Exhibit 10.2

 

EXECUTION VERSION

 

PURCHASE AND SALE AGREEMENT

 

between

 

DLF Financing SPV LLC,
as the Purchaser

 

and

 

Morgan Stanley Direct Lending Fund,
as the Seller

 

Dated as of October 14, 2020

 

 

 

 

TABLE OF CONTENTS

 

    Page ARTICLE I   DEFINITIONS   Section 1.1    General 1 Section 1.2   
Specific Terms 2 Section 1.3    Other Terms 4 Section 1.4    Computation of Time
Periods 4 Section 1.5    Certain References 4       ARTICLE II   SALE AND
PURCHASE OF COLLATERAL LOANS AND OTHER ASSETS   Section 2.1    Sale and Purchase
of Collateral Loans and Other Assets 4 Section 2.2   Purchase Price 7 Section
2.3    Payment of Purchase Price 7 Section 2.4    Nature of the Sales 8      
ARTICLE III   CONDITIONS OF SALE AND PURCHASE   Section 3.1    Conditions
Precedent to Effectiveness 9 Section 3.2    Conditions Precedent to All
Purchases 10       ARTICLE IV   REPRESENTATIONS AND WARRANTIES   Section 4.1   
Representations and Warranties of the Seller 11 Section 4.2    Representations
and Warranties of the Seller Relating to the Agreement and the Sale Portfolio 18
Section 4.3    Representations and Warranties of the Purchaser 19       ARTICLE
V   COVENANTS OF THE SELLER   Section 5.1    Protection of Title of the
Purchaser 21

 

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Section 5.2    Affirmative Covenants of the Seller 24 Section 5.3    Negative
Covenants of the Seller 27       ARTICLE VI   REPURCHASES AND SUBSTITUTION BY
THE SELLER   Section 6.1    Repurchase of Collateral Loans 28 Section 6.2   
Substitution of Collateral Loans 29 Section 6.3    Repurchase Limitations 30    
  ARTICLE VII   ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE SALE
PORTFOLIO   Section 7.1    Rights of the Purchaser 30 Section 7.2    Notice to
Collateral Agent and Administrative Agent 31       ARTICLE VIII   SELLER
TERMINATION EVENTS   Section 8.1    Seller Termination Events 31 Section 8.2   
Remedies 33 Section 8.3    Survival of Certain Provisions 34       ARTICLE IX  
Indemnification   Section 9.1    Indemnification by the Seller 34 Section 9.2   
Assignment of Indemnities 37       ARTICLE X   MISCELLANEOUS   Section 10.1  
Liability of the Seller 37 Section 10.2    Limitation on Liability 37 Section
10.3    Amendments; Limited Agency 38 Section 10.4    Waivers; Cumulative
Remedies 38 Section 10.5    Notices 38 Section 10.6    Merger and Integration 39
Section 10.7    Severability of Provisions 39 Section 10.8    GOVERNING LAW;
JURY WAIVER 39

 

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Section 10.9    Consent to Jurisdiction; Service of Process 39 Section 10.10   
Costs, Expenses and Taxes 40 Section 10.11    Counterparts 41 Section 10.12   
Bankruptcy Non-Petition and Limited Recourse; Claims 41 Section 10.13    Binding
Effect; Assignability 41 Section 10.14    Waiver of Setoff 42 Section 10.15   
Headings and Exhibits 42 Section 10.16    Rights of Inspection 42 Section
10.17    Subordination 43 Section 10.18    Breaches of Representations,
Warranties and Covenants 43 Section 10.19   Confidentiality 43 Section 10.20   
Assignments of Collateral Loans 43

 

SCHEDULES AND EXHIBITS

 

Schedule I- Sale Portfolio List Exhibit A- Form of Loan Assignment Exhibit B-
Form of Officer’s Purchase Date Certificate Exhibit C- Form of Power of Attorney
for Seller

 

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PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND SALE AGREEMENT, dated as of October 14, 2020, between MORGAN
STANLEY DIRECT LENDING FUND, a Delaware corporation, as the seller (the
“Seller”) and DLF Financing SPV LLC, a Delaware limited liability company, as
the purchaser (the “Purchaser”).

 

W I T N E S S E T H:

 

WHEREAS, the Purchaser has agreed to Purchase (as hereinafter defined) from the
Seller from time to time, and the Seller has agreed to Sell (as hereinafter
defined) to the Purchaser from time to time, certain Collateral Loans and other
assets related thereto on the terms set forth herein;

 

WHEREAS, it is contemplated that the Collateral Loans and other related assets
Purchased hereunder may be pledged by the Purchaser pursuant to the Credit
Agreement (as defined herein) and the related Facility Documents, to the
Collateral Agent, for the benefit of the Secured Parties; and

 

WHEREAS, the Seller agrees that all representations, warranties, covenants and
agreements made by the Seller herein with respect to any Sale Portfolio shall
also be for the benefit of any Secured Party.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Purchaser and the Seller, intending
to be legally bound, hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1.              General. The specific terms defined in this Article
include the plural as well as the singular. Words herein importing a gender
include the other gender. References herein to “writing” include printing,
typing, lithography and other means of reproducing words in visible form.
References to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement or the Credit
Agreement (as hereinafter defined). References herein to Persons include their
successors and assigns permitted hereunder or under the Credit Agreement. The
terms “include” or “including” mean “include without limitation” or “including
without limitation”. The words “herein”, “hereof” and “hereunder” and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision, and Article, Section, Schedule
and Exhibit references, unless otherwise specified, refer to Articles and
Sections of and Schedules and Exhibits to this Agreement. Capitalized terms used
herein but not defined herein shall have the respective meanings assigned to
such terms in the Credit Agreement, provided that, if, within such definition in
the Credit Agreement a further term is used which is defined herein, then such
further term shall have the meaning given to such further term herein.

 

 

 

 

Section 1.2.              Specific Terms. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:

 

“Agreement” means this Purchase and Sale Agreement, as the same may be amended,
restated, waived, supplemented and/or otherwise modified from time to time
hereafter.

 

“Collateral Loan” means any loan listed on Schedule I hereto, as the same may be
amended, supplemented, restated or replaced from time to time.

 

“Credit Agreement” means that certain Revolving Credit and Security Agreement,
dated as of October 14, 2020, by and among the Purchaser, as the Borrower, each
of the Lenders from time to time party thereto, BNP Paribas, as the
Administrative Agent, the Seller, as the Equityholder and as the Servicer, and
U.S. Bank National Association, as the Collateral Agent, as such may be amended,
restated, supplemented or otherwise modified from time to time pursuant to the
terms thereof.

 

“Early Termination” has the meaning specified in Section 8.1.

 

“ERISA Group” means each controlled group of corporations or trades or
businesses (whether or not incorporated) under common control that is treated as
a single employer under Section 414(b) or (c) of the Code or, for purposes of
Section 302 of ERISA or Section 412 of the Code (and the regulations promulgated
and rulings issued thereunder), Section 414(m) or (o) of the Code, with the
Seller.

 

“Facility Financing Statements” has the meaning specified in Section 3.1(iv).

 

“Indemnified Amounts” has the meaning specified in Section 9.1(a).

 

“Indemnified Party” has the meaning specified in Section 9.1(a).

 

“Loan Assignment” means a Loan Assignment executed by the Seller, substantially
in the form of Exhibit A attached hereto.

 

“Multiemployer Plan” means a “multiemployer plan” within the meaning of Section
4001(a)(3) of ERISA that is sponsored by the Seller or a member of its ERISA
Group or to which the Seller or a member of its ERISA Group is obligated to make
contributions or has any liability.

 

“Non-Consolidation/True Sale Opinion” has the meaning specified in Section
4.1(mm).

 

“Plan” means an employee pension benefit plan (other than a Multiemployer Plan)
that is covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code, in any case, which is sponsored by the Seller or
a member of its ERISA Group or to which the Seller or a member of its ERISA
Group is obligated to make contributions or has any liability.

 

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“Plan Asset Rule” has the meaning specified in Section 4.1(s).

 

“Purchase” means a purchase by the Purchaser of any Sale Portfolio from the
Seller pursuant to Article II.

 

“Purchase Date” has the meaning specified in Section 2.1(b).

 

“Purchase Price” has the meaning specified in Section 2.2.

 

“Purchaser” has the meaning specified in the preamble.

 

“Replaced Collateral Loan” has the meaning specified in Section 6.2(b)(i).

 

“Repurchase Price” means, with respect to a Collateral Loan to be repurchased
pursuant to Article VI hereof, an amount equal to the Purchase Price less all
Principal Proceeds received in respect of such Collateral Loan from the Purchase
Date to the date of repurchase hereunder.

 

“Sale” and “Sell” have the meanings specified in Section 2.1(a), and the term
“Sold” shall have the corresponding meaning.

 

“Sale Portfolio” means all right, title, and interest (whether now owned or
hereafter acquired or arising, and wherever located) of the Seller in the
property identified below in clauses (i) through (iv) and all accounts, cash and
currency, chattel paper, tangible chattel paper, electronic chattel paper,
copyrights, copyright licenses, equipment, fixtures, contract rights, general
intangibles, instruments, certificates of deposit, certificated securities,
uncertificated securities, financial assets, securities entitlements, commercial
tort claims, deposit accounts, inventory, investment property, letter-of-credit
rights, software, supporting obligations, accessions, or other property
consisting of, arising out of, or related to any of the following (in each case
excluding the Excluded Amounts):

 

(i)          the Collateral Loans listed on Schedule I hereto, and all monies
due, to become due or paid in respect of such Collateral Loans on and after the
related Purchase Date, including, but not limited to, all Collections and other
recoveries thereon, in each case as they arise after the related Purchase Date;

 

(ii)         all Related Documents with respect to the Collateral Loans referred
to in clause (i) above;

 

(iii)        all Liens, property, guaranties, supporting obligations, insurance
and other agreements or arrangements of whatever character from time to time
supporting or securing payment of the Collateral Loans referred to in clause (i)
above; and

 

(iv)        all income and Proceeds of the foregoing.

 

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“Schedule I” means the schedule of all Sale Portfolio that is Sold by the Seller
to the Purchaser on a Purchase Date, as supplemented on any subsequent Purchase
Date by the “Schedule I” attached to the applicable Loan Assignment, and
incorporated herein by reference, as such schedule may be supplemented and
amended from time to time pursuant to the terms hereof.

 

“Seller Purchase Event” means the occurrence of a breach of the Seller’s
representations and warranties under Section 4.2.

 

“Seller Termination Event” has the meaning specified in Section 8.1(a).

 

“Substitute Eligible Collateral Loan” has the meaning specified in Section
6.2(a).

 

“Substitution” has the meaning specified in Section 6.2(a).

 

“Transfer Taxes” means any tax, fee or governmental charge payable by the
Purchaser, the Seller or any other Person to any federal, state or local
government arising from or otherwise related to the Sale of any Sale Portfolio
from the Seller to the Purchaser under this Agreement (excluding taxes measured
by net income).

 

Section 1.3.               Other Terms. All accounting terms used but not
specifically defined herein shall be construed in accordance with GAAP. All
terms used in Article 9 of the UCC in the State of New York, and used but not
specifically defined herein, are used herein as defined in such Article 9.

 

Section 1.4.               Computation of Time Periods. Unless otherwise stated
in this Agreement, in the computation of a period of time from a specified date
to later specified date, the word “from” means “from and including” and the
words “to” and “until” each mean “to but excluding”.

 

Section 1.5.              Certain References. All references to the Principal
Balance of a Collateral Loan as of a Purchase Date shall refer to the close of
business on such day.

 

ARTICLE II

SALE AND PURCHASE OF COLLATERAL LOANS
AND OTHER ASSETS

 

Section 2.1.               Sale and Purchase of Collateral Loans and Other
Assets.

 

(a)          Subject to the terms and conditions of this Agreement, on and after
the Closing Date, the Seller hereby agrees to (i) sell, transfer and otherwise
convey (collectively, “Sell” and any such sale, transfer and/or other
conveyance, a “Sale”), from time to time, to the Purchaser, without recourse
(except to the extent specifically provided herein), and the Purchaser hereby
agrees to purchase, all right, title and interest of the Seller (whether now
owned or hereafter acquired or arising, and wherever located) in and to certain
Sale Portfolio designated by the Seller and (ii) transfer, or cause the deposit
into, the Collection Account of all Collections received by the Seller on
account of any Sale Portfolio hereunder on and after the Purchase Date with
respect to such Sale Portfolio, in each case, within three (3) Business Days of
the receipt thereof. The Seller hereby acknowledges that each Sale to the
Purchaser hereunder is absolute and irrevocable, without reservation or
retention of any interest whatsoever by the Seller.

 

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(b)         The Seller shall on or prior to any Business Day prior to a Seller
Termination Event (each a “Purchase Date”) execute and deliver to the Purchaser
a proposed Loan Assignment identifying the Sale Portfolio to be Sold by the
Seller to the Purchaser on such Purchase Date. From and after such Purchase
Date, the Sale Portfolio listed on Schedule I to the related Loan Assignment
shall be deemed to be listed on Schedule I hereto and constitute part of the
Sale Portfolio hereunder.

 

(c)          On or before any Purchase Date with respect to the Sale Portfolio
to be acquired by the Purchaser on such Purchase Date, the Seller shall provide
the Purchaser with an officer’s certificate, in the form of Exhibit B hereto,
signed by a duly authorized Responsible Officer certifying, as of such Purchase
Date, to each of the items in Section 4.2.

 

(d)         On and after each Purchase Date hereunder and upon payment of the
Purchase Price therefor, the Purchaser shall own the Sale Portfolio Sold by the
Seller to the Purchaser on such Purchase Date, and the Seller shall not take any
action inconsistent with such ownership and shall not claim any ownership
interest in such Sale Portfolio.

 

(e)          Except as specifically provided in this Agreement, the Sale and
Purchase of any Sale Portfolio under this Agreement shall be without recourse to
the Seller; it being understood that the Seller shall be liable to the Purchaser
for all representations, warranties, covenants and indemnities made by the
Seller pursuant to the terms of this Agreement, all of which obligations are
limited so as not to constitute recourse to the Seller for the credit risk of
the Obligors.

 

(f)          Neither the Purchaser nor any assignee of the Purchaser (including
the Secured Parties) shall have any obligation or liability to any Obligor or
client of the Seller (including any obligation to perform any obligation of the
Seller, including with respect to any other related agreements) in respect of
any Sale Portfolio (other than with respect to funding obligations to Obligors
pursuant to the terms of the applicable Related Documents for Revolving
Collateral Loans and Delayed Drawdown Collateral Loans, as applicable). No such
obligation or liability is intended to be assumed by the Purchaser or any
assignee of the Purchaser (including the Secured Parties) and any such
assumption is expressly disclaimed. Without limiting the generality of the
foregoing, the Sale of any Sale Portfolio by the Seller to the Purchaser
pursuant to this Agreement does not constitute and is not intended to result in
a creation or assumption by the Purchaser or any assignee of the Purchaser
(including the Secured Parties), of any obligation of the Seller, as lead agent,
collateral agent or paying agent under any agented Collateral Loan.

 

(g)         As early as commercially practicable, but no later than 12:00 p.m.
New York City time on the Business Day following each Purchase Date, the
Purchaser (or the Servicer on its behalf) shall provide by electronic mail to
the Administrative Agent (with a copy to the Purchaser and the Collateral Agent)
a copy of the Collateral Loan Buy Confirmation.

 

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(h)         In accordance with the Credit Agreement, certain documents relating
to all Sale Portfolio shall be delivered to and held in trust by the Custodian
for the benefit of the Purchaser and its assignees, and the Purchaser hereby
instructs the Seller to cause such documents to be delivered to the Custodian
within five (5) Business Days after the related Purchase Date. Such delivery to
the Custodian of such documents and the possession thereof by the Custodian is
at the will of the Purchaser and its assignees and in a custodial capacity for
their benefit only.

 

(i)           The Seller shall provide all information, and any other reasonable
assistance, to the Servicer, the Custodian and the Collateral Agent necessary
for the Servicer, the Custodian and the Collateral Agent, as applicable, to
conduct the management, administration and collection of all Sale Portfolio
Purchased hereunder in accordance with the terms of the Credit Agreement.

 

(j)          In connection with each Purchase of any Sale Portfolio, the Seller
hereby grants to each of the Purchaser and its assigns, the Administrative
Agent, the Lenders, the Collateral Agent, the Custodian and the Servicer an
irrevocable, non–exclusive license to use, without royalty or payment of any
kind, all software used by the Seller to account for such Sale Portfolio, to the
extent necessary to administer such Sale Portfolio, whether such software is
owned by the Seller or is owned by others and used by the Seller under license
agreements with respect thereto; provided that, should the consent of any
licensor of such software be required for the grant of the license described
herein to be effective or for the Purchaser to assign such licenses to the
Servicer or any successor, the Seller hereby agrees that upon the request of the
Purchaser or its assignees, the Administrative Agent, the Custodian or the
Collateral Agent, the Seller shall use its best efforts to obtain the consent of
such third-party licensor. The license granted hereby shall be irrevocable until
the Collection Date and shall terminate on the date this Agreement terminates in
accordance with its terms. The Seller (i) shall take such action reasonably
requested by the Purchaser or the Administrative Agent, from time to time
hereafter, that may be necessary or appropriate to ensure that the Purchaser and
its assigns under the Credit Agreement have an enforceable ownership or security
interest, as applicable, in the Sale Portfolio Purchased by the Purchaser as
contemplated by this Agreement, and (ii) shall use its commercially reasonable
efforts to ensure that each of the Purchaser (and its assignees), the
Administrative Agent, the Lenders, the Collateral Agent, the Custodian and the
Servicer (or any successor) has an enforceable right (whether by license or
sublicense or otherwise) to use all of the computer software used to account for
such Sale Portfolio and/or the Related Documents.

 

(k)         In connection with the Purchase by the Purchaser of any Sale
Portfolio as contemplated by this Agreement, the Seller further agrees that it
shall, at its own expense, indicate clearly and unambiguously in its computer
files on or prior to each Purchase Date, and its financial statements, that such
Sale Portfolio has been purchased by the Purchaser in accordance with this
Agreement.

 

(l)           The Seller further agrees to deliver to the Purchaser on or before
each Purchase Date a computer file containing a true, complete and correct list
of all Collateral Loans to be Sold hereunder on such Purchase Date, identified
by Obligor’s name and Principal Balance as of the related Purchase Date. Such
file or list shall be marked as Schedule I to the applicable Loan Assignment and
shall be delivered to the Purchaser as confidential and proprietary, and is
hereby incorporated into and made a part of Schedule I to this Agreement, as
such Schedule I may be supplemented and amended from time to time.

 

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(m)         The Seller shall, at all times, continue to fulfill its obligations
under, and in strict conformance with the terms of all Related Documents (other
than with respect to funding obligations to Obligors in connection with
Revolving Collateral Loans and Delayed Drawdown Collateral Loans, as applicable)
related to any Sale Portfolio Purchased hereunder.

 

(n)          The Seller and the Purchaser each acknowledge with respect to
itself that the representations and warranties of the Seller in Sections 4.1 and
4.2 hereof and of the Purchaser in Section 4.3 hereof, and the covenants of the
Seller in Article V hereof, will run to and be for the benefit of the Purchaser
and the Collateral Agent (on behalf of the Secured Parties) and the Collateral
Agent (on behalf of the Secured Parties) may enforce directly (without joinder
of the Purchaser when enforcing against the Seller), the obligations of the
Seller or the Purchaser, as applicable, with respect to breaches of such
representations, warranties and covenants as set forth in this Agreement.

 

Section 2.2.               Purchase Price. The purchase price for each item of
Sale Portfolio Sold to the Purchaser hereunder (the “Purchase Price”) shall be
in a dollar amount equal to the fair market value of such Collateral Loan as
determined from time to time by the Seller and the Purchaser. Each of the
Purchaser and the Seller hereby agree that the fair market value of each
Collateral Loan Sold hereunder as of the related Purchase Date shall not be less
than the Loan Value thereof as of the applicable Purchase Date multiplied by the
principal balance of such Collateral Loan.

 

Section 2.3.               Payment of Purchase Price.

 

(a)          The Purchase Price for any Sale Portfolio Sold by the Seller to the
Purchaser on any Purchase Date shall be paid in a combination of: (i)
immediately available funds; and (ii) if the Purchaser does not have sufficient
funds to pay the full amount of the Purchase Price (after taking into account
the proceeds the Purchaser expects to receive pursuant to the Advances under the
Credit Agreement), by means of a capital contribution by the Seller to the
Purchaser.

 

(b)          The portion of such Purchase Price to be paid in immediately
available funds shall be paid by wire transfer on the applicable Purchase Date
to an account designated by the Seller on or before such Purchase Date or by
means of proper accounting entries being entered upon the accounts and records
of the Seller and the Purchaser on the applicable Purchase Date.

 

(c)           In connection with each delivery of a Loan Assignment, the Seller
hereunder shall be deemed to have certified, with respect to the Sale Portfolio
to be Sold by it on such day, that its representations and warranties contained
in Sections 4.1 and 4.2 are true and correct in all material respects on and as
of such day, with the same effect as though made on and as of such day (other
than any representation or warranty that is made as of a specific date), that no
Event of Default has occurred or would result therefrom and no Default exists or
would result therefrom.

 

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(d)         Upon the payment of the Purchase Price for any Purchase, title to
the Sale Portfolio included in such Purchase shall vest in the Purchaser,
whether or not the conditions precedent to such Purchase and the other covenants
and agreements contained herein were in fact satisfied; provided that the
Purchaser shall not be deemed to have waived any claim it may have under this
Agreement for the failure by the Seller in fact to satisfy any such condition
precedent, covenant or agreement.

 

Section 2.4.               Nature of the Sales.

 

(a)          It is the express intent of the parties hereto that the Sale of any
Sale Portfolio by the Seller to the Purchaser hereunder be, and be treated for
all purposes (other than tax and accounting purposes) as an absolute sale by the
Seller (free and clear of any Lien, security interest, charge or encumbrance
other than Permitted Liens) of such Sale Portfolio. It is, further, not the
intention of the parties that such Sale be deemed a pledge of the related Sale
Portfolio by the Seller to the Purchaser to secure a debt or other obligation of
the Seller. However, in the event that, notwithstanding the intent of the
parties, any Sale Portfolio is held to continue to be property of the Seller,
then the parties hereto agree that: (i) this Agreement shall also be deemed to
be a “security agreement” within the meaning of Article 9 of the UCC; (ii) the
Seller hereby grants to the Purchaser of a first priority security interest
(subject only to Permitted Liens) in all of the Seller’s right, title and
interest in and to such Sale Portfolio and all amounts payable to the holders of
such Sale Portfolio in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, including, without limitation, all amounts from
time to time held or invested in the Covered Accounts, whether in the form of
cash, instruments, securities or other property, to secure the prompt and
complete payment of a loan deemed to have been made in an amount equal to the
aggregate Purchase Price of such Sale Portfolio together with all of the other
obligations of the Seller hereunder; (iii) the possession by the Purchaser (or
the Securities Intermediary) of such Sale Portfolio and such other items of
property as constitute instruments, money, negotiable documents or chattel paper
shall be, subject to clause (iv), for purposes of perfecting the security
interest pursuant to the UCC; and (iv) acknowledgements from Persons holding
such property shall be deemed acknowledgements from custodians, bailees or
agents (as applicable) of the Purchaser for the purpose of perfecting such
security interest under Applicable Law. The parties further agree in such event
that any assignment of the interest of the Purchaser pursuant to any provision
hereof shall also be deemed to be an assignment of any security interest created
pursuant to the terms of this Agreement. The Purchaser shall, to the extent
consistent with this Agreement and the other Facility Documents, take such
actions as may be necessary to ensure that, if this Agreement were deemed to
create a security interest in any Sale Portfolio, such security interest would
be deemed to be a perfected security interest of first priority (subject only to
Permitted Liens) under Applicable Law and will be maintained as such throughout
the term of this Agreement. The Purchaser shall have, in addition to the rights
and remedies which it may have under this Agreement, all other rights and
remedies provided to a secured creditor under the UCC and other Applicable Law,
which rights and remedies shall be cumulative.

 

(b)         It is the intention of each of the parties hereto that any Sale
Portfolio Sold by the Seller to the Purchaser pursuant to this Agreement shall
constitute assets owned by the Purchaser and shall not be part of the Seller’s
estate in the event of the filing of a bankruptcy petition by or against the
Seller under any bankruptcy or similar law.

 

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ARTICLE III

CONDITIONS OF SALE AND PURCHASE

 

Section 3.1.              Conditions Precedent to Effectiveness. This Agreement
shall be effective upon the satisfaction of the conditions precedent that the
Purchaser shall have received on or before the Closing Date, in form and
substance satisfactory to the Purchaser, all of the following:

 

(i)          a copy of this Agreement duly executed by each of the parties
hereto;

 

(ii)         a certificate of an authorized person of the Seller, dated the
Closing Date, certifying (A) the names and true signatures of the incumbent
Persons of the Seller authorized to sign on behalf of the Seller this Agreement,
the Loan Assignments and all other documents to be executed by the Seller
hereunder or in connection herewith (on which certificate the Purchaser and its
assignees may conclusively rely until such time as the Purchaser and such
assignees shall receive from the Seller, a revised certificate meeting the
requirements of this Section 3.1(ii)), (B) that the copy of the certificate of
incorporation of the Seller attached thereto is a complete and correct copy and
that such certificate of incorporation has not been amended, modified or
supplemented and is in full force and effect, (C) that the copy of the bylaws of
the Seller attached thereto is a complete and correct copy, and that such bylaws
have not been amended, modified or supplemented and is in full force and effect,
and (D) the resolutions of the board of directors of the Seller attached thereto
approving and authorizing the execution, delivery and performance by the Seller
of this Agreement, the Loan Assignments and all other documents to be executed
by the Seller hereunder or in connection herewith;

 

(iii)        a good standing certificate, dated as of a recent date for the
Seller, issued by the Secretary of State of Delaware;

 

(iv)        filed, electronic copies of proper financing statements (the
“Facility Financing Statements”) describing the Sale Portfolio, and naming the
Seller as the “Debtor” and the Purchaser as “Assignor Secured Party”, or other
similar instruments or documents, in form and substance sufficient for filing
under the UCC or any comparable law of any and all jurisdictions as may be
necessary to perfect the Purchaser’s ownership interest in such Sale Portfolio;

 

(v)         [reserved];

 

(vi)        copies of tax and judgment lien searches in all jurisdictions
reasonably requested by the Purchaser or its assignees and requests for
information (or a similar UCC search report certified by a party acceptable to
the Purchaser and its assigns), dated a date reasonably near to the Closing
Date, and with respect to such requests for information or UCC searches, listing
all effective financing statements which name the Seller (under its present name
and any previous name) as debtor and which are filed in the State of Delaware,
together with copies of such financing statements (none of which shall cover any
Sale Portfolio);

 

-9-

 

 

(vii)       all instruments in connection with the transactions contemplated by
this Agreement shall be satisfactory in form and substance to the Purchaser and
the Administrative Agent, and the Purchaser and the Administrative Agent shall
have received from the Seller copies of all documents (including, without
limitation, records of corporate proceedings, approvals and opinions) relevant
to the transactions herein contemplated as the Purchaser and the Administrative
Agent may have reasonably requested;

 

(viii)      any necessary third party consents to the closing of the
transactions contemplated hereby, in form and substance satisfactory to the
Purchaser;

 

(ix)         the Seller shall have paid all fees required to be paid by it on
the Closing Date; and

 

(x)          one or more favorable legal opinions from counsel to the Seller
with respect to the perfection and enforceability of the security interest
hereunder and such other matters as the Purchaser or any assignee thereof may
reasonably request.

 

Section 3.2.               Conditions Precedent to All Purchases. The Purchase
to take place on the initial Purchase Date and each Purchase to take place on a
subsequent Purchase Date hereunder shall be subject to the further conditions
precedent that:

 

(a)          The following statements shall be true:

 

(i)          The representations and warranties of the Seller contained in
Sections 4.1 and 4.2 shall be true and correct on and as of such Purchase Date
in all material respects, before and after giving effect to the Purchase to take
place on such Purchase Date and to the application of proceeds therefrom, as
though made on and as of such date (other than any representation and warranty
that is made as of a specific date);

 

(ii)         The Seller is in compliance in all respects with each of its
covenants and other agreements set forth herein;

 

(iii)        No Seller Termination Event (or event which, with the passage of
time or the giving of notice, or both would constitute a Seller Termination
Event) shall have occurred or would result from such Purchase;

 

(iv)        The Final Maturity Date has not yet occurred; and

 

(v)         No Applicable Law shall prohibit or enjoin, and no order, judgment
or decree of any federal, state or local court or governmental body, agency or
instrumentality shall prohibit or enjoin, the making of any such Purchase by the
Purchaser in accordance with the provisions hereof.

 

-10-

 

 

(b)         The Purchaser shall have received a duly executed and completed Loan
Assignment along with a Schedule I that is true, accurate and complete in all
respects as of the related Purchase Date.

 

(c)         The Seller shall have delivered to the Custodian on behalf of the
Purchaser and any assignee thereof copies of any Related Documents of any of the
Collateral Loans being acquired by the Purchaser within five (5) Business Days
of the related Purchase Date.

 

(d)        The Seller shall have taken all steps necessary under all Applicable
Law in order to Sell to the Purchaser the Sale Portfolio being Purchased on such
Purchase Date and, upon the Sale of such Sale Portfolio from the Seller to the
Purchaser pursuant to the terms hereof, the Purchaser will have acquired good
and marketable title to (subject to Section 10.20) and a valid and perfected
ownership interest in such Sale Portfolio, free and clear of any Lien, security
interest, charge or encumbrance (other than Permitted Liens); provided that if
any item of such Sale Portfolio contains a restriction of transferability, the
applicable Related Documents provide that any consents necessary for future
assignments shall not be unreasonably withheld by the applicable Obligor and/or
agent, and the rights to enforce rights and remedies in respect of the same
under the applicable Related Documents inure to the benefit of the holder of
such Collateral Loan (subject to the rights of any applicable agent or other
lenders).

 

(e)          The Seller shall have received copies of the Approved List and any
Approval Request approved by the Administrative Agent, in each case, evidencing
the approval of the Administrative Agent, in its sole and absolute discretion,
of the Sale to the Purchaser of the Collateral Loans identified on Schedule I to
the applicable Loan Assignment on the applicable Purchase Date.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

Section 4.1.               Representations and Warranties of the Seller. The
Seller makes the following representations and warranties, on which the
Purchaser relies in acquiring any Sale Portfolio Purchased hereunder and each of
the Secured Parties relies upon in entering into the Credit Agreement. As of the
execution and delivery of this Agreement and as of each Purchase Date (unless a
specific date is specified below), the Seller represents and warrants to the
Purchaser for the benefit of the Purchaser and each of its successors and
assigns that:

 

(a)         Organization and Good Standing. The Seller has been duly formed and
is validly existing as a corporation and such corporation is in good standing
under the laws of the State of Delaware (subject to Section 5.1(f)). The Seller
has all requisite corporate power and authority to own or lease its properties
and to conduct its business as such business is presently conducted, and has all
necessary power, authority and legal right to acquire and own the Sale Portfolio
and to Sell such Sale Portfolio to the Purchaser hereunder.

 

(b)         Due Qualification. The Seller is duly qualified to do business and
has obtained all necessary licenses and approvals, in all jurisdictions in which
the ownership or lease of its property or the conduct of its business requires
such qualification, licenses and/or approvals.

 

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(c)         Power and Authority; Due Authorization; Execution and Delivery. The
Seller (i) has all necessary corporate power, authority and legal right to (a)
execute and deliver this Agreement, each Loan Assignment and the other Facility
Documents to which it is a party and (b) carry out the terms of this Agreement,
each Loan Assignment and the other Facility Documents to which it is a party and
(ii) has duly authorized by all necessary corporate action the execution,
delivery and performance of this Agreement, each Loan Assignment and the other
Facility Documents to which it is a party and the sale and assignment of an
ownership interest in the Sale Portfolio on the terms and conditions herein
provided. This Agreement, each Loan Assignment and each other Facility Document
to which the Seller is a party have been duly executed and delivered by the
Seller.

 

(d)         Valid Conveyance; Binding Obligations. This Agreement, each Loan
Assignment and the Facility Documents to which the Seller is party have been
and, in the case of each Loan Assignment delivered after the Closing Date, will
be, duly executed and delivered by the Seller, and this Agreement, together with
the applicable Loan Assignment in each case, shall effect valid Sales of Sale
Portfolio, enforceable against the Seller and creditors of and purchasers from
the Seller, and this Agreement, each Loan Assignment and such Facility Documents
shall constitute legal, valid and binding obligations of the Seller enforceable
against the Seller in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally and general principles of equity (whether such enforceability is
considered in a proceeding in equity or at law).

 

(e)       No Violation. The execution, delivery and performance of this
Agreement, each Loan Assignment and all other agreements and instruments
executed and delivered or to be executed and delivered by the Seller pursuant
hereto or thereto in connection with the Sale of the Sale Portfolio will not (i)
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
the Seller’s articles of incorporation or bylaws or any contractual obligation
of the Seller, (ii) result in the creation or imposition of any Lien (other than
Permitted Liens) upon any of the Seller’s properties pursuant to the terms of
any such contractual obligation, other than this Agreement, or (iii) violate any
Applicable Law.

 

(f)          [Reserved].

 

(g)         No Proceedings. There is no litigation, proceeding or investigation
pending or, to the knowledge of the Seller, threatened against the Seller,
before any Governmental Authority (i) asserting the invalidity of this
Agreement, any Loan Assignment or any other Facility Document to which the
Seller is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement, any Loan Assignment or any other
Facility Document to which the Seller is a party or (iii) seeking any
determination or ruling that could reasonably be expected to have a Material
Adverse Effect.

 

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(h)         No Consents. The Seller is not required to obtain the consent or
approval of any other party or any consent, license, approval or authorization,
or registration or declaration with, any Governmental Authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or any Loan Assignment, except those which have
been obtained.

 

(i)          State of Organization, Etc. Except as permitted hereunder, the
Seller’s legal name is as set forth in this Agreement. Except as permitted
hereunder, the Seller has not changed its name since its formation; does not
have tradenames, fictitious names, assumed names or “doing business as” names.
The chief executive office of the Seller (and the location of the Seller’s
records regarding the Sale Portfolio (other than those delivered to the
Custodian)) is at the address of the Seller set forth in Section 10.5 hereto.
The Seller’s only jurisdiction of formation is the State of Delaware, and,
except as permitted hereunder, the Seller has not changed its jurisdiction of
formation.

 

(j)          Bulk Sales. The execution, delivery and performance of this
Agreement and the transactions contemplated hereby do not require compliance
with any “bulk sales” act or similar law by the Seller.

 

(k)         Solvency. The Seller is not the subject of any bankruptcy,
reorganization, receivership, arrangement, insolvency, moratorium or liquidation
proceeding or other proceeding under federal or state bankruptcy or similar laws
or any Insolvency Event. The Seller is Solvent, and the transactions under this
Agreement and any other Facility Document to which it is a party do not and will
not render it not Solvent. The Seller, after giving effect to the transactions
contemplated by this Agreement and the other Facility Documents, will have
adequate capital to conduct its business.

 

(l)         Selection Procedures. No procedures believed by the Seller to be
adverse to the interests of the Purchaser were utilized by the Seller in
identifying and/or selecting the Collateral Loans included in the Sale
Portfolio.

 

(m)         Compliance with Laws. The Seller has complied in all material
respects with all Applicable Law to which it may be subject, and no Sale
Portfolio contravenes any Applicable Law.

 

(n)         Taxes. With respect to the Sale Portfolio, the Seller has filed or
caused to be filed all material tax returns that are required to be filed by it,
if any, and has paid or made adequate provisions for the payment of all taxes
and all assessments and other governmental charges due and payable from the
Seller except for any such taxes, assessments or charges that are being
contested in good faith by appropriate proceedings and for which appropriate
reserves in accordance with GAAP have been established. No material Tax lien
(other than a Permitted Lien) or similar adverse claim with respect to the Sale
Portfolio has been filed, and no claim is being asserted, with respect to any
such Tax, assessment or other governmental charge. Any material Taxes, fees and
other governmental charges due and payable by the Seller, in connection with the
execution and delivery of this Agreement and the other Facility Documents and
the transactions contemplated hereby or thereby have been paid or shall have
been paid if and when due.

 

-13-

 

 

(o)         Exchange Act Compliance; Regulations T, U and X. None of the
transactions contemplated herein or in the other Facility Documents (including,
without limitation, the use of the proceeds from the Sale of the Sale Portfolio)
will violate or result in a violation of Section 7 of the Exchange Act, or any
regulations issued pursuant thereto, including, without limitation, Regulations
T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II. The Seller does not own or intend to carry or purchase, and no
proceeds from the Sale of the Sale Portfolio will be used to carry or purchase,
any “margin stock” within the meaning of Regulation U or to extend “purpose
credit” within the meaning of Regulation U.

 

(p)         Loan Assignments. Each Loan Assignment is accurate in all respects.

 

(q)         No Liens, Etc. The Sale Portfolio to be acquired by Purchaser
hereunder is owned by the Seller free and clear of any Lien, security interest,
charge or encumbrance (subject only to Permitted Liens), and the Seller has the
full right, corporate power and lawful authority to Sell the same and interests
therein and, upon the Sale thereof hereunder, the Purchaser will have acquired
good and marketable title to (subject to Section 10.20) and a valid and
perfected ownership interest in such Sale Portfolio, free and clear of any Lien,
security interest, charge or encumbrance (subject only to Permitted Liens);
provided that if such item of Sale Portfolio contains a restriction of
transferability, the applicable Related Documents provide that any consents
necessary for future assignments shall not be unreasonably withheld by the
applicable Obligor and/or agent, and the rights to enforce rights and remedies
in respect of the same under the applicable Related Documents inure to the
benefit of the holder of such Collateral Loan (subject to the rights of any
applicable agent or other lenders). No effective financing statement reflecting
the Seller or the Seller’s predecessor in interest, as a “Debtor”, or other
instrument similar in effect covering all or any part of any Sale Portfolio
Purchased hereunder is on file in any recording office, except such as may have
been filed in favor of the Collateral Agent as “Secured Party” or “Assignee”, in
each case, for the benefit of the Secured Parties pursuant to the Credit
Agreement.

 

(r)          Information True and Correct. All information heretofore furnished
by or on behalf of the Seller to the Purchaser or any assignee thereof in
connection with this Agreement or any transaction contemplated hereby is and
will be (when taken as a whole) true, complete and correct in all material
respects as of the date such information is stated or certified and does not and
will not omit to state a material fact necessary to make the statements
contained therein not misleading; provided that, solely with respect to
information furnished by the Seller which was provided to the Seller from an
Obligor with respect to a Collateral Loan, such information shall only need to
be true, complete and correct to the actual knowledge of the Seller.

 

(s)         ERISA Compliance. Neither the Seller nor any member of the ERISA
Group has, or during the past six years had, any liability or obligation with
respect to any Plan or Multiemployer Plan that would reasonably be expected to
result in a Material Adverse Effect. The Seller’s assets are not treated and
during the term of this Agreement will not be treated as “plan assets” for
purposes of 29 C.F.R. Section 2510.3-101 and Section 3(42) of ERISA (the “Plan
Asset Rule”).

 

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(t)          Investment Company Status. The Seller (i) is not required to
register as an “investment company” under the provisions of the Investment
Company Act and (ii) has elected to be regulated as a “business development
company” for purposes of the Investment Company Act.

 

(u)         Intent of the Seller. The Seller has not sold, contributed,
transferred, assigned or otherwise conveyed any interest in any Sale Portfolio
to the Purchaser with any intent to hinder, delay or defraud any of the Seller’s
creditors.

 

(v)         Value Given. The Seller has received reasonably equivalent value
from the Purchaser in exchange for the Sale of such Sale Portfolio Sold
hereunder. No such Sale has been made for or on account of an antecedent debt
owed by the Seller and no such transfer is or may be voidable or subject to
avoidance under any section of the Bankruptcy Code.

 

(w)         Accounting. Other than for tax and consolidated accounting purposes,
the Seller will not account for or treat (whether in financial statements or
otherwise) the transactions contemplated hereby in any manner other than as a
sale of the Sale Portfolio by the Seller to the Purchaser.

 

(x)          No Broker-Dealers. The Seller is not a broker-dealer or subject to
the Securities Investor Protection Act of 1970, as amended.

 

(y)         Special Purpose Entity. The Purchaser is an entity with assets and
liabilities separate and distinct from those of the Seller and any Affiliates
thereof, and the Seller hereby acknowledges that the Administrative Agent, the
Lenders, the Collateral Agent and the other Secured Parties are entering into
the transactions contemplated by the Credit Agreement in reliance upon the
Seller’s identity as an entity being separate from the Purchaser and from each
other Affiliate of the Seller. Therefore, from and after the date of execution
and delivery of this Agreement, the Seller shall take all reasonable steps,
including, without limitation, all steps that the Administrative Agent and the
Collateral Agent may from time to time reasonably request, to maintain its
separate identity as an entity separate from the Purchaser and to make it
manifest to third parties that the Purchaser is an entity with assets and
liabilities distinct from those of the Seller and each other Affiliate thereof
and not just a division of the Seller or any such other Affiliate (other than
for tax purposes). Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, the Seller shall take all
reasonable steps to ensure that the Purchaser has not and will not take, refrain
from taking, or fail to take (as applicable) any action described in Section
9(j) of its amended and restated limited liability company agreement and
Sections 5.01(k), 5.04(d) and 5.05 of the Credit Agreement.

 

(z)          Sale Agreement. This Agreement and the Loan Assignments
contemplated herein are the only agreements or arrangements pursuant to which
the Seller Sells the Sale Portfolio Sold by it to the Purchaser.

 

(aa)       Security Interest.

 

(i)          This Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in the Sale Portfolio in favor of the Purchaser,
which security interest is prior to all other Liens (except for Permitted
Liens), and is enforceable as such against creditors of and purchasers from the
Seller;

 

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(ii)         the Collateral Loans, along with the Related Documents, constitute
either a “general intangible,” an “instrument,” an “account,” “securities
entitlement,” “tangible chattel paper”, “certificated security,” “uncertificated
security,” “supporting obligation,” or “insurance” (each as defined in the
applicable UCC), real property and/or such other category of collateral under
the applicable UCC as to which the Seller has complied with its obligations
under this Section 4.1(aa).

 

(iii)         the Seller owns and has good and marketable title to the Sale
Portfolio (subject to Section 10.20) Sold by it to the Purchaser hereunder on
such Purchase Date, free and clear of any Lien (other than Permitted Liens) or
claim of any Person;

 

(iv)        the Seller has received all consents and approvals required by the
terms of the Related Documents in respect of any Collateral Loan, to the Sale
thereof and the granting of a security interest in the Collateral Loans
hereunder to the Purchaser;

 

(v)         the Seller 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 of the Purchaser in
that portion of the Sale Portfolio in which a security interest may be perfected
by filing granted hereunder to the Purchaser; provided that filings in respect
of real property shall not be required; and

 

(vi)        other than (i) as expressly permitted by the terms of this Agreement
and the Credit Agreement and (ii) the security interest granted to the
Purchaser, the Seller has not pledged, assigned, sold, granted a security
interest in or otherwise conveyed any of the Sale Portfolio. The Seller has not
authorized the filing of and is not aware of any financing statements against
the Seller that include a description of collateral covering the Sale Portfolio
other than any financing statement (A) relating to the security interest granted
to the Purchaser under this Agreement, (B) relating to assets sold or
contributed to any Person not prohibited hereunder or under the Credit
Agreement, (C) relating to the closing of a Permitted Refinancing or Permitted
Securitization contemplated by Section 10.01(e) of the Credit Agreement or (D)
that has been terminated and/or fully and validly assigned to the Collateral
Agent on or prior to the date hereof. The Seller is not aware of the filing of
any judgment, PBGC lien or tax lien filings against the Seller or any of its
assets.

 

(bb)       Servicing Standard. The Seller has complied in all material respects
with the Servicing Standard with respect to all of the Sale Portfolio.

 

(cc)       [Reserved].

 

(dd)      Set-Off, Etc. No Sale Portfolio has been compromised, adjusted,
extended, satisfied, subordinated, rescinded, set-off or modified by the Seller
or the Obligor thereof (except, with respect to the Obligor only, if such action
has occurred to a Sale Portfolio without the consent of the Seller), and no Sale
Portfolio is subject to compromise, adjustment, extension, satisfaction,
subordination, rescission, set–off, counterclaim, defense, abatement,
suspension, deferment, deduction, reduction, termination or modification,
whether arising out of transactions concerning such Sale Portfolio or otherwise,
by the Seller or the Obligor with respect thereto (except, with respect to the
Obligor only, if such action has occurred to a Sale Portfolio without the
consent of the Seller), except for any Material Modification or amendments,
extensions or modifications to such Sale Portfolio otherwise permitted under
Section 11.04(b) of the Credit Agreement and in accordance with the Servicing
Standard.

 

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(ee)       [Reserved].

 

(ff)         Full Payment. As of the related Purchase Date thereof, the Seller
has no knowledge of any fact which should lead it to expect that any Sale
Portfolio will not be paid in full.

 

(gg)       Ownership of the Purchaser. The Seller owns, directly or indirectly,
100% of the membership interests of the Purchaser, free and clear of any Lien.
Such membership interests are validly issued and there are no options or other
rights to acquire membership interests of the Purchaser.

 

(hh)       Confirmation from the Seller. The Seller has provided written
confirmation to the Purchaser that the Seller will not cause the Purchaser to
file a voluntary petition under the Bankruptcy Code with respect to the
Purchaser.

 

(ii)         [Reserved].

 

(jj)         Anti-Corruption Laws and Anti-Terrorism Laws. None of the Seller,
its subsidiaries, their respective directors or officers, or, to the best
knowledge of the Seller, their respective employees or Persons Controlling or
Controlled by the Seller has engaged in any activity or conduct which would
violate any applicable anti-bribery, anti-corruption, anti-terrorism or
anti-money laundering laws, regulations or rules in any applicable jurisdiction
and the Seller has instituted and maintains policies and procedures designed to
prevent violation of such laws, regulations and rules.

 

(kk)       Sanctions. None of the Seller, its subsidiaries, their respective
directors or officers, or, to the best knowledge of the Seller, their respective
employees or Persons Controlling or Controlled by the Seller is a Person that
is, or is owned or controlled by Persons that are: (i) a Sanctioned Person or
(ii) located, organized or resident in, or whose government is, a Sanctioned
Country.

 

(ll)         Seller Termination Event. No event has occurred which constitutes a
Seller Termination Event and no event has occurred and is continuing which, with
the passage of time or the giving of notice, or both would constitute a Seller
Termination Event (other than as previously disclosed to the Administrative
Agent as such).

 

(mm)     Opinion. The statements of fact in the section heading “Assumptions of
Fact” in the non-consolidation and true sale opinion of Latham & Watkins LLP,
dated as of the Closing Date (together with any subsequent bringdown opinions of
Latham & Watkins LLP delivered thereafter, the “Non-Consolidation/True Sale
Opinion”), are true and correct in all material respects.

 

-17-

 

 

(nn)       Compliance with Legal Opinions.  The Seller shall take all other
actions necessary to maintain the accuracy of the factual assumptions set forth
in the legal opinions of Latham & Watkins LLP, as special counsel to the Seller,
issued in connection with the Facility Documents and relating to the issue of
substantive consolidation.

 

(oo)      Accuracy of Representations and Warranties. Each representation or
warranty by the Seller contained (i) herein or (ii) in any certificate or other
document furnished by the Seller to the Purchaser or the Administrative Agent in
writing pursuant hereto or in connection herewith is, as of its date, true and
correct in all material respects.

 

(pp)       Representations and Warranties for Benefit of the Purchaser’s
Assignees. The Seller hereby makes each representation and warranty contained in
this Agreement and the other Facility Documents to which it is a party and that
have been executed and delivered on or prior to such Purchase Date to, and for
the benefit of the Purchaser (and its assignees), the Administrative Agent, the
Lenders and the Collateral Agent as if the same were set forth in full herein.

 

It is understood and agreed that the representations and warranties provided in
this Section 4.1 shall survive (x) the Sale of any Sale Portfolio to the
Purchaser and (y) the grant of a first priority perfected security interest in,
to and under such Sale Portfolio pursuant to the Credit Agreement by the
Purchaser. Upon discovery by the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice thereof to the other and to the Administrative
Agent immediately upon obtaining knowledge of such breach.

 

Section 4.2.               Representations and Warranties of the Seller Relating
to the Agreement and the Sale Portfolio. The Seller makes the following
representations and warranties, on which the Purchaser relies in acquiring the
Sale Portfolio Purchased hereunder and each of the Secured Parties relies upon
in entering into the Credit Agreement. As of each Purchase Date (unless a
specific date is specified below), the Seller represents and warrants to the
Purchaser for the benefit of the Purchaser and each of its successors and
assigns that:

 

(a)         Binding Obligation, Valid Transfer and Security Interest. This
Agreement, together with the Loan Assignments, constitutes a valid transfer to
the Purchaser of all right, title and interest in, to and under all Sale
Portfolio, free and clear of any Lien of any Person claiming through or under
the Seller or its Affiliates, except for Permitted Liens. If the conveyances
contemplated by this Agreement are determined to be a transfer for security,
then this Agreement constitutes a grant of a security interest in all Sale
Portfolio to the Purchaser which upon the delivery of the Related Documents and
the filing of the financing statements shall be a first priority perfected
security interest in all Sale Portfolio, subject only to Permitted Liens.
Neither the Seller nor any Person claiming through or under the Seller shall
have any claim to or interest in the Covered Accounts; provided that if this
Agreement constitutes only a grant of a security interest in such property, then
the Seller shall have the rights in such property as a debtor for purposes of
the UCC.

 

-18-

 

 

(b)         Eligibility of Collateral Loans. As of each Purchase Date,
(i) Schedule I is an accurate and complete listing of all Sale Portfolio as of
the related Purchase Date and the information contained therein with respect to
the identity of such Sale Portfolio and the amounts owing thereunder is true and
correct as of the related Purchase Date, (ii) each item of the Sale Portfolio
Purchased by the Purchaser hereunder is an Eligible Collateral Loan (unless
otherwise consented to by the Administrative Agent), and (iii) with respect to
each item of the Sale Portfolio all consents, licenses, approvals or
authorizations of or registrations or declarations of any Governmental Authority
or any Person required to be obtained, effected or given by the Seller in
connection with the transfer of an ownership interest or security interest in
each item of Sale Portfolio to the Purchaser have been duly obtained, effected
or given and are in full force and effect. For the avoidance of doubt, any
inaccurate representation that a Collateral Loan is an Eligible Collateral Loan
hereunder shall not constitute an Event of Default if the Seller complies with
Section 6.1 of this Agreement.

 

(c)         No Fraud. Each Collateral Loan was originated without any fraud or
material misrepresentation by the Seller or, to the best of the Seller’s
knowledge, on the part of the Obligor.

 

It is understood and agreed that the representations and warranties provided in
this Section 4.2 shall survive (x) the Sale of any Sale Portfolio to the
Purchaser, (y) the grant of a first priority perfected security interest in, to
and under such Sale Portfolio pursuant to the Credit Agreement by the Purchaser
and (z) the termination of this Agreement and the Credit Agreement. Upon
discovery by the Seller or the Purchaser of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice thereof to the other and to the Administrative Agent
immediately upon obtaining knowledge of such breach.

 

Section 4.3.               Representations and Warranties of the Purchaser. The
Purchaser makes the following representations and warranties, on which the
Seller relies in selling any Sale Portfolio to the Purchaser hereunder. Such
representations are made as of the execution and delivery of this Agreement, but
shall survive until the Collection Date, the Sale of any Sale Portfolio
hereunder, and the grant of a security interest in such Sale Portfolio by the
Purchaser to the Collateral Agent, on behalf of the Secured Parties, under the
Credit Agreement.

 

(a)         Organization and Good Standing. The Purchaser has been duly
organized and is validly existing and in good standing as a limited liability
company under the laws of the State of Delaware or such other jurisdiction as
permitted under the terms of the Facility Documents, with the power and
authority to own or lease its properties and to conduct its business as such
properties are currently owned and such business is currently conducted, and had
at all relevant times, and has, all necessary power, authority and legal right
to acquire and own any Sale Portfolio.

 

(b)         Due Qualification. The Purchaser is duly qualified to do business as
a limited liability company in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
its property or the conduct of its business requires such qualification,
licenses and/or approvals.

 

(c)         Power and Authority; Due Authorization; Execution and Delivery. The
Purchaser has all necessary power, authority and legal right to execute and
deliver this Agreement and to carry out the terms hereof and to acquire any Sale
Portfolio ; and the execution, delivery and performance of this Agreement and
all of the documents required pursuant hereto have been duly authorized by the
Purchaser by all necessary limited liability company action.

 

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(d)         No Consent Required. The Purchaser is not required to obtain the
consent of any other party, or any consent, license, approval or authorization
or registration or declaration with, any Governmental Authority, bureau or
agency in connection with the execution, delivery or performance of this
Agreement, each Loan Assignment and the Facility Documents to which it is a
party, except for such as have been obtained, effected or made.

 

(e)         Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and general principles of equity
(whether considered in a suit at law or in equity).

 

(f)          No Violation. The consummation of the transactions contemplated by
this Agreement, each Loan Assignment and the other Facility Documents to which
it is a party and the fulfillment of the terms hereof and thereof will not (i)
conflict with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time or both) a default under,
the Purchaser’s certificate of formation, limited liability company agreement or
any contractual obligation of the Purchaser, (ii) result in the creation or
imposition of any Lien (other than Permitted Liens) upon any of the Purchaser’s
properties pursuant to the terms of any such contractual obligation, other than
this Agreement, or (iii) violate any Applicable Law.

 

(g)         Value Given. The Purchaser has given reasonably equivalent value to
the Seller in exchange for the Sale of such Sale Portfolio, which amount the
Purchaser hereby agrees is the fair market value of such Sale Portfolio. No such
Sale has been made for or on account of an antecedent debt owed by the Seller
and no such transfer is or may be voidable or subject to avoidance under any
section of the Bankruptcy Code.

 

(h)         No Proceedings. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is presently pending or, to the
knowledge of the Purchaser, threatened against the Purchaser or any properties
of the Purchaser or with respect to this Agreement, any Loan Assignment or any
other Facility Document to which the Purchaser is a party, which, if adversely
determined, could have a material adverse effect on the ability of the Purchaser
to perform its obligations under this Agreement, any Loan Assignment or any
Facility Document to which the Purchaser is a party or any of the other
applicable documents forming part of any Sale Portfolio.

 

(i)          Sale Agreement. This Agreement and the Loan Assignments
contemplated herein are the only agreements or arrangements pursuant to which
the Purchaser Purchases any Sale Portfolio Sold to it by the Seller.

 

(j)          Investment Company Act. The Purchaser is not required to register
as an “investment company” under the provisions of the Investment Company Act.

 

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(k)          Compliance with Law. The Purchaser has complied in all material
respects with all Applicable Law to which it may be subject, and no Sale
Portfolio contravenes any Applicable Law.

 

(l)           Opinions. The statements of fact in the section heading
“Assumptions of Fact” in the Non-Consolidation/True Sale Opinion are true and
correct in all material respects.

ARTICLE V

COVENANTS OF THE SELLER

 

Section 5.1.               Protection of Title of the Purchaser.

 

(a)         On or prior to the Closing Date, the Seller shall have filed or
caused to be filed UCC-1 financing statements, naming the Seller as “Debtor”,
naming the Purchaser as “Assignor Secured Party”, and naming the Collateral
Agent, for the benefit of the Secured Parties, as “Assignee of Assignor Secured
Party”, and describing the Sale Portfolio to be acquired by the Purchaser, with
the office of the Secretary of State of the state of the jurisdiction of
organization of the Seller. From time to time thereafter, the Seller shall file
such financing statements and cause to be filed such continuation statements,
all in such manner and in such places as may be required by law (or deemed
desirable by the Purchaser or any assignee thereof) to fully perfect, preserve,
maintain and protect the ownership interest of the Purchaser under this
Agreement and the security interest of the Collateral Agent for the benefit of
the Secured Parties under the Credit Agreement, in the Sale Portfolio acquired
by the Purchaser hereunder, as the case may be, and in the proceeds thereof. The
Seller shall deliver (or cause to be delivered) to the Purchaser, the Collateral
Agent, the Custodian, the Servicer and the Administrative Agent (who will
provide each Lender (except if such Lender is also the Administrative Agent)
with a copy promptly upon receipt thereof) file-stamped copies of, or filing
receipts for, any document filed as provided above, as soon as available
following such filing. The Seller agrees that it will from time to time, at its
expense, take all actions, that the Purchaser, the Collateral Agent or the
Administrative Agent may reasonably request in order to perfect, protect or more
fully evidence the Purchases hereunder and the security and/or interest granted
in any Sale Portfolio Purchased hereunder, or to enable the Purchaser, the
Collateral Agent, the Administrative Agent or the Secured Parties to exercise
and enforce their rights and remedies hereunder or under any Facility Document.

 

(b)         On or prior to each Purchase Date hereunder, the Seller shall take
all steps necessary under all Applicable Law in order to Sell to the Purchaser
the Sale Portfolio being acquired by the Purchaser on such Purchase Date so
that, upon the Sale of such Sale Portfolio from the Seller to the Purchaser
pursuant to the terms hereof on such Purchase Date, the Purchaser will have
acquired good and marketable title to (subject to Section 10.20) and a valid and
perfected ownership interest in such Sale Portfolio, free and clear of any Lien,
security interest, charge or encumbrance or restrictions on transferability
(subject only to Permitted Liens). On or prior to each Purchase Date hereunder,
the Seller shall take all steps required under Applicable Law in order for the
Purchaser to grant to the Collateral Agent, for the benefit of the Secured
Parties, a first priority perfected security interest (subject only to Permitted
Liens) in the Sale Portfolio being Purchased by the Purchaser on such Purchase
Date and, from time to time thereafter, the Seller shall take all such actions
as may be required by Applicable Law to fully preserve, maintain and protect the
Purchaser’s ownership interest in, and the Collateral Agent’s first priority
perfected security interest in (subject only to Permitted Liens), any Sale
Portfolio which has been acquired by the Purchaser hereunder.

 

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(c)         The Seller shall direct any agent or administrative agent for any
Sale Portfolio originated or acquired by the Seller to remit all payments and
collections with respect to such Sale Portfolio and direct the Obligor with
respect to such Sale Portfolio to remit all such payments and collections
directly to the Collection Account. The Seller will not make any change, or
permit the Servicer to make any change, in its instructions to Obligors
regarding payments to be made to the Seller or the Servicer or payments to be
made to the Collection Account, unless the Purchaser and the Administrative
Agent have consented to such change. The Seller shall direct or cause only funds
constituting payments and collections relating to such Sale Portfolio to be
deposited into the Collection Account. In the event any payments relating to any
Sale Portfolio are remitted directly to the Seller or any Affiliate of the
Seller, the Seller will remit (or will cause all such payments to be remitted)
directly to the Collection Account within three (3) Business Days following
receipt thereof, and, at all times prior to such remittance, the Seller will
itself hold or, if applicable, will cause such payments to be held in trust for
the exclusive benefit of the Purchaser and its assignees. Until so deposited,
all such Interest Proceeds and Principal Proceeds shall be held in trust for the
Purchaser or its assignees by the Seller.

 

(d)         At any time after the occurrence or declaration of the Final
Maturity Date, the Purchaser, the Collateral Agent or the Administrative Agent
may direct the Seller or the Servicer to notify the Obligors, at Seller’s
expense, of the Purchaser’s (or its assigns) or the Secured Parties’ interest in
the Sale Portfolio Purchased under this Agreement and may direct that payments
of all amounts due or that become due under any or all of the Sale Portfolio
Purchased under this Agreement be made directly to the Purchaser (or its
assigns), the Collateral Agent or the Administrative Agent.

 

(e)         The Seller shall, on or before the fifth anniversary of the Closing
Date:

 

(i)          file or cause to be filed an appropriate continuation statement
with respect to the financing statement referred to in Section 3.1 or any other
financing statement filed pursuant to this Agreement or in connection with any
Purchase hereunder and the Purchaser hereby authorizes the Seller to file such
continuation statements; and

 

(ii)         deliver or cause to be delivered to the Purchaser, the Collateral
Agent and the Administrative Agent an opinion of the counsel for Seller, in form
and substance reasonably satisfactory to the Purchaser, the Collateral Agent and
the Administrative Agent, stating that, in the opinion of such counsel, as of
the date of such opinion, such financing statement(s) shall remain effective and
no additional financing statements, continuation statements or amendments with
respect to such financing statement(s) shall be required to be filed in the
State of Delaware from the date thereof through the next five years to maintain
the perfection of the security interest of this Agreement as such security
interest otherwise exists on the date thereof.

 

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(f)          The Seller shall not (x) change its name, move the location of its
principal place of business and chief executive office, change the offices where
it keeps records concerning all Sale Portfolio Purchased hereunder from the
address set forth under its name in Section 10.5 hereto, or change the
jurisdiction of its formation, or (y) subject to Sections 7.05 and 8.08 of the
Credit Agreement, move, or consent to the Collateral Agent moving, the Related
Documents from the location required under the Facility Documents, unless the
Seller has given at least 30 days’ (or such shorter notice period as consented
to by the Administrative Agent) written notice to the Purchaser, the Collateral
Agent and the Administrative Agent (who will provide each Lender (except if such
Lender is also the Administrative Agent) with a copy promptly upon receipt
thereof) and has taken all actions required under the UCC of each relevant
jurisdiction in order to continue the first priority perfected security interest
of the Purchaser in such Sale Portfolio, together with such opinions of counsel
and other documents and instruments as the Administrative Agent may request in
connection therewith.

 

(g)         [Reserved].

 

(h)         The Seller shall mark its master data processing records so that,
from and after the time of Sale under this Agreement of the related Sale
Portfolio to the Purchaser and the grant of a security interest in such Sale
Portfolio by the Purchaser to the Collateral Agent for the benefit of the
Secured Parties under the Credit Agreement, the Seller’s master data processing
records (including archives) that refer to such Sale Portfolio shall indicate
clearly that such Sale Portfolio has been Purchased by the Purchaser hereunder
and pledged by the Purchaser to the Collateral Agent, on behalf of the Secured
Parties, under the Credit Agreement. Indication of the Collateral Agent’s
security interest for the benefit of the Secured Parties in any Sale Portfolio
shall be deleted from or modified on the Seller’s computer systems when, and
only when, such Sale Portfolio shall be (i) paid off by the related Obligor,
(ii) purchased or substituted by the Seller in accordance with Section 6.1 or
6.2 hereof or (iii) released by the Collateral Agent pursuant to Section 8.08 of
the Credit Agreement.

 

(i)          If the Seller fails to perform any of its obligations hereunder,
the Purchaser, the Collateral Agent or the Administrative Agent may (but shall
not be required to) perform, or cause performance of, such obligation; and the
Purchaser’s, the Collateral Agent’s or the Administrative Agent’s costs and
expenses incurred in connection therewith shall be payable by the Seller as
provided in Section 9.1. The Seller irrevocably authorizes the Purchaser, the
Collateral Agent or the Administrative Agent at any time and from time to time
at the Purchaser’s, the Collateral Agent’s or the Administrative Agent’s sole
discretion and appoints the Purchaser, the Collateral Agent and the
Administrative Agent as its attorney–in–fact pursuant to a power of attorney
substantially in the form of Exhibit C to act on behalf of the Seller (i) to
file financing statements on behalf of the Seller, as debtor, necessary or
desirable in the Purchaser’s, the Collateral Agent’s or the Administrative
Agent’s sole discretion to perfect and to maintain the perfection and priority
of the interest of the Purchaser or the Collateral Agent in any Sale Portfolio
and (ii) to file a carbon, photographic or other reproduction of this Agreement
or any financing statement with respect to any Sale Portfolio as a financing
statement in such offices as the Purchaser, the Collateral Agent or the
Administrative Agent in their sole discretion deem necessary or desirable to
perfect and to maintain the perfection and priority of the interests of the
Purchaser or the Collateral Agent in any Sale Portfolio. This appointment is
coupled with an interest and is irrevocable.

 

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Section 5.2.               Affirmative Covenants of the Seller. From the date
hereof until the Collection Date:

 

(a)          Compliance with Law. The Seller will comply in all material
respects with all Applicable Law, including those applicable to the Seller as a
result of its interest in any Sale Portfolio or any part thereof.

 

(b)        Preservation of Company Existence. The Seller will preserve and
maintain its existence, rights, franchises and privileges as a corporation in
the jurisdiction of its formation, and qualify and remain qualified as a
corporation in each jurisdiction where the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification could reasonably be
expected to have a Material Adverse Effect.

 

(c)         Performance and Compliance with Sale Portfolio. The Seller will, at
its expense, timely and fully perform and comply in all material respects with
all provisions, covenants and other promises required to be observed by it under
any Sale Portfolio and all other agreements related to such Sale Portfolio.

 

(d)       Keeping of Records and Books of Account. The Seller will maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing any Sale Portfolio in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all or any portion of any Sale Portfolio.

 

(e)         Separate Identity. The Seller acknowledges that the Administrative
Agent, the Collateral Agent, the Lenders and the other Secured Parties are
entering into the transactions contemplated by this Agreement, the Credit
Agreement and the other Facility Documents in reliance upon the Purchaser’s
identity as an entity being separate from the Seller and each other Affiliate of
the Seller. Therefore, from and after the date of execution and delivery of this
Agreement, the Seller will take all reasonable steps including, without
limitation, all steps that the Administrative Agent and the Collateral Agent may
from time to time reasonably request to maintain the Purchaser’s identity as an
entity that is separate from the Seller and each other Affiliate of the Seller
and to make it manifest to third parties that the Purchaser is an entity with
assets and liabilities distinct from those of the Seller and each other
Affiliate thereof (other than for tax purposes) and not just a division of the
Seller or any such other Affiliate. Without limiting the generality of the
foregoing and in addition to the other covenants set forth herein, the Seller
agrees that:

 

(i)          the Seller will take all other actions necessary on its part to
ensure that the Purchaser is at all times in compliance with the criteria and
the restrictions set forth in Section 9(j) of the amended and restated limited
liability company agreement of the Purchaser and Sections 5.01(k), 5.04(d) and
5.05 of the Credit Agreement;

 

(ii)         the Seller shall maintain corporate records and books of account
separate from those of the Purchaser;

 

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(iii)                the annual financial statements of the Seller shall
disclose the effects of the Seller’s transactions in accordance with GAAP and
the annual financial statements of the Seller shall not reflect in any way that
the assets of the Purchaser, including, without limitation, any Sale Portfolio,
could be available to pay creditors of the Seller or any other Affiliate of the
Seller;

 

(iv)                the resolutions, agreements and other instruments underlying
the transactions described in this Agreement shall be continuously maintained by
the Seller as official records;

 

(v)                 the Seller shall maintain an arm’s–length relationship with
the Purchaser and will not hold itself out as being liable for the debts of the
Purchaser;

 

(vi)                the Seller shall keep its assets and its liabilities wholly
separate from those of the Purchaser; and

 

(vii)               the Seller will avoid the appearance, and promptly correct
any known misperception of any of the Seller’s creditors, that the assets of the
Purchaser are available to pay the obligations and debts of the Seller.

 

(f)                Servicing Standard. The Seller will comply in all material
respects with the Servicing Standard in regard to any Sale Portfolio.

 

(g)               [Reserved].

 

(h)               Cooperation with Requests for Information or Documents. The
Seller will cooperate fully with all reasonable requests of the Purchaser and
its assigns regarding the provision of any information or documents, necessary
or desirable, including the provision of such information or documents in
electronic or machine–readable format, to allow each of the Purchaser and its
assignees to carry out their responsibilities under the Facility Documents.

 

(i)                 Payment, Performance and Discharge of Obligations. The
Seller will pay, perform and discharge all of its obligations and liabilities,
including, without limitation, all taxes, assessments and governmental charges
upon its income and properties, when due, unless and only to the extent that
such obligations, liabilities, taxes, assessments and governmental charges shall
be contested in good faith and by appropriate proceedings and that, to the
extent required by GAAP, proper and adequate book reserves relating thereto are
established by the Seller and then only to the extent that a bond is filed in
cases where the filing of a bond is necessary to avoid the creation of a Lien
against any of its properties.

 

(j)                 Representations and Covenants. The Seller shall promptly,
upon receipt of notice or discovery thereof, notify the Purchaser, the
Collateral Agent, the Administrative Agent and each Lender (i) if any
representation or warranty set forth in Section 4.1 or Section 4.2 was incorrect
at the time it was given or deemed to have been given or (ii) of the breach of
any covenant under Section 5.1, Section 5.2 or Section 5.3 and at the same time
deliver to the Purchaser, the Collateral Agent and the Administrative Agent (who
will provide each Lender (except if such Lender is also the Administrative
Agent) with a copy promptly upon receipt thereof) a written notice setting forth
in reasonable detail the nature of such facts and circumstances. In particular,
but without limiting the foregoing, the Seller shall notify the Purchaser, the
Collateral Agent and the Administrative Agent (who will provide each Lender
(except if such Lender is also the Administrative Agent) with a copy promptly
upon receipt thereof) in the manner set forth in the preceding sentence before
any Purchase Date of any facts or circumstances within the knowledge of the
Seller which would render any of the said representations and warranties untrue
at the date when such representations and warranties were made or deemed to have
been made.

 

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(k)               Notices. The Seller will furnish to the Purchaser and the
Administrative Agent (with enough additional copies for each Lender):

 

(i)                within three Business Days after a Responsible Officer of the
Seller obtains actual knowledge of the occurrence and continuance of any
(A) Default, (B) Event of Default, (C) event or occurrence that has resulted or
could reasonably be expected to result in a Material Adverse Effect or
(D) receipt of notice from the agent on a Collateral Loan that the related
Obligor has defaulted (beyond applicable grace periods) in the payment of
principal or interest, a certificate of a Responsible Officer setting forth the
details thereof and the action which the Seller is taking or proposes to take
with respect thereto;

 

(ii)               promptly after receiving notice of the occurrence of any
ERISA Event, and promptly provide the Administrative Agent and each Lender with
a copy of such notice;

 

(iii)              promptly following any reasonable request by the
Administrative Agent or any Lender, all documentation and other information that
the Administrative Agent or such Lender requests in order to comply with its
ongoing obligations under applicable “know your customer,” anti-money laundering
and sanctions rules and regulations, including the PATRIOT Act; and

 

(iv)              within two Business Days after a Responsible Officer of the
Seller obtains actual knowledge thereof, provide notice to the Administrative
Agent of any settlement of, material judgment (including a material judgment
with respect to the liability phase of a bifurcated trial) in or commencement of
any material labor controversy, material litigation, material action, material
suit or material proceeding before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
directly and adversely affecting in any material respect the Sale Portfolio
(taken as a whole), the Facility Documents, or any Secured Party’s interest in
the Sale Portfolio.

 

(l)                 Seller Termination Event and Seller Purchase Event. The
Seller will provide the Purchaser, the Administrative Agent and the Collateral
Agent with prompt (and in any event within three (3) Business Days) written
notice of the occurrence of each Seller Termination Event and each Seller
Purchase Event of which the Seller has actual knowledge or has received notice
(other than notice received from the Administrative Agent).

 

(m)             Other. The Seller will furnish to the Purchaser, the Collateral
Agent and the Administrative Agent promptly, from time to time such other
information, documents, records or reports respecting any Sale Portfolio or the
condition or operations, financial or otherwise, of the Seller as the Purchaser,
the Collateral Agent and the Administrative Agent may from time to time
reasonably request in order to protect the interests of the Purchaser, the
Administrative Agent, the Collateral Agent, the Lenders or the Secured Parties
under or as contemplated by this Agreement and the other Facility Documents. The
Administrative Agent will provide each Lender with a copy of any such other
information, documents, records or reports promptly upon receipt thereof.

 

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(n)               Costs and Expenses. The Seller shall pay all reasonable,
documented costs and disbursements in connection with the performance of its
obligations hereunder.

 

(o)               [Reserved].

 

(p)               Opinion. The Seller will comply in all material respects with
any requirements for future action set forth in the section heading “Assumptions
of Fact” in the Non-Consolidation/True Sale Opinion, with respect to the
Facility Documents.

 

Section 5.3.               Negative Covenants of the Seller. From the date
hereof until the Collection Date:

 

(a)               Sale Portfolio Not to be Evidenced by Instruments. The Seller
will take no action to cause any Sale Portfolio that is not, as of the related
Purchase Date, as the case may be, evidenced by an instrument, to be so
evidenced except in connection with the enforcement or collection of such Sale
Portfolio.

 

(b)               Security Interests. Except as otherwise permitted herein and
in the Credit Agreement, the Seller will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien on
any Sale Portfolio Sold by the Seller to the Purchaser hereunder, whether now
existing or hereafter transferred hereunder, or any interest, therein, and the
Seller will not sell, pledge, assign or suffer to exist any Lien (except for
Permitted Liens) on its interest in any Sale Portfolio Sold by the Seller to the
Purchaser hereunder. The Seller will promptly notify the Purchaser, the
Collateral Agent and the Administrative Agent (who will provide each Lender
(except if such Lender is also the Administrative Agent) with a copy promptly
upon receipt thereof) of the existence of any Lien on any Sale Portfolio and the
Seller shall defend the right, title and interest of the Purchaser and the
Collateral Agent, on behalf of the Secured Parties, in, to and under such Sale
Portfolio against all claims of third parties; provided that nothing in this
Section 5.3(b) shall prevent or be deemed to prohibit the Seller from suffering
to exist Permitted Liens upon any portion of such Sale Portfolio.

 

(c)               [Reserved].

 

(d)               Transfer of Purchaser Membership Interests. The Seller shall
not transfer, pledge, assign, participate or otherwise encumber its membership
interests in the Purchaser without the prior written consent of the
Administrative Agent and the delivery of an acceptable (in the Administrative
Agent’s reasonable discretion) non-consolidation opinion.

 

(e)               Transaction with Affiliates. The Seller shall not cause or
permit the Purchaser to sell, lease or otherwise transfer any property or assets
to, or purchase, lease or otherwise acquire any property or assets from, or
otherwise engage in any other transactions with, the Servicer, the Seller and/or
any of their Affiliates (including sales of Defaulted Collateral Loans and other
Collateral Loans), unless otherwise permitted under the Facility Documents.

 

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(f)                Accounting of Purchases. Other than for tax and consolidated
accounting purposes, the Seller will not account for or treat (whether in
financial statements or otherwise) the transactions contemplated hereby in any
manner other than as a sale of the Collateral Loans to the Purchaser.

 

(g)               ERISA. The Seller shall not establish or incur any liability
or obligation with respect to any Plan or Multiemployer Plan and no member of
the ERISA Group shall establish or incur any liability or obligation with
respect to any Plan or Multiemployer Plan that in each case would reasonably be
expected to result in a Material Adverse Effect. The Seller’s assets shall not
constitute “plan assets” for purposes of the Plan Asset Rule.

 

(h)               [Reserved].

 

(i)                 [Reserved].

 

(j)                 Limitation on Financing Activities. The Seller shall not,
directly or indirectly, advance or contribute to the Purchaser any funds
pursuant to any financial accommodation. For the avoidance of doubt, this clause
(j) shall not prohibit the Seller from contributing Collateral Loans to the
Purchaser as contemplated herein.

 

(k)               Organizational Documents. The Seller will not cause or permit
the Purchaser to amend, modify, waive or terminate any provision of the
Purchaser’s operating agreement without the prior written consent of the
Administrative Agent.

 

(l)                 Deposits to Special Accounts. The Seller will not deposit or
otherwise credit, or cause to be so deposited or credited, to the Collection
Account cash or cash proceeds other than Principal Proceeds and Interest
Proceeds in respect of any Sale Portfolio.

 

(m)             Changes in Payment Instructions to Obligors. The Seller will not
make any change, or permit the Purchaser to make any change, in its instructions
to Obligors regarding payments to be made with respect to any Sale Portfolio to
the Collection Account.

ARTICLE VI

REPURCHASES AND SUBSTITUTION BY THE SELLER

 

Section 6.1.               Repurchase of Collateral Loans. In the event of the
occurrence of a Seller Purchase Event, the Seller will within ten (10) Business
Days of the discovery by or notice (from any Person) to the Seller of the Seller
Purchase Event, subject to the conditions set forth in Section 10.03 of the
Credit Agreement, (i) purchase each Collateral Loan hereunder which is affected
by or related to such Seller Purchase Event from the Purchaser, and the Seller
shall pay to the Purchaser (by means of a deposit to the Collection Account,
provided that the excess if any of the Repurchase Price of such Collateral Loan
over the amount equal to the Loan Value of such Collateral Loan on the
applicable Purchase Date multiplied by the principal balance of such Collateral
Loan as of the date of repurchase shall be paid to the Purchaser or as otherwise
directed by the Purchaser) the Repurchase Price of such Collateral Loan as of
the date of the purchase thereof from the Purchaser or (ii) subject to the
satisfaction of the conditions in Section 6.2, substitute for such Collateral
Loan, a Substitute Eligible Collateral Loan. It is understood and agreed that
the obligation of the Seller to purchase the Collateral Loans or substitute a
Substitute Eligible Collateral Loan for the Collateral Loans which are affected
by or related to such Seller Purchase Event is not intended to, and shall not,
constitute a guaranty of the collectability or payment of any Collateral Loan
which is not collected, not paid or uncollectible on account of the insolvency,
bankruptcy or financial inability to pay of the related Obligor. Upon deposit in
the Collection Account of the Repurchase Price for any Collateral Loan purchased
by the Seller, the Purchaser shall (and shall request the Collateral Agent to),
at the sole expense of the Seller, take such steps as may be reasonably
requested by the Seller in order to Sell to the Seller all of the Purchaser’s
and the Collateral Agent’s right, title and interest in and to such Collateral
Loan, without recourse, representation or warranty of any kind, except as to the
absence of Liens, charges or encumbrances created by or arising solely as a
result of actions of the Purchaser or the Collateral Agent. Such Sale shall be a
sale outright, and not for security.

 

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Section 6.2.               Substitution of Collateral Loans.

 

(a)               The Seller shall have the right, but not the obligation,
subject to the prior written consent of the Administrative Agent and the
Purchaser, in their sole discretion, to substitute one or more Collateral Loans
(“Substitute Eligible Collateral Loan”) for a Collateral Loan (each such act, a
“Substitution”).

 

(b)               The Substitution shall not occur unless the following
conditions are satisfied as of the date of such Substitution:

 

(i)                the Seller has recommended to the Purchaser and the
Administrative Agent (with a copy to the Collateral Agent and the Custodian) in
writing that the Collateral Loan to be replaced should be replaced (each, a
“Replaced Collateral Loan”);

 

(ii)               no event has occurred, or would result from such
Substitution, which constitutes an Event of Default and no event has occurred
and is continuing, or would result from such Substitution, which constitutes a
Default;

 

(iii)               the Minimum OC Coverage Test is satisfied (or, if not
satisfied immediately prior to such Substitution, compliance with the Minimum OC
Coverage Test is maintained or improved);

 

(iv)              all representations and warranties contained in Sections 4.1
and 4.2 shall be true and correct in all material respects as of the date of
Substitution (other than any representation and warranty that is made as of a
specific date);

 

(v)               no selection procedures adverse to the interests of the
Purchaser, the Administrative Agent, the Lenders or the other Secured Parties
were utilized by the Seller in the selection of the Collateral Loan to be
replaced by the Substitute Eligible Collateral Loan;

 

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(vi)                the limits set forth in Section 10.03 of the Credit
Agreement applicable to such Substitution are satisfied;

 

(vii)               each Collateral Loan that is replaced pursuant to the terms
of this Section 6.2 shall be substituted only with another Collateral Loan that
meets the foregoing conditions; and

 

(viii)              all terms, provisions, representations, warranties and
covenants hereunder with respect to Collateral Loans that have been Sold by the
Seller to the Purchaser hereunder shall apply equally to Substitute Eligible
Collateral Loans.

 

Section 6.3.               Repurchase Limitations. Except as otherwise expressly
permitted under the Credit Agreement, the Seller and the Purchaser agree that
the Seller and any Affiliate of the Seller may repurchase any Sale Portfolio
only from the Purchaser in the case of a repurchase or Substitution of any Sale
Portfolio pursuant to Sections 6.1 or 6.2.

 

ARTICLE VII

ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF THE SALE PORTFOLIO

 

Section 7.1.               Rights of the Purchaser.

 

(a)               After the occurrence or declaration of the Final Maturity
Date, the Seller hereby authorizes the Purchaser, the Servicer, the Collateral
Agent, the Administrative Agent, and/or their respective designees or assignees
to take any and all steps in Seller’s name and on behalf of the Seller that the
Purchaser, the Servicer, the Collateral Agent, the Administrative Agent and/or
their respective designees or assignees determine are reasonably necessary or
appropriate to collect all amounts due under any Sale Portfolio and to enforce
or protect the Purchaser’s, the Collateral Agent’s, the Administrative Agent’s
and the Lenders’ rights under this Agreement, including endorsing the name of
the Seller on checks and other instruments representing Interest Proceeds and
Principal Proceeds and enforcing such Sale Portfolio.

 

(b)               Except as set forth in Sections 6.1 and 6.2 with respect to
the repurchase or Substitution of certain Collateral Loans, the Purchaser shall
have no obligation to account for, replace, substitute or return any Sale
Portfolio to the Seller. The Purchaser shall have no obligation to account for
or to return Interest Proceeds or Principal Proceeds, or any interest or other
finance charge collected pursuant thereto, to the Seller, irrespective of
whether such Interest Proceeds and Principal Proceeds and charges are in excess
of the Purchase Price for such Sale Portfolio.

 

(c)               The Purchaser shall have the right to further assign,
transfer, deliver, hypothecate, subdivide or otherwise deal with any Sale
Portfolio and all of the Purchaser’s right, title and interest in, to and under
this Agreement, pursuant to this Agreement or the Credit Agreement.

 

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(d)               The Purchaser shall have the sole right to retain any gains or
profits created by buying, selling or holding any Sale Portfolio and shall have
the sole risk of and responsibility for losses or damages created by such
buying, selling or holding.

 

Section 7.2.               Notice to Collateral Agent and Administrative Agent.
The Seller agrees that, concurrently with its delivery to the Purchaser, copies
of all notices, reports, documents and other information required to be
delivered by the Seller to the Purchaser hereunder shall be delivered by the
Seller to the Collateral Agent and the Administrative Agent (who will provide
each Lender (except if such Lender is also the Administrative Agent) with a copy
promptly upon receipt thereof).

 

ARTICLE VIII

SELLER TERMINATION EVENTS

 

Section 8.1.               Seller Termination Events.

 

(a)               If any of the following events (each a “Seller Termination
Event”) shall have occurred:

 

(i)                the Seller shall fail to pay (A) any amount due pursuant to
Section 6.1 in accordance with the provisions thereof and such failure shall
continue unremedied for a period of five (5) Business Days from the earlier of
(1) the date any Responsible Officer of the Seller obtains knowledge of such
failure and (2) the date the Seller receives notice of such failure from the
Purchaser, the Servicer, the Collateral Agent or the Administrative Agent or (B)
any other amount required to be paid by the Seller hereunder within two (2)
Business Days of the date when due; or

 

(ii)               the Seller shall fail to observe or perform in any material
respect any covenant or agreement applicable to it contained herein (other than
as specified in paragraph (i) of this Section 8.1); provided that no such
failure shall constitute a Seller Termination Event under this paragraph (ii)
unless such failure shall continue unremedied for a period of 30 days (if such
failure can be remedied) after the earlier to occur of (i) the date on which
written notice of such failure requiring the same to be remedied shall have been
given to the Seller by the Administrative Agent, the Servicer, the Collateral
Agent or the Purchaser and (ii) the date on which the Seller acquires knowledge
thereof; or

 

(iii)                any representation, warranty or certification made by the
Seller in this Agreement or in any statement, record, certificate, financial
statement or other document delivered pursuant to this Agreement shall prove to
have been incorrect when made, which has a Material Adverse Effect on the
Purchaser and continues to be unremedied for a period of 30 days after the
earlier to occur of (i) the date on which written notice of such incorrectness
requiring the same to be remedied shall have been given to the Seller by the
Administrative Agent, the Servicer, the Collateral Agent or the Purchaser and
(ii) the date on which a Responsible Officer of the Seller acquires knowledge
thereof; provided that a Seller Termination Event shall not be deemed to have
occurred under this paragraph (iii) based upon a Seller Purchase Event if the
Seller shall have complied with the provisions of Section 6.1 in respect
thereof; or

 

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(iv)                (A) a court having jurisdiction in the premises shall enter
a decree or order for relief in respect of the Seller in an involuntary case
under the Bankruptcy Code or any other applicable insolvency law now or
hereafter in effect, which decree or order is not stayed or any other similar
relief shall be granted under any applicable federal or state law now or
hereafter in effect and shall not be stayed; (B) (1) any involuntary case is
commenced against the Seller under any applicable insolvency law now or
hereafter in effect, a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Seller, or over all or
a substantial part of the property of the Seller, shall have been entered, an
interim receiver, trustee or other custodian of the Seller for all or a
substantial part of the property of the Seller is involuntarily appointed, a
warrant of attachment, execution or similar process is issued against any
substantial part of the property of the Seller, and (2) any event referred to in
clause (B)(1) above continues for 60 days unless dismissed, bonded or disclosed;
(C) the Seller shall at its request have a decree or an order for relief entered
with respect to it or commence a voluntary case under any applicable insolvency
law now or hereafter in effect, or shall consent to the entry of a decree or an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such applicable insolvency law, consent to
the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; (D) the making by the
Seller of any general assignment for the benefit of creditors; (E) the inability
or failure of the Seller generally to pay its debts as such debts become due; or
(F) the board of directors of the Seller authorizes action to approve any of the
foregoing; or

 

(v)               the occurrence of (A) an Event of Default set forth in Section
6.01 of the Credit Agreement or (B) the Final Maturity Date; or

 

(vi)                a notice of Lien shall have been filed by the Pension
Benefit Guaranty Corporation against the Seller under Section 430(k) of the Code
or Section 303(k) of ERISA for a failure to make a required installment or other
payment to a plan to which Section 430(k) of the Code or Section 303(k) of ERISA
applies unless there shall have been delivered to the Administrative Agent proof
of release of such Lien; or

 

(vii)               a federal tax notice of Lien, in an amount equal to or
greater than $100,000,000, shall have been filed against the Seller unless there
shall have been delivered to the Administrative Agent proof of release of such
Lien;

 

then, (A) in the case of any Seller Termination Event described in paragraph
(iv), (v)(A), (vi), (vii) or (viii) above, the obligation of the Purchaser to
Purchase Sale Portfolio from the Seller shall thereupon automatically terminate
without further notice of any kind, which is hereby waived by the Seller, (B) in
the case of any Seller Termination Event described in paragraph (v)(B) above,
the obligation of the Purchaser to Purchase Sale Portfolio from the Seller shall
thereupon terminate without notice of any kind, which is hereby waived by the
Seller unless both the Purchaser and the Seller agree in writing that such event
shall not trigger an Early Termination (as hereinafter defined) hereunder, and
(C) in the case of any other Seller Termination Event, so long as such Seller
Termination Event shall be continuing, the Purchaser or the Administrative Agent
may terminate its obligation to Purchase Sale Portfolio from the Seller by
written notice to the Seller (any termination pursuant to clause (A), (B) or (C)
of this paragraph is herein called an “Early Termination”); provided that, in
the event of any involuntary petition or proceeding as described in paragraphs
(iv)(A) and (iv)(B) above, the Purchaser shall not Purchase Sale Portfolio from
the Seller unless such involuntary petition or proceeding is dismissed, bonded
or discharged within 60 days of the filing of such petition or the commencement
of such proceeding.

 

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Section 8.2.               Remedies.

 

(a)               If a Seller Termination Event has occurred, the Purchaser (and
its assignees) shall have, in addition to all other rights and remedies under
this Agreement or otherwise all of the rights and remedies provided to a secured
creditor under the UCC of each applicable jurisdiction and other Applicable Law
in respect thereto, which rights shall be cumulative.

 

(b)               The Seller agrees that, upon the occurrence of a Seller
Termination Event under Section 8.1(a)(iv) or Section 8.1(a)(v)(A) the
Purchaser, the Collateral Agent or the Administrative Agent shall have the right
to:

 

(i)                require the Seller to, and the Seller hereby agrees that it
will at the Seller’s expense and upon request of the Purchaser, the Collateral
Agent or the Administrative Agent forthwith, assemble all or any part of any
Sale Portfolio as directed by the Purchaser, the Collateral Agent or the
Administrative Agent and make the same available at a place to be designated by
the Purchaser, the Collateral Agent or the Administrative Agent; and

 

(ii)              without notice except as specified below, sell any Sale
Portfolio or any part thereof in one or more parcels at a public or private
sale, at any of the Collateral Agent’s, the Purchaser’s or the Administrative
Agent’s offices or elsewhere, for cash, or credit or for future delivery, and
upon such other terms as the Purchaser, the Collateral Agent or the
Administrative Agent may deem commercially reasonable. The Seller agrees that,
to the extent notice of sale shall be required by law, at least ten (10) days’
notice to the Seller of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
The Purchaser, the Collateral Agent or the Administrative Agent shall not be
obligated to make any sale of any Sale Portfolio or any part thereof regardless
of notice of sale having been given. The Purchaser, the Collateral Agent or the
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.

 

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Section 8.3.               Survival of Certain Provisions. Notwithstanding any
provision contained herein to the contrary, the Seller’s and the Purchaser’s
representations, covenants and obligations set forth in Articles IV, V, VI, and
VII, as applicable, create and constitute the continuing obligation of the
parties hereto in accordance with its terms, and shall remain in full force and
effect until the Collection Date; provided that the rights and remedies with
respect to any breach of any representation and warranty made or deemed made by
the Seller pursuant to Articles III and IV and the provisions of Sections 6.1
and 6.2, the rights and obligations under Article VII, the indemnification
provisions of Article IX and the provisions of Sections 5.1, 10.2, 10.8, 10.9,
10.10, 10.12, 10.13, 10.14 and 10.17 shall be continuing and shall survive any
termination of this Agreement. For the avoidance of doubt, in the event that a
Seller Termination Event has occurred but has been waived unconditionally and in
its entirety in accordance with the terms hereof, such Seller Termination Event
shall be deemed to have not “occurred” and references to “after the occurrence
of a Seller Termination Event” shall be inapplicable for all purposes in this
Agreement or any of the Facility Documents, except to the extent otherwise
provided for in the relevant waiver; provided that any waiver which by its terms
becomes effective upon certain conditions precedent being met will not be
considered a conditional waiver solely due to the existence of such conditions
precedent if all such conditions precedent to effectiveness have been satisfied.

 

ARTICLE IX

Indemnification

 

Section 9.1.               Indemnification by the Seller.

 

(a)               Without limiting any other rights which the Purchaser, any
assignee of the Purchaser or any such Persons’ respective shareholders,
officers, employees, agents, or Affiliates (each an “Indemnified Party”) may
have hereunder or under Applicable Law, the Seller hereby agrees to indemnify
any Indemnified Party from and against any and all costs, expenses, losses,
damages, claims, and liabilities, including attorneys’ fees and disbursements
(all of the foregoing, being collectively referred to as, “Indemnified
Amounts”), awarded against or incurred by such Indemnified Party or other
non-monetary damages of any such Indemnified Party or any of them arising out of
or as a result of this Agreement excluding, however, (a) any such amounts
resulting solely from any gross negligence, bad faith or willful misconduct on
the part of the applicable Indemnified Party or (b) Collateral Loans that are
uncollectible due to the Obligor’s financial inability to pay. Without limiting
the foregoing, the Seller shall indemnify each Indemnified Party for Indemnified
Amounts relating to or resulting from any of the following (to the extent not
resulting from the conditions set forth in (a) or (b) above):

 

(i)                any Person’s use, ownership or operation of any underlying
assets securing a Collateral Loan to the extent that such use, ownership or
operation took place prior to the Purchase Date with respect to the related Sale
Portfolio;

 

(ii)               any action taken by the Seller, other than in accordance with
this Agreement, in respect of any portion of any Sale Portfolio, which results
in any claim, suit or action of any kind pertaining to such Sale Portfolio or
which reduces or impairs the rights of the Purchaser (or any assignee thereof)
with respect to any Collateral Loan or the value of any such Collateral Loan;

 

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(iii)                any taxes (other than taxes based upon the net or gross
income of an Indemnified Party and taxes that would constitute Excluded Amounts)
that may at any time be asserted against any Indemnified Party with respect to
the transactions contemplated in this Agreement, including, without limitation,
any sales, gross receipts, general corporation, tangible or intangible personal
property, privilege, stamp or license taxes and costs and expenses in defending
against the same, arising by reason of the acts to be performed by the Seller
under this Agreement and imposed against such Indemnified Party. Without
limiting the foregoing, in the event that the Purchaser, the Collateral Agent,
the Servicer, any Lender or the Administrative Agent receives actual notice of
any Transfer Taxes arising out of the Sale of any Sale Portfolio from the Seller
to the Purchaser under this Agreement, on written demand by such party, or upon
the Seller otherwise being given notice thereof, the Seller shall pay, and
otherwise indemnify and hold the Purchaser, the Collateral Agent, the Servicer,
each Lender and the Administrative Agent harmless, on an after-tax basis, from
and against any and all such Transfer Taxes (it being understood that the
Purchaser, the Collateral Agent, the Servicer, each Lender and the
Administrative Agent shall have no contractual obligation to pay such Transfer
Taxes);

 

(iv)               the failure by the Seller to pay when due any Taxes due by
the Seller for which the Seller is liable, including without limitation, sales,
excise or personal property taxes payable in connection with any Sale Portfolio;

 

(v)               the negligence, willful misconduct or bad faith of the Seller
in the performance of its duties under this Agreement or by reason of reckless
disregard of the Seller’s obligations and duties under this Agreement;

 

(vi)               any failure of the Seller to perform its duties or
obligations in accordance with the provisions of this Agreement or any of the
other Facility Documents to which it is a party or any failure by the Seller or
any Affiliate thereof to perform its respective duties under any Sale Portfolio;

 

(vii)              the failure of any Sale Portfolio to comply with all
requirements of Applicable Law as of its Purchase Date;

 

(viii)             the failure by the Seller to comply with all requirements of
Section 6.1 hereof;

 

(ix)               the failure by the Seller to comply with any term, provision
or covenant contained in this Agreement or any agreement executed in connection
with this Agreement, any Facility Document or with any Applicable Law;

 

(x)                 any representation or warranty made or deemed made by the
Seller, or any of its officers, under or in connection with this Agreement or
any other Facility Document, which shall have been false, incorrect or
misleading in any material respect when made or deemed made or delivered;

 

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(xi)                except in connection with a disposition permitted under the
Credit Agreement, the failure to vest and maintain vested in the Purchaser an
undivided ownership interest in any Sale Portfolio, together with all Interest
Proceeds and Principal Proceeds, free and clear of any Lien (other than
Permitted Liens) whether existing at the time of any Purchase or at any time
thereafter;

 

(xii)               the failure to file, or any delay in filing, financing
statements, continuation statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other Applicable Law with
respect to any Sale Portfolio, whether at the time of any Purchase or at any
subsequent time;

 

(xiii)               any dispute, claim, offset or defense (other than the
discharge in bankruptcy of the Obligor) of the Obligor to the payment with
respect to any Sale Portfolio (including, without limitation, a defense based on
such Sale Portfolio not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms);

 

(xiv)               any inability to obtain any judgment in, or utilize the
court or other adjudication system of, any state in which an Obligor may be
located as a result of the failure of the Seller to qualify to do business or
file any notice or business activity report or any similar report;

 

(xv)               any action taken by the Seller in the enforcement or
collection of any Sale Portfolio;

 

(xvi)               [reserved];

 

(xvii)              the commingling of Interest Proceeds and Principal Proceeds
on such Sale Portfolio at any time with other funds of the Seller;

 

(xviii)             any investigation, litigation or proceeding related to this
Agreement or the use of proceeds by the Seller or the security interest in such
Sale Portfolio granted hereunder;

 

(xix)                any failure by the Purchaser to give reasonably equivalent
value to the Seller in consideration for the transfer by the Seller to the
Purchaser of any item of any Sale Portfolio or any attempt by any Person to void
or otherwise avoid any such transfer under any statutory provision or common law
or equitable action, including, without limitation, any provision of the
Bankruptcy Code; or

 

(xx)               the failure of the Seller or any of its agents or
representatives to remit to the Purchaser Interest Proceeds and Principal
Proceeds on any Sale Portfolio remitted to the Seller or any such agent or
representative as provided in this Agreement.

 

(b)               Any amounts subject to the indemnification provisions of this
Section 9.1 shall be paid by the Seller to the Indemnified Party within five (5)
Business Days following such Person’s demand therefor.

 

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(c)               If for any reason the indemnification provided above in this
Section 9.1 is unavailable to the Indemnified Party or is insufficient to hold
an Indemnified Party harmless, then the Seller shall contribute to the amount
paid or payable by such Indemnified Party as a result of such loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by such Indemnified Party on the one hand and the
Seller, as the case may be, on the other hand but also the relative fault of
such Indemnified Party as well as any other relevant equitable considerations.

 

(d)               Indemnification under this Section 9.1 shall be in an amount
necessary to make the Indemnified Party whole after taking into account any tax
consequences to the Indemnified Party of the receipt of the indemnity provided
hereunder, including the effect of such tax or refund on the amount of tax
measured by net income or profits that is or was payable by the Indemnified
Party.

 

(e)               If the Seller has made any payments in respect of Indemnified
Amounts to an Indemnified Party pursuant to this Section 9. 1 and such
Indemnified Party thereafter collects any of such amounts from others, such
Indemnified Party will promptly repay such amounts collected to the Seller in an
amount equal to the amount it has collected from others in respect of such
Indemnified Amounts, without interest.

 

(f)                The obligations of the Seller under this Section 9.1 shall
survive the termination of this Agreement.

 

Section 9.2.               Assignment of Indemnities. The Seller acknowledges
that, pursuant to the Credit Agreement, the Purchaser shall assign its rights of
indemnity hereunder to the Collateral Agent, on behalf of the Secured Parties.
Upon such assignment, (a) the Collateral Agent, on behalf of the Secured
Parties, shall have all rights of the Purchaser hereunder and may in turn assign
such rights, and (b) the obligations of the Seller under this Section 9.2 shall
inure to the Collateral Agent, on behalf of the Secured Parties. The Seller
agrees that, upon such assignment, the Collateral Agent, on behalf of the
Secured Parties, may enforce directly, without joinder of the Purchaser, the
indemnities set forth in this Article IX.

 

ARTICLE X

MISCELLANEOUS

 

Section 10.1.           Liability of the Seller. The Seller shall be liable in
accordance herewith only to the extent of the obligations in this Agreement
specifically undertaken by the Seller and with respect to its representations
and warranties expressly set forth hereunder.

 

Section 10.2.           Limitation on Liability. Except with respect to any
claim arising solely out of the willful misconduct or gross negligence of a
Lender, the Collateral Agent, the Administrative Agent or any other Secured
Party, no claim may be made by the Seller or any other Person against any
Lender, the Collateral Agent, the Administrative Agent or any other Secured
Party or their respective Affiliates, directors, officers, employees, attorneys
or agents for any special, indirect, consequential or punitive damages in
respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement, or
any act, omission or event occurring in connection therewith; and the Seller
hereby waives, releases and agrees not to sue upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.

 

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Section 10.3.           Amendments; Limited Agency. Except as provided in this
Section 10.3, no amendment, waiver or other modification of any provision of
this Agreement shall be effective unless signed by the Purchaser and the Seller
and consented to in writing by the Administrative Agent and the Collateral
Agent. The Purchaser shall provide not less than ten (10) Business Days’ or such
lesser period as agreed to by the Administrative Agent prior written notice of
any such amendment to the Administrative Agent (who will provide each Lender
(except if such Lender is also the Administrative Agent) with a copy promptly
upon receipt thereof) and the Collateral Agent.

 

Section 10.4.           Waivers; Cumulative Remedies. No failure or delay on the
part of the Purchaser (or any assignee thereof) or the Seller, in exercising any
power, right or remedy under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or remedy
preclude any other or future exercise thereof or the exercise of any other
power, right or remedy. The powers, rights and remedies herein provided are
cumulative and not exhaustive of any powers, rights and remedies provided by
law. Any waiver of this Agreement shall be effective only in the specific
instance and for the specific purpose for which it is given.

 

Section 10.5.           Notices. All demands, notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication and communication by e-mail in portable document
format (.pdf)) and faxed, e-mailed or delivered, to each party hereto, at its
address set forth under its name below or at such other address as shall be
designated by such party in a written notice to the other parties hereto:

 

If to the Purchaser:

DLF Financing SPV LLC
1585 Broadway, 39th Floor
New York, NY 10036
Attention: Venu Rathi
Telephone: (212) 761-8972
Email: Venu.Rathi@morganstanley.com

 

If to the Seller:

Morgan Stanley Direct Lending Fund
1585 Broadway, 39th Floor
New York, NY 10036
Attention: Orit Mizrachi
Telephone: (212) 761-0380
Email: Orit.Mizrachi@morganstanley.com

 

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Notices and communications by facsimile and e-mail shall be effective when sent,
and notices and communications sent by other means shall be effective when
received.

 

Section 10.6.           Merger and Integration. Except as specifically stated
otherwise herein, this Agreement, the Credit Agreement and the other Facility
Documents set forth the entire understanding of the parties relating to the
subject matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement, the Credit Agreement and the Facility Documents.
This Agreement may not be modified, amended, restated, waived or supplemented
except as provided herein.

 

Section 10.7.           Severability of Provisions. If any one or more of the
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.

 

Section 10.8.           GOVERNING LAW; JURY WAIVER. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND ANY CLAIM,
CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR
OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
FACILITY DOCUMENT (EXCEPT, AS TO ANY OTHER FACILITY DOCUMENT, AS EXPRESSLY SET
FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

 

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
OTHER FACILITY DOCUMENT OR FOR ANY COUNTERCLAIM HEREIN OR THEREIN OR RELATING
HERETO OR THERETO.

 

Section 10.9.           Consent to Jurisdiction; Service of Process.

 

(a)               Each party hereto hereby irrevocably submits to the
non-exclusive jurisdiction of any New York State or federal court sitting in New
York City in any action or proceeding arising out of or relating to this
Agreement, and each party hereto hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in such New
York State court or, to the extent permitted by law, in such federal court. The
parties hereto hereby irrevocably waive, to the fullest extent they may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding. The parties hereto agree that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.

 

(b)               Each of the Seller and the Purchaser agrees that service of
process may be effected by mailing a copy thereof by registered or certified
mail, postage prepaid, to the Seller or the Purchaser, as applicable, at its
address specified in Section 10.5. Nothing in this Section 10.9 shall affect the
right of the Seller or the Purchaser to serve legal process in any other manner
permitted by law.

 

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Section 10.10.       Costs, Expenses and Taxes.

 

(a)               In addition to the rights of indemnification granted to the
Purchaser and its Affiliates and officers, directors, employees and agents
thereof under Section 9.1 hereof, the Seller agrees to pay on demand all
reasonable, invoiced out-of-pocket costs and expenses of the Purchaser or its
assignees incurred in connection with the preparation, execution, delivery,
enforcement, administration (including periodic auditing), renewal, amendment or
modification of, or any waiver or consent issued in connection with, this
Agreement and the other documents to be delivered hereunder or in connection
herewith, including, without limitation, the reasonable fees and out–of–pocket
expenses of counsel with respect thereto and with respect to advising the
Purchaser or its assignees as to its rights and remedies under this Agreement
and the other documents to be delivered hereunder or in connection herewith, and
all invoiced out-of-pocket costs and expenses, if any (including reasonable
counsel fees and expenses), incurred by the Purchaser or its assignees in
connection with the enforcement of this Agreement and the other documents to be
delivered hereunder or in connection herewith.

 

(b)               The Seller shall pay on demand any and all stamp, sales,
excise and other similar Taxes and fees payable or determined to be payable to
any Governmental Authority in connection with the execution, delivery, filing
and recording of this Agreement and the other documents to be delivered
hereunder.

 

(c)               The Seller shall pay on demand all other reasonable, invoiced
out-of-pocket costs and expenses incurred by the Purchaser or its assignees in
connection with the execution, delivery, filing and recording of this Agreement
and the other documents to be delivered hereunder, including, without
limitation, all costs and expenses incurred by the Purchaser or its assignees in
connection with periodic audits of the Seller’s books and records.

 

(d)               For the avoidance of doubt, costs and expenses to be paid
pursuant to this Section 10.10 shall exclude all allocable overhead costs and
expenses.

 

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Section 10.11.       Counterparts.For the purpose of facilitating the execution
of this Agreement and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute but
one and the same instrument. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile or e-mail in portable document format (.pdf)
shall be effective as delivery of a manually executed counterpart of this
Agreement. The words “execution,” “signed,” “signature,” and words of like
import in this Agreement shall be deemed to include electronic signatures or the
keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the use
of a paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

 

Section 10.12.       Bankruptcy Non-Petition and Limited Recourse; Claims. The
Seller hereby agrees that it will not institute against, or join any other
Person in instituting against, the Purchaser any bankruptcy, reorganization,
receivership, arrangement, insolvency, moratorium or liquidation proceeding or
other proceeding under federal or state bankruptcy or similar laws until at
least one year and one day (or, if longer, the applicable preference period then
in effect plus one day) after the payment in full of all outstanding Obligations
and the termination of all Individual Lender Maximum Funding Amounts. The Seller
hereby acknowledges that (i) the Purchaser has no assets other than all Sale
Portfolio Purchased hereunder, (ii) the Purchaser shall, immediately upon
Purchase hereunder, grant a security interest in the related Sale Portfolio to
the Collateral Agent, on behalf of the Secured Parties, pursuant to the Credit
Agreement, and (iii) Collections generated by all Sale Portfolio Purchased
hereunder will be applied to payment of the Purchaser’s obligations under the
Credit Agreement. In addition, the Seller shall have no recourse for any amounts
payable or any other obligations arising under this Agreement against any
officer, member, director, employee, partner, Affiliate or security holder of
the Purchaser or any of its successors or assigns.

 

The provisions of this Section 10.12 are a material inducement for the Purchaser
to enter into this Agreement and the transactions contemplated hereby and for
the Administrative Agent and the Secured Parties to enter into the Credit
Agreement and the transactions contemplated thereby and are an essential term
hereof. Each of the Purchaser (or its assignees) and the Administrative Agent
may seek and obtain specific performance of such provisions (including
injunctive relief), including, without limitation, in any bankruptcy,
reorganization, arrangement, winding-up, insolvency, moratorium or liquidation
proceedings, or other proceedings under United States federal or state
bankruptcy laws or any similar laws.

 

Section 10.13.       Binding Effect; Assignability.

 

(a)               This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.

 

(b)               Notwithstanding anything to the contrary contained herein,
this Agreement may not be assigned by the Purchaser or the Seller except as
permitted by this Section 10.13 or the Credit Agreement. Simultaneously with the
execution and delivery of this Agreement, the Purchaser will assign all of its
right, title and interest in this Agreement to the Collateral Agent, for the
benefit of the Secured Parties, to which assignment the Seller hereby expressly
consents. Upon assignment, the Seller agrees to perform its obligations
hereunder for the benefit of the Collateral Agent, for the benefit of the
Secured Parties, under the Credit Agreement. The Collateral Agent, in such
capacity, and the Administrative Agent shall each be a third party beneficiary
hereof. The Collateral Agent, for the benefit of the Secured Parties, under the
Credit Agreement upon such assignment may enforce the provisions of this
Agreement, exercise the rights of the Purchaser and enforce the obligations of
the Seller hereunder without joinder of the Purchaser.

 

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Section 10.14.       Waiver of Setoff.

 

(a)               The Seller’s obligations under this Agreement shall not be
affected by any right of setoff, counterclaim, recoupment, defense or other
right the Seller might have against the Purchaser, the Administrative Agent, the
Lenders, the Collateral Agent, the other Secured Parties or any assignee of such
Persons, all of which rights are hereby waived by the Seller.

 

(b)               The Purchaser shall have the right to set–off against the
Seller any amounts to which the Seller may be entitled hereunder and to apply
such amounts to any claims the Purchaser may have against the Seller from time
to time under this Agreement. Upon any such set–off, the Purchaser shall give
notice of the amount thereof and the reasons therefor to the Seller.

 

Section 10.15.       Headings and Exhibits. The headings herein are for purposes
of references only and shall not otherwise affect the meaning or interpretation
of any provision hereof. The schedules and exhibits attached hereto and referred
to herein shall constitute a part of this Agreement and are incorporated into
this Agreement for all purposes.

 

Section 10.16.       Rights of Inspection. The Purchaser and its representatives
and assigns may conduct at any reasonable time, with reasonable notice, and from
time to time, and the Seller will fully cooperate with, a reasonable number of
field examinations and audits of the Collateral Loans and the business affairs
of the Seller with respect thereto each calendar year. Each such inspection
shall be at the sole expense of the Seller; provided that, at the Seller’s
expense, (i) prior to the occurrence of a Seller Termination Event, the
Purchaser and the Administrative Agent shall be entitled to one (1) such audit
during each calendar year and, (ii) after the occurrence of a Seller Termination
Event, the Purchaser and the Administrative Agent shall be entitled to such
number of audits per annum and at such times as it shall require in its
reasonable discretion in accordance with the terms of the Credit Agreement;
provided that the Purchaser shall use commercially reasonable efforts to
coordinate audits under this Section 10.16 with any audits under Section 5.02(e)
of the Credit Agreement. The Purchaser and its representatives and successors
and assigns acknowledge that in exercising the rights and privileges conferred
in this Section 10.16, it or its representatives or assigns may, from time to
time, obtain knowledge of information, practices, books, correspondence and
records of a confidential nature and in which the Seller has a proprietary
interest. The Purchaser and its representatives and successors and assigns agree
that (i) they shall retain in strict confidence and shall use their best efforts
to ensure that their representatives retain in strict confidence and will not
disclose without the prior written consent of the Seller any or all of such
information, practices, books, correspondence and records furnished to them and
(ii) that they will not, and will use their best efforts to ensure that their
representatives and assigns will not, make any use whatsoever (other than for
the purposes contemplated by this Agreement) of any of such information,
practices, books, correspondence and records without the prior written consent
of the Seller, unless such information is generally available to the public or
is required by law to be disclosed.

 

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Section 10.17.       Subordination. After giving effect to any payment relating
to any indebtedness, obligation or claim the Seller may from time to time hold
or otherwise have against the Purchaser or any assets or properties of the
Purchaser, whether arising hereunder or otherwise existing, the Borrowing Base
at such time must exceed the Obligations owed by the Purchaser to the Secured
Parties under the Credit Agreement. The Seller hereby agrees that at any time
during which the condition set forth in the preceding sentence shall not be
satisfied, the Seller shall be subordinate in right of payment to the prior
payment of any indebtedness or obligation of the Purchaser owing to the Lenders,
the Collateral Agent, the Administrative Agent or any other Secured Party under
the Credit Agreement.

 

Section 10.18.       Breaches of Representations, Warranties and Covenants. For
the avoidance of doubt, no breach or default of any representation, warranty or
covenant contained in Sections 4.1, 4.2, 4.3, 5.1, 5.2 or 5.3 that does not
constitute a “Default” under the Credit Agreement, “Event of Default” under the
Credit Agreement or Seller Termination Event under this Agreement shall be
deemed to be a breach or default hereunder; provided that the foregoing shall
not affect the definition of “Seller Purchase Event”, Sections 2.1(n), 2.3(c),
3.2(a), 4.1(nn), 4.1(oo), 5.2(j), 6.2(b), 8.3, 9.1 and the schedules and
exhibits hereto.

 

Section 10.19.       Confidentiality. Each of the parties hereto hereby agrees
with the confidentiality provisions set forth in Section 13.09 of the Credit
Agreement.

 

Section 10.20.       Assignments of Collateral Loans.

 

(a)               Notwithstanding anything to the contrary herein, solely for
administrative convenience and solely in the case of Collateral Loans acquired
by the Seller from a third party, (i) the chain of endorsements required under
any Related Documents by the third party to the Seller and the Seller to the
Purchaser may be satisfied by a direct endorsement from the applicable third
party to the Purchaser or (ii) delivery of the transfer documents or instruments
may be satisfied by delivery of transfer documents or instruments evidencing the
assignment of such Collateral Loan by the applicable third party directly to the
Purchaser (and by the Purchaser either to the Collateral Agent or in blank).

 

(b)               Nothing in this Section 10.20 shall limit any requirement that
all Collateral Loans treated as or represented to be Eligible Collateral Loans
hereunder or in any Facility Document be purchased by the Purchaser from the
Seller pursuant to this Agreement (as evidenced by the assignments applicable to
this Agreement) or any representations or warranties with respect to Collateral
Loans so purchased or the liabilities or recourse of the Seller or Purchaser, as
applicable, pertaining to such sales.

 

[Signature pages to follow.]

 

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

 

DLF Financing SPV LLC,as the Purchaser       By: /s/ Venugopal Rathi     Name:  
Venugopal Rathi     Title: Chief Financial Officer

 

MSIM

Purchase and Sale Agreement

 

 

 

MORGAN STANLEY DIRECT LENDING FUND, as the Seller       By: /s/ Orit Mizrachi  
  Name:  Orit Mizrachi     Title: Chief Operating Officer

 

MSIM

Purchase and Sale Agreement