Document:

Exhibit 10.1

 

AMENDED AND
RESTATED

RECEIVABLES
PURCHASE AGREEMENT

 

among

 

MANITOWOC
FUNDING, LLC,

 

as Seller,

 

THE MANITOWOC
COMPANY, INC.,

 

as Servicer,

 

HANNOVER
FUNDING COMPANY LLC,

 

as Purchaser,

 

and

 

NORDDEUTSCHE
LANDESBANK GIROZENTRALE,

 

as Agent

 

Dated as of December 21, 2006

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  AMOUNTS AND TERMS OF THE PURCHASES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.1

  	
  Purchase Facility

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.2

  	
  Making Purchases

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.3

  	
  Participation Computation

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.4

  	
  Settlement Procedures

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.5

  	
  Fees

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.6

  	
  Payments and Computations, Etc

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.7

  	
  Increased Costs

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.8

  	
  Requirements of Law

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.9

  	
  Inability to Determine Eurodollar Rate

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  REPRESENTATIONS AND WARRANTIES; COVENANTS;
  TERMINATION EVENTS

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Representations and Warranties; Covenants

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.2

  	
  Termination Events

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  INDEMNIFICATION

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Indemnification

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  ADMINISTRATION AND COLLECTIONS

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Appointment of Servicer

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.2

  	
  Duties of Servicer

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.3

  	
  Establishment and Use of Certain Accounts

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.4

  	
  Enforcement Rights

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.5

  	
  Responsibilities of the Seller

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.6

  	
  Servicing Fee

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  MISCELLANEOUS

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Amendments, Etc

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.2

  	
  Notices, Etc.; Extension of Stated
  Termination Date

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.3

  	
  Assignability

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.4

  	
  Costs, Expenses and Taxes

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.5

  	
  No Proceedings; Limitation on Payments

  	
   

  	
  19

  
							

 

i

 

	
  Section 5.6

  	
  Confidentiality

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.7

  	
  GOVERNING LAW AND JURISDICTION

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.8

  	
  Execution in Counterparts

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.9

  	
  Survival of Termination

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.10

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.11

  	
  Entire Agreement

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.12

  	
  Headings

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.13

  	
  Purchaser’s Liabilities

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.14

  	
  Mutual Negotiations

  	
   

  	
  22

  

 

 

EXHIBITS

 

	
  Exhibit I

  	
  Definitions

  
	
   

  	
   

  
	
  Exhibit II

  	
  Conditions of Purchases

  
	
   

  	
   

  
	
  Exhibit III

  	
  Representations and Warranties

  
	
   

  	
   

  
	
  Exhibit IV

  	
  Covenants

  
	
   

  	
   

  
	
  Exhibit V

  	
  Termination Events

  
	
   

  	
   

  
	
  Exhibit VI

  	
  Supplemental Representations, Warranties
  and Covenants

  
	
   

  	
   

  
	
  SCHEDULES

  
	
   

  	
   

  
	
  Schedule I

  	
  Notices

  
	
   

  	
   

  
	
  Schedule II

  	
  Lock-Box Banks, Lock-Box Accounts,
  Lock-Boxes and Post Office Boxes

  
	
   

  	
   

  
	
  Schedule III

  	
  Trade Names

  
	
   

  	
   

  
	
  Schedule IV

  	
  Credit and Collection Policy

  
	
   

  	
   

  
	
  ANNEXES

  
	
   

  	
   

  
	
  Annex A

  	
  Form of Notice of Purchase

  
	
   

  	
   

  
	
  Annex B

  	
  Form of Monthly Report

  
	
   

  	
   

  

 

iii

 

AMENDED AND RESTATED

RECEIVABLES PURCHASE AGREEMENT

 

This AMENDED
AND RESTATED RECEIVABLES PURCHASE AGREEMENT (this “Agreement”) is
entered into as of December 21, 2006 among MANITOWOC FUNDING, LLC, a
Nevada limited liability company, as seller (the “Seller”), THE
MANITOWOC COMPANY, INC. (“Manitowoc”), a Wisconsin corporation, as
initial servicer (in such capacity, together with its successors and permitted
assigns in such capacity, including any other Person designated as Servicer
pursuant to Section 4.1(a), the “Servicer”), HANNOVER
FUNDING COMPANY LLC, a Delaware limited liability company (the “Purchaser”),
and NORDDEUTSCHE LANDESBANK GIROZENTRALE (“NORD/LB”), as agent for the
Purchaser (in such capacity, together with its successors and assigns in such
capacity, the “Agent”).

 

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

 

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

 

The Seller and
the Servicer are parties to the Receivables Purchase Agreement dated as of November 30,
2005 (as amended, the “Existing RPA”) with Fairway Finance Company, LLC
and Harris Nesbitt Corp. The parties hereto wish to amend and restate the
Existing RPA.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree to amend and restate
the Existing RPA as follows:

 

ARTICLE I

AMOUNTS AND TERMS OF THE PURCHASES

 

Section 1.1                                      Purchase
Facility. (a) On the terms and conditions hereinafter set forth,
including the conditions set forth in Exhibit II hereto, the
Purchaser hereby agrees to purchase the Participation from the Seller on the
Closing Date and make Payments with regard to the Participation purchased from
the Seller from time to time during the period from the date hereof to the
Facility Termination Date. Under no circumstances shall the Purchaser make any
such Payment if, after giving effect thereto, the aggregate outstanding
Investment of the Participation would exceed the Purchase Limit.

 

 

(b)                                 The
Seller may, upon at least five (5) Business Days’ notice to the Agent,
terminate the purchase facility provided in this Section 1.1 in
whole or, from time to time, irrevocably reduce in part the unused portion
of the Purchase Limit; provided that each partial reduction shall be in
the amount of at least one million dollars ($1,000,000) or an integral multiple
of one hundred thousand dollars ($100,000) in excess thereof; provided, further,
that unless reduced to zero, the Purchase Limit shall never be reduced below
thirty million dollars ($30,000,000).

 

Section 1.2                                      Making
Purchases. (a) Each Payment (other than any Payment made out of
Collections pursuant to Section 1.4(b)(ii) or (iii), as
applicable) by the Purchaser with regard to the Participation hereunder shall
be made upon the Seller’s irrevocable written notice in the form of Annex
A delivered to the Agent in accordance with Section 5.2 (which
notice must be received by the Agent prior to 1:00 p.m., New York time) on
or before the Business Day next preceding the date of such proposed Payment. Each
such notice of any such proposed Payment shall specify the desired amount of
such Payment (provided that such amount shall not be less than one
million dollars ($1,000,000) and integral multiples of one hundred thousand
dollars ($100,000) in excess thereof), the date of such Payment and the other
information contemplated by Annex A. After giving effect to any
such Payment, the Participation shall not exceed one hundred percent (100%). The
Agent shall select the duration of such initial Yield Period, and each
subsequent Yield Period in its discretion; provided that it shall use reasonable
efforts, taking into account market conditions, to accommodate the Seller’s
preferences.

 

(b)                                 On
the date of each such Payment with regard to the Participation hereunder (other
than any Payment made out of Collections pursuant to Section 1.4(b)(ii) or
(iii), as applicable), the Purchaser shall, upon satisfaction of the
applicable conditions set forth in Exhibit II hereto, make
available to the Agent at the Agent’s office at its address determined pursuant
to Section 5.2, the amount of such Payment (set forth in each
notice delivered in accordance with Section 1.2(a)) in same day
funds, and after the Agent’s receipt of such funds, the Agent shall make such
funds immediately available to the Seller at such office.

 

(c)                                  Effective
on the Closing Date, the Seller hereby sells and assigns to the Purchaser the
Participation, which represents an undivided percentage ownership interest in
all of the Seller’s right, title and interest in and all now and hereafter
existing or arising Pool Receivables, and all Related Security and Collections
with respect to, and other proceeds of, such Pool Receivables and Related
Security.

 

(d)                                 To
secure all of the Seller’s obligations (monetary or otherwise) under this
Agreement and the other Transaction Documents to which it is a party, whether
now or hereafter existing or arising, due or to become due, direct or indirect,
absolute or contingent, the Seller hereby grants to the Purchaser a security
interest in all of the Seller’s right, title and interest (including without
limitation any undivided interest of the Seller) in, to and under all of the
following, whether now or hereafter owned, existing or arising:  (A) all Pool Receivables, (B) all
Related Security with respect to each such Pool Receivable, (C) all
Collections with respect to each such Pool Receivable, (D) the Lock-Box
Accounts and all amounts on deposit therein representing proceeds of the Pool
Receivables and proceeds of the Related Security with respect

 

2

 

thereto, the Collection
Account and all amounts on deposit therein and all certificates and
instruments, if any, from time to time evidencing such Lock-Box Accounts and
Collection Account and such amounts on deposit therein and any such amounts
that are invested in Permitted Investments and any securities or other account
into which such Permitted Investments, if any, may from time to time be
deposited and any other amounts from time to time on deposit in any such
account, (E) all other accounts, deposit accounts, chattel paper,
documents, fixtures, general intangibles (including payment intangibles),
goods, instruments, investment property, letter-of-credit rights, letters of
credit, money, and supporting obligations and proceeds from commercial tort
claims, (F) all other personal property of any nature or type, and (G) all
accessions, products, substitutions, replacements and proceeds of any of the
foregoing, and all other personal property of any nature or type, and cash and
non-cash proceeds of any of the foregoing. The Purchaser shall have, with
respect to the property described in this Section 1.2(d), and in
addition to all the other rights and remedies available to the Purchaser, all
the rights and remedies of a secured party under any applicable UCC.

 

Section 1.3                                      Participation
Computation. The Participation shall be initially computed on the date of
the initial purchase hereunder. Thereafter until the Termination Date, the
Participation shall be automatically recomputed (or deemed to be recomputed) on
each Business Day other than a Termination Day. From and after the occurrence
and during the continuation of any Termination Day, the Participation shall be
deemed to be one hundred percent (100%). The Participation shall become zero
when the Investment and Discount thereon shall have been paid in full, all the
amounts owed by the Seller hereunder to the Purchaser, the Agent, and any other
Indemnified Party or Affected Person are paid in full and the Servicer shall
have received the accrued Servicing Fee thereon.

 

Section 1.4                                      Settlement
Procedures. (a) Collection of the Pool Receivables shall be
administered by the Servicer in accordance with the terms of this Agreement. The
Seller shall provide to the Servicer on a timely basis all information needed
for such administration, including notice of the occurrence of any Termination
Day and current computations of the Participation.

 

(b)                                 The
Servicer shall, on each day on which Collections of Pool Receivables are
received (or deemed received) by the Seller or Servicer, transfer such
Collections from the Lock-Box Accounts and deposit such Collections into the
Collection Account, except as otherwise permitted pursuant to Section 4.3(a).
With respect to all Collections on deposit in the Collection Account on such
day, the Servicer shall:

 

(i)                                     set
aside for the benefit of the Purchaser, out of the percentage of such
Collections represented by the Participation, first an amount equal to
the Discount accrued through such day for each Portion of Investment and not
previously set aside and second, to the extent funds are available
therefor, an amount equal to the Servicing Fee, the Utilization Fee, the
Commitment Fee and Breakage Costs accrued through such day and not previously
set aside; and

 

3

 

(ii)                                  subject
to Section 1.4(f), if such day is not a Termination Day, remit to
the Seller, on behalf of the Purchaser, the remainder of the percentage of such
Collections, represented by the Participation, to the extent representing a
return on the Investment; such Collections shall automatically remain invested
in the Participation; it  being  understood, that prior to
so remitting to the Seller the remainder of such Collections, the Servicer
shall have calculated the Participation on such day, and if such Participation
shall exceed one hundred percent (100%) on such day, such Collections shall not
be remitted to the Seller but shall remain in the Collection Account for the
benefit of the Purchaser in accordance with paragraph (iii) below;

 

(iii)                               if
such day is a Termination Day, maintain in the Collection Account for the
Purchaser the entire remainder of the percentage of the Collections represented
by the Participation; provided that so long as the conditions set forth
in Section 2 of Exhibit II are satisfied or are waived
by the Agent, the amount so maintained in the Collection Account shall be
remitted to the Seller and remain invested in accordance with the preceding paragraph
(ii) on the day of such subsequent satisfaction or waiver of conditions;
and

 

(iv)                              during
such times as amounts are required to remain invested in accordance with the
foregoing paragraph (ii) or the proviso to paragraph (iii),
release to the Seller (subject to Section 1.4(f)) for its own
account any Collections in excess of the sum of (x) such amounts, (y) the
amounts that are required to be maintained in the Collection Account pursuant
to paragraph (i) above and (z) in the event an Originator is not
the Servicer, all reasonable and appropriate out-of-pocket costs and expenses
of such Servicer of servicing, collecting and administering the Pool
Receivables.

 

(c)                                  The
Servicer shall deposit into the Purchaser’s Account (or such other account
designated by the Agent), on each Settlement Date, Collections held on deposit
in the Collection Account pursuant to Section 1.4(b)(i) in
respect of the accrued Utilization Fee, accrued Commitment Fee and accrued
Breakage Costs (if any). The Servicer shall deposit into the Purchaser’s
Account (or such other account designated by the Agent), on the last day of
each Yield Period relating to a Portion of Investment:

 

(i)                                     Collections
held on deposit in the Collection Account pursuant to Section 1.4(b)(i) in
respect of accrued Discount with respect to such Portion of Investment;

 

(ii)                                  Collections
held on deposit in the Collection Account pursuant to Section 1.4(f) with
respect to such Portion of Investment; and

 

(iii)                               the
lesser of (x) the amount of Collections then held on deposit in the Collection
Account pursuant to Section 1.4(b)(iii) and (y) such Portion
of Investment.

 

On each
Settlement Date, the Servicer shall deposit to its own account, from
Collections held on deposit in the Collection Account pursuant to Section 1.4(b)(i) in
respect of the accrued Servicing Fee, an amount equal to such accrued Servicing
Fee.

 

4

 

(d)                                 Upon
receipt of funds deposited into the Purchaser’s Account pursuant to the first
sentence of Section 1.4(c), the Agent shall cause such funds to be
distributed to the Purchaser in payment of the accrued and unpaid Utilization
Fee, Commitment Fee and Breakage Costs (if any). Upon receipt of funds
deposited into the Purchaser’s Account pursuant to the second sentence of Section 1.4(c) with
respect to any Portion of Investment, the Agent shall cause such funds to be
distributed as follows:

 

(i)                                     if
such distribution occurs on a day that is not a Termination Day, first
to the Purchaser in payment in full of all accrued Discount with respect to
such Portion of Investment, and second to the Purchaser, the Agent and
any other Indemnified Party or Affected Person in payment in full of any other
amounts owed thereto pursuant to Section 1.7, Section 1.8,
Section 3.1, or Section 5.4; and

 

(ii)                                  if
such distribution occurs on a Termination Day, first to the Purchaser in
payment in full of all accrued Discount with respect to such Portion of
Investment, second to the Purchaser in payment in full of such Portion
of Investment, and third to the Purchaser, the Agent and any other
Indemnified Party or Affected Person in payment in full of any other amounts
owed thereto by the Seller or the Servicer hereunder.

 

After the
Investment, the accrued and unpaid Utilization Fee, the accrued and unpaid
Commitment Fee, the accrued and unpaid Discount, the accrued and unpaid
Servicing Fee, and any other amounts payable by the Seller to the Purchaser,
the Agent or any other Indemnified Party or Affected Person hereunder, have
been paid in full, all additional Collections with respect to the Participation
shall be paid to the Seller for its own account.

 

(e)                                  For
the purposes of this Section 1.4:

 

(i)                                     if
on any day the Outstanding Balance of any Pool Receivable is reduced or
adjusted as a result of any defective, damaged, rejected, returned, repossessed
or foreclosed goods or services, or any discount, rebate, credit, counterclaim,
billing error or other adjustment made by the Seller, any Originator or
Servicer, or any setoff or dispute between the Seller, any Originator or the
Servicer and an Obligor, the Seller shall be deemed to have received on such
day a Collection of such Pool Receivable in the amount of such reduction or
adjustment;

 

(ii)                                  if
on any day any of the representations or warranties in paragraphs (e), (f) or
(k) of Section 1 of Exhibit III is not true with
respect to any Pool Receivable, the Seller shall be deemed to have received on
such day a Collection of such Pool Receivable in full;

 

(iii)                               If
an Obligor makes a payment but does not designate the Receivable to which such
payment applies, then the Servicer shall contact such Obligor promptly in order
to determine to which Receivable such payment relates; provided that if the
Obligor does not direct the Servicer to apply such payment to a particular
Receivable or Receivables within thirty (30) days after such payment has been
received in a Lock-Box Account or by the Servicer, then, except as otherwise
required by applicable law or the

 

5

 

relevant Contract, such payment shall be applied to
the Receivables of such Obligor in the order of the age of such Receivables,
starting with the oldest such Receivable; and

 

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

 

(f)                                    If
at any time the Seller shall wish to cause the reduction of the entire
Investment or any Portion of Investment, the Seller may do so as follows:

 

(i)                                     the
Seller shall give the Agent at least five (or in the case of any reduction of a
Portion of Investment which is not a reduction of the entire Investment, one)
Business Days’ prior written notice thereof (including the amount of such
proposed reduction and the proposed date on which such reduction will
commence),

 

(ii)                                  on
the proposed date of commencement of such reduction and on each day thereafter,
the Servicer shall cause Collections with respect to the Investment or such
Portion of Investment (including to any related Discount) not to be reinvested
until the amount thereof not so reinvested shall equal the desired amount of
reduction, and

 

(iii)                               the
Servicer shall hold such Collections in the Collection Account for the benefit
of the Purchaser, for payment to the Agent on the last day of the current Yield
Period relating to the Investment or such Portion of Investment (and in the
case of a reduction of the entire Investment, the Servicer shall hold in the
Collection Account for payment on such date an amount equal to all other
obligations of the Seller or Servicer to the Purchaser, the Agent and each
other Indemnified Party or Affected Person hereunder), and the Investment or
the applicable Portion of Investment shall be deemed reduced in the amount to
be paid to the Agent only when in fact finally so paid;

 

provided
that,

 

A.                                   the
amount of any such reduction shall be not less than one million dollars
($1,000,000) and shall be an integral multiple of one hundred thousand dollars
($100,000), and the entire Investment of the Participation after giving effect
to such reduction shall be not less than one million dollars ($1,000,000)
unless the entire Investment shall have been reduced to zero,

 

B.                                     the
Seller shall choose a reduction amount, and the date of commencement thereof,
so that to the extent practicable such reduction shall commence and conclude in
the same Yield Period, and

 

6

 

C.                                     if
two or more Portions of Investment shall be outstanding at the time of any
proposed reduction, such proposed reduction shall be applied, unless the Seller
shall otherwise specify in the notice given pursuant to Section 1.4(f)(i),
to the Portion of Investment with the shortest remaining Yield Period.

 

Section 1.5                                      Fees.
The Seller shall pay to the Purchaser certain fees in the amounts and on the
dates set forth in a letter dated as of the Closing Date among the Seller, the Agent,
the Purchaser and the Servicer (as the same may be amended, amended and
restated, supplemented or modified, the “Fee Letter”) delivered pursuant
to Section 1 of Exhibit II, as such letter agreement may be
amended, supplemented or otherwise modified from time to time.

 

Section 1.6                                      Payments
and Computations, Etc. (a) All amounts to be paid or deposited by the
Seller or the Servicer hereunder shall be paid or deposited no later than 1:00 p.m.
(New York time) on the day when due in same day funds in U.S. dollars to
the Purchaser’s Account. All amounts received after 1:00 p.m. (New
York time) will be deemed to have been received on the immediately succeeding
Business Day.

 

(b)                                 The
Seller shall, to the extent permitted by law, pay interest on any amount not
paid or deposited by the Seller or Servicer when due hereunder, at an interest
rate equal to two percent (2%) per  annum above the Base Rate,
payable on demand.

 

(c)                                  All
computations of interest under subsection (b) above and all
computations of Discount, fees, and other amounts hereunder shall be made on
the basis of a year of three hundred sixty (360) days (other than Discount
calculated of the Base Rate which shall be computed on the basis of a year of
three hundred sixty-five (365) or three hundred sixty-six (366) days, as the
case may be) for the actual number of days elapsed. Whenever any payment
or deposit to be made hereunder shall be due on a day other than a Business
Day, such payment or deposit shall be made on the next succeeding Business Day
and such extension of time shall be included in the computation of such payment
or deposit.

 

(d)                                 From
time to time, upon reasonable request by the Seller or the Servicer, the Agent
shall notify the Seller or the Servicer, in response to such request, as to changes
in the Base Rate, the CP Rate, the Eurodollar Rate and LIBOR; provided
that the failure of such notice to be requested or given shall not waive,
preclude, delay or otherwise limit the effectiveness of any such change.

 

Section 1.7                                      Increased
Costs. (a) If the Agent, the Purchaser, any Liquidity Bank, any other
Program Support Provider or any of their respective Affiliates (each an “Affected
Person”) determines that the existence of or compliance with (i) any
law, rule or regulation of any Governmental Authority or any change
therein or in the interpretation or application thereof, in each case adopted,
issued or occurring after the date hereof or (ii) any request, guideline
or directive from any central bank or other Governmental Authority (whether or
not having the force of law) issued or occurring after the date of this
Agreement affects or would affect the amount of capital required or expected to
be maintained by such Affected Person and such Affected Person determines that
the amount of such capital is increased by or based upon the

 

7

 

existence of any
commitment to make purchases of or otherwise to maintain the investment in Pool
Receivables related to this Agreement or any related liquidity facility or
credit enhancement facility and other commitments of the same type, then, upon
demand by such Affected Person (with a copy to the Agent), the Seller shall
promptly pay to the Agent, for the account of such Affected Person, from time
to time as specified by such Affected Person, additional amounts sufficient to
compensate such Affected Person in the light of such circumstances, to the
extent that such Affected Person determines such increase in capital to be
allocable to the existence of any of such commitments. A certificate as to such
amounts submitted to the Seller and the Agent by such Affected Person
certifying, in reasonably specific detail, the basis for, and calculation of
such amounts, shall be conclusive and binding for all purposes, absent manifest
error.

 

(b)                                 If,
due to either (i) the introduction of or any change (other than any change
by way of imposition or increase of reserve requirements referred to in Section 1.8)
in or in the interpretation of any law or regulation or (ii) compliance
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to any Affected Person of agreeing to purchase or purchasing, or
maintaining the ownership of the Participation in respect of which Discount is
computed by reference to the Eurodollar Rate, then, upon demand by such
Affected Person, the Seller shall immediately pay to such Affected Person, from
time to time as specified, additional amounts sufficient to compensate such
Affected Person for such increased costs. A certificate as to such amounts
submitted to the Seller by such Affected Person certifying, in reasonably
specific detail, the basis for, and calculation of such amounts, shall be
conclusive and binding for all purposes, absent manifest error.

 

Section 1.8                                      Requirements
of Law. In the event that any Affected Person determines that the existence
of or compliance with (i) any law, rule or regulation of any
Governmental Authority or any change therein or in the interpretation or
application thereof, in each case adopted, issued or occurring after the date
hereof or (ii) any request, guideline or directive from any central bank
or other Governmental Authority (whether or not having the force of law) issued
or occurring after the date of this Agreement:

 

(i)                                     does
or shall subject such Affected Person to any tax of any kind whatsoever with
respect to this Agreement, any increase in the Participation or in the amount
of Investment relating thereto, or does or shall change the basis of taxation
of payments to such Affected Person on account of Collections, Discount or any
other amounts payable hereunder (excluding taxes imposed on the overall net
income or gross receipts of such Affected Person, and franchise taxes imposed
on such Affected Person, by the jurisdiction under the laws of which such
Affected Person is organized or a political subdivision thereof);

 

(ii)                                  does
or shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, purchases, advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Affected Person

 

8

 

which are not otherwise included in the determination
of the Eurodollar Rate or the Base Rate hereunder; or

 

(iii)                               does
or shall impose on such Affected Person any other condition; and the result of
any of the foregoing is (x) to increase the cost to such Affected Person of
acting as Agent, or of agreeing to purchase or purchasing or maintaining the
ownership of undivided ownership interests with regard to the Participation (or
interests therein) or any Portion of Investment in respect of which Discount is
computed by reference to the Eurodollar Rate or the Base Rate or (y) to reduce
any amount receivable hereunder (whether directly or indirectly) funded or
maintained by reference to the Eurodollar Rate or the Base Rate, then, in any
such case, upon demand by such Affected Person the Seller shall pay such
Affected Person any additional amounts sufficient to compensate such Affected
Person for such additional cost or reduced amount receivable. All such amounts
shall be payable as incurred. A certificate from such Affected Person to the
Seller certifying, in reasonably specific detail, the basis for, calculation
of, and amount of such additional costs or reduced amount receivable shall be
conclusive and binding for all purposes, absent manifest error.

 

Section 1.9                                      Inability
to Determine Eurodollar Rate. In the event that the Agent shall have
determined prior to the first day of any Yield Period (which determination
shall be conclusive and binding upon the parties hereto) by reason of
circumstances affecting the interbank Eurodollar market, either (a) dollar
deposits in the relevant amounts and for the relevant Yield Period are not
available, (b) adequate and reasonable means do not exist for ascertaining
the Eurodollar Rate for such Yield Period or (c) the Eurodollar Rate
determined pursuant hereto does not accurately reflect the cost to the
Purchaser (as conclusively determined by the Agent) of maintaining any Portion
of Investment during such Yield Period, the Agent shall promptly give
telephonic notice of such determination, confirmed in writing, to the Seller
prior to the first day of such Yield Period. Upon delivery of such notice (a) no
Portion of Investment shall be funded thereafter at the Bank Rate determined by
reference to the Eurodollar Rate, unless and until the Agent shall have given
notice to the Seller that the circumstances giving rise to such determination
no longer exist, and (b) with respect to any outstanding Portions of
Investment then funded at the Bank Rate determined by reference to the
Eurodollar Rate, such Bank Rate shall automatically be converted to the Bank
Rate determined by reference to the Base Rate at the respective last days of
the then-current Yield Periods relating to such Portions of Investment.

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES;
COVENANTS;

TERMINATION EVENTS

 

Section 2.1                                      Representations
and Warranties; Covenants. The Seller hereby makes the representations and
warranties, and hereby agrees to perform and observe the covenants, set forth
in Exhibits III, IV and VI, respectively hereto.

 

9

 

Section 2.2                                      Termination
Events. If any of the Termination Events contemplated by Exhibit V
hereto shall occur and be continuing, the Agent may, by notice to the Seller,
declare the Facility Termination Date to have occurred (in which case the
Facility Termination Date shall be deemed to have occurred); provided
that, automatically upon the occurrence of any event (without any requirement
for the passage of time or the giving of notice) described in subsections (g) of
Exhibit V, the Facility Termination Date shall occur. Upon any such
declaration, occurrence or deemed occurrence of the Facility Termination Date,
the Purchaser and the Agent shall have, in addition to the rights and remedies
which they may have under this Agreement, all other rights and remedies
provided after default under the UCC and under other applicable law, which
rights and remedies shall be cumulative.

 

ARTICLE III

INDEMNIFICATION

 

Section 3.1                                      Indemnification.

 

(a)                                  Indemnities
by the Seller. Without limiting any other rights that the Agent, the
Purchaser, any Liquidity Banks, any other Program Support Providers, or any of
their respective Affiliates, employees, agents, successors, transferees or
assigns (each of the Agent, the Purchaser, the Liquidity Banks, the other
Program Support Providers, and their respective Affiliates, employees, agents,
successors, transferees and assigns may be referred to as an “Indemnified
Party”) may have hereunder or under applicable law, the Seller hereby
agrees to indemnify each Indemnified Party from and against any and all claims,
damages, taxes, costs, expenses, losses, judgments, liabilities and other
amounts (including Attorney Costs) (all of the foregoing being collectively
referred to as “Indemnified Amounts”) arising out of or resulting from
this Agreement or other Transaction Documents (whether directly or indirectly)
or the use of proceeds of purchases or reinvestments or the ownership of the Participation,
or any interest therein, or in respect of any Receivable or any Contract,
excluding, however, (a) Indemnified Amounts to the extent resulting from
gross negligence or willful misconduct on the part of such Indemnified
Party, or (b) any net income taxes or franchise taxes imposed on such
Indemnified Party by the jurisdiction under the laws of which such Indemnified
Party is organized or is doing business (except solely as a result of the
transactions contemplated by this Agreement and the other Transaction
Documents) or any political subdivision thereof. Without limiting or being
limited by the foregoing, but subject to the exclusions set forth in the
preceding sentence, the Seller shall pay within five Business Days of demand to
each Indemnified Party any and all amounts necessary to indemnify such
Indemnified Party from and against any and all Indemnified Amounts relating to
or resulting from any of the following:

 

(i)                                     the
failure of any Receivable included in the calculation of the Net Eligible Pool
Balance to be an Eligible Receivable, the failure of any information contained
in a Monthly Report to be true and correct, or the failure of any other
information provided to the Purchaser or the Agent with respect to Receivables
or this Agreement to be true and correct;

 

10

 

(ii)                                  the
failure of any representation or warranty or statement made or deemed made by
the Seller (or any of its officers) under or in connection with this Agreement
to have been true and correct in all respects when made;

 

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

 

(iv)                              the
failure to vest in the Purchaser a valid and enforceable (A) perfected
undivided percentage ownership interest, to the extent of the Participation, in
the Receivables in, or purporting to be in, the Receivables Pool and the
Related Security and Collections with respect thereto and (B) first
priority perfected security interest in the items described in Section 1.2(d),
in each case, free and clear of any Adverse Claim;

 

(v)                                 the
failure to have filed, or any delay in filing, financing statements or other
similar instruments or documents under the UCC of any applicable jurisdiction
or other applicable laws with respect to any Receivables in, or purporting to
be in, the Receivables Pool and the Related Security and Collections in respect
thereof, whether at the time of any purchase or reinvestment or at any
subsequent time in accordance with the terms hereof;

 

(vi)                              any
dispute, claim, offset or defense of the Obligor to the payment of any
Receivable in, or purporting to be in, the Receivables Pool (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 goods or services related to such Receivable or the furnishing or failure
to furnish such goods or services or relating to collection activities with
respect to such Receivable;

 

(vii)                           any
failure of the Seller to perform its duties or obligations in accordance
with the provisions hereof or to perform its duties or obligations under
the Contracts;

 

(viii)                        any
products liability or other claim, investigation, litigation or proceeding
arising out of or in connection with merchandise, insurance or services which
are the subject of any Contract;

 

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

 

(x)                                   any
investigation, litigation or proceeding related to this Agreement or the use of
proceeds of purchases or reinvestments or the ownership of the Participation or
in respect of any Receivable, Related Security or Contract;

 

11

 

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

 

(xii)                             any
tax or governmental fee or charge (other than any tax upon or measured by net
income or gross receipts or franchise tax), all interest and penalties thereon
or with respect thereto, and all reasonable out-of-pocket costs and expenses,
including the reasonable fees and expenses of counsel in defending against the same,
which are required to be paid by reason of the purchase or ownership of the
Participation, or other interests in the Receivables Pool or in any Related
Security or Contract; or

 

(xiii)                          any
Lock-Box Agreement.

 

Without limiting or being
limited by the foregoing, if any Indemnified Party incurs any loss or expense
(including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Indemnified Party)
(such loss or expense may be referred to as “Breakage Costs”) as a
result of (i) the full or partial repayment of any Portion of Investment
on any day other than the scheduled last day of a Yield Period with respect
thereto or on any day in an amount greater than the amount specified by the
Seller or the Servicer or (ii) any Payment not being made (other than as a
result of a default by the Purchaser) in accordance with a notice pursuant to Section 1.2(a),
then upon demand by such Indemnified Party, the Seller shall pay to such
Indemnified Party the amount of such Breakage Costs.

 

The obligations of the Seller
under this Section 3.1(a) shall survive the resignation or
removal of the Agent and the execution, delivery, performance and termination
of this Agreement, regardless of any investigation made by any Indemnified
Party.

 

(b)                                 Indemnity
by the Servicer. Without limiting any other rights which any Indemnified
Party may have hereunder under applicable law, the Servicer hereby agrees
to indemnify each Indemnified Party, forthwith within five Business Days of
demand, from and against any and all Indemnified Amounts awarded against or
incurred by any of them arising out of or relating to:

 

(i)                                     any
representation or warranty made by the Servicer under or in connection with any
Transaction Document or any information or report delivered by or on behalf of
the Servicer pursuant hereto, which shall have been false, incorrect or
misleading in any respect when made or deemed made (except any such amounts to
the extent representing recourse due to the insolvency or other financial
inability to pay of any Obligor);

 

(ii)                                  the
failure by the Servicer to comply with any applicable law, rule or
regulation (including truth in lending, fair credit billing, usury, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy) with respect to any Pool Receivable or other related Contract;

 

12

 

(iii)                               any
failure of the Servicer to perform its duties, covenants and obligations
in accordance with the applicable provisions of this Agreement;

 

(iv)                              any
dispute, claim, offset or defense (other than a discharge in bankruptcy of the
related Obligor) of an Obligor to the payment of any Receivable in or
purporting to be in the Receivables Pool resulting solely from collection or
other servicing activities of the Servicer with respect to such Receivable; or

 

(v)                                 costs
and expenses (including Attorney Costs) in connection with litigation relating
to any Transaction Document.

 

The obligations of the Servicer
under this Section 3.1(b) shall survive the resignation or
removal of the Agent and the execution, delivery, performance and termination
of this Agreement for a period of three years following the Final Payout Date,
regardless of any investigation made by any Indemnified Party.

 

ARTICLE IV

ADMINISTRATION AND COLLECTIONS

 

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

 

(b)                                 Upon
the designation of a successor Servicer as set forth in Section 4.1(a) hereof,
the Servicer agrees that it will terminate its activities as Servicer hereunder
in a manner which the Agent determines will facilitate the transition of the
performance of such activities to the new Servicer, and the Servicer shall
cooperate with and assist such new Servicer. Such cooperation shall include
(without limitation) access to and transfer of records and use by the new
Servicer of all licenses or software necessary or desirable to collect the Pool
Receivables and the Related Security.

 

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

 

(d)                                 The
Servicer may delegate its duties and obligations hereunder to any
subservicer (each, a “Sub-Servicer”); provided that, in each such
delegation (i) such Sub-Servicer shall agree in a separate letter
agreement, to perform the duties and obligations of the Servicer pursuant
to

 

13

 

the terms hereof, (ii) the
Servicer shall remain solely liable to the Purchaser and the Agent for the
performance of the duties and obligations so delegated, (iii) the Seller,
the Agent and the Purchaser shall have the right to look solely to the Servicer
for performance and (iv) the terms of any agreement with any Sub-Servicer
shall provide that the Agent may terminate such agreement upon the
termination of the Servicer hereunder by giving notice of its desire to
terminate such agreement to the Servicer (and the Servicer shall provide
appropriate notice to such Sub-Servicer). For avoidance of doubt, the existence
of the Bond Administration Agreement shall not limit or diminish the obligations
of the Servicer under this Agreement.

 

Section 4.2                                      Duties
of Servicer. (a) The Servicer shall take or cause to be taken all such
action as may be necessary or advisable to collect each Pool Receivable
from time to time, all in accordance with this Agreement and all applicable
laws, rules and regulations, with reasonable care and diligence, and in
accordance with the Credit and Collection Policy. The Servicer also shall perform the
duties of the Servicer set forth in the Purchase and Sale Agreement, in accordance
with all applicable laws, rules and regulations and with reasonable care
and diligence. The Servicer shall set aside for the accounts of the Seller and
the Purchaser the amount of the Collections to which each is entitled in
accordance with Article I hereto. The Servicer may, in accordance
with the Credit and Collection Policy, extend the maturity of any Pool
Receivable (but not beyond thirty (30) days) and extend the maturity or adjust
the Outstanding Balance of any Defaulted Receivable or Delinquent Receivable as
the Servicer may determine to be appropriate to maximize Collections
thereof; provided, however, that (i) such extension or
adjustment shall not alter the status of such Pool Receivable as a Delinquent
Receivable or a Defaulted Receivable or limit the rights of the Purchaser or
the Agent under this Agreement and (ii) if a Termination Event has
occurred and is continuing and Manitowoc or any of its Affiliates is still
serving as Servicer, the Servicer may make such extension or adjustment only
upon the prior written approval of the Agent. The Seller shall deliver to the
Servicer and the Servicer shall hold for the benefit of the Seller and the
Agent (for the benefit of the Purchaser and individually) in accordance with
their respective interests, all records and documents (including without
limitation computer tapes or disks) with respect to each Pool Receivable. Notwithstanding
anything to the contrary contained herein, the Agent may direct the
Servicer to commence or settle any legal action to enforce collection of any
Pool Receivable or to foreclose upon or repossess any Related Security; provided,
however, that no such direction may be given unless either: (A) a
Termination Event has occurred and is continuing or (B) the Agent believes
in good faith that the failure to commence, settle or effect such legal action,
foreclosure or repossession could adversely affect the collectibility of such
Pool Receivable.

 

(b)                                 On
each Business Day, the Servicer shall provide to the Agent a report, in form and
substance reasonably satisfactory to the Agent, as to: (i) all outstanding
Receivables that have been sold or contributed by the Originators to the Seller
pursuant to the Purchase and Sale Agreement since the most recent such report; (ii) the
Net Eligible Pool Balance as of the beginning of the day on the date of such
report; (iii) the Participation; (iv) Receivables that became
Defaulted Receivables since the most recent such report; (v) agings of
Pool Receivables as of the beginning of the day on the date of such report; and
(vi) the sum of the Outstanding Balances of the Eligible Receivables in
the Receivables Pool.

 

14

 

(c)                                  The
Servicer’s obligations hereunder shall terminate on the Final Payout Date. After
such termination the Servicer shall promptly deliver to the Seller all books,
records and related materials that the Seller previously provided to the
Servicer in connection with this Agreement.

 

Section 4.3                                      Establishment
and Use of Certain Accounts.

 

(a)                                  Lock-Box
Accounts. Prior to the initial purchase hereunder, the Seller shall enter
into Lock-Box Agreements covering the Lock-Box Accounts listed on Schedule II
with all of the Lock-Box Banks, and deliver original counterparts thereof to
the Agent. All Lock-Box Accounts shall be maintained in the name of the Seller.
Each of the Seller and the Servicer have directed each Lock-Box Bank to cause
all Collections received in the applicable Lock-Box Accounts to be
automatically (and without further action, notice to or consent of the Seller
or Servicer) wire transferred to the Collection Account within one Business Day
following the receipt thereof into such Lock-Box Account; provided that, unless
a Termination Event has occurred and is continuing, M&T Account Collections
need not be transferred automatically to the Collection Account and, instead,
the Servicer shall cause M&T Account Collections to be deposited in the
Collection Account on the first Business Day after any day on which the
aggregate amount of M&T Account Collections exceeds fifteen thousand
dollars ($15,000) and, in any event, the Servicer shall cause all M&T
Account Collections to be transferred to the Collection Account at least once
each calendar month.

 

The Agent (for
the benefit of the Purchaser) shall have sole dominion and control over each
Lock-Box Account together with the ability, in the circumstances contemplated
by Section 4.3(d), to exercise all rights with respect thereto,
including without limitation, the exclusive right to receive all Collections
deposited therein. Neither the Seller nor the Servicer shall have any ability
to control or direct the application of any Collections deposited in the
Lock-Box Accounts; provided that unless a Termination Event or an Unmatured
Termination Event has occurred and is continuing, all such Collections shall
continue to be automatically transferred to the Collection Account as described
in this Section 4.3(a).

 

(b)                                 Collection
Account. The Servicer has established the Collection Account. The Collection
Account shall be used to accept the transfer of Collections of Pool Receivables
from the Lock-Box Accounts pursuant to Section 1.4 and for such
other purposes described in the Transaction Documents.

 

(c)                                  Permitted
Investments. Prior to the occurrence and continuation of any Termination
Event, any amounts in the Collection Account may be invested by the
Collection Account Bank at Servicer’s direction, in Permitted Investments, so
long as (i) either (A) such Permitted Investments are credited to a “securities
account” (as defined in the applicable UCC) over which the Purchaser shall have
a first priority perfected security interest, (B) such Permitted
Investments are purchased in the name of the Purchaser or (C) such
Permitted Investments are held in another manner sufficient to establish the
Purchaser’s first priority perfected security interest over such Permitted
Investments and (ii) such Permitted Investments are scheduled to mature
prior to the last day of the Yield Period during which such investment is made.

 

15

 

(d)                                 Control
of Accounts. The Agent may at any time following the occurrence and
during the continuance of a Termination Event or Unmatured Termination Event
give notice to each Lock-Box Bank and the Collection Account Bank that the
Agent is exercising its rights under the Lock-Box Agreements and the Collection
Account Agreement to do any or all of the following: (i) to have the
exclusive ownership and control of the Lock-Box Accounts and/or the Collection
Account, as the case may be, transferred to the Agent, to the extent
provided in the related Lock-Box Agreement and/or the Collection Account
Agreement, as applicable, (ii) to have the proceeds that are sent to the
respective Lock-Box Accounts and/or the Collection Account, as the case may be,
be redirected pursuant to its instructions rather than deposited in the
applicable Lock-Box Account and/or the Collection Account, as the case may be,
and (iii) to take any or all other actions permitted under the applicable
Lock-Box Agreement and the Collection Account Agreement. The Seller hereby
agrees that if the Agent at any time takes any action set forth in the
preceding sentence, the Agent shall have exclusive control of the proceeds
(including Collections) of all Pool Receivables and the Seller hereby further
agrees to take any other action that the Agent may reasonably request to
transfer such control. Any proceeds of Pool Receivables received by the Seller
or the Servicer, thereafter shall be sent immediately to the Agent. The parties
hereto hereby acknowledge that if at any time the Agent takes control of any
Lock-Box Account and/or the Collection Account, the Agent shall not have any
rights to the funds therein in excess of the unpaid amounts due to the Agent,
the Purchaser or any other Person hereunder and any such funds shall be
distributed by the Agent in accordance with the provisions set forth in Section 1.4.

 

Section 4.4                                      Enforcement
Rights. (a) At any time following the occurrence and during the
continuance of a Termination Event:

 

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

 

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

 

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

 

16

 

(b)                                 The
Seller hereby authorizes the Agent, and irrevocably appoints the Agent as its
attorney-in-fact with full power of substitution and with full authority in the
place and stead of the Seller, which appointment is coupled with an interest,
during the occurrence and continuance of a Termination Event or Unmatured
Termination Event, to take any and all steps in the name of the Seller and on
behalf of the Seller necessary or desirable, in the determination of the Agent,
to collect any and all amounts or portions thereof due under any and all Pool
Receivables or Related Security, including, without limitation, endorsing the
name of the Seller on checks and other instruments representing Collections and
enforcing such Pool Receivables, Related Security and the related Contracts. Notwithstanding
anything to the contrary contained in this subsection (b), none of
the powers conferred upon such attorney-in-fact pursuant to the immediately
preceding sentence shall subject such attorney-in-fact to any liability if any
action taken by it shall prove to be inadequate or invalid, nor shall they
confer any obligations upon such attorney-in-fact in any manner whatsoever,
except to the extent arising out of the negligence or willful misconduct of such
attorney-in-fact.

 

Section 4.5                                      Responsibilities
of the Seller. Anything herein to the contrary notwithstanding, the Seller
shall (i) perform all of its obligations, if any, under the Contracts
related to the Pool Receivables to the same extent as if interests in such Pool
Receivables had not been transferred hereunder, and the exercise by the Agent
or the Purchaser of its rights hereunder shall not relieve the Seller from such
obligations and (ii) pay when due any taxes, including, without
limitation, any sales taxes payable in connection with the Pool Receivables and
their creation and satisfaction. The Agent and the Purchaser shall not have any
obligation or liability with respect to any Pool Receivable, any Related
Security or any related Contract, nor shall any of them be obligated to perform any
of the obligations of the Seller under any of the foregoing.

 

Section 4.6                                      Servicing
Fee. The Servicer shall be paid a fee, through distributions contemplated
by Section 1.4(d), which shall accrue for each day, equal to the
result of (a) one percent (1%) multiplied by (b) the Outstanding
Balance of all Pool Receivables on such day, multiplied by (c) a fraction,
the numerator of which is one (1) and the denominator of which is three
hundred sixty-five (365).

 

ARTICLE V

MISCELLANEOUS

 

Section 5.1                                      Amendments,
Etc. No amendment or waiver of any provision of this Agreement or consent
to any departure by the Seller or the Servicer therefrom shall be effective
unless in a writing signed by the Agent, and, in the case of any amendment, by
the Seller and the Servicer and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such material amendment shall
be effective until the Rating Agencies have notified the Agent in writing that
such action will not result in a reduction or withdrawal of the rating of any
Notes. No failure on the part of the Purchaser or the Agent 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.

 

17

 

Section 5.2                                      Notices,
Etc.; Extension of Stated Termination Date. (a) All notices and other
communications hereunder shall, unless otherwise stated herein, be in writing
(which shall include facsimile communication) and sent or delivered, to each
party hereto, at its address set forth under its name on Schedule I
hereto, or at such other address as shall be designated by such party in a
written notice to the other parties hereto. Notices and communications by
facsimile shall be effective when sent (and shall be followed by hard copy sent
by first class mail), and notices and communications sent by other means
shall be effective when received.

 

(b)                                 The
Seller may advise the Agent in writing of its desire to extend the Stated
Termination Date for an additional three hundred sixty-four (364) days,
provided such request is made not more than ninety (90) days prior to, and not
less than sixty (60) days prior to, the then current Stated Termination Date. The
Agent shall notify the Seller in writing, within forty-five (45) days after its
receipt of such request by the Seller, whether the Liquidity Banks or any of
them are agreeable to such extension (it being understood that the Liquidity
Banks may accept or decline such a request in their sole discretion and on
such terms as they may elect) and, to the extent the Liquidity Banks are
agreeable, the Seller, the Agent and the Liquidity Banks shall enter into such
documents as the Liquidity Banks may deem necessary or appropriate to
reflect such extension, and all reasonable costs and expenses incurred by the
Liquidity Banks, the Purchaser and the Agent in connection therewith (including
reasonable attorneys’ costs) shall be paid by the Seller; it being understood,
that the failure of the Agent to so notify the Seller as set forth above shall
not be deemed to be a consent to such request for extension.

 

Section 5.3                                      Assignability.
(a) This Agreement and the Purchaser’s rights and obligations herein
(including ownership of the Participation) shall be assignable, in whole or in
part, by the Purchaser and its successors and assigns; any such assignment
shall be subject to the prior written consent of the Seller (which consent
shall not be unreasonably withheld), unless (i) such assignment is to a
Note Issuer or (ii) a Termination Event or an Unmatured Termination Event
has occurred and is continuing. Subject to Section 5.6, each
assignor may, in connection with the assignment, disclose to the applicable
assignee any information relating to the Seller or the Pool Receivables furnished
to such assignor by or on behalf of the Seller, the Purchaser or the Agent.

 

Upon such an
assignment the assignee shall have all of the rights of the Purchaser with
respect to the Transaction Documents and the Investment (or such portion
thereof as has been assigned).

 

(b)                                 The
Purchaser may at any time sell or grant to one or more banks or other
institutions (each a “Liquidity Bank”) party to the Liquidity Agreement
or to any other Program Support Provider, participating interests or security
interests in the Participation. In the event of any such sale or grant by the
Purchaser of a participating interest to a Liquidity Bank or other Program
Support Provider, the Purchaser shall remain responsible for the performance of
its obligations hereunder. The Seller agrees that each Liquidity Bank or other
Program Support Provider shall be entitled to the benefits of Sections 1.7,
1.8 and 1.9. No bank or other financial institution (other than
NORD/LB and those institutions for which the Agent shall have given Seller
notice on or prior to the Closing Date that are existing as such on the date
hereof) shall

 

18

 

become a party to the
Liquidity Agreement as a Liquidity Bank without the prior written consent of the
Servicer, which consent shall not be unreasonably withheld.

 

(c)                                  This
Agreement and the rights and obligations of the Agent hereunder shall be
assignable, in whole or in part, by the Agent and its successors and assigns.

 

(d)                                 Except
as provided in Section 4.1(d), neither the Seller nor the Servicer may assign
its rights or delegate its obligations hereunder or any interest herein without
the prior written consent of the Agent.

 

(e)                                  Without
limiting any other rights that may be available under applicable law, the
rights of the Purchaser may be enforced through it or by its agents.

 

Section 5.4                                      Costs,
Expenses and Taxes. (a) In addition to the rights of indemnification
granted under Section 3.1 hereof, the Seller agrees to pay, upon
demand, all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including auditing Receivables prior to
the Closing Date, periodic auditing of Receivables and the servicing thereof
from and after the Closing Date, and any reasonable and customary fees from
time to time payable to the Rating Agencies in connection with the transactions
contemplated by this Agreement) of this Agreement and the other Transaction
Documents, including all reasonable costs and expenses relating to the
amending, amending and restating, modifying or supplementing of this Agreement
and the other Transaction Documents and the waiving of any provisions hereof or
thereof (whether or not any such amendment, amendment and restatement,
modification, supplement or waiver becomes effective), and including in all
cases, without limitation, Attorney Costs for the Agent, the Purchaser and
their respective Affiliates and agents with respect thereto and with respect to
advising the Agent, the Purchaser and their respective Affiliates and agents as
to their rights and remedies under this Agreement and the other Transaction
Documents, and all costs and expenses, if any (including Attorney Costs), of
the Agent, the Purchaser and their respective Affiliates and agents, in connection
with the enforcement of this Agreement and the other Transaction Documents.

 

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

 

Section 5.5                                      No
Proceedings; Limitation on Payments. (a) Each of the Seller, the
Servicer, the Agent, each assignee of the Participation or any interest
therein, and each Person which enters into a commitment to purchase the
Participation or interests therein, hereby covenants and agrees that it will
not institute against, or join any other Person in instituting against, the
Purchaser or any other Note Issuer, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding, or other proceeding under
any federal or state bankruptcy or similar law, for one year and one day after
the latest maturing Note issued by the Purchaser or any such Note Issuer is
paid in full.

 

19

 

(b)                                 Notwithstanding
any provisions contained in this Agreement to the contrary, the Purchaser shall
not, and shall not be obligated to, pay any amount, if any, payable by it
pursuant to this Agreement or any other Transaction Document unless (i) the
Purchaser has received funds which may be used to make such payment and
which funds are not required to repay the Notes when due and (ii) after
giving effect to such payment, either (x) the Purchaser could issue Notes to
refinance all outstanding Notes (assuming such outstanding Notes matured at
such time) in accordance with the program documents governing the Purchaser’s
securitization program or (y) all Notes are paid in full. Any amount which the
Purchaser does not pay pursuant to the operation of the preceding sentence
shall not constitute a claim (as defined in §101 of the Bankruptcy Code)
against or corporate obligation of the Purchaser for any such insufficiency
unless and until the Purchaser satisfies the provisions of clauses (i) and
(ii) above.

 

Section 5.6                                      Confidentiality.
Unless otherwise required by applicable law (including the disclosure
requirement of applicable securities laws), each of the Seller and the Servicer
agrees to maintain the confidentiality of this Agreement and the other Transaction
Documents (and all drafts thereof) in communications with third parties and
otherwise; provided that this Agreement may be disclosed to (a) third
parties to the extent such disclosure is made pursuant to a written agreement
of confidentiality in form and substance reasonably satisfactory to the
Agent and (b) the Seller’s and/or the Servicer’s legal counsel and
auditors if they agree to hold it confidential; provided that only the
terms and conditions of this Agreement may be revealed to such parties and
not the details of any fees, pricing or interest rates. Unless otherwise
required by applicable law, each of the Agent and the Purchaser agrees to
maintain the confidentiality of non-public financial information regarding
Manitowoc and its Subsidiaries and other information marked as confidential by
the Servicer or the Seller; provided, that such information may be
disclosed to: (i) third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to Manitowoc, (ii) legal counsel and auditors of
the Purchaser or the Agent if they agree to hold it confidential, (iii) the
rating agencies rating the Notes, (iv) any Program Support Provider or
potential Program Support Provider (if they agree to hold it confidential), (v) any
placement agent placing the Notes and (vi) any regulatory authorities
having jurisdiction over the Agent, the Purchaser, any Program Support Provider
or any Liquidity Bank. Nothing in this Section shall prevent disclosure of
information as part of a legal proceeding relating to litigation in
respect of this Agreement or any other Transaction Document.

 

Section 5.7                                      GOVERNING
LAW AND JURISDICTION. (a) THIS AGREEMENT, INCLUDING THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND
5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT
REGARD TO ANY OTHER CONFLICT OF LAWS PROVISIONS THEREOF).

 

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

 

20

 

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

 

Section 5.8                                      Execution
in Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.

 

Section 5.9                                      Survival
of Termination. The provisions of Sections 1.7, 1.8, 1.9,
and this Article V shall survive any termination of this Agreement.

 

Section 5.10                                WAIVER
OF JURY TRIAL. THE PURCHASER, THE SELLER, THE SERVICER AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION
OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PURCHASER, THE
SELLER, THE SERVICER AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT
TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY
ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION
HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

 

Section 5.11                                Entire
Agreement. This Agreement and the other Transaction Documents embodies the
entire agreement and understanding between the Purchaser, the Seller, the
Servicer and the Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.

 

Section 5.12                                Headings.
The captions and headings of this Agreement and in any Exhibit hereto are
for convenience of reference only and shall not affect the interpretation
hereof or thereof.

 

21

 

Section 5.13                                Purchaser’s
Liabilities. The obligations of the Purchaser under this Agreement are
solely the corporate obligations of the Purchaser. No recourse shall be had for
any obligation or claim arising out of or based upon this Agreement against any
stockholder, employee, officer, director or incorporator of the Purchaser; and provided,
however, that this Section 5.13 shall not relieve any such
Person of any liability it might otherwise have for its own gross negligence or
willful misconduct. The agreements provided in this Section 5.13
shall survive termination of this Agreement.

 

Section 5.14                                Mutual
Negotiations. This Agreement and the other Transaction Documents are the
product of mutual negotiations by the parties thereto and their counsel, and no
party shall be deemed the draftsperson of this Agreement or any other
Transaction Document or any provision hereof or thereof or to have provided the
same. Accordingly, in the event of any inconsistency or ambiguity of any
provision of this Agreement or any other Transaction Document, such
inconsistency or ambiguity shall not be interpreted against any party because
of such party’s involvement in the drafting thereof.

 

[SIGNATURES FOLLOW]

 

22

 

IN WITNESS
WHEREOF, the parties have caused this Agreement to be duly executed as of the
date first above written.

 

	
   

  	
  MANITOWOC FUNDING, LLC,

  
	
   

  	
  as Seller

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

S-1

 

	
   

  	
  THE MANITOWOC COMPANY, INC.,

  as Servicer

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

S-2

 

 

	
   

  	
  NORDDEUTSCHE LANDESBANK

  GIROZENTRALE, as Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

S-3

 

	
   

  	
  HANNOVER FUNDING COMPANY LLC,

  as Purchaser

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

S-4

 

EXHIBIT I

 

DEFINITIONS

 

As used in the
Agreement (including its Exhibits), 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). Unless otherwise indicated, all
Section, Annex, Exhibit and Schedule references in this Exhibit are
to Sections of and Annexes, Exhibits and Schedules to the Agreement.

 

“Adverse
Claim” means a lien, security interest, restriction on transfer or other
charge or encumbrance, or any other type of preferential arrangement, including
the interest of a consignor, it being understood that a lien, security interest
or other charge or encumbrance, or any other type of preferential arrangement,
in favor of or granted to the Seller or the Purchaser pursuant to this
Agreement and the other Transaction Documents shall not constitute an Adverse
Claim and excluding (i) liens for taxes, assessments or other governmental
charges which are not yet due and payable, and (ii) liens granted to any
Lock-Box Bank and/or the Collection Account Bank in the Collections held by
such bank in the related Lock-Box Account and/or Collection Account, as the
case may be, and solely for and relating to the payment of fees and other
charges to such bank and the ability of such bank to recover for returned
items, in each case, to the extent described and provided for in the agreement,
if any, relating to such account and/or the applicable Lock-Box Agreement
and/or Collection Account Agreement.

 

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

 

“Affiliate”
means, as to any Person, any other Person that, directly or indirectly, is in
control of, is controlled by or is under common control with such Person or is
a director or officer of such Person.

 

“Affiliate
Obligor” means any Obligor that is a Subsidiary of a Parent Obligor or that
is an Affiliate of a Parent Obligor.

 

“Agent”
shall have the meaning set forth in the preamble to the Agreement.

 

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

 

“Average
Remaining Maturity” means, for any day, the result of (i) the sum of,
for each Eligible Receivable then in the Receivables Pool, (a) the
Remaining Maturity times (b) the Net Outstanding Balance, divided by (ii) the
sum of the Net Outstanding Balances of all Eligible Receivables then in the
Receivables Pool.

 

“Bank Rate”
for any Yield Period for any Portion of Investment of the Participation means
an interest rate per  annum equal to (A) the Eurodollar Rate
for such Yield Period plus two percent (2%) for the first ten days of such
Yield Period and (B) the Eurodollar Rate plus two and

 

I-1

 

one-half percent (2.5%) thereafter; provided that the “Bank
Rate” for each day in a Yield Period occurring during the continuance of a
Termination Event shall be an interest rate equal to plus two percent (2%) per
annum above the Base Rate in effect on such day.

 

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

 

“Base
Concentration Limit” means, for any day, a percentage,  not to exceed five percent (5%), determined
by the Servicer.

 

“Base Rate”
means for any day, a fluctuating interest rate per annum as shall be in effect
from time to time, which rate shall be at all times equal to the greater of (i) the
rate of interest most recently announced by NORD/LB at its branch in New York,
New York as its prime commercial rate for United States loans made in the
United States (which rate is not necessarily intended to be the lowest rate of
interest determined by NORD/LB in connection with extensions of credit) and (ii) the
latest Federal Funds Rate plus one-half of one percent (0.50%) per annum.

 

“Bond
Administration Agreement” means the Bond Administration Agreement dated as
of December 21, 2006 between the Servicer and Finacity.

 

“Breakage
Costs” is defined in Section 3.1 of the Agreement.

 

“Business
Day” means any day on which (i) both (A) the Agent at its branch
office in New York, New York is open for business and (B) commercial banks
in New York City are not authorized or required to be closed for business, and (ii) if
this definition of “Business Day” is utilized in connection with the Eurodollar
Rate, dealings are carried out in the London interbank market.

 

“Calculation
Period” means a calendar month.

 

“Change in
Control” means (x) with respect to Manitowoc, (a) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
group (within the meaning of the Securities Exchange Act of 1934 and the rules of
the Securities and Exchange Commission thereunder as in effect on the date
hereof) of Equity Interests representing more than thirty percent (30%) of the
aggregate ordinary voting power represented by the issued and outstanding
Equity Interests of Manitowoc, ( b) occupation of a majority of the seats
(other than vacant seats) on the board of directors of Manitowoc by Persons who
were neither (i) nominated by the board of directors of Manitowoc nor (ii) appointed
by directors so nominated, (c) the acquisition of direct or indirect
Control of Manitowoc by any Person or group or (d) a “Change of Control”
as defined in the Senior Note Documents or the Subordinated Note Documents; and

 

(y) with
respect to an Originator, (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof),
other than Manitowoc (or a Subsidiary of Manitowoc), of any membership
interests or Equity Interests of such Originator, (b) occupation of a
majority of the seats (other

 

I-2

 

than vacant seats) on the board of directors of the Seller by Persons
who were neither (i) nominated by the board of directors of the Seller nor
(ii) appointed by directors so nominated, or (c) the acquisition of
direct or indirect Control of such Originator by any Person or group other than
Manitowoc (or a Subsidiary of Manitowoc); and

 

(z) with
respect to the Seller, (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof),
other than Grove U.S. L.L.C., of any membership interests or Equity Interests
of the Seller, (b) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Seller by Persons who were
neither (i) nominated by the board of directors of the Seller nor (ii) appointed
by directors so nominated, or (c) the acquisition of direct or indirect
Control of the Seller by any Person or group other than Grove U.S. L.L.C.; and

 

For purposes
of this definition of Change in Control, capitalized terms used in this
definition that are defined in the Credit Agreement (or by reference in the
Credit Agreement) shall have the meanings assigned thereto in (or by reference
in) the Credit Agreement, without giving effect to any amendment, amendment and
restatement, supplement or other modification to the Credit Agreement; provided
that the terms “Seller” and “Manitowoc” shall have the meanings assigned
thereto in the Agreement.

 

“Closing
Date” means December 22, 2006.

 

“Collection
Account” means that certain bank account numbered 330-785-7 maintained at
Harris N.A. which is (i) identified as the “Manitowoc Funding, LLC Collection
Account,” (ii) pledged, on a first-priority basis, to the Purchaser
pursuant to Section 1.2(d) of the Agreement, and (iii) is
governed by the Collection Account Agreement.

 

“Collection
Account Agreement” means a letter agreement, in form and substance
satisfactory to the Agent, among the Seller, the Agent, the Collection Account
Bank, and such other Persons as may be acceptable to the Agent, as the
same may be amended, supplemented, amended and restated, or otherwise
modified from time to time in accordance with the Agreement and with the
consent of the Agent.

 

“Collection
Account Bank” means the bank holding the Collection Account.

 

“Collections”
means, with respect to any Pool Receivable, (a) all funds which are
received by the Seller, Servicer or any Originator in payment of any amounts
owed in respect of such Receivable (including, without limitation, purchase
price, finance charges, interest and all other charges), or applied to amounts
owed in respect of such Receivable (including, without limitation, insurance
payments and net proceeds of the sale or other disposition of repossessed goods
or other collateral or property of the related Obligor or any other Person
directly or indirectly liable for the payment of such Pool Receivable and
available to be applied thereon), (b) all Collections deemed to have been
received pursuant to Section 1.4(e) of the Agreement and (c) all
other proceeds of such Receivable.

 

I-3

 

“Commitment
Fee” has the meaning set forth in the Fee Letter.

 

“Commitment
Fee Rate” has the meaning set forth in the Fee Letter.

 

“Commitment
Fee Reserve” means on any date of determination, an amount equal to the
product of (a) the Commitment Fee Rate, times (b) two (2) times
the Days Sales Outstanding at such time, times (c) the result of (1) the
Purchase Limit at such time minus (2) the Investment at such time, divided
by (d) three hundred sixty (360).

 

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

 

“Concentration
Component” means, on any date, the greatest of:  (a) the Concentration Percentage for all
Group B Obligors, (b) two (2) times the Concentration Percentage for
all Group C Obligors, or (c) four (4) times the Concentration
Percentage for all Group D Obligors.

 

“Concentration
Percentage” means, on any day, (a) for any Group A Obligor, a
percentage equal to one hundred percent (100%), or any other percentage as
agreed by the Servicer and the Agent in writing, (b) for all Group B
Obligors, a percentage equal to four (4) times the Base Concentration
Limit, (c) for all Group C Obligors, a percentage equal to two (2) times
the Base Concentration Limit, and (d) for all Group D Obligors, a
percentage equal to the Base Concentration Limit.

 

“Consolidated
Interest Coverage Ratio” has the meaning set forth in the Credit Agreement,
without giving effect to any amendment, amendment and restatement, supplement
or other modification to the Credit Agreement (unless such amendment, amendment
and restatement, supplement or other modification has been consented to in
writing by the Agent).

 

“Consolidated
Senior Leverage Ratio” has the meaning set forth in the Credit Agreement,
without giving effect to any amendment, amendment and restatement, supplement
or other modification to the Credit Agreement (unless such amendment, amendment
and restatement, supplement or other modification has been consented to in
writing by the Agent).

 

“Consolidated
Total Leverage Ratio” has the meaning set forth in the Credit Agreement, without
giving effect to any amendment, amendment and restatement, supplement or other
modification to the Credit Agreement (unless such amendment, amendment and
restatement, supplement or other modification has been consented to in writing
by the Agent).

 

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

 

“Contractual
Dilution” means any Dilution that is contractually limited prior to the
sale or contribution to the Seller, pursuant to the Purchase and Sale
Agreement, of the Receivable(s) that gave rise to such Dilution, such as
discounts or rebates.

 

I-4

 

“Contributed
Receivables” is defined in Section 1.1(a) of the Purchase
and Sale Agreement.

 

“Contributed
Value” is defined in Section 3.3(b) of the Purchase and
Sale Agreement.

 

“CP Rate”
for any Yield Period for any Portion of Investment of the Participation means,
to the extent the Purchaser funds such Portion of Investment for such Yield
Period by issuing Notes, a rate per  annum equal to the sum of (a) the
weighted average of the rates paid or payable by the Purchaser from time to
time as interest on or otherwise (by means of interest rate hedges or
otherwise) in respect of Notes and allocated, in whole or in part, by the Agent
to fund the purchase or maintenance of a Portion of Investment (and which may also
be allocated in part to the funding of other assets of the Purchaser)
during the relevant Yield Period, provided that if any component of such rate
is a discount rate, then such component shall be the rate resulting from
converting such discount rate to an interest-bearing equivalent rate per annum,
plus (b) the per annum rate (expressed as a percentage and an interest
rate equivalent and calculated based on a 360-day year) equivalent to the sum
of (i) the allocable amount of any placement agent or commercial paper
dealer fees incurred in connection with the issuance of Notes, plus (ii) certain
documentation and transaction costs associated with the issuance of Notes, plus
(iii) any incremental carrying costs incurred with respect to Notes
maturing on dates other than those on which corresponding funds are received by
the Purchaser, plus (iv) other borrowings by the Purchaser, including
borrowings to fund small or odd dollar amounts that are not easily accommodated
in the commercial paper market (provided that the rate contemplated by this
clause (iv) shall not exceed the Eurodollar Rate plus fifty basis
points (0.50%)). Notwithstanding anything to the contrary in the Agreement or
in any other Transaction Document on and after the occurrence and during the
continuation of any Termination Event the “CP Rate” shall be equal to the Base
Rate plus two percent (2%) per  annum.

 

“Crane
Business” means the Crane business segment as described in Part I,
Item 1 of Form 10-K filed by Manitowoc with the United States Securities
and Exchange Commission for the fiscal year ended December 31, 2005.

 

“Credit
Agreement” means the Amended and Restated Credit Agreement dated as of December 14,
2006 among Manitowoc, the Subsidiary Borrowers party thereto, the Lenders party
thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, without giving
effect to any amendment, amendment and restatement, supplement or other
modification thereto (except as expressly provided in the Agreement or the
Purchase and Sale Agreement, as applicable).

 

“Credit and
Collection Policy” means those receivables credit and collection policies
and practices of the Servicer in effect on the date of the Agreement and attached
as Schedule IV to the Agreement, as modified in compliance with the
Agreement.

 

“Cutoff
Date” means, (a) for any Settlement Date, the final day of a preceding
Calculation Period, or (b) for any other date, the Cutoff Date for the
immediately preceding Settlement Date.

 

I-5

 

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

 

“Debt”
means Indebtedness as defined in the Credit Agreement without giving effect to
any amendment, amendment and restatement, supplement or other modification to
the Credit Agreement.

 

“Default
Horizon” means the number four (4).

 

“Default
Horizon Calculation Period” means, for any day, a number, equal to the
Default Horizon, of consecutive Calculation Periods ending with the Cutoff
Date.

 

“Default
Ratio” means, for any day, the ratio computed as of the Cutoff Date by
dividing (i) the sum (without duplication) of the Net Outstanding Balances
of Pool Receivables that (a) were Defaulted Receivables as of the Cutoff
Date, and (b) were not Defaulted Receivables as of the previous Cutoff
Date, and (c) were Eligible Receivables on at least one day during the
Calculation Period by (ii) the Eligible Sales during the Loss Horizon
Lookback Period.

 

“Defaulted
Receivable” means a Receivable:

 

(i)                                     as
to which any payment, or part thereof, remains unpaid for at least
ninety-one (91) days from the original due date, or, if applicable, the
adjusted due date, provided that any such adjustments are consistent with the
Credit and Collection Policy therefor;

 

(ii)                                  as
to which the Obligor thereof or any other Person obligated thereon or owning
any Related Security in respect thereof has taken any action, or suffered any
event to occur, of the type described in paragraph (g) of Exhibit V
to the Agreement; or

 

(iii)                               which
has been, or, consistent with the Credit and Collection Policy, which should
be, written off as uncollectible.

 

“Delinquent
Receivable” means a Receivable which is not a Defaulted Receivable and:

 

(i)                                     as
to which any payment, or part thereof, remains unpaid for at least 61 days
from the original due date therefor; or

 

(ii)                                  which,
consistent with the Credit and Collection Policy, would be classified as
delinquent.

 

“Dilution”
means any non-cash credit granted to an Obligor for the purpose of reducing or
canceling the Net Outstanding Balance of any Eligible Receivable of such
Obligor, except to the extent that such credit is offset by the sale or
contribution of an Eligible Receivable(s) to the

 

I-6

 

Seller pursuant to the Purchase and Sale Agreement, as part of a
transfer, cancellation (of invoice, not product), replacement (of invoice, not
product), correction, or any artifact of A/R tracking, or as part of a
buyback/resell arrangement between such Obligor and the applicable Originator.

 

“Dilution
Component” means, for any day, the product of (i) the average of the
Dilution Ratios for the twelve most recent Calculation Periods and (ii) the
Dilution Horizon Ratio.

 

“Dilution
Horizon” means the number one (1).

 

“Dilution
Horizon Calculation Period” means, for any day, a number, equal to the
Dilution Horizon, of consecutive Calculation Periods ending with the Cutoff
Date.

 

“Dilution
Horizon Lookback Period” means, for any day, the Calculation Period
preceding the Calculation Period containing the Cutoff Date by a number, equal
to the Dilution Horizon, of Calculation Periods.

 

“Dilution
Horizon Ratio” means, for any Settlement Date (and any subsequent date
until the following Settlement Date), the result of (i) the Eligible Sales
during the Dilution Horizon Calculation Period, divided by (ii) the Net
Eligible Pool Balance as of such date.

 

“Dilution
Ratio” means, for any day, the ratio computed as of the Cutoff Date by
dividing:  (a) the Eligible Dilution
during the Calculation Period by (b) the Eligible Sales during the
Dilution Horizon Lookback Period.

 

“Dilution
Reserve Percentage” means, on any Settlement Date (and any subsequent date
until the following Settlement Date), the product of (i) the Dilution
Horizon Ratio multiplied by (ii) the sum of (x) the Dilution Reserve
Stress Factor times the average of the Dilution Ratios for the twelve most
recent Calculation Periods and (y) the Spike Factor.

 

“Dilution
Reserve Stress Factor” means the number two (2).

 

“Discount”
means:

 

(i)                                     for
the Portion of Investment of the Participation for any Yield Period to the
extent the Purchaser is funding such Portion of Investment through the issuance
of Notes,

 

[CPR x I x (ED/360)] + TF

 

(ii)                                  for
the Portion of Investment of the Participation for any Yield Period to the
extent the Purchaser is funding such Portion of Investment pursuant to the
Liquidity Agreement or other than through the issuance of Notes,

 

[BR x I x
(ED/Year)]+ TF

 

I-7

 

where:

 

	
  BR

  	
  =

  	
  the Bank Rate for the Portion of Investment of the Participation for
  such Yield Period

  
	
   

  	
   

  	
   

  
	
  I

  	
  =

  	
  the Portion of Investment of the Participation for such Yield Period

  
	
   

  	
   

  	
   

  
	
  CPR

  	
  =

  	
  the CP Rate for the Portion of Investment of the Participation for
  such Yield Period

  
	
   

  	
   

  	
   

  
	
  ED

  	
  =

  	
  the actual number of days during such Yield Period

  
	
   

  	
   

  	
   

  
	
  Year

  	
  =

  	
  if such Portion of Investment is funded based upon: (i) the
  Eurodollar Rate, three hundred sixty (360) days, and (ii) the Base Rate,
  three hundred sixty-five (365) or three hundred sixty-six (366) days, as
  applicable

  
	
   

  	
   

  	
   

  
	
  TF

  	
  =

  	
  the Termination Fee, if any, for the Portion of Investment of the
  Participation for such Yield Period

  

 

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

 

“Discount
Reserve” at any time means the sum of (i) the Termination Discount at
such time, and (ii) the then accrued and unpaid Discount.

 

“Dividends”
means any dividend or distribution (in cash or obligations) on any of the
Seller’s membership or other equity interests or any warrants, options or other
rights with respect to any of the Seller’s membership or other equity
interests.

 

“Eligible
Dilution” means, for any Calculation Period, the sum of all Variable
Dilutions occurring during the Calculation Period except to the extent that
such credits have been applied to any Obligor in excess of the amount of any
Net Outstanding Balances owed on Eligible Receivables for any such Obligor.

 

“Eligible
Receivables” means, at any time, Receivables:

 

(i)                                     the
Obligor of which is a resident of either (a) the United States, or (b) Canada
(excluding the province of Quebec);

 

(ii)                                  the
Obligor of which is not, nor has at any time during the life of such Receivable
been, subject to any bankruptcy, insolvency or any other action, circumstance
or proceeding of the type described in paragraph (g) of Exhibit V
to the Agreement;

 

I-8

 

(iii)                               the
Obligor of which is not an Affiliate of Manitowoc or any Affiliate of
Manitowoc;

 

(iv)                              which
are denominated and payable only in U.S. dollars in the United States;

 

(v)                                 which
have a stated maturity; and the invoice relating thereto has been sent to the
related Obligor;

 

(vi)                              which
arise under a Contract which is in full force and effect and which is a legal,
valid and binding obligation of the related Obligor, enforceable against such
Obligor in accordance with its terms and which contains an obligation to pay a
specified amount of money, and, without limiting the foregoing, such
Receivables (A) constitute legal, valid, binding and irrevocable payment
obligations of the related Obligor, enforceable against such Obligor in
accordance with their terms and (B) have not been terminated (according to
the Servicer’s records) and whose termination is not pending;

 

(vii)                           which
were created in compliance with all laws, rulings and regulations applicable to
the transactions under which such Receivables were generated;

 

(viii)                        which conform with
all applicable laws, rulings and regulations in effect; which are not the
subject of any dispute, offset, hold back defense, Adverse Claim, counterclaim,
warranty claim or other claim or defense (including as a result of any
liability of the applicable Originator to any such Obligor that is also a
supplier to such Originator); and which do not arise from the sale of inventory
which is subject to any Adverse Claim;

 

(ix)                                which
were created in accordance with, and which comply with, the requirements of the
Credit and Collection Policy;

 

(x)                                   which
arise from the sale and delivery of goods or services in the ordinary course of
business of the Crane Business or the Foodservice Business of an Originator;

 

(xi)                                which
do not require the consent of the related Obligor to be sold, transferred or
assigned, under the related Contract or otherwise, and the Contract relating
thereto does not contain any provision that restricts the ability of the
Purchaser or the Agent to exercise rights thereunder or under the Transaction
Documents, except in each case as consented to or waived by the related Obligor
pursuant to a written consent or waiver in form and in substance
satisfactory to the Agent;

 

(xii)                             which
have not been modified, extended, renegotiated or restructured since their
creation in any way not provided for in the Credit and Collection Policy;

 

(xiii)                          in which
the Seller owns good and valid title, free and clear of any Adverse Claim, and
which are freely assignable by the Seller;

 

I-9

 

(xiv)                         for which
the Purchaser shall have a valid and enforceable undivided percentage ownership
interest, to the extent of the Participation, and a valid and enforceable first
priority perfected security interest therein and in the Related Security and
Collections with respect thereto, in each case free and clear of any Adverse
Claim;

 

(xv)                            which
constitute accounts as defined in the UCC, and which are not evidenced by
instruments or chattel paper as defined in the UCC;

 

(xvi)                         which are
not Defaulted Receivables and which, on the date of purchase of such
Receivables by the Seller, are not Delinquent Receivables;

 

(xvii)                      which are
not Receivables in any Parent Obligor Pool where the aggregate Outstanding
Balance of all Defaulted Receivables in such Parent Obligor Pool exceeds
thirty-five percent (35%) of the aggregate Outstanding Balance of all
Receivables in such Parent Obligor Pool;

 

(xviii)                   which are
accounts receivable representing all or part of the sales price of
merchandise, insurance or services within the meaning of Section 3(c)(5) of
the Investment Company Act of 1940, as amended, and are “eligible assets” as
defined in Rule 3a-7 under such Act;

 

(xix)                           the
Originator of which (A) is not in default in any material respect under
the terms of the related Contract from which such Receivable arose and (B) is
wholly-owned by Manitowoc;

 

(xx)                              that
represent amounts earned and payable by the related Obligor and that are not
subject to the performance of additional services or to the delivery of
additional goods by the Originator thereof;

 

(xxi)                           which
have not been disqualified by the Agent, Purchaser or the rating agencies
rating the Purchaser’s commercial paper for any other reason;

 

(xxii)                        for which
the Obligor has been directed to make all payments to a Lock-Box Account which
is subject to a Lock-Box Agreement;

 

(xxiii)                     which are not
“bill and hold” Receivables, unless (A) the applicable Originator has
received a letter from the applicable Obligor identifying the goods relating to
such Receivables and stating that such Obligor accepts such goods, (B) such
goods have been placed in a gated area on the premises of such Originator that
does not contain any goods owned by such Originator and (C) such
Originator has fulfilled all of its obligations under the applicable Contract
with respect to such goods and such Receivables (and, without limiting the
generality of the foregoing, such Originator has no delivery obligation with
respect to such goods);

 

(xxiv)                    which are not
payable in installments; and

 

I-10

 

(xxv)                       for which
the related goods have been shipped to the applicable Obligor and for which the
related services have been performed.

 

“Eligible
Sales” means, for any Calculation Period, the sum of the Net Outstanding
Balances of all Pool Receivables that were originated during or prior to the
Calculation Period and were Eligible Receivables at any time during the
Calculation Period but were not Eligible Receivables during any previous Calculation
Period.

 

“Eligible
Unapplied Cash and Credits” means the sum of (i) all cash and non-cash
credits not applied to any Obligor, and the sum of (ii) for each Obligor,
the smaller of (a) the sum of all cash and non-cash credits applied to
such Obligor but not yet applied to any particular Receivable, or (b) the
sum of the Net Outstanding Balance of all Eligible Receivables for which such
Obligor is the Obligor.

 

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

 

“ERISA
Affiliate” means with respect to any Person, at any time, each trade or
business (whether or not incorporated) that would, at the time, be treated
together with such Person as a single employer under Section 4001 of ERISA
or Sections 414(b), (c), (m) or (o) of the Code.

 

“Eurodollar
Rate” means, for any Yield Period, an interest rate per annum (rounded
upward to the nearest 1/100th of 1%) determined pursuant to the following
formula:

 

Eurodollar
Rate =

 

	
   

  	
   

  	
                LIBOR              

  	
   

  	
   

  
	
   

  	
   

  	
  1.00
  - Eurodollar Reserve Percentage     

  	
   

  	
   

  

 

Where,

 

“Eurodollar
Reserve Percentage” means, for any Yield Period, the maximum reserve
percentage (expressed as a decimal, rounded upward to the nearest 1/100th of
1%) in effect with respect to any Program Support Provider on the date LIBOR
for such Yield Period is determined under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
with respect to “Eurocurrency” funding (currently referred to as “Eurocurrency
liabilities”) having a term comparable to such Yield Period; and

 

“Excess
Concentration” means, for any Parent Obligor Pool, the amount by which the
sum of the Net Outstanding Balances, or portions thereof, of the Eligible
Receivables in such Parent Obligor Pool exceeds an amount equal to:  (a) the Concentration Percentage for
such

 

I-11

 

Parent Obligor multiplied by (b) the Outstanding Balance of all
Receivables then in the Receivables Pool.

 

“Excluded
Receivable” means a Receivable (a) the Obligor of which is a resident
of Quebec, Canada, (b) the Obligor of which is a resident of any country
other than Canada or the United States, or (c) the Obligor of which is the
United States Federal Government; provided that the determination as to whether
a Receivable is an Excluded Receivable shall be made only at the time that such
Receivable was transferred to the Seller pursuant to the Purchase and Sale
Agreement.

 

“Facility
Termination Date” means the earliest of (a) the fifth anniversary of
the Closing Date, (b) the declaration or occurrence of the Facility
Termination Date pursuant to Section 2.2 of the Agreement, (c) the
Purchase and Sale Termination Date, and (d) the current scheduled
termination date of the commitments of the Liquidity Banks under the Liquidity
Agreement with respect to this Agreement.

 

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

 

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

 

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

 

“Finacity”
means Finacity Corporation, a Delaware corporation.

 

“Final
Payout Date” means the date following the Facility Termination Date on
which no Investment or Discount in respect of the Participation under the
Agreement shall be outstanding and all other amounts then due and payable by
the Originators, the Seller or the Servicer to the Purchaser, the Agent or any
other Indemnified Party or Affected Person under the Transaction Documents
shall have been paid in full.

 

“Foodservice
Business” means the Foodservice business segment as described in Part 1,
Item I of Form 10-K filed by Manitowoc with the United States Securities
and Exchange Commission for the fiscal year ended December 31, 2005.

 

I-12

 

“GAAP”
means generally accepted accounting principles in the United States.

 

“Governmental
Authority” means any nation or government, any state, municipal or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, any court or arbitrator, and any accounting board or authority
(whether or not a part of government) which is responsible for the
establishment or interpretation of national or international accounting
principles, in each case whether foreign or domestic. Without limiting the
foregoing, Governmental Authority shall include any Person owned or controlled,
through stock or capital ownership or otherwise, by any of the foregoing.

 

“Group A
Obligor” means any Obligor that has a short-term rating of at least: (a) “A-1”
by S&P, or if such Obligor does not have a short-term rating from
S&P,  a rating of “AA-” or better by
S&P on its long-term senior unsecured and uncredit-enhanced debt
securities, and (b) “P-1” by Moody’s, or if such Obligor does not have a
short-term rating from Moody’s, “Aa3”or better by Moody’s on its long-term
senior unsecured and uncredit-enhanced debt securities; provided that if an
Obligor is not rated by S&P but is rated by Moody’s, then such Obligor
shall be deemed to be a Group D Obligor, and if an Obligor is not rated by
Moody’s but is rated by S&P, then such Obligor shall be deemed to be a Group
D Obligor.

 

“Group B
Obligor” means any Obligor that is not a Group A Obligor, and has a
short-term rating of at least:  (a) “A-2”
by S&P, or if such Obligor does not have a short-term rating from S&P,
a rating of  “A-” or better by S&P on
its long-term senior unsecured and uncredit-enhanced debt securities, and (b) “P-2”
by Moody’s, or if such Obligor does not have a short-term rating from Moody’s, “A3”
or better by Moody’s on its long-term senior unsecured and uncredit-enhanced
debt securities; provided that if an Obligor is not rated by S&P but is
rated by Moody’s, then such Obligor shall be deemed to be a Group D Obligor,
and if an Obligor is not rated by Moody’s but is rated by S&P, then such
Obligor shall be deemed to be a Group D Obligor.

 

“Group C
Obligor” means any Obligor that is neither a Group A Obligor nor a Group B
Obligor, and has a short-term rating of at least:  (a) “A-3” by S&P, or if such Obligor
does not have a short-term rating from S&P, a rating of “BBB-” or better by
S&P on its long-term senior unsecured and uncredit-enhanced debt
securities, and (b) “P-3” by Moody’s, or if such Obligor does not have a
short-term rating from Moody’s, “Baa3” or better by Moody’s on its long-term
senior unsecured and uncredit-enhanced debt securities; provided that if an
Obligor is not rated by S&P but is rated by Moody’s, then such Obligor
shall be deemed to be a Group D Obligor, and if an Obligor is not rated by
Moody’s but is rated by S&P, then such Obligor shall be deemed to be a
Group D Obligor.

 

“Group D
Obligor” means any Obligor that is not a Group A Obligor, nor a Group B
Obligor, nor a Group C Obligor.

 

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

 

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

 

I-13

 

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

 

“Intercreditor
Agreement” means the Amended and Restated Intercreditor Agreement dated as
of December 21, 2006 among Manitowoc, the Originators party thereto, the
Seller, the Agent and JPMorgan Chase Bank, N.A.

 

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

 

“Joinder
Agreement” means a joinder agreement entered into by the Seller and a
Person becoming an Originator pursuant to Section 4.3 of the
Purchase and Sale Agreement.

 

“LIBOR”
means the rate of interest per annum (i) for deposits in U.S. dollars for
a period equal to such Yield Period which appears on Telerate Page 3750 or
(ii) if such rate does not appear on Telerate Page 3750, determined
by the Liquidity Agent to be the arithmetic mean (rounded upward, if necessary,
to the nearest 1/100th of 1%) of the rates of interest per annum notified to
the Liquidity Agent as the rate of interest at which dollar deposits in the
approximate amount of the Investment associated with such Yield Period would be
offered to major banks in the London interbank market at their request, in each
case at or about 11:00 a.m. (London time) on the second Business Day prior
to the commencement of such Yield Period.

 

“Lien”
means, with respect to any Property, any mortgage, lien, pledge, claim, charge,
security interest or encumbrance of any kind, any other type of preferential
arrangement in respect of such Property having the effect of a security
interest or any filing consented to by any Company of any financing statement
under the UCC or any other similar notice of Lien under any similar notice or
recording statute of any Governmental Authority consented to by any Company,
including any easement, right-of-way or other encumbrance on title to Real
Property, and any agreement to give any of the foregoing.

 

“Liquidity
Agent” means NORD/LB in its capacity as Liquidity Agent pursuant to the
Liquidity Agreement.

 

“Liquidity
Agreement” means that certain Liquidity Asset Purchase Agreement dated as
of July 31, 2000 and the Liquidity Asset Purchase Agreement dated as of December 21,
2006 pertaining to this Agreement, in each case entered into among the Purchaser
and the other parties

 

I-14

 

thereto, as amended, amended and restated, supplemented or otherwise
modified from time to time.

 

“Liquidity
Bank” has the meaning set forth in Section 5.3(b) of the
Agreement.

 

“Lock-Box
Account” means each account maintained at a bank or other financial
institution for the purpose of receiving Collections.

 

“Lock-Box
Agreement” means an agreement, in form and substance satisfactory to
the Agent, among an Originator, the Seller, a Lock-Box Bank, and the Agent and
such other Persons as may be acceptable to the Agent.

 

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

 

“Loss
Horizon” means the number five (5).

 

“Loss Horizon
Lookback Period” means, for any day, the Calculation Period preceding the
Calculation Period containing the Cutoff Date by a number, equal to the Loss
Horizon, of Calculation Periods.

 

“Loss
Horizon Ratio” means, for any Settlement Date (and any subsequent date
until the following Settlement Date), the result of (i) the Eligible Sales
during the Default Horizon Calculation Period, divided by (ii) the Net
Eligible Pool Balance as of such date.

 

“Loss
Reserve Percentage” means, on any Settlement Date (and any subsequent date
until the following Settlement Date), the result of (i) the Loss Reserve
Stress Factor times (ii) the highest average of the Default Ratios for any
three consecutive Calculation Periods from among the twelve most recent such
averages prior to such Settlement Date, multiplied by (iii) the Loss
Horizon Ratio.

 

“Loss
Reserve Stress Factor” means the number two (2).

 

“M&T”
means Manufacturers and Traders Trust Company.

 

“M&T
Account” means an account of Grove U.S. L.L.C. held at M&T and identified
in Schedule II to the Agreement.

 

“M&T
Account Collections” means Collections received in or deposited in the
M&T Account.

 

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

 

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

 

I-15

 

(i)                                     the
business, operations, assets, financial condition or other condition of the
Seller, any Originator or the Servicer;

 

(ii)                                  the
ability of the Seller, any Originator or the Servicer (if it is Manitowoc or an
Affiliate of Manitowoc) to perform its obligations under the Transaction
Documents to which it is a party or the performance of any such obligations;

 

(iii)                               the
validity or enforceability of any portion of, or collectibility of amounts
payable under, the Agreement or any other Transaction Document;

 

(iv)                              the
rights and remedies of the Purchaser, the Agent, any Program Support Provider
or any of their respective Affiliates under the Agreement or any other
Transaction Document;

 

(v)                                 the
status, existence, perfection, priority or enforceability of the Seller’s or
Purchaser’s interest in the Pool Receivables, Contracts, or Related Security;
or

 

(vi)                              the
validity, enforceability or collectibility of a material portion of the Pool
Receivables.

 

“Monthly
Report” means a report, in substantially the form of Annex C hereto,
furnished by the Servicer to the Agent pursuant to paragraph (l)(iii) and
(l)(iv) of Exhibit IV to the Agreement.

 

“Monthly
Reporting Date” means the Business Day immediately following the 14th
calendar day of each calendar month.

 

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

 

“Net
Eligible Pool” means, on any date of calculation, a set, determined by the
Servicer of Eligible Receivables (or portions thereof) then in the Receivables
Pool, provided that such set has (a) no Excess Concentrations, and (b) no
Receivables due more than sixty (60) days thereafter.

 

“Net
Eligible Pool Balance” means, at any time, (a) the sum of the Net
Outstanding Balances of the Receivables in the Net Eligible Pool minus (b) the
sum of (i) Eligible Unapplied Cash and Credits, (ii) the amount by
which (A) the sum of the Net Outstanding Balances of the Receivables in
the Net Eligible Pool having due dates that have been adjusted and that have
been outstanding for more than ninety (90) days from their original due dates,
exceeds (B) an amount equal to five percent (5%) of the Net Outstanding
Balances of the Receivables in the Net Eligible Pool, (iii) the amount by
which (A) the sum of the Net Outstanding Balances of the Receivables in
the Net Eligible Pool for which the Obligors are Governmental Authorities
(excluding the United States Federal Government) exceeds (B) an amount
equal to five percent (5%) of the Net Outstanding Balances of the Receivables
in the Net Eligible Pool, and (iv) the amount by which (A) the sum of
the Net Outstanding Balances of the Receivables in the Net Eligible Pool for

 

I-16

 

 

which the Obligors are residents of Canada exceeds (B) an amount
equal to five percent (5%) of the Net Outstanding Balances of the Receivables
in the Net Eligible Pool.

 

“Net
Outstanding Balance” means, for any Receivable, at any time, (i) the
Outstanding Balance of such Receivable reduced by the amount of any and all
available, unused discounts or credits relating to such Receivable, provided
that the result is greater than zero, or (ii) zero, otherwise.

 

“NORD/LB”
is defined in the preamble to the Agreement.

 

“Note
Issuer” means (a) the Purchaser, (b) any Affiliate of the
Purchaser, (c) any Liquidity Bank, (d) any other Program Support
Provider, or (e) any Person which is (x) in the business of issuing Notes
and (y) associated with or administered by the Agent or any Affiliate of the
Agent.

 

“Notes”
means with regard to this Agreement, short-term promissory notes issued or to
be issued by any Note Issuer to fund its investments in accounts receivable or
other financial assets.

 

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

 

“Originators”
means each of the Persons from time to time party to the Purchase and Sale
Agreement as “Originators” (including Persons that become a party to the
Purchase and Sale Agreement as “Originators” pursuant to a Joinder Agreement).

 

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

 

“Parent
Obligor” means any Obligor so designated by the Servicer; provided  that each Obligor must be either a Parent
Obligor or an Affiliate Obligor but not both.

 

“Parent
Obligor Pool” means, for any Parent Obligor, all Receivables in the
Receivables Pool owed either by such Parent Obligor or by any Affiliate Obligor
of such Parent Obligor.

 

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

 

I + TR + DR + SFR + CFR

NEPB + C

 

where:

 

I-17

 

I                                                                          =          the Investment of the
Participation at the day of computation.

 

TR                                                              =          the Total Reserve as of
two Business Days prior to the day of computation.

 

DR                                                             =          the Discount Reserve of
the Participation at the day of computation.

 

SFR                                                        =          the Servicing Fee
Reserve of the Participation at the day of computation.

 

CFR                                                       =          the Commitment Fee
Reserve at the day of computation.

 

NEPB                                               =          the Net Eligible Pool
Balance as of two Business Days prior to the day of computation.

 

C                                                                      =          Cash in the Collection
Account at the close of the Business Day prior to the day of computation.

 

The
Participation shall be determined from time to time pursuant to the provisions
of Section 1.3 of the Agreement.

 

“Payment”
means, any amount paid or released to the Seller pursuant to Section 1.2
and/or Section 1.4 of the Agreement.

 

“Payment
Date” is defined in Section 2.2 of the Purchase and Sale
Agreement.

 

“Permitted
Investments” means with respect to any of the funds in the Lock-Box
Accounts or the Collection Account which are invested, (a) certificates of
deposit that are not represented by instruments, have a maturity of one week or
less and are issued by the Collection Account Bank (with respect to the
investment of funds in the Collection Account) or NORD/LB, in either case
issued by an institution having a rating no lower than the respective ratings
assigned by each of the Rating Agencies to the Notes, (b) direct
obligations of the United States of America, or of any agency thereof, or
obligations guaranteed as to principal and interest by the United States of
America, or by any agency thereof, in either case maturing not more than sixty
(60) days from the date of acquisition thereof by such Person, (c) time
deposits, certificates of deposit or bankers’ acceptances (including Eurodollar
deposits) issued by any bank or trust company organized under the laws of the
United States of America or any state thereof and having capital, surplus and
undivided profits of at least five hundred million dollars ($500,000,000) and a
deposit rating of A/A-1 or better by S&P and A2/P-1 or better by Moody’s, (d) commercial
paper rated A-1 or better by S&P and P-1 or better by Moody’s maturing not
more than sixty (60) days from the date of acquisition thereof by such Person, (e) repurchase
obligations with a term of not more than thirty (30) days for underlying
securities of the types described in clause (c) above, (f) securities
with maturities of sixty (60) days or less from the date of acquisition issued
or fully guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof,
and rated at least A by S&P and A by Moody’s, or (g) money market
mutual funds that invest primarily in

 

I-18

 

the foregoing items, such funds coming from an institution having a
rating no lower than the respective ratings assigned by each of the Rating
Agencies to the Notes; provided, however, that the Agent (on
behalf of the Purchaser) may, from time to time, upon three (3) Business
Days’ prior written notice to the Servicer, remove from the scope of “Permitted
Investments” certificates of deposit of any such bank(s) and specify to be
within such scope, certificates of deposit of any other bank that has a rating
of at least A-1 by S&P and P-1 by Moody’s.

 

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

 

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

 

“Portion of
Investment” means each portion of the Investment pursuant to which the
Discount with respect thereto is calculated by reference to a different
interest rate.

 

“Prime Rate”
is defined in the Purchase and Sale Agreement.

 

“Program
Support Provider” means and includes any Liquidity Bank and any other or
additional Person (other than any customer of the Purchaser) now or hereafter
extending credit or having a commitment to extend credit to or for the account
of, or to make purchases from, the Purchaser or issuing a letter of credit,
surety bond or other instrument to support any obligations arising under or in
connection with the Purchaser’s securitization program.

 

“Program
Support Agreement” means and includes the Liquidity Agreement and any other
agreement entered into by any Program Support Provider providing for the
issuance of one or more letters of credit for the account of the Purchaser, the
issuance of one or more surety bonds for which the Purchaser is obligated to
reimburse the applicable Program Support Provider for any drawings thereunder,
the sale by the Purchaser to any Program Support Provider of the Participation (or
portions thereof) and/or the making of loans and/or other extensions of credit
to the Purchaser in connection with the Purchaser’s securitization program,
together with any letter of credit, surety bond or other instrument issued
thereunder.

 

“Property”
means any right, title or interest in or to property or assets of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible
and including ownership interests of any Person.

 

“Purchase
and Sale Agreement” means the Amended and Restated Purchase and Sale
Agreement, dated as of December 21, 2006, among the Originators and the
Seller, as the same may be modified, supplemented, amended and amended and
restated from time to time in accordance with the Agreement and the Purchase
and Sale Agreement.

 

“Purchase
and Sale Termination Date” is defined in Section 1.4 of the
Purchase and Sale Agreement.

 

I-19

 

“Purchase
and Sale Termination Event” is defined in Section 8.1 of the
Purchase and Sale Agreement.

 

“Purchase
Limit” means the lesser of (i) ninety million dollars ($90,000,000),
as such amount may be reduced pursuant to Section 1.1(b) of
the Agreement and (ii) the aggregate of the commitments, if any, of all
then existing Liquidity Banks under the Liquidity Agreement relating to this
Agreement. References to the unused portion of the Purchase Limit means, at any
time, the Purchase Limit minus the then outstanding Investment of the
Participation under the Agreement.

 

“Purchase
Price” is defined in Section 2.2 of the Purchase and Sale
Agreement.

 

“Purchase
Report” is defined in Section 2.1 the Purchase and Sale
Agreement.

 

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

 

“Purchaser’s
Account” means the account (account number 507-944941) of the Purchaser
maintained at the office of JPMorgan Chase Bank in New York, New York (ABA#
021-000-021), or such other account as may be so designated in writing by
the Agent to the Seller and the Servicer.

 

“Rate
Variance Factor” means two (2); provided, that the “Rate Variance
Factor” may be changed from time to time by the Agent (if such change is
necessary or desirable in the reasonable credit judgment of the Agent) upon at
least five Business Days’ prior written notice to the Servicer; provided,
further, that the Agent may not decrease the “Rate Variance Factor”
below two (2) without the prior written consent of each Rating Agency.

 

“Rating
Agencies” means Moody’s and S&P.

 

“Receivable”
means any indebtedness and other obligations owed to an Originator or the
Seller or any right of any Originator or the Seller to payment from or on
behalf of an Obligor, whether constituting an account, chattel paper,
instrument or general intangible, arising in connection with the sale of goods or
the rendering of services by any Originator relating to the cranes and related
products business or the foodservice and related products business of such
Originator, and includes, without limitation, the obligation to pay any finance
charges, fees and other charges with respect thereto. Indebtedness and other
obligations arising from any one transaction, including, without limitation,
indebtedness and other obligations represented by an individual invoice or
agreement, shall constitute a Receivable separate from a Receivable consisting
of the indebtedness and other obligations arising from any other transaction.

 

“Receivables
Pool” means at any time all of the then outstanding Receivables in which
the Seller has an interest (and, for avoidance of doubt, shall not include the
Excluded Receivables).

 

“Related
Rights” is defined in Section 1.1 of the Purchase and Sale
Agreement.

 

I-20

 

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

 

(i)                                     all
of the Seller’s and any Originator’s interest in any goods (including returned
goods), and documentation or title evidencing the shipment or storage of any
goods (including returned goods), relating to any sale giving rise to such
Receivable;

 

(ii)                                  all
other security interests or liens and property subject thereto from time to
time purporting to secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with all UCC
financing statements or similar filings relating thereto; and

 

(iii)                               all
guaranties, indemnities, insurance and other agreements (including the related
Contract) or arrangements of whatever character from time to time supporting or
securing payment of such Receivable or otherwise relating to such Receivable
whether pursuant to the Contract related to such Receivable or otherwise.

 

“Remaining
Maturity” means, for any day, for any Receivable in the Receivables Pool, (i) if
such Receivable is a Defaulted Receivable, the number zero, or (ii) otherwise,
the lesser of (a) the number of days until such Receivable would become a
Defaulted Receivable if it remained unpaid and (b) one hundred fifty
(150).

 

“Requirement
of Law” means as to any Person, the certificate of incorporation and
by-laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its Property or to which such Person or any of its
Property is subject.

 

“Responsible
Officer” means the Chief Executive Officer of the Seller or the Servicer,
as the case may be, or the President of the Seller or the Servicer, as the
case may be, or, with respect to financial matters, the Chief Financial
Officer of Manitowoc, any Vice President-Finance or Treasurer (or an equivalent
officer); it being understood, that for purposes of this definition if the
Seller or Servicer, as applicable, does not have or no longer has an officer with
one of the titles set forth above, a “Responsible Officer” for purposes of this
Agreement and the other Transaction Documents shall be the officer or officers
of the Seller or Servicer, as applicable, designated to perform the duties
of the officers described above.

 

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

 

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

 

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

 

“Servicer
Default” means any of the following:

 

I-21

 

(a)                                  the
Servicer shall fail to make when due any payment or deposit to be made by it
under the Agreement or any other Transaction Document and such failure shall
continue unremedied for two Business Days; or

 

(b)                                 Manitowoc
(or any Affiliate thereof) shall fail to transfer to any successor Servicer
when required any rights, pursuant to the Agreement, which Manitowoc (or such
Affiliate) then has as Servicer; or

 

(c)                                  Any
representation or warranty or certification made or deemed made by the Servicer
(or any of its officers) under or in connection with the Agreement or any other
Transaction Document or any information or report delivered by the Servicer
pursuant to the Agreement shall prove to have been incorrect or untrue in any
material respect when made or deemed made or delivered; or

 

(d)                                 The
Servicer shall fail to perform or observe any of the covenants set forth
in clause (s) (Financial Covenants) of Exhibit IV to the
Agreement; or

 

(e)                                  The
Servicer shall fail to perform or observe any other term, covenant or
agreement contained in the Agreement or any other Transaction Document on its part to
be performed or observed and any such failure shall remain unremedied for
thirty (30) days after the Servicer has notice or knowledge thereof (or, with
respect to a failure to deliver the Monthly Report pursuant to the Agreement or
the daily report pursuant to Section 4.2(b) of the Agreement,
such failure shall remain unremedied for two (2) Business Days); or

 

(f)                                    The
Servicer shall fail to pay any principal of or premium or interest on any of
its Debt which is outstanding in a principal amount of at least ten million
dollars ($10,000,000) in the aggregate when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement, mortgage, indenture or instrument relating
to such Debt; or any other event shall occur or condition shall exist under any
agreement, mortgage, indenture or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in such
agreement, mortgage, indenture or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to repay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior to the
stated maturity thereof; or

 

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

 

I-22

 

other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it), either (a) such
proceeding shall remain undismissed or unstayed for a period of sixty (60)
days, or (b) in any such proceeding, there is entered an order for relief
against, or there is appointed a receiver, trustee, custodian or other similar
official for, it or for any substantial part of its property; or the
Servicer shall take any corporate action to authorize any of the actions set
forth above in this paragraph (g); or

 

(h)                                 In
the judgment of the Agent, there shall have occurred a material adverse change
in (x) the ability of the Servicer to adequately service the Receivables or (y)
the ability of the Purchaser to enforce or otherwise realize upon its interest
in the Receivables or the Collections.

 

“Servicing
Fee” means the fee referred to in Section 4.6 of the Agreement.

 

“Servicing
Fee Reserve” at any time means the sum of (i) the unpaid Servicing Fee
accrued to such time, plus (ii) an amount equal to (a) the aggregate
Outstanding Balance of Pool Receivables at the time of computation multiplied
by (b) the product of (x) one percent (1%) and (y) a fraction having two (2) times
the Days Sales Outstanding as its numerator and three hundred sixty (360) as
its denominator.

 

“Settlement
Date” means the second (2nd) Business Day following each Monthly
Reporting Date.

 

“Solvent”
means, with respect to any Person at any time, a condition under which:

 

(i)                                     the
fair value and present fair saleable value of such Person’s total assets is, on
the date of determination, greater than such Person’s total liabilities
(including contingent and unliquidated liabilities) at such time;

 

(ii)                                  the
fair value and present fair saleable value of such Person’s assets is greater
than the amount that will be required to pay such Person’s probable liability
on its existing debts as they become absolute and matured (“debts,” for
this purpose, includes all legal liabilities, whether matured or unmatured,
liquidated or unliquidated, absolute, fixed, or contingent);

 

(iii)                               such
Person is and shall continue to be able to pay all of its liabilities as such
liabilities mature; and

 

(iv)                              such
Person does not have unreasonably small capital with which to engage in its
current and in its anticipated business.

 

For purposes
of this definition:

 

(A)                              the
amount
of a Person’s contingent or unliquidated liabilities at any time shall be that
amount which, in light of all the facts and circumstances then existing,
represents the amount which can reasonably be expected to become an actual or
matured liability;

 

I-23

 

(B)                                the
“fair value” of an asset shall be the amount which may be realized within
a reasonable time either through collection or sale of such asset at its
regular market value;

 

(C)                                the
“regular market value” of an asset shall be the amount which a capable and
diligent business person could obtain for such asset from an interested buyer
who is willing to Purchase such asset under ordinary selling conditions; and

 

(D)                               the
“present fair saleable value” of an asset means the amount which can be
obtained if such asset is sold with reasonable promptness in an arm’s-length
transaction in an existing and not theoretical market.

 

“Spike
Factor” means on any Settlement Date (and any subsequent date until the
following Settlement Date), the product of (i) the excess, if any, of (a) the
highest Dilution Ratio for any Calculation Period during the twelve most recent
Calculation Periods over (b) the arithmetic average of the Dilution Ratios
for such twelve months, times (ii)(a) the highest Dilution Ratio
for any Calculation Period during the twelve most recent Calculation Periods, divided
by (b) the arithmetic average of the Dilution Ratios for such
twelve months.

 

“Stated
Termination Date” means the then current scheduled termination date of the
commitments of the Liquidity Banks under the Purchase Commitment Agreement
referred to in the definition of Liquidity Agreement, as such date may be
extended from time to time in the sole discretion of the Liquidity Banks.

 

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

 

“Subsidiary”
means, with respect to any Person, any corporation, partnership or other entity
of which at least a majority of the securities or other ownership interests
having by the terms thereof ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes
of such corporation, partnership or other entity shall have or might have
voting power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person. Unless the context clearly requires otherwise, all references to
any Subsidiary means a Subsidiary of Manitowoc.

 

“Tangible
Net Worth” means, with respect to any Person, the net worth of such Person
after subtracting therefrom the aggregate amount of such Person’s intangible
assets, including, without limitation, goodwill, franchises, licenses, patents,
trademarks, trade names, copyrights, service marks and brand names.

 

“Termination
Date” means the earlier of (i) the Business Day which the Seller so
designates by notice to the Agent at least thirty (30) days in advance and (ii) the
Facility Termination Date.

 

I-24

 

“Termination
Day” means (i) each day on which the conditions set forth in Section 2
of Exhibit II to the Agreement are not satisfied and (ii) each
day which occurs on or after the Termination Date.

 

“Termination
Discount” means, on any date, an amount equal to the product of (i) the
Investment on such date, times (ii) LIBOR times (iii) one and
one-quarter (1.25), times (iv) a fraction having as its numerator the
Average Remaining Maturity at such time and three hundred sixty (360) as its
denominator.

 

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

 

“Termination
Fee” means, for any Yield Period, the amount, if any, by which (i) the
additional Discount (calculated without taking into account any Termination Fee
or any shortened duration of such Yield Period pursuant to clause (iii) of
the definition thereof) which would have accrued during such Yield Period on
the reductions of Investment of the Participation relating to such Yield Period
had such reductions remained as Investment, exceeds (ii) the income, if
any, received by the Purchaser from the Purchaser investing the proceeds of
such reductions of Investment, as determined by the Agent, which determination
shall be binding and conclusive for all purposes, absent manifest error.

 

“Total
Reserve” means (a) the greater of the Total Reserve Percentage and
fifteen percent (15%) multiplied
by (b) the Net
Eligible Pool Balance.

 

“Total
Reserve Percentage” means the greater of (i) the sum of (a) the
Loss Reserve Percentage and (b) the Dilution Reserve Percentage or (ii) the
sum of (a) the Concentration Component and (b) the Dilution
Component.

 

“Transaction
Documents” means the Agreement, the Fee Letter, the Purchase and Sale
Agreement, each Company Note, the Lock-Box Agreements, the Collection Account
Agreement, the Intercreditor Agreement, the Liquidity Agreement, the Bond
Administration Agreement, each Joinder Agreement and all other certificates,
instruments, UCC financing statements, reports, notices, agreements and
documents executed or delivered under or in connection with the Agreement, in
each case as the same may be amended, amended and restated, supplemented
or otherwise modified from time to time in accordance with the Agreement.

 

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

 

“United
States Federal Government” means the government of the United States of
America, and any body or entity exercising executive, legislative, judicial,
regulatory or administrative functions of the government of the United States
of America. For avoidance of doubt, this definition includes, without
limitation, agencies of the government of the United States of America that are
subject to the Federal Assignment of Claims Act.

 

“Unmatured
Purchase and Sale Termination Event” means any event which, with the giving
of notice or lapse of time, or both, would become a Purchase and Sale
Termination Event.

 

I-25

 

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

 

“Utilization
Fee” has the meaning set forth in the Fee Letter.

 

“Utilization
Fee Rate” has the meaning set forth in the Fee Letter.

 

“Variable
Dilution” means any Dilution other than Contractual Dilution.

 

“Yield
Period” means, with respect to each Portion of Investment:

 

(a)                                  initially
the period commencing on the date of any purchase pursuant to Section 1.2
of the Agreement and ending such number of days as the Agent shall select
(subject to the proviso set forth in the fourth sentence of Section 1.2(a) of
the Agreement), up to ninety (90) days after such date; and

 

(b)                                 thereafter
each period commencing on the last day of the immediately preceding Yield
Period for such Portion of Investment and ending such number of days (not to
exceed ninety (90) days) as the Agent (subject to the proviso set forth in the
fourth sentence of Section 1.2(a) of the Agreement) shall
select; provided, that

 

(i)                                     any
Yield Period (other than of one day) which would otherwise end on a day which
is not a Business Day shall be extended to the next succeeding Business Day;

 

(ii)                                  in
the case of any Yield Period of one day, (A) if such Yield Period is the
initial Yield Period for a purchase pursuant to Section 1.2 of the
Agreement, such Yield Period shall be the day of such purchase; (B) any
subsequently occurring Yield Period which is one day shall, if the immediately
preceding Yield Period is more than one day, be the last day of such
immediately preceding Yield Period, and, if the immediately preceding Yield
Period is one day, be the day next following such immediately preceding Yield
Period; and (C) if such Yield Period occurs on a day immediately preceding
a day which is not a Business Day, such Yield Period shall be extended to the
next succeeding Business Day; and

 

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

 

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

 

I-26

 

EXHIBIT II

 

CONDITIONS OF PURCHASES

 

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

 

(a)                                  Counterparts
of the Agreement, the Fee Letter and the other Transaction Documents, signed by
the parties thereto.

 

(b)                                 Certified
copies of (i) the resolutions of the Board of Directors of each of the
Seller, the Servicer and the Originators authorizing the execution, delivery,
and performance by the Seller, the Servicer and the Originators of the
Transaction Documents to which they are a party, (ii) all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to this Agreement and the other Transaction Documents and (iii) the
certificate of incorporation and by-laws (or other constituent documents) of
the Seller, the Servicer and the Originators.

 

(c)                                  A
certificate of the Secretary or Assistant Secretary of each of the Seller, the
Servicer and the Originators certifying the names and true signatures of its
officers authorized to sign the Agreement and the other Transaction Documents
to which it is a party. Until the Agent receives a subsequent incumbency
certificate from the Seller, the Servicer and the Originators in form and
substance satisfactory to the Agent, the Agent shall be entitled to rely on the
last such certificate delivered to it by the Seller, the Servicer and the
Originators, as the case may be.

 

(d)                                 UCC
financing statements, duly filed on or before the date of such initial purchase
under the UCC of all jurisdictions that the Agent may deem necessary or
desirable in order to perfect the interests of the Purchaser contemplated by
the Agreement and other Transaction Documents.

 

(e)                                  UCC
financing statements, if any, necessary to release or assign to the Purchaser
all security interests and other rights of any Person in the Receivables (other
than Excluded Receivables), Contracts or Related Security previously granted by
the Seller or any Originator.

 

(f)                                    Completed
UCC requests for information, dated on or before the date of such initial
purchase, listing all effective financing statements filed in the jurisdictions
referred to in subsection (e) above that name the Seller or
any Originator as debtor, together with copies of such other financing
statements (none of which shall cover any Receivables, Contracts or Related
Security), and similar search reports with respect to federal tax liens and
liens of the Pension Benefit Guaranty Corporation in such jurisdictions as the
Agent may request, showing no such liens on any of the Receivables,
Contracts or Related Security.

 

(g)                                 Copies
of executed (i) Lock-Box Agreements with the Lock-Box Banks and (ii) the
Collection Account Agreement with the Collection Account Bank.

 

II-1

 

(h)                                 Favorable
opinions of Quarles & Brady LLP, in form and substance acceptable
to the Agent, as to corporate, enforceability, UCC and such other matters
(including absence of conflict with the Credit Agreement) as the Agent may reasonably
request.

 

(i)                                     Favorable
opinions of Quarles & Brady LLP, in form and substance acceptable
to the Agent, as to true sale and non-consolidation matters.

 

(j)                                     A
pro-forma Monthly Report.

 

(k)                                  Evidence
(i) of the execution and delivery by each of the parties thereto of the
Purchase and Sale Agreement and all documents, certificates (including, if
applicable, the certificate referred to in Section 4.1(i) of
the Purchase and Sale Agreement), agreements and instruments contemplated
thereby (which evidence shall include copies, either original or facsimile, of
each of such certificates (including the certificate referred to in Section 4.1(i) of
the Purchase and Sale Agreement), documents, instruments and agreements), (ii) that
each of the conditions precedent to the execution and delivery of the Purchase
and Sale Agreement has been satisfied to the Agent’s satisfaction, and (iii) that
the initial purchases under the Purchase and Sale Agreement have been
consummated.

 

(l)                                     Evidence
of payment by the Seller of all accrued and unpaid fees (including the “Structuring
Fee” contemplated by the Fee Letter), costs and expenses to the extent then due
and payable on the date thereof, together with Attorney Costs of the Agent to
the extent invoiced prior to or on such date, plus such additional amounts of
Attorney Costs as shall constitute the Agent’s reasonable estimate of Attorney
Costs incurred or to be incurred by it through the closing proceedings;
including any such costs, fees and expenses arising under or referenced in Section 5.4.

 

(m)                               Good
standing certificates with respect to the Seller, the Originators and the
Servicer issued by the Secretaries of State (or comparable office) of the
States of such Person’s organization.

 

(n)                                 In
the event that any lender, purchaser or agent under any debt or purchase
facility to which an Originator or the Servicer is a party must consent to the
execution, delivery or performance of the Transaction Documents by such
Originator or the Servicer, or to the consummation of any of the transactions
contemplated thereby, evidence that such consent has been obtained.

 

(o)                                 Internal
credit approval of NORD/LB with respect to the transactions contemplated
hereby.

 

(p)                                 Confirmation
from the Rating Agencies to the effect that the Purchaser’s entry into this
Agreement will not result in a reduction of the ratings of such Notes.

 

(q)                                 Such
other approvals, opinions or documents as the Agent may reasonably
request.

 

II-2

 

In addition,
the initial purchase under the Agreement is subject to the condition precedent
that the Agent shall be satisfied with its due diligence with respect to the
Seller, the Servicer and the Originators.

 

2.                                       Conditions
Precedent to All Payments. Each Payment shall be subject to the further
conditions precedent that:

 

(a)                                  in
the case of each Payment (other than (1) the initial Payment under the
Agreement and (2) a Payment out of Collections pursuant to Section 1.4(b)(ii) and
(iii) of the Agreement), the Agent shall have received, by the time
of such Payment, in form and substance satisfactory to the Agent, (x) a
completed Monthly Report with respect to the period ending on the close of
business on the Business Day immediately preceding the date of the applicable
notice pursuant to Section 1.2(a) of the Agreement and a
completed Monthly Report with respect to the calendar month ended immediately
prior to the date of such Payment, and (y) all other reports and information
required to be delivered under this Agreement by the Seller or the Servicer;
and

 

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

 

(i)                                     the
representations and warranties contained in Exhibit III and Exhibit VI
to the Agreement are true and correct on and as of the date of such Payment as
though made on and as of such date;

 

(ii)                                  each
of the Originators, the Servicer and the Seller shall have performed and
observed all terms, covenants and agreements contained in this Agreement or any
other Transaction Document on its part to be performed or observed;

 

(iii)                               without
limiting the foregoing, no event has occurred and is continuing, or would
result from such Payment or from the application of proceeds therefrom, that
constitutes a Termination Event or an Unmatured Termination Event;

 

(iv)                              without
limiting the foregoing, the Participation shall not exceed one hundred percent
(100%);

 

(v)                                 without
limiting the foregoing, the Internal Revenue Service shall not have filed
notice of a lien pursuant to Section 6323 of the Internal Revenue Code
with regard to any asset of the Seller or any Originator, and the Pension
Benefit Guaranty Corporation shall not have filed notice of a lien pursuant to Section 4068
of ERISA with regard to any assets of the Seller or any Originator, unless, in
either case, such lien shall have been released prior to the date of such
Payment;

 

(vi)                              the
Facility Termination Date shall not have occurred; and

 

II-3

 

(vii)                           after
giving effect to such Payment, the aggregate outstanding Investment shall not
exceed the Purchase Limit.

 

II-4

 

EXHIBIT III

 

REPRESENTATIONS AND WARRANTIES

 

1.                                       Representations
and Warranties of the Seller. The Seller represents and warrants as
follows:

 

(a)                                  The
Seller is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Nevada, and is duly qualified to do
business, and is in good standing, as a foreign limited liability company in
every jurisdiction where the nature of its business requires it to be so
qualified if any failure to be so qualified would be reasonably likely to have
a Material Adverse Effect.

 

(b)                                 The
execution, delivery and performance by the Seller of the Agreement and the
other Transaction Documents to which it is a party, including the Seller’s use
of the proceeds of purchases and reinvestments, (i) are within the Seller’s
limited liability company powers, (ii) have been duly authorized by all
necessary limited liability company action on the part of the Seller, (iii) do
not contravene or result in a default under or conflict with (1) the
Seller’s articles of organization or limited liability company agreement, (2) any
law, rule or regulation applicable to the Seller, (3) any contractual
restriction binding on or affecting the Seller or its property or (4) any
order, writ, judgment, award, injunction or decree binding on or affecting the
Seller or its property unless, in each case, 
such contravention, default or conflict could not reasonably be expected
to have a Material Adverse Effect, and (iv) do not result in or require
the creation of any Adverse Claim upon or with respect to any of its properties.
The Agreement and the other Transaction Documents to which it is a party have
been duly executed and delivered by the Seller.

 

(c)                                  No
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or other Person is required for the due execution,
delivery and performance by the Seller of the Agreement or any other
Transaction Document to which it is a party other than those previously
obtained or UCC filings.

 

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

 

(e)                                  The
Seller is the legal and beneficial owner of the Receivables purporting to be in
the Receivables Pool and all Related Security with respect thereto, free and
clear of any Adverse Claim; upon each purchase or reinvestment under the
Agreement, the Purchaser shall acquire a valid and enforceable perfected
undivided percentage ownership interest, to the extent of the Participation, in
each Pool Receivable then existing or thereafter arising, and in the Related
Security and Collections and other proceeds with respect thereto, free and
clear of any Adverse Claim; the Agreement creates a security interest in favor
of the Purchaser in the items described in Section 1.2(d) of
the Agreement, and the Purchaser has a first priority perfected security

 

III-1

 

interest in such items,
free and clear of any Adverse Claims. No effective financing statement or other
instrument similar in effect covering any Contract or any Pool Receivable or
the Related Security or Collections with respect thereto or any Lock-Box
Account is on file in any recording office, except those filed in favor of the
Seller and the Purchaser pursuant to this Agreement and the other Transaction
Documents (and those relating to security interests that will be terminated or
released on or prior to the Closing Date).

 

(f)                                    Each
Monthly Report, information, exhibit, financial statement, document, book,
record or report furnished or to be furnished at any time by or on behalf of
the Seller to the Agent or the Purchaser in connection with the Agreement is or
will be accurate in all material respects as of its date or as of the date so
furnished, and no such item contains or will contain any untrue statement of a
material fact.

 

(g)                                 The
principal place of business and chief executive office (as such terms are used
in the UCC) of the Seller and the office where the Seller keeps its records
concerning the Receivables are located at the address referred to in Section 1(b) of
Exhibit IV.

 

(h)                                 The
names and addresses of all the Lock-Box Banks, together with the account
numbers of the Lock-Box Accounts at such Lock-Box Banks and any lock-boxes or
post office boxes relating to such Lock-Box Accounts, are specified in Schedule II
to the Agreement (except as otherwise consented by the Agent in accordance with
clause (i) of Exhibit IV to the Agreement) and all such
Lock-Box Accounts, lock-boxes and post office boxes are subject to Lock-Box
Agreements. All Obligors have been directed to make all payments with respect
to each Contract to such a Lock-Box Account or to such a lock-box or post
office box.

 

(i)                                     The
Seller is not in violation of any law, rule or regulation or of any order
of any court, arbitrator or Governmental Authority that could be reasonably be
expected to have a Material Adverse Effect.

 

(j)                                     No
proceeds of any purchase or reinvestment will be used by the Seller for any
purpose that violates any applicable law, rule or regulation, including,
without limitation, Regulations T, U or X of the Federal Reserve Board.

 

(k)                                  Each
Receivable included in the calculation of the Net Eligible Pool Balance is an
Eligible Receivable as of the date of such calculation.

 

(l)                                     No
event has occurred and is continuing, or would result from a purchase in
respect of, or reinvestment in respect of, the Participation or from the
application of the proceeds therefrom, which constitutes a Termination Event or
an Unmatured Termination Event.

 

(m)                               The
Seller has complied in all material respects with the Credit and Collection
Policy with regard to each Pool Receivable.

 

(n)                                 The
Seller has complied with all of the terms, covenants and agreements contained
in the Agreement and the other Transaction Documents.

 

(o)                                 The
Seller’s complete corporate name is set forth in the preamble to the Agreement,
and the Seller does not use and has not during the last six years used any
other

 

III-2

 

corporate name, trade
name, doing-business name or fictitious name, and except for names first used
after the date of the Agreement and set forth in a notice delivered to the
Agent pursuant to Section 1(l)(vii) of Exhibit IV.

 

(p)                                 The
Seller has filed or caused to be filed all U.S. federal income tax returns and
all other returns, statements, forms and reports for taxes, domestic or
foreign, required to be filed by it and has paid all taxes payable by it which
have become due or any assessments made against it or any of its Property and
all other taxes, fees or other charges imposed on it or any of its Property by
any Governmental Authority (other than those the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with generally accepted accounting
principles have been provided on the books of the Seller).

 

(q)                                 The
Seller is not an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

 

(r)                                    The
consolidated balance sheet of Manitowoc as at December 31, 2005, a copy of
which has been furnished to the Agent, fairly presents the financial condition
of Manitowoc in all material respects, as at such date, and since the date of
such balance sheet, there has been no material adverse change in the financial
condition of the Seller or Manitowoc or the ability of the Seller or any
Originator to perform their material obligations under the Agreement or
the other Transaction Documents to which it is a party or the collectibility of
the Pool Receivables, or which affects the legality, validity or enforceability
of the Agreement or the other Transaction Documents.

 

(s)                                  There
is no pending action, suit or proceeding and, to the Seller’s knowledge, no
threatened action, suit or proceeding, affecting the Seller, the Servicer or
any Originator before any Governmental Authority or arbitrator which could
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect or which questions the validity of any of the transactions
contemplated by any Transaction Document.

 

(t)                                    The
facts and assumptions relating to the Seller set forth in the opinions rendered
by Quarles & Brady LLP pursuant to Exhibit II to the
Agreement and relating to true sale and non-consolidation matters, and in the
officer’s certificates referred to in such opinions, are true and correct in
all material respects.

 

(u)                                 The
Seller’s federal tax identification number is 20-3841459.

 

(v)                                 The Seller is not in
default under any of its contractual obligations.

 

2.                                       Representations
and Warranties of the Servicer. The Servicer represents and warrants as
follows:

 

(a)                                  The
Servicer is a corporation duly incorporated, validly existing and in active
status under the laws of the State of Wisconsin and is duly qualified to do
business, and is in good standing, as a foreign corporation in every
jurisdiction where the nature of its business requires it to be so qualified
unless any failure to be so qualified would not have a Material Adverse Effect.

 

III-3

 

(b)                                 The
execution, delivery and performance by the Servicer of the Agreement and the
other Transaction Documents to which it is a party, (i) are within the
Servicer’s corporate powers, (ii) have been duly authorized by all
necessary corporate action on the part of the Servicer, (iii) do not
contravene or result in a default under or conflict with (1) the Servicer’s
charter or by-laws, (2) any law, rule or regulation applicable to the
Servicer, (3) any contractual restriction binding on or affecting the
Servicer or its property or (4) any order, writ, judgment, award,
injunction or decree binding on or affecting the Servicer or its property,
unless in each case such continuation, default or conflict could not reasonably
be expected to have a Material Adverse Effect, and (iv) with respect to
the Servicer, do not result in or require the creation of any Adverse Claim
upon or with respect to any of its properties. Without limiting the foregoing,
the transactions contemplated by the Transaction Documents constitute a “Permitted
Securitization” (as that term is defined in the Credit Agreement). The
Agreement and the other Transaction Documents to which it is a party have been
duly executed and delivered by the Servicer.

 

(c)                                  No
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or other Person is required for the due execution,
delivery and performance by the Servicer of the Agreement or any other
Transaction Document to which it is a party, other than those previously
obtained.

 

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

 

(e)                                  The
consolidated balance sheets of the Servicer and its subsidiaries as at December 31,
2005, a copy of which has been furnished to the Agent, fairly presents the
financial condition of the Servicer and its subsidiaries in all material
respects, as at such date, and since December 31, 2005, no event has
occurred that has had, or could be reasonably expected to have, a Material
Adverse Effect.

 

(f)                                    There
is no pending action or proceeding and, to the Servicer’s knowledge, no
threatened action or proceeding, affecting the Servicer before any Governmental
Authority or arbitrator which could reasonably be expected to have a Material
Adverse Effect.

 

(g)                                 The
Servicer has complied in all material respects with the Credit and Collection
Policy with regard to each Pool Receivable.

 

(h)                                 Each
Monthly Report, information, exhibit, financial statement, document, book,
record or report furnished or to be furnished at any time by or on behalf of
the Servicer to the Agent in connection with the Agreement is or will be
accurate in all material respects as of its date or (except as otherwise
disclosed to the Agent at such time) as of the date so furnished, and no such
item contains or will contain any untrue statement of a material fact.

 

III-4

 

(i)                                     The
Servicer is not in violation of any law, rule or regulation or of any
order of any court, arbitrator or Governmental Authority that could reasonably
be expected to have a Material Adverse Effect.

 

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

 

(k)                                  No
event has occurred and is continuing, or would result from a Payment in or from
the application of proceeds therefrom, which constitutes a Termination Event or
an Unmatured Termination Event.

 

(l)                                     The
Seller is the legal and beneficial owner of the Receivables purporting to be in
the Receivables Pool and all Related Security with respect thereto, free and
clear of any Adverse Claim; upon each purchase or reinvestment under the
Agreement, the Purchaser shall acquire a valid and enforceable perfected undivided
percentage ownership interest, to the extent of the Participation, in each Pool
Receivable then existing or thereafter arising, and in the Related Security and
Collections and other proceeds with respect thereto, free and clear of any
Adverse Claim; the Agreement creates a security interest in favor of the
Purchaser in the items described in Section 1.2(d) of the
Agreement, and the Purchaser has a first priority perfected security interest
in such items, free and clear of any Adverse Claims. No effective financing
statement or other instrument similar in effect covering any Contract or any
Pool Receivable or the Related Security or Collections with respect thereto or
any Lock-Box Account is on file in any recording office, except those filed in
favor of the Seller and the Purchaser pursuant to this Agreement and the other
Transaction Documents (and those relating to security interests that will be
terminated or released on or prior to the Closing Date).

 

(m)                               The
names and addresses of all the Lock-Box Banks, together with the account
numbers of the Lock-Box Accounts at such Lock-Box Banks and the numbers of any
lock-boxes or post office boxes relating to such Lock-Box Accounts, are
specified in Schedule II to the Agreement (except as otherwise
consented by the Agent in accordance with clause (i) of Exhibit IV
to the Agreement) and all such Lock-Box Accounts and all such lock-boxes and
post office boxes are subject to Lock-Box Agreements. All Obligors have been
directed to make all payments with respect to each Contract to such a Lock-Box
Account or to such a lock-box or post office box.

 

(n)                                 The
Servicer has filed or caused to be filed all U.S. federal income tax returns
and all other returns, statements, forms and reports for taxes, domestic or
foreign, required to be filed by it and has paid all taxes payable by it which
have become due or any assessments made against it or any of its Property and
all other taxes, fees or other charges imposed on it or any of its Property by
any Governmental Authority other than: (i) those the amount or validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on
the books of the Servicer; and (ii) in the case of taxes (“designated
taxes”) other than income or similar taxes, if the failure to pay such
designated taxes could not reasonably be expected to result in a Material
Adverse Effect.

 

(o)                                 The
facts and assumptions relating to the Servicer set forth in the opinions rendered
by Quarles & Brady LLP pursuant to Exhibit II to the
Agreement and relating to true

 

III-5

 

sale and
non-consolidation matters, and in the officer’s certificates referred to in
such opinions, are true and correct.

 

III-6

 

EXHIBIT IV

 

COVENANTS

 

Covenants of
the Seller and the Servicer. Until the Final Payout
Date:

 

(a)                                  Compliance
with Laws, Etc. Each of the Seller and the Servicer shall comply in all
material respects with all applicable laws, rules, regulations and orders, and
preserve and maintain its company or corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve
and maintain such existence, rights, franchises, qualifications, and privileges
would not adversely affect the collectibility of the Receivables or the
enforceability of any related Contract or materially adversely affect the
ability of the Seller or the Servicer to perform its obligations under any
related Contract or under the Agreement or any other Transaction Document.

 

(b)                                 Offices,
Records and Books of Account, Etc. The Seller (i) shall keep its
principal place of business and chief executive office (as such terms are used
in the UCC) and the office where it keeps its records concerning the
Receivables at the address of the Seller set forth under its name on Schedule I
to the Agreement or, upon at least thirty (30) days’ prior written notice of a
proposed change to the Agent, at any other locations in jurisdictions where all
actions reasonably requested by the Agent to protect and perfect the interest
of the Purchaser in the Receivables and related items (including without
limitation the items described in Section 1.2(d)) of the Agreement
have been taken and completed and (ii) shall provide the Agent with at
least sixty (60) days’ written notice prior to making any change in (A) the
Seller’s name or making any other change in the Seller’s identity or company
structure (including a merger) or (B) the Seller’s jurisdiction of
formation; each notice to the Agent pursuant to this sentence shall set forth
the applicable change and the effective date thereof. The Seller or the
Servicer on its behalf also will maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing Receivables and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain all documents,
books, records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of all Receivables in the ordinary
course of business (including, without limitation, records adequate to permit
the daily identification of each Receivable and all Collections of and
adjustments to each Receivable). Without limiting the foregoing, the Servicer
shall maintain adequate computer and other systems in order to service the Receivables.

 

(c)                                  Performance
and Compliance with Contracts and Credit and Collection Policy. Each of the
Seller and the Servicer shall, at its expense, timely and fully perform and
comply with all material provisions, covenants and other promises required to
be observed by it under the Contracts related to the Receivables, and timely
and fully comply in all material respects with the Credit and Collection Policy
with regard to each Receivable and the related Contract.

 

(d)                                 Ownership
Interest, Etc. The Seller shall, at its expense, take all action necessary
or desirable to establish and maintain a valid and enforceable undivided
ownership interest, to

 

IV-1

 

the extent of the
Participation, in the Pool Receivables and the Related Security and Collections
and other proceeds with respect thereto, and a first priority perfected
security interest in the items described in Section 1.2(d) of
the Agreement, in each case free and clear of any Adverse Claim, in favor of the
Purchaser, including, without limitation, taking such action to perfect,
protect or more fully evidence the interest of the Purchaser under the
Agreement as the Purchaser, through the Agent, may request.

 

(e)                                  Sales,
Liens, Etc. Except for retransfers of Pool Receivables to the Originators
in accordance with the Purchase and Sale Agreement, neither the Seller nor the
Servicer shall sell, assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist any Adverse Claim upon or with respect
to, any or all of its right, title or interest in, to or under, any item
described in Section 1.2(d) of the Agreement (including
without limitation the Seller’s undivided interest in any Pool Receivable,
Related Security, or Collections, or upon or with respect to any account to
which any Collections of any Receivables are sent), or assign any right to
receive income in respect of any items contemplated by this paragraph (e).

 

(f)                                    Extension
or Amendment of Receivables. Except as provided in the Agreement and the
Credit and Collection Policy, neither the Seller nor the Servicer shall extend
the maturity or adjust the Outstanding Balance or otherwise modify the terms of
any Pool Receivable in any material respect, or amend, modify or waive in any
material respect any term or condition of any related Contract.

 

(g)                                 Change
in Business or Credit and Collection Policy. Neither the Seller nor the
Servicer shall make any material change in the character of its business, or
make any change in the Credit and Collection Policy that would adversely affect
the collectibility of the Receivables Pool or the enforceability of any related
Contract or materially adversely affect the ability of the Seller or Servicer
to perform its obligations under any related Contract or under the
Agreement. Neither the Seller nor the Servicer shall make any material change
in the Credit and Collection Policy without the prior written consent of the
Agent.

 

(h)                                 Audits.
Each of the Seller and the Servicer shall, at the Seller’s or Servicer’s
expense, as applicable, at any time and from time to time (but, so long as no
Termination Event or Unmatured Termination Event has occurred and is
continuing, not more than once during any calendar year relating to the Crane
Business of the Originators and not more than once during any calendar year
relating to the Foodservice Business of the Originators), during regular
business hours, upon reasonable advance notice as requested by the Agent,
permit the Agent, or its agents or representatives, (i) to examine and
make copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in the possession or under the
control of the Seller or the Servicer relating to Receivables and the Related Security,
including, without limitation, the related Contracts and (ii) to visit the
offices and properties of the Seller and the Servicer for the purpose of
examining such materials described in clause (i) above, and to
discuss matters relating to Receivables and the Related Security or the Seller’s
or Servicer’s performance hereunder or under the Contracts with any of the
officers, employees, agents or contractors of the Seller or the Servicer having
knowledge of such matters.

 

IV-2

 

(i)                                     Change
in Lock-Box Banks, Lock-Box Accounts and Payment Instructions to Obligors. Neither
the Seller nor the Servicer shall add or terminate any bank as a Lock-Box Bank
or any account as a Lock-Box Account from those listed in Schedule II
to the Agreement, or make any change in its instructions to Obligors regarding
payments to be made to the Seller or the Servicer or payments to be made to any
Lock-Box Account (or related lock-box or post office box), unless the Agent
shall have consented thereto in writing and the Agent shall have received
copies of all agreements and documents (including without limitation Lock-Box
Agreements) that it may request in connection therewith.

 

(j)                                     Lock-Box
Accounts; Lock-Boxes; Post Office Boxes. The Seller or the Servicer shall: (i) instruct
all Obligors of Pool Receivables to make payments of Receivables only to one or
more Lock-Box Accounts subject to Lock-Box Agreements or to lock-boxes or post
office boxes subject to Lock-Box Agreements to which only Lock-Box Banks have
access (and shall instruct the Lock-Box Banks to cause all items and amounts
relating to such Receivables received in such lock-boxes or post office boxes
to be removed and deposited into such Lock-Box Account on a daily basis); and (ii) 
deposit, or cause to be deposited, any Collections of Pool Receivables received
by the Seller or the Servicer into Lock-Box Accounts subject to Lock-Box
Agreements not later than one Business Day (or, in the case of amounts received
by the Seller or Servicer after 3:00 p.m. on any Business Day, the second
Business Day following such receipt) after receipt thereof. Neither the Seller
nor the Servicer will deposit or otherwise credit, or cause or permit to be so
deposited or credited, to any Lock-Box Account cash or cash proceeds other than
Collections of Pool Receivables, unless each holder of a Lien or ownership
interest in such cash or cash proceeds is a party to the Intercreditor
Agreement.

 

(k)                                  Marking
of Records. At its expense, the Seller (or the Servicer on its behalf)
shall mark its master data processing records relating to Pool Receivables and
related Contracts, with a legend or other notation evidencing that the
undivided percentage ownership interests with regard to the Participation related
to such Receivables and related Contracts have been sold in accordance with the
Agreement.

 

(l)                                     Reporting
Requirements. The Seller or the Servicer shall provide to the Agent (in
multiple copies, if requested by the Agent) the following:

 

(i)                                     as
soon as available and in any event within sixty (60) days after the end of the
first three quarters of each fiscal year of the Seller and Manitowoc
(separately for each), consolidated balance sheets of the Seller and Manitowoc,
respectively, and (in the case of Manitowoc) its subsidiaries as of the end of
such quarter and statements of operations, cash flows and shareholders’ equity
of the Seller and Manitowoc, respectively, and (in the case of Manitowoc) its
subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, certified by the chief financial
officer of the Seller and Manitowoc as applicable, which certificate shall
state that said consolidated financial statements fairly present the
consolidated financial condition, results or operations and cash flows of such
Person in accordance with GAAP, as of the end of, and for, such period (subject
to normal year-end audit adjustments), as applicable;

 

IV-3

 

(ii)                                  as
soon as available and in any event within one hundred twenty (120) days after
the end of each fiscal year of the Seller and Manitowoc (separately for each),
consolidated statements of operations, cash flows and stockholder’ equity of
Seller and Manitowoc, respectively, and (in the case of Manitowoc) its
subsidiaries for such year and the related consolidated balance sheets of
Seller and Manitowoc, respectively, and (in the case of Manitowoc) its
subsidiaries as at the end of such year, accompanied by an opinion of
independent certified public accountants of recognized national standing, which
opinion shall state that said consolidated financial statements fairly present
the consolidated financial conditions, results or operations and cash flows of
Seller and Manitowoc as applicable and (in the case of Manitowoc) its
subsidiaries as at the end of, and for, such fiscal year in accordance with
GAAP;

 

(iii)                               on
each Monday of each calendar week (or if such day is not a Business Day, the
next succeeding Business Day), a report, substantially in the form of the
Monthly Report described in the next paragraph, summarizing the Receivables
activity pertinent to the transactions contemplated by the Transaction
Documents since the last such report;

 

(iv)                              as
soon as available and in any event not later than the Monthly Reporting Date, a
Monthly Report as of the calendar month ended immediately prior to such Monthly
Reporting Date;

 

(v)                                 as
soon as possible and in any event within two Business Days after an officer of
the Seller or the Servicer obtains knowledge of the occurrence of a Termination
Event or Unmatured Termination Event, a statement of a Responsible Officer of
the Seller or the Servicer setting forth details of such Termination Event or
event and the action that the Seller or the Servicer has taken and proposes to
take with respect thereto;

 

(vi)                              promptly
after the filing or receiving thereof, copies of all reports and notices that
the Seller or any Affiliate files under ERISA with the Internal Revenue Service
or the Pension Benefit Guaranty Corporation or the U.S. Department of Labor or
that the Seller or any Affiliate receives from any of the foregoing or from any
multiemployer plan (within the meaning of Section 4001(a)(3) of
ERISA) to which the Seller or any Affiliate is or was, within the preceding
five years, a contributing employer;

 

(vii)                           at
least sixty (60) days prior to any change in the Seller’s name, jurisdiction of
formation or any other change requiring the amendment of a UCC financing
statement in order to maintain the perfection of a security interest, a notice
setting forth such changes and the effective date thereof;

 

(viii)                        such other
information respecting the Receivables or the condition or operations,
financial or otherwise, of the Seller, the Servicer or any of their respective
Affiliates as the Agent may from time to time reasonably request;

 

(ix)                                promptly
after a Responsible Officer of the Seller or the Servicer obtains notice or
knowledge thereof, notice of any litigation, investigation or proceeding which

 

IV-4

 

would be reasonably expected to have a material
adverse effect on the business, operations, assets, financial condition or
other condition of the Seller, any Originator or the Servicer; and

 

(x)                                   promptly
after a Responsible Officer of the Seller or the Servicer obtains notice or
knowledge thereof, notice of a material adverse change in the business,
operations, assets, financial condition or other condition of the Seller, any
Originator or the Servicer.

 

(m)                               Separate
Existence. Each of the Seller and the Servicer hereby acknowledges that
Purchaser and the Agent are entering into the transactions contemplated by the
Agreement and the Transaction Documents in reliance upon the Seller’s identity
as a legal entity separate from Servicer, Manitowoc and the Originators. Therefore,
from and after the date hereof, the Seller and the Servicer shall take all
reasonable steps to continue the Seller’s identity as a separate legal entity
and to make it apparent to third Persons that the Seller is an entity with
assets and liabilities distinct from those of the Servicer, Manitowoc, the
Originators and any other Person, and is not a division of the Servicer,
Manitowoc or the Originators or any other Person. Without limiting the
generality of the foregoing and in addition to and consistent with the covenant
set forth in paragraph (a) of this Exhibit IV, the
Seller and the Servicer shall take such actions as shall be required in order
that:

 

(i)                                     The
Seller will be a limited purpose limited liability company whose sole
activities are restricted in its articles of organization to purchasing
Receivables from the Originators, entering into agreements for the servicing of
such Receivables, selling undivided interests in such Receivables and
conducting such other activities as it deems necessary or appropriate to carry
out its primary purpose;

 

(ii)                                  Not
less than one member of the Seller’s Board of Directors (the “Independent
Director”) shall be individuals (A) who are not (except as members of
the Seller’s Board of Directors) direct, indirect or beneficial stockholders,
officers, directors, employees, affiliates, associates, customers or suppliers
of the Seller, the Servicer or any Originator or any of their respective
Affiliates and (B) who are acceptable to the Agent. The Seller’s Board of
Directors shall not approve, or take any other action to cause the commencement
of a voluntary case or other proceeding with respect to the Seller under any
applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law, or the appointment of or taking possession
by, a receiver, liquidator, assignee, trustee, custodian, or other similar
official for the Seller unless in each case the Independent Director shall
approve the taking of such action in writing prior to the taking of such action.
The Independent Director’s fiduciary duty shall be to the Seller (and its
creditors) and not to the Seller’s members in respect of any decision of the type
described in the preceding sentence. In the event an Independent Director
resigns or otherwise ceases to be a director of the Seller, there shall be
selected a replacement Independent Director (A) who shall not be an
individual within the proscriptions of the first sentence of this clause (ii) or
any individual who has any other type of professional relationship with the
Seller, the Servicer or any Originator or any of their respective Affiliates or
any

 

IV-5

 

management personnel of any such Person or Affiliate
and who shall be (x) a tenured professor at a business or law school, (y) a
retired judge or (z) an established independent member of the business
community, having a sound reputation and experience relative to the duties to
be performed by such individual as an Independent Director and (B) who
shall be acceptable to the Agent;

 

(iii)                               No
Independent Director shall at any time serve as a trustee in bankruptcy for any
Originator or any Affiliate thereof;

 

(iv)                              Any
employee, consultant or agent of the Seller will be compensated from the Seller’s
own bank accounts for services provided to the Seller except as provided herein
in respect of the Servicing Fee. The Seller will engage no agents other than a
servicer for the Receivables, which servicer will be fully compensated for its
services to the Seller by payment of the Servicing Fee;

 

(v)                                 The
Seller will not incur any material indirect or overhead expenses for items
shared between the Seller and the Originators or any Affiliate thereof which
are not reflected in the Servicing Fee or otherwise appropriately allocated
between such Persons based on usage in accordance with the next sentence. To
the extent, if any, that the Seller and the Originators or any Affiliate
thereof share items of expenses not reflected in the Servicing Fee, such as
legal, auditing and other professional services, such expenses will be
allocated to the extent practical on the basis of actual use or the value of
services rendered, and otherwise on a basis reasonably related to the actual
use or the value of services rendered, it being understood that Manitowoc shall
pay all expenses relating to the preparation, negotiation, execution and
delivery of the Transaction Documents, including, without limitation, legal and
other fees;

 

(vi)                              The
Seller’s operating expenses will not be paid by any Originator or any Affiliate
thereof unless the Seller shall have agreed in writing with such Person
promptly to reimburse such Person for any such payments;

 

(vii)                           The
Seller will have its own separate mailing address and stationery;

 

(viii)                        The Seller’s
books and records will be maintained separately from those of Servicer,
Manitowoc and the Originators or any respective Affiliate thereof;

 

(ix)                                Any
financial statements of the Servicer, Manitowoc, any Originator or any
respective Affiliate thereof which are consolidated to include the Seller will
contain detailed notes clearly stating that the Seller is a separate corporate
entity and has sold ownership interests in the Seller’s accounts receivable;

 

(x)                                   The
Seller’s assets will be maintained in a manner that identifies and segregates
them from those of the Servicer, Manitowoc, the Originators and any of their
respective Affiliates;

 

IV-6

 

(xi)                                The
Seller will strictly observe limited liability company formalities in its
dealings with the Servicer, Manitowoc, the Originators and any respective
Affiliate thereof, and funds or other assets of the Seller will not be
commingled with those of the Servicer, Manitowoc, the Originators or any
respective Affiliate thereof. The Seller shall not maintain joint bank accounts
or other depository accounts to which Servicer, Manitowoc, the Originators or
any respective Affiliate thereof (other than Manitowoc in its capacity as
Servicer) has independent access. None of the Seller’s funds will at any time
be pooled with any funds of the Servicer, Manitowoc, the Originators or any
respective Affiliate thereof;

 

(xii)                             The
Seller shall pay to the Originators the marginal increase (or, in the absence
of such increase, the market amount of its portion) of the premium payable with
respect to any insurance policy that covers the Seller and any Affiliate
thereof, but the Seller shall not, directly or indirectly, be named or enter
into an agreement to be named, as a direct or contingent beneficiary or loss
payee, under any such insurance policy, with respect to any amounts payable due
to occurrences or events related to the Servicer, Manitowoc, the Originators or
any respective Affiliate thereof; and

 

(xiii)                          The
Seller will maintain arm’s length relationships with Servicer, Manitowoc, the
Originators and any respective Affiliate thereof and, except as contemplated by
the Transaction Documents, will have no other dealings, contractual, financial
or otherwise, among themselves. Any Originator or any Affiliate thereof that
renders or otherwise furnishes services to the Seller will be compensated by
the Seller at market rates for such services. Neither the Seller nor any
Originator or any Affiliate thereof will be or will hold itself out to be
responsible for the debts of the other or the decisions or actions respecting
the daily business and affairs of the other.

 

The Seller shall cause
the facts and assumptions relating to the Seller, and the Servicer shall cause
the facts and assumptions relating to the Servicer, in each case set forth in
the opinions rendered by Quarles & Brady LLP pursuant to Exhibit II
to the Agreement and relating to true sale and non-consolidation matters, and
in the officer’s certificates referred to in such opinions, to remain true and
correct in all material respects at all times.

 

(n)                                 Mergers,
Acquisitions, Sales, etc.

 

(i)                                     The
Seller shall not:

 

(A)                              be a
party to any merger or consolidation, or directly or indirectly purchase or
otherwise acquire, whether in one or a series of transactions, all or
substantially all of the assets or any stock of any class of, or any
partnership or joint venture interest or equity interest in, any other Person,
or sell, transfer, assign, convey or lease any of its property and assets
(including, without limitation, any Pool Receivable or any interest therein)
other than pursuant to this Agreement;

 

IV-7

 

(B)                                acquire
Receivables from any Person other than an Originator (and all such Receivables
shall be acquired pursuant to the Purchase and Sale Agreement);

 

(C)                                make,
incur or suffer to exist an investment in, equity contribution to, loan, credit
or advance to, or payment obligation in respect of the deferred purchase price
of property from, any other Person, except for obligations incurred pursuant to
the Transaction Documents; or

 

(D)                               create
any direct or indirect Subsidiary or otherwise acquire direct or indirect
ownership of any equity interests in any other Person; or

 

(E)                                 issue
any membership or equity interest any Person, or take any other action, that
would cause a Change in Control.

 

(ii)                                  The
Servicer shall not be a party to any merger or consolidation or sell, transfer,
assign, convey or lease all or substantially all of its property or assets.

 

(o)                                 Restricted
Payments.

 

(i)                                     General
Restriction. Except in accordance with subparagraph (ii) below,
the Seller shall not (A) purchase or redeem any of its membership or other
equity interests, (B) declare or pay any dividend or set aside any funds
for any such purpose, (C) prepay, purchase or redeem any subordinated
indebtedness of the Seller, (D) lend or advance any funds or (E) repay
any loans or advances to, for or from any Originator. Actions of the type
described in this clause (i) are herein collectively called “Restricted
Payments”.

 

(ii)                                  Types
of Permitted Payments. Subject to the limitations set forth in clause (iii) below,
the Seller may make Restricted Payments so long as such Restricted
Payments are made only to the Originators and only in one or more of the
following ways:

 

(A)                              Seller
may make cash payments (including prepayments) on the Company Notes in
accordance with their terms; and

 

(B)                                if
no amounts are then outstanding under the Company Notes, the Seller may declare
and pay Dividends.

 

(iii)                               Specific
Restrictions. The Seller may make Restricted Payments only out of
Collections paid or released to the Seller pursuant to Section 1.4
of the Agreement. Furthermore, the Seller shall not pay, make or declare any
Restricted Payment (including any Dividend) if, after giving effect thereto,
any Termination Event or Unmatured Termination Event shall have occurred and be
continuing.

 

(p)                                 Use
of Seller’s Share of Collections. The Seller shall apply its share of
Collections to make payments in the following order of priority:  first, the payment of its expenses
(including, without limitation, the obligations payable to Purchaser, the
Affected Persons and the Agent under the Transaction Documents), second,
the payment of accrued and

 

IV-8

 

unpaid interest on the
Company Notes, third, the payment of the outstanding principal amount of
the Company Notes, and fourth, other legal and valid company purposes.

 

(q)                                 Amendments
to Certain Documents.

 

(i)                                     Neither
the Seller nor the Servicer shall amend, supplement, amend and restate, or
otherwise modify (or add any Person as a party to) the Purchase and Sale Agreement,
the Company Notes, any other document executed under the Purchase and Sale
Agreement, the Collection Account Agreement, the Lock-Box Agreements or the
Seller’s articles of organization or limited liability company agreement or any
other Transaction Document to which it is a party, except (A) in
accordance with the terms of such document, instrument or agreement and (B) with
the advance written consent of the Agent.

 

(ii)                                  Neither
the Seller nor the Servicer shall enter into or otherwise become bound by any
agreement, instrument, document or other arrangement that restricts its right
to amend, supplement, amend and restate or otherwise modify, or to extend or
renew, or to waive any right under, this Agreement or any other Transaction
Document.

 

(r)                                    Incurrence
of Indebtedness. The Seller shall not (i) create, incur or permit to
exist, any Debt (or any Buy-Back Obligations, as defined in the Credit
Agreement) or (ii) cause or permit to be issued for its account any
letters of credit or bankers’ acceptances, except for indebtedness incurred
pursuant to the Company Notes or incurred pursuant to or in connection with the
Agreement or otherwise permitted by the Agreement.

 

(s)                                  Financial
Covenants.

 

(i)                                     Maximum
Consolidated Total Leverage Ratio. The Servicer shall cause the
Consolidated Total Leverage Ratio to be (a) less than 4.00 to 1.00 at all
times during the period from the Closing Date to and including June 30,
2008 and (b) less than 3.75 to 1.00 at all times thereafter.

 

(ii)                                  Maximum
Consolidated Senior Leverage Ratio. The Servicer shall cause the
Consolidated Senior Leverage Ratio to at all times be less than 3.0 to 1.0.

 

(iii)                               Minimum
Consolidated Interest Coverage Ratio. The Servicer shall not permit the
Consolidated Interest Coverage Ratio for any fiscal quarter of the Servicer
during any period set forth below to be less than or equal to the ratio set
forth opposite such period below:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  10/1/06 – 9/30/07

  	
   

  	
  2.25:1.00

  	
   

  
	
  10/1/07 – 9/30/08

  	
   

  	
  2.50:1.00

  	
   

  
	
  10/1/08 – 9/30/09

  	
   

  	
  2.75:1.00

  	
   

  
	
  10/1/09 and thereafter

  	
   

  	
  3.00:1.00

  	
   

  

 

IV-9

 

(t)                                    Additional
Financing Statements; Performance by the Agent. The Seller hereby
authorizes the Agent or the Agent’s designee (which may be counsel for the
Seller or counsel for the Agent) to file one or more UCC financing or
continuation statements on or after the date of the Agreement, and amendments
thereto and assignments thereof, relative to all or any of the Pool Receivables
and the Related Security (and the other property covered by Section 1.2(d) of
the Agreement) whether now existing or hereafter arising. Without limiting the
foregoing, the Seller hereby authorizes the Agent to file any financing
statement that (i) indicates the collateral (x) as all assets of the
Seller or words of similar effect, regardless of whether any particular asset
in the collateral falls within the scope of Article 9 of the UCC of the
jurisdiction in which such financing statement is filed, or (y) as being of an
equal or lesser scope or with greater detail, and (ii) contains any other
information permitted or required by Article 9 of the UCC of the
jurisdiction in which such financing statement is filed regarding the
sufficiency or filing office acceptance of any financing statement, including
whether the Seller is an organization, the type of organization and any
organizational identification number issued to the Seller. If the Seller fails
to perform any of its agreements or obligations under the Agreement or any
other Transaction Documents, the Agent or its designee may (but shall not
be required to) itself perform, or cause performance of, such agreement or
obligation, and the expenses of the Agent or its designee incurred in
connection therewith shall be payable by the Seller as provided in Section 5.4
of the Agreement.

 

(u)                                 Commercial
Tort Claims. The Seller or the Servicer shall promptly, and in any event
within two (2) Business Days after the same is acquired by the Seller,
notify the Agent of any commercial tort claim (as defined in the UCC) acquired
by the Seller and, unless otherwise consented by the Agent, the Seller shall
enter into a supplement to the Agreement granting to the Purchaser a security
interest in such commercial tort claim.

 

IV-10

 

EXHIBIT V

 

TERMINATION EVENTS

 

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

 

(a)                                  The
Servicer, any Originator or the Seller shall fail to make when due any payment
or deposit to be made by it under the Agreement or any other Transaction
Document and such failure shall continue unremedied for two Business Days; or

 

(b)                                 Manitowoc
(or any Affiliate thereof) shall fail to transfer to any successor Servicer
when required any rights, pursuant to the Agreement, which Manitowoc (or such
Affiliate) then has as Servicer; or

 

(c)                                  Any
representation or warranty or certification made or deemed made by the Seller,
any Originator or the Servicer (or any of their respective officers) under or
in connection with the Agreement or any other Transaction Document or any
information or report delivered by the Seller or the Servicer pursuant to the
Agreement shall prove to have been incorrect or untrue in any material respect
when made or deemed made or delivered; or

 

(d)                                 The
Seller, any Originator or the Servicer shall fail to perform or observe
any other term, covenant or agreement contained in the Agreement or any other
Transaction Document on its part to be performed or observed, or the
Seller shall fail to enforce any rights under any Transaction Document against
any Originator or shall give up any such rights, and any such failure (or such
giving up) shall remain unremedied for ten (10) Business Days after the
Seller, any Originator or the Servicer, as applicable, has notice or knowledge
thereof (or, with respect to a failure to deliver a Monthly Report pursuant to
the Agreement, such failure shall remain unremedied for two (2) Business
Days); or

 

(e)                                  The
Seller, any Originator or the Servicer shall fail to pay any principal of or
premium or interest on any of its Debt (or Buy-Back Obligations, as defined in
the Credit Agreement) which is outstanding in a principal amount of at least
ten million dollars ($10,000,000) in the aggregate when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable
grace period, if any, specified in the agreement, mortgage, indenture or
instrument relating to such Debt; or any other event shall occur or condition
shall exist under any agreement, mortgage, indenture or instrument relating to
any such Debt and shall continue after the applicable grace period, if any,
specified in such agreement, mortgage, indenture or instrument, if the effect
of such event or condition is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), redeemed, purchased or defeased, or an offer to repay,
redeem, purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or

 

(f)                                    The
Agreement or any purchase or any reinvestment pursuant to the Agreement shall
for any reason (other than pursuant to the terms hereof) (i) cease to
create, or the

 

V-1

 

Participation shall for
any reason cease to be, a valid and enforceable perfected undivided percentage
ownership interest to the extent of the Participation in each Pool Receivable
and the Related Security and Collections and other proceeds with respect
thereto, free and clear of any Adverse Claim or (ii) cease to create with
respect to the items described in Section 1.2(d), or the interest
of the Purchaser with respect to such items shall cease to be, a valid and
enforceable first priority perfected security interest, free and clear of any
Adverse Claim; or

 

(g)                                 The
Seller, Manitowoc or any Originator or any Subsidiary of Manitowoc or any
Originator shall generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally as such debts become
due, or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Seller, Manitowoc or any
Originator seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, receivership, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of
its property and, in the case of any such proceeding instituted against it (but
not instituted by it), either (a) such proceeding shall remain undismissed
or unstayed for a period of sixty (60) days, or (b) in any such
proceeding, there is entered an order for relief against, or the there is
appointed a receiver, trustee, custodian or other similar official for, it or
for any substantial part of its property); or the Seller, Manitowoc or any
Originator shall take any corporate action to authorize any of the actions set
forth above in this paragraph (g); or

 

(h)                                 As
of the last day of any calendar month, the arithmetic average for the most
recent three calendar months of (A) the Default Ratios shall exceed five
and one-half percent (5.5%), or (B) the Dilution Ratios shall exceed eight
percent (8.0%); or

 

(i)                                     The
Participation shall exceed one hundred percent (100%) and such condition shall
continue unremedied for more than two consecutive Business Days; or

 

(j)                                     A
Change in Control shall occur with respect to Manitowoc or the Seller; or

 

(k)                                  The
Internal Revenue Service shall file notice of a lien pursuant to Section 6323
of the Internal Revenue Code with regard to any assets of the Seller or any
Originator and such lien or any other lien filed thereunder shall not have been
released within ten (10) Business Days, or the Pension Benefit Guaranty
Corporation shall file notice of a lien pursuant to Section 4068 of ERISA
with regard to any of the assets of the Seller or any Originator and such lien
shall not have been released within five (5) Business Days; or

 

(l)                                     A
Servicer Default shall occur; or

 

(m)                               A
Purchase and Sale Termination Event shall occur; or

 

(n)                                 One
or more judgments for the payment of money in an aggregate amount in excess of
ten million dollars ($10,000,000) shall be rendered against Manitowoc, any
Subsidiary of Manitowoc or any combination thereof (or in excess of ten
thousand dollars ($10,000) shall be

 

V-2

 

rendered against the
Seller) and the same shall remain undischarged for a period of thirty (30)
consecutive days during which execution shall not be effectively stayed, or any
action shall be legally taken by a judgment creditor to attach or levy upon any
assets of Manitowoc or any Subsidiary of Manitowoc or the Seller to enforce any
such judgment; or

 

(o)                                 The
long-term senior unsecured and uncredit-enhanced long-term debt of Manitowoc
shall fail, at any time, to be rated at least “B” by S&P and at least “B2”
by Moody’s; or

 

(p)                                 The
“Receivables Indebtedness” (as such term is defined in the Credit Agreement, as
the Credit Agreement may be amended, amended and restated, supplemented,
or otherwise modified from time to time) exceeds the amount thereof permitted
under the Credit Agreement (as the Credit Agreement may be amended,
amended and restated, supplemented, or otherwise modified from time to time);
or

 

(q)                                 The
aggregate uncollected amount of accounts receivable sold pursuant to “Permitted
Securitizations” and “Factoring Agreements” (as such terms in quotation marks
are defined in the Credit Agreement, as the Credit Agreement may be
amended, amended and restated, supplemented or otherwise modified from time to
time) exceeds the amount thereof permitted under the Credit Agreement (as the
Credit Agreement may be amended, amended and restated, supplemented or
otherwise modified from time to time); or

 

(r)                                    The
net worth of the Seller is less than five million dollars ($5,000,000); or

 

(s)                                  a
Material Adverse Effect shall occur; or

 

(t)                                    any
Originator for any reason ceases to transfer, or is legally unable to transfer,
Receivables to the Seller under the Purchase and Sale Agreement, or the Seller
ceases to acquire Receivables from the Originators.

 

V-3

 

EXHIBIT VI

 

SUPPLEMENTAL REPRESENTATIONS, WARRANTIES AND
COVENANTS

 

In addition to
the representations, warranties and covenants contained in Exhibits III
and IV of the Agreement, to induce the Purchaser and the Agent to enter
into the Agreement and, in the case of Purchaser, to purchase the
Participation, the Seller hereby represents, warrants, and covenants as
follows:

 

A.                                   The Receivables.

 

1.                                       The
Agreement creates a valid and continuing security interest (as defined in the
applicable UCC) in the Pool Receivables in favor of the Purchaser, which
security interest is prior to all other Adverse Claims, and is enforceable as
such as against creditors of and purchasers from the Seller.

 

2.                                       The
Pool Receivables constitute “accounts” within the meaning of the applicable
UCC.

 

3.                                       The
Seller owns and has good and marketable title to the Pool Receivables free and
clear of any Adverse Claim.

 

4.                                       The
Seller has caused (and will cause each Originator to cause), within ten days
after the first transfer of Receivables by such Originator to the Seller, the
filing of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect the sale
and contribution of the Receivables from each Originator to the Seller pursuant
to the Purchase and Sale Agreement, and the security interest therein granted
by the Seller to the Purchaser under the Agreement.

 

B.                                     The Lock-Box
Accounts and the Collection Account.

 

1.                                       Each
of the Lock-Box Accounts and the Collection Account constitute “deposit
accounts” within the meaning of the applicable UCC.

 

2.                                       The
Seller owns and has good and marketable title to the Lock-Box Accounts and the
Collection Account free and clear of any Adverse Claim.

 

3.                                       The
Seller has delivered to the Purchaser a fully executed Lock-Box Agreement
relating to each Lock-Box Account and the Collection Account Agreement relating
to the Collection Account, in each case, pursuant to which the applicable
Lock-Box Bank and/or Collection Account Bank, as the case may be, has
agreed, following notice from the Agent, to comply with all instructions
originated by the Agent (on behalf of the Purchaser) directing the disposition
of funds in such Lock-Box Account or the Collection Account, as the case may be,
without further consent by the Seller or the Servicer.

 

4.                                       The
Seller has established procedures such that any Permitted Investments purchased
with funds (other than funds remitted to the Seller in accordance with Section 1.4
of this

 

VI-1

 

Agreement) withdrawn from the Lock-Box Accounts and/or
the Collection Account will be either (i) credited to a “securities
account” (within the meaning of the applicable UCC) over which the Purchaser
will have a first priority perfected security interest, (ii) purchased in
the name of the Purchaser, or (iii) held in another manner sufficient to
establish the Purchaser’s first priority perfected security interest over such
Permitted Investments.

 

C.                                     Priority.

 

1.                                       Other
than the transfer of the Receivables to the Seller and the Purchaser under the
Purchase and Sale Agreement and the Agreement, respectively, and/or the
security interest granted to the Seller and the Purchaser pursuant to the
Purchase and Sale Agreement and this Agreement, respectively, neither the
Seller nor any Originator has pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Pool Receivables, any Lock-Box
Account, any related lock-box or post office box, the Collection Account or any
subaccount thereof, except for any such pledge, grant or other conveyance which
has been released or terminated. Neither the Seller nor any Originator has
authorized the filing of, or is aware of any financing statements against
either the Seller or such Originator that include a description of Receivables
or any Lock-Box Account, the Collection Account or any subaccount thereof,
other than any financing statement (i) relating to the sale thereof by the
Originators to the Seller under the Purchase and Sale Agreement, (ii) relating
to the security interest granted to the Purchaser under the Agreement, or (iii) that
has been released or terminated.

 

2.                                       The
Seller is not is aware of any judgment, ERISA or tax lien filings against
either the Seller or any Originator.

 

3.                                       Neither
the Lock-Box Accounts nor the Collection Account are in the name of any Person
other than the Seller or the Purchaser. Neither the Seller nor the Servicer has
consented to any bank maintaining such accounts to comply with instructions of
any Person other than the Purchaser or the Agent on its behalf.

 

4.                                       Notwithstanding
any other provision of the Agreement or any other Transaction Document, the
representations contained in this Exhibit VI shall survive,
continue, and remain in full force and effect in each case until the Final
Payout Date.

 

5.                                       The
parties to the Agreement: (i) shall not, without obtaining a confirmation
of S&P’s then-current rating of the Notes, waive any of the representations
set forth in this Exhibit VI; (ii) shall provide S&P with prompt
written notice of any breach of any representations set forth in this Exhibit VI,
and shall not, without obtaining a confirmation of the then-current rating of
the Notes (as determined after any adjustment or withdrawal of the ratings following
notice of such breach) from S&P waive a breach of any of the
representations set forth in this Exhibit VI.

 

6.                                       In
order to evidence the interests of the Purchaser under the Agreement, the
Servicer shall, from time to time take such action, or execute and deliver such
instruments (other

 

VI-2

 

than filing financing statements) as may be
necessary or advisable (including, without limitation, such actions as are
reasonably requested by the Purchaser or the Agent) to maintain and perfect, as
a first-priority interest, the Purchaser’s security interest in the Pool
Receivables, Related Security and Collections with respect thereto. The
Servicer shall, from time to time and within the time limits established by
law, prepare and present to the Agent for the Agent’s authorization and
approval all financing statements, amendments, continuations or initial
financing statements in lieu of a continuation statement, or other filings
necessary to continue, maintain and perfect the Purchaser’s security interest
as a first-priority interest. The Agent’s approval of such filings shall
authorize the Servicer to file such financing statements under the UCC without
the signature of the Seller, any Originator or the Purchaser where allowed by
applicable law. Notwithstanding anything else in the Transaction Documents to
the contrary, the Servicer shall not have any authority to file a termination,
partial termination, release, partial release, or any amendment that deletes the
name of a debtor or excludes collateral of any such financing statements,
without the prior written consent of the Agent.

 

VI-3

 

SCHEDULE I

NOTICES

 

If to Seller:

 

Manitowoc Funding, LLC

c/o The Manitowoc Company, Inc.

2400 South 44th Street

Manitowoc, Wisconsin  54220

Attention:              Dean Nolden

 

with a copy to
the Servicer

 

If to Servicer:

 

The Manitowoc
Company, Inc.

2400 South 44th Street

Manitowoc, Wisconsin  54220

Attention:              Dean Nolden

Telephone:            (920) 652-1755

Facsimile:               (920) 652-9775

 

If to Agent:

 

Norddeutsche
Landesbank Girozentrale

1114 Avenue of the Americas

New York, New York  10036

Attention:              Asset Backed Finance

Telephone:            (212) 812-6946

Facsimile:               (212) 812-6860

 

If to
Purchaser:

 

Hannover
Funding Company LLC

c/o Global Securitization Services, LLC

445 Broad Hollow Road

Suite 239

Melville, New York 11747

Attention:              Tony Wong

Telephone:            (631) 930-7207

Facsimile:               (212) 302-8767

 

Schedule I

 

SCHEDULE II

LOCK-BOX BANKS, LOCK-BOX ACCOUNTS, LOCK-BOXES AND POST OFFICE BOXES

 

	
   

  	
   

  	
   

  	
   

  	
  Lock-Boxes or

  	
   

  
	
  Lock-Box Bank

  	
   

  	
  Lock-Box Accounts

  	
   

  	
  Post Office Boxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Northern Trust Company

  	
   

  	
  30142765

  	
   

  	
  93501

  	
   

  
	
   

  	
   

  	
  34496768

  	
   

  	
  96365

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Manufacturers and Traders Trust Company

  	
   

  	
  368636

  	
   

  	
  N/A

  	
   

  

 

Schedule II

 

SCHEDULE III

TRADE NAMES

 

None

 

Schedule III

 

SCHEDULE IV

CREDIT AND COLLECTION POLICY

 

[Attached]

 

Schedule IV

 

ANNEX A

 

FORM OF NOTICE OF PURCHASE

 

[Date]

 

Norddeutsche Landesbank Girozentrale

1114 Avenue of the Americas

New York, New York  10036

Attention:  Asset Backed Finance

 

Re:                               Manitowoc
Funding, LLC – Notice of Purchase

 

Ladies and
Gentlemen:

 

Please refer to the
Amended and Restated Receivables Purchase Agreement dated as of December 21,
2006 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the “Agreement”) among Manitowoc Funding, LLC, as Seller,
The Manitowoc Company, Inc., as Servicer, Norddeutsche Landesbank
Girozentrale, as Agent and Hannover Funding Company LLC, as Purchaser. Capitalized
terms defined in the Agreement and used herein without definition have the
meanings set forth in the Agreement.

 

Pursuant to Section 1.2(a) of
the Agreement:

 

1.                                       The
Seller hereby gives notice to the Agent of a proposed Payment with the
requested amount and date of Payment below:

 

•                  Amount
of Payment                                                       $[   ]

•                  Date
of Payment:                             [   ]

 

2.                                       The
Seller hereby represents and warrants that:

 

•                  the
Net Outstanding Balances of the Receivables in the Net Eligible Pool is $            .

•                  the
Eligible Unapplied Cash and Credits is $            .

•                  the
Net Eligible Pool Balance is $            .

 

A-1

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  MANITOWOC
  FUNDING, LLC,

  
	
   

  	
  as Seller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
					

 

A-2

 

ANNEX B

 

FORM OF MONTHLY REPORT

 

[Attached]

 

B-1Exhibit 4.1

THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS
ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS
PURCHASE OPTION EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS
PURCHASE OPTION AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR
HYPOTHECATE THIS PURCHASE OPTION FOR A PERIOD OF ONE YEAR FOLLOWING THE
EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER THAN (I) MORGAN JOSEPH & CO.
INC. (“MORGAN JOSEPH”), OR AN UNDERWRITER
OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE
OFFICER OR PARTNER OF MORGAN JOSEPH OR OF ANY SUCH UNDERWRITER OR SELECTED
DEALER.

THIS PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE
LATER OF THE CONSUMMATION BY HD PARTNERS ACQUISITION CORPORATION (“COMPANY”) OF A MERGER, CAPITAL
STOCK EXCHANGE, ASSET ACQUISITION OR OTHER SIMILAR BUSINESS COMBINATION (“BUSINESS COMBINATION”)(AS DESCRIBED
MORE FULLY IN THE COMPANY’S REGISTRATION STATEMENT (DEFINED HEREIN)) OR JUNE 1,
2007. VOID AFTER 5:00 P.M. NEW YORK CITY LOCAL TIME, JUNE 1, 2011.

UNIT PURCHASE OPTION

FOR THE PURCHASE OF

1,875,000 UNITS

OF

HD PARTNERS ACQUISITION
CORPORATION

1.                                       Purchase
Option.

THIS CERTIFIES THAT, in
consideration of $100.00 duly paid by or on behalf of Morgan Joseph or its
designee (“Holder”), as registered owner
of this Purchase Option, to HD Partners Acquisition Corporation (“Company”), Holder is entitled, at
any time or from time to time upon the later of the consummation of a Business
Combination or June 1, 2007 (“Commencement Date”),
and at or before 5:00 p.m., New York City local time, June 1, 2011 (“Expiration Date”), but not
thereafter, to subscribe for, purchase and receive, in whole or in part, up to
One Million Eight Hundred Seventy Five Thousand (1,875,000) units (“Units”) of the Company, each Unit
consisting of one share of common stock of the Company, par value $0.001 per
share (“Common Stock”), and one
warrant (“Warrant(s)”) expiring four
years from the effective date (“Effective Date”)
of the registration statement (“Registration Statement”)
pursuant to which Units are offered for sale to the public (“Offering”). Each Warrant is the
same as the warrants included in the Units being registered for sale to the
public by way of the Registration Statement (“Public
Warrants”), except that the warrants included in the option have
an exercise price of $6.875.  If the
Expiration Date is a day on which banking institutions are 

 

authorized by law to
close, then this Purchase Option may be exercised on the next succeeding day
which is not such a day in accordance with the terms herein. During the period
ending on the Expiration Date, the Company agrees not to take any action that
would terminate the Purchase Option. This Purchase Option is initially
exercisable at $10.00 per Unit so purchased; provided, however, that upon the
occurrence of any of the events specified in Section 6 hereof, the rights
granted by this Purchase Option, including the exercise price per Unit and the
number of Units (and shares of Common Stock and Warrants) to be received upon
such exercise, shall be adjusted as therein specified. The term “Exercise Price”
shall mean the initial exercise price or the adjusted exercise price, depending
on the context.

2.                                       Exercise.

2.1                                 Exercise
Form. In order to exercise this Purchase Option, the exercise form attached
hereto must be duly executed and completed and delivered to the Company,
together with this Purchase Option and payment of the Exercise Price for the
Units being purchased payable in cash or by certified check or official bank check.
If the subscription rights represented hereby shall not be exercised at or
before 5:00 p.m., New York City local time, on the Expiration Date this
Purchase Option shall become and be void without further force or effect, and
all rights represented hereby shall cease and expire.

2.2                                 Legend.
Each certificate for the securities purchased under this Purchase Option shall
bear a legend as follows unless such securities have been registered under the
Securities Act of 1933, as amended (“Act”):

“The securities
represented by this certificate have not been 
registered under the Securities Act of 1933, as amended (“Act”) or
applicable state law. The securities may not be offered for sale, sold  or otherwise transferred except pursuant to
an effective registration  statement
under the Act, or pursuant to an exemption from registration  under the Act and applicable state law.”

2.3                                 Cashless
Exercise.

2.3.1                      Determination
of Amount.  In lieu of the payment of
the Exercise Price multiplied by the number of Units for which this Purchase
Option is exercisable (and in lieu of being entitled to receive Common Stock
and Warrants) in the manner required by Section 2.1, the Holder shall have the
right (but not the obligation) to convert any exercisable but unexercised portion
of this Purchase Option into Units (the “Conversion
Right”) as follows: upon exercise of the Conversion Right, the
Company shall deliver to the Holder (without payment by the Holder of any of
the Exercise Price in cash) that number of Units, if the Units are still
traded, or if the Units are not still traded, that number of shares of Common
Stock and Warrants comprising that number of Units, equal to the quotient
obtained by dividing (x) the “Value” (as defined below) of the portion of the
Purchase Option being converted by (y) the “Current Market Value” (as defined
below).  The “Value” of the portion of the Purchase
Option being converted shall equal the remainder derived from subtracting (a)
(i) the Exercise Price multiplied by (ii) the number of Units underlying the
portion of this Purchase Option being converted from 

 

(b) (i) the Current Market Value of a Unit multiplied
by (ii) the number of Units underlying the portion of the Purchase Option being
converted. As used herein, the term “Current
Market Value” per Unit at any date means: (A) in the event that neither the Units nor
Warrants are still trading, the remainder derived from subtracting (x) the
exercise price of the Warrants multiplied by the number of shares of Common
Stock issuable upon exercise of the Warrants underlying one Unit from (y) (i)
the Current Market Price of the Common Stock multiplied by (ii) the number of
shares of Common Stock underlying one Unit, which shall include the shares of
Common Stock underlying the Warrants included in such Unit; (B) in the event
that the Units, Common Stock and Warrants are still trading, (i) if the Units
are listed on a national securities exchange or quoted on the Nasdaq National
Market, Nasdaq SmallCap Market or NASD OTC Bulletin Board (or successor such as
the Bulletin Board Exchange), the last sale price of the Units in the principal
trading market for the Units as reported by the exchange, Nasdaq or the NASD,
as the case may be, on the last trading day preceding the date in question less
$1.375 per Warrant share contained in the Unit; or (ii) if the Units are not
listed on a national securities exchange or quoted on the Nasdaq National
Market, Nasdaq SmallCap Market or the NASD OTC Bulletin Board (or successor
exchange), but is traded in the residual over-the-counter market, the closing
bid price for Units on the last trading day preceding the date in question for
which such quotations are reported by the Pink Sheets, LLC or similar publisher
of such quotations less $1.375 per Warrant share contained in the Unit; and (C)
in the event that the Units are not still trading but the Common Stock and
Warrants underlying the Units are still trading, the Current Market Price of
the Common Stock plus the product of (x) the Current Market Price of the Warrants
less $1.375 per Warrant share contained in the Unit and (y) the number of
shares of Common Stock underlying the Warrants included in one Unit.

The “Current
Market Price” shall mean (i) if the Common Stock (or Warrants,
as the case may be) is listed on a national securities exchange or quoted on
the Nasdaq National Market, Nasdaq SmallCap Market or NASD OTC Bulletin Board
(or successor such as the Bulletin Board Exchange), the last sale price of the
Common Stock (or Warrants) in the principal trading market for the Common Stock
as reported by the exchange, Nasdaq or the NASD, as the case may be, on the
last trading day preceding the date in question; (ii) if the Common Stock (or
Warrants, as the case may be) is not listed on a national securities exchange or
quoted on the Nasdaq National Market, Nasdaq SmallCap Market or the NASD OTC
Bulletin Board (or successor exchange), but is traded in the residual
over-the-counter market, the closing bid price for the Common Stock (or
Warrants) on the last trading day preceding the date in question for which such
quotations are reported by the Pink Sheets, LLC or similar publisher of such
quotations; and (iii) if the fair market value of the Common Stock cannot be
determined pursuant to clause (i) or (ii) above, such price as the Board of
Directors of the Company shall determine, in good faith.

2.3.2                        Mechanics
of Cashless Exercise. The Cashless Exercise Right may be exercised by the
Holder on any business day on or after the Commencement Date and not later than
the Expiration Date by delivering the Purchase Option with the duly executed
exercise form attached hereto with the cashless exercise section completed to 

 

the Company, exercising the Cashless Exercise Right
and specifying the total number of Units the Holder will purchase pursuant to
such Cashless Exercise Right.

3.                                       Transfer.

3.1                                 General
Restrictions. The registered Holder of this Purchase Option, by its
acceptance hereof, agrees that it will not sell, transfer, assign, pledge or
hypothecate this Purchase Option for a period of one year following the
Effective Date to anyone other than (i) Morgan Joseph or an underwriter or a
selected dealer in connection with the Offering, or (ii) a bona fide officer or
partner of Morgan Joseph or of any such underwriter or selected dealer. On and
after the first anniversary of the Effective Date, transfers to others may be
made subject to compliance with or exemptions from applicable securities laws.
In order to make any permitted assignment, the Holder must deliver to the
Company the assignment form attached hereto duly executed and completed,
together with the Purchase Option and payment of all transfer taxes, if any,
payable in connection therewith. The Company shall within five business days
transfer this Purchase Option on the books of the Company and shall execute and
deliver a new Purchase Option or Purchase Options of like tenor to the
appropriate assignee(s) expressly evidencing the right to purchase the
aggregate number of Units purchasable hereunder or such portion of such number
as shall be contemplated by any such assignment.

3.2                                 Restrictions
Imposed by the Act. The securities evidenced by this Purchase Option shall
not be transferred unless and until (i) the Company has received the opinion of
counsel for the Holder that the securities may be transferred pursuant to an
exemption from registration under the Act and applicable state securities laws,
the availability of which is established to the reasonable satisfaction of the
Company (the Company hereby agreeing that the opinion of Ellenoff Grossman and
Schole LLP shall be deemed satisfactory evidence of the availability of an
exemption), or (ii) a registration statement or a post-effective amendment to
the Registration Statement relating to such securities has been filed by the
Company and declared effective by the Securities and Exchange Commission (the “Commission”) and compliance with
applicable state securities law has been established.

4.                                       New Purchase Options to be Issued.

4.1                               Partial
Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this
Purchase Option may be exercised or assigned in whole or in part.  In the event of the exercise or assignment
hereof in part only, upon surrender of this Purchase Option for cancellation,
together with the duly executed exercise or assignment form and except in the
case of an exercise of a Purchase Option contemplated by Section 2.3 hereof,
funds sufficient to pay any Exercise Price and/or transfer tax, the Company
shall cause to be delivered to the Holder without charge a new Purchase Option
of like tenor to this Purchase Option in the name of the Holder evidencing the
right of the Holder to purchase the number of Units purchasable hereunder as to
which this Purchase Option has not been exercised or assigned.

 

4.2                                 Lost
Certificate. Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Purchase Option and of
reasonably satisfactory indemnification or the posting of a bond, the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any
such new Purchase Option executed and delivered as a result of such loss,
theft, mutilation or destruction shall constitute a substitute contractual
obligation on the part of the Company.

5.                                       Registration Rights.

5.1                                 Demand
Registration.

5.1.1                        Grant
of Right. The Company, upon written demand (“Initial
Demand Notice”) of the Holder(s) of at least 51% of the Purchase
Options and/or the underlying Units and/or the underlying securities (“Majority Holders”), agrees to
register (the “Demand Registration”)
under the Act on one occasion, all or any portion of the Purchase Options
requested by the Majority Holders in the Initial Demand Notice and all of the
securities underlying such Purchase Options, including the Units, Common Stock,
the Warrants and the Common Stock underlying the Warrants (collectively, the “Registrable Securities”). On such
occasion, the Company will file a registration statement or a post-effective
amendment to the Registration Statement covering the Registrable Securities
within sixty days after receipt of the Initial Demand Notice and use its best
efforts to have such registration statement or post-effective amendment
declared effective as soon as possible thereafter. The demand for registration
may be made at any time during a period of five years beginning on the
Effective Date.  The Initial Demand
Notice shall specify the number of shares of Registrable Securities proposed to
be sold and the intended method(s) of distribution thereof. The Company will
notify all holders of the Purchase Options and/or Registrable Securities of the
demand within ten days from the date of the receipt of any such Initial Demand
Notice. Each holder of Registrable Securities who wishes to include all or a
portion of such holder’s Registrable Securities in the Demand Registration
(each such holder including shares of Registrable Securities in such
registration, a “Demanding Holder”)
shall so notify the Company within fifteen (15) days after the receipt by the
holder of the notice from the Company. Upon any such request, the Demanding
Holders shall be entitled to have their Registrable Securities included in the
Demand Registration, subject to Section 5.1.4.

5.1.2                        Effective
Registration. A registration will not count as a Demand Registration until
the registration statement filed with the Commission with respect to such
Demand Registration has been declared effective and the Company has complied
with all of its obligations under this Agreement with respect thereto; provided,
however, that if, after such registration statement has been declared
effective, the offering of Registrable Securities pursuant to a Demand
Registration is interfered with by any stop order or injunction of the
Commission or any other governmental agency or court, the registration
statement with respect to such Demand Registration will be deemed not to have
been declared effective, unless and until, (i) such stop order or injunction is
removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of
the Demanding Holders thereafter elect to continue the offering.

 

5.1.3                        Underwritten
Offering. If the Majority Holders so elect and such holders so advise the
Company as part of the Initial Demand Notice, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. In such event, the right of any holder to include its
Registrable Securities in such registration shall be conditioned upon such
holder’s participation in such underwriting and the inclusion of such holder’s
Registrable Securities in the underwriting to the extent provided herein. All
Demanding Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the Majority
Holders.

5.1.4                        Reduction
of Offering. If the managing underwriter or underwriters for a Demand
Registration that is to be an underwritten offering advises the Company and the
Demanding Holders in writing that the dollar amount or number of shares of
Registrable Securities which the Demanding Holders desire to sell, taken
together with all other shares of Common Stock or other securities which the
Company desires to sell and the shares of Common Stock, if any, as to which
registration has been requested pursuant to written contractual piggy-back
registration rights held by other stockholders of the Company who desire to
sell, exceeds the maximum dollar amount or maximum number of shares that can be
sold in such offering without adversely affecting the proposed offering price,
the timing, the distribution method, or the probability of success of such
offering (such maximum dollar amount or maximum number of shares, as
applicable, the “Maximum Number of Shares”),
then the Company shall include in such registration: (i) first, the Registrable
Securities as to which Demand Registration has been requested by the Demanding
Holders (pro rata in accordance with the number of shares that each such Person
has requested be included in such registration, regardless of the number of
shares held by each such Person (such proportion is referred to herein as “Pro Rata”)) that can be sold
without exceeding the Maximum Number of Shares; (ii) second, to the extent that
the Maximum Number of Shares has not been reached under the foregoing clause
(i), the shares of Common Stock or other securities that the Company desires to
sell that can be sold without exceeding the Maximum Number of Shares; (iii)
third, to the extent that the Maximum Number of Shares has not been reached
under the foregoing clauses (i) and (ii), the shares of Common Stock or other
securities registrable pursuant to the terms of the Registration Rights
Agreement between the Company and the initial investors in the Company, dated
as of June 7, 2006 (the “Registration Rights
Agreement” and such registrable securities, the “Investor Securities”) as to which “piggy-back”
registration has been requested by the holders thereof, Pro Rata, that can be
sold without exceeding the Maximum Number of Shares; and (iv) fourth, to the
extent that the Maximum Number of Shares have not been reached under the
foregoing clauses (i), (ii), and (iii), the shares of Common Stock or other
securities for the account of other persons that the Company is obligated to
register pursuant to written contractual arrangements with such persons and
that can be sold without exceeding the Maximum Number of Shares.

5.1.5                        Withdrawal.
If a majority-in-interest of the Demanding Holders disapprove of the terms of
any underwriting or are not entitled to include all of their Registrable
Securities in any offering, such majority-in-interest of the Demanding 

 

Holders may elect to withdraw from such offering by
giving written notice to the Company and the underwriter or underwriters of
their request to withdraw prior to the effectiveness of the registration
statement filed with the Commission with respect to such Demand Registration.
If the majority-in-interest of the Demanding Holders withdraws from a proposed
offering relating to a Demand Registration, then such registration shall not
count as a Demand Registration provided for in Section 5.1.

5.1.6                        Terms.
The Company shall bear all fees and expenses attendant to registering the
Registrable Securities, including the expenses of any legal counsel selected by
the Holders to represent them in connection with the sale of the Registrable
Securities, but the Holders shall pay any and all underwriting commissions. The
Company agrees to use its reasonable best efforts to qualify or register the
Registrable Securities in such states as are reasonably requested by the
Majority Holder(s); provided, however, that in no event shall the Company be
required to register the Registrable Securities in a state in which such
registration would cause (i) the Company to be obligated to qualify to do
business in such state, or would subject the Company to taxation as a foreign
corporation doing business in such jurisdiction or (ii) the principal
stockholders of the Company to be obligated to escrow their shares of capital
stock of the Company. The Company shall cause any registration statement or
post-effective amendment filed pursuant to the demand rights granted under
Section 5.1.1 to remain effective for a period of nine consecutive months from
the effective date of such registration statement or post-effective amendment.

5.2                                 Piggy-Back
Registration.

5.2.1                        Piggy-Back
Rights. If at any time during the seven year period commencing on the
Effective Date the Company proposes to file a registration statement under the
Act with respect to an offering of equity securities, or securities or other
obligations exercisable or exchangeable for, or convertible into, equity
securities, by the Company for its own account or for stockholders of the
Company for their account (or by the Company and by stockholders of the Company
including, without limitation, pursuant to Section 5.1), other than a
registration statement (i) filed in connection with any employee stock option
or other benefit plan, (ii) for an exchange offer or offering of securities
solely to the Company’s existing stockholders, (iii) for an offering of debt
that is convertible into equity securities of the Company or (iv) for a
dividend reinvestment plan, then the Company shall (x) give written notice of
such proposed filing to the holders of Registrable Securities as soon as
practicable but in no event less than ten (10) days before the anticipated
filing date, which notice shall describe the amount and type of securities to
be included in such offering, the intended method(s) of distribution, and the
name of the proposed managing underwriter or underwriters, if any, of the
offering, and (y) offer to the holders of Registrable Securities in such notice
the opportunity to register the sale of such number of shares of Registrable
Securities as such holders may request in writing within five (5) days
following receipt of such notice (a “Piggy-Back Registration”).
The Company shall cause such Registrable Securities to be included in such
registration and shall use its best efforts to cause the managing underwriter
or underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration on the same
terms and conditions 

 

as any similar securities of the Company and to permit
the sale or other disposition of such Registrable Securities in accordance with
the intended method(s) of distribution thereof. All holders of Registrable
Securities proposing to distribute their securities through a Piggy-Back
Registration that involves an underwriter or underwriters shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such Piggy-Back Registration.

5.2.2                        Reduction
of Offering. If the managing underwriter or underwriters for a Piggy-Back
Registration that is to be an underwritten offering advises the Company and the
holders of Registrable Securities in writing that the dollar amount or number
of shares of Common Stock which the Company desires to sell, taken together
with shares of Common Stock, if any, as to which registration has been demanded
pursuant to written contractual arrangements with persons other than the
holders of Registrable Securities hereunder, the Registrable Securities as to
which registration has been requested under this Section 5.2, and the shares of
Common Stock, if any, as to which registration has been requested pursuant to
the written contractual piggy-back registration rights of other stockholders of
the Company, exceeds the Maximum Number of Shares, then the Company shall
include in any such registration:

(a)                                  If
the registration is undertaken for the Company’s account: (A) first, the shares
of Common Stock or other securities that the Company desires to sell that can
be sold without exceeding the Maximum Number of Shares; (B) second, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the shares of Common Stock or other securities, if any,
comprised of  Registrable Securities and
Investor Securities, as to which registration has been requested pursuant to
the applicable written contractual piggy-back registration rights of such
security holders, Pro Rata, that can be sold without exceeding the Maximum
Number of Shares; and (C) third, to the extent that the Maximum Number of
shares has not been reached under the foregoing clauses (A) and (B), the shares
of Common Stock or other securities for the account of other persons that the
Company is obligated to register pursuant to written contractual piggy-back
registration rights with such persons and that can be sold without exceeding
the Maximum Number of Shares;

(b)                                 If
the registration is a “demand” registration undertaken at the demand of holders
of Investor Securities, (A) first, the shares of Common Stock or other
securities for the account of the demanding persons, Pro Rata, that can be sold
without exceeding the Maximum Number of Shares; (B) second, to the extent that
the Maximum Number of Shares has not been reached under the foregoing clause
(A), the shares of Common Stock or other securities that the Company desires to
sell that can be sold without exceeding the Maximum Number of Shares; (C)
third, to the extent that the Maximum Number of Shares has not been reached
under the foregoing clauses (A) and (B), the shares of Registrable Securities,
Pro Rata, as to which registration has been requested pursuant to the terms
hereof, that can be sold without exceeding the Maximum Number of Shares; and
(D) fourth, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (A), (B) and (C), the shares of Common
Stock or other securities for the account of other persons that the Company is
obligated to

 

register pursuant to written contractual arrangements
with such persons, that can be sold without exceeding the Maximum Number of
Shares; and

(c)                                  If
the registration is a “demand” registration undertaken at the demand of persons
other than either the holders of Registrable Securities or of Investor
Securities, (A) first, the shares of Common Stock or other securities for the
account of the demanding persons that can be sold without exceeding the Maximum
Number of Shares; (B) second, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clause (A), the shares of Common Stock
or other securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares; (C) third, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A)
and (B), collectively the shares of Common Stock or other securities comprised
of Registrable Securities and Investor Securities, Pro Rata, as to which
registration has been requested pursuant to the terms hereof and of the
Registration Rights Agreement, as applicable, that can be sold without
exceeding the Maximum Number of Shares; and (D) fourth, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clauses (A),
(B) and (C), the shares of Common Stock or other securities for the account of
other persons that the Company is obligated to register pursuant to written
contractual arrangements with such persons, that can be sold without exceeding
the Maximum Number of Shares.

5.2.3                        Withdrawal.
Any holder of Registrable Securities may elect to withdraw such holder’s
request for inclusion of Registrable Securities in any Piggy-Back Registration
by giving written notice to the Company of such request to withdraw prior to
the effectiveness of the registration statement. The Company (whether on its
own determination or as the result of a withdrawal by persons making a demand
pursuant to written contractual obligations) may withdraw a registration statement
at any time prior to the effectiveness of the registration statement.
Notwithstanding any such withdrawal, the Company shall pay all expenses
incurred by the holders of Registrable Securities in connection with such
Piggy-Back Registration as provided in Section 5.2.4.

5.2.4                        Terms.
The Company shall bear all fees and expenses attendant to registering the
Registrable Securities, including the expenses of any legal counsel selected by
the Holders to represent them in connection with the sale of the Registrable
Securities but the Holders shall pay any and all underwriting commissions
related to the Registrable Securities. In the event of such a proposed
registration, the Company shall furnish the then Holders of outstanding
Registrable Securities with not less than fifteen days written notice prior to
the proposed date of filing of such registration statement. Such notice to the
Holders shall continue to be given for each applicable registration statement
filed (during the period in which the Purchase Option is exercisable) by the
Company until such time as all of the Registrable Securities have been
registered and sold. The Holders of the Registrable Securities shall exercise
the “piggy-back” rights provided for herein by giving written notice, within
ten days of the receipt of the Company’s notice of its intention to file a
registration statement. The Company shall cause any registration statement
filed pursuant to the above “piggyback” rights to remain effective for at least
nine months from the date that the Holders of the Registrable Securities are
first given the opportunity to sell all of such securities.

 

5.3                                 Damages.
Should the registration or the effectiveness thereof required by Sections 5.1
and 5.2 hereof be delayed by the Company or the Company otherwise fails to
comply with such provisions, the Company shall, in addition to any other
equitable or other relief available to the Holder(s), be liable for any and all
incidental, special and consequential damages sustained by the Holder(s),
including, but not limited to, the loss of any profits that might have been
received by the holder upon the sale of shares of Common Stock or Warrants (and
shares of Common Stock underlying the Warrants) underlying this Purchase
Option.

5.4                                 General
Terms.

5.4.1                        Indemnification.
The Company shall indemnify the Holder(s) of the Registrable Securities to be
sold pursuant to any registration statement hereunder and each person, if any,
who controls such Holders within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss,
claim, damage, expense or liability (including all reasonable attorneys’ fees
and other expenses reasonably incurred in investigating, preparing or defending
against litigation, commenced or threatened, or any claim whatsoever whether
arising out of any action between the underwriter and the Company or between
the underwriter and any third party or otherwise) to which any of them may
become subject under the Act, the Exchange Act or otherwise, arising from such
registration statement but only to the same extent and with the same effect as
the provisions pursuant to which the Company has agreed to indemnify the
underwriters contained in Section 5 of the Underwriting Agreement between the
Company, Morgan Joseph and the other underwriters named therein dated the
Effective Date. The Holder(s) of the Registrable Securities to be sold pursuant
to such registration statement, and their successors and assigns, shall
severally, and not jointly, indemnify the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage, expense or liability (including all reasonable attorneys’ fees and
other expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which they may become subject under the Act,
the Exchange Act or otherwise, arising from information furnished by or on
behalf of such Holders, or their successors or assigns, in writing, for
specific inclusion in such registration statement to the same extent and with
the same effect as the provisions contained in Section 5 of the Underwriting
Agreement pursuant to which the underwriters have agreed to indemnify the
Company.

5.4.2                        Exercise
of Purchase Options. Nothing contained in this Purchase Option shall be
construed as requiring the Holder(s) to exercise their Purchase Options or
Warrants underlying such Purchase Options prior to or after the initial filing
of any registration statement or the effectiveness thereof.

5.4.3                        Documents
Delivered to Holders. The Company shall furnish Morgan Joseph, as
representative of the Holders participating in any of the foregoing offerings,
a signed counterpart, addressed to the participating Holders, of (i) an opinion
of counsel to the Company, dated the effective date of such registration
statement (and, if such registration
includes an underwritten public offering, an opinion dated the date of 

 

the closing under any
underwriting agreement related thereto), and (ii) a “cold comfort” letter dated
the effective date of such registration statement (and, if such registration
includes an underwritten public offering, a letter dated the date of the
closing under the underwriting agreement) signed by the independent public
accountants who have issued a report on the Company’s financial statements
included in such registration statement, in each case covering substantially
the same matters with respect to such registration statement (and the
prospectus included therein) and, in the case of such accountants’ letter, with
respect to events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer’s counsel and in accountants’ letters
delivered to underwriters in underwritten public offerings of securities. The
Company shall also deliver promptly to Morgan Joseph, as representative of the
Holders participating in the offering, the correspondence and memoranda
described below and copies of all correspondence between the Commission and the
Company, its counsel or auditors and all memoranda relating to discussions with
the Commission or its staff with respect to the registration statement and
permit Morgan Joseph, as representative of the Holders, to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the National
Association of Securities Dealers, Inc. (“NASD”).
Such investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable
times and as often as Morgan Joseph, as representative of the Holders, shall
reasonably request. The Company shall not be required to disclose any
confidential information or other records to Morgan Joseph, as representative
of the Holders, or to any other person, until and unless such persons shall
have entered into reasonable confidentiality agreements (in form and substance
reasonably satisfactory to the Company), with the Company with respect thereto.

5.4.4                        Underwriting
Agreement. The Company shall enter into an underwriting agreement with the
managing underwriter(s), if any, selected by any Holders whose Registrable
Securities are being registered pursuant to this Section 5, which managing
underwriter shall be reasonably acceptable to the Company. Such agreement shall
be reasonably satisfactory in form and substance to the Company, each Holder
and such managing underwriters, and shall contain such representations,
warranties and covenants by the Company and such other terms as are customarily
contained in agreements of that type used by the managing underwriter. The
Holders shall be parties to any underwriting agreement relating to an
underwritten sale of their Registrable Securities and may, at their option,
require that any or all the representations, warranties and covenants of the
Company to or for the benefit of such underwriters shall also be made to and
for the benefit of such Holders. Such Holders shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holders and their intended
methods of distribution. Such Holders, however, shall agree to such covenants
and indemnification and contribution obligations for selling stockholders as
are customarily contained in agreements of that type used by the managing
underwriter. Further, such Holders shall execute appropriate custody agreements
and otherwise cooperate fully in the preparation of the registration statement
and other documents relating to any offering in which they 

 

include securities pursuant to this Section 5. Each
Holder shall also furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be reasonably required to effect the registration of
the Registrable Securities.

5.4.5                        Rule
144 Sale. Notwithstanding anything contained in this Section 5 to the
contrary, the Company shall have no obligation pursuant to Sections 5.1 or 5.2
for the registration of Registrable Securities held by any Holder (i) where
such Holder would then be entitled to sell under Rule 144 within any
three-month period (or such other period prescribed under Rule 144 as may be provided
by amendment thereof) all of the Registrable Securities then held by such
Holder, and (ii) where the number of Registrable Securities held by such Holder
is within the volume limitations under paragraph (e) of Rule 144 (calculated as if such Holder were an
affiliate within the meaning of Rule 144).

5.4.6                        Supplemental
Prospectus. Each Holder agrees, that upon receipt of any notice from the
Company of the happening of any event as a result of which the prospectus
included in the registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, such Holder will immediately
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder’s receipt of
the copies of a supplemental or amended prospectus, and, if so desired by the
Company, such Holder shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of such
destruction) all copies, other than permanent file copies then in such Holder’s
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.

6.                                       Adjustments.

6.1                                 Adjustments
to Exercise Price and Number of Securities. The Exercise Price and the
number of Units underlying the Purchase Option shall be subject to adjustment
from time to time as hereinafter set forth:

6.1.1                        Stock
Dividends - Split-Ups. If after the date hereof, and subject to the
provisions of Section 6.4 below, the number of outstanding shares of Common
Stock is increased by a stock dividend payable in shares of Common Stock or by
a split-up of shares of Common Stock or other similar event, then, on the
effective date thereof, the number of shares of Common Stock underlying each of
the Units purchasable hereunder shall be increased in proportion to such
increase in outstanding shares. In such case, the number of shares of Common
Stock, and the exercise price applicable thereto, underlying the Warrants
underlying each of the Units purchasable hereunder shall be adjusted in
accordance with the terms of the Warrants. For example, if the Company declares
a two-for-one stock dividend and at the time of such dividend this Purchase
Option is for the purchase of one Unit at $7.50 per whole Unit (each Warrant
underlying the Units is exercisable for $6.25 per share), upon effectiveness of
the dividend, this Purchase Option 

 

will be adjusted to allow for the purchase of one Unit
at $7.50 per Unit, each Unit entitling the holder to receive two shares of
Common Stock and two Warrants (each Warrant exercisable for $3.125 per share).

6.1.2                        Aggregation
of Shares. If after the date hereof, and subject to the provisions of
Section 6.4, the number of outstanding shares of Common Stock is decreased by a
consolidation, combination or reclassification of shares of Common Stock or
other similar event, then, on the effective date thereof, the number of shares
of Common Stock underlying each of the Units purchasable hereunder shall be
decreased in proportion to such decrease in outstanding shares. In such case,
the number of shares of Common Stock, and the exercise price applicable
thereto, underlying the Warrants underlying each of the Units purchasable
hereunder shall be adjusted in accordance with the terms of the Warrants.

6.1.3                        Replacement
of Securities upon Reorganization, etc. In case of any reclassification or
reorganization of the outstanding shares of Common Stock other than a change
covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value
of such shares of Common Stock, or in the case of any merger or consolidation
of the Company with or into another corporation (other than a consolidation or
merger in which the Company is the continuing corporation and that does not
result in any reclassification or reorganization of the outstanding shares of
Common Stock), or in the case of any sale or conveyance to another corporation
or entity of the property of the Company as an entirety or substantially as an
entirety in connection with which the Company is dissolved, the Holder of this
Purchase Option shall have the right thereafter
(until the expiration of the right of exercise of this Purchase Option) to
receive upon the exercise hereof, for the same aggregate Exercise Price payable
hereunder immediately prior to such event, the kind and amount of shares of
stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a
dissolution following any such sale or transfer, by a Holder of the number of
shares of Common Stock of the Company obtainable upon exercise of this Purchase
Option and the underlying Warrants immediately prior to such event; and if any
reclassification also results in a change in shares of Common Stock covered by
Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections
6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall
similarly apply to successive reclassifications, reorganizations, mergers or
consolidations, sales or other transfers.

6.1.4                        Changes
in Form of Purchase Option. This form of Purchase Option need not be
changed because of any change pursuant to this Section, and Purchase Options
issued after such change may state the same Exercise Price and the same number
of Units as are stated in the Purchase Options initially issued pursuant to
this Agreement. The acceptance by any Holder of the issuance of new Purchase
Options reflecting a required or permissive change shall not be deemed to waive
any rights to an adjustment occurring after the Commencement Date or the
computation thereof.

6.1.5                        Adjustments
of Warrants. To the extent the price of the Warrants are lowered pursuant
to Section 3.1 of the Warrant
Agreement, dated June 7, 2006, between the Company and American Stock Transfer
& Trust Company (the “Warrant 

 

Agreement”) the price of the Warrants underlying the
Purchase Option shall be reduced on identical percentage  terms.  To the extent the duration of the
Warrants is extended pursuant to Section 3.2 of the Warrant Agreement,
the duration of the Warrants underlying the Purchase Option shall be extended
on identical terms.

6.2                                 [Intentionally
Omitted]

6.3                                 Substitute
Purchase Option. In case of any consolidation of the Company with, or
merger of the Company with, or merger of the Company into, another corporation
(other than a consolidation or merger which does not result in any
reclassification or change of the outstanding Common Stock), the corporation
formed by such consolidation or merger shall execute and deliver to the Holder
a supplemental Purchase Option providing that the holder of each Purchase
Option then outstanding or to be outstanding shall have the right thereafter
(until the stated expiration of such Purchase Option) to receive, upon exercise
of such Purchase Option, the kind and amount of shares of stock and other
securities and property receivable upon such consolidation or merger, by a
holder of the number of shares of Common Stock of the Company for which such
Purchase Option might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental Purchase Option
shall provide for adjustments which shall be identical to the adjustments
provided in Section 6. The above provision of this Section shall similarly
apply to successive consolidations or mergers.

6.4                                 Elimination
of Fractional Interests. The Company shall not be required to issue
certificates representing fractions of shares of Common Stock or Warrants upon
the exercise of the Purchase Option, nor shall it be required to issue scrip or
pay cash in lieu of any fractional interests, it being the intent of the
parties that all fractional interests shall be eliminated by rounding any
fraction up or down to the nearest whole number of Warrants, shares of Common
Stock or other securities, properties or rights.

7.                                       Reservation and Listing. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon exercise of the Purchase Options or the
Warrants underlying the Purchase Option, such number of shares of Common Stock
or other securities, properties or rights as shall be issuable upon the
exercise thereof. The Company covenants and agrees that, upon exercise of the
Purchase Options and payment of the Exercise Price therefor, all shares of
Common Stock and other securities issuable upon such exercise shall be duly and
validly issued, fully paid and non-assessable and not subject to preemptive
rights of any stockholder. The Company further covenants and agrees that upon
exercise of the Warrants underlying the Purchase Options and payment of the
respective Warrant exercise price therefor, all shares of Common Stock and
other securities issuable upon such exercise shall be duly and validly issued,
fully paid and non-assessable and not subject to preemptive rights of any
stockholder. As long as the Purchase Options shall be outstanding, the Company
shall use its best efforts to cause all (i) Units and shares of Common Stock
issuable upon exercise of the Purchase Options, (iii) Warrants issuable upon
exercise of the Purchase Options and (iv) shares of Common Stock issuable upon
exercise of the Warrants included in the Units issuable upon exercise of the
Purchase Option to be listed (subject to official notice of issuance) on all
securities exchanges (or, 

 

if applicable on the Nasdaq National Market, SmallCap
Market, OTC Bulletin Board or any successor trading market) on which the Units,
the Common Stock or the Public Warrants issued to the public in connection
herewith may then be listed and/or quoted.

8.                                       Certain Notice Requirements.

8.1                                 Holder’s
Right to Receive Notice. Nothing herein shall be construed as conferring
upon the Holders the right to vote or consent as a stockholder for the election
of directors or any other matter, or as having any rights whatsoever as a
stockholder of the Company. If, however, at any time prior to the expiration of
the Purchase Options and their exercise, any of the events described in Section
8.2 shall occur, then, in one or more of said events, the Company shall give
written notice of such event at least fifteen days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholders entitled to such dividend, distribution, conversion or
exchange of securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall
specify such record date or the date of the closing of the transfer books, as
the case may be. Notwithstanding the foregoing, the Company shall deliver to
each Holder a copy of each notice given to the other stockholders of the
Company at the same time and in the same manner that such notice is given to
the stockholders.

8.2                                 Events
Requiring Notice. The Company shall be required to give the notice
described in this Section 8 upon one or more of the following events: (i) if
the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of retained earnings, as indicated by the accounting treatment of such
dividend or distribution on the books of the Company, or (ii) the Company shall
offer to all the holders of its Common Stock any additional shares of capital
stock of the Company or securities convertible into or exchangeable for shares
of capital stock of the Company, or any option, right or warrant to subscribe
therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a
consolidation or merger) or a sale of all or substantially all of its property,
assets and business shall be proposed.

8.3                                 Notice
of Change in Exercise Price. The Company shall, promptly after an event
requiring a change in the Exercise Price pursuant to Section 6 hereof, send
notice to the Holders of such event and change (“Price
Notice”). The Price Notice shall describe the event causing the
change and the method of calculating same and shall be certified as being true
and accurate by the Company’s President and Chief Financial Officer.

8.4                                 Transmittal
of Notices. All notices, requests, consents and other communications under
this Purchase Option shall be in writing and shall be deemed to have been duly
made when hand delivered, or mailed by express mail or private courier service:
(i) if to the registered Holder of the Purchase Option, to the address of such
Holder as shown on the books of the Company, or (ii) if to the Company, to the
following address or to such other address as the Company may designate by
notice to the Holders:

 

HD
Partners Acquisition Corporation

2610
Ocean Park Boulevard, Suite 320

Santa
Monica, CA 90405

Attn:   Bruce Lederman, Executive Vice President and
Secretary

9.                                       Miscellaneous.

9.1                                 Amendments.
The Company and Morgan Joseph may from time to time supplement or amend this
Purchase Option without the approval of any of the Holders in order to cure any
ambiguity, to correct or supplement any provision contained herein that may be
defective or inconsistent with any other provisions herein, or to make any
other provisions in regard to matters or questions arising hereunder that the
Company and Morgan Joseph may deem necessary or desirable and that the Company
and Morgan Joseph deem shall not adversely affect the interest of the Holders.
All other modifications or amendments shall require the written consent of and
be signed by the party against whom enforcement of the modification or
amendment is sought.

9.2                                 Headings.
The headings contained herein are for the sole purpose of convenience of
reference, and shall not in any way limit or affect the meaning or
interpretation of any of the terms or provisions of this Purchase Option.

9.3                                 Entire
Agreement. This Purchase Option (together with the other agreements and
documents being delivered pursuant to or in connection with this Purchase
Option) constitutes the entire agreement of the parties hereto with respect to
the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.

9.4                                 Binding
Effect. This Purchase Option shall inure solely to the benefit of and shall
be binding upon, the Holder and the Company and their permitted assignees,
respective successors, legal representative and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or
claim under or in respect of or by virtue of this Purchase Option or any
provisions herein contained.

9.5                                 Governing
Law; Submission to Jurisdiction. This Purchase Option shall be governed by
and construed and enforced in accordance with the laws of the State of New
York, without giving effect to conflict of laws. The Company hereby agrees that
any action, proceeding or claim against it arising out of, or relating in any
way to this Purchase Option shall be brought and enforced in the courts of the
State of New York or of the United States of America for the Southern District
of New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall be exclusive. The Company hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum. Any process
or summons to be served upon the Company may be served by transmitting a copy
thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the Company in any action,
proceeding or claim. The Company and the Holder agree that the prevailing
party(ies) in any such action shall be entitled to recover from the other 

 

party(ies) all of its
reasonable attorneys’ fees and expenses relating to such action or proceeding and/or
incurred in connection with the preparation therefor.

9.6                                 Waiver,
Etc. The failure of the Company or the Holder to at any time enforce any of
the provisions of this Purchase Option shall not be deemed or construed to be a
waiver of any such provision, nor to in any way affect the validity of this
Purchase Option or any provision hereof or the right of the Company or any
Holder to thereafter enforce each and every provision of this Purchase Option.
No waiver of any breach, non-compliance or non-fulfillment of any of the
provisions of this Purchase Option shall be effective unless set forth in a
written instrument executed by the party or parties against whom or which
enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non- fulfillment shall be construed or deemed to be a waiver
of any other or subsequent breach or non-compliance.

9.7                                 Execution
in Counterparts. This Purchase Option may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.

9.8                                 Exchange
Agreement. As a condition of the Holder’s receipt and acceptance of this
Purchase Option, Holder agrees that, at any time prior to the complete exercise
of this Purchase Option by Holder, if the Company and Morgan Joseph enter into
an agreement (“Exchange Agreement”)
pursuant to which they agree that all outstanding Purchase Options will be
exchanged for securities or cash or a combination of both, then Holder shall
agree to such exchange and become a party to the Exchange Agreement.

 

IN WITNESS WHEREOF, the
Company has caused this Purchase Option to be signed by its duly authorized
officer as of the 7th day of June 2006.

	
  

  	
  HD PARTNERS ACQUISITION 

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Eddy Hartenstein

  	
   

  
	
   

  	
  Name:

  	
  Eddy Hartenstein

  
	
   

  	
  Title:

  	
  President and Chief 

  
	
   

  	
   

  	
  Executive Officer

  

 

 

Form to be used to exercise Purchase Option:

HD Partners Acquisition Corporation

2610 Ocean Park Boulevard, Suite 320

Santa Monica, CA 90405

Date:                              ,
200    

The undersigned hereby
elects irrevocably to exercise all or a portion of the within Purchase Option
and to purchase      Units of HD Partners Acquisition
Corporation and hereby makes payment of $               
(at the rate of $      per Unit) in payment of the
Exercise Price pursuant thereto. Please issue the Common Stock and Warrants as
to which this Purchase Option is exercised in accordance with the instructions
given below.

or

The undersigned hereby
elects irrevocably to convert its right to purchase           
Units purchasable under the within Purchase Option by surrender of the
unexercised portion of the attached Purchase Option (with a “Value” of $         
based on a “Market Price” of $         ).
Please issue the securities comprising the Units as to which this Purchase
Option is exercised in accordance with the instructions given below.

	
  

  	
   

  
	
   

  	
  NOTICE: The
  signature to this assignment must correspond with the name as written upon
  the face of the purchase option in every particular, without alteration or
  enlargement or any change whatever.

  

 

Signature(s) Guaranteed:

	
   

  
	
  THE SIGNATURE(S) SHOULD BE
  GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
  AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
  SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

  

 

INSTRUCTIONS FOR
REGISTRATION OF SECURITIES

	
  Name

  
	
   

  	
   

  	
   

  
	
  (Print in Block Letters)

  
	
   

  
	
  Address

  
	
   

  	
   

  	
   

  

 

Form to be used to assign Purchase Option:

ASSIGNMENT

(To be executed by the
registered Holder to effect a transfer of the within Purchase Option):

FOR VALUE RECEIVED,                                                     
does hereby sell, assign and transfer unto                   
the right to purchase            
Units of HD Partners Acquisition Corporation (“Company”)
evidenced by the within Purchase Option and does hereby authorize the Company
to transfer such right on the books of the Company.

Dated:                    ,
200  

	
  

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NOTICE:  The signature to this assignment must
  correspond with the name as written upon the face of the purchase option in
  every particular, without alteration or enlargement or any change whatever.

  

 

Signature(s) Guaranteed:

	
   

  
	
  THE SIGNATURE(S) SHOULD BE
  GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
  AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE
  GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

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