholders’ Equity” means, at any time, the shareholders’ equity of the Parent and its Consolidated Subsidiaries, as set forth or reflected on the most recent consolidated balance sheet of the Parent and
its Consolidated Subsidiaries prepared in accordance with GAAP, but excluding any Redeemable Preferred Stock of the Parent or any of its Consolidated Subsidiaries. 
  
 “Subsidiary” means, with respect to any Person, any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person. 
  
 “Tax Code” means the Internal Revenue Code of 1986,
as the same may be amended from time to time. 
  
 “Termination Date” means the earliest to occur of (i) the Facility Termination Date (as defined in the Credit and Security Agreement), (ii) the Business Day immediately prior to the occurrence of a Termination Event
set forth in Section 5.1(d), (iii) the Business Day specified in a written notice from Buyer to ASP following the occurrence and during the continuation of any other Termination Event, and (iv) the date which is 10 Business Days after
Buyer’s receipt of written notice from ASP that it wishes to terminate the facility evidenced by this Agreement. 
  
 “Termination Event” has the meaning set forth in Section 5.1 of the Agreement. 
  
 “Transaction Documents” means, collectively, this
Agreement, each Collection Account Agreement, the Credit and Security Agreement, and all other instruments, documents and agreements executed and delivered in connection herewith. 
  
 “UCC” means the Uniform Commercial Code as the same may, from time to time, be enacted and in effect
in the State of Georgia; provided that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Buyer’s interest in the Receivables is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of Georgia, the term “UCC” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions 
  

 32 

 “Unmatured Termination Event” means an event which, with the passage of time or
the giving of notice, or both, would constitute a Termination Event. 
  
 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 Georgia, and not specifically defined herein, are used herein as defined in such
Article 9. 
  

 33 

 Exhibit II 
  
 Places of Business; Locations of Records; 
 Federal Employer Identification Number(s); Other Names 
  
 Places of Business: 
  
 1170 Peachtree Street, Suite 2400 
 Atlanta, Georgia 30309 
  
 Chief Executive Office: 
 1170 Peachtree Street, Suite 2400 
 Atlanta, Georgia 30309 
  
 Principal Place of Business: 
 1170 Peachtree Street, Suite 2400 
 Atlanta, Georgia 30309 
  
 Locations of Records: 
  
 1170 Peachtree Street, Suite 2400 
 Atlanta, Georgia 30309 
  
 One Lithonia Way 
 Conyers, Georgia 30012

  
 Highway 41 North 
 Emerson, Georgia 30137 
  
 1310 Seaboard Industrial Blvd. 
 Atlanta,
Georgia 30318 
  
 Federal Employer Identification
Number:      58-2633373 
  
 Legal, Trade and Assumed Names:                 National Chemical, Selig Chemical Industries, Zep 
             Manufacturing Company, Enforcer Products 
  
  

 34 

 Exhibit III 
  
 NAMES OF COLLECTION BANKS; LOCK-BOXES & COLLECTION ACCOUNTS 
  

	 LOCK-BOX

	  	 RELATED COLLECTION ACCOUNT

	  
 P.O. Box
945786
 Atlanta, GA 30392-5786
	  	 Name of Current Account Holder:
 Account Number:
 Bank Name:
 ABA Number:
 Contact Person:
 Contact’s Tel:
 Contact’s Fax:
	  	 Enforcer Products, a division of ASP
 Lockbox #945786, DDA#2079900422649
 Wachovia Bank of Georgia
 061000227
 Tracie Greene
 800-590-7868
 404-332-6898

			
	 n/a
	  	 Name of Current Account Holder:
 Account Number:
 Bank Name:
 ABA Number:
 Contact Person:
 Contact’s Tel:
 Contact’s Fax:
	  	 Zep Manufacturing, a division of ASP
 2079900421190
 Wachovia Bank of Georgia
 061000227
 Tracie Greene
 800-590-7868
 404-332-6898

			
	 P.O. Box 530737
 Atlanta, GA 30353-0737
  
 P.O. Box CH10697
 Palatine, IL 60055-0697
  
 Dept. LA21294
 Pasadena, CA 91185-1294
  
 Dept. 0905
 P.O. Box 120001
 Dallas, TX 75312-0905
  
 Box 382012
 Pittsburgh, PA 15250-8012
  
 Box 382156
 Pittsburgh, PA 15250-8156
	  	 Name of Current Account Holder:
 Account Number:
 Bank Name:
 ABA Number:
 Contact Person:
 Contact’s Tel:
 Contact’s Fax:
	  	 Zep Manufacturing, a division of ASP
 0373309
 Mellon Bank, Pittsburgh, PA
 043000261
 Edith Rickle
 412-234-6563
 412-209-6082

			
	 P.O. Box 12118
 Atlanta, GA 30384
	  	 Name of Current Account Holder:
 Account Number:
 Bank Name:
 ABA Number:
 Contact Person:
 Contact’s Tel:
 Contact’s Fax:
	  	 Enforcer Products, a division of ASP
 Lockbox #12118, DDA #3751911681
 Bank of America
 111000012
 Louvenia Parker
 404-607-5441
 404-532-3404

  

 35 

 Exhibit IV 
  
 Form of Compliance Certificate 
  
 This Compliance Certificate is furnished pursuant to that certain Receivables Sale and Contribution Agreement dated as of
September 2, 2003 (the “Agreement”) between Acuity Specialty Products Group, Inc., a Delaware corporation (“ASP”), and Acuity Enterprise, Inc., a Delaware corporation (“Buyer”).
Capitalized terms used and not otherwise defined herein are used with the meanings attributed thereto in the Agreement. 
  
 THE UNDERSIGNED HEREBY CERTIFIES, IN HIS OR HER REPRESENTATIVE CAPACITY ON BEHALF OF THE PARENT, THAT: 
  
 1. I am the duly elected
                     of Acuity Brands, Inc., a Delaware corporation (the “Parent”). 
  
 2. I have reviewed the terms of the Agreement and I have made, or have caused
to be made under my supervision, a detailed review of the transactions and conditions of the Parent and its Consolidated Subsidiaries during the accounting period covered by the attached financial statements. 
  
 3. The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes a Termination Event or an Unmatured Termination Event, as each such term is defined under the Agreement, during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Certificate[, except as set forth below]. 
  
 [4. Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has
existed and the action which the Parent has taken, is taking, or proposes to take with respect to each such condition or
event:                                       
 ]. 
  
 The foregoing certifications, together with the
computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered in the undersigned’s representative capacity on behalf of the Parent, all as of this
     day of             , 200    . 
  

	
	 
	

	 [Name]

  

 36 

 Exhibit V 
  
 Credit and Collection Policy 
  

INTRODUCTION 
  
 The backbone of any credit function is the credit policy. A good credit policy encompasses the important actions of prevention, collection and
administration. This policy will serve as a guide in determining how to handle given kinds of problems. But it rarely offers a definitive solution. The Credit Manager should exercise common sense when making decisions relevant to this credit
policy. 
  
 The credit limit extended to a customer is an investment, a loan and a
privilege. It must correspond to our terms of sale, desired market penetration and appetite for risk. Credit granting boils down to trust based on past performance and future prospects. It is important to get the facts, review all data, and consider
both current conditions and past performance of each customer. Evaluate all information for an indication of future probability. 
  
 Three Roles Of Credit In Our Business : 
  

	•	Generate more profits through increased sales; 

  

	•	Insure sound value in Accounts Receivable (our most liquid business asset); 

  

	•	Acts as a business stimulant 

  
 Keys To Making Good Credit Decisions : 
  

	•	Knowing when you have enough information – when you can stop digging. If there is a doubt as to whether you reject or accept an order, it is usually desirable to keep searching
for facts until the uncertainty is resolved. 

  

	•	Knowing when an investigation is merited. Know your information sources, how to use them and how much they cost. Reliable credit information costs time, effort and money. It is
important to know which sources to use and when to use them. 

  

	•	Keep in mind the three basic actions and objectives in credit granting: 

  
 1) Prevention - reduce risk of bad debt losses by making good credit decisions, 
  
 2) Collection - of Accounts Receivable faster and accurately, 
  
 3) Administration - of the Accounts Receivable to gain more profits
and sales. 
  
 “What was true yesterday may not be true today. What is
true today may not be true tomorrow. But what you find are indications that point to truth tomorrow. Your profits depend on how well you find them.” - (Anonymous) 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	37	 	 

 CALENDAR 
  
 Maintaining a clean, accurate Accounts Receivable should be one of the Credit or Branch Manager’s most important objectives. Proper
record keeping will aid in swift collection of all accounts and lead to future sales. Meeting deadlines and knowing the work flow helps achieve these objectives. 
  
 MONTHLY 
  

	 	  	 	  	 
	 Terms
	  	 :
	  	 Net 30 days ; No volume or early-pay discounts
 Administratively approved products on Installment Plan

			
	 Close-Out
	  	 :
	  	 last day of every month

			
	 COD Suspense File
	  	 :
	  	 Reviewed each Friday

			
	 Statement of Account
	  	 :
	  	 Prints end of every month for select customers

			
	 Over 90 > $1000 RPT
	  	 :
	  	 Run report at branch and forward to Home Office by the 4th

			
	 Credit Collection Letter
	  	 :
	  	 Display Monthly Calendar on 1st of each month
 Review
Customers Past Due Report
 Review / Update Protected Customer List
 Process Collection Letters
 Run Over 90 and Audit Report as necessary

	
	ANNUAL
			
	 Fiscal Year
	  	 :
	  	 September 1st to August 31st

			
	 Charge Offs
	  	 :
	  	 December 31st and August 31st

			
	 Credit Balance Absorption
	  	 :
	  	 June 30th

			
	 Sales Year
	  	 :
	  	 December 1st to November 30th

			
	 Sales Volume Charge Backs
	  	 :
	  	 November 30th

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	38	 	 

 RECORD RETENTION 
  
 ACCOUNTS RECEIVABLE 
  

	 	  	 PERIOD

	  	HOME OFFICE
MICROFICHE

	 Accounts Placed For Collection Files
	  	 Indefinitely
	  	NO
	 Aged AR - Microfiche
	  	 Indefinitely
	  	YES
	 Aged AR
	  	 Discretionary
	  	YES
	 Bad Debt Charge-Offs by Salesrep
	  	 2 Years
	  	NO
	 Bad Debt Charge-Offs by State
	  	 2 Years
	  	NO
	 Bills of Lading
	  	 1 Year
	  	NO
	 Credit Balance Charge-Offs
	  	 2 Years
	  	NO
	 Credit Memo
	  	 5 Years
	  	NO
	 Customer Check Vouchers
	  	 As Needed
	  	NO
	 Customer File
	  	 5 Years
	  	NO
	 Customer Invoices
	  	 5 Years
	  	NO
	 Customer Master Listing
	  	 Discretionary
	  	YES
	 Daily Adjustment Register
	  	 5 Years
	  	NO
	 Daily Cash Adjustment Register
	  	 5 Years
	  	NO
	 Daily Credit Memo Register
	  	 5 Years
	  	NO
	 Daily Credit Report (Failures/Overrides)
	  	 Discretionary
	  	NO
	 Daily Intercompany Credit Memo Register
	  	 5 Years
	  	NO
	 Daily Intercompany Invoice Register
	  	 1 Year
	  	NO
	 Daily Invoice Register
	  	 5 Years
	  	NO
	 Daily Register of 979313 Line Items
	  	 6 months
	  	NO
	 Daily Register of Cash Receipts
	  	 5 Years
	  	NO
	 Daily Report of Mismatched Cash
	  	 Discretionary
	  	NO
	 Daily Summary of Entries to AR
	  	 2 Years
	  	NO
	 Reports of Goods Returned
	  	 5 Years
	  	NO

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	39	 	 

 DSO FORMULA 
  
 The Method used to calculate DSO utilizes a three-month moving average of Sales, giving you the days in excess of 30. (The current
month’s sales are all assumed to be in Accounts Receivable.) 
  
 The
calculation formula follows: 
  

	(1)	Accounts Receivable Balance - Current Month’s Sales = Difference 

  

	(2)	Difference Average of Monthly Net Sales for 3 preceding months = Ratio 

  

	(3)	Ratio x 30 Days per Month = Days in Excess of Current Month 

  

	(4)	Days in Excess of Current Month + 30 Days in Current Month = 

	    	Number of Days Sales in Accounts Receivable 

  
 EXAMPLE 
  

	 Accounts Receivable

	  	 Net Sales

	  	 
	 N/A
	  	OCTOBER	  	$	1,000	  	 
	 N/A
	  	NOVEMBER	  	 	960	  	 
	 N/A
	  	DECEMBER	  	 	740	  	 
	 	  	 	  	
	
	  	 
	 	  	 	  	$	2,700	  	 3 = 900
 Average Monthly Sales

	 $1,100
	  	JANUARY	  	 	800	  	 

  
 The
calculation formula follows: 
  

	(1)	$1,100 - 800 = 300 

  

	(2)	300 / 900 = 0.333 

  

	(3)	0.333 x 30 days = 10 days 

  

	(4)	10 days + 30 days = 40 Days Sales in Accounts Receivable 

  
 THIRD PARTY CREDIT REPORTS 
  
 We primarily sell commercial accounts and utilize Dun & Bradstreet and TRW to obtain credit information. A Dun & Bradstreet (D&B) report, in most cases, gives
you sufficient information to make a credit decision. If not, a TRW report may be ordered. This report primarily lists trade credit experience. 
  
 Every quarter D&B sends us a tape to record our trade information. We send this tape back to D&B to update their database and once again they return the tape so
we can “populate” our accounts with D&B DUNS numbers. The Instructional sheet on page 2 explains how to gain access to a DUNS number using your System. 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	40	 	 

 D&B - Things to know before you use this service. 
  
 Each year Home Office negotiates a contract with D&B regarding volume of use based on
the previous year usage. At the end of the negotiations Zep is assigned a certain number of units. Each product and service from D&B is associated with a Unit value. When Zep requests a D&B product or service the unit is subtracted from the
total number of units assigned to Zep. The dollar equivalent differs depending on Zep’s overall volume commitment and the total contract price is passed on to each branch regardless of usage. 
  
 D&B gathers their information from various sources, including : D&B Customers,
Business Owners and Principals, Suppliers, Third-Party Sources, Courthouses/Statehouses, Banks, State and Federal Government Agencies, Telephone Listings, Daily Newspaper and Newswire Coverage. Uses of the Information Base ranges from Credit,
Marketing, Purchasing, Strategic Planning, Legal, and Merger/Acquisition. D&B provides Credit information on over 9.7 businesses. 
  
 Certain Products have been approved by Home Office and are discussed in this section. These products include: 
  

	•	Reference Book of American Business. (No longer included in Company Contract). Provides summary information on 4 million most requested businesses in D&B database. Information
includes Demographic Information (name, telephone area code, population, county or parish); Company Information (Name, phone number, Corporate relationship) ; Industry Codes (change indicators and Standard Industrial Class Codes); Ratings (D&B
Rating, product availability, Year Started). Any branch wanting a Reference Book can call Home Office for a phone number to order this product. Prices range around $150 per book. 

  

	•	DunsVoice. Available to all branches, see section below for instructions. [Unit Value of 0.20 per call + additional information requested]. Provides summary information via
telephone. Base information includes Rating and Year Started. Additional information available includes Business Summary [Unit Value of 0.50] and Payment Index [Unit Value of 0.30]. 

  

	•	Reference Lookup. Request through Home Office - Credit & Collections. This is the electronic version of DunsVoice. 

  

	•	Business Information Report . (BIR) Request Report through Home Office - Credit & Collections, see section below. [Unit Value of 1.40] Provides detailed information on a
business including : Summary Information, Special Events, Paydex, Top 10 Industries weighted payments, Payment Information, Updates, Financial, Public Filings, History, Operations. 

  

	•	Payment Analysis Report . (PAR) Request Report through Home Office - Credit & Collections, see section below. [Unit Value of 0.80] Provides detailed trade analysis of a
company’s payments habits over a year. Breaks into sections based on aging and industry. Compares payments to Industry Standard using Paydex score. 

  

	•	Interact Report. Request Report through Home Office - Credit & Collections, see section below. The Equifax Principal Connection. [Unit Value of 0.45] Provides detailed
information on principals of sole proprietorships and general partnerships that can help you further assess the creditworthiness of small businesses. This is a consumer credit report and is subject to the Federal Fair Credit Reporting Act (FCRA) and
Equal Credit opportunity Act (ECOA) and Regulation B promulgated by the Federal Reserve Board. 

  
 Legal restrictions apply when using this report. Please see below section for additional information. 
  

	•	Predictive Scoring Services. Request Report through Home Office - Credit & Collections, see section below. Two types may be requested. 

  
 1) Commercial Credit Scoring Report [Unit Value of 0.80 -
discount schedule is available.] 
 2) Small Business Credit Scoring Report [Unit Value of 0.25] 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	41	 	 

 D&B - Common Terms 
  

	•	DUNS Numbers. (Data - Universal - Numbering - System) A sequentially generated nine-digit number that is assigned and maintained only by D&B and
identifies unique business locations. 

  

	•	Rating & Symbols. This tool uses a two-part code to represent a firm’s estimated financial strength and composite credit appraisal. A rating may be based on a book
financial statement or on a estimated financial statement submitted by the company. Please see the D&B pamphlet on page X for the Key and additional information. 

  
 Ratings are assigned to the company’s headquarters locations. For this reason, any report request
through Home Office will automatically receive a headquarters report when available. Please note D&B has a policy not to rate a subsidiary higher than it’s parent corporation. 
  

	•	Paydex Score. This is a 1-100 dollar-weighted numerical score that indicates a company’s payment performance as reported to D&B. Scores are available on branch as well as
single and headquarter locations. Following is the Paydex Score Key : 

  

	Paydex

	  	 Payment Expectations

	 100
	  	 Anticipate / 30 Days Sooner than Terms

	 90
	  	 Discount / 20 Days Sooner than Terms

	 80
	  	 Prompt / On Terms

	 70
	  	 Slow to 15 Days

	 60
	  	 Slow to 22 Days

	 50
	  	 Slow to 30 Days

	 40
	  	 Slow to 60 Days

	 30
	  	 Slow to 90 Days

	 20
	  	 Slow to 120 Days

	 UN
	  	 Unavailable

  
 DunsVoice (Electronic Reference
Lookup) / Reference Lookup 
  
 To obtain D&B summary information each
branch Credit Department has access to an Electronic Reference Lookup (ERL). You will need a phone number or a DUNS number. Dial the toll free number, enter requested information at the prompt and write down the information using the provided
worksheet. Detailed instruction are provided on page 5. The Worksheet is provided on page 6. 
  
 D&B Business Information Report (BIR) 
  
 Sometimes additional information is required. The BIR will give detailed information on the business. This report may ONLY be requested through Home Office - Credit & Collections. You should request this report
when DunsVoice or Reference Lookup gives a Rating Under 4A2 and a Paydex under 70. 
  
 Payment Analysis Report . (PAR) 
  
 When an existing
customer continues to pay x days late or if a significant credit extension is requested it may be necessary to analyze their payment history. Request of this report will automatically be forwarded to the Director - Credit & Collections for
review. 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	42	 	 

 INTERACT - D&B Small Business Report 
  
 Small businesses play an increasing role in our economy. Finding information on start-up businesses and certain cottage industries
isn’t always easy, particularly a small business which has limited, if any, commercial “track record.” You will need to know the principal’s name and home residence, and certify you have a permissible purpose, before ordering
this report. Please be aware that your inquiry will be made available to that individual upon request. 
  
 Permissible purposes include : 1) principals of sole proprietorships or general partnerships; 2) individuals who have personally guaranteed or intend to guarantee personally a debt or obligation of a business or 3)
individuals who have provided the subscriber with their written authorization to access their consumer credit reports. 
  
 Predictive Scoring Services 
  
 Both (Commercial and Small Business) scoring services help you evaluate your credit risk by predicting the likelihood of severely delinquent payment by the business over
the next 12 months. Request of this report will automatically be forwarded to the Director - Credit & Collections for review. 
  
 Fax your requests to the Credit Fax Number - see next page for request form. 
  

	1.	Customer Name 

	2.	Physical Address (SHIP TO) 

	3.	Billing Address (BILL TO) 

	4.	Phone Number 

	5.	Duns Number - see ERL Instructions #4 on how to pull DUNS# from System. 

	6.	Indicate if you will wait for an Investigation 

	 	•	Sometimes D&B reports are not available and they must investigate the customer. Their investigation will take 2 to 4 days. If you are in need of a report within a day or two
indicate on D&B request to Home Office. 

	7.	Indicate Your Name and Branch 

	 	•	So we know who to fax it back to. 

  
 D&B Request 
  
 Fax this sheet to Home Office Credit & Collections for a Credit Report. 
  

	 Your Branch #
	 	  

	  	 Your first and last name
	 	  

  
 Please send me the
following D&B Report : 
  
  

	 Typical Reports :
	  	 Reports Requiring Director Approval :

	  ̈
	  	 Reference Lookup
	  	  ̈
	  	 Payment Analysis Report

	  ̈
	  	 Business Information Report
	  	  ̈
	  	 Commercial Credit Scoring

	  ̈
	  	 Interact Report
	  	  ̈
	  	 Small Business Credit Scoring

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	43	 	 

 Provide the following Required Information : 
  

	 Customer Name _________________________________________________________________________________

		
	 DUNS Number _____________________________
	  	 Telephone No. _____________________________________

	
	 Business Physical Address
________________________________________________________________________

			
	 City _____________________________________
	  	 State ___________________
	  	 Zip ___________________

	
	 Optional Address ________________________________________________________________________________

			
	 City _____________________________________
	  	 State ___________________
	  	 Zip ___________________

	
	Small Business Information :
	
	 Principal’s Name
_________________________________________________________________________________

	
	 Residential Address
______________________________________________________________________________

			
	 City _____________________________________
	  	 State ___________________
	  	 Zip ___________________

	
	 Social Security Number (increases 100% hit)
____________________________________________________________

  
 Indicate if you will
wait for an Investigation : 
  
 Sometimes D&B reports are not available
so they must investigate the customer in order to complete a report. Their investigation will take 2 to 4 days. If you are in need of a report within a day or two indicate on D&B request to Home Office. 
  

	 ̈	No, an Investigation is not necessary. 

  

	 ̈	Yes, an Investigation is necessary. There is no rush for this report. Take up to 4 days. 

  

	 ̈	Yes, an Investigation is necessary. RUSH - I need a report in      days. 

  
 Additional Information : 
  
 (ERL) Electronic Reference Lookup 
 DunsVoice Access System with “Joyce the Voice” 
  

	1.	Dial the toll free number 

	2.	Prompt to enter subscriber number 

	3.	Prompt to enter PID number 

	4.	Prompt to enter telephone number of business or DUNS number 

	 	    	Enter Area + 7 digit number + # OR    Enter 0 then DUNS Number + # 

  

	•	To obtain a DUNS number ask the customer for their number. Existing customers may have their number downloaded into our system. These numbers can be retrieved by:

  

	•	Go to your TCL prompt : Looks like this > 

  

	•	Enter the following ENGLISH Statement : 

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	44	 	 

 LIST CUST A12345 NAME DUNS.NO 
  

	•	The system will search and respond in the following format: 

  
 A12345 BRAKE SHOP 123456789 
  

	5.	“Joyce” repeats phone number 

  

	6.	HIT/NO HIT 

  

	 	•	 	HIT : “Joyce” states the line of business, SIC code, State, Zip Code, and spells name of business. 

	 	•	 	NO HIT : “Joyce” asks if you would like to be connected with directory assistant to look up business. Enter “9” for YES or “6” for NO.

  

	7.	“Joyce” asks, “Is that the company you are inquiring about?” 

  
 Enter “9” for YES or “6” for NO. (NO will connect you to Customer Service.) 

YES : “Joyce” states the Rating, year started, worth. 
 “Joyce states confirmation number. 
 “Joyce states if payment and/or financial information is available. 
  

	8.	“Joyce” will then ask if you would like additional information. Under no circumstance should you pull any D&B Report using this telephonic system.

  

	 Additional Menu Options:

	  	 	  	 	  	 Commands:

	  	 
	 PAYDEX
	  	20	  	 	  	 “YES”
	  	9
	 Business Summary
	  	30	  	 	  	 “NO”
	  	6
	 DUNS#
	  	50	  	 	  	 Pause
	  	*
	 	  	 	  	 	  	 Continue
	  	7#
	 !!Do not use other menu options !!
	  	 	  	 Repeat
	  	*44#
	     (other than those listed above)
	  	 	  	 Spelling of Co. name
	  	*72#
	 	  	 	  	 	  	 Spelling of Trade name
	  	*74#
	 	  	 	  	 	  	 Street Address
	  	*75#
	 	  	 	  	 	  	 City
	  	*78#
	 	  	 	  	 	  	 EXIT
	  	0

  
 ELECTRONIC REFERENCE
LOOKUP (ERL) 
 WORKSHEET 
  
 DIRECTIONS: 
  

	 1. Dial toll free number
	  	1-
	 2. Enter Subscriber Number, followed by #.
	  	#
	 3. Enter Personal ID Number, then #.
	  	#
	 4. Enter one of the following, followed by #:
	  	 
	 a. Telephone Number of business
                 including area code
                           -         
    -                   #

	 or
	  	 
	 b. “0” + Duns Number         0    
     -               -              
    #

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	45	 	 

 COMPANY INFO: Initial Charge of .20 units 
  

  

	Line of Business	 	S.I.C. Code	 	Subsidiary or
	            Branch	 	 	 	 

  

 Company Name 
  

	 Street Address
	 	 City
	 	 State
	  	 Zip

  

	 D&B Rating
 Available?
	 	 Year Started
	 	 Confirmation #
	  	 Additional Info

  
 OPTIONS (Additional
Charges involved) 
 All information may not be available on every inquiry 
  
 PAYMENT INDEX - Press 20# Charge of .30 units 
  

	 Company Payment Index
                         
	 Industry Median Index
                         

  
 Average payment    on terms OR    Average payment    on terms OR
     days beyond / sooner than terms.      days beyond / sooner than terms. 
  
 Number of Company Payment experiences              
  
 BUSINESS SUMMARY - Press 30# Charge of .50 units 
  

	 Sales $ ________________
 Steady
	 	 High Credit $____________
	 	 Trend    Up    Down

			
	 Net Worth $ ____________
	 	 % Experiences Slow ____________
	 	 History _________________

			
	 # Employees total ________
	 	 Placed for collection _______  times
	 	 Financial Condition ________

		
	 # Employees at location _________
	 	 Public Filings    YES Year Started ________________________________

		
	 # Payment Experiences __________
	 	 Owner, Partner or CEO : title/name ______________________________

		
	 Average High Credit ____________
	 	 Financing    Secured    Unsecured

			
	 DUNS # - Press 50# Charge of .30 units
	 	 	 	          -         
     -                   

  
 ORDER REPORT THROUGH
HOME OFFICE CREDIT ONLY 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	46	 	 

 ZEP CREDIT CARD PROGRAM 
  
 WHY CREDIT CARDS? 
  
 In today’s business environment, companies are striving to reduce purchasing costs and associated accounting overhead. By using Credit Cards our customers can not
only reduce hard purchasing costs, but also control spending through authorization limits on Credit Cards used by their purchasing managers. 
  
 A Credit Card program is more than an accommodation to our customers, it can be used as a selling tool. 
  
 BENEFITS TO THE ZEP REP, INCLUDE: 
  

	•	When opening new accounts, if the customer is going to pay with a Credit Card, a CREDIT APPLICATION IS NOT NECESSARY. Simply take the applicable Credit Card information (outlined
below) and provide it to the branch with the order. The account is then set up similar to COD, if they decide not to use a Credit Card in the future, credit approval will be required. 

  

	•	ZEP currently accepts VISA, MASTERCARD and AMERICAN EXPRESS Cards. 

  

	•	COLLECTION FOLLOW-UP IS NOT NECESSARY as ZEP is paid by the Credit Card Company. 

  

	•	You spend more of your time SELLING, less collecting. 

  

	•	When you have a collection problem on past due invoices, originally billed on net/30 terms, suggest to the customer they use a Credit Card to clear the balance.

  

	•	You provide your customer a payment alternative. Without waiting for their next check writing cycle, they can pay you now. 

  

	•	An order billed to a Credit Card gives you the assurance that SALES VOLUME earned will not be taken back as part of a bad debt charge-off. With a Credit Card order, the only way you
lose volume is if the merchandise is returned and/or the customer claims the purchase was unauthorized (it pays to get the customer to sign an order) resulting in a charge back to ZEP. If the customer requests the Credit Card company charge back the
sale to ZEP because of defective merchandise and a return does not occur, the charge to the Sales Rep will be determined in accordance with company policy. 

  

	•	Gives you and Zep a competitive advantage over companies not equipped to handle Credit Cards. Allows us to be competitive with companies that currently promote Credit Card
capabilities. 

  
 NON ZEP-O-TRACK REPS

 HERE’S WHAT YOU NEED TO DO: 
  

	1.	Fill out the Credit Card Authorization Form (ZDF 265) as shown on the attached example or list the following information on the order. 

  
 REQUIRED INFORMATION INCLUDES: 
  

	 	•	 	Customer Number 

  

	 	•	 	Customer Name 

  

	 	•	 	Type of Credit Card:    (VISA, MASTERCARD, AMEX) 

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	47	 	 

	 	•	 	Credit Card Account Number 

  

	 	•	 	Cardmember or authorized signer as shown on Credit Card. (Have the customer sign the order or Credit Card Authorization Form, if possible.) 

  

	 	•	 	Credit Card Expiration Date 

  
 You may have customers with multiple card numbers. ZEP’S computer database will retain the appropriate Credit Card Number(s) for selection at order
entry. You should note, some customers request that Credit Card Numbers NOT be retained in a database for security reasons. If the customer makes such a request you should so note on the order. 
  

	2.	Attach Credit Card Authorization Form to the order and fax, mail or deliver to branch. If the Credit Card Authorization form is not used you should ensure the required information
listed above is on the order. 

  
 * A small supply of the Credit
Card Authorization Form is provided for your convenience. Additional supplies may be obtained from your branch. 
  
 ZEP-O-TRACK REPS 
 HERE’S WHAT YOU NEED TO DO: 
  

	1.	In the Special Instructions box type : CREDIT CARD ORDER. 

  

	2.	When you fax your orders in, make a note of the following required Credit Card information on the cover sheet of your fax. 

  

	 	•	 	Customer Number 

  

	 	•	 	Customer Name 

  

	 	•	 	Type of Credit Card:    (VISA, MASTERCARD, AMEX) 

  

	 	•	 	Credit Card Account Number 

  

	 	•	 	Cardmember or authorized signer as shown on Credit Card. 

  

	 	•	 	Credit Card Expiration Date 

  

	*	Procedure to handle Credit Card Orders in Zep O Track Release 2.0 is in development and will be passed along to you as soon as complete. Improvements scheduled for Version 2.0
include the ability to transmit a Credit Card Order. The transmission will include the required Credit Card information. 

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	48	 	 

 BRANCH RESPONSIBILITIES 
 HERE’S WHAT THEY NEED TO DO: 
  

	1.	Branch Management may request a signed Credit Card Authorization form on initial Credit Card orders, unusually large orders outside of the customer’s normal purchasing habits
or walk-in Credit Card customers. This will be beneficial if the sale is charged back to Zep due to customer disputes or errors in order processing. 

  

	2.	Prior to entering the order, the amount will be extended to include tax and freight. 

  

	3.	When the order is entered it will fail Credit until the sale is authorized through the Credit Card Company. 

  

	4.	The branch must obtain an Authorization from the Credit Card Company PRIOR to shipping the order. This process currently involves a phone call, but will eventually be automated. You
will earn Sales Volume after the authorization is obtained and the Credit failure is overridden, just as with Non-Credit Card orders. 

  

	5.	If the Credit Card Authorization is DENIED, you may be asked to contact the customer to obtain another Credit Card Number or determine if the customer desires to pay on net/30
terms. May require Credit Application, subject to Company Credit Policy. 

  

	6.	After the Authorization is obtained, the order is shipped and invoiced. 

  

	7.	For Credit Card Credit Memos and invoices already on Zep’s Accounts Receivable System, branches must complete a Credit Card Authorization form, obtain the authorization
from the Credit Card Company and fax to Home Office Credit for processing. 

  
 ACCOUNTS RECEIVABLE/COMMISSION UPDATES 
  

	1.	During nightly computer update, the authorized Credit Card invoice and payment is processed to the customer’s account. 

  

	2.	You will be charged one-half of the fee charged to ZEP by the Credit Card Company. The current fees are 2% for VISA and MASTERCARD, and 2.25% for AMEX. The fees are based on the
TOTAL invoice amount, sales tax and freight included. {See the following calculated example} 

  

	3.	It is recommended that you increase your selling price by 2.5% (may vary by card type) to offset the effect of the Credit Card Fee on your Net Commission. Referring to the
Commission Calculation example below, adding 2.5% to the Merchandise Sales Price would result in a Net Commission amount of $56.29, instead of the $53.80. 

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	49	 	 

 EXAMPLE 
 CREDIT CARD SALE / COMMISSION / CALCULATION 
  
 The following example uses a 50/50 account split and a Credit Card Fee of 2.00% 
  

	 Error!
Bookmark
not
defined.$245.00
	 	 	  	 Invoice Amount

			
	 -20.00
	 	 	  	 Tax & Freight

	
	 	 	  	 
	 225.00
	 	 	  	 Merchandise Sales Price

	
	 	 	  	 
	 22.50
	 	 	  	 10% of Selling Price

			
	 90.00
	 	 	  	 Sales Cost

	
	 	 	  	 
	 112.50
	 	 	  	 Total Cost for Commission Calculation

	
	 	 	  	 
	 225.00
	 	 	  	 Merchandise Sales Price

			
	 -112.50
	 	 	  	 Total Cost for Commission Calculation

	
	 	 	  	 
	 112.50
	 	 	  	 
			
	 x 50%
	 	 	  	 Using a 50/50 Commission Split

	
	 	 	  	 
	 56.25
	 	 	  	 Gross Commission Amount (25%)

			
	 -2.45
	 	 	  	 Credit Card Fee ($245 x 2.00% = $4.90)
     $2.45 Sales Rep portion 50%
     $2.45 Company portion 50%

	
	 	 	  	 
	 $53.80
	 	 	  	 Net Commission Amount

			
	 23.91%
	 	 	  	 Commission Percentage (53.80    225.00)

  
 COMMISSION UPDATE (CON’T)

  
 The Monthly Commission Statement will show the Credit Card Fee charge for
each Credit Card Sale in the column currently headed “DEBIT”. The heading has been changed to read “DB/CCF” (Debit/Credit Card Fee). If there is a “DEBIT” and a “CCF”, they are combined into one entry.

  
 IF THE MERCHANDISE IS RETURNED: 
  

	1.	The contract ZEP signs with Credit Card Companies requires any Credit issued to the customer for merchandise billed to a Credit Card MUST be credited to the customer’s Credit
Card. Accordingly, when a Credit Memo is issued for returned merchandise a credit will be processed through the same Credit Card that was originally charged. 

  

	2.	The Sales Rep will lose commission and sales volume on any returned merchandise. 

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	50	 	 

 DEFECTIVE PRODUCT: 
  
 If the customer requests the Credit Card company charge back the sale to ZEP because of defective merchandise and a return does not occur, the commission and/or Sales
Volume charge-back will be determined in accordance with company policy. 
  
 IF
THE MERCHANDISE IS BACKORDERED: 
  
 It is necessary to WAIT until the
merchandise is available for shipment before a credit card authorization can be obtained. Keep in mind we are reserving part of the customer’s Credit Limit, therefore authorized amounts are only valid for three (3) business days. 
  
 UCC PROGRAM 
  
 When a customer’s credit is not enough to secure payment OR if a large amount of credit
is extended it may be necessary to have an Agreement signed. All Zep agreements incorporate a paragraph relating to a Secured Interest When a customer signs a secured interest to more than one party it is necessary to file a Financing Statement
(UCC-1) with the Secretary of States Office. This filing will notify other creditors that should the debtor not be able to meet the financial obligations of our agreement, Zep will have first access to any assets set forth per our agreement.

  
 Standard for filingError! Bookmark not defined. 
  
 For any Serial Number Equipment with an invoice total of $1000 or more and/or
equipment sold on extended terms. A customer meeting this standard and criteria (see Criteria section) should sign an agreement which grants Zep Manufacturing Company a Security Interest and uses Agency Language. This policy is not to jeopardize
sales, but to secure payment. 
  

	Criteria	for filing 

  
 The following criteria should be used to determine if Zep should take a secured interest in a piece of equipment or product(s): 
  

	 •      Type of Business - consider the industry Municipality vs. local car
clean-up
	  	 •      Years in Business - watch business less than two years.

		
	 •      D&B Rating - lack of a rating or one lower than 3A2 or Derogatory
information
	  	 •      Terms - any equipment sold in excess of net 30.

		
	 •      Large Dollar Amount Order Even if terms are net/30, equipment orders of $25,000 or more
need to be filed.
	  	 •      Large Inventory Order - Consignment or Pool Purchasing
Arrangements.

		
	 •      Zep Payment History - If customer continually pays slow, equipment sales should be
secured.
	  	 •      Overall Credit Worthiness - Determined by the Regional Branch or Credit
Manager.

		
	 •      Highly Rated Customers - With single equipment order $25,000 or more,
	  	 •      Credit Card Accounts UCC not necessary. regardless of terms.

	
	 •      National Accounts - Determined by size of order. Should be reviewed with
Home Office - Credit.

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	51	 	 

 While this is not an inclusive list of criteria, these elements are common in the Credit decision. In addition to
notifying you of equipment invoices that fall within the $1000 criteria, Home Office Credit will look at some of the aforementioned customer traits prior to requesting an explanation for not filing. Any questionable deals should be reviewed with
Richard Caldwell, Director - Credit & Collections. 
  
 Definitions:

  

	1.	Purchase-Money Security Interest : one taken or retained by the seller of the collateral to secure all or part of its price; The concept of PMSI is important in that it may
permit a secured creditor to acquire an interest ahead of other secured creditors holding the same type of collateral. To perfect properly, the seller must have a security agreement covering the goods and file it within ten days after the debtor
receives possession of the collateral. 

  

	2.	Secured Creditor : a creditor who holds security that will cover the amount the debtor owes him or her. 

  

	3.	Security Interest : an interest in real or personal property which secures the payment of an obligation. Under the Uniform Commercial Code security interests are limited to
personal property and fixtures. The signed security agreement must contain a description of the collateral. 

  

	4.	Uniform Commercial Code [U.C.C.] a code of laws governing various commercial transactions, including the sale of goods, banking transactions, secured transactions, in
personal property, and other matters designed to bring uniformity in these areas to the laws of the various states, and that has been adopted, with some modifications, in all states as well as in the District of Columbia and in the Virgin Islands.

  
 How to file 
  
 Home Office has an on line filing system. This was installed to circumvent the complex
network of State Rules concerning the filing of UCC documents and to streamline credit procedures where a perfected security interest is necessary. Filing these forms is not only a tedious task, but almost every State has a different procedure. The
on line system involves entering information at Home office via PC and transmitting to Data File Services, Inc. who in turn will file the necessary UCC-1 documentation. Home Office Credit will be responsible for the entry and maintenance of this
system. 
  
 Fax the following Documents to Home Office - Credit
& Collections : 
  
 1) UCC Information Sheet
* 
 2) Signed Agreement 
  
 * State Requirements - see below for more information 
  
 Timeline 
  
 Due to the nature of these filings it is very important to gather all information and fax it to home Office within 5 days of invoicing or shipment. The reason for
this deadline is because other creditors will have a chance to file against the assets of the company depending on the agreement with the business. It’s a race to the courthouse and the first one there has a “perfected” filing. This
puts Zep in a better position to recover assets. 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	52	 	 

 State Requirements 
  
 Certain states require specific information. Please make sure this information is present when faxing to Home Office. The following categories need to be reviewed when
filing in the states listed below: 
  

	 	  	REQUIRE
COUNTY
NAME

	  	FED TAX
ID & SS#

	  	NO
ABBREVIATIONS
IN BUSINESS
NAME

	  	AGREEMENT
COPY

	 	 	AMOUNT

	 ARKANSAS
	  	X	  	 	  	 	  	 	 	 	 
	 COLORADO
	  	 	  	X	  	 	  	 	 	 	 
	 FLORIDA
	  	 	  	 	  	X	  	 	 	 	 
	 GEORGIA
	  	 	  	X	  	 	  	 	 	 	 
	 ILLINOIS
	  	 	  	 	  	X	  	 	 	 	 
	 KANSAS
	  	 	  	X	  	 	  	 	 	 	 
	 KENTUCKY
	  	X = County filing only
	 LOUISIANA
	  	 	  	X	  	 	  	 	 	 	 
	 MAINE
	  	 	  	 	  	 	  	X	 	 	 
	 MASSACHUSETTS
	  	X	  	 	  	 	  	 	 	 	 
	 MICHIGAN
	  	 	  	X	  	 	  	 	 	 	 
	 MINNESOTA
	  	 	  	X	  	 	  	 	 	 	 
	 MISSISSIPPI
	  	X	  	 	  	 	  	 	 	 	 
	 MISSOURI
	  	X	  	 	  	 	  	 	 	 	 
	 MONTANA
	  	X	  	X	  	 	  	 	 	 	 
	 NEVADA
	  	 	  	 	  	 	  	X	 	 	 
	 NEW HAMPSHIRE
	  	X	  	 	  	 	  	 	 	 	 
	 NEW JERSEY
	  	 	  	 	  	 	  	X	 	 	 
	 NORTH CAROLINA
	  	X	  	 	  	 	  	X	 	 	 
	 NORTH DAKOTA
	  	 	  	X	  	 	  	 	 	 	 
	 OHIO
	  	X	  	 	  	 	  	 	 	 	 
	 PENNSYLVANIA
	  	X	  	 	  	 	  	X	 	 	 
	 SOUTH DAKOTA
	  	 	  	X	  	 	  	X	 	 	 
	 TENNESSEE
	  	 	  	 	  	 	  	 	 	 	X
	 UTAH
	  	 	  	X	  	 	  	 	 	 	 
	 VIRGINIA
	  	X	  	 	  	 	  	X 	**	 	 
	 WYOMING
	  	X = County filing only	  	X	 	 	 

	**	Virginia - send a clear copy of the agreement for Chesapeake City and the following counties: Amelia, Augusta, Chesterfield, Halifax, Henrico, Mecklenburg and Patrick.

  
 Monitor Filings 
  
 A list of filings will be kept at Home Office Credit & Collections for a period of 5
years. After 5 years the filing is automatically terminated by the State. A list of filings by branch is available upon request. This list will periodically be mailed to participating branches in order to maintain an accurate database. 

 
 Terminating Filings 
  
 Filings will only be terminated upon request of a branch or a customer. The account will be
researched to ensure the customer has paid for or returned the equipment in question. Upon receipt of the terminating statement the customer will receive a letter with copies that Zep no longer has a lien against their business. 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	53	 	 

 Expense 
  
 State filing fees will be disbursed by Home Office and charged to branches on a monthly basis. The filing service charges $9.75 per transaction for use of this service.

  
 [GRAPHIC APPEARS HERE] 
  
 UCC INFORMATION SHEET 
  
 FAX with Agreement to Home Office - Credit
404-350-6268            Please PRINT ALL Information 
  

	 1.      Invoice Number : __________________________________

	
	 2.      Customer Account Number / Branch :
__________________________________

	
	 3.      Filing Type : (mark one )

	
	Equipment
Sale                        Equipment
Lease                        Equipment Rental
	
	 4.      Entity Type : must include Owners Names for Partnership and Sole
Proprietor

	
	    Corporation             Partnership (list at least 2
names)                Federal Tax I.D. # ______________________________________
	
	 Owners Names if Partnership
________________________________________________________________________

	
	 Sole Proprietor - Please provide the following information

	
	 Owners Name ______________________________________    Social Security
#_______________________________

	
	 5.      Customer Name : Exact Legal Name / Parent Company’s
Name

	
	 ________________________________________________________________________________________________________

	
	 D.B.A.(if applicable)
________________________________________________________________________________________

	
	 6.      Location of Equipment : Street
___________________________________________________________________________

  

				
	 City _________________
	 	 State ______________
	  	 Zip ____________________
	  	 Country _________________

	
	 7. Equipment and/or Product Description : (as listed on invoice)

				
	 Qty
	 	 Product Number
	  	 Description
	  	 Serial #

				
	 _____________________
	 	 _____________________
	  	 ___________________________
	  	 ________________________

				
	 _____________________
	 	 _____________________
	  	 ___________________________
	  	 ________________________

			
	 8.      Price $ ___________
	 	 Delivery Date _______________________________
	  	 Terms __________________

  

 HOME OFFICE CREDIT DEPARTMENT ONLY 
  

	 DATE FILED
                                
	 	 TRANSACTION
#                                        
                                

		
	 DFS #
                                        
    
	 	 TERMINATED INFO                                   
                                  

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	54	 	 

 COLLECTION OF ACCOUNTS RECEIVABLE 
  
 DELINQUENCY 
  
 Delinquency is a pitfall which faces every company selling on credit. The ever changing economic conditions in various parts of the U.S.
dictates a flexible collection program to control delinquency. The most important person in our collection program is the Sales Representative. For this reason the phrase, “Know who you’re doing business with.” becomes a very
important by-law for the Sales force. 
  
 METHODS TO NOTIFY
CUSTOMER OF PAST DUE BALANCE : 
  
 1. The Monthly Statement. All
customers having a debit balance of more than $5.00 will receive a monthly statement. If the account has been coded “B” (placed and to be charged off), OR “1” (Cash On Delivery), OR “2” (Cash In Advance), a statement
will NOT be generated. See Section 2 regarding COD and CIA. If the account is delinquent, a message is printed by the computer, the message is increased in firmness as the delinquency progresses to a point where the account is 90 days or more
past due. See Section 7 for printing procedures. 
  
 2. The Credit
Collection Letter System. This automated system is comprised of three series of letters consisting of five varied letters. The three series are divided in aging categories of 45-60 days, 61-75 days and 76-90 days. The system is designed to insure a
particular letter format will not be repeated in less than six months. The collections letters that are created for mailing to customers include invoices to back up the balance due. 
  
 An audit confirmation is available in the system, along with a monthly report, by Sales Representative, of accounts exceeding 90 days past
due. Branches retain the ability to identify special customers for whom collection letters should not be sent. 
  
 The complete procedure on the Credit Collection Letter System is in Section 8. 
  
 3. Branch Reports. Several AR reports can be pulled from the Branch Reports Menu. Regional Credit Managers should monitor the status of accounts using these
reports on a monthly basis. These reports and options are discussed in detail in Section 17. 
  

	 	•	From the Aged AR Menu, Option #5, “Over 90 and Balance Greater than $1000” Report needs to be run and forwarded to Home Office by the 4th of each month. 

  

	 	•	From the Customer AR Status Reports Menu, you may choose different categories to review the AR status of all customers. 

  
 4 . The Personal Touch. Over 90 day customers do not receive automatic collection
letters. At this stage of delinquency, it is a good idea to resort to phone calls. As well, a good personal letter is an effective means of collection. When an account reaches 90 days past due, collection efforts should be accelerated. A credit
jacket (Form ZDF-50) should be prepared and all collection follow-up should be logged on the front. When an account reaches 120 days past due, a final demand letter should be sent, giving the customer 5 days to respond. If the customer fails to
respond, the account should be placed with a collection agency or the Home Office Credit Department. 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	55	 	 

 5 . The Sales Reps AR Hotsheet. Begin at “Branch Reports Menu” and select option #32 A/R HOTSHEET. This
is the A/R Hotsheet Report initial display: 
  
 A/R HOTSHEET REPORT

  
 Report Column Headings 
  
 (Y) Invoice date 
 (Y) 45—60 days 
 (Y) 61—90 days 
 (Y) 91—120 days 
 (Y) Over 120 days 
  
 Report based on ALL reps. 
  
 [A]ll reps, [S]pecify reps, 
 [C]hange
headings, [P]rint report, or e[X]it : 
  
 There are several options available:

  

		
	 [A]ll reps
	  	Press ‘A’ followed by [ENTER] to produce the report for all sales reps.
	 	  	 Note: This is the default. It is only necessary if reps have been specified and you want to reset to
all reps.

		
	 [S]pecify reps
	  	Press ‘S’ followed by [ENTER] to specify which sales reps will show on the report.
		
	 [C]hange options
	  	Press ‘C’ followed by [ENTER] to change the report column options.
		
	 [P]rint report
	  	Press ‘P’ followed by [ENTER] to print the report.
		
	 e[X]it
	  	Press ‘X’ followed by [ENTER] to exit report.

  
 5 . The Sales Reps AR Hotsheet.
[Continued] 
  
 SPECIFY REPS 
  
 Sales reps are specified on this screen. There are several options available: 
  

	 [A]dd
	  	Press ‘A’ followed by [ENTER] to add new reps to the list. Enter the three digit code assigned to the sales rep.
	 [D]elete Press ‘D’ followed by [ENTER] to delete an entry.

	 [I]nsert
	  	Press ‘I’ followed by [ENTER] to insert an entry.
	 [M]odify Press ‘M’ followed by [ENTER] to change an entry.

	 [P]age
	  	Press ‘P’ followed by [ENTER] to specify the page number.
	 [S]ave
	  	Press ‘S’ followed by [ENTER] to save the list of reps.
	 e[X]it
	  	Press ‘X’ followed by [ENTER] to return to the initial A/R Hotsheet display.

  

	Notice	that the report is now based on SPECIFIED reps. 

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	56	 	 

 CHANGE HEADINGS 
  
 Notice that “([Y]es or [N]o)” is displayed next to the current column to be changed. Press either ‘Y’ or ‘N’ followed by [ENTER] to specify
whether or not you want the current column displayed on the printed report. If you just press [ENTER], the option will remain as it is. There are several column headings: 
  

	 Invoice date
	  	Will print the invoice date next to the invoice number.
	45—60 days	  	Will include the 45-60 column on the report.
	61—90 days	  	Will include the 61-90 column on the report.
	91—120 days	  	Will include the 91-120 column on the report.
	Over 120 days	  	Will include the OVER 120 column on the report.

  
 PRINT REPORT 

 
 If the print option is selected, the report will begin to select the records for the
report. Once the report is completed, there will be a spooler entry displayed and the user will be prompted to press [ENTER] to continue. 
  
 This is a sample report. 
  
 15 MAY 1997             ACCOUNTS RECEIVABLE
HOTSHEET             PAGE             1 
  

FOR 033—FELDMAN, RICHARD 
  
  
  

	 CUSTOMER NAME
REMARKS

	  	45-60

	  	INVOICE
DATE

	  	WATCH IT
61-90

	  	INVOICE
DATE

	  	TROUBLE
91-120

	  	INVOICE
DATE

	  	 GONE!
 OVER 120

	  	INVOICE
DATE

	 GSA ACCOUNTS PAYABLE
	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 	  	#	 51026974	  	06/20/96
	KANSAS CITY MO	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 	  	$	90.99	  	—  
	 ACCT# GSA00402
	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 
	 PHONE 206.931.7932
	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 
	 Totals
	  	$	0.00	  	 	  	$	0.00	  	 	  	$	0.00	  	 	  	$	90.99	  	AR
	 $1689.31
	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 
	 SALESREP TOTALS
	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 	  	 	 	  	 
	 SALES VOLUME AT RISK
	  	$	0.00	  	 	  	$	0.00	  	 	  	$	0.00	  	 	  	$	90.99	  	 
	 COMISSION AT RISK
	  	$	0.00	  	 	  	$	0.00	  	 	  	$	0.00	  	 	  	$	18.42	  	 

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	57	 	 

 PLACEMENT OF ACCOUNTS (“B” Coding) 
  
 Who & What : 
  
 Bad debt expense represents a sizable portion of total expenses and a strong effort must be made to control this critical area. Once it has
been determined an account is not going to pay, as a result of in-house collection efforts, it is necessary the account be placed for collection. The Regional Credit Department will be responsible for “B” coding accounts, as well as the
accompanying bookkeeping. 
  
 When : 
  
 It is important accounts be placed for collection at the time they are 120-150 days past
due. Accounts are easier to collect early in the delinquency and some agencies charge more, or will not handle accounts with balances older than 6 months or 180 days past due. Therefore, one of your goals should be the timely placement of past due
accounts, with 120-150 days past due being the target area. 
  
 How :

  
 The Customer Account must be “B” coded by changing Credit
Status (Item 10 in Customer Maintenance) to “B”. This is accomplished by accessing Customer Maintenance (Item 4 on the Data Entry and Inquiry Menu). You will have an option of “Inquiry, Modify, Delete” as well as other options.
To B-Code, you should choose “Modify” and enter the customer number to be B-Coded. Item 10, Credit Status will change to “B”. 
  
 The system will calculate the Sales Representatives Commission to be charged back. Notify the Sales Rep through Credit Department Memo (ZDF-IS-S2). The Sales Rep should
be notified of this action by preparing the Memo from the Credit Department (ZDF-IS-S2) reflecting the commission charged back. 
  
 If partial payments have been made to one or more invoices., you must manually calculate the amount of commission to be charged back. You should consult the commission
statement to obtain the original amount of commission earned on invoices billed to the account. The appropriate commission should be charged back utilizing a commission adjustment form (ZDF-IS-SI-79) with a Code 83. 
  
 Legal Issues : 
  
 Accounts that require monitoring for Bankruptcy, Bulk Transfer, Out of Court Settlement, Receivership, Benefit of Creditors Committee, or
any special negotiations should be placed with Home Office - Credit & Collections regardless of amount. Special placement procedures apply to these customers, please see section below. 
  
 Placements (by Dollar Amount) : 
  

	1)	Accounts with balances less than $500.00 should be placed with a local collection agency. Credit Managers should review agency proposals with the Regional Credit Manager. As
collection fees on small balances can be high, it is important for the agency to provide a “free demand period”. Free demand allows us to remain in control of the account, while using the agency’s name. Most agencies offer from 10-30
days free demand. If the debtor pays during the free demand period, there is no charge to Zep. Conversely, if the account remains unpaid, the agency initiates normal collection procedures in our behalf, usually on a contingency basis of 15-35%.

  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	58	 	 

 Placements (by Dollar Amount) : [Continued] 
  

	2)	Accounts with balances in excess of $500.00 should be placed with the Home Office - Credit & Collections. The preparation of the placement file shall be completed by the
Regional or Branch Credit Department. The Regional Manager may delegate placement authority to Branch Managers, but only after consultation with the Home Office Credit Department. 

  

	•	Form ZDF-365 “Account Placement” should be completely filled out and attached to supporting documentation. 

  

	•	When placing a National Account, also complete Form ZDF-208 “Collection Summary - National Accounts”. Send the Yellow copy to the National Account Manager, and the White
Copy to Home Office with the placement package. 

  

	•	Mail to Home Office - Credit & Collections. Supporting documentation should include an open items statement, copy of the credit application, all open invoices, any signed
agreements, UCC information, and copies of any correspondence to and from the customer. 

  
 Placement Procedures For Bankruptcy (Or Legal Issues): 
  
 Upon receipt of ANY letter or form document regarding Bankruptcies, Bulk Transfers, Out of Court Settlements, Receiverships, Benefit of Creditors Committee, or any special negotiations; research open accounts first
and “B” code immediately to prevent additional orders from shipping. 
  
 If an open account is not found research charge off records for a possible debt. In bankruptcy cases involving individuals it is helpful to call the debtors attorney and ask for the name of the business and/or the amount listed on the
debtor’s Schedules owing to Zep. This Notice was sent to Zep for a reason - research it. It is possible that Zep did business with the debtor and the debt was paid in full. Zero balances should be reported to Home Office - Credit &
Collections. 
  
 Prepare the appropriate documents and send to Home Office -
Credit & Collections, Attention : Bankruptcy. The following information needs to be sent for every Bankruptcy. If there is a zero balance attach account number and branch number to the bankruptcy paper(s). Home Office keeps a supply of
Bankruptcy Jackets (specially designed) which will be used to organize the case, so a Credit/Collection File jacket is not necessary. 
  
 1) Zep Account Placement Form : ZDF-365 (6/88) 
 2) Notice of Commencement (or
other data referencing the bankruptcy case.) 
 3) Invoice Copy(s) 
 4) Signed Agreement(s), if applicable 
 5) AR Status Sheet 
  

Keeping Branch Records 
  
 Each Branch and Regional Office should keep a copy of all bankrupt accounts, regardless of amount, for future reference. Using a list will help keep research time to a
minimum. Using a Lotus or Excel Spreadsheet will allow you to keep up with each case. Each column should contain the following information : Case Year / Case Number / Legal Bankrupt Name (use the first if there are more than one) / Zep Account Name
(if significantly different from Bankrupt name) / Account Number / Branch Number / Debt Amount / Month - Year Placed / Status to Date (i.e., PIF,SIF...) 
  
 Additional Information will be kept at Home Office. Bear in mind a bankruptcy case can go on for 10 + years and you will receive a number of paper work. It’s not
necessary for you to keep copies of this information as a master file will be located at Home Office - Credit & Collections. Forward all original paperwork to Home Office - Credit & Collections with the account number and branch
number at the top. 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	59	 	 

 PREFERENCE ACTIONS 
  
 There is a 90 day window prior to the Petition Date of a Bankruptcy in which any payments by the debtor to a creditor could be considered
preferential over other creditors. The Estate has the right to request these amounts returned to the estate. This request can come at any time during the course of the bankruptcy. All requests concerning Preference Actions should be immediately
forwarded to Home Office - Credit & Collections : Attention Bankruptcy. Failure to do so will result in a default judgment against Zep with additional penalties. 
  
 The account will be researched and answered by Home Office - Credit & Collections. Should money be returned to the debtor’s estate,
the Regional Credit Manager will be notified. This amount will be debited from the Branch Recoveries. If the Sales Rep is still employed by Zep, charge back 100% Volume and 100% Commission (use rate on original order) as to the Preference Payment.
DO NOT make any adjustments based on the original letter. Make adjustments ONLY when notified by Home Office - Credit & Collections. 
  
 CONTINUING BUSINESS RELATION AFTER PLACEMENT (“B” Coding) 
  
 Automatically limited to one of the following: COD, Cash in Advance, Sales Representative to Guaranty, Credit Card or Security Agreement.
National Account Customers will not lose pricing status; however, payment method is limited to alternate methods. In any situation, the Branch Manager or Credit Manger must contact Home Office - Credit & Collections to discuss the next
appropriate step. 
  
 If the “B” coded account is being resold, a new
account should be set-up. The customer should be reducing any “B” coded balance on a regular basis or COD purchases will be discontinued. If the Sales Rep has guaranteed the new account, this will not be the case. 
  
 BANKRUPTCY : Continuing Business Relations - Chapters 11 & 13 

 
 A debtor emerging from a bankruptcy case, notified by an Order Closing the Case, may
still be financially weak. Remember that the Plan of Reorganization could be carried out over a time span of 10 or more years. For this reason accounts must remain on the same status. A change in Status will be available only upon review 6 months
after “Plan” payments to Zep begin. This review must be made by the Branch Manager/Credit Manger and Home Office - Credit & Collections. 
  
 PAYMENT AFTER PLACEMENT (“B” Coding) 
  
 After a “B” coded account has been charged off, payments, credit memos and adjustments should not be applied to the account. Payments should be applied
to recoveries and adjustments and credit memos should be manually posted to the file. Any change in the customer’s balance must be transmitted to the Home Office Credit Department via payment notification (ZDF-46). Home Office - Credit &
Collections will send an Account Status Report to notify a Branch of any changes regarding the account. 
  
 Special care should be taken when issuing a credit memo to a “B” coded account with a balance. The credit memo will charge back the Sales Rep’s commission. As this was done when the account was
“B” coded, a commission adjustment must be completed to offset the double entry. 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	60	 	 

 ADMINISTRATION OF ACCOUNTS RECEIVABLE 
  
 DUPLICATE PAYMENTS 
  
 All payments are to be reconciled prior to applying to Accounts Receivable. If a duplicate
payment is received the customer should be contacted for direction of how to apply the check. If the customer can not be contacted by phone, send a duplicate payment letter. The check should be retained in a safe and monitored by the Branch/Regional
Manager for thirty (30) days or until the matter is resolved, which every comes first. 
  
 The duplicate payment letter is to be forwarded to all customers who remit in duplicate, with a copy retained in a follow-up file. After fifteen (15) days, if there has been no response, a photocopy of the letter should be sent
marked “second request”. 
  
 If after the second fifteen (15) day
period, thirty (30) days from receipt of the check, there is no response, the check should be applied to the customer’s account. A copy of the letter and check should then be placed in the customer’s file. 
  
 It is always company policy, regardless of the age of the credit balance, to refund duplicate
payments, provided the customer does not have a balance on the account or another account. In all cases, we should apply any duplicate payments to related account’s past due invoices 
  
 CREDIT MEMOS 
  
 Mail credit memos to customers in the following situations : 
  

	•	does not zero the entire invoice. Note on CM “Short pay on original invoice” 

  

	•	original invoice has been paid in full and the CM will create a credit balance 

  

	•	customer request - you may want to advise customer how to use the CM 

  
 DO NOT MAIL if the following apply: 
  

	•	the CM clears the invoice in full and the Account Balance is zero. 

  

	•	Re-bills 

  

	•	B - Coded Accounts 

  
 REFUNDS 
  
 Upon receiving a
request for a Customer Refund, the credit balance must first be verified. It is against Company Policy to refund money to a customer who does not have a credit balance. After verification of the credit balance, a “Request for Check” (Form
ZDF-95) should be completed in duplicate and an “Adjustment to Accounts Receivable” (Form ZDF-IS-C3) completed in duplicate and approved by the Manager or designee. 
  
 After approval, the account should be debited with an Activity Code “22” adjustment. The entry date should be noted on the
Adjustment Form, one copy of the “Request for Check” and one copy of the Adjustment Form, along with the source document or letter that initiated the request, should be sent to Home Office—Credit & Collections. Additional
documentation includes: 
  

	•	Credit memos, if applicable 

  

	•	Duplicate Check copies, if applicable 

  

	•	Customer Status Report (DCR) 

  

	•	Written request from Customer or if verbal, indicate person’s name and date of request 

  
 Carbon Copies should be retained in a suspense file at the Branch until the check is received from Home Office. The customer’s check
should then be mailed can copies of all documents placed in the customer’s file. 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	61	 	 

 When the Daily Cash Reconcilement Summary (Form ZDF-90) is prepared, the customer refund adjustments must be listed on
the reverse side. This is very important, therefore, it should be coordinated in the Regional Office between the Cash Receipts and A/R Adjustment areas. 
  
 DISCOUNTS 
  
 With few exceptions, our terms are net 30 days. Generally, we do not offer volume or early pay discounts. However, occasionally customers will take discounts without explanation. When this occurs, it is important to
take the appropriate follow-up action to clear the remaining balance. 
  
 When a
customer check underpays an invoice, it will appear on the “Daily Report Of Mismatched Cash Applications”. This report should be reconciled on a daily basis. The cash receipts program will permit discounts of $1.00 or less to be adjusted
at the time of check posting. 
  
 If a customer takes a discount greater than
$1.00 but less than $10.00 the Branch Manager or Regional Credit Manager should contact the Sales Representative to ascertain why the discount was taken and how the balance will be cleared. Should the Sales Representative not respond within 30 days
and the discount balance remains, an A/R Adjustment (ZDF-IS-C3) should be processed, crediting the account. A Commission Adjustment (ZDF-IS-SI) should also be processed, charging one-half of the discount taken, to the Sales Representative. If the
customer persists in taking discounts on future payments, the A/R Adjustment and Commission Adjustment should be processed immediately. 
  
 When a customer takes a discount of $10.00 or more, a letter should be written to the customer, copy to the Sales Representative, to ascertain why the discount was taken.
Should the Sales Representative not respond within 45 days, and the discount balance remains, a price adjustment should be entered, clearing the balance. When the price adjustment is entered, the Sales Representatives Commission Account will be
charged 45% of the adjusted balance, and sales volume will be lost. 
  
 RETURNED CHECKS 
  
 Upon notification from the bank that a
check has been returned unpaid, please determine the reason for non-payment. In most cases, the reason will be one of the following : 
  

	 	•	 	Insufficient Funds (NSF) 

  

	 	•	 	Account Closed 

  

	 	•	 	Bankruptcy - Refer to Maker 

  

	 	•	 	Check Irregularity 

  
 An Accounts Receivable Adjustment (ZDF IS C3) must be prepared and entered as a code “25”, charging the NSF check back to the applicable payment (Code 33) on the customer’s account. If the invoice has
been cleared from the AR, you must place the code “25” - On Account. Depending on why the check was returned you may or may not be able to redeposit it. See below for additional information. 
  
 For any return check, the customer will be charged a $15.00 fee. This may be accomplished by
issuing a Debit-Collection Fee Account Receivable Adjustment (ZDF IS C3). Please note you will not charge this fee to Bankrupt Accounts. 
  
 RETURNED CHECKS [Continued] 
  
 The Branch Cash Posting Clerk should list all returned checks on the Daily Cash Reconcilement Summary, Form 90. The listing should include the customer’s name,
account number and amount of NSF check. A copy of ALL code “25” A/R Adjustments should be attached to the Form 90. 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	62	 	 

 All branches should maintain a “Return Check” file. A copy of the returned checks, whether first or second
deposits must be placed in this file. The check copy should be noted with the date for charge-back and disposition. Branch managers should review this file weekly to assure the necessary A/R Adjustments have been made. 
  
 Insufficient Funds - Immediately upon receiving notification of an NSF check,
the branch Manager should notify the customer in writing, with a copy to the Sales Rep. Redeposit the check and instruct the customer to deposit sufficient funds to allow clearance of the check. If the check has been returned a second time the
customer must be instructed, in writing, to remit certified funds within 7 to 10 days, depending on the governing state law. 
  
 Redeposit the check and post as a code “33” payment. If the check is returned the second time, prepare an Accounts Receivable Adjustment (ZDF IS C3) and enter
as a code “25”. It is recommended that you now send the check to your bank for “Forced Collection”. This technique provides for the bank to hold the item until there are sufficient funds in the account to cover the check. The
holding period inmost banks is 7 to 10 days. A cover letter to the bank should request if the check is made good, remission of their check less the bank service charge for collection. A 15 day follow-up is recommended for this action. 
  
 Placing a check for “Forced Collection” is not considered to be a deposit. When the
debtor check is good, the bank will issue their check, or credit our account, which will be posted against the Code “25” A/R entry on Zep’s books. If your account is credited you will be notified by Home Office Accounting to issue a
CM (Miscellaneous Credit). Enter a collection fee adjustment to offset the bank fee. 
  
 Please note most banks send NSF checks to the branch. However, if for some reason Home Office Accounting received the NSF check directly from the bank, it will be forwarded to your branch for necessary handling and adjustments. 

 
 Account Closed 
  
 When returned checks are marked “Account Closed”, the customer should be notified
in writing, requiring certified funds within a 7-10 day period, depending on the applicable state law. It is not necessary to redeposit returned checks marked “Account Closed”. 
  
 Bankruptcy - Refer To Maker 
  
 When returned checks are marked “Bankruptcy - Refer to Maker”, do not notify the customer, do not redeposit the check, and do not charge the customer the $15.00
fee. You are prohibited by Federal Law to pursue collection. Refer to the Placement Section for B-coding instructions with regards to Bankrupt Accounts. 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	63	 	 

 Irregular Signature / Amount / Date 
  
 When returned checks are marked “Irregular Signature or Amount”, it will be necessary to determine if the check may be corrected
for re-depositing. If you are unsure as to the proper action, please refer questions to Home Office Accounting or Credit & Collections. Do not charge the customer the $15.00 fee. 
  
 There are several tips to quickly correct an irregular check: 
  

	•	Stale Date - place an asterisk (*) next to the incorrect item and type “see over”. Endorse the check to say “Correct date is ??/??/??”

  

	•	Wrong Amount - place an asterisk (*) next to the incorrect item and type “see over”. Endorse the check to say “Correct amount is $?.?? Guaranteed by Zep
Manufacturing.” With Branch Manager signature and title. 

  

	•	Missing Signature - type “Missing endorsement guaranteed by Zep Manufacturing” with Branch Manager signature and title. 

  
 With this guarantee you are telling the bank that you will reimburse it should the maker
claim that the check was paid in error. 
  
 A/R (CASH) TRANSFERS

  
 It’s critical the following procedures be followed as errors create
imbalances in the Accounts Receivable, necessitating additional reconcilement work and hindering the month-end close-out process. It’s important cash and CM/DM’s not be posted after finalizing on the day of close-out because it creates an
imbalance in the Accounts Receivable and is carried forward into the subsequent month. 
  
 OUTSIDE REGION 
  
 When a branch receives a check for payment of an invoice billed by another branch, outside of the region, it should be sent to the appropriate branch immediately.

  
 WITHIN SAME REGION 
  
 Cash transfers between branches within the same region should be processed as CM’s and
DM’s not by A/R check. 
  
 A/R Transfer Adjustments between invoices on the
same account or to transfer amounts between different accounts (within the same branch) requires the completion of the Accounts Receivable Adjustment Form, as a record and a source of reconstruction in the event of down-time. 
  
 MULTIPLE REGIONS 
  
 Checks including payment for invoices in multiple branches and regions, should be applied by invoice on the appropriate account. The amount
pertaining to other branches should be posted “On Account”. The account should then be Debited (Activity Code 22) and a check request completed and forwarded to Home Office—Credit & Collections, requesting a “Zep” check
be sent to the applicable branch. 
  
 Copies of the supporting documents should be
placed in the customer’s file. Further, the code “22” and “DM/CM” entries should be entered on the reverse side of the Daily Cash Reconcilement Summary (Form ZDF-90). 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	64	 	 

 ACCOUNTS RECEIVABLE ADJUSTMENTS 
  
 It is important to know the proper A/R adjustments to be made and the purpose of each.
Following are the various adjustments, the intent of each and resulting activity codes. 
  
 Sales Tax 
  
 This adjustment is to be used only after receiving
the proper documentation that the customer is tax exempt. In certain cases, it may be necessary to add tax. A Debit will create an activity code “DT” and a Credit will create an activity code “CT”. 
  
 Freight 
  
 This adjustment should be used when it is necessary to add or delete freight on an account. A Debit will create an activity code of
“DF” and a credit will create an activity code of “CF”. 
  
 Discount 
  
 This adjustment is to be used only to adjust minor
amounts (less than $10.00) to clean an account. The Sales Representative should be charged, on a Commission Adjustment, one-half of the balance adjusted. A Debit will create an activity code “CD”. 
  
 Refund 
  
 This adjustment should be used when issuing a refund to a customer or to another Zep branch when transferring payments outside of the
region. A Debit will create an activity code “22” and a Correction or a Credit will credit an activity code “21”. 
  
 Returned Checks 
  
 This adjustment must be used for all returned checks charged back the first or second time. A Debit will create an activity code “25” and a Correction or Credit will create an activity code “24”.

  
 Bad Debt Charge-Off 
  
 This adjustment is never to be generated from regional or branch levels. Creates Activity
Code “70”. 
  
 Credit Balance Charge-Off 
  
 This adjustment is made once a year. Home Office—Credit & Collections will advise
the Branch or Regional offices of the timing of this adjustment. It will create an activity code “82”. 
  
 Collection Fee 
  
 When a collection agency collects an account, they normally remit to Zep less their collection fee. As an example, an agency collects $100.00 from an account and charges Zep a $25.00 collection fee. The agency remits
$75.00 to Zep, retaining their fee. The $75.00 would be processed as a code “33” (Payment on Account). The $25.00 fee would be credited to the account as a Collection Fee. This would create an activity code “96”. 
  
 Miscellaneous Debits and Credits 
  
 Miscellaneous adjustments should be used in specific situations only. Home Office - Credit
& Collections instructs regional offices to make miscellaneous adjustments in connection with: 
  
 1. Payments received at Home Office or in distribution of funds from National Accounts. 
  
 2. When customers request refunds on credit balances that were previously absorbed. 
  
 3. When transferring customer payments to another Zep Branch within your Region. 
  
 4. When charging back a guaranteed account. 
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	65	 	 

 A copy of each Miscellaneous Adjustment must be forwarded to the Regional Credit Manager. As well, a copy must be
attached to the Form 90. A Debit creates an activity code “DM” and a Credit creates an activity code “CM”. 
  
 If there are questions concerning the usage of miscellaneous adjustments you should contact Home Office - Credit & Collections. 
  
 Accounts Receivable Transfer 
  
 This adjustment is for use in transferring funds from one account to another within the same
branch or to offset Debits and Credits on the same account. An activity code “01” will be generated by either a Debit or Credit. 
  
 The above mentioned adjustments should be generated using Form ZDF-IS-C3. Please use the remarks section to explain your entries. 
  
  

	 Zep Manufacturing Company
 Credit & Collections
 Policy & Procedures - Revision 1998
	 	66	 	 

 ACTIVITY CODES & DESCRIPTIONS 
  

	 01 - A/R Transfer
	 	85 - Acrued Charge Off (DB)
	 11 - Customer Order - regular
	 	86 - Collection Fee Debit
	 12 - Customer Order - EP
	 	87 - Term RT II Chg-Off (CR)
	 13 - Sales Rep Order - Merch
	 	88 - RT II Wipe-Off (DB)
	 14 - Customer Order - phone
	 	89 - Book Sales (CR)
	 15 - Installment Invoices
	 	90 - Bad Debt Charge Off
	 16 - Sales Rep Order - novelties
	 	91 - Term RT Chg-Off (DB)
	 17 - Customer Order - mail
	 	92 - Credit Balance Charge Off (CR)
	 18 - Customer Order - rush
	 	93 - Comm. Charge Back Bad Debt (CR)
	 19 -   Customer Order - rush batch
	 	94 - Ledger Sales (CR)
	 20 - Customer Order - future
	 	95 - Accrued Charge Off (CR)
	 21 - Customer Refunds - Adj.
	 	96 - Collection Fee Credit
	 22 - Customer Refunds
	 	97 - Term RT II Chg-Off (CR)
	 24 - Returned Checks - Adj.
	 	98 - RT II Wipe-Off (CR)
	 25 - Returned Checks
	 	99 - Book Sales (CR)
	 28 - Customer Order - Inter Co.
	 	AI - Accrue Interest
	 29 - Customer DM - Internat. Int. (DB)
	 	C0 - Customer CM - interco return merch
	 32 - Cash Receipts - Adj.
	 	C1 - Customer CM - interco p/u by rep
	 33 - Cash Receipts
	 	C2 - Customer CM - interco defective
	 34 - Misc. Receipts
	 	C3 - Customer CM - interco damaged/lost
	 40 - Freight Out
	 	C5 - Customer CM - interco price adj.
	 42 - Freight on Return
	 	C8 - Customer CM - interco rebill
	 43 - Comm on Spec - B/O
	 	CD - Credit Discount
	 44 - Other Commission Debits
	 	CF - Credit Freight
	 45 - Phone Charges
	 	CI - Credit Interest
	 46 - Donations/Advertising
	 	CM - Credit Adjustment Misc (07)
	 47 - Salesreps Invoice Freight
	 	CT - Credit Tax
	 48 - Other Misc. Adjustments
	 	DD - Debit Discount
	 49 - Commission Draw Checks
	 	DF - Debit Freight
	 50 - Freight Out (CR)
	 	DI -   Debit Pastdue Interest (DB)
	 52 - Freight on Return (CR)
	 	DM - Debit Adjustment - Misc AR
	 53 - Commission Spec - B/O (CR)
	 	DT -   Debit Tax
	 54 - Other Commission Credits
	 	E0 - Customer CM-EP rtn merch
	 55 - Phone Credits
	 	E1 - Customer CM - EP p/u by rep
	 56 - Donation/Advertising Credits
	 	E2 - Customer CM - EP defective
	 57 - Sales rep Inv. Freight (CR)
	 	E3 - Customer CM - EP damaged/lost
	 58 - Other misc. Credits
	 	E8 - Customer CM - EP rebill
	 59 - Commission Draw Check (CR)
	 	MC - Returned Checks Adj (MLC)
	 70 - Customer CM - returned merch
	 	MD - Cash Recipts Adj (MLC)
	 71 - Customer CM - PU by rep
	 	MN - Returned Checks (MLC)
	 72 - Customer CM - defective
	 	MO - AR Debit from Transfer (MLC)
	 73 - Customer CM - damaged/lost
	 	MP - Cash Receipts (MLC)
	 74 - Insurance Liability Claim
	 	MR - AR Credit from Transfer (MLC)
	 75 - Customer CM - price adj.
	 	PI - Paid Interest
	 76 - Salesrep CM - merch
	 	RC - CS RT Manpower wipe-off CM
	 77 - Salesrep CM - novelties
	 	RD - CS RT Manpower wipe-off DM
	 78 - Customer CM - rebill
	 	X1 - Credit Card Cust Ref Adjust. (CR)
	 79 - Customer CM - Internat. Int (CR)
	 	X2 - Credit Card Cust Ref (DB)
	 80 - Bad Debt Charge Off (DB)
	 	X3 - Credit Card Cust Payment (CR)
	 81 - Term RT CHG-OFF (CR)
	 	X4 - Credit Card Adjust Cust RTN CHK (CR)
	 82 - Credit Balance Charge Off
	 	X5 - Credit Card Cust RTN CHK (DB)
	 83 - Comm. Charge Back Bad Debt (DB)
	 	X6 - Credit Card Cust Payment Adjust (DB)
	 84 - Leger Sales (DB)
	 	 

  

 67 

 CHARGE-OFFS 
  
 The following procedure is to be conformed to regarding August and December Charge-Offs. All “B”- coded accounts, in the Customer
Master File on the system, which remain unpaid on August 31st and December 31st, will be deleted from the Accounts Receivable and charged to Bad Debts. 
  
 All customer maintenance must be completed prior to the end of the month, as the data center requires one day for updating files. Any
account not properly updated will be carried past due until the next charge-off period. 
  

	1.	Prior to the end of August and December, the Accounts Receivable should be reviewed to assure all placed accounts have been “B” coded. To generate a Report of
“B” Coded accounts, select Option 18 on the Report Selector. 

  

	 	•	 	All check must be deposited and Accounts Receivable Adjustments processed prior to the close of August and December to prevent charging off accounts that have paid.

  

	 	•	 	Credit files should be reviewed to make certain that extended terms were not given to the account which would preclude “B” coding. 

  

	 	•	 	All open orders should be canceled prior to “B” coding an account. 

  

	 	•	 	All Commission Adjustments for Charged-Off Accounts should be made prior to close out so as to reflect on the next months Commission Statements. 

  

	2.	The Bad Debt Charge Offs will occur automatically during the Nitely Processing on the last business day of August and December. 

  

	3.	The following system generated listings of charge-offs will be printed at the Regional office. We suggest you run your nitelies for Fiscal Year End Close on FOUR PART paper.

  

	 	•	 	Customer alpha sequence within Branch code. 

  

	 	•	 	Customer alpha sequence within Sales Representative code. 

  

	4.	Distribute copies as follows: 

  

	 	•	 	2 copies = mailed to Home Office—Credit & Collections 

        One alpha listing by Branch Code & One alpha listing by Sales Rep Code. 
  

	 	•	 	The alpha listing within Branch Code should be retained in each branch office to be used in connection with recoveries and compute Sales Volume Charge Backs on November
30th. See #5 below for additional information. 

  

	 	•	 	The Sales Rep’s listing must be mailed to the Sales Rep advising the charge-offs are part of the November 30th Sales Year. 

  

 68 

 CHARGE-OFFS [Continued] 
  

	5.	The alpha listing within branch code, printed at August close-out, should be utilized to compute Sales Volume Charge Backs on November 30th. All payments should be noted on this listing. If additional accounts are B-coded between September 1st and November 30th, they
should be added to this list. If the above procedure is followed, Sales Volume Charge Backs in November will be routine. 

  

	6.	Do NOT Charge Off any accounts on December Close Out for which Sales Volume was NOT charged back to the Rep on November Close Out. 

  

	7.	If the Bad Debt Charge-Off Reports are lost during the Nitely Processing, you may recover them by using Option 18, “Bad Debt Charge-Offs” on the Branch Reports Menu. This
will bring you to the Bad Debt Menu. Choose Option 2, “Recover A/R Charge-Off Reports” to initiate the recovery process. 

  

	 	•	The original Bad Debt Reports must have been created in order to recover. 

  

	 	•	This recovery option is available only during the first month following a charge-off cycle. 

  
 NATIONAL ACCOUNTS 
  
 PAST DUE 
  
 When a National Account is 45 days past due, make the usual collection attempts. Make notes of dates of calls or correspondence and name of contact persons. Common practices include: 
  

	•	A phone call to the “Bill To” location or a reminder letter with invoice copies is appropriate. 

  

	•	The initial Automated Collection Letter, 45-60 day series, could be sent, however do not send any of the later series. 

  

	•	The Sales Rep should be asked to make collection attempts. 

  
 If preliminary collection attempts are unsuccessful, order a Proof of Delivery (POD) at 60 days past due. This is a common request made by National Account
customers when collection contacts are made. This process could take up to 2 weeks or longer. When the POD is received, verify if the account has been paid. 
  
 If invoices remain unpaid after 90 days, place the account with Home Office—Credit & Collections. DO NOT B-CODE THE ACCOUNT. Form ZDF-365
“Account Placement” should be completely filled out and attached to supporting documentation. When placing a National Account, also complete Form ZDF-208 “Collection Summary—National Accounts”. Send the Yellow copy to the
National Account Manager, and the White Copy to Home Office with the placement package. Mail to Home Office—Credit & Collections. Supporting documentation should include an open items statement, copy of the credit application, all open
invoices, any signed agreements, UCC information, and copies of any correspondence to and from the customer. 
  
 HOLDING ORDERS 
  
 DO NOT hold
National Account orders without approval of Home Office—Credit & Collections OR National Accounts. Both departments should be appraised of any situation where you feel orders should be held prior to taking such action. 
  
 PAYMENT 
  
 If payment is received on invoice(s) that were forwarded to Home Office, please note payment on a copy of the Collection Summary and forward
to Home Office—Credit & Collections. 
  

 69 

 B - CODING 
  
 If Home Office - Credit & Collections OR National Accounts attempts to collect are unsuccessful, you will be advised to B-code the National Account. 
  
 REPORTS 
  
 There are several Reports available to you when analyzing the Accounts Receivable. This
section will tell you how to access these reports. 
  
 The REPORTS MENU

  
 Go to the Main Menu. 
 Entering Option 2, “MASS UPDATES & PRINTING” 
 Select Option 4,
“Reports” 
  

	 B3XX
	  	4.2.4 Branch Reports Menu	  	 	  	07 APR 1998
	 1.
	  	 OPEN ORDERS LISTINGS
	  	21.	  	 BACKORDERS BY SALESREP

	 2.
	  	 SALESREP LABELS
	  	22.	  	 SALESREP MAILING LIST

	 3.
	  	 AGED A/R OPTIONS
	  	23.	  	 CUSTOMER LINE ITEM HISTORY

	 4.
	  	 CUSTOMER AR STATUS REPORTS
	  	24.	  	 NEW ACCOUNT LABEL PRINT

	 5.
	  	 CUSTOMER STATEMENT
	  	25.	  	 ANALYSIS OF ACCOUNTS SOLD

	 6.
	  	 PRODUCT MASTER BY CLASS
	  	26.	  	 SALESREP ACCOUNT LIST

	 7.
	  	 ACCOMMODATION ITEM LISTING
	  	27.	  	 CUSTOMERS 3X5 CARDS

	 8.
	  	 PRODUCT BASE USAGE REPORT
	  	28.	  	 CREDIT COLLECTION LETTERS

	 9.
	  	 CUSTOMER ALPHA LISTINGS
	  	29.	  	 MISC. PRODUCT LABELS

	 10.
	  	 ACCOUNT PENETRATION MENU
	  	30.	  	 FUTURE ORDER LISTING

	 11.
	  	 DOT TABLE
	  	31.	  	 SALESREP INV & NC REPORT

	 12.
	  	 CARRIER TABLE
	  	32.	  	 A/R HOTSHEET

	 13.
	  	 STANDARD P/S MESSAGES
	  	33.	  	 COMMISSION STATEMENTS RECOVERY

	 14.
	  	 STANDARD INVOICE MESSAGES
	  	34.	  	 PRODUCT MASTER BY MFG NAME

	 15.
	  	 SIC CODES
	  	35.	  	 CUSTOMER LABELS PER REPS

	 16.
	  	 MATERIAL SAFETY DATA SHEETS
	  	36.	  	 SALES & GP PER PRODUCT CATEGORY

	 17.
	  	 SALESREP MASTER LISTING
	  	37.	  	 PRODUCTS PURCHASED BY CUST

	 18.
	  	 BAD DEBT CHARGE-OFFS
	  	38.	  	 CONTEST OPTIONS

	 19.
	  	 TENTATIVE SALESREP DELETION
	  	39.	  	 INTL CUST PROD PURCHASES

	 20.
	  	 INVOICES PER SALESREP
	  	40.	  	 USER ENGLISH MENU

	 41.
	  	 VERATAX
	  	42.	  	 BRANCH ACTIVITY STATS

  
 In this section we will discuss the
following Reports: 
  

	3.	Aged A/R Options 

	4.	Customer AR Status Reports 

	9.	Customer Alpha Listings 

  
 PRINTING : The report is spooled to the branch’s STD queue in HOLD status. 
  
 Option 3. AGED A/R OPTIONS 
  

	 B3xx
	  	4.2.4.3 AGED AR REPORTS MENU	  	07 APR 1998
	 	  	 1.
	  	 ALL
	  	 
	 	  	 2.
	  	 COD
	  	 
	 	  	3.	  	 BALANCE GREATER THAN SELECTED AMOUNT
	  	 
	 	  	4.	  	 CREDIT BALANCES
	  	 
	 	  	5.	  	 OVER 90 AND BALANCE GREATER THAN SELECTED AMOUNT
	  	 
	 	  	6.	  	 RECAP NATIONAL ACCOUNTS AGED A/R
	  	 
			
	 	  	 Option:
	  	 

  

 70 

 For any option selected on the Aged AR Reports Menu, the system will prompt as to whether you want to use the AR file as
it exists today, or as it existed at the last ledger close-out. 
  
 If TODAY is
chosen, the aging will occur as of today and no items with a balance of zero at last ledger close will appear. 
  
 IF LAST LEDGER CLOSEOUT is chosen, aging will occur as of that date and all items that existed at the last ledger close will appear. 
  

 Explanation of Options on Aged AR Reports Menu 4.2.4.3 

  
 Option
1. All 
  

	•	Enter the option for Today’s ledger or Last ledger amount. 

  

	•	This report will run for all customers within a branch. 

  

	•	Banner = AGED A/R 

  
 Option 2. COD 
  

	•	Enter the option for Today’s ledger or Last ledger amount. 

  

	•	This report will run for all COD customers within a branch. 

  

	•	Banner = COD AGED A/R 

  
 Option 3. Balance Greater Than Selected Amount 
  

	•	Enter the desired Customer Balance Amount. This is a minimum amount. 

  

	•	Enter the option for Today’s ledger or Last ledger amount. 

  

	•	This report will run for all customers within a branch and meets the entered Customer Balance. 

  

	•	Banner = GT < xxxx AGED AR (x = amount entered for customer balance) 

  
 Option 4. Credit Balances 
  

	•	Enter the option for Today’s ledger or Last ledger amount. 

  

	•	This report will run for all customers with Credit Balances within a branch. 

  

	•	Banner = CRBAL AGED A/R 

  
 Option 5. Over 90 and Balance Greater than Selected Amount 
  

	•	Enter the option for Today’s ledger or Last ledger amount. 

  

	•	This report will run for all customers within a branch who’s AR Balance is Over 90 days and meets the minimum entered amount . 

  

	•	Banner = OVER 90 GT xxxx AGED AR (x = amount entered for customer balance) 

  

	•	Run this report with dollar amount = $1000 at the beginning of every month. Print this report and indicate an Explanation to the right of your report. Be specific in your response,
i.e., “Sales Rep working on price dispute. Anticipate payment on May 1st. “ IMPORTANT : Installment orders should be identified prior to explanation. Example : “Dyna Clean Promo on 12mth—Rep will p/u on 9/26 and f/u after.” Copy report with
explanations and forward to Home Office—Credit & Collections by the 4th of each month. West Coast and
Canada may fax in the report. 

  

 71 

 Sample Report : 
  
 07 APR 1998 AGED AR- CUSTOMERS OVER 90 BALANCE > $2000.00ZEP MANUFACTURING COMPANY 310- ATLANTA PAGE 17 
  

	 CUST #

	 	 NAME/ADDRESS

	 	 CC LMT SM#

	 	 REF#

	 	AC

	 	 DATE

	 	BALANCE

	 	0-30

	 	30-60

	 	60-90

	 	OVER 90

	 	 	 	 	 	 	 	 	 	 	 	 	*	 	*	 	*	 	*	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	*	 	*	 	*	 	*	 	 
	A00977	 	WILLIAMS BROS CONCRET	 	20000 069	 	10730602	 	18	 	03/31/97	 	100.03 *	 	*	 	*	 	*	 	 
	012	 	PO BOX 9399	 	 	 	 	 	 	 	 	 	100.03T*	 	*	 	*	 	*	 	100.03
	 	 	MARIETTA	 	 	 	10798474	 	18	 	11/05/97	 	2612.65 *	 	*	 	*	 	*	 	 
	YD 32382	 	GA 30065	 	 	 	 	 	 	 	 	 	2612.65T*	 	*	 	*	 	*	 	2612.65
	PY 44376	 	 	 	 	 	10831992	 	11	 	03/04/98	 	192.75 *	 	*	 	*	 	*	 	 
	 	 	 	 	 	 	 	 	33	 	04/07/98	 	-192.75 *	 	*	 	*	 	*	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	0.00T*	 	0.00 *	 	*	 	*	 	 
	 	 	 	 	 	 	10833470	 	11	 	03/10/98	 	449.54 *	 	*	 	*	 	*	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	449.54T*	 	449.54 *	 	*	 	*	 	 
	 	 	 	 	 	 	10834467	 	11	 	03/12/98	 	2076.06 *	 	*	 	*	 	*	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	2076.06T*	 	2076.06 *	 	*	 	*	 	 
	 	 	 	 	 	 	10838398	 	18	 	03/25/98	 	838.72 *	 	*	 	*	 	*	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	838.72T*	 	838.72 *	 	*	 	*	 	 
	 	 	 	 	 	 	10838505	 	11	 	03/26/98	 	1269.17 *	 	*	 	*	 	*	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	1269.17T*	 	1269.17 *	 	*	 	*	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	    *	 	*	 	*	 	*	 	 
	 	 	WILLIAMS BROS CONCRE	 	 	 	 	 	 	 	 	 	    *	 	*	 	*	 	*	 	 
	 	 	864 GLENWOOD AVE SE	 	 	 	 	 	 	 	 	 	    *	 	*	 	*	 	*	 	 
	 	 	ATLANTA             GA 30316	 	 	 	**TOTALS**	 	7346.17 *	 	4633.49*	 	0.00 *	 	0.00 *	 	2712.68
	 	 	 	 	 	 	***GRAND TOTALS***	 	7346.17 *	 	4633.49*	 	0.00 *	 	0.00 *	 	2712.68
	 	 	 	 	 	 	 	 	 	 	 	 	*	 	    *	 	*	 	*	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	*	 	    *	 	*	 	*	 	 
	 	 	 	 	 	 	BRANCH TOTAL	 	198357.20	 	49665.71	 	24785.15	 	30013.96	 	93892.38
	 	 	 	 	 	 	PERCENTAGE	 	 	 	25.04	 	12.50	 	15.13	 	47.34

  
 Option 6. Recap National Accounts Aged A/R 
  

	•	The purpose of this report is to provide a recap of the existing (Home Office) detailed report called “National Accounts Aged A/R and Open Items Report”.

  

	•	Branch level will show totals for the individual branch only. Regional level will show totals for the branches within the region only. 

  

	•	Home Office will have access to the detailed report as well as recap for all Region and Branches. (See Home Office Section for additional information.) 

  

	•	Accounts - NA, GSA, NSI accounts are available for Recap Reporting. 

  

	•	Frequency - As requested / on demand. The data file for the report will be updated weekly on Friday nights. 

  

	•	Banner = RECAP NA REPORT 

  

	 Instructions :
	  	You will be prompted to enter [A] to select ALL available accounts or [S] to select specific accounts. If you choose [S] the following will prompt, “Enter NA Customer
number or name or (Enter):” You have 3 options:
		
	 	  	1 - Enter an account number. Note : Do not enter a suffix number. The process will verify if the number is on file. If the number is on file, the recap report will be processed.
If not, the following message will display and the user will then hit enter to return to the previous screen. “NA1020 - is not a valid NA customer number...(Enter).”
		
	 	  	2 - Enter a customer name. The process will do a search for all NA customers with a name like the input name. The ‘like’ names selected will be displayed and the user
will then choose the necessary line number corresponding tot he required name. (Sample follows):
		
	 	  	1. NA0913 Best Foods
	 	  	2. NA0967 Krasdale Foods - Beta
	 	  	3. NA1020 Sysco Foods
	 	  	4. NA0915 Rich food Inc.
	 	  	            line[#], [P]age, e[X]it :

  

 72 

	 	  	Input the line number desired and the process will print the recap report for the customer. The screen will return to the first screen. If there are no matches for the input name,
the process will display the following message and the user will then hit enter to return to the previous screen. “No NA customer master records found with name like - FOOD (Enter).:”
		
	 	  	 3. Press Enter to exit screen.

  
 At this point Regional Levels have the
option to pull a Branch Recap or a Region Recap. The following message will display : 
  
 YOU ARE THE MAIN REGION BRANCH 
 CHOOSE [B]RANCH OR [R]EGION REPORT FORMAT: 
  
 A spooler number will display upon completion of the report process. Press enter after recording this number. 
  
 Sample Report: 
  
 ZEP MANUFACTURING COMPANY 
 NATIONAL ACCOUNT AGED A/R RECAP REPORT 
 FOR WEEK ENDING FRIDAY, APRIL 03, 1998 
  
 FOR NA2030 - MMANTEC INC (3) 
  

	 BRANCH

	  	BALANCE

	  	0 - 30

	  	30 - 60

	  	60 - 90

	  	OVER 90

	 310
	  	2,397.37	  	 	  	 	  	 	  	2,397.37
	 	  	
	  	 	  	 	  	 	  	

	 REGION - AG
	  	2,397.37	  	0.00	  	0.00	  	0.00	  	2,397.37

  
 OPTION 4. CUSTOMER AR STATUS
REPORTS 
  

	 B310
	  	CUSTOMER AR STATUS REPORTS MENU
		
	 	  	 1. ALL OVER 90

	 	  	 2. ALL 61-90

	 	  	 3. FOR SPECIFIED CUSTOMERS

	 	  	 4. FOR SPECIFIED SALESREP

	 	  	 5. INACTIVE CUSTOMERS WITH CREDIT BALANCE

	 	  	 6. ALL 45-60

		
	 	  	 OPTION:

  

	•	This procedure prints Customer AR Status reports for selected categories of customers. 

  

	•	The reports produced will be based on non B-coded customers whose oldest open invoice falls into the selected aging bracket. 

  

	•	Option 3 for Specified Customers will allow the user to generate reports for up to 16 accounts. 

  

	•	Option 5 for Inactive Customers with Credit Balances will generate reports for non B-coded customers that have a credit balance and have had no activity for at least 6 months

  

	•	Options 1, 2,5, and 6 allow you to specify which states should be processed and the sequence of the report by Customer Number or Salesrep Code. The following message will display:

  

 73 

 B325                    CUSTOMER AR STATUS REPORTS MENU 
  
 INACTIVE CUSTOMERS WITH CREDIT BALANCE 
  
 ENTER STATE CODE OR “ALL” FOR ALL: GA 
  
 REPORT SEQUENCE OPTIONS: [C]ustomer#, [S]alesrep code: 
  
 INTRODUCTION 
  
 The backbone of any credit function is the credit policy. A good credit policy encompasses the important actions of prevention, collection and
administration. This policy will serve as a guide in determining how to handle given kinds of problems. But it rarely offers a definitive solution. The Credit Manager should exercise common sense when making decisions relevant to this credit
policy. 
  
 The credit limit extended to a customer is an investment, a loan and a
privilege. It must correspond to our terms of sale, desired market penetration and appetite for risk. Credit granting boils down to trust based on past performance and future prospects. It is important to get the facts, review all data, and consider
both current conditions and past performance of each customer. Evaluate all information for an indication of future probability. 
  
 Three Roles Of Credit In Our Business : 
  

	•	Generate more profits through increased sales; 

  

	•	Insure sound value in Accounts Receivable (our most liquid business asset); 

  

	•	Acts as a business stimulant 

  
 Keys To Making Good Credit Decisions : 
  

	•	Knowing when you have enough information – when you can stop digging. If there is a doubt as to whether you reject or accept an order, it is usually desirable to keep searching
for facts until the uncertainty is resolved. 

  

	•	Knowing when an investigation is merited. Know your information sources, how to use them and how much they cost. Reliable credit information costs time, effort and money. It is
important to know which sources to use and when to use them. 

  

	•	Keep in mind the three basic actions and objectives in credit granting: 

  

	 	1)	Prevention - reduce risk of bad debt losses by making good credit decisions, 

  

	 	2)	Collection - of Accounts Receivable faster and accurately, 

  

	 	3)	Administration - of the Accounts Receivable to gain more profits and sales. 

  
 “What was true yesterday may not be true today. What is true today may not be true tomorrow. But what you find are indications that
point to truth tomorrow. Your profits depend on how well you find them.” - (Anonymous) 
  

 74 

 GENERAL INFORMATION 
  
 Maintaining a clean, accurate Accounts Receivable should be one of the Credit or Branch Manager’s most important objectives. Proper
record keeping will aid in swift collection of all accounts and lead to future sales. Meeting deadlines and knowing the work flow helps achieve these objectives. 
  

	 	  	 	  	MONTHLY
			
	 Terms
	  	:	  	 Net 30 days ; No volume or early-pay discounts
 Administratively approved products on Installment Plan

			
	 Close-Out
	  	:	  	 last day of every month

			
	 COD Suspense File
	  	:	  	 Reviewed each Friday

			
	 Statement of Account
	  	:	  	 Prints end of every month for select customers

  

	 	  	 	  	ANNUAL
			
	 Fiscal Year
	  	:	  	 September 1st to August 31st

			
	 Charge Offs
	  	:	  	 December 31st and August 31st

			
	 Credit Balance Absorption
	  	:	  	 June 30th

			
	 Sales Year
	  	:	  	 December 1st to November 30th

			
	 Sales Volume Charge Backs
	  	:	  	 November 30th

  
 CREDIT
DECISIONS 
  
 NEW ACCOUNTS 
  
 As our Sales Representatives identify and set up new customers, it is important to make
credit decisions quickly so that orders are shipped within 24 hours and future sales are not inhibited. Prior to the sale being consummated it is important to verify who is responsible for payment. The first law of credit is “know who
you’re doing business with”. 
  
 Determining ownership on certain
businesses can be difficult. The following customer classifications should provide verifiable ownership information : Apartment Complexes, Motel/Hotels, Management Companies, Fast Food Chains, and Retail Stores. 
  
 There are certain types of businesses which should be sold on a C.O.D. basis unless a credit
investigation indicates otherwise. This category includes : Service Stations, small Janitorial Firms, small Car Clean-Up Shops and other highly mobile types of businesses. See Alternatives to Open Credit (Pg. ?). 
  

 75 

 INVESTIGATE NEW ACCOUNTS 
  
 Investigation of the new customer is necessary using a variety of sources. On new accounts, the type and extent of the credit investigation
will be determined by the size of the order and the anticipated sales to the new account. 
  

	1.	Credit Application (Form ZDF-61) 

  
 It is recommended the Sales Representative obtain a credit application on the initial visit. With new or inexperienced Sales Representatives, the Manager may require a
credit application with every new order. It is wise for each Sales Representatives to obtain a credit application with each new order because: 
  

	1)	He is looking for increased orders from the new customer. 

  

	2)	All initial orders under $100.00 may be shipped without credit applications; however, Subsequent orders will not be shipped until the first order is paid or a credit application is
received and approved. 

  

	3)	In the event the account “skips” (thereby having the Sales Representative lose commission, volume and bonus) we may be able to locate the customer through information on
the application. 

  

	2.	Business Reference Letter 

  
 Using references listed on the Credit Application, contact the customer via phone, mail, fax, or e-mail. See Forms Section for an sample letter. 
  

	3.	Credit Reports : Dun & Bradstreet (D&B) / TRW 

  
 We primarily sell commercial accounts and utilize Dun & Bradstreet and TRW to obtain credit information. A Dun & Bradstreet report, in most cases, gives you
sufficient information to make a credit decision. If not, a TRW report may be ordered. This report primarily lists trade credit experience. To obtain D&B summary information each branch Credit Department has access to an Electronic Reference
Lookup (ERL). See Credit Report section for specific instructions regarding Credit Reports 
  
 ASSIGNING CREDIT LIMITS 
  
 Once we
decide to sell a new account on a credit basis, the decision is only half completed. We must then decide how much credit to extend to the new customer. It should be remembered, credit limits are intended as guidelines only and should not diminish
our flexibility. When the customer exceeds the original credit limit, we should obtain more information allowing us to increase the credit limit or make arrangements with the customer to clear unpaid invoices. Review the previous section on
how to investigate a customer (Pg. ?). 
  
 METHOD’S TO
EXTEND CREDIT 
  
 1. Forecast the customers’ Annual Sales and
divide by six, which will give two Average Months Sales, and set as the credit limit. Since our terms are net 30, this will allow a slight buffer so the customer will not constantly be exceeding the credit limit. 
  
 2. Based on the D & B Rating and Paydex Score, give the customer a credit limit
based on the customer’s pay habits and financial strength. If a customer is listed in Dun & Bradstreet with a first or second line rating, a credit application is not required. If the account has a lesser rating or is listed but not rated,
a Dun & Bradstreet report may be ordered by requesting through Home Office Credit Department. 
  
 3. Managers should use the “Four C’s Of Credit” to decide how much credit to extend to the new customer. They are defined as : 
  
 Character, is defined as integrity, sound moral reputation and the willingness and determination to meet obligations.

  

 76 

 Capacity, is defined as the ability of the customer to conduct his business efficiently and profitable.

  
 Capital, for credit purposes is defined as the financial
strength, for the granting of credit risk. Without financial strength, the granting of credit constitutes a “moral risk” (meaning that the grantor relies chiefly or entirely upon the character and capacity of the credit risk). 

 
 Condition, in a period of rising prices, men with little or no ability may
succeed in business, whereas, under adverse conditions, they are unable to cope with competitive forces. Political development, judicial decisions, disaster of diverse types, tax rates, competitive conditions, and the money market are all important
condition factors that may minimize or accentuate risk. 
  
 ALTERNATIVES TO
OPEN CREDIT 
  
 CREDIT CARD 
  
 Zep accepts VISA, MASTERCARD, and AMERICAN EXPRESS. Please see Credit Card Section for
procedures when processing Credit Card Payments. 
  
 CASH IN
ADVANCE 
  
 Place the order on hold, cut an invoice and fax it to the
customer. The customer should be instructed to express a check to the attention of the Branch Manager or the Credit Manager. Release the order upon receipt of the check. 
  
 COD ACCOUNTS 
  
 In cases where customers can not be shipped open account for reasons relating to credit or past due status, we may elect to ship customers COD. It is critical COD
shipments be monitored for payment. The following procedure should be used: 
  
 TRACKING COD PAYMENTS : 
  

	1)	COD shipment is invoiced and the (yellow) remittance copy of the invoice is retained in the COD Suspense File by the A/R Clerk or Credit Department. 

  

	2)	City Deliveries : the Warehouse Manager should have the driver sign for the shipment. A log of COD shipments should be prepared for each driver, having the driver sign prior to
departure each day. Upon return, any discrepancies should be reviewed with the driver, Credit Manager and/or Branch Manager. 

  

	3)	Run the Aged A/R for COD Customers Report on two-part paper and distribute as follows: one copy to Branch Manager or Regional Credit Manager to review immediately following
close out. Forward the second copy to Home Office Accounting Department, along with other special monthly reports. The Branch Managers and Regional Credit Managers should utilize this report for collection follow-up with the customers, Sales Reps or
freight carriers. 

  

	4)	Review the COD Suspense File each Friday (Branch Manager or Regional Credit Manager.) It is critical this file be maintained and worked according to schedule, as some truck lines,
especially UPS and other parcel delivery services, are slow in remitting funds. When COD shipments, delivered by UPS or other parcel delivery services, remain unpaid after 30 days, a claim should be filed with the carrier. 

 

	5)	If a COD delivery by a Sales Rep remains unpaid for 15 days, the balance will be charged to the Sales Rep, providing a credit balance exists in the commission account. Branch
Managers and Regional Credit Managers should monitor Sales Rep deliveries closely, especially where new Sales Reps or Sales Reps with debit balances are making the deliveries. 

  

 77 

	RECEIVING COD PAYMENT	: 

  

	1)	When a check or cash is returned to the branch with the order form, Order Entry must note the payment in the “Remarks Section” of the invoice as “Paid Check No.
     Date             ”. This will confirm payment has been received and collection follow-up is not necessary.

  

	2)	Pull the (yellow) remittance copy out of the COD Suspense File. Use this copy as the check voucher and keep with the Daily Deposit Listing as back-up. 

  

	3)	All incoming cash must have a receipt. The standard 3-part form, supplied by Home Office, is the only authorized receipt to be used. Distribute the 3 forms in the following manner:

  
 White = Customer Copy ; Yellow = Binder Copy ;
Blue = Home Office Accounting. 
  

	4)	Record the Branch Number, Cash Receipt Number and Date of the Deposit at the time the cash is given to the A/R clerk, for deposit. 

  

	5)	Attach the blue copy to the Form 90 and forward to Home Office on a daily basis. 

  
 GUARANTEED ACCOUNTS 
  
 Accounts may be guaranteed only by Sales Representatives who have sufficient credit balances on their Commission Statements. The credit balance should cover all accounts
guaranteed to date and the required percentage of holdback on their Receivables Balance must be present on their commission statement in the form of a credit balance. All guaranteed accounts must be guaranteed in full. Partial guarantees on specific
orders are not allowed with the exception of bankrupt accounts. All guarantees must be in writing on ZDF-205 (Entire Account) or ZDF -205a (Order Only). 
  
 Sales Representatives on the springboard program are NOT allowed to guarantee accounts. Newer Sales Representatives, beyond springboard, should have the approval of their
supervisor to guarantee an account. 
  
 MAINTAINING A GUARANTEED ACCOUNT :

  

	1)	When the guaranteed account is set-up, it must bear a credit code of “G”. Change the Credit Status, Item 10 in Customer Maintenance, to “G”

  

	2)	When any portion of the account reaches 120 days past due, the full balance must be charged to the Sales Representative. A Credit Miscellaneous (CM) must be issued to clear the
balance and the balance should be charged to the Sales Representatives Commission Account using a code “48”, Commission Adjustment. A copy of the charge, along with an open items statement, copies of invoices, credit miscellaneous, and
supporting documents, must be forwarded to the Home Office Credit & Collections Department. 

  

	3)	Prior to placing a guaranteed account, with the Home Office Credit Department or collection agency, the Sales Representative should be contacted for approval. There are certain
situations where the Sales Representative would not want the account placed. 

  
 PAYMENT OF A GUARANTEED ACCOUNT 
  

	1)	When an account balance is charged to the Sales Representative, the Accounts Receivable balance should reflect -0- on the Aged Accounts Receivable, but the account will remain on
the master file. 

  

	2)	Upon receipt of a payment on a guaranteed account that has been charged to the Sales Representative, apply the check “On Account”. Remember, the account balance is zero,
so the payment will be “On Account” leaving a credit balance. 

  

	3)	Then issue a Debit Miscellaneous (DM - Form ZDF-IS-CE) for the amount of the payment. This will return the account to a -0 - balance. 

  

 78 

	4)	Process a Sales Representatives Commission Adjustment, activity code “58”, to credit the Sales Representative for the received payment. The commission account should be
credited as partial payments are applied, not when the account is paid in full. 

  

	5)	If the account has been deleted from the master file, due to inactivity (12 months), the payment should be processed as a Miscellaneous Deposit, with remarks entered on the Daily
Cash Reconcilement Summary (Form 90), “750-060-Sales Rep Guarantee”, and step 4 repeated. 

  

	6)	In either case, a copy of all adjustments, checks and recovery deposits should be forwarded to the Home Office Credit & Collections Department. The proper journal entry will be
made from these documents to properly classify the entries on the company’s books. As a reminder, reduce the customer’s balance on the Recovery Record, (Form ZDF-47), by the amount of the payment. 

  

 79 

 SECURE PAYMENT : (Security Agreement) 
  
 Customers with questionable credit should sign a Security Agreement. A generic version is available; however, remember to contact Home
Office Credit & Collections for special deals and/or variations to any legal documents. 
  
 Equipment Deals need to have a customer signed agreement. Consult Home Office Credit & Collections for the proper document and instructions for preparation. 
  
 UCC FINANCING STATEMENT 
  
 This policy is not to jeopardize sales, but to secure payment. Article 9 of the Uniform
Commercial Code covers secured transactions. The filing of a UCC-1 Financing Statement allows the seller to retain the title of the goods until payment has been made in full. 
  
 STANDARD FOR FILING 
  

	 1.      Any Serial Number Equipment with
	 	 a) Invoice total of at least $1,000
	 	 OR 

	 	 	 b) Installment Purchase
	 	 

  

	2.	Customer Criteria, consider the following : 

  
 a) Type of Business 
 - Municipality vs. local car clean-up 
  
 b) Years in Business 
 - watch those in business less than two years 
  
 c) D&B Rating 
 - watch those with lacking a rating or one lower than 3A2 
  
 d) Terms 
 - should be concerned with deals in excess of n/30 
  
 e) Large Dollar Amount Order 
 - equipment orders of $25,000 or more must be filed regardless of terms. 
  
 f) Large Inventory 
 - consignments or Pool Purchasing arrangement 
  
 g) Zep Payment History 
 - customers continually paying slow, file financing statement. 
  
 h) Overall Credit Worthiness 
 - determined by the Regional Manager, Branch Manager, or Credit Manager. 
  
 i) Highly Rated Customers 
 - equipment orders over $25,000 or more must be filed regardless of terms 
  
 j) National Accounts 
 - determined by size of order, should be reviewed with Home Office - Credit. 
  
 k) Credit Card Payment 
 - Financing Statement not necessary 
  
 While this is not an inclusive list of criteria, these elements are common in the Credit decision. Any questionable deals should be reviewed with the Director - Credit
& Collections. 
  
 INSTRUCTIONS FOR FILING & MONITORING FILINGS

  
 See UCC Filing Section for complete procedure.
(Pg.    ) 
  

 80 

 COLLECTION OF ACCOUNTS RECEIVABLE 
  
 DELINQUENCY 
  
 Delinquency is a pitfall which faces every company selling on credit. The ever changing economic conditions in various parts of the U.S.
dictates a flexible collection program to control delinquency. The most important person in our collection program is the Sales Representative. For this reason the phrase, “Know who you’re doing business with.” becomes a very
important by-law for the Sales force. 
  
 PROCEDURES TO
NOTIFY CUSTOMER OF PAST DUE BALANCE : 
  
 1. The Monthly Statement.
All customers having a debit balance of more than $5.00 will receive a monthly statement. If the account has been coded “B”, “1”, or “2”, a statement will not be generated. If the account is delinquent, a message is
printed by the computer, the message is increased in firmness as the delinquency progresses to a point where the account is 90 days or more past due. 
  
 2. The Automated Collection Letter System. The system is comprised of three series of letters consisting of five varied letters. The three series are divided in
aging categories of 45-60 days, 61-75 days and 76-90 days. The system is designed to insure a particular letter format will not be repeated in less than six months. An audit confirmation is available in the system, along with a monthly report, by
Sales Representative, of accounts exceeding 90 days past due. 
  
 The mechanics of
the program are as follows: 
  

	A.	The letters are formulated and revised by the Home Office Credit Department. They are placed into your system by means of a file update. 

  

	B.	The reports, which initiate the letters, are compiled during the nightly processing on dates predetermined by the Home Office Credit Department. The run-dates are revised each year
and entered into the regional system by the Home Office Credit Department. 

  

	C.	The Credit Manager should review the reports quickly, noting those letters which should not be mailed, then print the letters. At your option, the letters for branches may be
shipped in bulk by express mail to the Regional Branch for mailing. 

  

	D.	The report of “Over 90’s” does not generate letters. A copy of this report is forwarded to the Sales Representative, serving as a good collection tool.

  
 3. The DCR (Delinquent Customer Report). This report can
be generated for both 70 and 90 day past due accounts. The Regional Credit Manager should print this report immediately after month-end close. Branch copies should be forwarded to the applicable Branch Manager. 
  
 4 . The Personal Touch. Over 90 day customers do not receive automatic collection
letters. At this stage of delinquency, it is a good idea to resort to phone calls. As well, a good personal letter is an effective means of collection. When an account reaches 90 days past due, collection efforts should be accelerated. A credit
jacket (Form ZDF-50) should be prepared and all collection follow-up should be logged on the front. When an account reaches 120 days past due, a final demand letter should be sent, giving the customer 5 days to respond. If the customer fails to
respond, the account should be placed with a collection agency or the Home Office Credit Department. 
  

 81 

 PLACEMENT OF ACCOUNTS (“B” Coding) 
  
 Bad debt expense represents a sizable portion of total expenses and a strong effort must be made to control this critical area. Once it has
been determined an account is not going to pay, as a result of in-house collection efforts, it is necessary the account be placed for collection. The Regional Credit Department will be responsible for “B” coding accounts, as well as the
accompanying bookkeeping. 
  
 It is important accounts be placed for collection at
the time they are 120-150 days past due. Accounts are easier to collect early in the delinquency and some agencies charge more, or will not handle accounts with balances older than 6 months or 180 days past due. Therefore, one of your goals should
be the timely placement of past due accounts, with 120-150 days past due being the target area. 
  
 The Customer Account must be “B” coded by changing Credit Status (Item 10 in Customer Maintenance) to “B”. The system will calculate the Sales Representatives Commission to be charged back. Notify
the Sales Rep through Credit Department Memo (ZDF-IS-S2). 
  
 Accounts that
require monitoring for Bankruptcy, Bulk Transfer, Out of Court Settlement, Receivership, Benefit of Creditors Committee, or any special negotiations should be placed with Home Office—Credit & Collections regardless of amount. Special
placement procedures apply to these customers, please see #3 below. 
  
 WHERE TO PLACE AN ACCOUNT 
  
 1) Accounts with balances less than
$500.00 should be placed with a local collection agency. Credit Managers should review agency proposals with the Regional Credit Manager. As collection fees on small balances can be high, it is important for the agency to provide a “free
demand period”. Free demand allows us to remain in control of the account, while using the agency’s name. Most agencies offer from 10-30 days free demand. If the debtor pays during the free demand period, there is no charge to Zep.
Conversely, if the account remains unpaid, the agency initiates normal collection procedures in our behalf, usually on a contingency basis of 15-35%. 
  
 2) Accounts with balances in excess of $500.00 should be placed with the Home Office - Credit & Collections. An open items statement should be prepared and
mailed to the Home Office - Credit & Collections along with copies of all supporting documents, these should include copies of the credit application. All open invoices and copies of any correspondence to and from the customer. The preparation
of the placement file shall be completed by the Regional or Branch Credit Department. The Regional Manager may delegate placement authority to Branch Managers, but only after consultation with the Home Office Credit Department. 
  
 3) PLACEMENT PROCEDURES FOR BANKRUPTCY (OR LEGAL ISSUES): 
  
 Upon receipt of ANY letter or form document regarding Bankruptcies, Bulk Transfers, Out of
Court Settlements, Receiverships, Benefit of Creditors Committee, or any special negotiations; research open accounts first and “B” code according to policy. 
  
 If an open account is not found research charge off records for a possible debt. In bankruptcy cases involving individuals it is helpful to
call the debtors attorney and ask for the name of the business and/or the amount listed on the debtor’s Schedules owing to Zep. This Notice was sent to Zep for a reason - research it. It is possible that Zep did business with the debtor and the
debt was paid in full. Zero balances should be reported to Home Office - Credit & Collections. 
  

 82 

 Prepare the appropriate documents and send to Home Office - Credit & Collections, Attention : Bankruptcy. The
following information needs to be sent for every Bankruptcy. If there is a zero balance attach account number and branch number to the bankruptcy paper(s). Home Office keeps a supply of Bankruptcy Jackets (specially designed) which will be used to
organize the case, so a Credit/Collection File jacket is not necessary. 
  
 1) Zep Account Placement Form : ZDF-365 (6/88) 
 2) Notice of Commencement (or other data
referencing the bankruptcy case.) 
 3) Invoice Copy(s) 
 4) Signed Agreement(s), if applicable 
 5) AR Status Sheet, if available 
  
 Branch Records 
  
 Each Branch and
Regional Office should keep a copy of all bankrupt accounts, regardless of amount, for future reference. Using a list will help keep research time to a minimum. Using a Lotus or Excel Spreadsheet will allow you to keep up with each case. Each column
should contain the following information : Case Year / Case Number / Legal Bankrupt Name (use the first if there are more than one) / Zep Account Name (if significantly different from Bankrupt name) / Account Number / Branch Number / Debt Amount /
Month - Year Placed / Status to Date (i.e., PIF,SIF...) 
  
 Additional Information
will be kept at Home Office. Bear in mind a bankruptcy case can go on for 10 + years and you will receive a number of paper work. It’s not necessary for you to keep copies of this information as a master file will be located at Home Office -
Credit & Collections. Forward all original paperwork to Home Office - Credit & Collections with the account number and branch number at the top. 
  
 Home Office - Credit & Collections will send an Account Status Report to notify a Branch of any changes regarding the case. Should a payment be received at the Branch
level forward the check to Home Office - Credit & Collections. If the check is inadvertently deposited at a Branch forward a Payment Notification ZDF-46 (5/88) to Home Office - Credit & Collections. A copy of the check is beneficial.

  
 CONTINUING BUSINESS RELATION AFTER PLACEMENT (“B” Coding)

  
 Automatically limited to one of the following: COD, Cash in Advance,
Sales Representative to Guaranty, Credit Card or Security Agreement. National Account Customers will not lose pricing status; however, payment method is limited to alternate methods. In any situation, the Branch Manager or Credit Manger must contact
Home Office - Credit & Collections to discuss the next appropriate step. 
  
 If the “B” coded account is being resold, a new account should be set-up. The customer should be reducing any “B” coded balance on a regular basis or COD purchases will be discontinued. If the Sales Rep has guaranteed
the new account, this will not be the case. 
  
 BANKRUPTCY : Continuing
Business Relations - Chapters 11 & 13 
  
 A debtor emerging from a
bankruptcy case, notified by an Order Closing the Case, may still be financially weak. Remember that the Plan of Reorganization could be carried out over a time span of 10 or more years. For this reason accounts must remain on the same status. A
change in Status will be available only upon review 6 months after “Plan” payments to Zep begin. This review must be made by the Branch Manager/Credit Manger and Home Office - Credit & Collections. 
  

 83 

 PAYMENT AFTER PLACEMENT (“B” Coding) 
  
 After a “B” coded account has been charged off, payments, credit memos and
adjustments should not be applied to the account. Payments should be applied to recoveries and adjustments and credit memos should be manually posted to the file. Any change in the customer’s balance must be transmitted to the Home
Office Credit Department via payment notification (ZDF-46). 
  
 Special care
should be taken when issuing a credit memo to a “B” coded account with a balance. The credit memo will charge back the Sales Rep’s commission. As this was done when the account was “B” coded, a commission adjustment must be
completed to offset the double entry. 
  
 ADMINISTRATION OF
ACCOUNTS RECEIVABLE 
  
 A/R (CASH) TRANSFERS 
  
 It’s critical the following procedures be followed as errors create imbalances in the
Accounts Receivable, necessitating additional reconcilement work and hindering the month-end close-out process. It’s important cash and CM/DM’s not be posted after finalizing on the day of close-out because it creates an imbalance in the
Accounts Receivable and is carried forward into the subsequent month. 
  
 OUTSIDE REGION 
  
 When a branch receives
a check for payment of an invoice billed by another branch, outside of the region, it should be sent to the appropriate branch immediately. 
  
 WITHIN SAME REGION 
  
 Cash transfers between branches within the same region should be processed as CM’s and DM’s not by A/R check. 
  
 A/R Transfer Adjustments between invoices on the same account or to transfer amounts between
different accounts (within the same branch) requires the completion of the Accounts Receivable Adjustment Form, as a record and a source of reconstruction in the event of down-time. 
  
 MULTIPLE REGIONS 
  
 Checks including payment for invoices in multiple branches and regions, should be applied by invoice on the appropriate account. The amount
pertaining to other branches should be posted “On Account”. The account should then be Debited (Activity Code 22) and a check request completed and forwarded to Home Office - Credit & Collections, requesting a “Zep” check be
sent to the applicable branch. 
  
 Copies of the supporting documents should be
placed in the customer’s file. Further, the code “22” and “DM/CM” entries should be entered on the reverse side of the Daily Cash Reconcilement Summary (Form ZDF-90). 
  
 ACCOUNTS RECEIVABLE ADJUSTMENTS 
  
 It is important to know the proper A/R adjustments to be made and the purpose of each.
Following are the various adjustments, the intent of each and resulting activity codes. 
  
 Sales Tax 
  
 This adjustment is to be used only after receiving the proper documentation that the customer is tax exempt. In certain cases, it may be necessary to add tax. A Debit
will create an activity code “DT” and a Credit will create an activity code “CT”. 
  
 Freight 
  
 This adjustment should be used when it is necessary to add or delete freight on an account. A Debit will create an activity code of “DF” and a credit will
create an activity code of “CF”. 
  

 84 

 Discount 
  
 This adjustment is to be used only to adjust minor amounts (less than $10.00) to clean an account. The Sales Representative should be
charged, on a Commission Adjustment, one-half of the balance adjusted. A Debit will create an activity code “CD”. 
  
 Refund 
  
 This adjustment should be used when issuing a refund to a customer or to another Zep branch when transferring payments outside of the region. A Debit will create an
activity code “22” and a Correction or a Credit will credit an activity code “21”. 
  
 Returned Checks 
  
 This adjustment must be used for all returned checks charged back the first or second time. A Debit will create an activity code “25” and a Correction or Credit
will create an activity code “24”. 
  
 Bad Debt Charge-Off 
  
 This adjustment is never to be generated
from regional or branch levels. Creates Activity Code “70”. 
  
 Credit Balance Charge-Off 
  
 This
adjustment is made once a year. Home Office—Credit & Collections will advise the Branch or Regional offices of the timing of this adjustment. It will create an activity code “82”. 
  
 Collection Fee 
  
 When a collection agency collects an account, they normally remit to Zep less their
collection fee. As an example, an agency collects $100.00 from an account and charges Zep a $25.00 collection fee. The agency remits $75.00 to Zep, retaining their fee. The $75.00 would be processed as a code “33” (Payment on Account). The
$25.00 fee would be credited to the account as a Collection Fee. This would create an activity code “96”. 
  
 Miscellaneous Debits and Credits 
  
 Miscellaneous adjustments should be used in specific situations only. Home Office - Credit & Collections instructs regional offices to make miscellaneous adjustments
in connection with: 
  
 1. Payments received at Home Office or in distribution of
funds from National Accounts. 
  
 2. When customers request refunds on credit
balances that were previously absorbed. 
  
 3. When transferring customer payments
to another Zep Branch within your Region. 
  
 4. When charging back a guaranteed
account. 
  
 A copy of each Miscellaneous Adjustment must be forwarded to the
Regional Credit Manager. As well, a copy must be attached to the Form 90. A Debit creates an activity code “DM” and a Credit creates an activity code “CM”. 
  
 If there are questions concerning the usage of miscellaneous adjustments you should contact Home Office - Credit & Collections.

  
 Accounts Receivable Transfer

  
 This adjustment is for use in transferring funds from one account to another
within the same branch or to offset Debits and Credits on the same account. An activity code “01” will be generated by either a Debit or Credit. 
  
 The above mentioned adjustments should be generated using Form ZDF-IS-C3. Please use the remarks section to explain your entries. 
  

 85 

 DISCOUNTS 
  
 With few exceptions, our terms are net 30 days. Generally, we do not offer volume or early pay discounts. However, occasionally customers will take discounts without
explanation. When this occurs, it is important to take the appropriate follow-up action to clear the remaining balance. 
  
 When a customer check underpays an invoice, it will appear on the “Daily Report Of Mismatched Cash Applications”. This report should be reconciled on a daily
basis. The cash receipts program will permit discounts of $1.00 or less to be adjusted at the time of check posting. 
  
 If a customer takes a discount greater than $1.00 but less than $10.00 the Branch Manager or Regional Credit Manager should contact the Sales Representative to ascertain
why the discount was taken and how the balance will be cleared. Should the Sales Representative not respond within 30 days and the discount balance remains, an A/R Adjustment (ZDF-IS-C3) should be processed, crediting the account. A Commission
Adjustment (ZDF-IS-SI) should also be processed, charging one-half of the discount taken, to the Sales Representative. If the customer persists in taking discounts on future payments, the A/R Adjustment and Commission Adjustment should be processed
immediately. 
  
 When a customer takes a discount of $10.00 or more, a letter
should be written to the customer, copy to the Sales Representative, to ascertain why the discount was taken. Should the Sales Representative not respond within 45 days, and the discount balance remains, a price adjustment should be entered,
clearing the balance. When the price adjustment is entered, the Sales Representatives Commission Account will be charged 45% of the adjusted balance, and sales volume will be lost. 
  
 CHARGE-OFFS 
  
 The following procedure is to be conformed to regarding August and December Charge-Offs. All “B”- coded accounts, which remain unpaid on August 31st and December 31st, will be deleted from the Accounts Receivable and charged to Bad Debts. 
  
 Prior to the end of August and December, the Accounts Receivable should be reviewed to assure all placed accounts have been “B” coded. At August and December close-outs, all “B” coded accounts
remaining unpaid or credited will be charged-off automatically. 
  
 A system
generated list of charge-offs is printed at the Regional office, with copies mailed to the branches and the Home Office - Credit & Collections. All customer maintenance must be completed prior to the end of the month, as the data center requires
one day for updating files. Any account not properly updated will be carried past due until the next charge-off period. 
  
 Credit files should be reviewed to make certain that extended terms were not given to the account which would preclude “B” coding. All open orders should be
canceled prior to “B” coding an account. 
  
 Following each charge-off
period, the following listings will be generated at the Regional office: 
  

	 	a.	Customer alpha sequence within Branch code. 

  

	 	b.	Customer alpha sequence within Sales Representative code. 

  
 The alpha listing within Branch Code should be retained in each branch office to be used in connection with recoveries. The Sales Rep’s listing must be mailed to the
Sales Rep advising the charge-offs are part of the November 30th Sales Year. 
  
 The alpha listing within branch code, printed at August close-out, should be utilized to
compute Sales Volume Charge Backs on November 30th. All payments should be noted on this listing. If additional
accounts are B-coded between September 1st and November 30th, they should be added to this list. If the above procedure is followed, Sales Volume Charge Backs in November will be routine. 
  

 86 

 CREDIT DECISIONS 
  
 NEW ACCOUNTS 
  
 As our Sales Representatives identify and set up new customers, it is important to make credit decisions quickly so that orders are shipped within 24 hours and future
sales are not inhibited. Prior to the sale being consummated it is important to verify who is responsible for payment. The first law of credit is “know who you’re doing business with”. 
  
 Determining ownership on certain businesses can be difficult. The following customer
classifications should provide verifiable ownership information : Apartment Complexes, Motel/Hotels, Management Companies, Fast Food Chains, and Retail Stores. 
  

There are certain types of businesses which should be sold on a C.O.D. basis unless a credit investigation indicates otherwise. This category includes : Service
Stations, small Janitorial Firms, small Car Clean-Up Shops and other highly mobile types of businesses. See Alternatives to Open Credit (Pg. ?). 
  
 INVESTIGATE NEW ACCOUNTS 
  
 Investigation of the new customer is necessary using a variety of sources. On new accounts, the type and extent of the credit investigation will be determined by the size
of the order and the anticipated sales to the new account. 
  

	1.	Credit Application (Form ZDF-61) 

  
 It is recommended the Sales Representative obtain a credit application on the initial visit. With new or inexperienced Sales Representatives, the Manager may require a
credit application with every new order. It is wise for each Sales Representatives to obtain a credit application with each new order because: 
  
 1) He is looking for increased orders from the new customer. 
  
 2) All initial orders under $100.00 may be shipped without credit applications; however, Subsequent orders will not be shipped until the first order is
paid or a credit application is received and approved. 
  
 3) In
the event the account “skips” (thereby having the Sales Representative lose commission, volume and bonus) we may be able to locate the customer through information on the application. 
  

	2.	Business Reference Letter 

  
 Using references listed on the Credit Application, contact the customer via phone, mail, fax, or e-mail. See Forms Section for an sample letter. 
  

	3.	Credit Reports : Dun & Bradstreet (D&B) / TRW 

  
 We primarily sell commercial accounts and utilize Dun & Bradstreet and TRW to obtain credit information. A Dun & Bradstreet report, in most cases, gives you
sufficient information to make a credit decision. If not, a TRW report may be ordered. This report primarily lists trade credit experience. To obtain D&B summary information each branch Credit Department has access to an Electronic Reference
Lookup (ERL). See Credit Report section for specific instructions regarding Credit Reports. 
  

 87 

 ASSIGNING CREDIT LIMITS 
  
 Once we decide to sell a new account on a credit basis, the decision is only half completed. We must then decide how much credit to extend
to the new customer. It should be remembered, credit limits are intended as guidelines only and should not diminish our flexibility. When the customer exceeds the original credit limit, we should obtain more information allowing us to increase the
credit limit or make arrangements with the customer to clear unpaid invoices. Review the previous section on how to investigate a customer (Pg. ?). 
  
 METHOD’S TO EXTEND CREDIT 
  
 1. Forecast the customers’ Annual Sales and divide by six, which will give two Average Months Sales, and set as the credit limit. Since our terms are net 30,
this will allow a slight buffer so the customer will not constantly be exceeding the credit limit. 
  
 2. Based on the D & B Rating and Paydex Score, give the customer a credit limit based on the customer’s pay habits and financial strength. If a customer is listed in Dun & Bradstreet with a first
or second line rating, a credit application is not required. If the account has a lesser rating or is listed but not rated, a Dun & Bradstreet report may be ordered by requesting through Home Office Credit Department. 
  
 3. Managers should use the “Four C’s Of Credit” to decide how much
credit to extend to the new customer. They are defined as : 
  
 Character, is defined as integrity, sound moral reputation and the willingness and determination to meet obligations. 
  
 Capacity, is defined as the ability of the customer to conduct his business efficiently and profitable. 
  
 Capital, for credit purposes is defined as the financial strength, for the
granting of credit risk. Without financial strength, the granting of credit constitutes a “moral risk” (meaning that the grantor relies chiefly or entirely upon the character and capacity of the credit risk). 
  
 Condition, in a period of rising prices, men with little or no ability may
succeed in business, whereas, under adverse conditions, they are unable to cope with competitive forces. Political development, judicial decisions, disaster of diverse types, tax rates, competitive conditions, and the money market are all important
condition factors that may minimize or accentuate risk. 
  
 ALTERNATIVES TO
OPEN CREDIT 
  
 CREDIT CARD

  
 Zep accepts VISA, MASTERCARD, and AMERICAN EXPRESS. Please see Credit Card
Section for procedures when processing Credit Card Payments. 
  
 ALTERNATIVES TO OPEN CREDIT [Continued] 
  
 CASH IN ADVANCE 
  
 Account Code
“2”. The Customer Account must be coded “2” by changing Credit Status (Item 10 in Customer Maintenance) to “2”. This is accomplished by accessing Customer Maintenance (Item 4 on the Data Entry and Inquiry Menu). You
will have an option of “Inquiry, Modify, Delete” as well as other options. To 2-Code, you should choose “Modify” and enter the customer number to be 2-Coded. Item 10, Credit Status will change to “2”. 
  
 To Enter The Order and Receive Payment. 
  
 Place the order on hold, cut an invoice and fax it to the customer. The customer should be
instructed to express a check to the attention of the Branch Manager or the Credit Manager. Release the order upon receipt of the check. 
  

 88 

 COD ACCOUNTS 
  
 Account Code “1”. The Customer Account must be coded “1” by changing Credit Status (Item 10 in Customer Maintenance) to
“1”. This is accomplished by accessing Customer Maintenance (Item 4 on the Data Entry and Inquiry Menu). You will have an option of “Inquiry, Modify, Delete” as well as other options. To 1-Code, you should choose
“Modify” and enter the customer number to be 1-Coded. Item 10, Credit Status will change to “1”. 
  
 To Enter The Order and Receive Payment 
  

In cases where customers can not be shipped open account for reasons relating to credit or past due status, we may elect to ship customers COD. It is critical COD
shipments be monitored for payment. The following procedure should be used: 
  
 TRACKING COD PAYMENTS : 
  

	1)	COD shipment is invoiced and the (yellow) remittance copy of the invoice is retained in the COD Suspense File by the A/R Clerk or Credit Department. 

  

	2)	City Deliveries : the Warehouse Manager should have the driver sign for the shipment. A log of COD shipments should be prepared for each driver, having the driver sign prior to
departure each day. Upon return, any discrepancies should be reviewed with the driver, Credit Manager and/or Branch Manager. 

  

	3)	Run the Aged A/R for COD Customers Report on two-part paper and distribute as follows: one copy to Branch Manager or Regional Credit Manager to review immediately following
close out. Forward the second copy to Home Office Accounting Department, along with other special monthly reports. The Branch Managers and Regional Credit Managers should utilize this report for collection follow-up with the customers, Sales Reps or
freight carriers. 

  

	4)	Review the COD Suspense File each Friday (Branch Manager or Regional Credit Manager.) It is critical this file be maintained and worked according to schedule, as some truck lines,
especially UPS and other parcel delivery services, are slow in remitting funds. When COD shipments, delivered by UPS or other parcel delivery services, remain unpaid after 30 days, a claim should be filed with the carrier. 

 

	5)	If a COD delivery by a Sales Rep remains unpaid for 15 days, the balance will be charged to the Sales Rep, providing a credit balance exists in the commission account. Branch
Managers and Regional Credit Managers should monitor Sales Rep deliveries closely, especially where new Sales Reps or Sales Reps with debit balances are making the deliveries. 

  
 RECEIVING COD PAYMENT : 
  

	1)	When a check or cash is returned to the branch with the order form, Order Entry must note the payment in the “Remarks Section” of the invoice as “Paid Check No.
             Date             “. This will confirm payment has been received and collection
follow-up is not necessary. 

  

	2)	Pull the (yellow) remittance copy out of the COD Suspense File. Use this copy as the check voucher and keep with the Daily Deposit Listing as back-up. 

  

	3)	All incoming cash must have a receipt. The standard 3-part form, supplied by Home Office, is the only authorized receipt to be used. Distribute the 3 forms in the following manner:

  

	 	White	= Customer Copy ;                Yellow = Binder Copy
;        Blue = Home Office Accounting. 

  

	4)	Record the Branch Number, Cash Receipt Number and Date of the Deposit at the time the cash is given to the A/R clerk, for deposit. 

  

	5)	Attach the blue copy to the Form 90 and forward to Home Office on a daily basis. 

  

 89 

 GUARANTEED ACCOUNTS 
  
 Accounts may be guaranteed only by Sales Representatives who have sufficient credit balances
on their Commission Statements. The credit balance should cover all accounts guaranteed to date and the required percentage of holdback on their Receivables Balance must be present on their commission statement in the form of a credit balance. All
guaranteed accounts must be guaranteed in full. Partial guarantees on specific orders are not allowed with the exception of bankrupt accounts. All guarantees must be in writing on ZDF-205 (Entire Account) or ZDF -205a (Order Only). 
  
 Sales Representatives on the springboard program are NOT allowed to guarantee accounts. Newer
Sales Representatives, beyond springboard, should have the approval of their supervisor to guarantee an account. 
  
 MAINTAINING A GUARANTEED ACCOUNT : 
  

	1)	When the guaranteed account is set-up, it must bear a credit code of “G”. Change the Credit Status, Item 10 in Customer Maintenance, to “G”

  

	2)	When any portion of the account reaches 120 days past due, the full balance must be charged to the Sales Representative. A Credit Miscellaneous (CM) must be issued to clear the
balance and the balance should be charged to the Sales Representatives Commission Account using a code “48”, Commission Adjustment. A copy of the charge, along with an open items statement, copies of invoices, credit miscellaneous, and
supporting documents, must be forwarded to the Home Office Credit & Collections Department. 

  

	3)	Prior to placing a guaranteed account, with the Home Office Credit Department or collection agency, the Sales Representative should be contacted for approval. There are certain
situations where the Sales Representative would not want the account placed. 

  
 PAYMENT OF A GUARANTEED ACCOUNT 
  

	1)	When an account balance is charged to the Sales Representative, the Accounts Receivable balance should reflect -0- on the Aged Accounts Receivable, but the account will remain on
the master file. 

  

	2)	Upon receipt of a payment on a guaranteed account that has been charged to the Sales Representative, apply the check “On Account”. Remember, the account balance is zero,
so the payment will be “On Account” leaving a credit balance. 

  

	3)	Then issue a Debit Miscellaneous (DM - Form ZDF-IS-CE) for the amount of the payment. This will return the account to a -0 - balance. 

  

	4)	Process a Sales Representatives Commission Adjustment, activity code “58”, to credit the Sales Representative for the received payment. The commission account should be
credited as partial payments are applied, not when the account is paid in full. 

  

	5)	If the account has been deleted from the master file, due to inactivity (12 months), the payment should be processed as a Miscellaneous Deposit, with remarks entered on the Daily
Cash Reconcilement Summary (Form 90), “750-060-Sales Rep Guarantee”, and step 4 repeated. 

  

	6)	In either case, a copy of all adjustments, checks and recovery deposits should be forwarded to the Home Office Credit & Collections Department. The proper journal entry will be
made from these documents to properly classify the entries on the company’s books. As a reminder, reduce the customer’s balance on the Recovery Record, (Form ZDF-47), by the amount of the payment. 

  
 SECURE PAYMENT : (Security Agreement) 
  
 Customers with questionable credit should sign a Security Agreement. A
generic version is available; however, remember to contact Home Office Credit & Collections for special deals and/or variations to any legal documents. 
  

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 Equipment Deals need to have a customer signed agreement. Consult Home Office Credit & Collections for the proper
document and instructions for preparation. 
  
 UCC FINANCING STATEMENT

  
 This policy is not to jeopardize sales, but to secure payment. Article 9
of the Uniform Commercial Code covers secured transactions. The filing of a UCC-1 Financing Statement allows the seller to retain the title of the goods until payment has been made in full. 
  
 STANDARD FOR FILING 
  

	 1.
	  	  Any Serial Number Equipment with	  	a) Invoice total of at least $1,000	  	OR
	 	  	 	  	b) Installment Purchase	  	 

  

	2.	Customer Criteria, consider the following : 

  
 a) Type of Business 
 - Municipality vs. local
car clean-up 
  
 b) Years in Business 
 - watch those in business less than two years 
  
 c) D&B Rating 
 - watch those with lacking
a rating or one lower than 3A2 
  
 d) Terms 
 - should be concerned with deals in excess of n/30 
  
 e) Large Dollar Amount Order 
 - equipment
orders of $25,000 or more must be filed regardless of terms. 
  
 f) Large Inventory 
 - consignments or Pool Purchasing arrangement 
  
 g) Zep Payment History 
 - customers continually paying slow, file financing statement. 
  
 h) Overall Credit Worthiness 
 - determined by the Regional Manager, Branch Manager, or Credit Manager. 
  
 i) Highly Rated Customers 
 - equipment orders over $25,000 or more must be filed regardless of terms 
  
 j) National Accounts 
 - determined by size of order, should be reviewed with Home Office—Credit. 
  
 k) Credit Card Payment 
 - Financing Statement not necessary 
  
 While this is not an inclusive list of criteria, these elements are common in the Credit
decision. Any questionable deals should be reviewed with the Director - Credit & Collections. 
  
 INSTRUCTIONS FOR FILING & MONITORING FILINGS 
  
 See UCC Filing Section for complete procedure. 
  
 DUPLICATE PAYMENTS 
  
 All payments are to be reconciled prior to applying to Accounts Receivable. If a duplicate payment is received the customer should be contacted for direction of how to
apply the check. If the customer can not be contacted by phone, send a duplicate payment letter. The check should be retained in a safe and monitored by the Branch/Regional Manager for thirty (30) days or until the matter is resolved, which every
comes first. 
  
 The duplicate payment letter is to be forwarded to all
customers who remit in duplicate, with a copy retained in a follow-up file. After fifteen (15) days, if there has been no response, a photocopy of the letter should be sent marked “second request”. 
  

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 If after the second fifteen (15) day period, thirty (30) days from receipt of the check, there is no response, the check
should be applied to the customer’s account. A copy of the letter and check should then be placed in the customer’s file. 
  
 It is always company policy, regardless of the age of the credit balance, to refund duplicate payments, provided the customer does not have a balance on the account or
another account. In all cases, we should apply any duplicate payments to related account’s past due invoices. 
  

 92 

 Exhibit VI 
  
 [Form of] Purchase Report 
  
 For the month beginning [date] and ending [date] 
  

  
 TO: BUYER AND THE AGENT (AS BUYER’S ASSIGNEE)

  

	 Aggregate Outstanding Balance of all Receivables sold during the period:
	  	$	            	 	 	 	 	  	A	 
	 Less: Aggregate Outstanding Balance of all Receivables sold during such period which were not Eligible Receivables
on the date when sold:
	  	$	(            	)	 	 	 	  	(B	)
	 Equals: Aggregate Outstanding Balance of all Eligible Receivables sold during the period (A - B):
	  	 	 	 	 	$	            	  	=C	 
	 Less: Purchase Price discount during the Period:
	  	$	(            	)	 	 	 	  	(D	)
	 Equals: Gross Purchase Price Payable during the period (C – D)
	  	 	 	 	 	$	            	  	=E	 
	 Less: Total Purchase Price Credits arising during the Period:
	  	$	(            	)	 	 	 	  	(F	)
	 Equals: Net Purchase Price payable during the Period (E - F):
	  	 	 	 	 	$	            	  	=G	 
				
	 Cash Purchase Price Paid to ASP during the Period:
	  	$	            	 	 	 	 	  	H	 
	 Aggregate Outstanding Balance of Receivables contributed during the Period:
	  	$	            	 	 	 	 	  	I	 

  

 93 

 Schedule A 
  
 DOCUMENTS TO BE DELIVERED TO BUYER 
 ON OR PRIOR TO THE EFFECTIVE DATE 
  

	I.	Parties. 

  

	           Blue Ridge =
	  	Blue Ridge Asset Funding Corporation
	           Wachovia =
	  	Wachovia Bank, National Association
	           ABI =
	  	Acuity Brands, Inc.
	           ALG =
	  	Acuity Lighting Group, Inc.
	           ASP =
	  	Acuity Specialty Products Group, Inc.
	           AUI =
	  	Acuity Unlimited, Inc. (f/k/a L&C Funding, Inc.)
	           AEI =
	  	Acuity Enterprise, Inc.

  

	II.	Anticipated Closing Documents. 

  

	1.	Amended and Restated Receivables Sale Agreement between ALG and AUI 

  

	2.	[New] Receivables Sale Agreement between ASP and AEI. 

  

	3.	Termination Agreement with respect to the existing First-Step Agreement between ALG and ASP. 

  

	4.	Credit and Security Agreement among AUI, AEI, ALG and ASP, as Servicers, Blue Ridge and Wachovia. 

  

	5.	Performance Undertaking by ABI in favor of AUI and AEI. 

  

	6.	Fee Letter among Agent, AEI and AUI. 

  

	7.	A certificate of the [Assistant] Secretary of each of ABI, ALG, ASP, AUI and AEI (collectively, the “Companies”) certifying: 

  
 (a) A copy of the Resolutions of its Board of Directors
authorizing its execution, delivery and performance of the Transaction Documents to which it is a party; 
  
 (b) A copy of its certificate/articles of incorporation (also certified by the Secretary of State of its State of Incorporation on or
within thirty (30) days prior to closing)[, as amended and/or restated through the closing date]; 
  
 (c) A copy of its by-laws, as amended)[, as amended and/or restated through the closing date]; 
  

 94 

 (d) A copy of a good standing certificate issued by the Secretaries of State of (i) its
state of incorporation, and (ii), if different, that state where it maintains its principal place of business; and 
  
 (e) The names, titles and signatures of its officers authorized to execute the Transaction Documents. 
  

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

  

	 	•	Debtor name: Acuity Lighting Group, Inc. 

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

	 	•	Debtor name: Acuity Specialty Products Group, Inc. 

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

	 	•	Debtor name: L&C Funding, Inc.  

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

	 	•	Debtor name: Acuity Unlimited, Inc.  

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

	 	•	Debtor name: Acuity Enterprise, Inc.  

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

	9.	UCC Financing Statements: (a) Amendment to existing ALG financing statements; (b) Delaware UCC-1 for ASP; (c) Delaware UCC-1s for AEI and AUI 

  

 95 

	10.	UCC Termination Statement for existing filing between ASP and ALG. 

  

	11.	Amended and Restated Collection Account Agreements for each Lock-Box and Collection Account: 

  

	 	•	Bank of America 

  

	 	•	Mellon 

  

	 	•	Wachovia. 

  

	12.	A favorable opinion of inhouse counsel to ABI as to certain matters. 

  

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

  

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

  

	15.	A favorable “true sale” opinion of Kilpatrick Stockton. 

  

	16.	A favorable “nonconsolidation” opinion of Kilpatrick Stockton . 

  

	17.	A Monthly Report as at July 31, 2003 

  

	18.	Liquidity Agreement by and between Blue Ridge and Wachovia. 

  

 96

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