Exhibit 10.3

POOLING AND SERVICING AGREEMENT

AMONG

ALLIANCE LAUNDRY SYSTEMS LLC

Servicer and Originator

ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2009 LLC

Transferor

AND

ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES TRUST 2009-A

Issuer

DATED AS OF JUNE 26, 2009

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

          Page ARTICLE I    CERTAIN DEFINITIONS    SECTION 1.01    Definitions
   1 ARTICLE II    PURCHASE AND SALE    SECTION 2.01    Purchase and Sale    1
SECTION 2.02    Timing of Conveyances    2 SECTION 2.03    Character of
Transfers    2 SECTION 2.04    No Recourse    2 SECTION 2.05    No Assumption of
Obligations Relating to Second Tier Purchased Assets    2 SECTION 2.06   
Absolute Conveyances    3 SECTION 2.07    Effect of Transfer    4 SECTION 2.08
   Servicing of Second Tier Purchased Assets    4 SECTION 2.09    Custody of
Collateral Documents    4 SECTION 2.10    Acceptance and Acknowledgment by
Issuer    7 SECTION 2.11    Representations and Warranties as to the Loans and
Receivables    7 SECTION 2.12    Payments in Respect of Receivables and
Repurchases of Loans    8 SECTION 2.13    Substitution of Loans    9 ARTICLE III
   GENERAL ADMINISTRATION; ADMINISTRATION AND SERVICING OF LOANS    SECTION 3.01
   Duties of the Servicer regarding Loans    10 SECTION 3.02    Collection of
Loan Payments    12 SECTION 3.03    Prepayments    12 SECTION 3.04   
Realization Upon Defaulted Equipment Loans    13 SECTION 3.05    Maintenance of
Insurance Policies    13 SECTION 3.06    Maintenance of Security Interests in
Collateral    13 SECTION 3.07    Covenants of the Servicer    14 SECTION 3.08   
Servicer’s Purchase of Loans or Payments in Respect of Receivables Upon Breach
of Covenant    17 SECTION 3.09    Servicing Fees; Payment of Certain Expenses by
Servicer    18 SECTION 3.10    Servicer’s Certificate    18 SECTION 3.11   
Application of Collections    19

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

          Page SECTION 3.12    Power of Attorney    19 SECTION 3.13    Backup
Servicer    19 SECTION 3.14    Schedule of Loans    20 ARTICLE IV   
ADMINISTRATION AND SERVICING OF RECEIVABLES    SECTION 4.01    Designation of
the Servicer    20 SECTION 4.02    Duties of the Servicer and Transferor    20
SECTION 4.03    Covenants of the Servicer    22 SECTION 4.04    Application of
Collections    22 ARTICLE V    SERVICER’S COVENANTS; DISTRIBUTIONS; STATEMENTS
TO BENEFICIARIES    SECTION 5.01    Annual Statement as to Compliance: Notice of
Servicer Default    22 SECTION 5.02    Annual Independent Accountants’ Report   
23 SECTION 5.03    Access to Certain Documentation and Information Regarding
Loans and Receivables    24 SECTION 5.04    Amendments to Loans and to Schedule
of Loans    25 SECTION 5.05    Assignment of Administrative Loans, Warranty
Loans    25 SECTION 5.06    Distributions    26 SECTION 5.07    No Set-off    26
SECTION 5.08    Reporting    26 SECTION 5.09    Information Provided to Rating
Agencies    26 ARTICLE VI    LOCKBOXES, ACCOUNTS; COLLECTIONS, DEPOSITS AND
INVESTMENTS; ADVANCES    SECTION 6.01    Loan Lockbox Account    27 SECTION 6.02
   Receivables Lockbox Accounts    28 SECTION 6.03    Loan Collection Account   
28 SECTION 6.04    Receivables Collection Account    29 SECTION 6.05    Reserve
Account    30 SECTION 6.06    Transfers Between Accounts    30 SECTION 6.07   
The Designated Accounts; Control of Designated Accounts    30 SECTION 6.08   
Collections    31 SECTION 6.09    Investment Earnings    31

 

2

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

          Page SECTION 6.10    Servicer Advances    31 SECTION 6.11   
Additional Deposits    32 SECTION 6.12    Yield Supplement Account    32 ARTICLE
VII   

REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR, ORIGINATOR,

SELLER, ISSUER AND THE SERVICER

   SECTION 7.01    Representations and Warranties of the Transferor, Originator,
Seller, Issuer and the Servicer    32 SECTION 7.02    Liability of Transferor   
38 SECTION 7.03    Merger or Consolidation of, or Assumption of the Obligations
of, Transferor; Amendment of Limited Liability Company Agreement    38 SECTION
7.04    Limitation on Liability of Transferor and Others    39 SECTION 7.05   
Transferor May Own Securities    39 SECTION 7.06    Rule 144A    39 ARTICLE VIII
   LIABILITIES OF SERVICER AND OTHERS    SECTION 8.01    Liability of Servicer;
Indemnities    39 SECTION 8.02    Merger or Consolidation of, or Assumption of
the Obligations of, the Servicer    41 SECTION 8.03    Limitation on Liability
of Servicer and Others    42 SECTION 8.04    Delegation of Duties    42 SECTION
8.05    Servicer Not to Resign    43 ARTICLE IX    SERVICER DEFAULT    SECTION
9.01    Servicer Defaults    43 SECTION 9.02    Consequences of a Servicer
Default    45 SECTION 9.03    Indenture Trustee to Act; Appointment of Successor
   46 SECTION 9.04    Notification to the Beneficiaries and the
Certificateholders    47 SECTION 9.05    Waiver of Past Defaults    47 SECTION
9.06    Effects of Termination or Resignation of Servicer    47 ARTICLE X   
TERMINATION; REDEMPTION    SECTION 10.01    Optional Purchase of Equipment Loans
and Receivables    48 SECTION 10.02    Termination of the Agreement    48

 

3

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

          Page ARTICLE XI    MISCELLANEOUS PROVISIONS    SECTION 11.01   
Amendment    48 SECTION 11.02    Protection of Title to Owner Trust Estate    50
SECTION 11.03    Notices    51 SECTION 11.04    Governing Law    51 SECTION
11.05    Severability of Provisions    51 SECTION 11.06    Assignment    52
SECTION 11.07    Benefits of Agreement    52 SECTION 11.08    Separate
Counterparts    52 SECTION 11.09    Headings and Cross-References    52 SECTION
11.10    Assignment to Indenture Trustee    52 SECTION 11.11    No Petition
Covenants    52 SECTION 11.12    Limitation of Liability of the Trustees    53
SECTION 11.13    Survival of Agreement    53 SECTION 11.14    Cooperation and
Further Assurances    53 SECTION 11.15    No Recourse    54

 

4

--------------------------------------------------------------------------------

EXHIBITS

 

  EXHIBIT A-1    Form of Initial PSA Assignment   EXHIBIT A-2    Form of
Additional PSA Assignment   EXHIBIT A-3    Form of Substitution Assignment
    EXHIBIT B    Locations of Schedule of Loans and Receivables     EXHIBIT C   
[Reserved]     EXHIBIT D    Form of Servicer’s Certificate     EXHIBIT E    Form
of Control Agreement     EXHIBIT F    Form of Borrowing Base Certificate
    EXHIBIT G    Agreed Upon Procedures APPENDICES   APPENDIX A    Defined Terms
and Rules of Construction   APPENDIX B    Addresses and Procedures   APPENDIX C
   Credit Agreement SCHEDULES SCHEDULE 7.01    Perfection Certificate –
Transferor

 

5

--------------------------------------------------------------------------------

THIS POOLING AND SERVICING AGREEMENT (this “Agreement”) is made as of June 26,
2009, by and among ALLIANCE LAUNDRY SYSTEMS LLC, a Delaware limited liability
company (“ALS” and, in its capacity as Originator and Servicer hereunder, the
“Originator” and the “Servicer,” respectively), ALLIANCE LAUNDRY EQUIPMENT
RECEIVABLES 2009 LLC, a Delaware limited liability company (“ALER” and, in its
capacity as the Transferor hereunder, the “Transferor”), and ALLIANCE LAUNDRY
EQUIPMENT RECEIVABLES TRUST 2009-A, a Delaware statutory trust (the “Issuer”).

WHEREAS, pursuant to the Purchase Agreement, ALS will from time to time sell or
convey certain Loans and all of its Receivables to the Transferor;

WHEREAS, the Transferor desires to further contribute such Loans and Receivables
to the Issuer in respect of its beneficial interest in the Issuer, and the
Servicer desires to perform the servicing obligations set forth herein for, and
in consideration of, the fees and other benefits set forth in this Agreement;

WHEREAS, the Transferor and the Issuer wish to set forth the terms pursuant to
which such Loans and Receivables are to be transferred by the Transferor to the
Issuer, and the Servicer and the Issuer wish to set forth the terms pursuant to
which such Loans and Receivables will be serviced by the Servicer;

NOW, THEREFORE, in consideration of the foregoing, the other good and valuable
consideration and the mutual terms and covenants contained herein, the parties
hereto agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

SECTION 1.01 Definitions. Certain capitalized terms used in the above recitals
and in this Agreement are defined in and shall have the respective meanings
assigned them in Part I of Appendix A to this Agreement. All references herein
to “the Agreement” or “this Agreement” are to this Pooling and Servicing
Agreement as it may be amended, supplemented or modified from time to time, the
exhibits hereto and the capitalized terms used herein which are defined in such
Appendix A, and all references herein to Articles, Sections and subsections are
to Articles, Sections or subsections of this Agreement unless otherwise
specified. The rules of construction set forth in Part II of such Appendix A
shall be applicable to this Agreement.

ARTICLE II

PURCHASE AND SALE

SECTION 2.01 Purchase and Sale. The Originator has previously sold, transferred
and conveyed to the Transferor, the Transferor hereby conveys, transfers or
assigns to the Issuer, and the Issuer hereby accepts from the Transferor, at the
times set forth in Section 2.02, all of Transferor’s right, title and interest
in, to and under:

(a) all Specified Assets that existed and were transferred to the Transferor on
the Closing Date under the Purchase Agreement;

--------------------------------------------------------------------------------

(b) all Specified Assets that existed and were acquired by the Transferor on
each Purchase Date during the period from and including the closing of business
on the Closing Date to the Purchase Termination Date;

(c) the Purchase Agreement and the other Basic Documents (other than the Trust
Agreement, and the documents and certificates executed in connection with the
foregoing) to the extent such rights relate to the Specified Assets, including
the right of the Transferor to cause ALS to perform its obligations thereunder
(including the obligation of ALS under Sections 2.12(c) and (d) of the Purchase
Agreement); and

(d) any and all income and Proceeds of the property described in clauses
(a) through (c) above.

As used herein, “Second Tier Purchased Assets” means the items listed above in
clauses (a), (b), (c) and (d) collectively.

SECTION 2.02 Timing of Conveyances.

(a) Initial Closing Date Conveyances. On the Closing Date, the Transferor will,
pursuant to an assignment in the form attached hereto as Exhibit A-1 (the
“Initial PSA Assignment”), convey, transfer, assign, and set over to the Issuer
all of the Specified Assets acquired by the Transferor on the Closing Date
pursuant to the Purchase Agreement.

(b) Regular Conveyances. On each Purchase Date under the Purchase Agreement, the
Transferor will immediately, upon the acquisition by the Transferor of such
Specified Assets, transfer, each and every Specified Asset acquired by the
Transferor on such Purchase Date pursuant to the terms of the Purchase
Agreement. Solely with respect to the Equipment Loans and the Related Assets
with respect thereto, each such transfer shall be pursuant to an assignment in
the form attached hereto as Exhibit A-2 (the “Additional PSA Assignment”).

SECTION 2.03 Character of Transfers. Each transfer of Second Tier Purchased
Assets as set forth in Section 2.02 will be treated as a capital contribution by
the Transferor to the Issuer.

SECTION 2.04 No Recourse. Except as specifically provided in Section 2.12 of
this Agreement, the transfer of Second Tier Purchased Assets under this
Agreement shall be without recourse to the Transferor; it being understood that
the Transferor shall be liable to the Issuer for all representations,
warranties, covenants and indemnities made by the Transferor pursuant to the
terms of this Agreement, all of which obligations are limited so as not to
constitute recourse to the Transferor for the credit risk of the Obligors under
any Second Tier Purchased Assets.

SECTION 2.05 No Assumption of Obligations Relating to Second Tier Purchased
Assets. Neither the Issuer nor the Servicer shall have any obligation or
liability to any Obligor or other customer or client of the Transferor
(including any obligation to perform any of the

 

2

--------------------------------------------------------------------------------

obligations of the Transferor under any Second Tier Purchased Asset including
any contract or purchase orders or other agreements related to any Second Tier
Purchased Asset). No such obligation or liability is intended to be assumed by
the Issuer or the Servicer hereunder, and any such assumption is expressly
disclaimed.

SECTION 2.06 Absolute Conveyances. Each of the Transferor and the Issuer intends
each transfer of the Second Tier Purchased Assets hereunder to be capital
contributions by the Transferor to the Issuer, that in each case are absolute
and irrevocable and that provide the Issuer with the full benefits of ownership
of the Second Tier Purchased Assets. Neither the Issuer nor the Transferor
intends the transactions contemplated hereunder to be, or for any purpose to be
characterized as, loans from the Issuer to the Transferor.

The Transferor, the Servicer and the Issuer intend to treat such transfer and
assignment as a capital contribution for accounting purposes. Notwithstanding
the foregoing, if the arrangements with respect to such assets are deemed for
any purpose to constitute a loan and not a purchase and sale or capital
contribution of the Second Tier Purchased Assets, it is the intention of the
parties hereto that this Agreement shall still constitute a security agreement
under applicable law, and Transferor hereby grants to the Issuer a first
priority perfected security interest in all of Transferor’s right, title and
interest, whether now owned or hereafter acquired, in, to and under the Second
Tier Purchased Assets, and all money, accounts, general intangibles, payment
intangibles, chattel paper, instruments, documents, supporting obligations,
goods, investment property, deposit accounts, securities entitlements,
certificates of deposit, letters of credit, letter-of-credit rights, and advices
of credit consisting of, arising from or related to such assets, and all
Proceeds thereof, to secure its obligations hereunder, including its obligation
to remit to the Issuer, or its successors and assigns, all Collections of such
assets and other Proceeds of such assets and all other Second Tier Purchased
Assets. The Transferor and the Issuer agree that the foregoing transfers of
Purchased Receivables and Loans included in the Second Tier Purchased Assets
constitute sales of “accounts,” “promissory notes” and “chattel paper” as
described in the UCC, and that this Agreement shall create a security interest
in favor of the Issuer as the purchaser of such assets.

Each of the Transferor and the Issuer shall, to the extent consistent with this
Agreement, take such actions as may be necessary to ensure that, if this
Agreement is deemed to create a security interest in the Second Tier Purchased
Assets, such security interest would be deemed to be a perfected security
interest of first priority Lien in favor of the Indenture Trustee (as assignee
of the Issuer) under applicable law (including the filing of any financing
statements describing the subject of such security interest as all assets of the
Transferor) and will be maintained as such throughout the term of this
Agreement. Such grant of a security interest in the Second Tier Purchased Assets
shall be deemed to include all rights, powers and options (but none of the
obligations, if any) of the Transferor under any agreement or instrument
included in the assets referred to in the Second Tier Purchased Assets,
including the immediate and continuing right to claim for, collect, receive and
give receipt for principal and interest payments in respect of Purchased
Equipment Loans and all other monies payable under such Purchased Equipment
Loans, the immediate and continuing right to collect the Purchased Receivables
to give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the name
of the Transferor or otherwise and generally to do and receive anything that the
Transferor is or may be entitled to do or receive under or with respect to the
Second Tier Purchased Assets. For purposes of such grant, this Agreement shall
constitute a security agreement under the UCC.

 

3

--------------------------------------------------------------------------------

SECTION 2.07 Effect of Transfer. Upon each Advance under the Indenture and the
Note Purchase Agreement, title to the Second Tier Purchased Assets shall vest in
the Issuer, whether or not the conditions precedent to the obligation of the
Issuer to acquire such Second Tier Purchased Assets were in fact satisfied.

SECTION 2.08 Servicing of Second Tier Purchased Assets. Consistent with the
Issuer’s ownership of the Second Tier Purchased Assets, the Issuer shall have
the sole right to service, administer and collect the Second Tier Purchased
Assets and to assign such right to others.

SECTION 2.09 Custody of Collateral Documents. Simultaneously with the execution
and delivery of this Agreement, the Servicer, the Issuer, the Indenture Trustee
and the Custodian shall enter into the Custodial Agreement, whereby the
Custodian shall act as the agent of the Indenture Trustee as custodian of the
following documents and instruments (collectively, the “Collateral Documents”)
for each Loan to be acquired by the Issuer pursuant to the terms of this
Agreement:

(a) the fully executed endorsed original of the Equipment Note and any original
loan agreement for any such Loan (which shall not bear any transfer or
encumbrance legend or, if it shall bear such a legend, shall be accompanied by
an unconditional release from the party or parties named in such legend);

(b) the original, fully executed Guaranty executed in respect of such Loan
(unless the Loan Schedule certifies that such document does not exist with
respect to the applicable Loan);

(c) the original, fully executed security agreement executed for such Loan;

(d) the original file-stamped UCC financing statement with recording information
indicated thereon for such Loan filed by the Originator against the Obligor with
respect to the related Equipment or a copy thereof and related certificates (as
provided in the second paragraph below);

(e) the Delivery and Acceptance Receipt for the Equipment relating to such Loan
(unless the Loan Schedule certifies that such document does not exist with
respect to the applicable Loan) or a copy thereof and related certification (as
provided in the second paragraph below); and

(f) the assignment of lease, landlord waiver, mortgagee waiver or deed, in each
case, with respect to the real property on which the related Equipment is
located (unless the Loan Schedule certifies that such document does not exist
with respect to the applicable Loan and is not required to be delivered to the
Custodian pursuant to this Agreement).

The Transferor shall, or shall cause the Servicer to, deliver to the Custodian
(i) on or prior to the Closing Date, all of the Collateral Documents (but shall
retain copies thereof) relating to the entire Aggregate Initial Loan Balance of
the Initial Loans (except for Loan #130013073, to

 

4

--------------------------------------------------------------------------------

Mona Eldib d/b/a Main Laundromat), and (ii) the Collateral Documents relating to
the remaining Initial Loans within sixty (60) Business Days of the Closing Date.
On or prior to the Closing Date (with respect to the entire Aggregate Initial
Loan Balance of the Initial Loans (except for Loan #130013073, to Mona Eldib
d/b/a Main Laundromat), and two (2) Business Days after receipt by the Custodian
solely with respect to Loan #130013073, to Mona Eldib d/b/a Main Laundromat)
such Collateral Documents shall have been certified as complete and without
Exception (as defined in the Custodial Agreement) by the Custodian (a copy of
such certification will be provided to the Administrative Agent and the
Indenture Trustee). With respect to any Loan transferred to the Issuer after the
Closing Date, the Transferor shall, or shall cause the Servicer to, deliver all
of the Collateral Documents (but shall retain copies thereof) relating to such
Loans to the Custodian and such Collateral Documents shall have been certified
as complete and without Exception (as defined in the Custodial Agreement) by the
Custodian (a copy of such certification will be provided to the Administrative
Agent and the Indenture Trustee) no later than 3:00 p.m. on the Business Day
prior to, and as a condition to the funding of the Equipment Loan under the
Indenture, on the applicable Equipment Loan Borrowing Date. The Custodian shall,
in accordance with the Custodial Agreement, review and certify as complete
pursuant to a Custodian Receipt Certification all Collateral Documents required
to be delivered to the Custodian with respect to each Loan. Except as otherwise
provided herein with respect to the transfer of servicing duties hereunder, the
Servicer: (i) shall maintain in its possession the Loan Files and Receivables
Files (other than the Collateral Documents) in a manner consistent with the Loan
Servicing Standards, (ii) will not dispose of any documents constituting the
Loan Files or Receivables Files, (iii) will not permit any Person other than the
Indenture Trustee to maintain any adverse claim upon any Loan File or
Receivables File, and (iv) will not permit any Person other than the Indenture
Trustee, the Servicer (or any sub-servicer or other agent permitted hereunder)
or the Custodian to maintain possession of any Loan File or Receivable File so
long as the related Loan or Receivable shall remain part of the Trust Estate.

With respect to any Collateral Documents described in clauses (d) or (f) above
which have been delivered, or are being delivered, to recording offices for
recording and have not been returned to the Transferor or Servicer in time to
permit their delivery hereunder at the time required, then, in lieu of
delivering such original documents, the Transferor or Servicer shall deliver to
the Custodian a true copy thereof with a certification (a copy of which
certification shall be delivered to the Administrative Agent and the Indenture
Trustee) executed by an authorized representative of the Transferor or Servicer
certifying that such copy is a true, correct and complete copy of the original,
which has been transmitted for recordation. The Transferor or Servicer shall
deliver such original documents to the Custodian promptly when they are
received.

Upon termination of the Servicer as Servicer, the terminated Servicer shall
promptly deliver to the Indenture Trustee any Loan Files and any Receivables
Files, or portion thereof, as applicable, and any copies of the Collateral
Documents that may be in the possession of such Servicer and that may have been
delivered to such Servicer pursuant to this Section 2.09. From time to time,
solely to the extent the same is required to implement the foreclosure,
purchase, payoff, substitution or servicing of the Loans or Receivables by the
Servicer or any related collateral, the Servicer may request release by the
Custodian of, and the Custodian shall deliver to the Servicer, any portion of
the Collateral Documents in accordance with the terms of the Custodial
Agreement. A copy of any such request shall be sent concurrently to the
Administrative Agent and the Indenture Trustee. In the event that an Event of
Default, Default,

 

5

--------------------------------------------------------------------------------

Rapid Amortization Event or Servicer Default has occurred and is continuing, the
consent of the Required Noteholders shall be required in order for the Servicer
to make any such request. The Servicer shall promptly return to the Custodian
each and every document previously requested from the Collateral Documents when
the Servicer’s need therefor no longer exists, unless the Loan or Receivable has
been liquidated, paid off or collected, is a Warranty Loan, an Administrative
Loan or is a Loan with respect to which a Substitute Loan has been substituted
in its place, in which case, the Servicer shall provide a certification to this
effect to the Custodian, which may be included in the request for release, a
copy of which shall be sent concurrently to the Administrative Agent and the
Indenture Trustee.

Notwithstanding anything to the contrary set forth herein, the Servicer shall
not, without the prior written consent of the Administrative Agent (acting at
the direction of the Required Noteholders), be entitled to request any
Collateral Documents held by the Custodian if the sum of the unpaid Loan
Balances of all Loans for which the Servicer is then in possession of the
related Collateral Documents (other than for Loans then held by the Servicer
which have been repurchased, paid off, substituted or liquidated in accordance
with the Loan Servicing Standards) (including the Collateral Documents to be
requested) exceeds 5% of the Aggregate Loan Balances of all Loans then owned by
the Trust. The Servicer may hold, and hereby acknowledges that it shall hold,
any Collateral Documents and all other property included in the Trust Estate
property that it may from time to time receive hereunder as custodian for the
Indenture Trustee solely at the will of the Custodian and the Indenture Trustee
for the sole purpose of facilitating the servicing of the Loans and such
retention and possession shall be in a custodial capacity only. To the extent
the Servicer, as agent of the Indenture Trustee and the Issuer, holds any Trust
Estate property, the Servicer shall do so in accordance with the Loan Servicing
Standards as such standard applies to servicers acting as custodial agent. The
Servicer shall promptly report to the Custodian and the Indenture Trustee the
loss by it of all or part of any Collateral Documents previously provided to it
by the Custodian and shall promptly take appropriate action to remedy any such
loss. In such custodial capacity, the Servicer shall have and perform the
following powers and duties:

(i) hold the Loan Files and Collateral Documents that it may from time to time
receive hereunder from the Indenture Trustee for the benefit of the Indenture
Trustee, maintain accurate records pertaining to each Loan to enable it to
comply with the terms and conditions of the Indenture and this Agreement, and
maintain a current inventory thereof;

(ii) implement policies and procedures consistent with the Servicing Standards
(and the Credit and Collection Policies generally) and requirements of the
Custodial Agreement so that the integrity and physical possession of such Loan
Files and Collateral Documents will be maintained; and

(iii) take all other actions, in accordance with the Servicing Standards (and
the Credit and Collection Policies generally), in connection with maintaining
custody of such Loan Files and Collateral Documents on behalf of the Indenture
Trustee.

 

6

--------------------------------------------------------------------------------

Acting as custodian of the Loan Files pursuant to this Section, the Servicer
agrees that it does not and will not have or assert any beneficial ownership
interest in the Loans, the Loan Files or the Collateral Documents.

The Servicer agrees to maintain the Collateral Documents in its possession that
it may from time to time receive from the Custodian at its office located in
Ripon, Wisconsin or at such other offices of the Servicer as shall from time to
time be identified by prior written notice to the Indenture Trustee and the
Administrative Agent. Notwithstanding the foregoing, the Servicer may
temporarily move individual Loan Files or Receivables Files (or any portion
thereof) or any Collateral Documents without notice as necessary to conduct the
collection and other servicing activities originally set forth in the request
for release in accordance with the Servicing Standards; provided, that the
Servicer shall not move any such Loan Files, Receivables Files or such
Collateral Documents for more than thirty (30) days without obtaining the
written consent of the Indenture Trustee and the Administrative Agent (acting at
the direction of the Required Noteholders), such consent not to be unreasonably
withheld or delayed.

SECTION 2.10 Acceptance and Acknowledgment by Issuer. (a) The Issuer hereby
accepts the Second Tier Purchased Assets and declares that the Issuer shall hold
such assets in trust for the benefit of Beneficiaries in accordance with the
Trust Agreement, the Indenture and this Agreement. The Issuer hereby accepts the
appointment of ALS as Servicer.

(b) Transfer of Conveyed Assets. Each of the Transferor, ALS, as the Originator,
and the Servicer understands that the Issuer intends to pledge the Trust Estate
to the Indenture Trustee for the benefit of the Beneficiaries pursuant to the
Indenture. Each of the Transferor, ALS, as the Originator, and the Servicer
agrees that, upon the occurrence of an Event of Default, the Indenture Trustee
may exercise the rights of the Issuer hereunder and shall be entitled to all of
the benefits to which the Issuer is entitled hereunder to the extent provided
for in the Indenture.

SECTION 2.11 Representations and Warranties as to the Loans and Receivables.
Pursuant to Section 2.01(c), the Transferor assigned to the Issuer all of its
right, title and interest in, to and under the Purchase Agreement, including the
representations and warranties of ALS made to the Transferor pursuant to
Section 3.1 of the Purchase Agreement. Each of the Originator and the Transferor
hereby represents, warrants and covenants to the Issuer that it has taken no
action, and will take no action, which would cause such representations,
warranties and covenants to be false in any material respect as of the Closing
Date, Purchase Date or Substitution Date, as applicable. Each of the Originator
and the Transferor further acknowledges that the Issuer, the Indenture Trustee
and the Beneficiaries rely on, and for their benefit, the Transferor hereby
reaffirms, the representations, warranties and covenants of the Transferor under
this Agreement and the Originator hereby reaffirms the representations,
warranties and covenants of ALS under the Purchase Agreement, in accepting the
Loans and Receivables in trust and executing and delivering the Securities. The
foregoing representations and warranties are made as of the Closing Date,
Purchase Date or Substitution Date but shall survive the sale, transfer and
assignment of the Loans, the Receivables and the other Second Tier Purchased
Assets to the Issuer and the pledge thereof to the Indenture Trustee pursuant to
the Indenture, until the Indenture is terminated in accordance with its terms;
provided that to the extent such representations and warranties relate to the
Receivables and the Related Assets with respect thereto, such representations
and warranties shall survive only until the Receivables Payoff Date.

 

7

--------------------------------------------------------------------------------

SECTION 2.12 Payments in Respect of Receivables and Repurchases of Loans. Upon
discovery by the Transferor, the Administrative Agent, the Servicer, the Issuer
or the Indenture Trustee of a breach of any of the representations and
warranties made with respect to any Conveyed Assets that were identified as
Eligible Receivables and/or Eligible Equipment Loans on the relevant Funding
Date Data Pool Report in:

(x) Section 3.01 of the Purchase Agreement (irrespective of any limitation set
forth in the Purchase Agreement regarding knowledge of the Originator); or

(y) Section 2.11 or clauses (i), (ii) or (iii) of Section 7.01(b) of this
Agreement; or

(z) Section 7.01(a), Section 7.01(b) (other than clauses (i), (ii) and (iii) of
Section 7.01(b)) or Section 7.01(c) of this Agreement which breach materially
and adversely affects the interests of the Beneficiaries in, or collectability
of, the affected Loan or Receivable, as the case may be;

the party discovering such breach shall give prompt written notice thereof to
the others.

Unless such breach shall have been waived in writing by the Administrative Agent
(at the direction of the Required Noteholders) or cured in all material respects
(whether by remedying the affected Loan or Receivable or by the Transferor’s
acquiring and conveying to the Issuer additional Eligible Receivables or
Eligible Equipment Loans, as the case may be), then the Transferor (in the event
of a breach of the representations and warranties made by the Transferor and not
by the Originator) or the Originator (in the event of a breach of representation
and warranty of the Originator and not the Transferor), shall:

(i) in the case of a non-conforming Receivable, on the Receivables Conversion
Date (and on each Business Day after the Receivables Conversion Date, with
respect to events or conditions that occur or exist (or are discovered) after
the Receivables Conversion Date) pay the Receivables Credit Amount, if any, as
described and defined in Section 2.12(c) of the Purchase Agreement; and

(ii) in the case of a non-conforming Loan, unless the Transferor shall have
provided a Substitute Loan as provided in Section 2.13, repurchase such Loan
from the Issuer for a price equal to the Warranty Payment by not later than the
Distribution Date following the second Accounting Date after the receipt of
notice of such breach.

The Owner Trustee shall have no affirmative duty to conduct any investigation as
to the occurrence of any event requiring the repurchase of any non-conforming
Loan or the payment in respect of any non-conforming Receivable pursuant to this
Section 2.12.

It is understood and agreed that the obligation of the Warranty Purchaser to
repurchase any Loan or make such payment in respect of a Receivable as to which
a breach has occurred and is continuing shall, if such payment or repurchase
obligations are fulfilled, constitute the sole remedy against the Transferor,
the Servicer or ALS for such breach available to any Interested

 

8

--------------------------------------------------------------------------------

Party. The Servicer acknowledges its obligations to repurchase Administrative
Loans from the Issuer pursuant to Section 3.08 and ALS, in its capacity as the
seller under the Purchase Agreement, acknowledges its obligations to repurchase
Warranty Loans pursuant to Section 2.12 of the Purchase Agreement.

SECTION 2.13 Substitution of Loans.

(a) Provided no Rapid Amortization Event or Event of Default has occurred and is
continuing, the Transferor may, at its option, transfer to the Issuer on or
prior to the eighth day of a month, pursuant to an assignment, substantially in
the form attached hereto as Exhibit A-3 (each, a “Substitution Assignment”) one
or more Eligible Equipment Loans (each, a “Substitute Loan”) for any Loan that
became subject to a Warranty Event (each such replaced Loan, a “Predecessor
Loan”), together with all right, title and interest of the Transferor in, to and
under:

(i) all documents and instruments evidencing or governing the Substitute Loans
and all Loan Files relating thereto, identified in the schedule to the
Substitution Assignment and all monies paid or payable thereon (including
Liquidation Proceeds) on or after or due and payable, but in each case not paid,
as of the Substitution Cutoff Date;

(ii) the Equipment, including all security interests therein, granted by
Obligors pursuant to such Substitute Loans and any other collateral securing
such Substitute Loans;

(iii) any Insurance Policies, and Proceeds thereof, and rights and benefits
thereunder, with respect to such Equipment and any other collateral securing
such Substitute Loans;

(iv) with respect to such Substitute Loans, any Guaranties, and Proceeds
thereof, and all rights and benefits thereunder;

(v) all funds on deposit from time to time in the Loan Lockbox or in the Loan
Lockbox Account with respect to such Substitute Loans and all Proceeds thereof;

(vi) the Purchase Agreement, and the other Basic Documents (other than the Trust
Agreement, the Trust Certificate, the Certificates and the documents and
certificates executed in connection with the foregoing) relating to such Loan,
including the right of the Transferor to cause ALS to perform its obligations
thereunder (including the obligation to repurchase such Loans under certain
circumstances); and

(vii) any Proceeds of the property described in clauses (i) through (vi) above.

The sum of the Loan Balances, measured as of the Substitution Cutoff Date, of
the Substitute Loans to be transferred to the Issuer on any Substitution Date
shall not be less than the sum of the Loan Balances, or more than 110%, of the
sum of the Loan Balance of the Predecessor Loans, in each case measured as of
the Substitution Cutoff Date. Any such Substitute Loan shall also bear interest
at the same or higher rate of interest as the Predecessor Loan and shall also
have a final maturity date that is not later than six months prior to the Final
Scheduled Distribution Date.

 

9

--------------------------------------------------------------------------------

(b) Each Substitute Loan shall be an Eligible Equipment Loan as of the close of
business on the last day of the month preceding the Substitution Date (the
“Substitution Cutoff Date”), and no Substitute Loan shall have previously been a
Substitute Loan. Loans may not be substituted for Warranty Loans if and to the
extent (i) from the Closing Date, the sum of the Loan Balances (measured as of
the related Substitution Cutoff Date) of all Substitute Loans (including the
Eligible Equipment Loans to be substituted on such date) exceeds an amount equal
to 5% of the sum of the Loan Balances of all Loans transferred by the Transferor
to the Trust on or after the Closing Date, or (ii) after giving effect to the
addition of the Substitute Loans to be added on such date, the Equipment Loan
Borrowing Base would be less than the Aggregate Equipment Loan Note Principal
Balance.

(c) Upon the replacement of a Loan and collateral as described above, the
interest of the Trustees and the Noteholders in such Predecessor Loan and
related collateral shall be terminated and such Predecessor Loan and collateral
shall be released to the Transferor.

(d) Any substitution of a Loan pursuant to this Agreement shall be effected by
(i) delivery to the Custodian on behalf of the Indenture Trustee of the
Collateral Documents for each such Substitute Loan on or prior to the related
Substitution Date in accordance with Section 2.03, (ii) filing of any UCC
financing statements necessary to perfect the interest of the Indenture Trustee
in the Substitute Loans, (iii) delivery to the Indenture Trustee of a list of
Substitute Loans reflecting such substitution, and (iv) execution of and
delivery of the related Assignments.

ARTICLE III

GENERAL ADMINISTRATION; ADMINISTRATION AND SERVICING OF LOANS

SECTION 3.01 Duties of the Servicer regarding Loans. ALS is hereby appointed as
the initial Servicer. The Servicer is hereby appointed and authorized to act as
agent for the Owner of the Loans and in such capacity shall manage, service,
administer and make Collections on the Loans with reasonable care, using no less
than that degree of skill and attention that the Servicer exercises with respect
to comparable stand-alone commercial laundry equipment loans that it services
for itself or others and consistent with the Loan Credit and Collection Policy
(collectively, the “Loan Servicing Standards”). ALS hereby accepts such
appointment and authorization and agrees to perform the duties of Servicer with
respect to the Loans set forth herein. The Servicer’s duties shall include, but
not be limited to, collection and posting of all payments, responding to
inquiries of Obligors on the Loans, investigating delinquencies, sending payment
statements to Obligors, upon the request of an Obligor reporting tax information
to such Obligors (which currently consists of IRS Form 1098), monitoring the
collateral in accordance with the Loan Servicing Standards, accounting for
Collections and furnishing monthly and annual statements to the Owner of any
Loans with respect to distributions, maintaining the first priority perfected
security interest of the Indenture Trustee in the Trust Estate (other than
Exempt Collateral) for the benefit of the Beneficiaries and filing any financing
and continuation statements required to be filed pursuant to the UCC, including
filings against ALS, the

 

10

--------------------------------------------------------------------------------

Transferor and Alliance Laundry Equipment Receivables 2005 LLC, respectively, to
perfect the transfers pursuant to the Purchase Agreement, this Agreement and any
document pursuant to which ALS acquired such assets from the Transferor and
Alliance Laundry Equipment Receivables 2005 LLC, continuation statements shall
be filed on or before the 60th day prior to the expiration date of such
financing statement; and promptly delivering evidence of all such filings to the
Indenture Trustee and the Administrative Agent which evidence shall be
satisfactory in form and substance to the Administrative Agent with evidence of
the filing of continuation statements being delivered on or before the 30th day
before the expiration of such financing statements, and performing the other
duties specified herein. Subject to the provisions of Section 3.02, the Servicer
shall follow the Loan Servicing Standards and shall have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable.

Without limiting the generality of the foregoing, the Servicer is hereby
authorized and empowered by the Owner of the Loans, pursuant to this
Section 3.01 to execute and deliver, on behalf of all Interested Parties, or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Loans and the related collateral but solely to the extent such release or
discharge is expressly permitted pursuant to the terms of the Basic Documents.
The Servicer is hereby authorized to commence in the name of the Owner of such
Loan or, to the extent necessary, in its own name, a legal proceeding to enforce
a Defaulted Equipment Loan as contemplated by Section 3.04, to enforce all
obligations of ALS and ALER, in its capacity as the Transferor or otherwise,
under each of the Purchase Agreement and the Pooling and Servicing Agreement or
to commence or participate in a legal proceeding (including a bankruptcy
proceeding) relating to or involving a Loan or a Defaulted Equipment Loan. If
the Servicer commences or participates in such a legal proceeding in its own
name (which any successor Servicer shall not be permitted to do, it being
understood that in no event will any successor Servicer take any action
hereunder in its own name, including setting up accounts or directing Obligors
to make payments to it or in its name), the Owner of such Loan shall thereupon
be deemed to have automatically assigned such Loan to the Servicer solely for
purposes of commencing or participating in any such proceeding as a party or
claimant, the Servicer is hereby authorized and empowered by the Owner of a Loan
to execute and deliver in the Servicer’s name any notices, demands, claims,
complaints, responses, affidavits, all instruments of satisfaction or
cancellation, or of partial or full release or discharge or other documents or
instruments in connection with any such proceeding. Any Owner of Loans, upon the
written request of the initial Servicer, shall furnish the Servicer with any
powers of attorney and other documents and take any other steps which the
Servicer may deem necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties under this Agreement. Except to the
extent required by the preceding two sentences, the authority and rights granted
to the Servicer in this Section 3.01 shall be nonexclusive and shall not be
construed to be in derogation of the retention by the Owner of a Loan of
equivalent authority and rights. If in any proceeding it is held that the
Servicer may not enforce a Loan on the grounds that it is not a real party in
interest or a holder entitled to enforce the Loan, the applicable Trustee shall,
at the Servicer’s specific written direction and expense, take such steps as
shall be reasonably required to enforce the Loan, including bringing suit in the
name of such Person.

 

11

--------------------------------------------------------------------------------

SECTION 3.02 Collection of Loan Payments. The Servicer shall make reasonable
efforts to collect all payments called for under the terms and provisions of the
Loans as and when the same shall become due, and shall follow the Loan Servicing
Standards. Notwithstanding anything in this Agreement to the contrary, neither
the Indenture Trustee nor the Servicer shall release the Equipment or other
collateral securing a Loan from the lien of the Indenture unless the outstanding
Loan Balance, if any, of such Loan has been deposited into the Equipment
Collection Account, except (x) upon substitution of Substitute Loans,
(y) substitution of equivalent Equipment or other collateral (such substitution
shall not reduce the Obligor’s payment obligations under such Loan) or (z) the
foreclosure and sale of collateral or final settlement or compromise of a
Defaulted Equipment Loan in which case the Proceeds of such foreclosure, sale,
or final settlement or compromise shall be deposited into the Collection Account
as required under the Basic Documents. Subject to the limitations in
Section 3.07(c), the Servicer is hereby authorized, in a manner consistent with
the Credit and Collection Policy, to (i) grant extensions, rebates or
adjustments on a Loan without the prior consent of the Owner, the Administrative
Agent or the Noteholders, and (ii) consent to the assignment or assumption,
including the release of the existing Obligor in connection therewith, without
the prior consent of the Owner, the Administrative Agent or the Noteholders,
provided that (x) after giving effect to such extension, rebate or adjustment,
the Equipment Loan Borrowing Base would not be less than the then Aggregate
Equipment Loan Note Principal Balance, (y) with respect to any such assignment
or assumption (other than the assignment or assumption of a Defaulted Equipment
Loan) after giving effect to such assignment or assumption, the new Obligor and
Eligible Loan would satisfy all of the criteria set forth in the definition of
Eligible Equipment Loan applicable to Obligors and (z) such Loan, after any such
extension, rebate or adjustment, meets the definition of an Eligible Equipment
Loan; provided, further, that subject to preceding clauses (x), (y) and (z) and
Section 3.07(c), any successor Servicer (other than an Affiliate of ALS) shall
be authorized to grant extensions, rebates or adjustments without the consent of
the Administrative Agent or the Noteholders only to the extent it determines
that such action is reasonably likely to prevent a payment event of default by
the Obligor. The Servicer is authorized in its discretion to waive any
prepayment charge, late payment charge or any other fees that may be collected
in the ordinary course of servicing such Loan; provided, however, that once the
Servicer waives such fees, then such fee cannot be collected from the Designated
Accounts, the Loan Lockbox Account or any other source. To the extent provided
for in any Loan, the Servicer shall make reasonable efforts to collect all
payments with respect to amounts due for maintenance, taxes or assessments on
the Equipment or the Loans and shall remit such amounts to the appropriate
maintenance provider or Governmental Authority on or prior to the date such
payments are due.

SECTION 3.03 Prepayments. The Servicer may accept the prepayment in part or in
full of a Loan; provided, that in the event of Full Prepayment, the Servicer may
consent to such Full Prepayment only if the amount thereof deposited into the
Collection Account in connection with such prepayment is not less than the then
Loan Balance of, and all accrued and unpaid interest on, such Loan and all other
amounts due and payable in connection therewith other than fees and charges that
would otherwise be payable to the Servicer pursuant to Section 8.2(c)(1) or
Section 8.2(d)(1) of the Indenture; and provided further, that in the event of a
Prepayment in part, the outstanding Loan Balance of such Loan is not reduced by
more than the amount of such Prepayment allocable to the payment of principal
pursuant to Section 3.11.

 

12

--------------------------------------------------------------------------------

SECTION 3.04 Realization Upon Defaulted Equipment Loans. The Servicer shall use
reasonable efforts, consistent with the Loan Servicing Standards, to repossess,
remarket or otherwise comparably convert the ownership of each item of Equipment
and other collateral that it has reasonably determined should be repossessed or
otherwise converted following a default under the Loan secured by each such item
of Equipment and other collateral. The Servicer is authorized to follow such
practices, policies and procedures as it shall deem necessary or advisable and
as shall be in accordance with the Loan Servicing Standards to realize upon or
obtain benefits of any Proceeds from any Insurance Policies and Proceeds from
any Guaranties, in each case with respect to the Loans, selling the related
Equipment and other collateral at public or private sale or sales and other
actions by the Servicer in order to realize upon such a Loan. The foregoing is
subject to the provision that, in any case in which the Equipment shall have
suffered damage, the Servicer shall not expend funds in connection with any
repair or towards the repossession of such Equipment unless it shall determine
in its discretion consistent with the Loan Servicing Standards that such repair
and/or repossession shall likely increase the Proceeds of liquidation of the
related Loan by an amount greater than the amount of such expenses. The Servicer
shall be entitled to receive Liquidation Expenses with respect to each Defaulted
Equipment Loan out of amounts that would otherwise comprise Liquidation Proceeds
with respect to the related Loan. The Servicer shall enforce any of the
foregoing rights and remedies described in this Section 3.04 with respect to any
Defaulted Equipment Loans that are cross collateralized by other loan
obligations, in the manner and priority specified in Section 5.1(k) of the
Purchase Agreement. To the extent that an escrow account has been established
by, or on behalf of an Obligor to cover defaults on contracts between such
Obligor and the Originator, amounts in such escrow account shall be applied
against defaults under each such contract in the order that such defaults occur
with respect to any such contract unless otherwise required by law, regulation
or judicial order. The Servicer shall not accelerate any Scheduled Payment
unless permitted to do so by the terms of the Loan or under applicable law.

SECTION 3.05 Maintenance of Insurance Policies. The Servicer shall, except as
specified in clause (q) of the definition of “Eligible Equipment Loan,” require
that each Obligor shall have obtained physical damage insurance covering each
item of Equipment as of the execution of the related Loan. The Servicer shall,
in accordance with the Loan Servicing Standards, monitor such physical damage
insurance with respect to each item of Equipment that secures each Loan. The
Servicer shall remit to the Collection Account within two (2) Business Days of
receipt all Insurance Proceeds received directly by the Servicer with respect to
any Loan or Equipment subject thereto. Additionally, the Servicer shall maintain
a general liability policy in the amount of at least $1,000,000 per occurrence
and at least $2,000,000 in the aggregate, and an excess liability insurance
policy in umbrella form in the aggregate amount of at least $5,000,000. All
premiums due and payable for the term of the period in respect of such policies
have been paid and shall continue to be paid promptly as such premiums become
due. The Indenture Trustee, the Administrative Agent, the Issuer, the Transferor
and the Noteholders shall at all times while the Notes are outstanding be named
as an additional insured or a primary insured on such casualty and liability
policies maintained by the Servicer.

SECTION 3.06 Maintenance of Security Interests in Collateral. The Servicer
shall, in accordance with the Loan Servicing Standards and at its own expense,
take such steps as are necessary to maintain in favor of the Indenture Trustee
perfection of the first priority security interest in the Trust Estate (other
than Exempt Collateral) including filings required because of

 

13

--------------------------------------------------------------------------------

revisions to the UCC. The Owner of each Loan hereby authorizes the Servicer to
re-perfect such first priority security interest as necessary for any reason.
The Servicer shall file such continuation statements and any other documents
reasonably requested by the Indenture Trustee or which may be required by law to
fully preserve and protect the first priority perfected security interest of the
Indenture Trustee on behalf of the Beneficiaries in and to the Trust Estate
other than Exempt Collateral. The Servicer shall use commercially reasonable
efforts to enforce the obligations of the Obligors under the applicable loan
documents to remove any Lien on the Trust Estate of which the Servicer has
actual knowledge or reason to have knowledge pursuant to the performance of its
obligations as Servicer hereunder other than the Lien created pursuant to the
Indenture.

SECTION 3.07 Covenants of the Servicer. The Servicer hereby makes the following
covenants on which the Issuer, the Administrative Agent, the Indenture Trustee
and the Noteholders are relying in connection with the Issuer acquiring the
Loans hereunder and issuing the Securities under the Basic Documents. The
Servicer covenants that from and after the Closing Date:

(a) Liens in Force. Except as expressly provided in this Agreement, the Servicer
shall not release in whole or in part any Lien on any collateral securing any
Loan or any Equipment or other collateral from the security interest securing
such related Loan and shall use reasonable efforts not to permit any Liens to
attach to the Trust Estate except those created under the Indenture.

(b) No Impairment. The Servicer shall not impair the rights of the Issuer or any
Interested Party in and to any Loan and shall take no action with respect to a
Loan which at the time the Servicer reasonably believes would be contrary to the
maximization of the ultimate repayment on such Loan.

(c) No Modifications. The Servicer shall not (i) amend or otherwise modify or
grant rebates or adjustments on any Loan such that (A) the Loan Balance is
decreased, (B) after such amendment, modification, rebate or adjustment, the
Equipment Loan Borrowing Base would be less than the Aggregate Equipment Loan
Note Principal Balance, (C) the Loan no longer meets the definition of Eligible
Equipment Loan or (ii) grant any extension with respect to, or amend, any
Scheduled Payment to extend or delay any payments of principal on any Loan which
modification or amendment would extend the due date for the final Scheduled
Payment on such Loan beyond six (6) months prior to the Final Scheduled
Distribution Date. Except as accounted for under clause (m) of the definition of
“Excess Loan Concentration Amount,” the Servicer shall not amend or otherwise
modify any Loan more than once after its applicable Loan Cutoff Date.

(d) Contract Management System. The Servicer will, at its own cost and expense,
(A) retain the Contract Management System, or an alternative system of equal
capability, used by the Servicer as a master record of the Loans and Receivables
and (B) mark the Contract Management System to the effect that the Loans and
Receivables listed thereon have been conveyed to the Issuer pursuant to this
Agreement and pledged by the Issuer pursuant to the Indenture to the Indenture
Trustee for the benefit of the Beneficiaries.

 

14

--------------------------------------------------------------------------------

The Servicer will maintain accounts and records as to each Loan and Receivable
serviced by the Servicer that are accurate and sufficiently detailed to permit
(i) the reader thereof to know as of the most recent Determination Date the
status of such Loan or Receivable, including payments and recoveries made and
payments owing (and the nature of each), and (ii) reconciliation between
payments or recoveries on (or with respect to) each Loan and Receivable and the
amounts from time to time deposited in the Collection Account in respect of such
Loan or Receivable.

(e) Compliance with Law. The Servicer will comply, in all material respects,
with all acts, rules, regulations, orders, decrees and directions of any
Governmental Authority applicable to the Loans, the Receivables and the
Equipment or any part thereof; provided, however, that the Servicer may contest
any act, regulation, order, decree or direction in any reasonable manner that
shall not materially and adversely affect the rights of the Interested Parties
in the Trust Estate; and provided, further, that such contests shall be in good
faith by appropriate proceedings and shall not subject the Agents or the
Indenture Trustee to any civil or criminal liability or risk of loss of any
collateral.

(f) Obligations with Respect to Loans and Receivables. The Loans and Receivables
shall impose no material obligation on the Originator or any successor or
assignee. Without limiting the foregoing, as more specifically set forth in this
Agreement, in performing its servicing duties hereunder, the Servicer shall, in
accordance with the Servicing Standards, collect all payments required to be
made by the Obligors under the Loans and Receivables and enforce all material
rights of the Issuer under the Loans and Receivables. The Servicer shall not
assign, sell, pledge, or exchange, or in any way encumber or otherwise dispose
of the Equipment or other collateral securing the Loans, except as expressly
permitted under this Agreement and the Indenture.

(g) No Ownership Interest. The Servicer does not have any ownership interest in
the Trust Estate and, except for the purposes of commencing a collection
proceeding against an Obligor as provided in Section 3.01, will not assert any
ownership interest in the Trust Estate.

(h) Collection Policies and Procedures. The Servicer shall not, without the
prior written consent of the Administrative Agent (acting at the direction of
the Special Required Noteholders), amend, modify or otherwise change its Credit
and Collection Policies in any manner unless such amendment, modification or
change (i) applies generally to all contracts, loans or receivables serviced by
the Servicer (and not just to Loans or Receivables in the Trust Estate) and
(ii) would not materially and adversely affect the Trust Estate or the ability
of the Servicer to collect the Loans or Receivables or the minimum required
credit quality of the Loans or Receivables consistent with the underwriting
criteria of ALS in the ordinary course of business. The Servicer shall provide
at least five (5) Business Days’ prior written notice to the Administrative
Agent and the Noteholders of any proposed material change to the Credit and
Collection Policy.

(i) Financial Condition Covenants. For so long as any payments of principal or
interest remain outstanding on the Notes or any other amounts are owed to any
Beneficiary, the Issuer or the Indenture Trustee under the Basic Documents, the
Servicer shall, so long as ALS, any Affiliate thereof or any successor thereto
pursuant to Section 8.02 is the Servicer, maintain

 

15

--------------------------------------------------------------------------------

the following financial ratios (the “Financial Condition Covenants”) as
specified in this Section 3.07. If the Credit Agreement is in full force and
effect, the Servicer shall not permit the Consolidated Leverage Ratio as at the
last day of any period of four consecutive fiscal quarters of the Servicer
ending with any fiscal quarter set forth below to exceed the ratio set forth
below opposite such fiscal quarter under the column entitled “Consolidated
Leverage Ratio”:

 

Fiscal Period

   Consolidated
Leverage
Ratio

June 30, 2009

   4.50 to 1.00

September 30, 2009

   4.50 to 1.00

December 31, 2009

   4.25 to 1.00

March 31, 2010

   4.25 to 1.00

June 30, 2010

   4.25 to 1.00

September 30, 2010

   4.25 to 1.00

Each Fiscal Quarter thereafter

   4.00 to 1.00

and;

If the Credit Agreement is in full force and effect, the Servicer shall not
permit the Consolidated Interest Coverage Ratio for any period of four
consecutive fiscal quarters of the Servicer ending with any fiscal quarter set
forth below to be less than the ratio set forth below opposite such fiscal
quarter under the column entitled “Consolidated Interest Coverage Ratio”:

 

Fiscal Period

   Consolidated Interest
Coverage Ratio

June 30, 2009

   2.25 to 1.00

September 30, 2009

   2.25 to 1.00

December 31, 2009

   2.50 to 1.00

March 31, 2010

   2.50 to 1.00

June 30, 2010

   2.50 to 1.00

September 30, 2010

   2.50 to 1.00

Each Fiscal Quarter thereafter

   2.75 to 1.00

In the event the Credit Agreement is replaced, the Servicer shall maintain
(i) Consolidated Leverage Ratios not more than, and (ii) Consolidated Interest
Coverage Ratios no less than, in each case, the corresponding ratios set forth
in such replacement facility (as amended), based on the same definitions used to
calculate such ratios as are set forth in such replacement facility (as
amended). If, at any time, the Servicer has not entered into such a replacement
facility or such replacement facility does not contain corresponding ratios, the
Servicer shall maintain the above Consolidated Leverage Ratios and the above
Consolidated Interest Coverage Ratios required as if the Credit Agreement
remained in full force and effect.

 

16

--------------------------------------------------------------------------------

(j) Final Distribution Date. The Servicer shall not amend, modify or otherwise
extend the final Distribution Date in respect of the Equipment Loans beyond the
date which is the ninth (9th) anniversary of the Loan Conversion Date.

SECTION 3.08 Servicer’s Purchase of Loans or Payments in Respect of Receivables
Upon Breach of Covenant. (a) Upon discovery by any of the Administrative Agent,
the Issuer, the Transferor, the Servicer or any party under the Transfer and
Servicing Agreements of a breach of any of the covenants set forth in
Section 3.06 or Section 3.07(a), (b) or (c), the party discovering such breach
shall give prompt written notice thereof to the other Persons set forth above.
Unless such breach shall have been waived by the Administrative Agent (acting at
the direction of the Required Noteholders) or cured in all material respects,
the Servicer shall purchase from the Owner thereof any Loan affected by such
breach by depositing the Administrative Purchase Payment in the Loan Collection
Account by not later than the Determination Date immediately following the
second Accounting Date after receipt of notice of such breach. It is understood
and agreed that the obligation of the Servicer to purchase any Loan with respect
to which such a breach has occurred and is continuing shall, if such obligation
is fulfilled, constitute the sole remedy against the Servicer for such breach
available to the Transferor or any Interested Party so long as the cumulative
sum of the then Principal Balance of all Loans shall not exceed 4% of the sum of
the Loan Balances of all Loans sold to the Trust on or after the Closing Date.
Should the Servicer’s cumulative repurchases exceed the 4% threshold described
in the foregoing sentence, then the Transferor or any Interested Party shall be
entitled to exercise any rights to which they are entitled pursuant to
Section 9.02. Each of the Owner Trustee and the Indenture Trustee shall have no
affirmative duty to conduct any investigation as to the occurrence of any event
requiring the repurchase of any Loan pursuant to this Section 3.08.

(b) If on any Business Day, either of the following conditions shall apply:

(A) the Servicer shall have breached its covenants set forth in Section 4.03(a)
(no impairment) with respect to any Receivable that was an Eligible Receivable
on the Purchase Date on which it was transferred by the Originator to the
Transferor; or

(B) the Servicer shall have breached its covenants set forth in Section 4.03(b)
(limited modifications) with respect to any Receivable that was an Eligible
Receivable on the Purchase Date on which it was transferred by the Originator to
the Transferor;

then, in either such instance, the Issuer shall be entitled to a credit (such
credit, a “Servicer Modification Credit”) in an amount equal to (i) in the case
of clause (A) above, the Unpaid Balance on such Business Day of such
non-conforming Receivable, and (ii) in the case of clause (B) above, the full
amount of such reduction, setoff or cancellation in the Unpaid Balance of such
Receivable (the applicable amount set forth in clause (i) or (ii), the “Servicer
Modification Credit Amount”). On each Purchase Date with respect to Receivables
and for so long as the Servicer is the sole owner of the Transferor, the
Servicer Modification Credit Amount, if any, shall be reduced by the amount of
the capital contributions made pursuant to Section 2.12(a)(ii) of the Purchase
Agreement and not previously applied to the Servicer Modification Credit

 

17

--------------------------------------------------------------------------------

Amounts. The Servicer may, at its option, at any time prior to the Receivables
Conversion Date elect to remedy the events described in clause (A) or (B) above
by remitting to the Issuer cash in an amount equal to the unpaid Servicer
Modification Credit Amount.

Notwithstanding the foregoing, the Servicer shall remit to the Issuer: (x) on
the Receivables Conversion Date, cash in an amount equal to the sum of all then
unpaid Servicer Modification Credit Amounts calculated as of the Receivables
Conversion Date and (y) on each Business Day after the Receivables Conversion
Date, cash in an amount equal to all unpaid Servicer Modification Credit Amounts
that result from events or conditions that occur or exist (or are discovered)
subsequent to the Receivables Conversion Date and with respect to which payment
has not already been made pursuant to this sentence.

SECTION 3.09 Servicing Fees; Payment of Certain Expenses by Servicer. The
Servicer is entitled to receive the Servicing Fee out of Collections (to the
extent not waived by the Servicer) in respect of the Trust Estate as provided in
Section 8.2 of the Indenture. Subject to any limitations on the Servicer’s
liability hereunder or as otherwise specifically provided herein, the Servicer
shall be required to pay from its own funds all expenses incurred by it in
connection with its activities under this Agreement (including fees and
disbursements of the Issuer, any trustees and independent accountants, taxes
imposed on the Servicer, expenses incurred in connection with distributions and
reports to the Beneficiaries and the Registered Owners, the fees of the
Indenture Trustee, the Backup Servicer, the Custodian and the Lockbox Bank, and
all other fees and expenses not expressly stated under this Agreement to be for
the account of the Beneficiaries and the Registered Owners, but excluding
federal, state and local income and franchise taxes, if any, of the Issuer, the
Beneficiaries and the Registered Owners). Notwithstanding any of the foregoing,
unless the Servicer has caused such loss through its gross negligence, willful
misconduct or bad faith, the Issuer shall reimburse the Servicer for any amounts
paid by the Servicer to a Lockbox Bank, the Custodian or the Backup Servicer (in
its capacity as such) as a result of an indemnity owed to either such party by
the Servicer pursuant to a Lockbox Agreement, the Custodial Agreement or the
Backup Servicing Agreement, as applicable; provided that the Issuer shall be
required to pay such reimbursement only to the extent that funds are released to
the Issuer in accordance with the priority of payments in Section 8.2 of the
Indenture.

SECTION 3.10 Servicer’s Certificate. Not later than 11:00 a.m. (New York City
time) on each Determination Date, the Servicer shall deliver to the Issuer, the
Indenture Trustee, the initial Noteholders, the Administrative Agent and the
Rating Agencies a Servicer’s Certificate substantially in the form of Exhibit D
with respect to the immediately preceding Monthly Period executed by the
President or any of the Director, Financial Services, the Vice President/Chief
Financial Officer or the Treasurer of the initial Servicer or by an appropriate
officer of any successor Servicer (or, if such Servicer’s Certificate is
delivered electronically, such Servicer’s Certificate shall be deemed for all
purposes to have been certified by the Chief Financial Officer or similar
officer), containing all information necessary to each such party for making the
calculations, withdrawals, deposits, transfers and distributions required by
Section 5.06 of this Agreement and Section 8.2 of the Indenture, all information
required to be provided to Registered Owners, the Administrative Agent and the
Noteholders under Section 5.08(a) and the net amount of Servicer Modification
Credits. Loans to be purchased by the Servicer under Section 3.08 or to be
repurchased by the Transferor or Originator under Section 2.12 or by ALS

 

18

--------------------------------------------------------------------------------

under the Purchase Agreement as of the last day of any Monthly Period shall be
identified by Loan number (as set forth in the Schedule of Loans). With respect
to any Loans for which the Transferor, the Originator or ALS becomes the Owner,
the Servicer shall deliver to the Transferor, the Originator or ALS such
accountings relating to such Loans and the actions of the Servicer with respect
thereto as the Transferor, the Originator or ALS may reasonably request and at
the expense of the requesting party.

SECTION 3.11 Application of Collections. For the purposes of this Agreement, as
of each Accounting Date, all payments by, or on behalf of, an Obligor received
during a Monthly Period with respect to a Loan shall be applied by the Servicer
(i) first, to any unpaid Scheduled Payment for any prior Monthly Period with
respect to such Loan, (ii) second, to the Scheduled Payment for such Monthly
Period with respect to such Loan, (iii) third, to the payment of any late fees,
rewrite charges, and other related fees with respect to such Loan and
(iv) fourth, the remainder shall constitute, with respect to such Loan, a
Prepayment of principal of the Loan.

SECTION 3.12 Power of Attorney. The Servicer (other than a successor Servicer)
and the Originator each irrevocably constitute and appoint the Indenture
Trustee, with full power of substitution, as their true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Servicer or the Originator, as applicable, and in the name of the
Servicer or the Originator, as applicable, or in its own name, for purposes of
taking any and all appropriate action and executing any and all documents and
instruments which may be necessary to accomplish either of the following:

(a) so long as an Event of Default, Rapid Amortization Event or Servicer Default
has occurred and is continuing, at any time, for the purpose of carrying out the
terms of this Agreement in the name of the Servicer or its own name, or
otherwise, to take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instrument, general intangible or contract or with
respect to any other collateral and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Indenture Trustee or the Administrative Agent for the purpose
of collecting any and all such monies due under any account, instrument, general
intangible or contract with respect to the Trust Estate; and

(b) whether or not an Event of Default, Rapid Amortization Event or Servicer
Default has occurred or is continuing, execute and deliver any and all
agreements, instruments, documents and papers (including UCC financing
statements) as the Indenture Trustee or the Administrative Agent may reasonably
request to perfect the Indenture Trustee’s security interest in the Trust Estate
(other than Exempt Collateral).

SECTION 3.13 Backup Servicer. The Servicer shall retain a backup servicer (the
“Backup Servicer”) designated by the Required Noteholders, which is reasonably
acceptable to the Servicer to be the Backup Servicer for the Equipment Loans and
Receivables, who will agree to perform the services as may be agreed upon by the
parties to the Backup Servicing Agreement pursuant to terms and conditions
acceptable to the Required Noteholders; provided that for any backup servicer
that is appointed other than Lyon, the Servicer shall retain a backup servicer
designated by the Special Required Noteholders, which is reasonably acceptable
to the Servicer to be the Backup Servicer for the Equipment Loans and
Receivables, who will agree to perform the services as may be agreed upon by the
parties to the Backup Servicing Agreement pursuant

 

19

--------------------------------------------------------------------------------

to the terms and conditions acceptable to the Special Required Noteholders. The
initial Backup Servicer shall be Lyon and the Required Noteholders hereby agree
that the terms and conditions of the Backup Servicing Agreement entered into on
the date hereof with Lyon is acceptable. The Servicer shall on or prior to the
time set forth in the Backup Servicing Agreement send such Backup Servicer the
information required to be provided pursuant to the Backup Servicing Agreement.
The fees and expenses of the Backup Servicer shall be paid by the Servicer from
the Servicing Fee. To the extent the obligations of the Backup Servicer as
Servicer under this Agreement shall be expressly modified pursuant to the
provisions of its Backup Servicing Agreement, such provisions shall modify the
obligations of the Backup Servicer as Servicer under this Agreement.

SECTION 3.14 Schedule of Loans. Servicer shall maintain the Schedule of Loans,
showing all Loans owned by the Issuer and whether those Loans are Eligible
Equipment Loans.

ARTICLE IV

ADMINISTRATION AND SERVICING OF RECEIVABLES

SECTION 4.01 Designation of the Servicer. The servicing, administering and
collection of the Receivables shall be conducted by the Person designated as the
Servicer hereunder from time to time in accordance with this section. ALS is
designated (and agrees to act) as the initial Servicer.

SECTION 4.02 Duties of the Servicer and Transferor.

(a) Duties of the Servicer in General. The Servicer shall service the
Receivables and, subject to the terms and provisions of this Agreement, shall
have full power and authority, acting alone or through any sub-servicer
permitted hereunder, to do any and all things in connection with such servicing
that it may deem necessary or appropriate. The Indenture Trustee shall execute
and deliver to the Servicer any instruments or documents that are prepared by
the Servicer and stated in an Officer’s Certificate to be, and shall furnish the
Servicer with any documents in its possession, necessary or appropriate to
enable the Servicer to carry out its servicing duties. The Servicer shall
manage, service, administer and make Collections on the Receivables with
reasonable care, using no less than that degree of skill and attention that the
Servicer would exercise and apply if it owned such Receivables and consistent
with the Receivables Credit and Collection Policy (collectively the “Receivables
Servicing Standards”).

The Servicer shall take all such actions as the Servicer deems necessary or
appropriate to collect each Receivable, all in accordance with applicable law
and the Receivables Credit and Collection Policy.

Without limiting the generality of the foregoing and subject to the preceding
paragraph and Article VIII, the Servicer or its designee is hereby authorized
and empowered, unless such power and authority is revoked by the Indenture
Trustee on account of the occurrence of a Servicer Default, (i) to instruct
Indenture Trustee to make withdrawals and payments from the Designated Accounts
as set forth in this Agreement, (ii) to execute and deliver, on behalf of the
Issuer for the benefit of the Beneficiaries, any and all instruments of
satisfaction or cancellation,

 

20

--------------------------------------------------------------------------------

or of partial or full release or discharge, and all other comparable
instruments, with respect to the Receivables, (iii) to make any filings,
reports, notices, applications and registrations with, and to seek any consents
or authorizations from, the Securities and Exchange Commission, the Ontario
Securities Commission and any state securities authority on behalf of the Issuer
as may be necessary or appropriate to comply with any federal or state
securities laws or reporting requirements or other laws or regulations, and
(iv) to the extent permitted under, and in compliance with, the Receivables
Credit and Collection Policy and all Applicable Law, to commence or settle
collection proceedings with respect to the Receivables and otherwise to enforce
the rights and interests of the Trust and the Registered Owners and the
Beneficiaries in, to and under the Receivables. If in any proceeding it is held
that the Servicer may not enforce a Receivable on the grounds that it is not a
real party in interest or a holder entitled to enforce the Receivable, the
applicable Trustee shall, at the Servicer’s specific written direction and
expense, take such steps as shall be reasonably required to enforce the
Receivable, including bringing suit in the name of such Person.

(b) Identification and Transfer of Collections. The Servicer shall direct the
Lockbox Bank to transfer Collections of Receivables that consist of cash or cash
equivalents to be deposited into the Collection Account pursuant to the terms
and provisions of the Basic Documents.

(c) [Reserved]

(d) Documents and Records. At any time when ALS is not Servicer, ALER, to the
extent that it is entitled to do so under the Purchase Agreement, shall, upon
the request of the then-acting Servicer, cause the applicable Transferor to
deliver to Servicer, and Servicer shall hold in trust for ALER and Indenture
Trustee in accordance with their respective interests, all records that evidence
or relate to the Receivables originated by such Transferor and the contracts
related to the Receivables, or that are otherwise necessary or desirable to
collect the Receivables of the applicable Transferor, and Servicer shall make
the same available to the Indenture Trustee at one or more places selected by
Trustee or its designee.

(e) Identification of Eligible Receivables. The initial Servicer will include in
each Servicer’s Certificate and Borrowing Base Certificate information that
shows whether, and to what extent, the Receivables described in such Servicer’s
Certificate and Borrowing Base Certificate, as the case may be, are Eligible
Receivables.

(f) Authorization to Act as Issuer’s Agent. Without limiting the generality of
subsection (a), with respect to the Receivables, the Issuer hereby appoints the
Servicer as its agent for the following purposes: (i) specifying deposit
accounts to which payments to the Issuer are to be made, (ii) making transfers
among, and deposits to and withdrawals from, all deposit accounts of the Issuer
for the purposes described in the Basic Documents, and (iii) arranging payment
by the Issuer of all fees, expenses and other amounts payable by the Issuer
pursuant to the Basic Documents. The Issuer irrevocably agrees that (i) it shall
be bound by all actions taken by the Servicer pursuant to the preceding
sentence, and (ii) Indenture Trustee and the banks holding all deposit accounts
of the Issuer are entitled to accept submissions, determinations, selections,
specifications, transfers, deposits and withdrawal requests, and payments from
the Servicer on behalf of the Issuer.

 

21

--------------------------------------------------------------------------------

(g) Schedule of Receivables. Servicer shall maintain the Schedule of
Receivables, showing all Receivables owned by the Issuer and whether those
Receivables are Eligible Receivables.

SECTION 4.03 Covenants of the Servicer. The Servicer hereby makes the following
covenants on which the Issuer, the Administrative Agent, the Indenture Trustee
and the Noteholders are relying in connection with the Issuer acquiring the
Receivables hereunder and issuing the Securities under the Basic Documents. The
Servicer covenants that from and after the Closing Date:

(a) No Impairment. The Servicer shall not impair the rights of the Issuer or any
Interested Party in and to any Receivable and shall take no action with respect
to a Receivable which at the time the Servicer reasonably believes would be
contrary to the maximization of the ultimate payment of such Receivable.

(b) Limited Modifications. Except (i) on account of Dilution or (ii) as is
accounted for pursuant to clause (m) of the term “Excess Receivables
Concentration Amount,” the Servicer shall not amend, modify or waive the terms
of any Receivable.

SECTION 4.04 Application of Collections. For the purposes of this Agreement, as
of each Accounting Date, unless the Obligor shall have otherwise specified
pursuant to specific instructions, all payments received from, or on behalf of,
an Obligor during a Monthly Period with respect to a Receivable shall be applied
by the Servicer (i) first, to any unpaid payment for any prior Monthly Period
with respect to such Receivable, (ii) second, to the current payment for such
Monthly Period with respect to such Receivable and (iii) third, to the payment
of any late fees, and other related fees with respect to such Receivable.

ARTICLE V

SERVICER’S COVENANTS; DISTRIBUTIONS;

STATEMENTS TO BENEFICIARIES

SECTION 5.01 Annual Statement as to Compliance: Notice of Servicer Default.

(a) The Servicer shall deliver to each Trustee and the Administrative Agent
(with a copy to the Noteholders), on or before April 15 of each year, beginning
April 15, 2010, an officer’s certificate signed by an Executive Officer of the
initial Servicer (or by an appropriate officer of any successor Servicer), dated
as of the immediately preceding December 31, stating that (i) a review of the
activities of the Servicer during the preceding twelve (12) month period (or,
with respect to the first such certificate, such period as shall have elapsed
from the Closing Date to December 31, 2009) and of its performance under this
Agreement has been made under such officer’s supervision and (ii) to the best of
such officer’s knowledge, based on such review, the Servicer has fulfilled its
obligations under this Agreement in all material respects throughout such
period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof. A copy of such certificate may be obtained by any Noteholder
or any Registered Owner by a request in writing to the Issuer addressed to the
Corporate Trust Office of the Indenture Trustee or the Owner Trustee,
respectively.

 

22

--------------------------------------------------------------------------------

(b) The Servicer shall deliver to each Trustee, the Administrative Agent and the
Rating Agencies (with a copy to the Noteholders), promptly after having obtained
knowledge thereof, but in no event later than (2) two Business Days thereafter,
written notice in an officer’s certificate signed by an Executive Officer of the
Servicer of any Servicer Default or event which with the giving of notice or
lapse of time, or both, would become a Servicer Default under Section 9.01. Such
notice shall describe the nature and period of existence of such event and the
action, if any, the Servicer is taking or proposes to take with respect thereto.

SECTION 5.02 Annual Independent Accountants’ Report.

(a) The Servicer shall, at its own expense, cause a firm of independent
accountants, who may also render other services to the Servicer or the
Transferor, to deliver to each Trustee, the Administrative Agent and the Rating
Agencies (with a copy to the Noteholders), on or before April 15 of each year,
beginning April 15, 2010, with respect to the twelve (12) months ended on the
immediately preceding December 31 (or, with respect to the first such report,
such period as shall have elapsed from the Closing Date to December 31, 2009), a
report (the “Accountants’ Report”) addressed to the board of directors of the
Servicer and to each Trustee and the Administrative Agent, to the effect that
such firm has reviewed the Servicer’s performance of its obligations under this
Agreement and issued its report thereon and that (A) such Accountants’ Report
was made in accordance with generally accepted auditing standards, (B) such
Accountants’ Report included tests relating to Loans and the Receivables
serviced for others in accordance with the requirements of the Uniform Single
Audit Program for Mortgage Bankers (the “Program”), to the extent the procedures
in the Program are applicable to the servicing obligations set forth in this
Agreement, (C) such Accountant’s Report included the results of the procedures
set forth on Exhibit G (which procedures, (i) prior to the occurrence of a Rapid
Amortization Event or an Event of Default, shall be subject to the
Administrative Agent’s and each Noteholder’s review and right to expand or
modify such procedures so long as such expansion or modification does not result
in a material increase in accounting cost to ALS, unless ALS shall consent
thereto (such consent not to be unreasonably withheld), and (ii) following the
occurrence of a Rapid Amortization Event or an Event of Default, shall be
subject to the Administrative Agent’s and each Noteholder’s review and right to
expand or modify such procedures as the Administrative and the Noteholders deem
appropriate in their reasonable discretion) and (D) except as described in the
Accountants’ Report, disclosed no exceptions or errors in the records relating
to equipment notes or receivables serviced for others that, in the firm’s
opinion, paragraph four of the Program requires such firm to report.

(b) The Accountants’ Report shall also indicate that the firm is independent of
the Transferor, the Servicer and ALH within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.

 

23

--------------------------------------------------------------------------------

(c) For so long as ALS or any of its Affiliates is the Servicer, Servicer shall
deliver to the Indenture Trustee and the Agents:

(i) as soon as publicly available and in any event by the Reporting Date after
the end of each of the first three (3) quarterly fiscal periods of each fiscal
year of ALH, the unaudited consolidated balance sheet of ALH and its
consolidated Subsidiaries as at the end of such period and the related unaudited
consolidated statement of income and cash flows for ALH and its consolidated
Subsidiaries for such period and the portion of the fiscal year through the end
of such period, accompanied by a certificate of an Authorized Officer of ALH,
which certificate shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations ALH and
its Subsidiaries in accordance with GAAP, consistently applied, as at the end
of, and for, such period (subject to normal fiscal year-end audit adjustments
and the omission of footnotes);

(ii) as soon as publicly available and in any event by the Reporting Date after
the end of each fiscal year of ALH, the consolidated balance sheet of ALH and
its consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statement of income and cash flows for ALH and its consolidated
Subsidiaries for such year, accompanied by an opinion thereon of independent
certified public accountants of recognized national standing which opinion shall
not be qualified as to scope of audit or going concern and shall state that said
consolidated financial statements fairly present the consolidated financial
condition and results of operations of ALH and its consolidated Subsidiaries as
at the end of, and for, such fiscal year in accordance with GAAP; and

(iii) promptly upon transmission or receipt thereof, copies of any filings and
registrations with, and reports to or from, the Securities and Exchange
Commission (or the Ontario Securities Commission, as applicable) or any national
securities exchange, or any successor agency, and copies of all proxy
statements, and material notices, if any, and reports (including compliance
certificates and financial reports) as ALH or any of its Subsidiaries shall send
to its equity holders generally or to a holder of any indenture, note or other
indebtedness owed by ALH or any of its Subsidiaries.

(d) Each of the Servicer and the Transferor will furnish to the Issuer and the
Agents such other information (including non-financial information and
information regarding the financial condition, operations or business of ALH) as
such Persons (or any of their respective assignees) may from time to time
reasonably request. Each of the Servicer and the Transferor will furnish to the
Backup Servicer such other information relating to the Conveyed Assets or the
performance of the Backup Servicer’s obligations under the Basic Documents, as
the Backup Servicer may from time to time reasonably request.

SECTION 5.03 Access to Certain Documentation and Information Regarding Loans and
Receivables.

(a) The Servicer shall provide to the Agents, initial Noteholders (so long as
they are Noteholders), the Issuer, the Indenture Trustee and each of their
respective representatives, attorneys and accountants access (as described
below) to the documentation regarding the Loans and Receivables as described
below. The Servicer shall provide such access to any other Noteholder only in
such cases where a Noteholder is required by applicable statutes or regulations
to review such documentation, and then, if permitted by law, only upon receipt
by it

 

24

--------------------------------------------------------------------------------

of a confidentiality agreement reasonably acceptable to it and such Noteholder
restricting the Noteholder’s use of any proprietary information of the Servicer
made available to the Noteholder in connection with such review. In each case,
such access shall be afforded without charge but only upon reasonable request
and during normal business hours at offices of the Servicer designated by the
Servicer. The failure of the Servicer to provide access as provided in this
Section 5.03, because the Servicer reasonably believes access would violate
applicable law with respect to disclosure shall not constitute a breach of this
Section 5.03.

(b) At all times during the term hereof, the Servicer shall maintain electronic
facilities which allow the Loan Schedule and a reconciliation of the Loan
Schedule to the list of Initial Loans to be generated in a readable form which
can be accessed by the Issuer, the Indenture Trustee, the Backup Servicer and
each of their respective representatives, attorneys or accountants (it being
agreed that information in ASCII or Excel are acceptable forms).

(c) The Servicer shall maintain and implement administrative and operating
procedures (including an ability to generate duplicates of Records evidencing
Receivables in the event of the destruction of the originals thereof), and shall
keep and maintain all documents, books, records and other information that the
Servicer deems reasonably necessary for the collection of all Receivables.

SECTION 5.04 Amendments to Loans and to Schedule of Loans. If the Servicer,
during a Monthly Period, assigns to a Loan an account number that differs from
the account number previously identifying such Loan on the Schedule of Loans,
the Servicer shall deliver to the Transferor, the Backup Servicer, the
Administrative Agent and each Trustee on or before the Distribution Date related
to such Monthly Period an amendment to the Schedule of Loans to report the newly
assigned account number. Each such amendment shall list all new account numbers
assigned to Loans during such Monthly Period and shall show by cross reference
the prior account numbers identifying such Loans on the Schedule of Loans. The
Servicer shall amend the Schedule of Loans, as appropriate, to reflect (x) the
removal of repaid Loans, substituted Loans, Administrative Loans, Warranty
Loans, Defaulted Equipment Loans and Loans which have been liquidated in
accordance with the Loan Servicing Standards and (y) the addition of Loans and
shall deliver an updated Schedule of Loans to the Administrative Agent, the
Backup Servicer, the Transferor and each Trustee on each Distribution Date.

SECTION 5.05 Assignment of Administrative Loans, Warranty Loans. Upon deposit
into the Loan Collection Account of an Administrative Purchase Payment or a
Warranty Payment with respect to an Administrative Loan or Warranty Loan,
respectively, or upon the substitution of a Substitute Loan for a Warranty Loan
and provided that such purchase or substitution of a Loan shall otherwise have
been made in full compliance with the provisions of the Basic Documents, each
Trustee shall assign, without recourse, representation or warranty, to the
Servicer or the Warranty Purchaser, as applicable, all of such Person’s right,
title and interest in, to and under, with respect to the Administrative Loan or
Warranty Loan, (i) such Administrative Loan or Warranty Loan and all monies due
thereon, (ii) the security interests in the related collateral, (iii) amounts
held on deposit in the Designated Accounts or the Loan Lockbox Account with
respect to such Loan and not applied to the Loan Balance as of the applicable
Accounting Date, if any, (iv) Proceeds from any Insurance Policies with respect
to the collateral securing such Loan or any Guaranties of such Loan received
after the applicable

 

25

--------------------------------------------------------------------------------

Accounting Date, if any, and (v) the rights of such Person under the Purchase
Agreement with respect to such Loan, such assignment being an assignment
outright and not for security. Upon the assignment of such Loan described in the
preceding sentence, the Servicer, the Warranty Purchaser or the Transferor, as
applicable, shall own such Loan and all such security and documents, free of any
further obligations to the Indenture Trustee or the Beneficiaries and the
Certificateholders with respect thereto.

SECTION 5.06 Distributions. On or before each Determination Date, with respect
to the preceding Monthly Period and the related Distribution Date, the Servicer
shall calculate each of the amounts required to be distributed or drawn from the
Reserve Account, the Equipment Loan Collection Account and/or the Receivables
Collection Account (including the Carrying Cost Reserve), as applicable, on the
next succeeding Distribution Date.

SECTION 5.07 No Set-off. ALS shall not be permitted to offset against any
Collections any amounts owed to ALS by the Issuer or the Transferor.

SECTION 5.08 Reporting.

(a) On each Distribution Date, the Owner Trustee shall include with each
distribution to each Registered Owner, and the Indenture Trustee shall include
with each distribution to each Noteholder, a copy of the Servicer’s Certificate
furnished pursuant to Section 3.10.

(b) Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of this Agreement, the Servicer shall
prepare and execute and the Indenture Trustee and the Owner Trustee shall mail
to each Person who at any time during such calendar year shall have been a
holder of Notes or Certificates, respectively, and received any payments
thereon, a statement prepared and supplied by the Servicer containing the sum of
the amount of interest and principal paid to such Person for such calendar year
or, if such Person shall have been a Securityholder during a portion of such
calendar year and received any payments thereon, for the applicable portion of
such year, for the purposes of such Securityholder’s preparation of federal
income tax returns.

SECTION 5.09 Information Provided to Rating Agencies. In addition to receiving
any information or documents required to be delivered to any Rating Agency
pursuant to any Basic Document, each Rating Agency and the Administrative Agent
may request in writing to the Servicer, and the Servicer shall deliver,
reasonable additional information necessary to the Rating Agencies and the
Administrative Agent to monitor the Notes. Promptly, but in no event later than
two (2) Business Days, after obtaining knowledge of an Insolvency Event with
respect to the Servicer, the Transferor or the Trust, the Servicer shall deliver
to each of the Rating Agencies and the Administrative Agent notice of such
Insolvency Event.

 

26

--------------------------------------------------------------------------------

ARTICLE VI

LOCKBOXES, ACCOUNTS; COLLECTIONS, DEPOSITS AND

INVESTMENTS; ADVANCES

SECTION 6.01 Loan Lockbox Account.

(a) The Servicer, for the benefit of the Beneficiaries shall establish and
maintain in the name of the Indenture Trustee and under the Indenture Trustee’s
sole dominion and control an Eligible Deposit Account known as the Alliance
Laundry Equipment Receivables Trust 2009-A Loan Lockbox Account (the “Loan
Lockbox Account”) bearing an additional designation clearly indicating that the
funds deposited therein are held for the benefit of the Indenture Trustee on
behalf of the Beneficiaries.

(b) Prior to the date on which any Loan is transferred to the Trust, the
Servicer shall direct each of the Obligors under such Loan to make all Scheduled
Payments and other payments under such Loan or otherwise in connection with the
Trust Estate, including any and all payments of late fees, directly to the Loan
Lockbox Account in the name of the Indenture Trustee. In the event that any
Servicer resigns or is replaced, then, if the place for payment of amounts owing
by an Obligor with respect to any Loan is changed, the successor Servicer shall
give each related Obligor prompt written notice of its appointment and the
revised address to which such Obligor should make payment to each such Loan.

(c) The Servicer shall at all times direct each obligor which is not an Obligor
of Loans held by the Issuer, to make all payments to an address other than the
Loan Lockbox. So long as no Servicer Default is continuing, the Servicer is
hereby expressly authorized and empowered to request that the Indenture Trustee
return to it from the Loan Collection Account any payment received and deposited
into the Loan Collection Account which is not a payment with respect to the
Loans, the Receivables or the Trust Estate. The Servicer shall certify in
writing to the Indenture Trustee that such request is pursuant to this
Section 6.01(c) and such request shall be accompanied by appropriate
documentation in form and substance satisfactory to the Indenture Trustee. Any
amounts deposited into the Loan Lockbox Account shall not be removed by the
Servicer.

(d) The Servicer and the Indenture Trustee shall direct the Lockbox Bank to
transfer by wire transfer of immediately available funds on each Business Day
all available amounts in the Loan Lockbox Account to the Loan Collection
Account. The Servicer’s Certificate shall specify the amounts transferred into
the Loan Collection Account with respect to the immediately preceding Monthly
Period.

(e) The parties hereto agree that, in the event (i) none of ALS, an affiliate of
ALS or a successor to ALS pursuant to Section 8.02 is the Servicer or (ii) any
Rating Agency has indicated that maintenance of the Lockboxes or the Lockbox
Accounts with the then current Lockbox Bank could result in a downgrading of the
Notes, the Servicer shall, at the request of the Administrative Agent, designate
a new Lockbox Bank acceptable to the Administrative Agent and shall promptly
thereafter (A) establish new Lockboxes and Lockbox Accounts in the name and
under the sole dominion and control of the Indenture Trustee with such new
Lockbox Bank, (B) instruct all Obligors to make payments under the Loans or
otherwise in connection with the Trust Estate directly to such new Loan Lockbox,
and (iii) enter into a Lockbox Agreement with such new Lockbox Bank satisfactory
to the Administrative Agent. In such event, the Indenture Trustee shall promptly
send a termination notice to the existing Lockbox Bank to terminate the Lockbox
Agreement with the existing Lockbox Bank following receipt of an instruction to
such effect from the Administrative Agent.

 

27

--------------------------------------------------------------------------------

SECTION 6.02 Receivables Lockbox Accounts.

(a) The Servicer, for the benefit of the Beneficiaries shall establish and
maintain in the name of the Indenture Trustee under the Indenture Trustee’s sole
dominion and control (i) with respect to the Domestic Receivables, an Eligible
Deposit Account known as the Alliance Laundry Equipment Receivables Trust 2009-A
Domestic Receivables Lockbox Account (the “Domestic Receivables Lockbox
Account”) and (ii) with respect to the Foreign Receivables, an Eligible Deposit
Account known as the Alliance Laundry Equipment Receivables Trust 2009-A Foreign
Receivables Lockbox Account (the “Foreign Receivables Lockbox Account”), each
Receivables Lockbox Account bearing an additional designation clearly indicating
that the funds deposited therein are held for the benefit of the Indenture
Trustee on behalf of the Beneficiaries.

(b) Prior to the date on which any Receivable is transferred to the Trust, the
Servicer shall direct each of the Obligors under such Receivable to make all
payments under such Receivable or otherwise in connection with the Trust Estate,
including any and all payments of late fees, directly to the Receivables
Lockboxes in the name of the Indenture Trustee. In the event that any Servicer
resigns or is replaced, then if the place for payment pursuant to any Receivable
is changed, the successor Servicer shall give each related Obligor prompt
written notice of its appointment and the address, if not the Receivables
Lockboxes, to which such Obligor should make payments to each such Receivable.

(c) So long as no Servicer Default is continuing, the Servicer is hereby
expressly authorized and empowered to request the Indenture Trustee to return to
it from the Receivables Collection Account any payment received and deposited
into the Receivables Collection Account which is not a payment with respect to
the Receivables, the Loans or the Trust Estate. The Servicer shall certify in
writing to the Indenture Trustee that such withdrawal is pursuant to this
Section 6.02(c) and such request shall be accompanied by appropriate
documentation in form and substance satisfactory to the Indenture Trustee. Any
amounts transferred into the Receivables Lockbox Account shall not be removed by
the Servicer.

(d) The Servicer and the Indenture Trustee shall direct the Lockbox Bank to
transfer by wire transfer of immediately available funds all available amounts
on each Business Day in the Receivables Lockbox Accounts to the Receivables
Collection Account. The Servicer’s Certificate shall specify the amounts
transferred into the Receivables Collection Account with respect to the
immediately preceding Monthly Period.

SECTION 6.03 Loan Collection Account.

(a) Prior to the Closing Date, the Servicer, for the benefit of the
Beneficiaries shall establish and maintain in the name of the Indenture Trustee
and under the Indenture Trustee’s sole dominion and control an Eligible Deposit
Account known as the Alliance Laundry Equipment Receivables Trust 2009-A Loan
Collection Account (the “Loan Collection Account”), bearing an additional
designation clearly indicating that the funds deposited therein are held for the
benefit of the Beneficiaries.

 

28

--------------------------------------------------------------------------------

(b) On each Distribution Date, the Indenture Trustee shall withdraw funds from
the Loan Collection Account in the amounts specified in the Indenture and make
the distributions required by Section 8.2 of the Indenture.

SECTION 6.04 Receivables Collection Account.

(a) Prior to the Closing Date, the Servicer, for the benefit of the
Beneficiaries, shall establish and maintain in the name of the Indenture Trustee
and under the Indenture Trustee’s sole dominion and control an Eligible Deposit
Account known as the Alliance Laundry Equipment Receivables Trust 2009-A
Receivables Collection Account (the “Receivables Collection Account”), bearing
an additional designation clearly indicating that the funds deposited therein
are held for the benefit of the Beneficiaries.

(b) On each Business Day, the Indenture Trustee, at the direction of the
Servicer, shall confirm the amount of funds collected on the Receivables in the
Receivables Collection Account. On the Closing Date and, prior to the occurrence
of a Rapid Amortization Event or Event of Default (unless at such time there are
no outstanding amounts owed in respect of principal of, interest on or fees or
other indemnities in respect of the Receivables Notes), (i) on each Receivables
Borrowing Date thereafter after giving effect to any Advances on such
Receivables Borrowing Date, and (ii) in the Servicer’s Certificate for each
Distribution Date, the Servicer shall calculate and report the Purchasers’
Interest and the Transferor’s Interest and such calculations shall remain in
effect until the earliest to occur of (x) the next Receivables Borrowing Date,
(y) the delivery of the next Servicer’s Certificate for the applicable
Distribution Date or (z) the occurrence of a Rapid Amortization Event or an
Event of Default. So long as a Rapid Amortization Event or an Event of Default
has occurred and is continuing, the Purchasers’ Interest shall be 100% and the
Transferor’s Interest shall be 0%. Funds allocated to the Purchasers’ Interest
and the Transferor’s Interest shall be deposited into the Receivables Collection
Account and applied pursuant to Section 6.04(d).

(c) [Reserved]

(d) On each Business Day, an amount equal to the Daily Carrying Costs for such
Business Day will be retained in the Receivables Collection Account, funded from
that portion of Collections received in the Receivables Collection Account on
such Business Day. On each Business Day, the excess of (x) the amount then on
deposit in the Receivables Collection Account over (y) the Daily Carrying Costs
will be distributed by the Indenture Trustee in accordance with Section 8.2(e)
of the Indenture. On each Distribution Date, the Indenture Trustee shall
withdraw funds that have been retained in the Receivables Collection Account in
accordance with the preceding sentences of this Section 6.04(d) (the total
amount of such funds on deposit in the Receivables Collection Account as of any
given date, the “Carrying Cost Reserve”), in the amounts specified in the
Indenture and make the distributions required by Section 8.2(f) of the
Indenture. Notwithstanding the foregoing, at such time after the Receivables
Conversion Date as there are no outstanding amounts owed in respect of principal
of, interest on or fees or other indemnities in respect of the Receivables Notes
and no Rapid Amortization or Event of Default has occurred which is continuing,
all amounts on deposit in the Receivables Collection Account shall be
distributed by the Indenture Trustee as required by Clause (2) of
Section 8.2(e)(i) of the Indenture.

 

29

--------------------------------------------------------------------------------

(e) Following notification from the Lockbox Bank that an item received therein
has been returned or is uncollected and that the Lockbox Bank has not been
otherwise reimbursed pursuant to the terms of the Lockbox Agreement for any such
amounts, the Servicer shall instruct Indenture Trustee in writing to, and the
Indenture Trustee shall turn over to such Lockbox Bank, funds in such amount
from funds then on deposit in the Receivables Collection Account.

SECTION 6.05 Reserve Account.

(a) Prior to the Closing Date, the Servicer, for the benefit of the
Beneficiaries, shall establish and maintain in the name of the Indenture Trustee
and subject to the sole dominion and control of the Indenture Trustee an
Eligible Deposit Account known as the Alliance Laundry Equipment Receivables
Trust 2009-A Reserve Account (the “Reserve Account”) to include the money and
other property deposited and held therein (including any required Ineligible Cap
Reserve) pursuant to this Section 6.05 and Section 8.2 of the Indenture. On the
Closing Date, the Transferor shall deposit into the Reserve Account funds in an
amount equal to three million two hundred thirty five thousand nine hundred
thirteen dollars and thirty four cents ($3,235,913.34).

(b) If on any Distribution Date the amount on deposit in the Reserve Account
(after giving effect to all deposits therein or withdrawals therefrom on such
Distribution Date) exceeds the Reserve Account Required Amount for such
Distribution Date, the Servicer shall instruct the Indenture Trustee to deposit
such excess into the corresponding Collection Accounts and shall be deemed
Available Amounts at the times and in the amounts determined under the
Indenture.

SECTION 6.06 Transfers Between Accounts.

So long as no Servicer Default is continuing, the Servicer is hereby expressly
authorized and empowered to direct the Indenture Trustee to transfer funds
between the Collection Accounts to the extent of funds deposited in such
accounts in error and such direction shall be accompanied by appropriate
documentation in form and substance satisfactory to the Indenture Trustee.

SECTION 6.07 The Designated Accounts; Control of Designated Accounts.

(a) Each of the Designated Accounts shall be initially established with the
Indenture Trustee and shall be maintained with the Indenture Trustee and shall
be under its sole dominion and control so long as (A) the short-term unsecured
debt obligations of the Indenture Trustee have the Required Deposit Rating or
(B) each of the Designated Accounts are maintained in the corporate trust
department of the Indenture Trustee. All amounts held in such accounts
(including amounts which the Servicer is required to remit daily to the
Collection Accounts pursuant to Section 6.08) shall, to the extent permitted by
applicable laws, rules and regulations, be invested, at the written direction of
the Servicer, by such bank or trust company in Eligible Investments. Such
written direction shall constitute certification by the Servicer that any such
investment is authorized by this Section 6.07. Funds deposited in the Loan
Collection Account, the Receivables Collection Account and Reserve Account shall
be invested in Eligible Investments that mature prior to the next Distribution
Date except, and then only to the extent, as shall be otherwise permitted by the
Required Noteholders. Investments in Eligible Investments shall be made in the
name of the Indenture Trustee or its nominee, and such investments shall not

 

30

--------------------------------------------------------------------------------

be sold or disposed of prior to their maturity. Should the short-term unsecured
debt obligations of the Indenture Trustee (or any other bank or trust company
with which the Designated Accounts are maintained) no longer have the Required
Deposit Rating, then the Servicer shall within twenty (20) Business Days (or
such longer period as to which the Administrative Agent (acting at the direction
of the Required Noteholders) shall consent), with the Indenture Trustee’s
assistance as necessary, cause the Designated Accounts (A) to be moved to a bank
or trust company, the short-term unsecured debt obligations of which shall have
the Required Deposit Rating and which is otherwise acceptable to the
Administrative Agent (acting at the direction of the Required Noteholders), or
(B) to be moved to the corporate trust department of the Indenture Trustee.

(b) Each of the Lockbox Accounts shall at all times be subject to the respective
Lockbox Agreement, and each of the Loan Collection Account, Receivables
Collection Account and the Reserve Account shall at all times be subject to a
control agreement (the “Control Agreement”) substantially in the form of Exhibit
E.

SECTION 6.08 Collections. Notwithstanding the Servicer’s notice to each Obligor
pursuant to Section 6.02(b), the Servicer shall remit or shall cause to be
remitted to the Lockbox Accounts, the Loan Collection Account or the Receivables
Collection Account, as applicable, within two (2) Business Days after receipt
all payments by, or on behalf of, the Obligors on the Loans or the Receivables,
including all Insurance Proceeds, Liquidation Proceeds and Proceeds from any
Guaranties, that were received directly by the Servicer, the Issuer or any of
their respective Affiliates; provided, however, that up to Three Hundred
Thousand Dollars ($300,000) of such payments and Proceeds deposited to a lockbox
account associated with another financing facility in a calendar month may be
remitted to the appropriate Collection Account on a later date which is no later
than the last day of the calendar month in which they were received. Until such
amounts are so remitted, the Servicer shall (or shall cause such recipient to)
segregate such payments and hold such payments in trust for Indenture Trustee.
Based upon the amounts set forth in the Servicer’s Certificate or the daily
report of the Indenture Trustee delivered pursuant to Section 7.3 of the
Indenture, as the case may be, the Servicer shall direct the Indenture Trustee
to distribute the Available Amounts in the appropriate Collection Accounts (and
the Reserve Account, if applicable) according to the priority of payments set
forth in Section 8.2 of the Indenture.

SECTION 6.09 Investment Earnings. Investment Earnings on the Designated Accounts
and any available Investment Earnings on the Lockbox Accounts shall be deposited
in the corresponding Collection Accounts and shall be deemed to be Available
Amounts.

SECTION 6.10 Servicer Advances. As of each Accounting Date, if the payments
during the related Monthly Period by or on behalf of the Obligor on a Loan
(other than an Administrative Loan, a Warranty Loan or a Defaulted Equipment
Loan) after application under Section 3.11 shall be less than the Scheduled
Payment then the Servicer shall, if in its sole discretion it deems the
shortfall recoverable, advance from its own funds any such shortfall (such
amounts, a “Servicer Advance”). In addition, the Servicer shall be required to
advance the amount of any fees paid to the Lockbox Banks by setoff against
amounts in the Lockbox Accounts pursuant to the Lockbox Agreements. The Servicer
shall receive Servicer Advance Reimbursement Amounts pursuant to Section 8.2 of
the Indenture.

 

31

--------------------------------------------------------------------------------

SECTION 6.11 Additional Deposits. Servicer Advances pursuant to Section 6.10 and
the Proceeds of Administrative Purchase Payments and the Warranty Payments with
respect to Administrative Loans and Warranty Loans, respectively, shall be
deposited into the Collection Accounts. All such deposits with respect to a
Monthly Period shall be made in immediately available funds one (1) Business Day
prior to the Distribution Date related to such Monthly Period.

SECTION 6.12 Yield Supplement Account.

(a) Prior to the first Distribution Date, the Servicer, for the benefit of the
Beneficiaries, shall establish and maintain in the name of the Indenture Trustee
and subject to the sole dominion and control of the Indenture Trustee an
Eligible Deposit Account known as the Alliance Laundry Equipment Receivables
Trust 2009-A Yield Supplement Account (the “Yield Supplement Account”) to
include the money and other property deposited and held therein pursuant to this
Section 6.12 and Section 8.2 of the Indenture. On the first Distribution Date,
the Transferor shall deposit into the Yield Supplement Account funds in an
amount determined under Section 8.2 of the Indenture.

(b) If on any Distribution Date the amount on deposit in the Yield Supplement
Account (after giving effect to all deposits therein or withdrawals therefrom on
such Distribution Date) exceeds the Yield Supplement Required Amount for such
Distribution Date, the Servicer shall instruct the Indenture Trustee to deposit
such excess into the corresponding Collection Accounts and shall be deemed
Available Amounts at the times and in the amounts determined under the
Indenture.

ARTICLE VII

REPRESENTATIONS AND

WARRANTIES OF THE TRANSFEROR,

ORIGINATOR, SELLER, ISSUER AND THE SERVICER

SECTION 7.01 Representations and Warranties of the Transferor, Originator,
Seller, Issuer and the Servicer. The Transferor, the Originator, the Issuer and
the Servicer, in its capacity as such, each makes the following representations
and warranties as to itself on which the Issuer is relying in acquiring the
Loans and Receivables hereunder and issuing the Securities under the other
Transfer and Servicing Agreements and for the benefit of the Indenture Trustee,
the Agents and the Noteholders. The following representations and warranties are
made severally by each of the Transferor, the Originator, the Servicer and the
Issuer (for purposes of this Section 7.01, each, a “Party”) and, unless
otherwise specified, are made as of the Closing Date and each Purchase Date (in
each case with respect to the Second Tier Purchased Assets, to such assets
acquired on such date) but shall survive the sale, transfer and assignment of
the Loans to the Issuer and the pledge thereof to the Indenture Trustee pursuant
to the Indenture, until the Indenture is terminated in accordance with its
terms; provided that to the extent such representations and warranties relate to
the Receivables and the Related Assets with respect thereto, such
representations and warranties shall survive only until the Receivables Payoff
Date.

 

32

--------------------------------------------------------------------------------

(a) Representations and Warranties as to each Party.

(i) Organization and Good Standing. Such Party has been duly organized and is
validly existing as a limited liability company (with respect to the Issuer, a
Delaware statutory trust) in good standing under the laws of the State of
Delaware, with power and authority to own its properties and to conduct its
business as such properties are presently owned and such business is presently
conducted, and had at all relevant times, and now has, power, authority and
legal right (A) in the case of the Transferor, to acquire, own and sell the
Loans and Receivables and (B) in the case of the Servicer, to service the Loans
and Receivables as provided in this Agreement.

(ii) Due Qualification. Such Party is duly qualified to do business as a foreign
limited liability company (with respect to the Issuer, a foreign statutory
trust) in good standing, and has obtained all necessary licenses and approvals
in all jurisdictions in which the ownership or lease of property or the conduct
of its business (including, in the case of the Servicer, the servicing of the
Loans and Receivables as required by this Agreement) requires or shall require
such qualification.

(iii) Power and Authority. Such Party (A) has the power and authority to execute
and deliver the Basic Documents to which it is a party (as used in this
Section 7.01(a), the “applicable Basic Documents”) and to carry out the
respective terms of such agreements, (B) in the case of the Transferor, has the
power and authority to sell and assign the property to be sold and assigned to
and deposited with the Issuer as part of the Owner Trust Estate and has duly
authorized such sale and assignment to the Issuer by all necessary limited
liability company action, and (C) in the case of the Originator, has the power
and authority to sell and assign the property to be sold and assigned to the
Transferor and has duly authorized such sale and assignment to the Transferor by
all necessary limited liability company action; and the execution, delivery and
performance by such Party of the applicable Basic Documents have been duly
authorized by such Party by all necessary limited liability company (with
respect to the Issuer, statutory trust) action.

(iv) Binding Obligations. The applicable Basic Documents, when duly executed and
delivered, shall constitute a legal, valid and binding obligation of such Party
enforceable against such Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights in general and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.

(v) No Violation. The consummation by such Party of the transactions
contemplated by the applicable Basic Documents and the fulfillment of the terms
of such agreements by such Party shall not conflict with, result in any breach
of any of the terms and provisions of or constitute (with or without notice or
lapse of time) a default under, the limited liability company agreement (with
respect to the Issuer, trust agreement) of such Party, or any indenture,
agreement or other instrument to which such Party is a party or by which it is
bound, or result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument, other than the applicable Basic Documents, or violate any law or, to
such Party’s

 

33

--------------------------------------------------------------------------------

knowledge, any order, rule or regulation applicable to such Party of any court
or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over such Party or any of its
properties.

(vi) No Proceedings. There are no proceedings or, investigations pending or, to
such Party’s knowledge, threatened before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over such Party or its properties (i) asserting the invalidity of
the applicable Basic Documents, any Securities issued pursuant thereto and, in
the case of the Transferor, the Custodial Agreement or the Administration
Agreement, (ii) seeking to prevent the issuance of such Securities or the
consummation of any of the transactions contemplated by the applicable Basic
Documents, or (iii) seeking any determination or ruling that might materially
and adversely affect the performance by such Party of its obligations under, or
the validity or enforceability of, such Securities, under the applicable Basic
Documents.

(vii) Consents and Approvals. No consent or authorization of, filing with,
notice to or other act by or in respect of any Governmental Authority or any
other Person is required in connection with the transactions contemplated
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Basic Documents except as
to such consents which have already been obtained prior to the Closing Date and
filings necessary to perfect the security interests of the Indenture Trustee in
the Trust Estate.

(b) Representations and Warranties of the Transferor and Issuer Only.

(i) Good Title. No Loan or Receivable has been sold, transferred, assigned or
pledged by the Transferor to any Person other than the Issuer; immediately prior
to the conveyance of the Loans or Receivables pursuant to this Agreement the
Transferor had good and marketable (provided that the Transferor makes no
representation as to the existence of a willing buyer of such Loans or
Receivables) title thereto, free of any Lien; and, upon execution and delivery
of this Agreement by the Transferor, the Issuer shall have all of the right,
title and interest of the Transferor in, to and under the Purchased Property
transferred thereby free of any Lien.

(ii) All Filings Made. All filings (including UCC filings) necessary in any
jurisdiction to give the Issuer a first priority perfected security or ownership
interest in the Trust Estate (other than Exempt Collateral) shall have been
made.

(iii) Valid Transfer. This Agreement constitutes a valid transfer and assignment
of the Purchased Property transferred thereby, enforceable against creditors of
the Transferor.

(iv) Financial Condition. Each of the Transferor and Issuer is solvent and able
to pay its debts when due, and is not the subject of any case or proceeding,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
arrangement, adjustment of debts, winding-up, liquidation, dissolution,
composition, receivership, trusteeship, custodianship, or any other proceeding
regarding relief of debtors or enforcement of

 

34

--------------------------------------------------------------------------------

creditors’ rights. Neither the Transferor nor the Issuer shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the foregoing cases or proceedings. Neither the Transferor nor the
Issuer is a defendant in any case, proceeding or other action seeking issuance
of a writ or warrant of attachment, execution, distraint or similar process
against all or any part of its assets.

(v) Place of Business. The principal places of business and chief executive
office of the Transferor and Issuer and the offices where Transferor keeps all
of its Loan Files (other than any Collateral Documents held by the Custodian)
and Receivables Files is located at Shepard Street, Ripon, WI 54971-0990.

(vi) Absence of Event. No event has occurred which materially and adversely
affects the Transferor’s operations or its ability to perform its obligations
under the Basic Documents to which it is a party.

(vii) UCC Information. The information set forth on Schedule 7.01 is true,
correct and complete in all material respects.

(viii) Security Interest Representations.

(1) In the event that the transfer of the Second Tier Purchased Assets pursuant
to the terms of this Agreement is held not to constitute a “true sale” or “true
contribution,” this Agreement creates a valid and continuing security interest
(as defined in the applicable UCC) in the Second Tier Purchased Assets in favor
of the Issuer, which security interest is prior to all other Liens, and is
enforceable as such as against creditors of and purchasers from the Transferor;

(2) The Receivables constitute “accounts” within the meaning of the applicable
UCC. The Equipment Loans constitute “tangible chattel paper” within the meaning
of the applicable UCC. The Equipment Notes constitute “instruments” within the
meaning of the applicable UCC. The rights of the Transferor under the Purchase
Agreement are “general intangibles” under the applicable UCC.

(3) Immediately prior to the conveyance of the Second Tier Purchased Assets set
forth in this Agreement, the Transferor was the sole owner of such Second Tier
Purchased Assets and owned and had good and marketable title to the Second Tier
Purchased Assets, free and clear of any Lien, claim or encumbrance of any Person
(whether senior, junior or pari passu) other than Permitted Adverse Claims;
provided, however, that the Transferor makes no representation regarding the
availability of a willing buyer for the Second Tier Purchased Assets;

(4) The Transferor has caused the filing of all appropriate financing statements
in the proper filing office in the appropriate jurisdictions under applicable
law in order to perfect the security interest in the Second Tier Purchased
Assets granted to the Issuer and assigned to

 

35

--------------------------------------------------------------------------------

the Indenture Trustee. All financing statements filed against the Transferor in
favor of the Issuer in connection herewith describing the Second Tier Purchased
Assets contain a statement to the following effect: “A purchase of or security
interest in any collateral described in this financing statement except in favor
of the Indenture Trustee will violate the rights of the Issuer and the Indenture
Trustee”;

(5) Other than the security interest granted to the Issuer pursuant to this
Agreement and assigned to the Indenture Trustee, the Transferor has not pledged,
assigned, sold, granted a security interest in or otherwise conveyed any of the
Second Tier Purchased Assets except as permitted hereby. The Transferor has not
authorized the filing of, and is not aware of, any financing statements or
documents of similar import against the Transferor that include a description of
collateral covering the Second Tier Purchased Assets other than any financing
statement or document of similar import (i) relating to the security interest
granted to the Issuer and assigned to the Indenture Trustee or (ii) that has
been terminated. The Transferor is not aware of any judgment or tax lien filings
against the Transferor;

(6) The Transferor has received a written acknowledgement from the Custodian
that the Custodian is holding the only original executed counterpart of each
Equipment Note and the related security agreement on behalf of, and for the
benefit of, the Indenture Trustee and is subject to the Custodian’s customary
security and safekeeping procedures;

(7) None of the Equipment Notes or Equipment Loans have any marks or notations
indicating that they have been pledged, assigned or otherwise conveyed to any
Person other than the Issuer’s assignee, the Indenture Trustee, except as
provided in Section 2.09(a); and

(8) The Transferor has received all necessary consents and approvals required by
the terms of the Second Tier Purchased Assets to pledge to the Issuer its
interest and rights in such Second Tier Purchased Assets hereunder, or the
Indenture.

The representations and warranties set forth above shall survive until the
Indenture is terminated in accordance with its terms; provided that to the
extent such representations and warranties relate to the Purchased Receivables
and the Related Assets with respect thereto, such representations and warranties
shall survive only until the Receivables Payoff Date. Any breaches of the
representations and warranties set forth in Section 7.01(b)(viii) above maybe
waived upon prior written notice to the Rating Agencies and consent of the
Required Noteholders, unless such waiver would amount to a waiver of an Event of
Default under Section 5.1(e) of the Indenture or a Servicer Default under
Section 9.01(q), which, in either such case, any such waiver shall require
consent of the Special Required Noteholders.

 

36

--------------------------------------------------------------------------------

(ix) Non-Consolidation of Issuer and Transferor. (I) Such Party has, consistent
with the Basic Agreements, been operated in such a manner that it shall not be
substantively consolidated with the trust estate of any other person in the
event of the bankruptcy or insolvency of such Party or such other Person.
Without limiting the foregoing the Issuer has (1) conducted its business in its
own name, (2) maintained its books, records and cash management accounts
separate from those of any other Person, (3) maintained its bank accounts
separate from those of any other Person, (4) maintained separate financial
statements of the Transferor, showing its assets and liabilities separate and
apart from those of any other Person, (5) paid its own liabilities and expenses
only out of its own funds, (6) allocated fairly and reasonably any overhead
expenses that are shared with an Affiliate, (7) held itself out as a separate
entity, (8) maintained adequate capital in light of its contemplated business
operations and (9) observed all other appropriate limited liability or trust and
other organizational formalities including, inter alia, remaining in good
standing and qualified as a foreign limited liability or trust in each
jurisdiction and obtaining all necessary licenses and approvals as required
under Applicable Law.

(II) Such Party has not (1) held itself out as being liable for the debts of any
other Person, (2) acted other than in its own name and through its trustee or
its duly authorized officers or agents, (3) engaged in any joint activity or
transaction of any kind with or for the benefit of any Affiliate including any
loan to or from or guarantee of the indebtedness of any Affiliate, except
payment of lawful distributions to its beneficial owners or members,
(4) commingled its funds or other assets with those of any other person,
(5) created, incurred, assumed, guaranteed or in any manner became liable in
respect of any indebtedness (except pursuant to the Indenture) other than
indemnities, trade payables and expense accruals incurred in the ordinary course
of its business, (6) entered into a transaction with an Affiliate unless such
transaction was commercially reasonable and on the same terms as would be
available in an arm’s length transaction with a person or entity that is not an
Affiliate, or (7) taken any other action that would be inconsistent with
maintaining the separate legal identity of such Party.

(c) Representations and Warranties of the Originator Only.

(i) Purchase Agreement Representations and Warranties. The representations and
warranties of the Originator in Section 3.1 of the Purchase Agreement are true
and correct as of the date when made.

(ii) Absence of Event. No event has occurred which materially and adversely
affects the Originator’s operations or its ability to perform its obligations as
Originator under the Basic Documents.

(iii) Non-Consolidation of ALS. (a) ALS has, consistent with the Basic
Agreements, been operated in such a manner that it shall not be substantively
consolidated with the trust estate of either or both of the Transferor or the
Issuer in the event of the bankruptcy or insolvency of either or both of the
Transferor or the Issuer. Without limiting the foregoing ALS has (1) maintained
its books, records and cash management accounts separate from those of either or
both of the Transferor or the

 

37

--------------------------------------------------------------------------------

Issuer, (2) maintained its bank accounts separate from those of either or both
of the Transferor or the Issuer, (3) maintained separate financial statements,
showing its assets and liabilities separate and apart from those of either or
both of the Transferor or the Issuer or maintained consolidated financial
statements that contain a footnote indicating that the assets of the Transferor
and the Issuer are not available to creditors of ALS, (4) paid its own
liabilities and expenses of either or both of the Transferor or the Issuer,
(5) allocated fairly and reasonably any overhead expenses that are shared with
either or both of the Transferor or the Issuer and (6) held itself out as a
separate entity from either or both of the Transferor or the Issuer.

(b) ALS has not (1) held itself out as being liable for the debts of either or
both of the Transferor or the Issuer, (2) acted or conducted its business in the
name of either or both of the Transferor or the Issuer, (3) engaged in any joint
activity or transaction of any kind with or for the benefit of either or both of
the Transferor or the Issuer including any loan to or from or guarantee of the
indebtedness of any Affiliate, (4) commingled its funds or other assets with
those of either or both of the Transferor or the Issuer, (5) created, incurred,
assumed, guaranteed or in any manner became liable in respect of any
indebtedness of either or both of the Transferor or the Issuer, (6) entered into
a transaction with either or both of the Transferor or the Issuer unless such
transaction is commercially reasonable and on the same terms as would be
available in an arm’s length transaction with a person or entity that is not an
Affiliate, (7) conducted its business in the name of either or both of the
Transferor or the Issuer, or (8) taken any other action that would be
inconsistent with maintaining the separate legal identity of the either or both
of the Transferor or the Issuer.

(d) Representations and Warranties of the Servicer Only. No Servicer Default has
occurred and no condition exists which, upon the issuance of the Notes, would
constitute a Servicer Default.

SECTION 7.02 Liability of Transferor. The Transferor shall be liable in
accordance with this Agreement only to the extent of the obligations in this
Agreement specifically undertaken by the Transferor.

SECTION 7.03 Merger or Consolidation of, or Assumption of the Obligations of,
Transferor; Amendment of Limited Liability Company Agreement.

(a) Any Person (i) into which the Transferor may be merged or consolidated,
(ii) resulting from any merger or consolidation to which the Transferor shall be
a party, (iii) succeeding to the business of the Transferor, or (iv) more than
50% of the voting interests of which is owned directly or indirectly by ALS,
which Person in any of the foregoing cases executes an agreement of assumption
to perform every obligation of the Transferor under this Agreement, shall be the
successor to the Transferor under this Agreement without the execution or filing
of any document or any further act on the part of any of the parties to this
Agreement; provided that the Transferor shall provide ten (10) days’ prior
notice of any merger, consolidation or succession pursuant to this Section 7.03
to the Rating Agencies and obtain the prior written consent of the Special
Required Noteholders.

 

38

--------------------------------------------------------------------------------

(b) Until the Outstanding Obligations have been paid in full, the Transferor
shall at all times have two “Independent Managers.” The Transferor hereby agrees
that during the term of this Agreement it shall not amend the definition of
“Independent Manager” or Sections 1.3, 1.4, 1.5, 1.7, 4.1, 4.2, 4.4, 5.1, 5.3,
5.4, 5.5, 6.1, 6.2, 6.3, 9.1 or 9.7 or Schedule 1 of its limited liability
agreement without obtaining the prior written consent of the Special Required
Noteholders and providing prior written notice thereof to the Rating Agencies.

SECTION 7.04 Limitation on Liability of Transferor and Others. The Transferor
and any director or officer or employee or agent of the Transferor may rely in
good faith on the advice of counsel or on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
under this Agreement. The Transferor shall not be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its
obligations as Transferor of the Loans or Receivables under this Agreement and
that in its opinion may involve it in any expense or liability.

SECTION 7.05 Transferor May Own Securities. Each of the Transferor and any
Person controlling, controlled by or under common control with the Transferor
may in its individual or any other capacity become the owner or pledgee of
Securities with the same rights as it would have if it were not the Transferor
or an Affiliate thereof except as otherwise specifically provided herein. Except
as otherwise provided herein, Securities so owned by or pledged to the
Transferor or such controlling or commonly controlled Person shall have an equal
and proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of such Securities.

SECTION 7.06 Rule 144A. The Transferor, the Issuer and the Servicer shall
furnish, upon the request of any Noteholder, the Administrative Agent or the
Owner Trustee, to the Trust the information required to be delivered under Rule
144A(d)(4) under the Securities Act if at the time of such request the Issuer or
the Transferor is not a reporting company under Section 13 or Section 15(d) of
the Exchange Act, and any of the Notes are “restricted securities” within the
meaning of Rule 144(a)(3) under the 1933 Act at such time.

ARTICLE VIII

LIABILITIES OF SERVICER AND OTHERS

SECTION 8.01 Liability of Servicer; Indemnities.

(a) The Servicer shall be liable in accordance with this Agreement only to the
extent of the obligations in this Agreement specifically undertaken by the
Servicer. Such obligations shall include (but are not limited to) the following:

(i) The Servicer shall defend, indemnify and hold harmless each Trustee, each
Issuer, the Beneficiaries, the Registered Owners and any director, officer,
employee or agent thereof (and, if ALS or any of its Affiliates is no longer the
Servicer, then the indemnities in this provision shall run, in addition to the
foregoing, to the benefit of the Agents, the Administrative Agent and the
Noteholders and any director, officer, employee or agent thereof) from and
against any and all costs, expenses, losses, damages,

 

39

--------------------------------------------------------------------------------

claims and liabilities arising out of or resulting from claims by third parties
(other than parties to the Basic Documents) arising from the servicing of Loans
or Receivables or the use, ownership, repossession (other than losses related to
a decline in value of the Equipment repossessed) or operation by the Servicer or
any Affiliate thereof of any item of Equipment or other collateral therefor;

(ii) The Servicer (other than the Indenture Trustee in its capacity as successor
Servicer pursuant to Section 9.02) shall indemnify, defend and hold harmless
each Trustee, each Beneficiary, the Registered Owners, the Issuer and any
director, officer, employee or agent thereof (and, if ALS or any of its
Affiliates is no longer the Servicer, then indemnities in this provision shall
run, in addition to the foregoing, to the benefit of the Agent, the
Administrative Agent and the Noteholders and any director, officer, employee or
agent thereof) from and against any taxes that may at any time be asserted
against any such Person with respect to the transactions contemplated in this
Agreement, including any sales, gross receipts, general corporation, tangible
personal property, privilege or license taxes (but not including any taxes
asserted with respect to, and as of the date of, the sale of the Loans and the
Receivables to the Issuer or the issuance and original sale of the Securities,
or asserted with respect to ownership of the Loans or Receivables, or federal or
other income taxes arising out of distributions on the Securities, or any fees
or other compensation payable to any such Person) and costs and expenses in
defending against the same;

(iii) The Servicer shall indemnify, defend and hold harmless each Trustee, the
Issuer, the Beneficiaries, the Registered Owners and any director, officer,
employee or agent thereof (and, if ALS or any of its Affiliates is no longer the
Servicer, then the indemnities in this provision shall run, in addition to the
foregoing, to the benefit of the Agent, the Administrative Agent and the
Noteholders and any director, officer, employee or agent thereof) from and
against any and all costs, expenses, losses, claims, damages, and liabilities to
the extent that such cost, expense, loss, claim, damage, or liability arose out
of, or was imposed upon such Trustee, the Issuer, the Beneficiaries or the
Registered Owners through the negligence, willful misfeasance or bad faith of
the Servicer or any breach or failure by the Servicer in the performance of its
duties under this Agreement and any other Basic Documents or by reason of
negligent disregard of its obligations and duties or if any of the
representations and warranties by the Servicer shall be inaccurate as of the
date made under any of the Basic Documents; and

(iv) The Servicer (other than the Indenture Trustee in its capacity as successor
Servicer pursuant to Section 9.02) shall indemnify, defend and hold harmless
each Trustee and their respective agents, officers, directors and servants, from
and against all costs, expenses, losses, claims, damages and liabilities arising
out of or incurred in connection with (x) in the case of the Owner Trustee, the
Indenture Trustee’s performance of its duties under the Basic Documents, (y) in
the case of the Indenture Trustee, the Owner Trustee’s performance of its duties
under the Basic Documents or (z) the acceptance, administration or performance
by, or action or inaction of, the applicable Trustee of the trusts and duties
contained in this Agreement, the Basic Documents, the Indenture (in the case of
the Indenture Trustee), including the administration of the Trust Estate, and
the Trust Agreement (in the case of the Owner Trustee), including the

 

40

--------------------------------------------------------------------------------

administration of the Owner Trust Estate, except in each case to the extent that
such cost, expense, loss, claim, damage or liability: (A) is due to the willful
misfeasance, bad faith or gross negligence of the Person seeking to be
indemnified, (B) (if otherwise payable to the Indenture Trustee) arises from the
Indenture Trustee’s breach of any of its representations or warranties in
Section 6.13 of the Indenture or (C) (if otherwise payable to the Owner Trustee)
arises from the Owner Trustee’s breach of any of its representations or
warranties set forth in Section 6.6 of the Trust Agreement.

(b) Indemnification under this Section 8.01 shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of this
Agreement. If the Servicer has made any indemnity payments pursuant to this
Section 8.01 and the recipient thereafter collects any of such amounts from
others, the recipient shall promptly repay such amounts collected to the
Servicer, without interest.

(c) The Servicer shall pay any amounts owing pursuant to Section 8.01 directly
to the indemnified Person and such amounts will not be deposited in the
Collection Accounts.

(d) Indemnification pursuant to this Section 8.01 will include reasonable fees
and expenses of counsel and expenses of litigation reasonably incurred.

(e) Notwithstanding the foregoing indemnification obligations, nothing in this
Section 8.01 shall be intended by the parties to constitute a guaranty by the
Servicer of repayment of the Loans.

SECTION 8.02 Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer. Notwithstanding anything in this Agreement to the contrary,
without the consent of the Special Required Noteholders or any other Person,
(a) the Servicer may consolidate, merge or sell all or substantially all of its
assets and (b) any Person (i) into which the Servicer may be merged or
consolidated, (ii) resulting from any merger, conversion or consolidation to
which the Servicer shall be a party, (iii) succeeding to the business of the
Servicer, or (iv) of which more than 50% of the voting interests is owned
directly or indirectly by ALS and which is otherwise servicing the Transferor’s
loans, which Person in any of the foregoing cases executes an agreement of
assumption reasonably satisfactory to the Special Required Noteholders and the
Indenture Trustee to perform every obligation of the Servicer under this
Agreement shall be the successor to the Servicer under this Agreement without
the further execution or filing of any paper or any further act on the part of
any of the parties to this Agreement; provided, however, that immediately after
giving effect thereto, there shall be no Servicer Default; provided further,
that following any such merger, conversion or consolidation, the business of
such successor Servicer shall be materially the same as the Servicer’s business
as constituted immediately prior to such merger, conversion or consolidation. In
the event that the requirements in each of the provisos of the preceding
sentence are not satisfied, such transaction shall require the Special Required
Noteholders’ written consent, not to be unreasonably withheld. Pursuant to this
Section 8.02, the Servicer shall provide the Administrative Agent and the Rating
Agencies at least thirty (30) days’ prior written notice of any merger,
consolidation or succession and a copy of the agreement of assumption in respect
of such merger, consolidation or succession, the pro forma financial
calculations supporting the successor entity’s compliance with the financial
covenants specified in Section 3.07(i), if applicable, and such other additional
information as the

 

41

--------------------------------------------------------------------------------

Administrative Agent shall reasonably request. It is understood that nothing in
this Section 8.02 shall be construed to limit or otherwise impair the ability of
the Transferor or any Interested Party to enforce such remedies as are available
to them under the Basic Documents.

SECTION 8.03 Limitation on Liability of Servicer and Others.

(a) Neither the Servicer nor any of the directors or officers or employees or
agents of the Servicer shall be under any liability to the Issuer or the
Noteholders, except as specifically provided in this Agreement, for any action
taken or for refraining from the taking of any action pursuant to the Basic
Documents or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such Person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence (negligence, in the case of the initial Servicer) in the performance
of duties or by reason of reckless (negligent, in the case of the initial
Servicer) disregard of obligations and duties under the Basic Documents. The
Servicer and any director, officer or employee or agent of the Servicer may rely
in good faith on the advice of counsel or on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement.

(b) [Reserved]

(c) Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its duties to service the Loans or Receivables in accordance with
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement and
the rights and duties of the parties to this Agreement and the interests of the
Beneficiaries and the Registered Owners under this Agreement and the
Beneficiaries under the Indenture and the interests of the Registered Owners
under the Trust Agreement. In such event, the reasonable legal expenses and
costs for such action and any liability resulting therefrom that is not
incidental to its duties to service the Loans or Receivables in accordance with
this Agreement shall be expenses, costs and liabilities of the Issuer and the
Servicer shall be entitled to be reimbursed therefor.

(d) The Indenture Trustee shall distribute out of the Collection Accounts on a
Distribution Date any amounts permitted for reimbursement pursuant to
Section 8.03(c) which have not been previously reimbursed in accordance with
Section 8.2 of the Indenture; provided, however, that the Indenture Trustee
shall not distribute such amounts if the amount on deposit in the Reserve
Account (after giving effect to all deposits and withdrawals pursuant to
Section 8.2 of the Indenture) is greater than zero but less than the Reserve
Account Required Amount for such Distribution Date.

SECTION 8.04 Delegation of Duties. So long as ALS acts as Servicer, the Servicer
may, at any time without notice or consent, delegate any duties under this
Agreement to any other entity more than 50% of the voting stock of which is
owned, directly or indirectly, by ALS. The Servicer may at any time perform
specific duties as Servicer through sub-contractors who are in the business of
servicing stand alone commercial laundry equipment loans; provided,

 

42

--------------------------------------------------------------------------------

however, that (i) Servicer shall not delegate to any such sub-contractor any
material portion of such servicing duties without the Administrative Agent’s
(acting at the direction of the Required Noteholders) consent, and (ii) no such
delegation shall relieve the Servicer of its responsibility with respect to such
duties.

SECTION 8.05 Servicer Not to Resign. Subject to the provisions of Section 9.02,
the Servicer shall not resign from the obligations and duties imposed on it by
this Agreement as Servicer without the consent of the Special Required
Noteholders, except upon determination that the performance of its duties under
this Agreement is no longer permissible under applicable law. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to each Trustee and the
Administrative Agent and the Rating Agencies (with a copy to the initial
Noteholders). No such resignation shall become effective until the Indenture
Trustee or a successor Servicer acceptable to the Special Required Noteholders
shall have assumed the responsibilities and obligations of the Servicer in
accordance with Section 9.02.

ARTICLE IX

SERVICER DEFAULT

SECTION 9.01 Servicer Defaults. Each of the following shall constitute a
“Servicer Default”:

(a) any failure by the Servicer to deliver to the Indenture Trustee for deposit
in any of the Designated Accounts or the Lockbox Accounts any required payment
or to direct the Indenture Trustee to make any required distributions therefrom,
which failure continues unremedied for a period of three (3) Business Days after
the date when due;

(b) failure on the part of the Transferor or the Servicer to duly observe or
perform any of their respective covenants or agreements set forth in the
Purchase Agreement, this Agreement or any of the other Basic Documents which
failure (i) materially and adversely affects the rights of the Beneficiaries,
and (ii) continues unremedied for a period of thirty (30) days after the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Transferor or the Servicer, as applicable, by the
Indenture Trustee (acting at the direction of the Administrative Agent), or to
the Transferor or the Servicer, as applicable, and to the Indenture Trustee by
the Administrative Agent;

(c) the entry of a decree or order by a court or agency or supervisory authority
having jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar official for the Transferor or the Servicer, in
any bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding up or liquidation of
their respective affairs, and the continuance of any such decree or order
unstayed and in effect for a period of sixty (60) or more consecutive days;

(d) the consent by the Transferor or the Servicer to the appointment of a
conservator or receiver, liquidator or similar official in any bankruptcy,
insolvency, readjustment of debt, marshaling of assets and liabilities, or
similar proceedings of or relating to the Transferor or the

 

43

--------------------------------------------------------------------------------

Servicer or of or relating to substantially all of their respective property; or
the Transferor or the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable bankruptcy, insolvency or reorganization statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations;

(e) the failure to distribute a Servicer’s Certificate pursuant to the terms of
Section 3.10 or Section 5.08 within three (3) Business Days after the related
Determination Date provided, however, that in the event such failure is caused
by an occurrence out of the reasonable control of the Servicer and is consented
to by the Noteholders (such consent not to be unreasonably withheld), then a
Servicer Default will not occur if such failure is cured within an additional
two (2) Business Days, such exception to be limited to one time per twelve
(12) months during the life of this Agreement;

(f) any assignment of rights or delegation of duties by the Servicer in
violation of this Agreement;

(g) any material adverse change in the properties, business or condition
(financial or otherwise) of the Servicer or the existence of any other condition
which, in each case, constitutes, in the reasonable discretion of the
Administrative Agent (acting at the direction of the Special Required
Noteholders) a material impairment of the Servicer’s ability to perform its
obligations under this Agreement; provided that a change in the value of any
Loan or Receivable shall not result in a Servicer Default under this subsection
(g);

(h) the first to occur of (i) an event of default by the Servicer or its
Affiliate, as applicable, in the performance of any term, provision or condition
of any indebtedness for borrowed money in excess of $5,000,000, which event of
default other than a payment default is neither waived pursuant to an
unconditional waiver nor cured within sixty (60) days (inclusive of any cure
period or other period of grace) of the date upon which such event of default
occurs or (ii) the acceleration of any such indebtedness as a result of an event
of default, such that any indebtedness due thereunder is due prior to its stated
maturity; or any such indebtedness shall be declared to be due and payable prior
to the date of maturity thereof or shall be unpaid on its maturity date;

(i) a final judgment or judgments for the payment of money in excess of
$5,000,000 in the aggregate against the Servicer and the same shall not be
discharged (or provisions made for such discharge) or bonded, or a stay of
execution thereof shall not be procured, within sixty (60) days from the date of
entry thereof and the Servicer shall not, within said period of sixty (60) days,
or within such longer period during which execution of the same shall have been
stayed or bonded, appeal therefrom and cause the execution thereof to be stayed
during such appeal;

(j) the rolling three (3) month average of the Delinquency Ratio - Receivables
exceeds 6.50%;

(k) the rolling three (3) month average of the Delinquency Ratio - Equipment
Loans exceeds 3.50%;

 

44

--------------------------------------------------------------------------------

(l) the rolling three (3) month average of the Dilution Ratio - Receivables
exceeds 10.0%;

(m) the rolling three (3) month average of the Default Ratio - Receivables
exceeds 5.00%;

(n) the rolling three (3) month average of the Default Ratio - Equipment Loans
exceeds 1.50%;

(o) the Days Sales Outstanding - Receivables exceeds one hundred ten (110) days;

(p) if ALS or an Affiliate thereof is the Servicer, the breach by the Servicer
of one or both of the covenants set forth in Section 3.07(i); or

(q) the breach, in any material respect, by the Servicer of any representation
or warranty made by the Servicer in this Agreement or any of the Basic
Documents.

SECTION 9.02 Consequences of a Servicer Default.

(a) If a Servicer Default shall occur and be continuing, the Administrative
Agent (at the direction of the Special Required Noteholders) by notice then
given in writing to the Servicer, the Owner Trustee and the Indenture Trustee
may, in addition to other rights and remedies available in a court of law or
equity to damages, injunctive relief and specific performance, elect to waive
such Servicer Default or direct the Indenture Trustee to terminate all of the
rights and obligations of the Servicer as Servicer under this Agreement
(provided that a termination shall occur without notice upon a Servicer Default
under Section 9.01(c) or (d)). On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Securities, the Loans or Receivables or otherwise,
shall pass to and be vested in the Indenture Trustee and any successor Servicer
pursuant to and under Section 9.03. The Indenture Trustee and any successor
Servicer is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Loans and related documents, or
otherwise. The predecessor Servicer agrees to cooperate with the Backup
Servicer, the Indenture Trustee and any successor Servicer in effecting the
termination of the responsibilities and rights of the Servicer under this
Agreement, including the transfer to the Indenture Trustee for administration by
it of all cash amounts that shall at the time be held by the Servicer for
deposit, or that shall have been deposited by the Servicer in the Lockbox
Accounts, the Collection Accounts, the Reserve Account or thereafter received
with respect to the Loans and the Receivables that shall at that time be held by
the Servicer, and will provide the Backup Servicer, the Indenture Trustee and
any successor Servicer reasonable access to the servicing systems and records
with respect to the Loans and the Receivables. In addition to any other amounts
that are then payable to the predecessor Servicer under this Agreement, the
predecessor Servicer shall be entitled to receive from the successor Servicer
the portions of any Servicer Advance Reimbursement Amount which relates to any
Servicer Advance made by the terminated Servicer. To assist the successor
Servicer in enforcing all rights under the Loans and the Receivables, the
predecessor Servicer, at

 

45

--------------------------------------------------------------------------------

its own expense, shall transfer its electronic records relating to such Loans
and Receivables to the successor Servicer in such electronic form as is
then-maintained by the predecessor Servicer in the ordinary course of its
business and shall transfer the related Loan Files and all other records,
correspondence and documents relating to the Loans and Receivables that it may
possess to the successor Servicer in the manner and at such times as the
successor Servicer shall reasonably request.

(b) Following the occurrence of a Servicer Default, but without limiting the
rights of the Indenture Trustee or the Beneficiaries under any other provisions
of the Basic Documents, the Administrative Agent (at the written direction of
the Required Noteholders) may direct the Indenture Trustee to conduct a review
of the Servicer’s cash application procedures with respect to Collections on the
Loans and Receivables, including transfers from the Lockbox Accounts to the
Collection Accounts, and the Indenture Trustee hereby agrees to conduct such
review, or cause a third party to conduct such review, at the expense of the
Servicer, on such basis as the Administrative Agent (acting at the direction of
the Required Noteholders) shall reasonably determine.

SECTION 9.03 Indenture Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 9.02
unless and until the Administrative Agent (at the direction of the Special
Required Noteholders) has designated a successor Servicer, which has accepted
such appointment, the Backup Servicer shall be the successor in all respects to
the Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for in this Agreement, and shall be subject
to all the responsibilities, restrictions, duties and liabilities relating
thereto placed on the Servicer by the terms and provisions of this Agreement;
provided, however, that the predecessor Servicer shall remain liable for, and
the successor Servicer shall have no liability for, any indemnification
obligations of the Servicer arising as a result of acts, omissions or
occurrences during the period in which the predecessor Servicer was the
Servicer, and provided, further, that ALS shall remain liable for the
indemnification obligations of the Servicer under Sections 8.01(ii) and (iv) of
this Agreement without regard to whether it is still Servicer hereunder. The
Servicer shall be subrogated to the rights of the indemnified party with respect
to claims against a replacement Servicer. As compensation therefor, the Backup
Servicer, the Indenture Trustee or a successor Servicer designated by the
Administrative Agent (at the direction of the Special Required Noteholders)
shall be entitled to reimbursement of costs and expenses incurred in the
transfer and conversion of the electronic records relating to the Loans and the
Receivables received from the predecessor Servicer, together with such
compensation (whether payable out of the Collection Accounts or otherwise) as
the Servicer would have been entitled to under this Agreement if no such notice
of termination had been given including the Servicing Fee, and in the case of
the Backup Servicer, of any amounts to which the Backup Servicer is entitled as
the Servicing Fee pursuant to the Backup Servicing Agreement. In the event the
Indenture Trustee becomes the successor Servicer, it hereby reserves the right
to terminate any then existing sub-servicing agreements as may be entered into
pursuant to Section 8.04. Notwithstanding the above, the Indenture Trustee may,
if it shall be unwilling so to act, or shall, if it is legally unable so to act,
appoint, or petition a court of competent jurisdiction to appoint, a successor
(i) having a net worth of not less than $10,000,000, (ii) acceptable to the
Special Required Noteholders and (iii) whose regular business includes the
servicing of equipment loans, as the successor to the Servicer under this
Agreement in the assumption of all or any part of the responsibilities, duties

 

46

--------------------------------------------------------------------------------

or liabilities of the Servicer under this Agreement. In connection with such
appointment and assumption, the Indenture Trustee may make such arrangements for
the compensation of such successor out of payments on Loans and Receivables as
it and such successor shall agree, subject to the consent of the Required
Noteholders; provided, that if a successor Servicer is appointed and assumes the
duties of successor Servicer hereunder, the Servicing Fee Rate used to calculate
the Servicing Fee payable to the successor Servicer shall be a rate agreed upon
by such successor Servicer and the person or group appointing it hereunder but
not in excess of 1.0% unless the Rating Agencies have received prior written
notice thereof and the Administrative Agent (at the direction of the Required
Noteholders) has consented to such rate. The Indenture Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. No removal or resignation of the
Servicer shall (other than under Section 9.02(a) with respect to a Servicer
Default under Section 9.01(c) or (d)) become effective until the Backup Servicer
under Section 3.13, the Indenture Trustee or another successor Servicer
acceptable to the Special Required Noteholders shall have assumed the Servicer’s
responsibilities and obligations in accordance with this Section 9.03.

SECTION 9.04 Notification to the Beneficiaries and the Certificateholders. Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article IX, the Indenture Trustee shall give prompt written notice thereof
to the Noteholders, the Administrative Agent and the Rating Agencies, and the
Owner Trustee shall give prompt written notice thereof to the
Certificateholders.

SECTION 9.05 Waiver of Past Defaults. The Special Required Noteholders may, on
behalf of all Beneficiaries and Registered Owners, waive any default by the
Servicer in the performance of its obligations hereunder and its consequences,
including a default in making any required deposits to or payments from any of
the accounts in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.

SECTION 9.06 Effects of Termination or Resignation of Servicer.

(a) Upon the appointment of the successor Servicer, the predecessor Servicer
shall immediately remit any Scheduled Payments, Liquidation Proceeds or other
payments that it may receive pursuant to any Loan or Receivable or otherwise to
the successor Servicer for the benefit of the Issuer after such date of
appointment.

(b) After the termination of the Servicer pursuant to Section 9.02 or
resignation pursuant to Section 8.05 (except as otherwise provided in
Section 8.05 or 9.03), the predecessor Servicer shall have no further rights or
obligations with respect to the management or servicing of the Trust Estate or
the enforcement, custody or collection of the Loans or Receivables, and the
successor Servicer shall have all of such obligations, except that the
predecessor Servicer will transmit or cause to be transmitted directly to the
relevant Designated Account, promptly upon receipt and in the same form in which
received, any amounts held by the predecessor Servicer (properly endorsed where
required for the successor Servicer to collect them) received as payments upon
or otherwise in connection with the Loans or Receivables. The predecessor

 

47

--------------------------------------------------------------------------------

Servicer’s indemnification obligations pursuant to Section 8.01 will survive the
termination or resignation of the predecessor Servicer but will not extend to
any acts or omissions of a successor Servicer.

ARTICLE X

TERMINATION; REDEMPTION

SECTION 10.01 Optional Purchase of Equipment Loans and Receivables. If at any
time after the Loan Conversion Date, the Aggregate Loan Balance of the Loans
held by the Trust is 10% or less of the Aggregate Loan Balance on such Loan
Conversion Date, the Servicer shall have the option, but not the obligation, to
purchase for cash the Equipment Loans and related assets and Receivables at a
price equal to the aggregate Administrative Purchase Payments for all Loans
(including Defaulted Equipment Loans) plus the appraised value of the
Receivables and such other related assets held by the Trust (less the
Liquidation Expenses to be incurred in connection with the recovery thereof
(excluding the Receivables and related assets)), such value to be determined by
an appraiser mutually agreed upon by the Servicer, each Trustee and the
Administrative Agent (acting at the direction of the Required Noteholders) (the
“Optional Purchase Price”); provided, however, that the Servicer may not
exercise its option if the Optional Purchase Price would be less than the sum of
(i) the Redemption Price and (ii) all administrative expenses, operating costs
and amounts to third parties due as of such Distribution Date. In the event the
Servicer elects to exercise its option, the Issuer shall redeem the Equipment
Loan Notes and the Receivables Notes in accordance with this Section 10.01
effective as of such date of purchase. The Issuer shall be required to notify
the Indenture Trustee and the Administrative Agent in writing by no later than
five (5) Business Days prior to a notice required to be sent by the Indenture
Trustee pursuant to Section 11.1(a) of the Indenture. To exercise such option,
the Servicer shall deposit in the Loan Collection Account an amount equal to the
Optional Purchase Price.

SECTION 10.02 Termination of the Agreement. Unless otherwise agreed by the
Transferor, the Servicer, the Issuer and the Beneficiaries and the Registered
Owners, this Agreement shall terminate upon termination of the Indenture and the
Servicer shall give the Owner Trustee prompt notice of such termination;
provided that the Notes and all other amounts due to third parties referred to
in Section 10.01 have been paid in full.

ARTICLE XI

MISCELLANEOUS PROVISIONS

SECTION 11.01 Amendment.

(a) This Agreement may be amended by the Transferor, the Servicer and the Issuer
with the consent of the Indenture Trustee and the Administrative Agent, but
without the consent of any of the Noteholders, (i) to cure any ambiguity,
(ii) to correct or supplement any provision in this Agreement that may be
defective or inconsistent with any other provision in this Agreement or any
other Basic Document, (iii) to add to the covenants, restrictions or obligations
of the Transferor, the Servicer or the Indenture Trustee or (iv) to add, change
or eliminate any other provision of this Agreement in any manner that shall not,
as evidenced by an Officer’s Certificate, adversely affect in any material
respect the interests of the Noteholders.

 

48

--------------------------------------------------------------------------------

(b) Notwithstanding paragraph (a), this Agreement may also be amended from time
to time by the Transferor, the Servicer and the Issuer with the consent of the
Required Noteholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement, or of
modifying in any manner the rights of the Noteholders, and any provisions hereof
may be waived with the consent of the Required Noteholders except that no
amendment may be made to this Agreement which would be prohibited under the
proviso of Section 9.2 of the Indenture if such amendment were to be made to the
Indenture unless the consent that would have been required as described therein,
if such amendment were to be made to the Indenture, shall have been obtained.

(c) Prior to the execution of any such amendment or consent, the Indenture
Trustee shall furnish written notification of the substance of such amendment or
consent to the Rating Agencies, the Administrative Agent and the initial
Noteholders.

(d) Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Registered Owner, the Administrative Agent and the Indenture
Trustee shall furnish written notification to each Noteholder.

(e) It shall not be necessary for the consent of the Noteholders pursuant to
Section 11.01(b) to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof but it shall be necessary to obtain the consent of the Administrative
Agent. The manner of obtaining such consents of the Noteholders (and any other
consents of the Noteholders provided for in this Agreement) and of evidencing
the authorization of the execution thereof by the Noteholders shall be subject
to such reasonable requirements as the Indenture Trustee may prescribe.

(f) The Owner Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Owner Trustee’s own rights, duties or immunities
under this Agreement or otherwise. The Indenture Trustee may, but shall not be
obligated to, execute and deliver any such amendment which affects the Indenture
Trustee’s rights, duties or immunities under this Agreement or otherwise.

(g) Each of ALS and the Transferor agrees that such Person shall not amend or
agree to any amendment of the Purchase Agreement unless such amendment would be
permissible under the terms of this Section 11.01 as if this Section 11.01 were
contained in the Purchase Agreement with the consent of the Required
Noteholders.

(h) Notwithstanding the foregoing, the signatures of the Transferor and the
Issuer shall not be required for the effectiveness of any amendment which
modifies the representations, warranties, covenants or responsibilities of the
Servicer at any time when the Servicer is not the Originator or a successor
Servicer is designated pursuant to Section 9.02.

 

49

--------------------------------------------------------------------------------

SECTION 11.02 Protection of Title to Owner Trust Estate.

(a) The Transferor or the Servicer or both shall execute and file such financing
statements and cause to be executed and filed such continuation and other
statements, all in such manner and in such places as may be required by law
fully to preserve, maintain and protect the interest of the Beneficiaries, the
Certificateholders and the Trustees under this Agreement in the Loans and
Receivables. The Transferor or the Servicer or both shall deliver (or cause to
be delivered) to each Trustee and the Administrative Agent file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.

(b) Neither the Transferor nor the Servicer shall change its jurisdiction of
organization, name, identity or corporate structure in any manner that would,
could or might make any financing statement or continuation statement filed in
accordance with paragraph (a) above incorrect or seriously misleading within the
meaning of Section 9-507 of the UCC, unless it shall have given each Trustee and
the Administrative Agent at least sixty (60) days prior written notice thereof
and shall have taken all such actions as may be reasonably requested by the
Trustees or the Administrative Agent necessary to maintain the perfection and
priority of such Liens of the Trustees.

(c) Each of the Transferor and the Servicer shall give each Trustee and the
Administrative Agent at least sixty (60) days prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement. The Servicer shall at all times maintain each office from
which it services Loans and Receivables and its principal executive office
within the United States of America.

(d) The Servicer shall maintain accounts and records as to each Loan accurately
and in sufficient detail to permit (i) the reader thereof to know at any time
the status of such Loan, including payments and recoveries made and payments
owing (and the nature of each) and extensions of any scheduled payments made not
less than forty-five (45) days prior thereto, and (ii) reconciliation between
payments or recoveries on (or with respect to) each Loan and Receivable and the
amounts from time to time deposited in the Lockbox Accounts and the Collection
Accounts.

(e) The Servicer shall maintain its computer systems so that, from and after the
time of sale under this Agreement of the Loans and Receivables to the Issuer,
the Servicer’s master computer records (including any Backup archives) that
refer to any Loan or Receivable indicate clearly that the Loan or Receivable is
owned by the Issuer. Indication of the Issuer’s ownership of a Loan or
Receivable shall be deleted from or modified on the Servicer’s computer systems
when, and only when, the Loan or Receivable has been paid in full, liquidated or
repurchased by the Transferor or purchased by the Servicer.

(f) If at any time the Transferor or the Servicer proposes to sell, grant a
security interest in, or otherwise transfer any interest in stand-alone
commercial laundry equipment loans to any prospective purchaser, lender or other
transferee, the Servicer shall give to such prospective purchaser, lender or
other transferee computer tapes, records or print-outs (including any restored
from Backup archives) that, if they refer in any manner whatsoever to any Loan,
indicate clearly that such Loan has been sold and is owned by the Issuer unless
such Loan has been paid in full, liquidated or repurchased by the Transferor or
purchased by the Servicer.

 

50

--------------------------------------------------------------------------------

(g) If at any time the Transferor or the Servicer proposes to sell, grant a
security interest in, or otherwise transfer any interest in trade receivables to
any prospective purchaser, lender or other transferee, the Servicer shall give
to such prospective purchaser, lender or other transferee computer tapes,
records or print-outs (including any restored from Backup archives) that, if
they refer in any manner whatsoever to any Receivable, indicate clearly that
such Receivable has been sold and is owned by the Issuer unless such Receivable
has been paid in full, liquidated or repurchased by the Transferor or purchased
by the Servicer.

(h) The Servicer shall permit each Trustee and the Administrative Agent and
their respective agents (at such Person’s cost and expense except to the extent
such costs and expenses shall be required to be paid by ALS or its Affiliates
pursuant to the Basic Documents) at any time during normal business hours and
upon reasonable advance notice to inspect, audit and make copies of and
abstracts from the Servicer’s records regarding any Loans and Receivables then
or previously included in the Owner Trust Estate.

(i) The Servicer shall furnish to each Trustee and the Administrative Agent at
any time upon request a list of all Loans and Receivables then held as part of
the Trust including any then existing amendments, substitutions or replacements
thereto, together with a reconciliation of such list to the Schedule of Loans
and Schedule of Receivables and to each of the Servicer’s Certificates furnished
before such request indicating removal of Loans or Receivables from the Trust.
Upon request, the Servicer shall furnish a copy of any such list to the
Transferor. Each Trustee and the Transferor shall hold any such list and the
Schedule of Loans and Schedule of Receivables for examination by interested
parties during normal business hours at their respective offices located at the
addresses set forth in Section 11.03.

SECTION 11.03 Notices. All demands, notices and communications upon or to the
Transferor, the Servicer, the Indenture Trustee, the Administrative Agent, the
Rating Agencies or the initial Noteholders under this Agreement shall be
delivered as specified in Appendix B.

SECTION 11.04 Governing Law. All questions concerning the construction, validity
and interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
giving effect to any choice of law or conflict provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York; provided, however
that the duties and immunities of the Owner Trustee hereunder shall be governed
by the laws of the State of Delaware.

SECTION 11.05 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Securities or
the rights of the holders thereof.

 

51

--------------------------------------------------------------------------------

SECTION 11.06 Assignment.

(a) Notwithstanding anything to the contrary contained in this Agreement, this
Agreement may not be assigned by the Transferor without the prior written
consent of the Special Required Noteholders. The Transferor shall provide notice
of any such assignment to the Rating Agencies and the Administrative Agent (with
a copy to the initial Noteholders).

(b) Notwithstanding anything to the contrary contained in this Agreement, this
Agreement may not be assigned by the Servicer without the prior written consent
of the Special Required Noteholders other than as permitted by Section 8.02. The
Servicer shall provide notice of any such assignment to the Rating Agencies and
the Administrative Agent (with a copy to the initial Noteholders).

SECTION 11.07 Benefits of Agreement. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, the Beneficiaries (subject to the
procedures in Article V of the Indenture), the Certificateholders and the
Trustees and their respective successors and permitted assigns. Except as
otherwise provided in Section 8.01, this Article XI or in Article V of the
Indenture, no other Person shall have any right or obligation hereunder.

SECTION 11.08 Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.

SECTION 11.09 Headings and Cross-References. The various headings in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement.

SECTION 11.10 Assignment to Indenture Trustee. The Transferor hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Beneficiaries and (only to the extent expressly
provided therein) the Registered Owners of all right, title and interest of the
Issuer in, to and under the Purchased Property and/or the assignment of any or
all of the Issuer’s rights and obligations hereunder to the Indenture Trustee.

SECTION 11.11 No Petition Covenants. Notwithstanding any prior termination of
this Agreement, the Servicer and the Transferor shall not, prior to the date
which is one (1) year and one (1) day after the Outstanding Obligations shall
have been paid in full, acquiesce, petition or otherwise invoke or cause the
Transferor or the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Transferor or the Issuer under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Transferor or the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Transferor or the Issuer. The covenants set forth in this
Section 11.11 shall survive the termination of this Agreement.

 

52

--------------------------------------------------------------------------------

SECTION 11.12 Limitation of Liability of the Trustees.

(a) Notwithstanding anything contained herein to the contrary, this Agreement
has been acknowledged and accepted by The Bank of New York Mellon not in its
individual capacity but solely as Indenture Trustee and in no event shall The
Bank of New York Mellon have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer. For all purposes
of this Agreement in performance of its rights and duties hereunder, the
Indenture Trustee shall be entitled to the benefits of Article VI of the
Indenture.

(b) Notwithstanding anything contained herein to the contrary, this Agreement
has been executed by Wilmington Trust Company not in its individual capacity but
solely in its capacity as Owner Trustee of the Issuer and in no event shall
Wilmington Trust Company in its individual capacity or, except as expressly
provided in the Trust Agreement, as Owner Trustee of the Issuer have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of any
duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of Article
VI of the Trust Agreement.

SECTION 11.13 Survival of Agreement. All covenants, agreements, representations
and warranties made herein, in the Basic Documents and in the other agreements
delivered pursuant hereto shall survive the pledge of the Trust Estate and the
issuance of the Notes and shall continue in full force and effect until payments
in full of the Notes and all amounts owing to the Indenture Trustee and the
Beneficiaries hereunder and under the Basic Documents, as applicable; provided
that on the Receivables Payoff Date, all covenants, agreements, representations
and warranties made herein with respect to the Receivables and the Related
Assets with respect thereto shall be of no further force and effect.

SECTION 11.14 Cooperation and Further Assurances. (a) Each of the parties hereto
hereby agrees that it will cooperate in good faith and use commercially
reasonable efforts to assist the Administrative Agent in any sale or
securitization of the Specified Assets to take place after the Loan Conversion
Date; provided, however, that each of the parties hereto agrees that it shall
not be obligated to take any action (including making any changes or amendments
to any of the Basic Documents), or provide any consent if such party would
thereby incur any material obligations or liabilities as a result thereof;
provided, further, that the Administrative Agent shall, at the written request
of the assisting party, offer such party indemnification reasonably satisfactory
to such party against any costs, liabilities and expenses incurred in providing
any requested assistance.

(b) In the event of any Regulatory Change (as defined in the Note Purchase
Agreement) which results in either (i) a determination that either (x) the
Issuer is not a Qualified Special Purpose Entity or (y) any CP Conduit is not a
Person, in either case that is not required, under generally accepted accounting
principles, to consolidate its financial statements with any other entity, or
(ii) a cost arising under Section 2.3 of the Note Purchase Agreement, the
parties hereto agree to negotiate in good faith to amend the Basic Documents in
order to eliminate the

 

53

--------------------------------------------------------------------------------

consolidation requirement; provided, however, that no party shall be obligated
to take any action (or make any amendments) if in the reasonable opinion of such
party any such amendment to the Basic Documents will be unlawful or otherwise
disadvantageous or inconsistent with its policies or regulatory restrictions or
result in any liability, unreimbursed cost or expense to such party.

SECTION 11.15 No Recourse. It is expressly understood and agreed by the parties
hereto that (a) this Agreement is executed and delivered by Wilmington Trust
Company, not individually or personally but solely as trustee of the Issuer, in
the exercise of the powers and authority conferred and vested in it, (b) each of
the representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
of binding only the Issuer, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
Person claiming by, through or under the parties hereto and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Issuer under this Agreement or any other related documents.

[Signature Pages Follow]

 

54

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.

 

ALLIANCE LAUNDRY EQUIPMENT

RECEIVABLES TRUST 2009-A

By:   WILMINGTON TRUST COMPANY,  

not in its individual capacity but solely

as Owner Trustee

By:  

 

Name:   Title:  

 

  S-1   Pooling and Servicing Agreement

--------------------------------------------------------------------------------

ALLIANCE LAUNDRY EQUIPMENT

RECEIVABLES 2009 LLC,

as Transferor

By:  

 

Name:   Title:  

ALLIANCE LAUNDRY SYSTEMS LLC,

as Servicer and Originator

By:  

 

Name:   Title:  

 

  S-2   Pooling and Servicing Agreement

--------------------------------------------------------------------------------

Acknowledged and Agreed:

 

THE BANK OF NEW YORK MELLON,

not in its individual capacity but solely as

Indenture Trustee

By:  

 

Name:   Title:  

 

  S-3   Pooling and Servicing Agreement

--------------------------------------------------------------------------------

EXHIBIT A-1

Form of Initial PSA Assignment

June 26, 2009

For value received, in accordance with the Pooling and Servicing Agreement,
dated as of June 26, 2009 (the “Pooling and Servicing Agreement”), among
Alliance Laundry Systems LLC, a Delaware limited liability company (“ALS”),
Alliance Laundry Equipment Receivables 2009 LLC, a Delaware limited liability
company (the “Transferor”), and Alliance Laundry Equipment Receivables Trust
2009-A (the “Issuer”), the Transferor does hereby sell, assign, transfer and
otherwise convey unto the Issuer, without recourse (except as otherwise provided
in the Pooling and Servicing Agreement), all right, title and interest of the
Transferor in, to and under (a) all Second Tier Purchased Assets that existed on
the Closing Date; and (b) any income and Proceeds of the property described in
clause (a) above.

The foregoing sale does not constitute and is not intended to result in any
assumption by the Issuer of any obligation of the undersigned to the Obligors,
insurers or any other Person in connection with the Second Tier Purchased Assets
or any agreement or instrument relating to any of them.

As set forth in Section 2.06 of the Pooling and Servicing Agreement, the parties
hereto intend that the transactions set forth herein constitute an absolute
assignment by the Transferor to the Issuer on the Closing Date of all the
Transferor’s right, title and interest in and to the Second Tier Purchased
Assets. In the event any transaction set forth herein does not constitute an
absolute assignment, it shall constitute the granting of a security interest by
the Transferor in favor of the Issuer in such assets as provided in Section 2.06
of the Pooling and Servicing Agreement.

This Initial PSA Assignment is made pursuant to and affirms the representations,
warranties and agreements on the part of the undersigned contained in the
Pooling and Servicing Agreement and is to be governed by the Pooling and
Servicing Agreement. The undersigned certifies that all conditions precedent
under the Basic Documents to transfer to the Issuer of the Second Tier Purchased
Assets conveyed hereby have been satisfied.

Capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in the Pooling and Servicing Agreement.

All questions concerning the construction, validity and interpretation of this
Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without giving effect to any choice of
law or conflict provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York; provided, however that the duties and
immunities of the Owner Trustee hereunder shall be governed by the laws of the
State of Delaware.

*  *  *  *  *

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Initial PSA Assignment to be
duly executed as of the day and year first above written.

 

ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2009 LLC

By:

 

 

Name:

 

Title:

 

 

2

--------------------------------------------------------------------------------

EXHIBIT A-2

Form of Additional PSA Assignment

[Date]

For value received, in accordance with the Pooling and Servicing Agreement,
dated as of June 26, 2009 (the “Pooling and Servicing Agreement”), among
Alliance Laundry Systems LLC, a Delaware limited liability company (“ALS”),
Alliance Laundry Equipment Receivables 2009 LLC, a Delaware limited liability
company (the “Transferor”), and Alliance Laundry Equipment Receivables Trust
2009-A (the “Issuer”), the Transferor does hereby sell, assign, transfer and
otherwise convey unto the Issuer, without recourse (except as otherwise provided
in the Pooling and Servicing Agreement), all right, title and interest of the
Transferor in, to and under (a) all Specified Assets that are Equipment Loans
and the Related Assets with respect thereto that existed and were acquired by
the Transferor on such Purchase Date; and (b) any income and Proceeds of the
property described in clause (a) above.

The foregoing sale does not constitute and is not intended to result in any
assumption by the Issuer of any obligation of the undersigned to the Obligors,
insurers or any other Person in connection with the Loans, any Insurance
Policies or any agreement or instrument relating to any of them.

As set forth in Section 2.06 of the Pooling and Servicing Agreement, the parties
hereto intend that the transactions set forth herein constitute an absolute
assignment by the Transferor to the Issuer on the Purchase Date of all the
Transferor’s right, title and interest in and to the Second Tier Purchased
Assets. In the event any transaction set forth herein does not constitute an
absolute assignment, it shall constitute the granting of a security interest by
the Transferor in favor of the Issuer in such assets as provided in Section 2.06
of the Pooling and Servicing Agreement.

This Additional PSA Assignment is made pursuant to and affirms the
representations, warranties and agreements on the part of the undersigned
contained in the Pooling and Servicing Agreement and is to be governed by the
Pooling and Servicing Agreement. The undersigned certifies that all conditions
precedent under the Basic Documents to the transfer of the Second Tier Purchased
Assets to the Issuer conveyed hereby have been satisfied.

Capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in the Pooling and Servicing Agreement.

All questions concerning the construction, validity and interpretation of this
Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without giving effect to any choice of
law or conflict provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York; provided, however that the duties and
immunities of the Owner Trustee hereunder shall be governed by the laws of the
State of Delaware.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Replacement Assignment to be
duly executed as of the day and year first above written.

 

ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2009 LLC

By:

 

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

EXHIBIT A-3

Form of Substitution Assignment

[Date]

For value received, in accordance with the Pooling and Servicing Agreement,
dated as of June 26, 2009 (the “Pooling and Servicing Agreement”), among
Alliance Laundry Systems LLC, a Delaware limited liability company (“ALS”),
Alliance Laundry Equipment Receivables 2009 LLC, a Delaware limited liability
company (the “Transferor”), and Alliance Laundry Equipment Receivables Trust
2009-A (the “Issuer”), the Transferor does hereby sell, assign, transfer and
otherwise convey unto the Issuer, without recourse (except as otherwise provided
in the Pooling and Servicing Agreement), all right, title and interest of the
Transferor in, to and under (a) the Substitute Loans, including all documents
and instruments evidencing or governing the Substitute Loans and all Loan Files
relating thereto, identified on the Schedule of Loans attached hereto (the
“Substitute Loans”) and all monies paid or payable thereon (including
Liquidation Proceeds) on or after or due and payable, but in each case not paid,
as of                      (the “Substitution Cutoff Date”); (b) the Equipment,
including all security interests therein, granted by Obligors pursuant to such
Substitute Loans and any other collateral securing such Substitute Loans;
(c) any Insurance Policies, and Proceeds thereof, and all rights and benefits
thereunder, with respect to such Equipment and any other collateral securing
such Substitute Loans; (d) with respect to such Substitute Loans, any
Guaranties, and Proceeds thereof, and all rights and benefits thereunder;
(e) all funds on deposit from time to time in the Lockbox or in the Lockbox
Accounts with respect to such Substitute Loans and all Proceeds thereof; (f) the
Purchase Agreement with respect to such Substitute Loans, and the other Basic
Documents (other than the Trust Agreement and the documents and certificates
executed in connection with the foregoing), including the right of the
Transferor to cause ALS to perform its obligations thereunder (including the
obligation to repurchase such Substitute Loans under certain circumstances); and
(g) any income and Proceeds of the property described in clauses (a) through
(f) above.

The foregoing sale does not constitute and is not intended to result in any
assumption by the Issuer of any obligation of the undersigned to the Obligors,
insurers or any other Person in connection with the Second Tier Purchased Assets
or any agreement or instrument relating to any of them.

As set forth in Section 2.06 of the Pooling and Servicing Agreement, the parties
hereto intend that the transactions set forth herein constitute an absolute
assignment by the Transferor to the Issuer on the Substitution Date of all the
Transferor’s right, title and interest in and to the Second Tier Purchased
Assets. In the event any transaction set forth herein does not constitute an
absolute assignment, it shall constitute the granting of a security interest by
the Transferor in favor of the Issuer in such assets as provided in Section 2.06
of the Pooling and Servicing Agreement.

This Substitution Assignment is made pursuant to and affirms the
representations, warranties and agreements on the part of the undersigned
contained in the Pooling and Servicing

--------------------------------------------------------------------------------

Agreement and is to be governed by the Pooling and Servicing Agreement. The
undersigned certifies that all conditions precedent under the Basic Documents to
transfer to the Issuer of the Second Tier Purchased Assets conveyed hereby have
been satisfied.

Capitalized terms used herein and not otherwise defined shall have the meaning
assigned to them in the Pooling and Servicing Agreement.

All questions concerning the construction, validity and interpretation of this
Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without giving effect to any choice of
law or conflict provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York; provided, however that the duties and
immunities of the Owner Trustee hereunder shall be governed by the laws of the
State of Delaware.

*  *  *  *  *

 

2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has caused this Substitution Assignment to
be duly executed as of the day and year first written above.

 

ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2009 LLC By:  

 

Name:   Title:  

--------------------------------------------------------------------------------

EXHIBIT B

Locations of Schedule of Loans And Receivables

The Schedule of Loans and Receivables is on file at the offices of:

 

1. The Indenture Trustee

 

2. The Owner Trustee

 

3. Alliance Laundry Systems LLC

 

4. Alliance Laundry Equipment Receivables 2009 LLC

--------------------------------------------------------------------------------

EXHIBIT C

[Reserved]

--------------------------------------------------------------------------------

EXHIBIT D

Form of Servicer’s Certificate

[ALS to provide]

--------------------------------------------------------------------------------

EXHIBIT E

Form of Securities Account Control Agreement

--------------------------------------------------------------------------------

SECURITIES ACCOUNT CONTROL AGREEMENT

This Securities Account Control Agreement (this “Agreement”) dated as of
June 26, 2009, among Alliance Laundry Equipment Receivables Trust 2009-A (the
“Debtor”), THE BANK OF NEW YORK MELLON, a New York banking corporation, as
Indenture Trustee (the “Secured Party”) and THE BANK OF NEW YORK MELLON (the
“Securities Intermediary”) is entered into pursuant to the provisions of
Section 6.07(b) of the Pooling and Servicing Agreement, dated as of June 26,
2009, among Alliance Laundry Systems LLC, Alliance Laundry Equipment Receivables
2009 LLC and the Debtor (the “Pooling and Servicing Agreement”). All references
herein to the “UCC” shall mean the Uniform Commercial Code as in effect in the
State of New York.

Section 1. Establishment of Securities Accounts. The Securities Intermediary
hereby confirms and agrees that:

(a) The Secured Party was granted by the Debtor a security interest in the
Securities Account (as defined below) pursuant to the Indenture, dated as of
June 26, 2009, between the Debtor and the Secured Party (the “Indenture”);

The Securities Intermediary has established in the name of the Secured Party the
Alliance Laundry Equipment Receivables Trust 2009-A Loan Collection Account
(Account No. 505600), the Alliance Laundry Equipment Receivables Trust 2009-A
Receivables Collection Account (Account No. 505601) and the Alliance Laundry
Equipment Receivables Trust 2009-A Reserve Account (Account No. 505602)
(collectively the “Securities Account”). The Securities Intermediary shall not
change the names or account numbers of the Securities Account without the prior
written consent of the Secured Party;

(b) The Securities Account shall be under the sole dominion and control at all
times of the Secured Party. The Securities Intermediary shall comply with all
entitlement orders (as defined in Section 8-102(a)(8) of the UCC) originated by
the Secured Party without the further consent of the Debtor or any other person
or entity. Any securities or other property underlying any financial assets
credited to the Securities Account shall be registered in the name of the
Securities Intermediary, indorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to a Securities
Account be registered in the name of the Debtor, payable to the order of the
Debtor or specially indorsed to the Debtor except to the extent the foregoing
have been specially indorsed to the Securities Intermediary or in blank;

(c) All property delivered to the Securities Intermediary pursuant to the
Indenture or the Pooling and Servicing Agreement shall be promptly credited to
the applicable Securities Account in accordance with the terms thereof; and

(d) The Securities Account are accounts to which financial assets are or may be
credited.

Section 2. “Financial Assets” Election. The Securities Intermediary hereby
agrees that each item of property (whether investment property, financial asset,
security, instrument, credit balances or uninvested funds) credited to the
Securities Account shall be treated as a “financial asset” within the meaning of
Section 8-102(a)(9) of the UCC.

--------------------------------------------------------------------------------

Section 3. Entitlement Orders. Notwithstanding Section l(b), the Securities
Intermediary may comply with the entitlement orders (as defined in
Section 8-102(a)(8) of the UCC) concerning the Securities Account originated by
the Debtor (to the extent they do not conflict with the requirements of the
Indenture and the Pooling and Servicing Agreement) prior to receipt from the
Secured Party of a Notice of Sole Control in substantially the form set forth in
Exhibit A hereto and shall, after the receipt from the Secured Party of a Notice
of Sole Control, cease complying with the entitlement orders concerning the
Securities Account originated by the Debtor and comply solely with the
entitlement orders originated by the Secured Party (without the requirement of
notice to or any action by any other person, including the Debtor).

Section 4. Subordination of Lien, Waiver of Set-Off. In the event that the
Securities Intermediary has or subsequently obtains by agreement, by operation
of law or otherwise a security interest in the Securities Account or any
security entitlement credited thereto, the Securities Intermediary hereby agrees
that such security interest shall be subordinate to the security interest of the
Secured Party created by the Indenture. The financial assets and other items
deposited to the Securities Account will not be subject to deduction, set-off,
banker’s lien, or any other right in favor of any person other than as created
pursuant to the Indenture.

Section 5. Choice of Law. This Agreement and the Securities Account (as well as
the securities entitlements related thereto) shall be governed by the laws of
the State of New York. Regardless of any provision in any other agreement, for
purposes of the UCC, the State of New York shall be deemed to be the Securities
Intermediary’s jurisdiction.

Section 6. Conflict with Other Agreements.

(a) In the event of any conflict between this Agreement (or any portion thereof)
and any other agreement now existing or hereafter entered into, the terms of
this Agreement shall prevail; and

(b) No amendment or modification of this Agreement or waiver of any right
hereunder shall be binding on any party hereto unless it is in writing, signed
by all of the parties hereto and consented to in writing by the Required
Noteholders.

Section 7. Adverse Claims. Except for the claims and interest of the Secured
Party and of the Debtor in the Securities Account, the Securities Intermediary
does not know of any claim to, or interest in, the Securities Account or in any
financial asset credited thereto. If any person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against the Securities Account or in any financial
asset carried therein, the Securities Intermediary will promptly notify the
Debtor, the Secured Party, the Servicer and the Administrative Agent thereof.

Section 8. Maintenance of the Securities Account. In addition to, and not in
lieu of, the obligation of the Securities Intermediary to honor entitlement
orders as agreed in Section 1(b) and Section 3, the Securities Intermediary
agrees to maintain the Securities Account as follows:

(a) Notice of Sole Control. If at any time the Secured Party delivers to the
Securities Intermediary a Notice of Sole Control, the Securities Intermediary
agrees that after receipt of such notice it will comply only with entitlement
orders and other directions with respect to the Securities Account originated by
the Secured Party and will cease complying with any such entitlement orders or
other directions originated by or on behalf of the Debtor;

 

2

--------------------------------------------------------------------------------

(b) Eligible Investments. Until such time as the Securities Intermediary
receives a Notice of Sole Control signed by the Secured Party, the Securities
Intermediary shall, notwithstanding any entitlement orders or other directions
to the contrary from the Debtor, make all Eligible Investments in accordance
with the Pooling and Servicing Agreement;

(c) Statements and Confirmations. The Securities Intermediary will promptly send
copies of all statements, confirmations and other correspondence concerning the
Securities Account and/or any financial assets credited thereto simultaneously
to each of the Debtor, the Secured Party, the Servicer, the Administrative Agent
and at the address referenced in Section 12 of this Agreement; and

(d) Tax Reporting. All items of income, gain, expense and loss recognized in the
Securities Account shall be reported to the Internal Revenue Service and all
state and local taxing authorities under the name and taxpayer identification
number of the Debtor.

Section 9. Representations, Warranties and Covenants of the Securities
Intermediary. The Securities Intermediary hereby makes the following
representations, warranties and covenants:

(a) The Securities Account has been established as set forth in Section 1 above
and the Securities Account will be maintained in the manner set forth herein
until termination of this Agreement;

(b) The Securities Account constitutes a “securities account” within the meaning
of Section 8-501(a) of the UCC;

(c) The Securities Intermediary shall not change the name or the account number
of the Securities Account without the prior written consent of the Secured
Party;

(d) No financial asset is or will be registered in the name of the Debtor,
payable to Debtor’s order, or specifically indorsed to the Debtor, except to the
extent such financial asset has been indorsed to the Securities Intermediary or
in blank;

(e) This Agreement is the valid and legally binding obligations of the
Securities Intermediary; and

(f) There are no other agreements entered into between the Securities
Intermediary and the Debtor or any other person with respect to the Securities
Accounts, and the Securities Intermediary has not entered into, and until the
termination of this Agreement will not enter into, any agreement with any other
person relating to the Securities Account and/or any financial asset credited
thereto pursuant to which the Securities Intermediary has agreed to comply with
entitlement orders of such person. The Securities Intermediary has not entered
into,

 

3

--------------------------------------------------------------------------------

and until the termination of this Agreement will not enter into, any agreement
with the Debtor or the Secured Party purporting to limit or condition the
obligation of the Securities Intermediary to comply with entitlement orders as
set forth in Section 3.

Section 10. Granting Clause. Without limiting the terms of the Indenture, as
security for all amounts owed and any remaining payments of interest and
principal under the Indenture, the Debtor hereby pledges, assigns and conveys to
the Secured Party for the benefit of the Beneficiaries, all of its right, title
and interest in and to the Securities Account and all securities, cash,
investments or other financial assets now or hereafter credited thereto.

Section 11. Successors, Assignment. The terms of this Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
corporate successors or heirs and personal representatives who obtain such
rights solely by operation of law. The Secured Party may assign its rights
hereunder only with the express written consent of the Securities Intermediary
and by sending written notice of such assignment to the Debtor.

Section 12. Notices. Any communication, notice or demand to be given hereunder
shall be duly given hereunder if given in the form and manner, and delivered to
the address set forth in the Pooling and Servicing Agreement, or in such other
form and manner or to such other address as shall be designated by any party
hereto to each other party hereto in a written notice delivered in accordance
with the terms of the Pooling and Servicing Agreement.

Section 13. Termination. The rights and powers granted herein to the Secured
Party, granted in order to perfect its security interest in the Securities
Account, are powers coupled with interest and will neither be affected by the
bankruptcy of the Debtor nor by the lapse of time. The obligations of the
Securities Intermediary hereunder shall continue in effect until the security
interests of the Secured Party in the Securities Account have been terminated
and the Secured Party has notified the Securities Intermediary and the
Administrative Agent of such termination in writing. The Secured Party agrees to
provide Notice of Termination in substantially the form of Exhibit B hereto to
the Securities Intermediary and the Administrative Agent upon the request of the
Debtor on or after the termination of the Secured Party’s interest in the
Securities Account pursuant to the terms of this Agreement.

Section 14. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.

Section 15. No Recourse. It is expressly understood and agreed by the parties
hereto that (a) this Agreement is executed and delivered by Wilmington Trust
Company, not individually or personally but solely as trustee of the Debtor, in
the exercise of the powers and authority conferred and vested in it, (b) each of
the representations, undertakings and agreements herein made on the part of the
Debtor is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
of binding only the Debtor, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
Person claiming by, through or under the parties hereto and (d)

 

4

--------------------------------------------------------------------------------

under no circumstances shall Wilmington Trust Company be personally liable for
the payment of any indebtedness or expenses of the Debtor or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Debtor under this Agreement or any other related documents.

Section 16. Incorporation by Reference. In connection with its appointment and
acting hereunder, Secured Party (as Secured Party and Securities Intermediary)
is entitled to all rights, privileges, protections, benefits, immunities and
indemnities to the extent provided to it as Indenture Trustee under the
Indenture.

[The remainder of this page intentionally left blank.]

 

5

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

Debtor: Alliance Laundry Equipment Receivables Trust
2009-A By:   Wilmington Trust Company, not in its individual capacity, but
solely as Owner Trustee

By:  

 

Name:  

 

Title:  

 

Secured Party: THE BANK OF NEW YORK MELLON, as Indenture Trustee for the benefit
of the Beneficiaries under the Indenture By:  

 

Name:  

 

Title:  

 

Securities Intermediary: THE BANK OF NEW YORK MELLON By:  

 

Name:  

 

Title:  

 

--------------------------------------------------------------------------------

EXHIBIT F

Form of Borrowing Base Certificate

[Natixis/ALS to provide]

--------------------------------------------------------------------------------

EXHIBIT G

Agreed Upon Procedures

[See Attached]

--------------------------------------------------------------------------------

APPENDIX A

PART I - DEFINITIONS

All terms defined in this Appendix shall have the defined meanings when used in
the Basic Documents, unless otherwise defined therein.

Accountants’ Report: As defined in Section 5.02 of the Pooling and Servicing
Agreement.

Accounting Date: With respect to a Distribution Date, the last day of the
related Monthly Period, or, with respect to the Distribution Date, if any, that
occurs in the same calendar month as the Closing Date, the close of business on
the Closing Date.

Accounts: Has the meaning given to such term in Section 9-102(a) of the UCC.

Act: An Act as specified in Section 12.3(a) of the Indenture.

Additional PSA Assignment: The assignment substantially in the form of Exhibit
A-2 to the Pooling and Servicing Agreement.

Adjusted Eurodollar Rate: On any day, an interest rate per annum equal to the
quotient, expressed as a percentage and rounded upwards (if necessary) to the
nearest 1/100 of 1%, obtained by dividing (i) LIBOR on such day by (ii) the
decimal equivalent of 100% minus the Eurodollar Reserve Percentage on such day.

Adjusted Receivables Balance: As of any date of determination, the excess of
(x) the then Gross Receivables Balance over (y) the sum of the Unpaid Balances
of all Receivables owned by the Issuer that are not Eligible Receivables.

Administration Agreement: That certain Administration Agreement, dated as of
June 26, 2009, among ALS, as Administrator, the Trust and the Indenture Trustee,
as amended and supplemented from time to time.

Administrative Agent: As defined in the Note Purchase Agreement.

Administrative Loan: A Loan which the Servicer is required to purchase as of an
Accounting Date pursuant to Section 3.08 of the Pooling and Servicing Agreement
or which the Servicer has elected to repurchase as of an Accounting Date
pursuant to Section 10.01 of the Pooling and Servicing Agreement.

Administrative Purchase Payment: With respect to a Distribution Date and to an
Administrative Loan purchased as of the related Accounting Date, the Unpaid
Balance of a Purchased Equipment Loan (as each such term is defined in the
Purchase Agreement).

Administrator: ALS or any successor Administrator under the Administration
Agreement.

--------------------------------------------------------------------------------

Advances: Advances made on the Equipment Loan Notes and Receivables Notes in
accordance with the Note Purchase Agreement.

Adverse Claim: A lien, security interest, charge or encumbrance, or other right
or claim in, of or on any Person’s assets or properties in favor of any other
Person.

Affiliate: With respect to any specified Person, any other Person controlling,
controlled by or under common control with such specified Person. For the
purposes of this definition, “control” when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

Agency Office: The Bank of New York Mellon, 101 Barclay Street, 4 West, New
York, New York 10286, Attention Asset Backed Securities Group/Alliance Laundry
Equipment Receivables Series 2009-A/Antonio Vayas.

Agents: As defined in the Note Purchase Agreement.

Aggregate Equipment Loan Note Principal Balance: As of any date of
determination, the sum of the Note Principal Balances of all Equipment Loan
Notes then Outstanding.

Aggregate Initial Loan Balance: The sum of the Initial Loan Balances of the
Loans as of the Initial Cutoff Date, which is $275,016,210.

Aggregate Loan Balance: The sum of the Loan Balances of all outstanding Loans
(other than Defaulted Equipment Loans) held by the Trust, as of any date.

Aggregate Note Principal Balance: As of any date of determination, the sum of
the Note Principal Balances for all Notes then Outstanding.

Aggregate Receivables Note Principal Balance: As of any date of determination,
the sum of the Note Principal Balances of all Receivables Notes then
Outstanding.

ALER: Alliance Laundry Equipment Receivables 2009 LLC, a Delaware limited
liability company.

ALERT 2005 Transaction: That certain trade receivables and equipment loan
funding facility pursuant to an Indenture, dated as of June 28, 2005, between
Alliance Laundry Equipment Receivables Trust 2005-A and the Indenture Trustee,
and all other documents related thereto.

ALH: Alliance Laundry Holdings LLC, a Delaware limited liability company.

ALS: Alliance Laundry Systems LLC, a Delaware limited liability company.

Alternative Rate: On any day, an interest rate per annum equal to fifty basis
points (0.50%) per annum above the Adjusted Eurodollar Rate; provided, however,
that the Alternative

 

2

--------------------------------------------------------------------------------

Rate on any such day for the outstanding principal amount of any Advance, made
by an Agent or a Noteholder associated with such Agent, allocated to an Interest
Period shall be the Base Rate if (A)(i) on or before the third Business Day
prior to such Interest Period, such Agent shall have notified the Indenture
Trustee and the Issuer that a Eurodollar Disruption Event has occurred and is
continuing and (ii) as a result thereof, such Advance was funded by such Agent
and its associated Noteholders, as the case may be, by a source of funds for
which interest is determined by reference to the Base Rate or (B) an Interest
Period is commenced as a result of the events described in the proviso to the
definition of Interest Period.

Annual Percentage Rate: With respect to a Loan, the annual rate of finance
charges stated in such Loan, stated as a percentage.

Applicable Law: With respect to any Person, all existing laws, rules,
regulations (including proposed, temporary and final income tax regulations),
statutes, treaties, codes, ordinances, permits, certificates, orders and
licenses of and interpretations by any Governmental Authority and judgments,
decrees, injunctions, writs, or orders of any court, arbitrator or other
administrative, judicial, or quasi-judicial tribunal or agency of competent
jurisdiction applicable to such Person.

Applicable Margin: As defined in the Applicable Margin Fee Letter.

Applicable Margin Fee Letter: The letter agreement among the Issuer, the
Noteholders and the Indenture Trustee.

Assignment: Any Initial Assignment or Subsequent Assignment.

Assignment of Proceeds Receivables: A Receivable owing from a distributor that
is to be repaid from the Proceeds of a Loan.

Authorized Officer: With respect to the Issuer, any officer of the Owner Trustee
who is authorized to act for the Owner Trustee in matters relating to the Issuer
and who is identified on the list of Authorized Officers delivered by the Owner
Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter) and, so long as the
Administration Agreement is in effect, any Vice President or more senior officer
of the Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant to the
Administration Agreement and who is identified on the list of Authorized
Officers delivered by the Administrator to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter).

Available Amount: Either or both, as the context may require, of the Equipment
Loan Available Amount or the Receivables Available Amount.

Available Drawing Amount: As of any date of determination, an amount equal to
the product of (x) ten percent (10%) or such lesser percentage (subject to a
floor of 5.75%) as is necessary to ensure that both the Equipment Loan Required
Credit Support and the Receivables Required Credit Support are fully covered
with no resulting Borrowing Base Shortfall at such time and (y) the sum of
(i) the Equipment Loan Collateral Value as of the most recent Equipment

 

3

--------------------------------------------------------------------------------

Loan Borrowing Date or Distribution Date and (ii) the Receivables Collateral
Value as of the most recent Receivables Borrowing Date or Distribution Date;
provided, however, that upon the occurrence of an Event of Default or Rapid
Amortization Event, the Equipment Loan Collateral Value and the Receivables
Collateral Value, as the case may be, for purposes of the preceding sentence,
shall be determined as of the Accounting Date immediately prior to the
occurrence of such event; and provided, further, that the Available Drawing
Amount shall be subject to adjustment pursuant to Section 3.27(f) of the
Indenture.

Notwithstanding the foregoing, at all times on and after the Loan Conversion
Date (except for such designation being due to the operation of clause (x) of
the definition thereof) the amount set forth in this definition of Available
Drawing Amount shall be equal to the sum of (A) the greater of (i) 5.75% of the
Net Equipment Loans Balance, as of the Loan Conversion Date or (ii) ten percent
(10%) of the Net Equipment Loans Balance or such lesser percentage as is
necessary to ensure that the Equipment Loan Required Credit Support is fully
covered with no resulting Borrowing Base Shortfall at such time and (B) ten
percent (10%) of the Receivables Required Credit Support or such lesser
percentage as is necessary to ensure that the Receivables Required Credit
Support is fully covered with no resulting Borrowing Base Shortfall at such
time.

Backup Servicer: The entity designated as such pursuant to Section 3.13 of the
Pooling and Servicing Agreement; initially, Lyon.

Backup Servicer Fee: The amount payable to the Backup Servicer pursuant to
Section 6 of the Backup Servicing Agreement.

Backup Servicing Agreement: Initially, the Backup Servicing Agreement, dated as
of June 26, 2009, among the Servicer, the Issuer, the Indenture Trustee and
Lyon; and any successor Backup Servicing Agreement entered into among the entity
designated as Backup Servicer pursuant to 3.13 of the Pooling and Servicing
Agreement, the Servicer, the Issuer and the Indenture Trustee.

Balloon Loan: Any Loan for which the principal portion of the final Scheduled
Payment for such Loan exceeds the principal amount of the Scheduled Payment for
the prior month.

Base Rate: On any date, a fluctuating rate of interest per annum equal to the
highest of (i) the rate of interest in effect for such day as publicly announced
from time to time by the applicable Managing Agent as its “prime rate” for such
day, (ii) the Federal Funds Rate plus one-half of one percent (0.50%) per annum,
and (iii) if the certification described in part (b) of the definition of
Eurodollar Disruption Event is in effect (except when the Adjusted Eurodollar
Rate is unavailable during the circumstances in part (a) or part (c) of such
definition), the sum of the (x) Adjusted Eurodollar Rate plus one-half of one
percent (0.50%) per annum plus (y) the Market Disruption Spread.

Basic Documents: The Certificate of Trust, the Trust Agreement, the Purchase
Agreement, the Pooling and Servicing Agreement, any Assignment, the Custodial
Agreement, the Administration Agreement, the Indenture, the Note Purchase
Agreement, the LLC Agreement, the Certificate of Formation of the Transferor,
the Backup Servicing Agreement, any Interest Rate Cap Agreements, the Applicable
Margin Fee Letter, the Lockbox Agreements, the Control Agreement and the other
documents and certificates delivered in connection therewith.

 

4

--------------------------------------------------------------------------------

Beneficiaries: The Noteholders and the Administrative Agent.

Borrowing Base Certificate: The certificate substantially in the form of Exhibit
F to the Pooling and Servicing Agreement.

Borrowing Base Shortfall: As of any date of determination, either or both, as
the context may require, of a Loan Borrowing Base Shortfall or a Receivables
Borrowing Base Shortfall.

Business Day: Any day other than a Saturday, a Sunday or any other day on which
banking institutions in New York, New York or Chicago, Illinois or, if a
successor Servicer shall have been appointed, the location of the successor
Servicer’s principal banking institution may, or are required to, remain closed.

Business Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12 Del.
Code § 3801 et seq., as the same may be amended from time to time.

Canadian Translation Premium: An amount equal to the adjustment associated with
the translation of the Equipment Loans denominated in Canadian dollars to
Dollars.

Carrying Cost Reserve: As defined in Section 6.04(d) of the Pooling and
Servicing Agreement.

Certificate: As defined in the Trust Agreement.

Certificate Distribution Account: As defined in the Trust Agreement.

Certificate of Formation: The certificate of formation of the Transferor to be
filed for the Transferor pursuant to and in accordance with the Delaware Limited
Liability Company Act.

Certificate of Trust: The certificate of trust of the Issuer substantially in
the form of Exhibit B to the Trust Agreement to be filed for the Trust pursuant
to Section 3810(a) of the Business Trust Statute.

Certificate Register: As defined in the Trust Agreement.

Certificateholder: As defined in the Trust Agreement.

Change of Control: Either one of the following:

(a) the failure of the Transferor to own, free and clear of any Adverse Claim
and on a fully diluted basis, 100% of the outstanding Equity Interests of the
Issuer; or

(b) the failure of ALS to own, free and clear of any Adverse Claim and on a
fully diluted basis, at least 100% of the outstanding Equity Interests of the
Transferor.

 

5

--------------------------------------------------------------------------------

Chargebacks: The sum of the Unpaid Balances of all Receivables of an Obligor
created in connection with the partial payment of previously existing
Receivables of such Obligor.

Chattel Paper: Has the meaning given to such term in Section 9-102(a) of the
UCC.

Closing Date: June 26, 2009.

Code: The Internal Revenue Code of 1986, as amended from time to time, and the
Treasury Regulations promulgated thereunder.

Collateral: The Trust Estate.

Collateral Documents: As defined in Section 2.09 of the Pooling and Servicing
Agreement.

Collateral Value: The sum of (A) the Equipment Loan Collateral Value and (B) the
Receivables Collateral Value.

Collection Accounts: Collectively, the Loan Collection Account and the
Receivables Collection Account.

Collections: As defined in the Purchase Agreement.

Commercial Paper: Commercial paper issued by, or on behalf of, a CP Conduit in
order to fund or maintain its interest in a Note.

Consolidated Interest Coverage Ratio: As defined in the Credit Agreement;
provided, that if the Credit Agreement is replaced, the “Consolidated Interest
Coverage Ratio” shall be calculated as defined in such replacement facility (as
amended) unless such replacement facility (as amended) does not contain such
corresponding ratio. If, at any time, the Servicer has not entered into such a
replacement facility or such replacement facility does not contain corresponding
ratios, the Servicer shall maintain the Consolidated Interest Coverage Ratios
set forth in Section 3.07 of the Pooling and Servicing Agreement as if the
Credit Agreement remained in full force and effect.

Consolidated Leverage Ratio: As defined in the Credit Agreement; provided, that
if the Credit Agreement is replaced, the “Consolidated Leverage Ratio” shall be
calculated as defined in such replacement facility (as amended) unless such
replacement facility (as amended) does not contain such corresponding ratio. If,
at any time, the Servicer has not entered into such a replacement facility or
such replacement facility does not contain corresponding ratios, the Servicer
shall maintain the Consolidated Leverage Ratios set forth in Section 3.07 of the
Pooling and Servicing Agreement as if the Credit Agreement remained in full
force and effect.

Contingent Fees: As of any Distribution Date, any excess of the amount equal to
the Receivables Fee not paid by the Issuer pursuant to Sections 8.2(f)(i)(8) and
8.2(f)(ii)(8) of the Indenture and any excess amount equal to the Equipment Fee
not paid by the Issuer pursuant to Sections 8.2(c)(10) and 8.2(d)(10) of the
Indenture, as applicable.

 

6

--------------------------------------------------------------------------------

Contra Allowance: During any quarterly period, the highest month-end balance
during the preceding quarter of Receivables owing from Obligors with respect to
which the Originator owes off-setting amounts payable (measured to the extent of
such offset). The Contra Allowance for the period from the Closing Date through
June 30, 2009 shall equal $245,457. Further, the Contra Allowance for the
quarter beginning on July 1, 2009 shall be measured by the highest month-end
balance during the period from April 1, 2009 to June 30, 2009.

Contract Management System: All computerized electronic contract management
systems maintained by the Servicer for all Loans, Receivables and other
agreements similar to the Loans and the Receivables.

Contracts: Has the meaning given to such term in Section 9-102(a) of the UCC.

Control Agreement: As defined in Section 6.07(b) of the Pooling and Servicing
Agreement.

Conversion Date: Either or both, as the context may require, of the Loan
Conversion Date or the Receivables Conversion Date.

Corporate Trust Office: With respect to the Indenture Trustee or the Owner
Trustee, the principal office at which at any particular time the corporate
trust business of the Indenture Trustee or Owner Trustee, respectively, shall be
administered, which offices at the Closing Date are located, in the case of the
Indenture Trustee, at The Bank of New York Mellon, 101 Barclay Street, 4 West,
New York, New York 10286, Attention Asset Backed Securities Group/Alliance
Laundry Equipment Receivables Series
2009-A/Antonio Vayas., (fax) 212-815-2493, and in the case of the Owner Trustee,
at Wilmington Trust Company, Rodney Square North, 1100 North Market Street CFS,
Ninth Floor, Wilmington, Delaware 19890, Attn: Corporate Trust Administration.

Cost of Funds Rate: With respect to (i) any Advance funded by a CP Conduit via
the issuance of Commercial Paper, the CP Rate and (ii) any Advance not funded by
a CP Conduit via the issuance of Commercial Paper, the Alternative Rate.

CP Conduit: As defined in the Note Purchase Agreement.

CP Rate: With respect to any Advance held by a CP Conduit for all or part of any
Interest Period, a per annum rate equal to the weighted average cost (as
determined by such CP Conduit or its administrator and notified to the
Administrative Agent, and which shall include commissions of placement agents
and dealers, incremental carrying costs incurred with respect to Commercial
Paper issued by or with respect to such CP Conduit maturing on dates other than
those on which corresponding funds are received by such CP Conduit and any other
costs associated with the issuance of such Commercial Paper, estimates of
commercial paper rates for the period from the end of any Interest Period
through the related Distribution Date and good faith increases and decreases of
cost of funds to reflect overestimation or underestimation of commercial paper
rates for prior periods) of or related to the issuance of Commercial Paper
issued by or with respect to such CP Conduit and other borrowings by such CP
Conduit (including sales of interests in any Advance or the related Notes by
such CP Conduit to and any borrowings by such CP Conduit from, its Support Party
(as defined in the Note Purchase

 

7

--------------------------------------------------------------------------------

Agreement)) that are allocated, in whole or in part, by such CP Conduit or its
administrator to fund or maintain any portion of any Advance or the related
Notes (and which may be also allocated in part to the funding of other assets of
such CP Conduit); provided, that if any component of such rate is a discount
rate, in calculating the “CP Rate” for any portion of the Advances for such
Interest Period, such CP Conduit shall for such component use the rate resulting
from converting such discount rate to an interest-bearing equivalent rate per
annum.

Credit Agreement: The Credit Agreement, dated as of January 27, 2005, among the
Servicer, Alliance Laundry Holdings LLC, ALH Finance LLC, Lehman Brothers Inc.,
as Sole Adviser, Sole Lead Arranger, and Sole Bookrunner, The Bank of Nova
Scotia, as Syndication Agent, Royal Bank of Canada and LaSalle National Bank, as
Documentation Agents, and Lehman Commercial Paper Inc., as Administrative Agent,
as amended, restated, modified or supplemented through the Closing Date but not
thereafter (without any waivers thereto), a true and complete copy of which is
attached to the Pooling and Servicing Agreement as Appendix C.

Credit and Collection Policy: Either or both, as the context may require, of the
Loan Credit and Collection Policy and the Receivables Credit and Collection
Policy.

Credit Rewrite Equipment Loan: A delinquent Equipment Loan which is rewritten
for credit reasons related to the Obligor thereof and with respect to which
(i) such delinquent Equipment Loan is deemed to have been paid in full with the
Proceeds of a new Equipment Loan made to such Obligor or a new Obligor, (ii) a
new loan number is assigned and (iii) such new Equipment Loan satisfies the
requirements of an Eligible Equipment Loan.

Custodial Agreement: The Custodial Agreement, dated as of June 26, 2009, among
the Custodian, the Servicer and the Indenture Trustee, as amended or
supplemented or replaced from time to time.

Custodian: The custodian named from time to time in the Custodial Agreement;
initially, Bank of America, N.A.

Custodian Fee: Has the meaning set forth in the letter agreement between the
Custodian and the Servicer.

Custodian Receipt Certification: The receipt delivered by the Custodian to the
Indenture Trustee certifying that all Collateral Documents pertaining to a Loan
have been received by the Custodian.

Daily Carrying Costs: For each day, an amount equal to the product of (x) the
Yield Reserve and (y) the Collections received in the Receivables Collection
Account on such day.

Days Sales Outstanding — Receivables: For any Monthly Period, an amount equal to
the product of (x) a fraction, the numerator of which is (a) the ending accounts
receivable balance at the end of such period and the denominator of which is
(b) the aggregate amount of Receivables originated in such Monthly Period and
the previous two (2) Monthly Periods and (y) the number of calendar days in such
three (3) month period.

 

8

--------------------------------------------------------------------------------

Default: Any occurrence that is, or with notice or the lapse of time or both
would become, an Event of Default.

Default Ratio — Equipment Loans: For any Monthly Period a fraction (expressed as
a percentage) equal to (i) the Aggregate Loan Balance of Loans which first
became Defaulted Equipment Loans during such Monthly Period divided by (ii) the
Aggregate Loan Balance of the Trust as of the first day of such Monthly Period.

Default Ratio — Loss Reserve: As of the related Accounting Date, a fraction
(expressed as a percentage) the numerator of which is the sum, without
duplication, of (i) the aggregate outstanding balance of all Receivables that
were unpaid for more than ninety (90) days but less than or equal to one hundred
twenty (120) days past the dates on which they were due as of such Accounting
Date and (ii) the aggregate outstanding balance of all Receivables that have
been written off (or should have been written off in accordance with the Credit
and Collection policy) in the Monthly Period, less recoveries received during
such Monthly Period, and the denominator of which is the aggregate amount of all
Receivables originated in the Monthly Period which ended seven months
immediately prior to such Accounting Date. For purposes of calculating the
Default Ratio — Loss Reserve, the term Receivables when used in reference to
periods prior to the Closing Date shall mean all of the trade receivables owned
by Alliance Laundry Equipment Receivables Trust 2005-A.

Default Ratio — Receivables: As of the related Accounting Date, a fraction
(expressed as a percentage) the numerator of which is the sum, without
duplication, of (i) the aggregate outstanding balance of all Receivables that
were unpaid for more than ninety (90) days but less than or equal to one hundred
twenty (120) days past the dates on which they were due as of the end of such
Monthly Period, (ii) the aggregate outstanding balance of all Receivables owing
from Obligors which became the subject of an Insolvency Event during such
Monthly Period, and (iii) the aggregate outstanding balance of all Receivables
that have been written off (or should have been written off in accordance with
the Receivables Credit and Collection Policy) in such Monthly Period less
recoveries received during such Monthly Period and the denominator of which is
the Net Receivables Balance on such date.

Default Step-Up Amount: An amount of interest that would accrue on the
Receivables Notes or the Equipment Loan Notes, as applicable, using two percent
(2%) per annum as the rate of interest.

Defaulted Equipment Loan: Any Equipment Loan as to which (1) the Servicer
(a) has reasonably determined in accordance with its Servicing Standard that
eventual payment of amounts owing on such Loan is unlikely, (b) has repossessed
the Equipment or other collateral securing such Loan, or (2) any related
Scheduled Payment is at least ninety (90) days past due, or (3) is owed by an
Obligor which is the subject of an Insolvency Event or (4) consistent with the
Loan Credit and Collection Policy, there has been, or is required to be, a
Write-Off.

Defaulted Receivable: A Receivable: (i) as to which any payment, or part
thereof, remains unpaid for more than ninety (90) days from the date on which it
was due, (ii) as to which is owed by an Obligor which is the subject of an
Insolvency Event or (iii) which, consistent with the Receivables Credit and
Collection Policy, there has been, or is required to have been, a Write-Off.

 

9

--------------------------------------------------------------------------------

Delinquency Ratio — Equipment Loans: For any Monthly Period, the fraction
(expressed as a percentage) equal to (i) the Aggregate Loan Balance of Loans
which, during such Monthly Period, first became unpaid for sixty-one (61) days
past their due dates, divided by (ii) the Aggregate Loan Balance as of the first
day of such Monthly Period.

Delinquency Ratio — Receivables: For any Monthly Period, the fraction (expressed
as a percentage) determined as of the related Accounting Date by dividing
(i) the outstanding balance of all Receivables that are Delinquent Receivables
on such date by (ii) the aggregate Net Receivables Balance on such date.

Delinquent Receivable: A Receivable which is not a Defaulted Receivable, which
remains unpaid for more than sixty (60) days but less than or equal to ninety
(90) days from the due date, or which would be classified as delinquent pursuant
to the Originator’s Receivables Credit and Collection Policy.

Delivery and Acceptance Receipt: As defined in the Custodial Agreement.

Deposit Account: Has the meaning given to such term in Section 9-102(a) of the
UCC.

Designated Accounts: The Collection Accounts and the Reserve Account,
collectively.

Determination Date: The day that is the fifth (5th) Business Day of each month,
beginning on August 7, 2009.

Diluted Receivable: The portion of any Receivable which is reduced or canceled
as a result of or subject to any Dilution. The Seller shall be deemed to have
received a collection of each Diluted Receivable on the day such Dilution
occurs.

Dilution: Any reduction in the balance of a Receivable issued by any Seller to
an Obligor on account of discounts, incorrect billings, incentive payments,
credits, rebates (including volume rebates), setoffs, allowances, disputes,
chargebacks, returned or repossessed goods, allowances for early payments or any
other reduction in the balance of a Receivable for any other reason unrelated to
the inability of the Obligor to pay the Receivable.

Dilution Horizon Ratio: For any Monthly Period, an amount equal to the sum of
the Receivables originated in such Monthly Period and the immediately preceding
Monthly Period, divided by the Net Receivables Balance on the related Accounting
Date. For the purpose of calculating the Dilution Horizon Ratio, the term
Receivables, when used in reference to periods prior to the Closing Date, shall
mean all the trade receivables owned by Alliance Laundry Equipment Receivables
Trust 2005-A.

Dilution Ratio — Receivables: For any Monthly Period, a fraction (expressed as a
percentage) determined as of the last day of such Monthly Period by dividing
(i) the portion of all Receivables which became Diluted Receivables during such
Monthly Period (except for those due to the “meet comp” allowance for Coinmach
Corporation) by (ii) the aggregate amount of all

 

10

--------------------------------------------------------------------------------

Receivables originated in the Monthly Period which ended two months immediately
prior to such current Monthly Period. For purposes of calculating the Dilution
Ratio — Receivables, when used in reference to periods prior to the Closing
Date, shall mean all of the trade receivables owned by Alliance Laundry
Equipment Receivables Trust 2005-A.

Dilution Reserve: As calculated in each Servicer’s Certificate relating to the
most recently ended Monthly Period, the percentage resulting from the following
formula:

((2.25 x ED) + ((DS - ED) x (DS / ED))) x DHR

where:

ED = Expected Dilution for such Monthly Period

DS = Dilution Spike for such Monthly Period

DHR = Dilution Horizon Ratio for such Monthly Period

Dilution Spike: For any Monthly Period, the highest rolling two-month average
Dilution Ratio — Receivables calculated during the twelve (12) Monthly Periods
ending on the related Accounting Date.

Distribution Date: The eighth (8th) Business Day of each month, beginning on
August 12, 2009.

Documents: Has the meaning given to such term in Section 9-102(a) of the UCC.

Dollars: The lawful currency of the United States of America.

Domestic Lockbox Agreement: The Deposit Account Control Agreement dated as of
June 26, 2009, among the Servicer, the Issuer, the Indenture Trustee and Bank of
America, N.A.

Domestic Person: Any Person that is organized under the laws of the United
States or any State thereof, or has a place of business located in the United
States or otherwise is subject to the jurisdiction of one or more civil courts
of the United States (other than by reason of contractual submission to such
jurisdiction).

Domestic Receivables: Receivables generated by US entities.

Domestic Receivables Lockbox: The post office box specified in the Domestic
Lockbox Agreement relating to the Domestic Receivables.

Domestic Receivables Lockbox Account: As defined in Section 6.02 of the Pooling
and Servicing Agreement.

Drawing Certificate: A completed drawing certificate substantially in the form
attached to the Letter(s) of Credit delivered on the Closing Date.

 

11

--------------------------------------------------------------------------------

Effective Receivables Commitment: As of any date of determination, an amount
equal to the Receivables Commitment minus the excess, if any, of the outstanding
Aggregate Equipment Loan Note Principal Balance over $270,000,000.

Eligible Bank: Either (a) a banking institution capable of issuing or confirming
an Eligible Letter of Credit, the unsecured long-term senior debt obligations
(or long-term deposits) of which are rated “A+” or better by S&P or “A1” or
better by Moody’s or (b) such other banking, financial or similar institution
acceptable to the Special Required Noteholders (such approval not to be
unreasonably withheld upon receipt by the Noteholders of notices from S&P and
Moody’s that their respective ratings on the Notes will not be withdrawn or
lowered as a result of the Trust obtaining such Letters of Credit from such
institution).

Eligible Cap Provider: Any of the following: (A) any Person acceptable to the
Special Required Noteholders that itself has, or whose Credit Support Provider
(as defined in the relevant Interest Rate Cap Agreement) has, (x) a short-term
unsecured debt rating of at least “A-1/P-1” (or the equivalent) from the
applicable Rating Agency and (y) a long-term unsecured debt rating of at least
“AA-”/“Aa3” (or the equivalent) from the applicable Rating Agency or (B) any
counterparty that is otherwise acceptable to the Special Required Noteholders.

Eligible Deposit Account: A segregated account with an Eligible Institution.

Eligible Equipment Loan: At any time, an Equipment Loan that satisfies all of
the following criteria or that is otherwise permitted by the Special Required
Noteholders as an Eligible Equipment Loan:

(a) it is secured by a first priority perfected security interest in the
Equipment;

(b) it is not a Defaulted Equipment Loan;

(c) no payment is more than sixty (60) days past due on the date on which such
Equipment Loan is acquired by the Issuer, and the related Obligor is not then
subject to an Insolvency Event; provided that, Loans previously financed in the
ALERT 2005 Transaction that are more than sixty (60) but less than ninety
(90) days delinquent when sold to the Trust will not be ineligible solely as a
result of this clause (c) so long as such related Obligor is not subject to an
Insolvency Event;

(d) it is not more than ninety (90) days delinquent; provided that, loans that
are more than ninety (90) days delinquent may be transferred to the Trust but
shall remain ineligible;

(e) it does not have a Loan Balance of more than $1,500,000;

(f) it has an original term of not less than twelve (12) months and not more
than one hundred eight (108) months; provided that, Loans previously financed in
the ALERT 2005 Transaction with an original term of not more than one hundred
twenty (120) months will not be ineligible solely as a result of this clause
(f), but will be treated as having a Loan Balance equal to the sum of all
principal payments scheduled to be made on or prior to the date that is one
hundred eight (108) months from the Closing Date;

 

12

--------------------------------------------------------------------------------

(g) it is not secured by any Common Collateral (as defined in Section 5.1(k)(1)
of the Purchase Agreement);

(h) the principal place of business of the related Obligor is located in either
the United States, United States territories that have adopted the Uniform
Commercial Code or Canada (but, with respect to Canada, only if the principal
place of business of the related Obligor is in a province that is governed by
the Personal Property Securities Act);

(i) it is denominated in Dollars or Canadian dollars; provided that, if it is
denominated in Canadian dollars, it shall be expressed in Dollars pursuant to
the Canadian Translation Premium;

(j)(a) if it has a fixed interest rate, it must have an effective interest rate
over its life of not less than 8.0% per annum and not greater than 22.0% per
annum; and (b) if it has a variable interest rate, it must have an effective
interest rate over its life based on the prime rate and the margin over the
prime rate on such loan must not be less than 1.00%;

(k) the written and electronic information (including the information provided
on the Funding Date Data Report and the Schedule of Loans) provided by the
Originator, the Transferor and the Servicer to the Issuer, the Administrative
Agent, or the Indenture Trustee with respect to any Equipment Loan and the
Equipment subject to such Equipment Loan is true and correct in all material
respects;

(l) the representations and warranties set forth in Section 3.1 of the Purchase
Agreement are true and correct, to the extent such are applicable, to such
Equipment Loan;

(m) no provision of such Loan has been waived, altered or modified in any
respect more than once since origination (except as permitted under the Excess
Loan Concentration Amount);

(n) it constitutes “chattel paper” as defined under the UCC;

(o) the Obligor is an Eligible Obligor, and either an individual or is organized
under the laws of any state of the United States or any province of Canada and
is acquiring Equipment for commercial and not personal, family or household use;

(p) it does not require prior written consent of an Obligor for, or contain any
restriction on, its transfer or assignment;

(q) unless the Initial Loan Balance was $25,000 or less in conformance with the
applicable provisions of the Credit and Collection Policy, its Obligor is
required to maintain casualty insurance with respect to the related collateral
in an amount at least equal to the Initial Loan Balance; provided, however, that
Loans with route operators as the Obligor will be exempt from this requirement
to the extent that the Obligor has less than $25,000 of Equipment per location;

 

13

--------------------------------------------------------------------------------

(r) it is not subject to any guarantee by the Originator or any affiliate of the
Originator, the Obligor is not an affiliate of the Originator, and neither the
Servicer nor the Originator has established any specific credit reserve that
relates solely to the related Obligor;

(s) it provides that the lender party providing the financing thereunder, may
accelerate all remaining Scheduled Payments (subject to all applicable grace
periods) if a payment default occurs under such Loan;

(t) it is not a “lease” as defined in Section 2A-103 (1)(j) of the UCC and it is
not a lease intended as a security interest within the meaning of
Section 1-201(37) of the UCC; the Equipment covered thereby is not a “fixture”
as defined in the applicable UCC;

(u) with respect to it, the Originator has no material performance obligation in
favor of the Obligor, and the Obligor is solely responsible for all maintenance,
repairs and taxes to be paid with respect to the related Equipment;

(v) it provides for Scheduled Payments that fully repay the amount financed over
its term;

(w) other than up to an initial one hundred twenty (120) day deferral period, if
any, it provides that the Obligor thereunder is required to make at least one
(1) Scheduled Payment per month during the term of the Loan;

(x) the assets financed pursuant to and which secure such Loan consist primarily
of commercial stand alone laundry equipment and related accessories and
leasehold improvements;

(y) with respect to all Loans having an Obligor which is a laundromat, Loans
with an Initial Loan Balance in excess of $100,000 per location (or such lesser
amount as is required in the Credit and Collection Policy), the owner of any
real property (and mortgage thereon) on which the Equipment is located has, by
written consent, waived any liens or claims thereon. If the location is leased,
the landlord has, by written consent, waived any liens or claims thereon and,
when obtained, agreed to permit the Originator or its appointee to take over and
operate the leased premises and assume or sublet the lease;

(z) all Equipment associated with each Loan has been delivered, inspected,
installed, is in good working condition, free of all disputes, claims or
encumbrances, and either (A) such Equipment has been accepted by the Obligor as
satisfactory or (B) as of the Determination Date, the Obligor has made at least
one Scheduled Payment;

(aa) the Obligor has irrevocably waived any claim or offset against the
Originator and recognized the Originator’s right to enforce the Loan according
to it terms free of any defenses, offsets or counterclaims, and the Obligor is
obligated to pay all scheduled principal and interest on the Loan regardless of
the performance of the related Equipment;

(bb) the Loan Balance is net of any prepayments and security deposits;

 

14

--------------------------------------------------------------------------------

(cc) it is substantially in the form of one of the forms attached to the Pooling
and Servicing Agreement or otherwise approved in writing by the Administrative
Agent (acting at the direction of the Special Required Noteholders);

(dd) if any Scheduled Payment for such Loan does not include a component
allocable to the repayment of principal of such Loan, such loan does not permit
such “interest only” Scheduled Payments for more than twenty-four (24) months;

(ee) with respect to (a) any Loan transferred on the Closing Date, the
Collateral Documents for such Loan have been certified as complete and without
Exception (as defined in the Custodial Agreement) by the Custodian on the
Closing Date and (b) any Loan transferred to the Issuer after the Closing Date,
the Collateral Documents for such Loan have been certified as complete and
without Exception (as defined in the Custodial Agreement) by the Custodian no
later than 3:00 p.m. New York City time on the Business Day prior to, and as a
condition to the funding of the Equipment Loan under the Indenture on, the
applicable Equipment Loan Borrowing Date;

(ff) the UCC filing with respect to such Equipment Loan was made prior to or
within twenty (20) days of the date on which the Obligor receives such
Equipment;

(gg) the terms of such Equipment Loan provide that a default by the Obligor
under any Loan originated by the Originator (or, in the case of any Loan
originated by an Affiliate of the Originator, any default that allows the
holders of such Loan to accelerate its maturity) will result in a default under
such Equipment Loan;

(hh) the Obligor is required to remit payment to the Equipment Lockbox Account;

(ii) the Loan shall be in conformance with the applicable provisions of the
Credit and Collection Policy; and

(jj) it is not a Balloon Loan that is additionally considered an Interest Only
Loan; provided that, Loans previously financed in the ALERT 2005 Transaction
that are Interest Only Loans will not be ineligible solely as a result of this
clause (jj).

Eligible Institution: A depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), (A) which has either (1) a
long-term unsecured debt rating of at least “A+” from S&P and “A1” from Moody’s
or (2) a short-term unsecured debt or certificate of deposit rating of at least
“A-1” from S&P and “P-1” from Moody’s, (B) whose deposits are insured by the
FDIC and (C) having a combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition.

Eligible Investments: Book-entry securities, negotiable instruments or
securities represented by instruments in bearer or registered form which
evidence:

(a) direct obligations of, and obligations fully guaranteed as to timely payment
of principal and interest by, the United States of America;

 

15

--------------------------------------------------------------------------------

(b) demand deposits, time deposits or certificates of deposit of any depository
institution or trust company incorporated under the laws of the United States of
America or any state thereof (or any domestic branch of a foreign bank) and
subject to supervision and examination by Federal or state banking or depository
institution authorities; provided, however, that at the time of the investment
or contractual commitment to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such depository institution
or trust company) thereof shall have a credit rating from each of the Rating
Agencies in the highest investment category for short-term unsecured debt
obligations or certificates of deposit granted thereby;

(c) commercial paper having, at the time of the investment or contractual
commitment to invest therein, a rating from each of the Rating Agencies in the
highest investment category for short-term unsecured debt obligations or
certificates of deposit granted thereby;

(d) investments in money market or common trust funds having a rating from each
of the Rating Agencies in the highest investment category for short-term
unsecured debt obligations or certificates of deposit granted thereby (including
funds for which the Indenture Trustee or the Owner Trustee or any of their
respective affiliates is investment manager or advisor, so long as such fund
shall have such rating);

(e) bankers’ acceptances issued by any depository institution or trust company
referred to in clause (b) above;

(f) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in either case entered
into with (A) a depository institution or trust company (acting as principal)
described in clause (ii) or (B) a depository institution or trust company the
deposits of which are insured by FDIC or (y) the counterparty for which has a
rating from each of the Rating Agencies in the highest investment category for
short-term unsecured debt obligations, the collateral for which is held by a
custodial bank for the benefit of the Trust or the Indenture Trustee, is marked
to market daily and is maintained in an amount that exceeds the amount of such
repurchase obligation, and which requires liquidation of the collateral
immediately upon the amount of such collateral being less than the amount of
such repurchase obligation (unless the counterparty immediately satisfies the
repurchase obligation upon being notified of such shortfall);

(g) commercial paper notes having, at the time of the investment or contractual
commitment to invest therein, a rating from each of the Rating Agencies in the
highest investment category for short-term unsecured debt obligations; and

(h) any other investment permitted by each of the Rating Agencies,

in each case, other than as permitted by the Rating Agencies, maturing not later
than the Business Day immediately preceding the next Distribution Date.

 

16

--------------------------------------------------------------------------------

Eligible Letter of Credit: Any irrevocable, transferable, unconditional,
direct-pay standby letter of credit (a) that (i) is issued and confirmed by an
Eligible Bank for the benefit of the Indenture Trustee; provided that, subject
to the ratings floor set forth in the first proviso to Section 3.27(d) of the
Indenture, any such Letter of Credit described in this clause (a)(i) shall not
cease to be an Eligible Letter of Credit if only one of either the issuing or
the confirming bank, as applicable, no longer meets the ratings threshold set
forth in the definition of Eligible Bank or (ii) is issued by a bank in the
event such bank has a long-term credit rating of at least “AA” by S&P or “Aa2”
by Moody’s and a short-term credit rating of at least “A-1” by S&P or “P-1” by
Moody’s, (b) that either has a stated expiration date of not earlier than the
Final Scheduled Distribution Date or permits drawing thereon on non-renewal
thereof, at least sixty (60) days prior thereto (c) that may be drawn at sight
upon at the principal offices of the Eligible Bank as the same shall be
designated from time to time by notice to the Indenture Trustee pursuant to the
terms of such letter of credit, (d) which is payable in Dollars in immediately
available funds in an amount, in the aggregate with all other Eligible Letters
of Credit, of not less than the Available Drawing Amount, (e) that is governed
by the Uniform Customs and Practice for Documentary credits (1993 Revision),
International Chamber of Commerce Publication No. 500 (the “UCP”), and any
amendments or revisions thereto, except for waivers with respect to (A) the time
periods in Articles 13(b) and 14(d)(i) of the UCP, (B) the application of
Article 17 of the UCP and (C) any provisions of Article 48 of the UCP
invalidating transfers made in accordance with clause (g) below, and, to the
extent not governed thereby, the laws of the State of New York, except for
waiver of Section 5-112 of the New York Uniform Commercial Code, (f) that may be
transferred by the Indenture Trustee, without a fee payable by the Indenture
Trustee to any replacement Indenture Trustee appointed in accordance with the
terms of the Indenture, and (g) that otherwise contains terms and conditions
that are acceptable to the Special Required Noteholders; provided that a Letter
of Credit made ineligible by the occurrence of a downgrade of the financial
institution that issued or confirmed such Letter of Credit set forth in
Section 4.1(c) of the Indenture shall remain an Eligible Letter of Credit during
the applicable grace period set forth in such Section. Notwithstanding any of
the foregoing, cash or alternative collateral posted by the Issuer and then on
deposit in the Reserve Account pursuant to Section 3.27 of the Indenture shall
be deemed to be an acceptable substitute to an Eligible Letter of Credit.

Eligible Obligor: At any time, an Obligor that satisfies all of the following
criteria:

(a) it is not an Affiliate of ALS; and

(b) no Insolvency Event had occurred and was continuing with respect to such
Obligor as of the end of the most recent Monthly Period and is continuing.

Eligible Receivable: At any time, a Receivable:

(a) that arose from a bona fide sale of goods or services by a Seller in the
ordinary course of its business;

(b) that represents the legal, valid and binding bona fide obligation of the
Obligor, to pay the stated amount;

 

17

--------------------------------------------------------------------------------

(c) that constitutes an “account” or “general intangible” as defined in the UCC;

(d) the Obligor of which is an Eligible Obligor, and is not owing from any party
that is an Affiliate of the Originator;

(e) that arises under a Contract that does not require the Obligor of such
Contract or any other Person to consent to the sale, assignment or transfer of,
and the granting of a security interest in such Contract;

(f) that is denominated and payable only in Dollars;

(g) that arises under a Contract that has been duly authorized and that,
together with such Receivable, is in full force and effect and represents the
legal, valid and binding obligation of the Obligor of such Receivable
enforceable against such Obligor in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors’ rights generally and by
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law;

(h) is not subject to any right of rescission, encumbrance, lien, security
interest, charge, express right of set-off (or the Obligor is not currently
exercising set off), dispute, counterclaim, defense, or other right or claim of
any third-party;

(i) that, together with the Contract related thereto, was created without any
fraud or misrepresentation and was created in accordance with, and conforms in
all material respects with, all applicable laws, rules, regulations, orders,
judgments, decrees and determinations of all courts and other governmental
authorities (whether Federal, state, local or foreign and including usury laws);

(j) that satisfies in all material respects the applicable requirements of the
Receivables Credit and Collection Policy of the applicable Transferor as in
effect on its date of origination;

(k) that has not been compromised, adjusted, satisfied, subordinated, rescinded,
impaired or modified (other than as permitted under the Excess Receivables
Concentration Amount or the granting of any discounts, allowances or credits);

(l) that is not a Defaulted Receivable;

(m) the Obligor is required to remit payment to the Receivables Collection
Account or a Lockbox Account;

(n) that arises under a Contract that is governed by the laws of a state of the
United States and which is substantially similar to one of the forms attached
approved by the Administrative Agent (acting at the direction of the Special
Required Noteholders) and that remains in full force and effect;

 

18

--------------------------------------------------------------------------------

(o) that arises out of a “current transaction” within the meaning of the
Securities Act of 1933, as amended;

(p) that pursuant to its Contract, is required to be paid in full no later than
one hundred eighty (180) days from the original invoice date therefor;

(q) that pursuant to its Contract, has no outstanding performance obligations
(e.g. shipment of goods or rendering of services) on the part of the originator
under such Receivable;

(r) all written and electronic information in respect of such Receivable set
forth in the Schedule of Receivables and the Funding Date Data Pool Report is
true and correct in all material respects and such Receivable and all
accompanying documents are complete and authentic and all signatures thereon are
genuine;

(s) following the transfers contemplated by the Purchase Agreement and the
Pooling and Servicing Agreement, the Issuer holds good and indefeasible title
to, and is the sole owner (or assignee) of such Receivable, and such Receivable
is not subject to any Liens, other than Permitted Adverse Claims; and

(t) all taxes, other than sales taxes that are not yet required to be remitted
to the relevant taxing authority, of any nature or description whatsoever
relating to such Receivable that are due and owing have been paid in full.

Equipment: The stand alone commercial laundry equipment and related accessories,
including any additions, substitutions or accessions thereto, securing an
Obligor’s indebtedness under a Loan, other than pursuant to cross
collateralization provisions in such Loan as described in clause (d) of the
definition of Exempt Collateral. A Loan may be secured by one or more items of
Equipment.

Equipment Fee: For each Distribution Date and each Noteholder, an amount equal
to the sum, for each day during the related Interest Period, of an amount equal
to the aggregate, for all Advances under the Equipment Loan Notes then
outstanding, equal to the sum of (a) the product of (i) the principal amount of
such Advance (or a portion thereof), (ii) a rate equal to the sum of (x) the
Cost of Funds Rate on such day and (y) the Applicable Margin and (iii) 1/360;
plus (b) either (i) if such day is subsequent to the occurrence of an Event of
Default, an additional amount equal to the Default Step-Up Amount or (ii) if
such day is subsequent to the occurrence of a Rapid Amortization Event (other
than a Rapid Amortization Event caused by an Event of Default), an additional
amount equal to the Rapid Amortization Step-Up Amount.

Equipment Loan: Shall mean a Loan.

Equipment Loan Advance Rate: An amount equal to a fraction (expressed as a
percentage) the numerator of which is equal to the Equipment Loan Borrowing Base
and the denominator of which is equal to the Equipment Loan Collateral Value.

Equipment Loan Available Amount: For any Distribution Date, with respect to the
related Monthly Period, or with respect to the first Distribution Date, the
period from and

 

19

--------------------------------------------------------------------------------

including the initial Loan Cutoff Date to the last day of the related Monthly
Period, the sum of, without duplication, (1) all Collections on the Loans
received by or on behalf of the Trust, (2) all Liquidation Proceeds, Insurance
Proceeds, Proceeds from casualty loss, Guarantees and early termination charges
to the extent received by the Trust, (3) all Servicer Advances on the Equipment
Loans other than payments made with respect to fees owing under the Lockbox
Agreement, (4) the Warranty Payment, the Administrative Purchase Payment or the
Optional Purchase Price of each Loan that the Transferor or Originator
repurchased or the Servicer purchased during such related Monthly Period,
(5) any Prepayment with respect to Loans, (6) any amounts drawn from the Reserve
Account but solely to the extent available to pay interest and principal
pursuant to Section 8.2(h) of the Indenture, (7) any amounts drawn from the
Yield Supplement Account but solely to the extent available to pay interest
pursuant to Section 8.2(h) of the Indenture, (8) any amount drawn from the
Letters of Credit but solely to the extent available to pay interest and
principal pursuant to Section 8.2(h), (9) earnings on amounts in the Accounts
and (10) any payments received from an Interest Rate Cap Provider.

Equipment Loan Borrowing Base: As of any date of determination, the then amount
equal to the sum of (A) product of (i) 100% minus the Equipment Loan Required
Credit Support and (ii) the Equipment Loan Collateral Value, (B) the Equipment
Loan LC Amount including amounts drawn pursuant to Sections 3.27(d) and 3.27(e)
of the Indenture and (C) the amount in the Reserve Account related to the Loans
(as determined in accordance with Section 8.7 of the Indenture). For the
avoidance of doubt, the Ineligible Cap Reserve shall be excluded from the
calculation of the preceding clause (C).

Equipment Loan Borrowing Date: As defined in Section 1.1 of the Note Purchase
Agreement.

Equipment Loan Collateral Value: As of any date of determination, the Equipment
Loan Collateral Value shall be equal to the Net Equipment Loans Balance.

Equipment Loan LC Amount: The undrawn face amount of the Letters of Credit that
are attributable (as determined in accordance with Section 8.7 of the Indenture)
to the Equipment Loan Notes.

Equipment Loan Note: Any one of the Notes substantially in the form of Exhibit
A-1 to the Indenture, issued pursuant to the terms of the Indenture.

Equipment Loan Note Commitment: As of any date of determination, an amount equal
to the excess of (x) Three Hundred-Thirty Million Dollars ($330,000,000) over
(y) the Aggregate Receivables Note Principal Balance on such date. On and after
the Loan Conversion Date, the Equipment Loan Note Commitment shall be zero.

Equipment Loan Note — Fixed Rate Portion: On any date of determination, an
amount equal to the product of (x) the sum of the then Note Principal Balances
of all Equipment Loan Notes then outstanding and (y) a fraction expressed as a
percentage, the numerator of which is equal to the sum of the then Loan Balances
of all fixed-rate Eligible Equipment Loans included in the Trust Estate on such
date and the denominator of which is equal to the sum of the then Loan Balances
of all Eligible Equipment Loans included in the Trust Estate on such date.

 

20

--------------------------------------------------------------------------------

Equipment Loan Note Interest Payment: For each Distribution Date and each
Noteholder, an amount equal to the sum, for each day during the related Interest
Period, of an amount equal to the aggregate, for all Advances under the
Equipment Loan Notes then outstanding, equal to the sum of (a) the product of
(i) the principal amount of such Advance (or a portion thereof), (ii) a rate
equal to the sum of (x) the Cost of Funds Rate on such day and (y) the
Applicable Margin and (iii) 1/360; plus (b) either (i) if such day is subsequent
to the occurrence of an Event of Default, an additional amount equal to the
Default Step-Up Amount or (ii) if such day is subsequent to the occurrence of a
Rapid Amortization Event (other than a Rapid Amortization Event caused by an
Event of Default), an additional amount equal to the Rapid Amortization Step-Up
Amount.

Equipment Loan Noteholder: A Holder of an Equipment Loan Note.

Equipment Loan Note Senior Interest Amount: For each Distribution Date and each
Noteholder, an amount equal to the sum, for each day during the related Interest
Period, of an amount equal to the aggregate, for all Advances under the
Equipment Loan Notes then outstanding, equal to the product of (i) the principal
amount of such Advance (or a portion thereof), (ii) a rate equal to the
one-month LIBOR plus 350 basis points (3.50%) and (iii) 1/360.

Equipment Loan Required Credit Support: The percentage which is equal to
(i) prior to the Loan Conversion Date, 26%; and (ii) on and after the Loan
Conversion Date, the sum of the greater of (x) 26% and (y) the sum of (a) the
Equipment Loan Reserve Requirement at such time as a percentage of the Net
Equipment Loans Balance, (b) the Available Drawing Amount at such time as a
percentage of the Net Equipment Loans Balance and (c) the OC Percentage in
effect as of the Loan Conversion Date. The Equipment Loan Required Credit
Support is effective for the period beginning on the Determination Date on which
the information is reported through and including the day prior to the following
Determination Date.

Equipment Loan Reserve Requirement: With respect to any Distribution Date, the
amount of the Reserve Account Required Amount allocated to the Equipment Loan
Notes pursuant to Section 8.7 of the Indenture.

Equipment Note: A commercial loan evidenced by a note and secured by Equipment.

Equipment Unused Facility Fee: As defined in Section 2.7(e) of the Indenture.

Equity Interests: With respect to any Person, any and all shares, interests,
participations or other equivalents, including membership interests (however
designated, whether voting or non-voting or whether certificated or not
certificated), of capital of such Person, including, if such Person is a
partnership, partnership interests (whether general or limited) and any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, such partnership,
whether outstanding on the date hereof or issued thereafter.

ERISA: The Employee Retirement Income Security Act of 1974, as amended.

Eurodollar Disruption Event: Any of the following: (a) a determination by an
Agent, a Noteholder or its related Support Party that it would be contrary to
law or to the directive of any

 

21

--------------------------------------------------------------------------------

central bank or other governmental authority (whether or not having the force of
law) to obtain Dollars in the London interbank market to make, fund or maintain
any Advance for such Interest Period, (b) a determination by an Agent, that, in
its reasonable judgment, the rate at which deposits of Dollars are being offered
to such Person in the London interbank market does not accurately or fairly
reflect its cost of making, funding or maintaining any Advance for such Interest
Period, such determination (including the factual basis for such determination)
to be certified by such Person to the Indenture Trustee, the Issuer and the
Servicer no later than the third day prior to the commencement of the related
Interest Period (such determination to be re-certified each month during the
continuation of such condition) or (c) the inability of an Agent, a Noteholder
or its related Support Party to obtain Dollars in the London interbank market to
make, fund or maintain any Advance for such Interest Period.

Eurodollar Reserve Percentage: With respect to any Interest Period (or portion
thereof), the reserve percentage (rounded upwards, if necessary, to the nearest
1/16th of one percent per annum) applicable during such Interest Period (or
portion thereof) (or, if more than one such percentage shall be so applicable
during such Interest Period, the daily average of such percentages for those
days in such Interest Period (or portion thereof) during which any such
percentages shall be in effect) under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) for banks or other financial
institutions subject to such regulations with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (as that term is defined in
Regulation D of the Board of Governors of the Federal Reserve System) having a
term equal to such Interest Period (or portion thereof).

Event of Default: The occurrence of an event described in Section 5.1 of the
Indenture, and the continuation of such condition beyond the applicable grace
period set forth therein.

Excess Loan Concentration Amount: As of any date of determination, an amount
equal to the sum of the following, determined only with respect to Eligible
Equipment Loans:

(a) the amount by which (x) the sum of the Loan Balances for all Loans that have
an original term of greater than 96 months but less than or equal to 108 months,
exceeds (y) an amount equal to fifteen percent (15%) of the Aggregate Loan
Balance; plus

(b)(i) the amount by which (x) the sum of the Loan Balances for all Interest
Only Loans, exceeds (y) an amount equal to twenty-five percent (25%) of the
Aggregate Loan Balance and (ii) the amount by which (x) the sum of the Loan
Balances for all Interest Only Loans with interest only periods exceeding twelve
(12) months, exceeds (y) an amount equal to twelve and one-half percent
(12.5%) of the Aggregate Loan Balance; plus

(c)(i) the amount by which (x) the sum of the Loan Balances of all Balloon
Loans, exceeds (y) an amount equal to five percent (5%) of the Aggregate Loan
Balance, (ii) the amount by which (x) the sum of the Loan Balances of all
Balloon Loans which are Credit Rewrite Equipment Loans, amended in conformance
with the applicable provisions of the Loan Credit and Collection Policy, exceeds
(y) an amount equal to three percent (3%) of the Aggregate Loan Balance, and
(iii) the amount by which (x) the sum of the Loan Balances of all

 

22

--------------------------------------------------------------------------------

Balloon Loans with scheduled amortization periods that are more than four
(4) years longer than the stated maturity date of such Loan, exceeds (y) an
amount equal to one percent (1%) of the Aggregate Loan Balance; plus

(d) the amount by which (x) the Loan Balance owing by the Obligor (together with
any other Obligors whose majority owner is the same as such Obligor) with the
highest Loan Balance, exceeds (y) an amount equal to the lesser of
(i) $18,900,000, and (ii) an amount equal to 7% of the Aggregate Loan Balance;
plus

(e) the amount by which (x) the Loan Balances owing by the four (4) Obligors
(together with any other Obligors whose majority owner is the same as any such
Obligor) with the highest Loan Balances, exceeds (y) an amount equal to the
lesser of (i) $27,000,000 and (ii) an amount equal to 10% of the Aggregate Loan
Balance; plus

(f) the amount by which (x) the Loan Balances for all Loans for which the
related Obligor is obligated to make Scheduled Payments denominated in Canadian
dollars or maintains its principal place of business in Canada, exceed (y) an
amount equal to 2% of the Aggregate Loan Balance; plus

(g) the amount by which (x) the sum of the Loan Balances for all Loans secured
by Equipment located (as set forth in the related loan agreement) in the State
of California, exceeds (y) an amount equal to 30% of the Aggregate Loan Balance;
plus

(h) the amount by which (x) the sum of the Loan Balance for all Loans secured by
Equipment located (as set forth in the related loan agreement) in the State of
New York, exceeds (y) an amount equal to 25% of the Aggregate Loan Balance; plus

(i) the amount by which (x) the sum of the Loan Balance for all Loans secured by
Equipment located (as set forth in the related loan agreement) in the State of
Florida, exceeds (y) an amount equal to 20% of the Aggregate Loan Balance; plus

(j) the amount by which (x) the sum of the Loan Balance for all Loans secured by
Equipment located (as set forth in the related loan agreement) in any of the
State of Texas, the State of Georgia, the State of New Jersey or the
Commonwealth of Massachusetts exceeds (y) an amount equal to 10% of the
Aggregate Loan Balance; plus

(k) the amount by which (x) the sum of the Loan Balances for all Loans secured
by Equipment located (as set forth in the related loan agreement) in any state
(other than California, New York, Florida, Texas, Georgia, New Jersey or the
Commonwealth of Massachusetts), exceeds (y) an amount equal to 5% of the
Aggregate Loan Balance; plus

(l) the amount by which (x) the sum of the Loan Balances owing by any single
Obligor (other than the four (4) Obligors with the highest Loan Balances)
exceeds (y) an amount equal to 2.5% of the Aggregate Loan Balances; plus

(m) the amount by which (x) the sum of the Loan Balances for all Loans that have
been waived, altered or modified in conformance with the applicable provisions
of the Loan Credit and Collection Policy in any respect two (2) or more times
since origination exceeds (y) five percent (5%) of the Aggregate Loan Balance;
plus

 

23

--------------------------------------------------------------------------------

(n) the amount by which (x) the sum of the Loan Balances of all Credit Rewrite
Equipment Loans, amended in conformance with the applicable provisions of the
Loan Credit and Collection Policy exceeds (y) 4.50% of the Aggregate Loan
Balance; plus

(o) the amount by which (x) the sum of the Loan Balances of all fixed rate
Equipment Loans exceeds (y) 20% of the aggregate Loan Balance of Eligible
Equipment Loans; plus

(p) the amount by which (x) the sum of the Loan Balances of all Equipment Loans
that are in a payment deferred period, exceeds (y) 10% of the Aggregate Loan
Balance.

(q) the amount by which (x) the sum of the Loan Balances of all Obligors which
are Governmental Authorities exceeds (y) 2% of the aggregate Loan Balance of all
fixed rate Equipment Loans; plus

(r) as of any date of determination occurring after the Loan Conversion Date, so
long as “USD-LIBOR-BBA” (as defined in the Interest Rate Cap Agreement) is in
excess of the Cap Strike Rate (as defined in the Note Purchase Agreement), the
amount by which (x) the Equipment Loan Note - Fixed Rate Portion as of such date
of determination, exceeds (y) the then notional balance of the Interest Rate Cap
Agreement.

Notwithstanding the foregoing, specified Loans may be excluded from the
concentration limits set forth in clauses (d) and (e) of the definition of
Excess Loan Concentration Limits upon prior written notice to the Rating
Agencies and with the written consent of the Special Required Noteholders;
provided that no such Loans may be excluded if such Loans, together with all
previous exclusions, would exceed the concentrations provided in the
parentheticals set forth in clauses (d) and (e).

Excess Receivables Concentration Amount: As of any date of determination an
amount equal to the sum of the following, determined only with respect to
Eligible Receivables and without duplication (subject to the terms contained in
a certain side letter executed between ALS and the Administrative Agent):

(a) for all Receivables for which Coinmach Corporation is the Obligor, the
amount by which (x) the sum of the then Unpaid Balances of all such Receivables
exceeds (y) an amount equal to fifteen percent (15%) of the Adjusted Receivables
Balance; plus

(b) for Receivables payable by each of the second through the fifth largest
Obligors that are not otherwise addressed herein, the amount by which (x) the
sum of the then Unpaid Balances of all Receivables owing by each such Obligor
exceeds (y) an amount equal to four percent (4%) of the Adjusted Receivables
Balance; plus

(c) for Receivables payable by a single Obligor that is not otherwise addressed
herein, the amount by which (x) the sum of the then Unpaid Balances of all
Receivables owing by such Obligor exceeds (y) an amount equal to three percent
(3%) of the Adjusted Receivables Balance; plus

 

24

--------------------------------------------------------------------------------

(d) the amount by which (x) the sum of the Unpaid Balances of all Receivables
for which Textron Financial Corporation is the Obligor exceeds (y) 3% of the
Adjusted Receivables Balance; plus

(e) for all Receivables that are Interest Bearing Receivables, the amount by
which (x) the sum of the then Unpaid Balances of all such Interest Bearing
Receivables, exceeds (y) an amount equal to ten percent (10%) of the Adjusted
Receivables Balance; plus

(f) for all Receivables for which a Governmental Authority is the Obligor, the
amount by which (x) the sum of the then Unpaid Balances of all such Receivables,
exceeds (y) an amount equal to two percent (2%) of the Adjusted Receivables
Balance; plus

(g) for all Receivables with an original scheduled due date that is greater than
one hundred twenty one (121) days but less than or equal to one hundred eighty
(180) days, the amount by which (x) the sum of the then Unpaid Balances of all
such Receivables, exceeds (y) an amount equal to two percent (2%) of the
Adjusted Receivables Balance; plus

(h) for all Receivables that are more than thirty (30) days but less than or
equal to sixty (60) days past due, the amount by which (x) the sum of the then
Unpaid Balances of all such Receivables, exceeds (y) an amount equal to seven
percent (7%) of the Adjusted Receivables Balance; plus

(i) for all Receivables that are more than sixty (60) days but less than or
equal to ninety (90) days past due, the amount by which (x) the sum of the then
Unpaid Balances of all such Receivables, exceeds (y) an amount equal to seven
percent (7%) of the Adjusted Receivables Balance; plus

(j) for all Receivables for which the Obligor is a Foreign Obligor, the amount
by which (x) the sum of the then Unpaid Balance of all such Receivables exceeds
(y) an amount equal to twenty five percent (25%) of the Adjusted Receivables
Balance; plus

(k) for all Receivables payable by Obligors that are located in a country other
than the United States that has a long-term currency rating of, with respect to
each country, less than “BBB-” by S&P or “Baa3” by Moody’s, the amount by which
(x) the sum of the then Unpaid Balances of all such Receivables, exceeds (y) an
amount equal to four percent (4%) of the Adjusted Receivables Balance; plus

(l) for all Receivables payable by Obligors that are located in a country other
than the United States that has a long-term currency rating of, with respect to
each country, the lower of less than “AA” by S&P or “Aa2” by Moody’s and greater
than or equal to the lower of “BBB-” by S&P or “Baa3” by Moody’s, the amount by
which (x) the sum of the then Unpaid Balances of all such Receivables, exceeds
(y) an amount equal to fourteen percent (14%) of the Adjusted Receivables
Balance; plus

 

25

--------------------------------------------------------------------------------

(m) for all Receivables for which the original due date has been extended for up
to sixty (60) days, the amount by which (x) the sum of the then Unpaid Balances
of all such Receivables, exceeds (y) an amount equal to two percent (2%) of the
Adjusted Receivables Balance; plus

(n) for all Assignment of Proceeds Receivables, the amount by which (x) the sum
of the then Unpaid Balance of all such Receivables exceeds (y) an amount equal
to eight percent (8%) of the Adjusted Receivables Balance.

Excess Spread: On any Determination Date, the percentage rate equal to the
product of (a) 12.0 and (b) a fraction, the numerator of which is equal to the
excess of (i) the sum of (x) the interest collections of the Equipment Loans,
(y) the Proceeds received by the Issuer from any Interest Rate Cap Agreements
and (z) the amounts in the Yield Supplement Account, in each case during the
related Monthly Period, over (ii) the sum of (x) the accrued Equipment Loan Note
Senior Interest Amount due on the Equipment Loan Notes, (y) the Servicing Fee
and (z) to the extent not previously paid by the Servicer, the per annum
percentage rate equivalent of the Indenture Trustee Fees, the Owner Trustee
Fees, the Custodian Fee and the Backup Servicer Fees, and the denominator of
which is equal to the Net Equipment Loans Balance.

Exchange Act: The Securities Exchange Act of 1934, as amended.

Executive Officer: With respect to any corporation, the Chief Executive Officer,
Chief Operating Officer, Chief Financial Officer, President, Executive Vice
President, any Vice President or the Treasurer of such corporation; with respect
to any partnership, any general partner thereof; and with respect to any limited
liability company, the Chief Executive Officer, Chief Financial Officer, any
Vice President, the Treasurer or the Controller.

Exempt Collateral: All (a) Insurance Policies, (b) security deposits relating to
any Loan, (c) collateral constituting real property, a leasehold improvement or
a fixture or an interest in real property, a leasehold improvement or a fixture
(but, in each case, only to the extent such policies, deposits and collateral
are not applied to reduce the amount owed in respect of a Loan transferred to
the Trust) and (d) on and after the Receivables Payoff Date, the Receivables and
Related Assets with respect thereto.

Expected Dilution: For any Monthly Period, a percentage equal to the average
Dilution Ratio — Receivables for the previous twelve-Monthly Periods ending on
the related Accounting Date.

FCIA: The Foreign Credit Insurance Agency, and its successors.

FCIA Insurance: Credit insurance issued by FCIA.

FDIC: Federal Deposit Insurance Corporation or any successor agency.

Federal Funds Rate: With respect to any Interest Period and any Noteholder, a
fluctuating interest rate per annum equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business

 

26

--------------------------------------------------------------------------------

Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
such day for such transactions received by the related Deal Agent from three
Federal funds brokers of recognized standing selected by it.

Fee Letter: That certain engagement letter dated as of October 24, 2008 among
Natixis Capital Markets Inc. and ALS, that certain Structuring and Arrangement
Fee Letter dated as of June 26, 2009 among Natixis Financial Products Inc., the
Issuer and the Indenture Trustee, and, in each case, any modifications,
amendments or supplements thereto.

Final Scheduled Distribution Date: For the Equipment Loan Notes, the one hundred
twenty six (126) month anniversary of the Loan Conversion Date, and for the
Receivables Notes, the first (1st) annual anniversary following the Receivables
Conversion Date.

Floorplan Receivable: A Receivable generated through a program under which ALS
loans funds to dealers to finance their inventory which Receivable accrues
interest (at short-term rates agreed to by such Obligor and the Originator) on
the Unpaid Balance thereof, excluding any Receivable for which Textron Financial
Corporation is the Obligor.

Foreign Obligor: An Obligor who is not a Domestic Person.

Foreign Receivables: Receivables generated by foreign entities.

Foreign Receivables Lockbox: The post office box specified in the Foreign
Receivables Lockbox Agreement relating to the Foreign Receivables.

Foreign Receivables Lockbox Account: As defined in Section 6.02 of the Pooling
and Servicing Agreement.

Foreign Receivables Lockbox Agreement: The Collection Account Agreement dated as
of June 26, 2009, among, the Servicer, the Issuer, the Indenture Trustee and
U.S. Bank National Association.

Full Prepayment: With respect to a Monthly Period, a Prepayment of the entire
Loan Balance of such Loan and all accrued and unpaid interest and other
outstanding amounts thereon (other than fees).

Funding Date Data Pool Report: As defined in the Purchase Agreement.

General Intangibles: Has the meaning given to such term in Section 9-102(a) of
the UCC.

Goods: Has the meaning given to such term in Section 9-102(a) of the UCC.

Governmental Authority: Any applicable federal, state county, or municipal
authority that exercises executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

 

27

--------------------------------------------------------------------------------

Grant: To mortgage, pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, and grant a lien upon and a security interest
in and right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the Granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of, the Collateral and all other moneys payable thereunder, to give
and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring Proceedings in the name
of the Granting party or otherwise and generally to do and receive anything that
the Granting party is or may be entitled to do or receive thereunder or with
respect thereto.

Gross Receivables Balance: The sum of the then Unpaid Balances of all
Receivables then owned by the Issuer, reduced by the sum of (i) unapplied cash,
(ii) unapplied credits including the “meet comp” allowance for Coinmach
Corporation, (iii) the Sales Tax Allowance, (iv) finance charges, late payments
or similar charges, (v) Contra Allowances and (vi) Chargebacks.

Guaranties: With respect to any Loan, personal or commercial guaranties of an
Obligor’s performance with respect thereto.

Holder: The Person in whose name a Note is registered on the Note Register or
who owns a beneficial interest in the Trust as set forth in the Certificate
Register, as applicable.

Indemnified Parties: The Persons specified in Section 6.9 of the Trust
Agreement.

Indenture: The Indenture, dated as of June 26, 2009, between the Issuer and the
Indenture Trustee, as amended and supplemented from time to time.

Indenture Trustee: The Bank of New York Mellon, a New York banking corporation,
not in its individual capacity but solely as trustee under the Indenture, or any
successor trustee under the Indenture.

Indenture Trustee Fee: Has the meaning given to such term as set forth in the
letter agreement between the Issuer and the Indenture Trustee.

Independent: When used with respect to any specified Person, that the Person
(i) is in fact independent of the Issuer, any other obligor upon the Notes, the
Transferor, ALS and any Affiliate of any of the foregoing Persons, (ii) does not
have any direct financial interest or any material indirect financial interest
in the Issuer, any such other obligor, the Transferor, ALS or any Affiliate of
any of the foregoing Persons and (iii) is not connected with the Issuer, any
such other obligor, the Transferor, ALS or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.

Independent Certificate: A certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of Section 12.1 of the Indenture, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of “Independent”
in the Indenture and that the signer is Independent within the meaning thereof.

 

28

--------------------------------------------------------------------------------

Ineligible Cap Reserve: With respect to any Distribution Date, means 1.0% of the
Net Equipment Loans Balance, as of the last day of the immediately preceding
Monthly Period (or, upon the occurrence of an Event of Default or Rapid
Amortization Event, as of the Accounting Date immediately prior to the
occurrence of such event).

Initial Assignment: Any Initial PA Assignment or Initial PSA Assignment.

Initial Cutoff Date: June 22, 2009, with respect to the Receivables; and
June 22, 2009, with respect to the Loans.

Initial Loan Balance: With respect to a Loan, the excess of (x) the aggregate
amount advanced under such Loan toward the purchase price of the Equipment,
including insurance premiums, service and warranty contracts, federal excise and
sales taxes and other items customarily financed as part of an Equipment Note
and related costs, over (y) payments received from the Obligor prior to the Loan
Cutoff Date that has been allocated in accordance with the terms of such Loan to
the reduction of the unpaid principal balance of such Loan.

Initial Loans: The Loans, including all documents and instruments evidencing or
governing the Loans and all Loan Files relating thereto, identified in the
schedule to the Initial PA Assignment and the Initial PSA Assignment.

Initial PA Assignment: The assignment substantially in the form of Exhibit A-1
to the Purchase Agreement.

Initial PSA Assignment: The assignment substantially in the form of Exhibit A-1
to the Pooling and Servicing Agreement.

Insolvency Event: With respect to a specified Person, (i) the entry of a decree
or order by a court, agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator for such
Person, in any bankruptcy, insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of such Person’s affairs, and the continuance of any such decree or
order unstayed and in effect for a period of sixty (60) consecutive days;
(ii) the consent by such Person to the appointment of a conservator, receiver or
liquidator in any bankruptcy, insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings of or relating to such Person or
of or relating to substantially all of such Person’s property, or (iii) such
Person shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable bankruptcy,
insolvency or reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations.

Instruments: Has the meaning given to such term in Section 9-102(a) of the UCC.

Insurance Policy: With respect to a Loan, an insurance policy covering Equipment
securing such Loan.

 

29

--------------------------------------------------------------------------------

Insurance Proceeds: With respect to any Loan, proceeds of any Insurance Policy
with respect to such Loan.

Interest Bearing Receivable: A Floorplan Receivable and any other Receivable
with respect to which interest (at short-term interest rates agreed to by such
Obligor and the Originator) accrues on the Unpaid Balance thereof, provided that
a Receivable shall not be deemed to be interest-bearing solely as a result of an
Originator’s imposition of an interest or other charge on any such Receivable
that remains unpaid after its due date for some specified period (but such
interest charge or other charge shall not be included in the Unpaid Balance of a
Receivable).

Interest Only Loan: With respect to any date of determination, any Loan for
which the Scheduled Payment owing by the related Obligor does not include a
component allocable to the repayment of the Loan Balance of such Loan.

Interest Period: With respect to any Distribution Date, the period commencing on
the second immediately preceding Determination Date and ending on the day prior
to the immediately preceding Determination Date, except that (x) the initial
Interest Period will be the period commencing on the Closing Date and ending on
the day prior to the first Determination Date and (y) the last Interest Period
will be the period commencing on the immediately preceding Determination Date
and ending on the date on which the outstanding principal balance of the Notes
has been reduced to zero; provided that, if an Interest Period in respect of
which the Equipment Loan Note Interest Payment or the Receivables Note Interest
Payment, as applicable, is computed by reference to the CP Rate and such rate is
terminated at the election of, and upon notice thereof to the Issuer by, the
applicable Agent any time, then the outstanding principal amount of the Advance
allocated to such terminated Interest Period shall be allocated to a new
Interest Period commencing on (and including) the date of such termination and
ending on (but excluding) the next following Determination Date.

Interest Rate Cap Agreement: The letter agreement (confirmation), effective as
of June 26, 2009, among Wells Fargo Bank, N.A. and the Issuer or any other cap
or other hedging instrument, in form and substance reasonably satisfactory to
the Administrative Agent (acting at the direction of the Special Required
Noteholders), between the Issuer and Interest Rate Cap Provider named therein,
including any schedules and confirmations prepared and delivered in connection
therewith, pursuant to which the Issuer will receive payments from the Interest
Rate Cap Provider based on “USD-LIBOR-BBA” (as defined in the Interest Rate Cap
Agreement).

Interest Rate Cap Provider: Any Eligible Cap Provider or any counterparty to an
interest rate swap, cap, collar or other hedging instrument permitted to be
entered into pursuant to the Indenture.

Interested Parties: The Issuer, each Beneficiary and each other party identified
or described in the Purchase Agreement or the Transfer and Servicing Agreements
as having an interest as owner, trustee or secured party with respect to the
Purchased Property.

Inventory: Has the meaning given to such term in Section 9-102(a) of the UCC.

Investment Company Act of 1940: The Investment Company Act of 1940, as amended.

 

30

--------------------------------------------------------------------------------

Investment Earnings: Investment earnings on funds deposited in the Designated
Accounts, the Lockbox Account and the Certificate Distribution Account, net of
losses and investment expenses, during the applicable Monthly Period.

Investment Property: Has the meaning given to such term in Section 9-102(a) of
the UCC.

Issuer: Alliance Laundry Equipment Receivables Trust 2009-A and any successors
and permitted assigns.

Issuer Order and Issuer Request: A written order or request signed in the name
of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee.

LC Recourse Draw Determination Date: As defined in Section 3.27(f) of the
Indenture.

LC Substitute Cash: RA Cash plus any additional cash collateral on deposit in
the Reserve Account designated to be in substitution of Eligible Letters of
Credit.

Letter(s) of Credit: The Letter(s) of Credit issued for the benefit of the
Indenture Trustee.

Letter of Credit Bank: The bank issuing (and, if applicable, its confirming
bank) the Letter of Credit.

Letter of Credit Drawing: As defined in Section 3.27(b) of the Indenture.

Letter-of-Credit Rights: Has the meaning given to such term in Section 9-102(a)
of the UCC.

LIBOR: An interest rate per annum equal to the rate for deposits in U.S. Dollars
for a period of one month which appears on Telerate Service Page 3750 as of
11:00 a.m., London time, on the related date of determination. If the rate does
not appear on that date on Telerate Service Page 3750 (or any other page as may
replace that page on that service, or if that service is no longer offered, any
other service for displaying LIBOR or comparable rates as may be selected by the
Indenture Trustee after consultation with the Transferor), then LIBOR will be
the Reference Bank Rate.

Lien: Any security interest, lien, charge, pledge, equity or encumbrance of any
kind other than (i) liens for taxes not yet due and payable, (ii) mechanics’
liens, (iii) any liens that attach by operation of law, and (iv) any liens being
contested by appropriate measures.

Liquidation Expenses: The out of pocket expenses reasonably incurred by the
Servicer in connection with the repossession, refurbishment and disposition of
the collateral relating to a Defaulted Equipment Loan.

Liquidation Proceeds: The Proceeds of the liquidation of any Defaulted Equipment
Loan, net of Liquidation Expenses.

 

31

--------------------------------------------------------------------------------

Liquidity Termination Date: June 25, 2010, or such later date to which the
Liquidity Termination Date may be extended (but no later than the Scheduled
Termination Date) by the Issuer, the Administrative Agent and some or all of the
Noteholders (in their sole discretion) in accordance with Section 2.8 of the
Note Purchase Agreement.

LLC Agreement: The Limited Liability Company Agreement of the Transferor, dated
as of June 19, 2009, as amended, supplemented or modified from time to time.

Loan: A commercial loan evidenced by an Equipment Note and the related security
agreement that grants a security interest in the related Equipment, including,
after the applicable addition date, Substitute Loans.

Loan Balance: With respect to any Loan, as of an Accounting Date, the Initial
Loan Balance thereof minus the sum of: (i) the principal portion of all
Scheduled Payments received on or after the applicable Loan Cutoff Date and on
or prior to the Accounting Date, (ii) the principal portion of all Prepayments
received, and (iii) the principal portion of Proceeds from any Insurance
Policies covering the Equipment, Liquidation Proceeds and Proceeds from any
Guaranties received and allocated to principal by the Servicer (it being
understood that Servicer Advances with respect to any Loan do not decrease the
Loan Balance of such Loan).

Loan Borrowing Base Shortfall: As of any date of determination the excess (if
any) of (x) the then Aggregate Equipment Loan Note Principal Balance over
(y) the Equipment Loan Borrowing Base as of such date.

Loan Collection Account: The account designated as such, established and
maintained pursuant to Section 6.03 of the Pooling and Servicing Agreement.

Loan Conversion Date: The earliest to occur of (v) the date elected as such Loan
Conversion Date by the Originator with at least thirty (30) days prior written
notice to the Administrative Agent; provided that if such termination occurs
within eighteen (18) months of the Closing Date, such termination may only occur
with the consent of the Noteholders, (w) the Scheduled Termination Date, (x) the
date on which a Rapid Amortization Event first occurs, (y) the date on which the
Originator’s revolving credit commitments under the Credit Agreement expire,
unless extended or replaced with a substantially similar revolving credit
commitment with equal or greater liquidity availability, (z) the Purchase
Termination Date and (aa) the Liquidity Termination Date with respect to all
Committed Purchasers then party to the Note Purchase Agreement. Notwithstanding
the foregoing, in the event that pursuant to Section 2.8 of the Note Purchase
Agreement, one or more of the Committed Purchasers does not consent to the
extension of the Liquidity Termination Date beyond June 25, 2010, the
requirement that the Originator obtain the consent of the Noteholders pursuant
to clause (v) above shall no longer apply.

Loan Credit and Collection Policy: With respect to the Equipment Loans, the
Credit and Collection Policy and procedures of the initial Servicer as in effect
on the Closing Date, a true and complete copy of which (to the extent reflected
in written form) has been provided to the Noteholders, as the same shall be
amended from time to time as permitted by the Pooling and Servicing Agreement
or, if a successor Servicer shall have been appointed, the standard credit and
collection policies of such successor Servicer as shall be in effect from time
to time provided that such credit and collection policies shall have been
approved by the Noteholders.

 

32

--------------------------------------------------------------------------------

Loan Cutoff Date: With respect to the initial transfer, the Initial Cutoff Date;
and with respect to transfers of Loans on any subsequent Purchase Date, the
close of business on the third Business Day prior to such Purchase Date.

Loan File: The documents pertaining to a particular Loan, all other documents or
instruments evidencing or governing such Loan and all other agreements,
instruments, documents and records maintained by the Servicer on behalf of the
Issuer and relating to such Loan.

Loan Lockbox: The post office box specified in the Domestic Lockbox Agreement.

Loan Lockbox Account: As defined in Section 6.01(a) of the Pooling and Servicing
Agreement.

Loan Schedule: The list of Loans to be delivered to the Custodian in connection
with the delivery of Collateral Documents.

Loan Servicing Standards: As defined in Section 3.01 of the Pooling and
Servicing Agreement.

Lockbox Accounts: Collectively, the Loan Lockbox Account, the Domestic
Receivables Lockbox Account and the Foreign Receivables Lockbox Account.

Lockbox Agreements: The Domestic Lockbox Agreement and the Foreign Receivables
Lockbox Agreement each as amended, supplemented or modified or superceded from
time to time.

Lockbox Bank: Bank of America, N.A., U.S. Bank, National Association, and any of
their respective successors in interest thereof, or any other Lockbox Bank that
is an Eligible Institution designated by the Servicer and acceptable to the
Administrative Agent and the Indenture Trustee.

Lockboxes: Collectively, the Loan Lockbox and the Receivables Lockboxes.

Loss Horizon Ratio: For any Monthly Period, an amount equal to the sum of the
Receivables originated in such Monthly Period and the immediately preceding six
Monthly Periods, divided by the Net Receivables Balance on the related
Accounting Date. For purposes of calculating the Loss Horizon Ratio, the term
Receivables, when used in reference to periods prior to the Closing Date, shall
mean all of the trade receivables owned by Alliance Laundry Equipment
Receivables Trust 2005-A.

Loss Reserve: As calculated in each Servicer’s Certificate relating to the most
recently ended Monthly Period, the percentage resulting from the following
formula:

2.25 x LHR x PLR

 

33

--------------------------------------------------------------------------------

where:

LHR = Loss Horizon Ratio for such Monthly Period

PLR = Peak Loss Ratio for such Monthly Period

Lyon: Lyon Financial Services, Inc. (d/b/a U.S. Bank Portfolio Services).

Manager: AMACAR Group, L.L.C.

Management Fee: An annual fee equal to $7,500 as set forth in that certain
Independent Manager Services Agreement, dated as of June 26, 2009, among the
Manager and the Transferor, as amended or supplemented or replaced from time to
time.

Market Disruption Spread: Zero unless a notice delivered pursuant to part (b) of
the definition of Eurodollar Disruption Event is in effect, in which case, such
spread shall be a rate per annum equal to 1.00%.

Minimum Excess Spread: Means 1.00%.

Monthly Period: With respect to a Determination Date, a Record Date and a
Distribution Date, the calendar month preceding the month in which such date
occurs. With respect to an Accounting Date, the calendar month in which such
Accounting Date occurs.

Moody’s: Moody’s Investors Service, Inc.

Net Equipment Loans Balance: As of any date of determination, an amount equal to
(x) the sum of all Loan Balances of all Eligible Equipment Loans then owned by
the Issuer minus (y) the sum of (i) any security deposits held by, or on behalf
of, the Issuer with respect to all such Eligible Equipment Loans and (ii) the
Excess Loan Concentration Amount.

Net Receivables Balance: As of any date of determination, (x) the then Adjusted
Receivables Balance minus (y) the Excess Receivables Concentration Amount.

New York UCC: The UCC as in effect in the State of New York.

Note Principal Balance: With respect to any Note as of any date of determination
the excess of (x) all Advances made by the Holder of such Note on and after the
Closing Date over (y) the cumulative amount of all principal payments and
prepayments actually received by such Holder on and after the Closing Date.

Note Purchase Agreement: The Note Purchase Agreement dated as of June 26, 2009,
among the Issuer, the Servicer, the Transferor, the Administrative Agent, the
Noteholders and the Agents as amended and supplemented from time to time.

Note Register: With respect to any class of Notes, the register of such Notes
specified in Section 2.4 of the Indenture.

 

34

--------------------------------------------------------------------------------

Note Registrar: The registrar at any time of the Note Register, appointed
pursuant to Section 2.4 of the Indenture.

Noteholders: Holders of the Notes pursuant to the Indenture and, with respect to
any class of Notes, Holders of such class of Notes pursuant to the Indenture.

Notes: Collectively, the Equipment Loan Notes and the Receivables Notes.

NPA Indemnified Amounts: The amounts payable pursuant to Sections 2.3, 2.4, 2.5
and 2.6 of the Note Purchase Agreement.

Obligor: With respect to any Loan, the purchaser or any co-purchaser of the
related Equipment or any other Person, other than the maker of any Guaranty, who
owes payments under a Loan. With respect to any Receivable, the Person who owes
payment under a Receivable.

OC Percentage: A percentage equal to (i) 100% minus (ii) the percentage
equivalent of the Outstanding Amount of the Equipment Loan Notes divided by the
Net Equipment Loan Balance.

Officer’s Certificate: A certificate signed by any Authorized Officer of the
Issuer, under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 12.1 of the Indenture, and delivered to the
Indenture Trustee. Unless otherwise specified, any reference in the Indenture to
an officer’s certificate shall be to an Officer’s Certificate of any Authorized
Officer of the Issuer.

Opinion of Counsel: A written opinion of counsel, who may, except as otherwise
expressly provided, be an employee of the Transferor or the Servicer. In
addition, for purposes of the Indenture: (i) such counsel shall be satisfactory
to the Indenture Trustee and the Administrative Agent; (ii) the opinion shall be
addressed to the Indenture Trustee as Trustee and the Administrative Agent; and
(iii) the opinion shall comply with any applicable requirements of Section 12.1
of the Indenture and shall be in form and substance satisfactory to the
Indenture Trustee and the Administrative Agent.

Optional Purchase Price: As defined in Section 10.01 of the Pooling and
Servicing Agreement.

Originator: Alliance Laundry Systems LLC.

Outstanding: With respect to the Notes, as of the Determination Date, all Notes
theretofore authenticated and delivered under the Indenture except:

(i) Notes theretofore canceled by the Indenture Trustee or delivered to the
Indenture Trustee for cancellation;

(ii) Notes or portions thereof the payment for which money in the necessary
amount has been theretofore deposited with the Indenture Trustee in trust for
the Holders of such Notes; provided, however, that if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant to the
Indenture or provision therefor, satisfactory to the Indenture Trustee, has been
made; and

 

35

--------------------------------------------------------------------------------

(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to the Indenture unless proof satisfactory
to the Indenture Trustee is presented that any such Notes are held by a bona
fide purchaser;

provided, however, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Transferor or
any Affiliate of any of the foregoing Persons shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that the Indenture Trustee
knows to be so owned shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Indenture Trustee the pledgor’s right so to act with
respect to such Notes and that the pledgee is not the Issuer, any other obligor
upon the Notes, the Transferor or any Affiliate of any of the foregoing Persons.

Outstanding Amount: As of any date, the aggregate principal amount of all Notes,
or a class of Notes, as applicable, Outstanding at such date.

Outstanding Obligations: As of any date of determination an amount equal to the
sum of (i) the then outstanding principal balance of, and accrued interest
payable on, all Notes issued under the Indenture or any Note Purchase Agreement
and (ii) all other amounts owing to Noteholders or to any Person under the
Indenture, any Note Purchase Agreement or any other Basic Document.

Owner: For purposes of the Purchase Agreement, the Custodial Agreement and the
Pooling and Servicing Agreement, the “Owner” of a Loan or Receivable means
(i) ALER until the execution and delivery of the Transfer and Servicing
Agreements and (ii) thereafter, the Issuer; provided that ALS or ALER, as
applicable, shall be the “Owner” of any Loan or Receivable from and after the
time that such Person shall acquire such Loan or Receivable, as the case may be,
pursuant to Section 6.4 of the Purchase Agreement, Sections 2.12 and 3.08, as
applicable, of the Pooling and Servicing Agreement and any other provision of
the Transfer and Servicing Agreements.

Owner Trust Estate: All right, title and interest of the Trust in and to the
property and rights assigned to the Trust pursuant to Article II of the Pooling
and Servicing Agreement, all funds on deposit from time to time in the Lockbox
Accounts, Reserve Account, Collection Accounts and the Certificate Distribution
Account and all other property of the Trust from time to time, including any
rights of the Owner Trustee and the Trust pursuant to the Pooling and Servicing
Agreement and the Administration Agreement.

Owner Trustee: Wilmington Trust Company, a Delaware banking corporation, not in
its individual capacity but solely as trustee under the Trust Agreement, or any
successor trustee under the Trust Agreement.

 

36

--------------------------------------------------------------------------------

Owner Trustee Fee: An initial fee and first year annual fee to be paid to the
Owner Trustee on the Closing Date and the annual fee to be paid to the Owner
Trustee on each anniversary of the Closing Date as determined in a separate fee
agreement between the depositor and the Owner Trustee.

Party: A Party as defined in Section 7.01 of the Pooling and Servicing
Agreement.

Paying Agent: With respect to the Indenture, the Indenture Trustee or any other
Person that meets the eligibility standards for the Indenture Trustee specified
in Section 6.11 of the Indenture and is authorized by the Issuer to make the
payments to and distributions from the Collection Account and the Note
Distribution Account, including payment of principal of or interest on the Notes
on behalf of the Issuer. With respect to the Trust Agreement, any paying agent
or co-paying agent appointed pursuant to Section 3.4 of the Trust Agreement that
meets the eligibility standards for the Owner Trustee specified in Section 6.13
of the Trust Agreement, and initially the Owner Trustee.

Payment Intangibles: Has the meaning given to such term in Section 9-102(a) of
the UCC.

Peak Loss Ratio: For any Monthly Period, the highest rolling three-month average
Default Ratio — Loss Reserve calculated during the twelve Monthly Periods ending
on the related Accounting Date.

Percentage: With respect to any Noteholder and its Equipment Loan Commitment or
Receivables Commitment, as the case may be, as of any date of determination, the
percentage equivalent of a fraction, the numerator of which is the Equipment
Loan Commitment or Receivables Commitment, as the case may be, of such
Noteholder and the denominator of which is equal to the sum of the Equipment
Loan Commitments or Receivables Commitments, as the case may be, of all
Noteholders of such class.

Permitted Adverse Claim: As defined in the Purchase Agreement.

Person: Any legal person, including any individual, corporation, limited
liability company, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

Physical Property: (i) Bankers’ acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute “instruments”
within the meaning of Section 9-102(a) of the UCC and are susceptible of
physical delivery and (ii) certificated securities.

Pooling and Servicing Agreement: The Pooling and Servicing Agreement, dated as
of June 26, 2009, among ALS, the Transferor and the Issuer, as amended,
supplemented or modified from time to time.

Predecessor Note: With respect to any particular Note, every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note authenticated
and delivered under Section 2.5 of the Indenture in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.

 

37

--------------------------------------------------------------------------------

Prepayment: Collections on a Loan held by the Trust made during a Monthly Period
(including Warranty Payments and Administrative Purchase Payments) which are not
late fees, prepayment charges or certain other similar fees or charges and which
would be allocated to principal prepayments pursuant to Section 3.11 of the
Pooling and Servicing Agreement.

Principal Distributable Amount: For each Distribution Date, an amount equal to
the product of (x) the Equipment Loan Advance Rate and (y) the Scheduled
Payments (including prepayments) on the Loans during the related Interest
Period.

Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.

Proceeds: Has the meaning given in Section 9-102(a)(64) of the UCC and, in any
event, shall include (i) any and all Accounts, Chattel Paper, Instruments, cash
or other proceeds payable to the Issuer from time to time in respect of the
Collateral, (ii) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to the Issuer from time to time with respect to any of the
Collateral, (iii) any and all payments (in any form whatsoever) made or due and
payable to the Issuer from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral above by any Governmental Authority (or any Person acting under color
of Governmental Authority), and (iv) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.

Program: As defined in Section 5.02(a) of the Pooling and Servicing Agreement.

PSA Assignment: The certificate substantially in the form of Exhibit A-2 to the
Pooling and Servicing Agreement.

Purchase Agreement: The Purchase Agreement, dated as of June 26, 2009, between
ALS and the Transferor, as amended, supplemented or modified from time to time
in accordance with its terms.

Purchase Date: As defined in the Purchase Agreement.

Purchase Termination Date: The earlier to occur of the date (other than a
Receivables Conversion Date) specified in Section 7.1 or Section 7.2 of the
Purchase Agreement.

Purchased Property: As of any date, means all of the Loans and Receivables
transferred by ALS to ALER pursuant to Section 2.1 of the Purchase Agreement as
of or prior to such date.

Purchasers’ Interest: A percentage, calculated in accordance with the following
formula:

 

PI    =            (NPB + RRCSA)        (NRB + RLCA + RRA)

 

38

--------------------------------------------------------------------------------

Where:      PI   =        Purchasers’ Interest NPB   =    the outstanding
principal of the Receivables Notes RRCSA   =    the RRCS x NRB RRCS   =    the
Receivables Required Credit Support NRB   =    the Net Receivables Balance RLCA
  =    the sum of (a) the lesser of (i) the Receivables LC Amount and (ii) the
actual amount available under Eligible Letters of Credit that is allocated to
the Receivables Notes plus (b) the amount of cash on deposit in the Reserve
Account representing Proceeds of draws under Letters of Credit under the
circumstances described in Section 4.1(c) of the Indenture (“RA Cash”) and
allocated to the Receivable Notes plus (c) any additional cash on deposit in the
Reserve Account designated to be in substitution of Eligible Letters of Credit
(collectively with RA Cash, “LC Substitute Cash”) and allocated to the
Receivables Notes RRA   =    the lesser of (x) 1% x NRB (y) the excess of the
actual amount on deposit in the Reserve Account that is allocated to the
Receivables Notes over the amounts of RA Cash and LC Substitute Cash allocated
to the Receivables Notes

Qualified Special Purpose Entity: As defined in accordance with GAAP as such
term is defined on the date of the Credit Agreement.

RA Cash: The amount of cash on deposit in the Reserve Account representing
Proceeds of draws under Letters of Credit under the circumstances described in
Section 4.1(c) of the Indenture.

Rapid Amortization Event: As defined in Article IV of the Indenture.

Rapid Amortization Step-Up Amount: An amount of interest that would accrue on
the Receivables Notes or the Equipment Loan Notes, as applicable, using one
percent (1%) per annum as the rate of interest.

Rating Agencies: As of any date, the nationally recognized statistical rating
organizations requested by the Transferor to provide ratings on the Notes which
are rating the Notes on such date.

 

39

--------------------------------------------------------------------------------

Receivables: Any right to payment (other than a right to payment under any
Equipment Loans), whether constituting an account, chattel paper, instrument,
general intangible or otherwise, arising from the sale of goods, services or
future services by a Seller or an Originator and includes the right to payment
of any interest or finance charges and other obligations with respect thereto
and any other rights to payment recorded as a receivable on a Seller’s or an
Originator’s accounts receivable ledger; provided that any such receivables
shall not include intercompany receivables arising between a Seller or an
Originator and any Affiliate thereof or any receivables not denominated in
Dollars.

Receivables Available Amount: For any Distribution Date, with respect to the
related Monthly Period, or with respect to the first Distribution Date, the
period from and including the Initial Cutoff Date to the last day of the related
Monthly Period, the sum of, without duplication, (1) all Collections on the
Receivables held by the Trust in the Receivables Collection Account, (2) all
Proceeds, Guarantees to the extent received by the Trust, (3) any amounts drawn
from the Reserve Account, (4) any amounts drawn from the Letters of Credit,
(5) all Servicer Modification Credit Proceeds and (6) earnings on amounts in the
relevant Accounts.

Receivables Borrowing Base: Is an amount equal to the sum of (A) product of
(i) 100% minus the Receivables Required Credit Support (expressed as a
percentage of the Net Receivables Balance) and (ii) the Receivables Collateral
Value, (B) the Receivables LC Amount including amounts drawn pursuant to
Sections 3.27(d) and 3.27(e) of the Indenture and (C) the amount in the Reserve
Account related to the Receivables (as determined in accordance with Section 8.7
of the Indenture).

Receivables Borrowing Base Shortfall: Shall exist if, on any date of
determination (including each date of transfer for any Receivables), the
Receivables Borrowing Base is less than the then unpaid principal balance of the
Receivables Notes.

Receivables Borrowing Date: As defined in Section 1.1 of the Note Purchase
Agreement.

Receivables Collateral Value: As of any date of determination, an amount equal
to the then Net Receivables Balance.

Receivables Collection Account: The account designated as such, established and
maintained pursuant to Section 6.04(a) of the Pooling and Servicing Agreement.

Receivables Commitment: Sixty Million Dollars ($60,000,000). On or after the
Receivables Conversion Date, the Receivables Commitment shall be zero.

Receivables Conversion Date: The earlier to occur of (x) the Loan Conversion
Date and (y) the date elected as such Receivables Conversion Date by the
Originator with at least thirty (30) days prior written notice to the
Administrative Agent.

Receivables Credit and Collection Policy: With respect to the Receivables, the
Credit and Collection Policy and procedures of the initial Servicer as in effect
on the Closing Date, a true and complete copy of which (to the extent reflected
in written form) has been provided to the Noteholders, as the same shall be
amended from time to time as permitted by the Pooling and Servicing Agreement
or, if a successor Servicer shall have been appointed, the standard credit and
collection policies of such successor Servicer as shall be in effect from time
to time provided that such credit and collection policies shall have been
approved by the Noteholders.

 

40

--------------------------------------------------------------------------------

Receivables Fee: For each Distribution Date and Noteholder, an amount equal to
the sum, for each day during the Interest Period, of an amount equal to the
aggregate, for all Advances under the Receivables Notes then outstanding, equal
to the sum of (a) the product of (i) the principal amount of such Advance (or a
portion thereof), (ii) a rate equal to the sum of (x) the Cost of Funds Rate on
such day and (y) the Applicable Margin and (iii) 1/360; plus (b) either (i) if
such day is subsequent to the occurrence of an Event of Default an additional
amount equal to the Default Step-Up Amount or (ii) if such day is subsequent to
the occurrence of a Rapid Amortization Event (other than a Rapid Amortization
Event caused by an Event of Default), an additional amount equal to the Rapid
Amortization Step-Up Amount.

Receivables Files: All documents or instruments evidencing or governing such
Receivable and all other agreements, instruments, documents and records
maintained by Servicer on behalf of the Issuer relating to such Receivable.

Receivables LC Amount: The undrawn amount of the Letters of Credit that are
attributable (as determined in accordance with Section 8.7 of the Indenture) to
the Receivables Notes.

Receivables Lockbox: Either or both, as the context may require, of the Domestic
Receivables Lockbox and the Foreign Receivables Lockbox.

Receivables Lockbox Account: Either or both, as the context may require, of the
Domestic Receivables Lockbox Account and the Foreign Receivables Lockbox
Account.

Receivables Note: Any one of the Notes substantially in the form of Exhibit A-2
to the Indenture, issued pursuant to the terms of the Indenture.

Receivables Note Interest Payment: For each Distribution Date and Noteholder, an
amount equal to the sum, for each day during the Interest Period, of an amount
equal to the aggregate, for all Advances under the Receivables Notes then
outstanding, equal to the sum of (a) the product of (i) the principal amount of
such Advance (or a portion thereof), (ii) a rate equal to the sum of (x) the
Cost of Funds Rate on such day and (y) the Applicable Margin and (iii) 1/360;
plus (b) either (i) if such day is subsequent to the occurrence of an Event of
Default an additional amount equal to the Default Step-Up Amount or (ii) if such
day is subsequent to the occurrence of a Rapid Amortization Event (other than a
Rapid Amortization Event caused by an Event of Default), an additional amount
equal to the Rapid Amortization Step-Up Amount.

Receivables Note Senior Interest Amount: For each Distribution Date and each
Noteholder, an amount equal to the sum, for each day during the related Interest
Period, of an amount equal to the aggregate, for all Advances under the
Receivables Notes then outstanding, equal to the product of (i) the principal
amount of such Advance (or a portion thereof), (ii) a rate equal to CP Rate plus
300 basis points (3.00%) and (iii) 1/360.

Receivables Noteholder: A Holder of a Receivables Note.

 

41

--------------------------------------------------------------------------------

Receivables Payoff Date: As defined in Section 8.4(b) of the Indenture.

Receivables Required Credit Support: The amount which is calculated as of the
end of each Accounting Date and equal to the greater of (i) the sum of the Loss
Reserve, Dilution Reserve and Yield Reserve and (ii) the sum of the Yield
Reserve and the Reserve Floor. The Receivables Required Credit Support is
effective for the period beginning on the Determination Date on which the
information is reported until the day prior to the following Determination Date.

Receivables Reserve Requirement: With respect to any Distribution Date, the
amount of the Reserve Account Required Amount allocated to the Receivables Notes
pursuant to Section 8.7 of the Indenture.

Receivables Servicing Standards: As defined in Section 4.02 of the Pooling and
Servicing Agreement.

Receivables Unused Facility Fee: As defined in Section 2.7(f) of the Indenture.

Record Date: With respect to any Distribution Date, the related Accounting Date.

Records: As defined in the Purchase Agreement.

Recourse Limit: As of any date of determination, an amount equal to the greater
of (i) 13% of the Outstanding Amount of the Notes at such time and (ii) the
lower of the maximum amount of “Limited Originator Recourse” permitted at such
time pursuant to (x) the Credit Agreement (as such agreement may be amended,
supplemented, restated, replaced or otherwise modified from time to time) or
(y) the Indenture, dated as of January 27, 2005, among ALH Finance LLC, ALH
Finance Corporation and the Bank of New York Trust Company, N.A., as Trustee (as
such agreement may be amended, supplemented, restated, replaced or otherwise
modified from time to time).

Redemption Date: The Distribution Date specified by the Servicer or the Issuer
pursuant to Section 10.1(a) of the Indenture.

Redemption Price: An amount equal to the sum of the Outstanding Obligations, as
of the Redemption Date.

Reference Bank Rate: The per annum rate determined on the basis of the rates at
which deposits in Dollars are offered by the reference banks (which will be four
major banks that are engaged in transactions in the London interbank market,
selected by the Indenture Trustee after consultation with the Transferor) as of
11:00 a.m., London time, on any date of determination to prime banks in the
London interbank market for a period of one month, in amounts approximately
equal to the principal amount of the then outstanding Equipment Loan Notes or
Receivables Notes, as the case may be. The Indenture Trustee will request the
principal London office of each of the reference banks to provide a quotation of
its rate. If at least two quotations are provided, the rate will be the
arithmetic mean of the quotations, rounded upwards to the nearest one-sixteenth
of one percent. If on that date fewer than two quotations are provided as
requested, the rate will be the arithmetic mean, rounded upwards to the nearest
one-sixteenth of

 

42

--------------------------------------------------------------------------------

one percent, of the rates quoted by one or more major banks in New York City,
selected by the Indenture Trustee after consultation with the Transferor, as of
11:00 a.m., New York City time, on the date to leading European banks for United
States dollar deposits for a period of one month in amounts approximately equal
to the principal amount of the then outstanding Equipment Loan Notes or
Receivables Notes, as the case may be.

Registered Owner: As defined in Section 3.1(a) of the Trust Agreement.

Regulatory Change: As defined in the Note Purchase Agreement.

Related Assets: As defined in the Purchase Agreement.

Related Security: As defined in the Purchase Agreement.

Reporting Date: As defined in the Purchase Agreement.

Required Deposit Rating: A rating on short-term unsecured debt obligations of
P-1 by Moody’s and A-1 by S&P. Any requirement that short-term unsecured debt
obligations have the “Required Deposit Rating” means that such short-term
unsecured debt obligations have the foregoing required ratings from each of such
rating agencies.

Required Noteholders: At any time that (a) any Noteholder holds a majority share
of the aggregate principal balance of the Outstanding Notes, then such
Noteholders that hold an aggregate pro rata share of equal to or greater than
two-thirds of the aggregate principal balance of the Outstanding Notes; or
(b) no single Noteholder holds a majority share of the aggregate principal
balance of the Outstanding Notes, then such Noteholders that hold an aggregate
pro rata share of greater than 50% of the aggregate principal balance of the
Outstanding Notes.

Reserve Account: The account designated as such, established and maintained
pursuant to Section 6.05 of the Pooling and Servicing Agreement.

Reserve Account Required Amount: With respect to any Distribution Date, means
the sum of (A) the lesser of:

(a) the sum of (x) 1.0% of the Net Equipment Loans Balance, as of the last day
of the immediately preceding Monthly Period (or, upon the occurrence of an Event
of Default or Rapid Amortization Event, as of the Accounting Date immediately
prior to the occurrence of such event) and (y) 1.0% of the Net Receivables
Balance, as of the last day of the immediately preceding Monthly Period (or,
upon the occurrence of an Event of Default or Rapid Amortization Event, as of
the Accounting Date immediately prior to the occurrence of such event); and

(b) the Aggregate Note Principal Balance;

(B) the amount of any Letter of Credit Drawings pursuant to Section 3.27(d) or
Section 3.27(e) of the Indenture (less distributions from the deposit of such
amount from the Reserve Account to the extent such amount is being held pending
application in respect of principal or interest on the outstanding Notes);

 

43

--------------------------------------------------------------------------------

and (C) if the counterparty to the Interest Rate Cap Agreement then in effect is
downgraded by the applicable Rating Agency below either “A-1”/ “P-1” or “AA-”/
“Aa3”, the Ineligible Cap Reserve; provided that such Ineligible Cap Reserve
shall only apply for so long as such counterparty is rated by the applicable
Rating Agency below either “A-1”/ “P-1” or “AA-”/ “Aa3”.

Notwithstanding the foregoing, at all times on and after the Loan Conversion
Date (except for such designation being due to (x) of the definition thereof)
the amount set forth in clause (A) of the above definition of Reserve Account
Required Amount will be the lesser of: (a) the sum of (x) the greater of
(i) 0.75% of the Net Equipment Loans Balance, as of the Loan Conversion Date and
(ii) 1.0% of the Net Equipment Loans Balance, as of the last day of the
immediately preceding Monthly Period (or, upon the occurrence of an Event of
Default or Rapid Amortization Event, as of the Accounting Date immediately prior
to the occurrence of such event) and (y) 1.0% of the Net Receivables Balance, as
of such date and (b) the Aggregate Note Principal Balance.

Reserve Floor: For any Monthly Period, the percentage resulting from the
following formula:

RFCF + (the greater of (I) ED x DHR and (II) the lesser of (a) 10% and (b)(i)
the sum of the Eligible Receivables for the second, third and 50% of the fourth
largest Obligors, divided by (ii) the Adjusted Receivables Balance); provided
that the preceding clause (II) shall only apply until such time as the Servicer
has notified S&P that such clause (II) is no longer applicable

where:

RFCF = Reserve Floor – Concentration Factor for such Monthly Period

ED = Expected Dilution for such Monthly Period

DHR = Dilution Horizon Ratio for such Monthly Period

Reserve Floor — Concentration Factor: For each Monthly Period, 31.00%.

Responsible Officer: With respect to the Indenture Trustee or the Owner Trustee,
any officer within the Corporate Trust Office of such trustee, and, with respect
to the Servicer, the President, any Vice President, Assistant Vice President,
Secretary, Assistant Secretary or any other officer or assistant officer of such
Person customarily performing functions similar to those performed by any of the
above designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer’s
knowledge of and familiarity with the particular subject.

Rule 144A: Rule 144A under the Securities Act.

S&P: Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.

 

44

--------------------------------------------------------------------------------

Sales Tax Allowance: An allowance which shall be $100,000 initially, but is
subject to annual review and revision by the Servicer with the consent of the
Administrative Agent (acting at the direction of the Required Noteholders).

Schedule of Loans: The schedule of Loans, annexed to the Pooling and Servicing
Agreement and on file at the locations listed on Exhibit B to the Pooling and
Servicing Agreement as it may be amended from time to time in accordance with
the Pooling and Servicing Agreement, and the schedule of Loans attached to the
Initial PSA Assignment.

Schedule of Receivables: The schedule of Receivables, annexed to the Pooling and
Servicing Agreement and on file at the locations listed on Exhibit B-2 to the
Pooling and Servicing Agreement, as it may be amended from time to time in
accordance with the Pooling and Servicing Agreement.

Scheduled Payment: A payment which (i) is in the amount required under the terms
of a Loan then in effect, except, in the case of any Loan secured by more than
one item of Equipment, including any changes in the terms of such Loan resulting
from a Full Prepayment with respect to any item of Equipment related thereto,
(ii) is payable by the Obligor and (iii) includes finance charges equivalent to
the then applicable Annual Percentage Rate. When Scheduled Payment is used with
reference to a Distribution Date, it means the payment which is due in the
related Monthly Period; provided, however, that in the case of the first
Distribution Date, the Scheduled Payment shall include all such payments due
from the Obligor on or after the Initial Cutoff Date.

Scheduled Termination Date: June 25, 2011.

Second Tier Purchased Assets: As defined in Section 2.01 of the Pooling and
Servicing Agreement.

Securities: The Notes and the beneficial interests in the Issuer.

Securities Act: The Securities Act of 1933, as amended.

Security Entitlements: Has the meaning given to such term in Section 8-102(a) of
the UCC.

Securityholder: Any of the Noteholders and Registered Owners.

Seller: The Person executing the Purchase Agreement as the Seller, or its
successor in interest.

Servicer: The Person executing the Pooling and Servicing Agreement as the
Servicer, or its successor in interest pursuant to Section 8.02 of the Pooling
and Servicing Agreement.

Servicer Advance: The amount, as of an Accounting Date, which the Servicer
advances on the respective Loan pursuant to Section 6.10 of the Pooling and
Servicing Agreement.

 

45

--------------------------------------------------------------------------------

Servicer Advance Reimbursement Amount: With respect to the Equipment Loan Notes
for any Distribution Date, the aggregate for each Loan the sum of (a) amounts
received in the related Monthly Period on each Loan to the extent that the
Servicer has previously made an unreimbursed Servicer Advance and (b) to the
extent that the Servicer, in its sole discretion, determines that any prior
unreimbursed Servicer Advances are not collectable, the unreimbursed amounts of
those Servicer Advances.

Servicer’s Certificate: A certificate, completed by and executed on behalf of
the Servicer, in accordance with Section 3.10 of the Pooling and Servicing
Agreement.

Servicer Default: As defined in Section 9.01 of the Pooling and Servicing
Agreement.

Servicer Modification Credit: As defined in Section 3.08 of the Pooling and
Servicing Agreement.

Servicer Modification Credit Amount: As defined in Section 3.08 of the Pooling
and Servicing Agreement.

Servicing Fee: A fee payable to Servicer on each Distribution Date equal to the
sum of (a) for the Equipment Loans held by the Issuer, the product of
one-twelfth of 1.00% and the average principal balance of the Equipment Loans
held by the Issuer during the prior Monthly Period (less Defaulted Equipment
Loans), and (b) for the Receivables held by the Issuer, the product of
one-twelfth of 1.00% and the average receivables balance during the prior
Monthly Period and relating to the Receivables held by the Issuer.

Servicing Standards: Either or both, as the context may require, of the Loan
Servicing Standards or the Receivables Servicing Standards.

Special Required Noteholders: At any time, if there are (a) three or fewer
Noteholders, then such Noteholders shall be the Special Required Noteholders or
(b) more than three Noteholders, then the Noteholders that hold an aggregate pro
rata share of equal to or greater than 81% of the aggregate principal balance of
the Outstanding Notes shall be the Special Required Noteholders.

Specified Assets: As defined in Section 2.2 of the Purchase Agreement.

Subsequent Purchase Agreement Assignment: The assignment substantially in the
form of Exhibit A-2 to the Purchase Agreement.

Substitute Loan: As defined in Section 2.13 of the Pooling and Servicing
Agreement.

Substitution Assignment: As defined in Section 2.13 of the Pooling and Servicing
Agreement.

Substitution Cutoff Date: As defined in Section 2.13(b) of the Pooling and
Servicing Agreement.

 

46

--------------------------------------------------------------------------------

Substitution Date: The date on which a Substitution Loan is transferred pursuant
to Section 2.13 of the Pooling and Servicing Agreement.

Support Party: Has the meaning given to such term in the Note Purchase
Agreement.

Supporting Obligations: Has the meaning given to such term in Section 9-102(a)
of the UCC.

Termination of Sale Notice: As defined in Section 7.1 of the Purchase Agreement.

Third Party Financier: As defined in the Purchase Agreement.

Transfer and Servicing Agreements: The Purchase Agreement, the assignments
pursuant to Section 2.1 of the Purchase Agreement, the Pooling and Servicing
Agreement, the Trust Agreement, the Indenture, the Administration Agreement and
the Custodial Agreement.

Transferor: Alliance Laundry Equipment Receivables 2009 LLC.

Transferor’s Interest: A percentage equal to 1 minus the Purchasers’ Interest.

Treasury Regulations: The regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.

Trust: Alliance Laundry Equipment Receivables Trust 2009-A, a Delaware statutory
trust created by the Trust Agreement.

Trust Agreement: The Trust Agreement dated as of June 19, 2009, between the
Transferor and the Owner Trustee as amended, modified or supplemented from time
to time.

Trust Estate: As defined in the Granting Clause of the Indenture.

Trustees: The Owner Trustee and the Indenture Trustee.

UCC: The Uniform Commercial Code as in effect from time to time in the relevant
jurisdiction.

UCC Collateral: Any property a security interest in which may be perfected by
filing under the applicable UCC.

UCC Equipment: Has the meaning given to such term in Section 9-102(a) of the
UCC.

Unpaid Balance: As defined in the Purchase Agreement.

Unused Facility Fee: Either or both, as the context may require, of the
Equipment Unused Facility Fee and the Receivables Unused Facility Fee.

Unused Facility Fee Percentage: As defined in the Applicable Margin Fee Letter.

 

47

--------------------------------------------------------------------------------

Warranty Event: With respect to a Loan, the receipt by the Transferor of notice
of an event or condition that with the passage of time would result in such Loan
becoming a Warranty Loan.

Warranty Loan: A Loan which the Warranty Purchaser has become obligated to
repurchase pursuant to Section 2.12 of the Purchase Agreement or Section 2.12 of
the Pooling and Servicing Agreement.

Warranty Payment: With respect to a Distribution Date and to a Warranty Loan
repurchased as of the related Accounting Date, the sum of (i) the Loan Balance
of such Loan, (ii) the interest portion of all due and past due and unpaid
Scheduled Payments and (iii) any other amounts due and owing on such Loan.

Warranty Purchaser: Either (i) the Transferor or Originator pursuant to
Section 2.12 of the Pooling and Servicing Agreement or (ii) ALS pursuant to
Section 2.12 of the Purchase Agreement.

Weighted Average Life: As of any date of determination and any Equipment Loans,
the average amount of time that will elapse from such date to the date of
payment by the related Obligors on such Equipment Loans of each dollar of
principal paid pursuant to the Scheduled Payments of such loans, assuming no
losses or prepayments.

Weighted Average Seasoning: For each Eligible Equipment Loan, the original term
of such Loan less the remaining term, multiplied by the current Loan Balance of
such Loan, and divided by the Aggregate Loan Balance.

Write-Off: As defined in the Purchase Agreement.

Yield Reserve: As of any date of determination, the percentage equal to the
product of (i) 2.0 times the Days Sales Outstanding - Receivables as of such
date and (ii) the quotient with a numerator of (x) the sum of (a) 2.0 times the
Cost of Funds Rate as determined in accordance with clause (i) of the definition
thereof on such date plus (b) the sum of the Applicable Margin, the Unused
Facility Fee, the Indenture Trustee Fees, the Owner Trustee Fees, the Backup
Servicer Fees and the Servicing Fees (each calculated (x) for a one (1) day
period and (y) based only on the amounts allocable to the Receivables Notes in
accordance with the Indenture) and the denominator of which is 365.

Yield Supplement: As of any date of determination in respect of any variable
rate Equipment Loan, the product of (A) a fraction with (I) a numerator equal to
(x) the absolute value of the negative difference, if any, of the effective
interest rate on such Equipment Loan at such date less the sum of (i) 1.00%
(representing the rate of the Servicing Fee), (ii) the annualized percentage
equivalent of sum of the Indenture Trustee Fees, the Owner Trustee Fees, the
Custodian Fee and the Backup Servicer Fees (each based only on the amounts
allocable to the Equipment Loan Notes in accordance with the Indenture),
(iii) the Minimum Excess Spread and (iv) the product of (x) the sum of
(a) one-month LIBOR and (b) 3.50% and (y) 100% – OC Percentage, and (II) a
denominator of twelve and (B) the Loan Balance of such Loan.

 

48

--------------------------------------------------------------------------------

Yield Supplement Account: The account designated as such, established and
maintained pursuant to Section 6.12 of the Pooling and Servicing Agreement.

Yield Supplement Required Amount: With respect to any Distribution Date, the sum
for all Equipment Loans of the Yield Supplement at such time for each variable
rate Equipment Loan.

 

49

--------------------------------------------------------------------------------

PART II - RULES OF CONSTRUCTION

(a) Accounting Terms. As used in this Appendix or the Basic Documents,
accounting terms which are not defined, and accounting terms partly defined,
herein or therein shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions of
accounting terms in this Appendix or the Basic Documents are inconsistent with
the meanings of such terms under generally accepted accounting principles, the
definitions contained in this Appendix or the Basic Documents will control.

(b) “Hereof,” etc. The words “hereof,” “herein” and “hereunder” and words of
similar import when used in this Appendix or any Basic Document will refer to
this Appendix or such Basic Document as a whole and not to any particular
provision of this Appendix or such Basic Document; and Section, Schedule and
Exhibit references contained in this Appendix or any Basic Document are
references to Sections, Schedules and Exhibits in or to this Appendix or such
Basic Document unless otherwise specified. The word “or” is not exclusive.

(c) Reference to Distribution Dates. With respect to any Distribution Date, the
“related Monthly Period,” and the “related Record Date,” will mean the Monthly
Period and Record Date, respectively, immediately preceding such Distribution
Date, and the relationships among Monthly Periods and Record Dates will be
correlative to the foregoing relationships.

(d) Number and Gender. Each defined term used in this Appendix or the Basic
Documents has a comparable meaning when used in its plural or singular form.
Each gender-specific term used in this Appendix or the Basic Documents has a
comparable meaning whether used in a masculine, feminine or gender-neutral form.

(e) Including. Whenever the term “including” (whether or not that term is
followed by the phrase “but not limited to” or “without limitation” or words of
similar effect) is used in this Appendix or the Basic Documents in connection
with a listing of items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted as a limitation
on, or exclusive listing of, the items within that classification.

(f) Calculations. Whenever calculations are to be performed and a component of
such calculation consists of information regarding the Receivables or the
Equipment for a time period prior to the Closing Date, such calculation shall be
based on historical data, as contained in the “model” as it existed on the
Closing Date.

--------------------------------------------------------------------------------

APPENDIX B

Notice Addresses and Procedures

All requests, demands, directions, consents, waivers, notices, authorizations
and communications provided or permitted under any Basic Document to be made
upon, given or furnished to or filed with ALS, the Transferor, the Servicer, the
Administrator, the Indenture Trustee, the Issuer, the Owner Trustee or the
Rating Agencies shall be in writing, personally delivered, sent by facsimile
with a copy to follow via first class mail or mailed by certified mail-return
receipt requested, and shall be deemed to have been duly given upon receipt:

 

  (a) in the case of the Transferor, at the following address:

Alliance Laundry Equipment Receivables 2009 LLC

c/o The Corporation Trust Company

1209 Orange Street

Wilmington, Delaware 19801

with a copy to:

Alliance Laundry Equipment Receivables 2009 LLC

Shepard Street and Hall Street

Suite 200

Ripon, WI 54971-0990

Attention: General Counsel

Telecopy: 920-748-4334

Confirmation: 920-748-4320

and

Ropes & Gray LLP

One International Place

Boston, MA 02110-2624

Attention: Winthrop Minot

Telecopy: 617-235-0076

Confirmation: 617-951-7364

 

  (b) in the case of the Servicer, at the following address:

Alliance Laundry Systems LLC

Shepard Street

P.O. Box 990

Ripon, WI 54971-0990

Attention: Chief Financial Officer

Telecopy: 920-748-1629

Confirmation: 920-748-1634

--------------------------------------------------------------------------------

with a copy to:

Alliance Laundry Systems LLC

Shepard Street

P.O. Box 990

Ripon, WI 54971-0990

Attention: General Counsel

Telecopy: 920-748-4334

Confirmation: 920-748-4320

and

Ropes & Gray LLP

One International Place

Boston, MA 02110-2624

Attention: Winthrop Minot

Telecopy: 617-235-0076

Confirmation: 617-951-7364

 

  (c) in the case of the Custodian, at the following address:

Bank of America, N.A.

540 W. Madison Street

Mail Code IL4-540-18-53

Chicago, IL 60661

Attn: Chris Claffy

 

  (d) in the case of the Indenture Trustee, at its Corporate Trust Office

 

  (e) in the case of the Issuer or the Owner Trustee, to the Owner Trustee at
its Corporate Trust Office, with copies to:

Alliance Laundry Equipment Receivables 2009 LLC

Shepard Street and Hall Street

Suite 200

Ripon, WI 54971-0990

Attention: Chief Financial Officer

Telecopy: 920-748-1629

Confirmation: 920-748-1634

 

2

--------------------------------------------------------------------------------

and:

Alliance Laundry Equipment Receivables 2009 LLC

Shepard Street and Hall Street

Suite 200

Ripon, WI 54971-0990

Attention: General Counsel

Telecopy: 920-748-4334

Confirmation: 920-748-4320

The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee and the Indenture Trustee shall likewise
promptly transmit any notice received by it from the Noteholders to the Issuer.

 

  (f) in the case of Moody’s, to

Moody’s Investors Service

ABS Monitoring Department

99 Church Street

New York, New York 10007

Telecopy: 212-552-4642

Confirmation: 212-553-0300

 

  (g) in the case of S&P, to

Standard & Poor’s Ratings Services,

a division of The McGraw-Hill Companies, Inc.

55 Water Street

New York, New York 10041

Attention: Asset Backed Surveillance Department

Telecopy: 212-438-2648

Confirmation: 212-438-2000

 

  (h) in the case of the Noteholders, to:

Natixis Financial Products Inc.

9 West 57th Street, 36th Floor

New York, NY 10019

Attention: Yazmin Vasconez

Telecopy No.: 646-942-2361

Confirmation: 212-891-6176

E-mail: Agent_group@cm.natixis.com

 

3

--------------------------------------------------------------------------------

BMO Capital Markets Corp.

115 S. LaSalle Street, 13th Floor West

Chicago, IL 60603

Attention: Conduit Management Team

Telecopy No.: (312) 461-3189 / (312) 294-4908

E-mail: fundingdesk@bmo.com

The Bank of Nova Scotia

One Liberty Plaza, 26th Floor

New York, NY 10006

Attention: Michael Eden

Telecopy No.: (212) 225-5274

Confirmation: (212) 225-5007

E-mail: michael_eden@scotiacapital.com

or at such other address as shall be designated by such party in a written
notice to the other parties to this Agreement.

Where any Basic Document provides for notice to the Noteholders of any condition
or event, such notice shall be sufficiently given (unless otherwise expressly
provided in a Basic Document) if it is in writing and mailed, first-class,
postage prepaid to each Noteholder affected by such condition or event, at such
Person’s address as it appears on the Note Register not later than the latest
date, and not earlier than the earliest date, prescribed in such Basic Document
for the giving of such notice. If notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.

 

4

--------------------------------------------------------------------------------

APPENDIX C

CREDIT AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE 7.01

PERFECTION CERTIFICATE – TRANSFEROR

June 26, 2009

The undersigned, Alliance Laundry Equipment Receivables 2009 LLC (the
“Transferor”), hereby certifies, with reference to the Pooling and Servicing
Agreement (the “Pooling and Servicing Agreement”), dated as of June 26, 2009
(terms defined in this certificate shall have the same meanings herein as
specified in the Pooling and Servicing Agreement), among the Servicer, the
Originator, the Transferor and the Issuer, to the Issuer as follows:

1. Name. The exact legal name of the Company as that name appears on its
Certificate of Formation is as follows:

Alliance Laundry Equipment Receivables 2009 LLC

2. Other Identifying Factors.

(a) The following is the mailing address of the Company:

Shepard and Hall Streets

Suite 200

Ripon, Wisconsin 54971

(b) If different from its mailing address, the Company’s place of business or,
if more than one, its chief executive office is located at the following
address:

None

(c) The following is the type of organization of the Company:

Limited Liability Company

(d) The following is the jurisdiction of the Company’s organization:

Delaware

3. Other Names, Etc.

(a) The following is a list of all other names (including trade names or similar
appellations) used by the Company, or any other business or organization to
which the Company became the successor by merger, consolidation, acquisition,
change in form, nature or jurisdiction of organization or otherwise, now or at
any time during the past five (5) years.

None

(b) Attached hereto is the information required in Section 2 for any other
business or organization to which the Company became the successor by merger,
consolidation, acquisition, change in form, nature or jurisdiction of
organization or otherwise, now or at any time during the past five (5) years.

Not Applicable

--------------------------------------------------------------------------------

4. Other Current Locations.

(a) The following are all other locations in the United States of America in
which the Company maintains any books or records relating to any of the
Specified Assets consisting of accounts, instruments, chattel paper, general
intangibles or mobile goods:

None

(b) The following are all other locations in the United States of America where
any of the Specified Assets consisting of inventory or equipment is located:

Not Applicable

(c) The following are the names and addresses of all persons or entities other
than the Company, such as, consignees, warehousemen or purchasers of chattel
paper, which have possession or are intended to have possession of any of the
Specified Assets consisting of instruments, chattel paper, inventory or
equipment:

LaSalle Bank National Association

2571 Busse Road

Suite 200

Elk Grove Village, IL 60007

5. Prior Locations.

(a) Set forth below is the information required by Section 4(a) with respect to
each location or place of business previously maintained by the Company at any
time during the past five (5) years in a state in which the Company has
previously maintained a location or place of business at any time during the
past four (4) months:

Not Applicable

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, we have hereunto signed this Certificate as of the date
first above written.

 

ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2009 LLC By:  

 

Name:   Title: