Exhibit 10.2

Execution Version

CREDIT AGREEMENT

By and Between

NCOP CAPITAL IV, LLC

as Borrower

and

CVI GVF FINCO, LLC

as Lender

Dated as of August 31, 2007

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Execution Version

CREDIT AGREEMENT

This Credit Agreement (this “Agreement”) is made as of August 31, 2007, by and
between NCOP CAPITAL IV, LLC, a Nevada limited liability company (the
“Borrower”) and CVI GVF FINCO, LLC, a Delaware limited liability company (the
“Lender”).

Recitals

WHEREAS, the Borrower may from time to time wish to purchase a pool or pools of
assets, which assets include consumer finance receivables.

WHEREAS, the Borrower has requested that the Lender consider making loans to the
Borrower from time to time to finance a portion of the purchase price to be paid
by the Borrower for such pools of accounts.

WHEREAS, the Lender has agreed to consider making such financing available to
the Borrower pursuant to the terms and subject to the conditions set forth in
this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the Lender and the Borrower hereby agree as
follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:

(a) the terms defined in the preamble hereto have the meanings therein assigned
to them;

(b) the terms defined in this Article have the meanings assigned to them in this
Article, and include the plural as well as the singular;

(c) all accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with GAAP; and

(d) all accounting terms, unless otherwise specified, shall be deemed to refer
to Persons and their subsidiaries on a consolidated basis in accordance with
GAAP.

“Accepted Borrowing Request” shall have the meaning set forth in Section 2.1(b).

“Account” means an obligation of an Obligor to pay money, whether under a
consumer finance receivable, open account balance, installment sales or payment
agreement, deferred payment contract or any other arrangement whatsoever, or a
check, as set forth and described in a Purchase Agreement, and all unpaid
balances due from the Obligors with respect to such obligations, together with
all documents evidencing such Obligors’ agreement to make payment of such unpaid
balances, including without limitation each agreement, and each promissory note,
loan agreement, receivable, chattel paper, check, instrument, payment agreement,
contract,

 

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installment sales agreement or other obligation or promise to pay of an Obligor,
all as described and referred to in a Purchase Agreement.

“Adequate Security” means security acceptable to the Lender in the exercise of
its reasonable discretion in light of all circumstances in connection with the
tender of such security, whether in the nature of payment, documentation,
indemnity or a combination thereof.

“Affiliate Subordinated Loan” shall have the meaning set forth in Section 2.9.

“Affiliated Party” means a Person which is controlling or controlled by, or
under common control with, or common ownership of, the Borrower, the Servicer or
the Parent or any member or equity holder of the Borrower, the Servicer or the
Parent which holds fifty percent (50%) or more of the membership or other equity
interests in the Borrower, the Servicer or the Parent; provided, however, an
Excluded Party shall not be deemed an “Affiliated Party”.

“Affiliated Party Asset Pool” shall mean an Asset Pool financed under (and as
defined in) an Affiliated Party Credit Agreement.

“Affiliated Party Credit Agreements” shall mean, collectively, any and all
credit agreements entered into by and between the Lender and an Affiliated Party
from time to time.

“Agreement” means this Credit Agreement and all exhibits, amendments and
supplements hereto.

“Asset” shall mean, with respect to an Asset Pool, each Account and any property
or other right obtained by the Borrower in connection with collection of any
such Account or in substitution therefor, all of which constituting a part of
the Asset Pool into which such Account was initially delivered.

“Asset Pool” shall mean all Accounts and other Assets described in a Borrowing
Request or an Accepted Borrowing Request, as the context may require, together
with (a) each and every Asset obtained in replacement or satisfaction of or
substitution for, any such Account so purchased, (b) each and every item of
property obtained by the Borrower as a result of its collection activities with
respect to any such Account, (c) each and every item of collateral or security,
including all security interests, liens, guarantees and other interests securing
payment of any Account, and all other rights and interests of the Borrower with
respect to each Account, (d) each judgment rendered against an Obligor in
respect of an Account, together with all lien rights related thereto, (e) Asset
Pool Proceeds derived from or paid or payable with respect thereto, together
with any and all earnings thereon and (f) each and every other right, claim and
interest associated therewith.

“Asset Pool Equity Contribution” shall mean, with respect to each Asset Pool (or
the applicable portion of an Asset Pool in connection with a Forward Flow
Purchase Agreement), that portion of the Total Cost of an Asset Pool (or the
applicable portion of an Asset Pool in connection with a Forward Flow Purchase
Agreement) not funded with the proceeds of a Loan, which, unless otherwise
approved by the Lender in an Approved Borrowing Request, shall be thirty percent
(30%) of such Total Cost.

 

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“Asset Pool Proceeds” shall mean, with respect to an Asset Pool, any and all
payments, revenues, income, receipts, collections, recoveries and other proceeds
or assets received with respect to such Asset Pool, including (without
limitation) (a) payments of principal, interest, fees, late charges,
insufficient funds charges, guaranty payments and any interest thereon, credit
insurance payments and other cash receipts on account of any Asset in such Asset
Pool, (b) payments of interest and principal paid to the Borrower in connection
with an Affiliate Subordinated Loan pursuant to an Affiliated Party Credit
Agreement, (c) interest on the Collateral Account or any other account created
in connection herewith, (d) legal fees, credit insurance costs, guaranty fees
and other amounts recovered on account of any Asset in such Asset Pool, to the
extent the obligation giving rise thereto has previously been paid or is
otherwise not due and payable with any such receipts, (e) settlements,
compromises, liquidations, foreclosure proceeds, dispositions, sales, transfers
or other proceeds, whether cash or otherwise, received as a result of or in any
way in connection with collection activities related to any Asset or in
connection with the sale, transfer or disposition of any Asset constituting a
part of such Asset Pool and (f) payments, fees, rebates, refunds, commissions,
kickbacks, rakeoffs, discounts, deductions, whether cash or otherwise, received
by Borrower, or any Affiliated Party, as a result of or in any way in connection
with collection activities related to any Asset or in connection with the sale,
disposition or transfer of any Asset constituting a part of such Asset Pool.

“Asset Pool Seller” shall mean, with respect to an Asset Pool, the party
described in a Borrowing Request which has agreed to sell a specified Asset Pool
to the Borrower pursuant to the terms and conditions of a Purchase Agreement;
provided, that, in connection with an assignment of a Purchase Agreement to the
Borrower from the Parent or a Purchase Affiliate, as applicable, in connection
with Section 2.1(g) hereof, the Asset Pool Seller shall be deemed to be the
Person (who shall not be an Affiliated Party) initially selling such Asset Pool
to the Parent or Purchase Affiliate, as applicable.

“Asset Pool Shortfall Amount” shall have the meaning set forth in Section 2.9.

“Borrower” shall have the meaning specified in the preamble.

“Borrowing Date” shall have the meaning specified in Section 2.1(d).

“Borrowing Request” shall have the meaning set forth in Section 2.1(a).

“Business Day” shall mean any day other than (a) a Saturday or Sunday and (b) a
day on which banking institutions in the States of Minnesota, Nevada and
Pennsylvania are authorized or obligated by law, executive order or governmental
decree to be closed.

“CarVal” shall mean CarVal Investors, LLC, a Delaware limited liability company.

“CarVal Affiliate” shall mean any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with CarVal. For
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlling,” “controlled by,” and “under common control with”), as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise.

 

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“Change of Control” shall mean:

(a) any event, circumstance or occurrence that results in (i) the Parent holding
and owning, directly or indirectly, less than one hundred percent (100%) of the
issued and outstanding equity interests in the Borrower, free and clear of all
liens, security interests and other encumbrances; or (ii) NCO Group, Inc.
holding and owning, directly or indirectly, less than fifty percent (50%) of the
issued and outstanding equity interests in either the Parent or the Servicer;

(b) the filing of a petition under the United States Bankruptcy Code naming the
Borrower, the Manager or the Parent as debtor; or

(c) Michael J. Barrist shall no longer be President and Chief Executive Officer
of the Parent.

“Collateral Account” shall have the meaning set forth in Section 2.8.

“Collateral Account Agreement” shall mean the Collateral Account Agreement by
and among the Borrower, the Servicer, the Lender and the Collateral Agent as to
the deposit of Asset Pool Proceeds to one or more Collateral Accounts.

“Collateral Agent” shall initially mean Wachovia Bank, N.A. and if thereafter
replaced, shall mean any replacement or permitted successor or assignee thereof
pursuant to the Collateral Account Agreement.

“Collection Period” shall mean, with respect to an Asset Pool, a period
commencing on the initial Borrowing Date for such Asset Pool and continuing
through and including Sunday of that week and thereafter each period commencing
on Monday of each week and continuing through the following Sunday (unless
otherwise agreed to in writing by the Lender and the Borrower) until all Assets
constituting a part of such Asset Pool have been collected, sold, abandoned or
otherwise disposed of to the satisfaction of the Borrower and the Lender.

“Contingent Payment” shall mean, with respect to each Asset Pool, a payment in
an amount equal to the amount determined by multiplying the Contingent Payment
Percentage and the amount of all remaining Asset Pool Proceeds generated from
Assets in such Asset Pool after the payments contemplated in Section 2.8(a)
through (i) have been made with respect to such Asset Pool.

“Contingent Payment Percentage” shall mean, with respect to each Asset Pool
twenty-eight percent (28%), or such other amount as may be set forth in the
applicable Accepted Borrowing Request.

“Default” shall mean an event that, with giving of notice or passage of the
grace period (if any) or both, would constitute an Event of Default.

“Default Rate” shall have the meaning set forth in Section 2.4(b).

“Distressed Loan” shall have the meaning set forth in Section 2.3.

 

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“Distribution Date” shall mean, with respect to an Asset Pool, Wednesday of each
week (unless otherwise agreed in writing by the Lender and the Borrower)
commencing on the first such specified day following a Borrowing Date and
continuing thereafter until all Assets constituting a part of such Asset Pool
have been collected, sold, abandoned or otherwise disposed of to the
satisfaction of the Borrower and the Lender; provided, however, that if on the
last day of any Collection Period Asset Pool Proceeds then on deposit in the
Collateral Account are less than $20,000 the Wednesday following such Collection
Period shall not constitute a Distribution Date hereunder unless such Wednesday
is the last Wednesday of the month, in which event such Wednesday shall
constitute a Distribution Date hereunder regardless of the amount of Asset Pool
Proceeds then on deposit in the Collateral Account.

“Distribution Report” shall have the meaning set forth in Section 2.7.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

“Event of Default” shall have the meaning specified in Section 8.1.

“Excluded Party” means (a) Inovision-Medclr-NCOP-F, L.L.C.;
(b) Inovision-Medclr-NCOP-NF, LLC; (c) Inovision-Medclr-NCOP Ventures, LLC;
(d) Inovision-Medclr Portfolio Group, LLC.; (e) NCOP/Marlin, Inc.; (f) any other
joint venture by NCO Group, Inc. and Marlin, Inc.; (g) NCO Capital, Inc.; and
(h) NCOP Capital I, LLC; (i) any other affiliate of NCO Group, Inc. to which
CFSC Capital Corp. XXXIV has provided financing.

“Exclusivity Agreement” means that certain Second Amended and Restated
Exclusivity Agreement dated as of August 31, 2007 among CarVal Investors, LLC, a
Delaware limited liability company, CVI GVF Finco, LLC, a Delaware limited
liability company, NCOP Lakes, Inc., a Nevada corporation, NCO Financial
Systems, Inc., a Delaware corporation, NCO Portfolio Management, Inc., a
Delaware corporation, NCO Group, Inc., a Pennsylvania corporation, NCOP Capital,
Inc., a Nevada corporation, NCOP Capital I, LLC, a Nevada limited liability
company, NCOP/CF, LLC, a Nevada limited liability company, NCOP/CF II, LLC, a
Nevada limited liability company, NCOP Capital III, LLC, a Nevada limited
liability company, and NCOP Capital IV, LLC, a Nevada limited liability company,
as such agreement is further amended or supplemented from time to time.

“Facility Termination Date” shall mean (i) the date upon which the Borrower has
completed full performance of the Obligations, or (ii) after the occurrence of
an Event of Default, the date so declared by the Lender after the Lender has
fully exercised all of its rights and remedies hereunder.

“Floating Rate” shall mean, with respect to a Loan, an annual rate of interest
equal to LIBOR plus two and one-half percent (2.5%), as adjusted on the first
day of each interest period.

“Forward Flow Purchase Agreement” shall have the meaning specified in
Section 2.1(c).

“Funding Termination Date” shall mean (i) the earlier of (a) June 30, 2009, or
(b) the date the Lender demands payment of the Obligations pursuant to
Section 8.2, or (ii) the date upon which the Lender delivers a written
declaration to the Borrower that it will no longer consider

 

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Borrowing Requests as a result of a Change of Control, or (iii) the date upon
which the Lender delivers a written declaration to the Borrower that it will no
longer consider Borrowing Requests pursuant to Section 8.2.

“GAAP” shall mean generally accepted accounting principles.

“Indemnitees” shall have the meaning specified in Section 9.6.

“Lender” shall have the meaning specified in the preamble.

“Lender Deposit Account” shall have the meaning specified in Section 2.11.

“LIBOR” shall mean, with respect to any interest period, an annual rate equal to
the rate set forth in the Wall Street Journal under the heading Money Rates and
described as the “London Interbank Offer Rate” for one month (or three months,
at the sole discretion of the Borrower); provided that, in the event no such
rate is shown, LIBOR shall be the rate per annum (rounded upwards, if necessary,
to the nearest 1/16th of one percent) based on the rates at which Dollar
deposits for one month (or three months, at the sole discretion of the Borrower)
are displayed on the Bloomberg Screen as of 11:00 a.m. London time on the date
of rate determination (it being understood that if at least two such rates
appear on such page, the rate will be the arithmetic mean of such displayed
rates); provided further that, in the event fewer than two such rates are
displayed, or if no such rate is relevant, LIBOR shall be the rate per annum
equal to the average of the rates at which deposits in Dollars are offered at
approximately 11:00 a.m. London time on the date of rate determination to prime
banks in the London interbank market for a one-month period (or three-month
period, at the sole discretion of the Borrower).

“LLC Agreement” shall mean the Limited Liability Company Agreement of the
Borrower, dated as of August 31, 2007, between the Manager and the Lender, as
amended from time to time.

“Loan” shall mean, with respect to an Asset Pool, the loan made by the Lender to
the Borrower pursuant to Section 2.1.

“Loan Collateral” shall have the meaning set forth in Section 3.1.

“Loan Costs” shall mean those out-of-pocket payments, costs and expenses paid or
incurred by the Lender pursuant to Section 9.5.

“Loan Documents” shall mean this Agreement, the Security Agreement, the
Collateral Account Agreement, the Servicing Agreement, the Exclusivity
Agreement, and, as and when issued, each Note and any other instrument, document
or agreement entered into by the Borrower or the Servicer for the benefit of the
Lender to evidence or secure any Loan, in each case as amended, supplemented or
modified with the consent of the Lender from time to time.

“Loan Maturity Date” shall mean, with respect to a Loan, (i) the final maturity
date specified in the Note evidencing the Borrower’s obligation to repay such
Loan, which shall be twenty-four (24) months after the initial funding date of
such Loan or, (ii) in the event of a Loan related to a Forward Flow Purchase
Agreement, the final maturity date specified in the Note

 

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evidencing the Borrower’s obligation to repay such Loan, which shall be the sum
of (a) twenty-four (24) months after the initial funding date of such Loan and
(b) one-half of the commitment period under such Forward Flow Purchase
Agreement, in no event, however, to exceed thirty (30) months.

“Manager” shall mean NCOP Nevada Holdings, Inc., the member of the Borrower
acting as manager pursuant to the terms and conditions of the limited liability
company agreement of the Borrower.

“Note” shall mean, with respect to an Asset Pool, the promissory note of the
Borrower payable to the order of the Lender, as described in Section 2.2,
evidencing a Loan made by the Lender with respect to such Asset Pool pursuant to
Section 2.1, including all replacements, extensions, restatements and
substitutions therefor.

“Obligations” shall mean (i) all advances made under this Agreement, whether or
not evidenced by a Note, (ii) all indebtedness evidenced by each Note, including
interest thereon and any extensions, renewals or replacements thereof, (iii) any
Contingent Payments and (iv) each and every other debt, liability and obligation
of every type and description which the Borrower may now or at any time
hereafter owe to the Lender pursuant to this Agreement or any other Loan
Document, whether such debt, liability or obligation now exists or is hereafter
created or incurred and whether it is or may be direct or indirect, due or to
become due, absolute or contingent, primary or secondary, liquidated or
unliquidated, or sole, joint, several or joint and several.

“Obligor” shall mean the customer, obligor, maker, borrower or other party
primarily obligated to pay an Account.

“Parent” shall mean NCO Group, Inc., a Delaware corporation.

“Permitted Lien” shall mean

(a) a lien for a tax, assessment or other governmental charge not yet due and
payable, or which is being contested in good faith by appropriate proceedings,
which, during the pendency thereof prevents (a) the collection of, or
realization on the lien, tax, assessment or other governmental charge so
contested, (b) the sale, forfeiture or loss of any Asset or any part thereof,
and (c) any interference with the collection or use of any Asset or any portion
thereof, and for which the Borrower has made adequate reserves therefor in
accordance with GAAP, and has given the Lender such security therefor as may be
demanded by the Lender;

(b) a lien for which the Borrower, within ten (10) days of its attachment, has
provided evidence reasonably satisfactory to the Lender that the same shall have
been satisfied and terminated; and

(c) a lien for the benefit of the Lender.

 

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“Person” shall mean any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

“Plan” shall mean an employee benefit plan or other plan maintained for
employees and covered by Title IV of ERISA.

“Projected Accrual Schedule” shall have the meaning set forth in Section 2.1(a).

“Purchase Affiliate” shall mean any Person other than the Parent, Borrower or
Servicer, directly or indirectly controlling or controlled by or under direct or
indirect common control with the Parent.

“Purchase Agreement” shall mean the asset or account purchase and sale agreement
by and between the Borrower and an Asset Pool Seller pursuant to which such
Asset Pool Seller agrees to sell a specified Asset Pool to the Borrower for a
specified purchase price; provided, that, in connection with an assignment to
the Borrower of a Purchase Agreement from the Parent or a Purchase Affiliate, as
applicable, in connection with Section 2.1(g) hereof, the Purchase Agreement
shall be deemed to be the asset or account purchase and sale agreement by and
between the Parent or Purchase Affiliate, as applicable, and the seller named
therein, as the same shall have been assigned to the Borrower in accordance with
Section 2.1(g) and the Exclusivity Agreement.

“Purchase Expenses” shall mean, with respect to an Asset Pool (or the applicable
portion of an Asset Pool in connection with a Forward Flow Purchase Agreement),
the lesser of (a) the maximum estimated expenses to be incurred in connection
with the purchase of an Asset Pool (or the applicable portion of an Asset Pool
in connection with a Forward Flow Purchase Agreement), as set forth in the
related Borrowing Request, or (b) the sum of (i) any brokers’ fees incurred in
connection with acquisition of an Asset Pool (or the applicable portion of an
Asset Pool in connection with a Forward Flow Purchase Agreement), not to exceed
one percent (1%) of the proposed purchase price for such Asset Pool (or the
applicable portion of an Asset Pool in connection with a Forward Flow Purchase
Agreement) and (ii) the out-of-pocket legal costs and expenses incurred by the
Borrower and the Lender in connection with the negotiation, preparation and
consummation of the related Purchase Agreement, the closing of the purchase by
the Borrower of such Asset Pool (or the applicable portion of an Asset Pool in
connection with a Forward Flow Purchase Agreement) and the making of the Loan or
Loans secured by such Asset Pool (or the applicable portion of an Asset Pool in
connection with a Forward Flow Purchase Agreement) and (iii) out-of-pocket costs
and expenses incurred by the Borrower in connection with its due diligence
investigation of the Asset Pool (or the applicable portion of an Asset Pool in
connection with a Forward Flow Purchase Agreement), but only to the extent such
costs and expenses have been included in a due diligence budget submitted to and
approved by the Lender in advance.

“Response Period” shall have the meaning specified in Section 2.1(a).

 

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“Security Agreement” shall mean the Security Agreement from the Borrower to the
Lender pursuant to which the Borrower grants to the Lender a security interest
in, among other things, all Loan Collateral to secure payment of the
Obligations.

“Servicer” shall initially mean NCO Financial Systems, Inc., a Pennsylvania
corporation, and, if thereafter replaced, shall mean any replacement or
permitted successor or assign thereof pursuant to the terms and conditions of
the Servicing Agreement.

“Servicing Agreement” shall have the meaning set forth in Section 3.3.

“Servicer Default” shall mean an “Event of Default” as defined in the Servicing
Agreement.

“Servicing Fee” shall mean, with respect to an Asset Pool, the fee calculated in
accordance with the Servicing Agreement, unless otherwise agreed by the Lender,
the Servicer and the Borrower in an Accepted Borrowing Request.

“Total Cost” shall mean, with respect to an Asset Pool (or the applicable
portion of an Asset Pool in connection with a Forward Flow Purchase Agreement),
an amount equal to the price actually paid by the Borrower to purchase such
Asset Pool (or the applicable portion of an Asset Pool in connection with a
Forward Flow Purchase Agreement) pursuant to the related Purchase Agreement (or
related Forward Flow Purchase Agreement) (which in no event shall be greater
than the purchase price (and closing adjustments) with respect thereto approved
by the Lender in the Accepted Borrowing Request for such Asset Pool).

“UCC” means the Uniform Commercial Code as in effect from time to time in
Minnesota or in any state whose laws are held to govern the creation, perfection
or foreclosure of any security interest granted pursuant to the Security
Agreement.

ARTICLE II

LOAN FACILITIES

Section 2.1 Loans to Purchase Asset Pools.

(a) Requests for Borrowing. From time to time during the period from the date
hereof to and including the Funding Termination Date, the Borrower may present
to the Lender written information describing a particular Asset Pool (i) with
respect to which the Borrower intends to submit an offer to purchase and
(ii) requesting that the Lender make a Loan to the Borrower to finance up to
seventy percent (70%) of the Total Cost of such Asset Pool; provided, however,
that the Lender may, in its sole and absolute discretion, agree to increase such
percentage on a transaction-by-transaction basis. Each such request for a Loan
hereunder shall be in substantially the form of Exhibit A hereto (each a
“Borrowing Request”), and shall be accompanied by the relevant bid package
(including, if available, the proposed Purchase Agreement (or Forward Flow
Purchase Agreement, if applicable and available) to be entered into if the
Borrower is the successful bidder for such Asset Pool (or in the case of a
Purchase Agreement assigned by the Parent or a Purchase Affiliate, as
applicable, in connection with Section 2.1(g), the Purchase Agreement so
assigned), all relevant information known to the Borrower

 

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regarding the Accounts comprising such Asset Pool, the proposed Servicing Fee
for collection of such Accounts, projections of the Borrower’s anticipated
recoveries, cash flows and net returns to be obtained upon collection of such
Accounts, a projection of the combined interest and Contingent Payments to be
paid to the Lender over the expected term of such Asset Pool as contemplated in
Treasury Regulation § 1.1275-4(b), which projection shall constitute the accrual
for federal income tax purposes, of the Borrower’s interest deductions and the
Lender’s interest income with respect to such Asset Pool (the “Projected Accrual
Schedule”) and such other information as the Lender may reasonably request. The
Lender shall accept or reject a Borrowing Request within five (5) Business Days
(the “Response Period”), after receipt thereof from the Borrower. The Lender’s
failure to accept a Borrowing Request within the Response Period shall be deemed
a rejection of the Borrowing Request by the Lender. Notwithstanding anything in
the foregoing to the contrary, the Lender’s decision to accept or reject a
Borrowing Request shall be in the Lender’s sole and absolute discretion and the
Lender may decline any Borrowing Request for any reason (or no reason), without
notification, justification or explanation, and without regard to whether or not
the Lender has given any prior indication of interest or oral approval with
respect to the specified Asset Pool.

(b) Acceptance of Borrowing Request. Any acceptance of a Borrowing Request shall
be evidenced by the Lender’s execution and return to the Borrower of such
Borrowing Request, and shall be subject to all terms and conditions of this
Agreement and in the Borrowing Request so accepted (each an “Accepted Borrowing
Request”). An Accepted Borrowing Request delivered to the Borrower by the Lender
shall constitute the Lender’s commitment, subject to satisfaction of all
applicable terms and conditions of this Agreement, to make a Loan to the
Borrower to fund up to seventy percent (70%) of the Total Cost of the Asset
Pool, as set forth in such Accepted Borrowing Request; provided, however, that
the Lender may, in its sole and absolute discretion, agree to increase such
percentage on a transaction-by-transaction basis and, provided further, that the
Lender’s commitment to make a Loan to the Borrower to finance the purchase of an
Asset Pool shall not constitute a revolving commitment and the Borrower shall
have no right to reborrow any amounts repaid to the Lender pursuant to an
Accepted Borrowing Request. An Accepted Borrowing Request shall expire and shall
have no further force or effect if (i) the Borrower is not the successful bidder
for the specified Asset Pool at a purchase price which is not in excess of the
anticipated purchase price described in such Borrowing Request, (ii) the
Borrower does not consummate its purchase of such Asset Pool pursuant to the
terms and conditions of the related Purchase Agreement and as contemplated in
the related Accepted Borrowing Request within thirty (30) calendar days
following issuance of the Accepted Borrowing Request by the Lender (unless
(A) such period of time is extended in writing by the Lender or (B) the Asset
Pool Seller has unilaterally extended the closing date for purchase of an Asset
Pool and the Borrower is unable to contest any such extension) or (iii) a
Default or Event of Default shall occur and shall be continuing under this
Agreement.

(c) Additional Provisions Relating to Accounts and other Assets Purchased under
Forward Flow Purchase Agreements. The Borrower and the Lender contemplate that
certain of the Purchase Agreements will provide for the purchase by the Borrower
from an Asset Pool Seller of Accounts and other Assets on a periodic basis for a
specified

 

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period of time (for example, the monthly purchase of Accounts and other Assets
during a specified period of time) (each such Purchase Agreement is herein
called a “Forward Flow Purchase Agreement”). All Accounts and other Assets
purchased by the Borrower during a period of twelve (12) months (or such shorter
period as the Lender shall agree to in writing) under a Forward Flow Purchase
Agreement shall constitute a single Asset Pool for all purposes of this
Agreement and the other Loan Documents. The Loan made by the Lender with respect
to an Asset Pool purchased by the Borrower under a Forward Flow Purchase
Agreement shall be made in multiple advances, with each such advance of the Loan
occurring on the date that the Borrower makes one of the periodic purchases of
the Accounts and other Assets under such Forward Flow Purchase Agreement;
provided, that, advances shall be made no more often than once per month for any
Asset Pool. In addition to the items required by Section 2.1(a), a Borrowing
Request related to a Forward Flow Purchase Agreement shall contain the
Borrower’s good faith estimate of the total amount of all Accounts and other
Assets to be purchased under the Forward Flow Purchase Agreement for a period
not to exceed twelve (12) months (or such shorter period as the Lender shall
agree to in writing) (regardless of the duration of the purchasing period under
the Forward Flow Purchase Agreement) and the Borrower’s good faith estimate of
the Total Cost of all Accounts and other Assets to be purchased under the
Forward Flow Purchase Agreement for a period not to exceed twelve (12) months
(or such shorter period as the Lender shall agree to in writing) (regardless of
the duration of the purchasing period under the Forward Flow Purchase
Agreement). The Lender shall accept or reject a Borrowing Request related to a
period of twelve (12) months (or such shorter period as the Lender shall agree
to in writing) under a Forward Flow Purchase Agreement in accordance with the
provisions of Section 2.1(a) and (b); provided, however, an Accepted Borrowing
Request related to a Forward Flow Purchase Agreement shall only constitute the
Lender’s commitment to make a Loan to fund up to seventy percent (70%) of the
Total Cost of the Asset Pool being purchased under such Forward Flow Purchase
Agreement (provided, however, that the Lender may, in its sole and absolute
discretion, agree to increase such percentages on a transaction-by-transaction
basis), in either case for such period of twelve (12) months (or such shorter
period as the Lender shall agree to in writing) as estimated by the Borrower in
the Accepted Borrowing Request related to such Forward Flow Purchase Agreement.
In the event that the Borrower determines that the actual Total Cost of the
Asset Pool being purchased under a Forward Flow Purchase Agreement during such
period of twelve (12) months (or such shorter period as the Lender shall agree
to in writing) will exceed the estimated Total Cost of the Asset Pool as
specified in the Accepted Borrowing Request or if the Borrower wishes the Lender
to continue financing its purchase of Accounts and other Assets after the
expiration of the currently approved period of twelve (12) months (or such
shorter period as the Lender shall agree to in writing), the Borrower shall
submit to the Lender a supplemental Borrowing Request, and the Lender may accept
or reject such supplemental Borrowing Request in accordance with the provisions
of Sections 2.1(a) and (b). Upon the Lender’s rejection of such supplemental
Borrowing Request, the Lender shall have no obligation to provide any funding to
the Borrower in excess of that agreed to in any Accepted Borrowing Request in
connection with the applicable Forward Flow Purchase Agreement and the Borrower
shall be permitted to seek financing from a third party in connection with the
amount of accounts and assets to be purchased under

 

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such Forward Flow Purchase Agreement which exceed that set forth in any Accepted
Borrowing Request in connection therewith and such excess shall not be
considered an Asset or Asset Pool subject to this Agreement.

(d) General Funding Procedures. The Borrower shall provide the Lender with not
less than three (3) Business Days prior written notice of the scheduled closing
date for purchase of an Asset Pool described in an Accepted Borrowing Request
and shall request funding of the related Loan on such date (each a “Borrowing
Date”). On the Business Day immediately preceding a Borrowing Date, the Borrower
shall transfer to the Lender the Borrower’s Asset Pool Equity Contribution for
the related Asset Pool, net of all Purchase Expenses paid or incurred by the
Borrower. Upon receipt by the Lender of such funds from the Borrower and upon
satisfaction of all applicable conditions set forth in Article IV and elsewhere
in this Agreement, the Lender shall make the Loan to the Borrower as specified
in the related Accepted Borrowing Request by transferring the amount of the
Loan, together with that portion of the Borrower’s Asset Pool Equity
Contribution received by the Lender, to the Asset Pool Seller (or in whole or in
part to the Parent or a Purchase Affiliate, as applicable, in connection with an
assignment under Section 2.1(g), but only as specified in an Accepted Borrowing
Request) in purchase of the related Asset Pool on (or immediately prior to) the
closing date for purchase of such Asset Pool.

(e) Special Funding Procedures in connection with Forward Flow Purchase
Agreements. In connection with a periodic purchase of a portion of an Asset Pool
under a Forward Flow Purchase Agreement, the Borrower shall provide the Lender
with not less than three (3) Business Days prior written notice of the Borrowing
Date for the purchase of such portion of an Asset Pool under such Forward Flow
Purchase Agreement, the Total Cost of such portion of the Asset Pool to be
purchased on the Borrowing Date and the amount of the advance of the Loan which
the Borrower requests the Lender to fund on the Borrowing Date in connection
with such portion of the Asset Pool to be purchased on the Borrowing Date. On
the Business Day immediately preceding a Borrowing Date for the purchase of a
portion of an Asset Pool under a Forward Flow Purchase Agreement, the Borrower
shall transfer to the Lender the Borrower’s Asset Pool Equity Contribution for
such portion of the Asset Pool to be purchased on such Borrowing Date net of all
Purchase Expenses paid or incurred by the Borrower with respect to such portion
of the Asset Pool to be purchased on such Borrowing Date. Upon receipt by the
Lender of such funds from the Borrower and upon satisfaction of all applicable
conditions set forth in Article IV and elsewhere in this Agreement, the Lender
shall make the applicable advance of the Loan to the Borrower by transferring
the amount of such advance of the Loan, together with that portion of the
Borrower’s Asset Pool Equity contribution received by the Lender, to the Asset
Pool Seller (or in whole or in part to the Parent or a Purchase Affiliate, as
applicable, in connection with an assignment under Section 2.1(g), but only as
specified in an Accepted Borrowing Request) in purchase of that portion of the
related Asset Pool on (or immediately prior to) the closing date for the
purchase of such portion of such Asset Pool.

(f) Combination of Asset Pools upon Mutual Written Consent of Borrower and
Lender. Notwithstanding anything to the contrary contained in this Agreement,
upon

 

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the mutual written consent of the Borrower and the Lender, two (2) or more Asset
Pools may be combined into a single Asset Pool subject to such terms and
conditions as the Borrower and the Lender shall specify in writing.

(g) Asset Pools Purchased by Borrower From Parent or Purchase Affiliate. The
Borrower may from time to time purchase an Asset Pool from the Parent or a
Purchase Affiliate if: (i) the Parent or Purchase Affiliate, as applicable, has
complied with the applicable provisions therefor contained in the Exclusivity
Agreement, (ii) the Borrower has submitted a Borrowing Request to the Lender in
connection therewith in accordance with this Section 2.1, which Borrowing
Request shall detail the assignment of a Purchase Agreement and/or other
security documents to the Borrower in connection with the Parent’s or Purchase
Affiliate’s, as applicable, purchase of the accounts or other assets
constituting such Asset Pool from another Person (who shall not be an Affiliated
Party) and such other information as the Lender shall require, and (iii) such
Borrowing Request has been accepted by the Lender in accordance with this
Section 2.1.

Section 2.2 Obligation to Repay Loans; Issuance of Notes. Each Loan made by the
Lender with respect to an Asset Pool under Section 2.1 shall be evidenced by a
separate promissory note of the Borrower payable to the order of the Lender in
the amount determined in accordance with the related Accepted Borrowing Request,
dated as of the Borrowing Date and otherwise in substantially the form of
Exhibit B-1 (each a “Note”). With respect to a Loan made by the Lender to the
Borrower in connection with an Asset Pool purchased under a Forward Flow
Purchase Agreement, the initial advance of such Loan shall be evidenced by a
Note, dated as of the Borrowing Date for such initial advance, in the amount of
such initial advance and otherwise in substantially the form of Exhibit B-1. The
second and each subsequent advance of a Loan made in connection with an Asset
Pool purchased under a Forward Flow Purchase Agreement shall be evidenced by a
replacement Note, dated as of the Borrowing Date for such second or subsequent
advance, as applicable, in the aggregate amount of all advances made of the Loan
(without reflecting any repayments of such Loan) and otherwise in substantially
the form of Exhibit B-2. Each such replacement Note issued in connection with a
Loan made in connection with an Asset Pool purchased under a Forward Flow
Purchase Agreement shall be issued in replacement of and substitution for, but
not in payment of, the previous Note related to such Loan. Upon the Lender’s
receipt of a written request to return to the Borrower a replaced note following
the Borrower’s execution and delivery to the Lender of a replacement Note
acceptable to the Lender, the Lender shall return the replaced Note to the
Borrower marked “Replaced by Substitution Note”. The aggregate unpaid principal
amount of each Note shall bear interest, be payable and be secured as provided
therein and herein.

Section 2.3 Purchase of Asset Pools Financed by Distressed Loans. If, sixty
(60) days prior to any Loan Maturity Date (including any Extended Maturity Date,
as defined below), the Borrower anticipates that the outstanding loan balance of
a Loan (the “Distressed Loan”) will not be paid off at the applicable Loan
Maturity Date, then the Borrower may send a notice (“Action Notice”) to the
Lender providing that an Affiliated Party has offered to purchase from the
Borrower the Asset Pool financed by the Distressed Loan (the “Distressed Loan
Asset Pool”). Within ten (10) Business Days of receipt of the Action Notice, the
Lender shall either (i) decline the offer described in the Action Notice and
extend the Loan Maturity Date for the Distressed Loan for one (1) year (such new
date, the “Extended Maturity Date”) or (ii) accept the offer

 

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described in the Action Notice. If the Lender does not respond to the Action
Notice within the required time the Action Notice will be deemed rejected and
the Loan Maturity Date for the Distressed Loan shall be extended for one
(1) year. Upon the sale of the Distressed Loan Asset Pool described in the
Action Notice, the Borrower will remit proceeds of the sale to the Lender to the
extent necessary to pay the outstanding principal balance of the Distressed Loan
plus all accrued and unpaid interest thereon.

Section 2.4 Interest on Loans. The Borrower hereby agrees to pay interest on the
unpaid principal balance of each Loan with respect to an Asset Pool for the
period commencing on the Borrowing Date for such Loan and continuing thereafter
until the Loan is paid in full, in accordance with the following:

(a) Prior to the occurrence of an Event of Default, the outstanding principal
balance of each Loan shall bear interest at an annual rate at all times equal to
the Floating Rate applicable to such Loan.

(b) From and after the occurrence of an Event of Default and continuing
thereafter until such Event of Default shall be remedied to the written
satisfaction of the Lender, the outstanding principal balance of each Loan shall
bear interest at an annual rate at all times equal to the sum of (i) the
Floating Rate applicable to such Loan and (ii) two percent (2%) (the “Default
Rate”).

(c) Notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, all agreements with respect to interest in this Agreement
and the other Loan Documents between the Borrower and the Lender are hereby
limited so that in no contingency or event whatsoever shall the total liability
for payments in the nature of interest exceed the applicable limits imposed by
any applicable usury laws. If any payments in the nature of interest made under
this Agreement or any other Loan Document are held to be in excess of the limits
imposed by any applicable usury laws, it is agreed that any such amount held to
be in excess shall be considered payment of principal in respect of the
applicable Loan, and the aggregate indebtedness under this Agreement and the
other Loan Documents shall be reduced by such amount so that the total liability
for payments in the nature of interest shall not exceed the applicable limits
imposed by any applicable usury laws, in compliance with the desires of the
Borrower and the Lender.

Section 2.5 Computation of Interest. Interest accruing on each Loan, on each
Asset Pool Equity Contribution and on each Affiliate Subordinated Loan, as
applicable, shall be computed on the basis of the actual number of days elapsed
in a year of three hundred and sixty (360) days and shall accrue on the
outstanding principal balance of each Loan, on each Asset Pool Equity
Contribution and on each Affiliate Subordinated Loan, as applicable, on a daily
basis. Interest accrued on each Loan, on each Asset Pool Equity Contribution and
on each Affiliate Subordinated Loan shall be capitalized on each Distribution
Date if funds are not available for payment thereof on such Distribution Date.

Section 2.6 Payment of Principal and Interest on Loans. All interest on a Loan
which has accrued, but is unpaid as of the day preceding a Distribution Date for
a related Asset Pool,

 

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shall be due and payable on such Distribution Date, but only to the extent
available in accordance with Section 2.9. If not paid in full on a Distribution
Date, all accrued and unpaid interest shall be capitalized as of such date in
accordance with Section 2.5. Principal of each Loan shall be finally due and
payable on the Loan Maturity Date for such Loan, as specified in the Note
evidencing payment of such Loan. In addition, each Loan shall be subject to
mandatory prepayment on each Distribution Date for the related Asset Pool in an
amount equal to the Asset Pool Proceeds available for such prepayment on such
date, as provided in Section 2.9. The Borrower may prepay any Loan, in whole or
in part, at any time and from time to time, without premium or penalty;
provided, however, that (i) no such prepayment shall terminate or satisfy the
Borrower’s obligation to pay Contingent Payments with respect to the related
Asset Pool for any such Loan, and (ii) any such prepayment can only be made from
Asset Pool Proceeds received with respect to the Asset Pool for such Loan and
not with any other proceeds or funds from any other source, unless otherwise
approved in writing by the Lender. Notwithstanding anything to the contrary
contained in this Section 2.6, the Lender shall not be entitled to receive any
Contingent Payments with respect to any Asset Pool financed by a Distressed Loan
and purchased pursuant to Section 2.3.

Section 2.7 Contingent Payments. The Borrower agrees to pay to the Lender a
Contingent Payment with respect to each Asset Pool, payable on each Distribution
Date for such Asset Pool in an amount equal to that portion of the Asset Pool
Proceeds available for payment thereof as provided in Section 2.9(j). Subject to
Sections 2.3 and 2.6, payment in full of any Loan made in respect of an Asset
Pool shall in no way affect the obligation of the Borrower to pay to the Lender
the Contingent Payments with respect to an Asset Pool as provided herein. The
Borrower and the Lender agree that all Contingent Payments with respect to an
Asset Pool will be treated as interest for United States federal income tax
purposes and that the Borrower’s interest deductions and the Lender’s interest
income with respect thereto shall accrue in accordance with the Projected
Accrual Schedule for such Asset Pool delivered by the Borrower pursuant to
Section 2.1(a) and accepted by the Lender pursuant to Section 2.1, as required
and determined in accordance with the non-contingent bond method described in
Treasury Regulation 1.1275-4(b).

Section 2.8 Collection and Deposit of Asset Pool Proceeds. Except as otherwise
provided in Section 2.10, each Loan shall be paid out of Asset Pool Proceeds
collected with respect to the related Asset Pool. All Asset Pool Proceeds
received by the Servicer or the Borrower will be deposited not later than the
next Business Day following receipt thereof, to a collection account maintained
by the Servicer, and not later than two (2) Business Days thereafter (or earlier
if checks in such collection account clear earlier), shall be transferred to a
separate Collateral Account for the Asset Pools opened and maintained by the
Collateral Agent, in the name of the Lender, pursuant to the Collateral Account
Agreement (the “Collateral Account”). Except for the days on which Asset Pool
Proceeds are on deposit in the Servicer’s collection account, neither the
Servicer nor the Borrower shall commingle any Asset Pool Proceeds collected with
respect to the Asset Pools with any moneys or other funds which are not Asset
Pool Proceeds. The Collateral Account shall be an interest bearing account and
all interest earned on amounts on deposit therein shall constitute, and be
treated as, Asset Pool Proceeds collected with respect to the Asset Pools. All
Asset Pool Proceeds shall be held in the Collateral Account until the next
occurring Distribution Date. Not later than 3:00 p.m., Minneapolis, Minnesota
time, on the Business Day preceding each Distribution Date, the Servicer shall
deliver

 

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to the Lender a report for the preceding Collection Period setting forth, by
Asset Pool, the Asset Pool Proceeds, Servicing Fees, outstanding balances of
Loans and other relevant information to determine the use and application of the
Asset Pool Proceeds deposited to the Collateral Account during the Collection
Period ending on the Sunday immediately preceding such Distribution Date (each,
a “Distribution Report”) and the Lender will make distributions in accordance
with Section 2.9 on each Distribution Date. In no event shall any Asset Pool
Proceeds be withdrawn from the Collateral Account without the prior written
consent of the Lender as to each such withdrawal or transfer.

Section 2.9 Distribution of Asset Pool Proceeds. Upon delivery to the Collateral
Agent of the Lender’s written authorization for distributions to be made from
the Collateral Account as contemplated in Section 2.8, Asset Pool Proceeds on
deposit in the Collateral Account with respect to an Asset Pool shall be
distributed on the next succeeding Distribution Date for such Asset Pool, in
accordance with the following:

(a) first, in connection with all Asset Pool acquisitions, to the Lender or the
Borrower, an amount equal to all unpaid Loan Costs and Purchase Expenses paid or
incurred by the Lender or the Borrower with respect to the making or collection
of a Loan secured by such Asset Pool, except for the expenses of the Borrower in
connection with the preparation, execution and delivery of the Loan Documents;

(b) second, to the Collateral Agent, an amount equal to all fees and expenses
due and owing to the Collateral Agent with respect to such Asset Pool;

(c) third, to the Servicer, an amount equal to the Servicing Fee, if any,
payable to the Servicer with respect to such Asset Pool Proceeds;

(d) fourth, to the Lender, an amount equal to all accrued and unpaid interest on
the related Loan for such Asset Pool;

(e) fifth, to the Servicer, an amount equal to all accrued and unpaid Deferred
Servicing Fees, as defined in the Servicing Agreement, but only to the extent no
Asset Pool Shortfall then exists with respect to such Asset Pool;

(f) sixth, to the Lender, an amount equal to the outstanding principal of the
related Loan for such Asset Pool, until such Loan shall have been paid in full;

(g) seventh, to the Lender, an amount equal to any Asset Pool Shortfall Amount
then outstanding, for application to payment of such Asset Pool Shortfall
Amount;

(h) eighth, to the Borrower, an amount equal to all accrued and unpaid interest
on (i) the Borrower’s Asset Pool Equity Contribution with respect to such Asset
Pool and (ii) any Affiliate Subordinated Loan, which interest shall be at the
Floating Rate and shall be calculated in accordance with Section 2.5 hereof;

(i) ninth, to the Borrower, an amount equal to (i) the Asset Pool Equity
Contribution made by the Borrower with respect to such Asset Pool and (ii) the
principal

 

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amount of any Affiliate Subordinated Loan, until such Asset Pool Equity
Contribution and all such Affiliate Subordinated Loans shall have been repaid in
full;

(j) tenth, to the Lender, its Contingent Payment for such Asset Pool; and

(k) eleventh, to the Borrower, the remainder of the Asset Pool Proceeds for such
Asset Pool.

Section 2.10 Asset Pool Shortfalls. If, (a)(i) as of any date on or after six
(6) months following the Borrowing Date with respect to an Asset Pool acquired
by means of a Loan, the Asset Pool Proceeds received through such date with
respect to such Asset Pool are less than eighty percent (80%) of the projected
Asset Pool Proceeds to be received through such date (as set forth in the bid
package submitted by the Borrower as part of the Borrowing Request for such
Asset Pool), and the Lender determines that, in its reasonable judgment, the
remaining Asset Pool Proceeds projected to be received and applied to the
related Loan will be insufficient to repay the related Loan and all accrued
interest thereon at the applicable Loan Maturity Date, or (ii) as of any date,
an Event of Default has occurred and is continuing, (b) in connection with any
Affiliated Party Credit Agreement (i) as of any date on or after six (6) months
following the Borrowing Date under (and as defined in) such Affiliated Party
Credit Agreement with respect to an Affiliated Party Asset Pool financed by
means of an Affiliated Party Loan, the Asset Pool Proceeds (as defined therein)
received through such date with respect to such Affiliated Party Asset Pool are
less than eighty percent (80%) of the projected Asset Pool Proceeds (as defined
therein) to be received through such date (as set forth in the bid package
submitted by the applicable Affiliated Party as a part of the Borrowing Request
under (and as defined in) such Affiliated Party Credit Agreement for such
Affiliated Party Asset Pool) and the Lender determines that, in its reasonable
judgment, the remaining Asset Pool Proceeds (as defined therein) projected to be
received and applied to such Affiliated Party Loan will be insufficient to repay
such Affiliated Party Loan and all accrued interest thereon on the applicable
Loan Maturity Date (as defined therein) or (ii) as of any date, an Event of
Default under (and as defined in) such Affiliated Party Credit Agreement has
occurred and is continuing, or (c) under the LLC Agreement, as of any date on or
after the Start-Up Date (as defined in the LLC Agreement), the aggregate of all
Asset Pool Proceeds (as defined in the LLC Agreement) received by the CVI Member
(as defined in the LLC Agreement) pursuant to Section 4.4 of the LLC Agreement
with respect to such Asset Pool is less than eighty percent (80%) of the
projected Asset Pool Proceeds (as defined in the LLC Agreement) forecasted (at
the time of funding the Capital Contribution (as defined in the LLC Agreement)
to be received by the CVI Member (as defined in the LLC Agreement) through the
date of determination and the CVI Member (as defined in the LLC Agreement)
determines that, in its reasonable judgment, the remaining Net Asset Pool
Proceeds (as defined in the LLC Agreement) projected to be received will be
insufficient to repay the related Capital Contribution (as defined in the LLC
Agreement) and the Initial Return (as defined in the LLC Agreement) thereon,
then the amount of such estimated deficiency (herein, the “Asset Pool Shortfall
Amount”) shall be paid:

(a) first, from Asset Pool Proceeds (as defined herein) collected with respect
to other Asset Pools financed with Loans as provided in Section 2.9(g) of this
Agreement;

 

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(b) second, from Asset Pool Proceeds (as defined in any Affiliated Party Credit
Agreement) collected with respect to any Affiliated Party Asset Pool financed by
means of an Affiliated Party Credit Agreement as provided in Section 2.9(g)
thereof (or such equivalent section), which amounts so paid shall constitute a
subordinated loan from the applicable Affiliated Party to the Borrower (each, an
“Affiliate Subordinated Loan”) and shall bear interest (accruing in accordance
with Section 2.5 only from the date of such payment) and be repaid only as
provided in Section 2.9(i) hereof; and

(c) third, from the Borrower’s own funds (and not from funds borrowed from a
CarVal Affiliate) and any amount so paid shall be treated hereunder as an Asset
Pool Equity Contribution on behalf of the Borrower for the Asset Pool for which
such payment was made, which amounts so paid shall bear interest (accruing in
accordance with Section 2.5 only from the date of such payment) and be repaid
only as provided in Section 2.9(i) hereof.; provided, however, that for purposes
of this Section 2.10(c) only, Asset Pool Proceeds shall be deemed to include any
of the Borrower’s own funds paid pursuant to this Section 2.10(c).

Section 2.11 Transfer or Assignment of Loans. Each Note evidencing a Loan shall
contain the following provisions restricting the transferability of such Note
and the Lender’s rights to receive payment thereunder: “This Note shall not be
transferred without providing written notice of the transfer and the identity of
the transferee to the issuer, which notice shall be in the form of a true and
correct copy of the original endorsement of this Note provided to the issuer in
accordance with the notice provisions of this Agreement. Any purported transfer
occurring without providing written notice to the issuer in accordance with the
previous sentence shall be null and void.” In the event that a Note is issued
that does not contain this language, the provisions of this Section 2.11 shall
be deemed to govern and apply to such Note as if such language were contained
therein.

Section 2.12 Agreement Regarding Collateral Account. Notwithstanding references
in this Agreement to a “Collateral Agent” and a “Collateral Account Agreement,”
no such Collateral Account Agreement shall be executed with a Collateral Agent
for delivery as of this date. Instead, the Lender shall open a deposit account
(the “Lender Deposit Account”) as specified in writing from time to time by the
Lender to the Borrower, which shall be an account owned solely and exclusively
by the Lender and in which neither the Borrower nor the Servicer shall have any
interest whatsoever. The Lender shall have and retain all rights over and
ownership with respect to the Lender Deposit Account. Such account so opened by
the Lender shall constitute the “Collateral Account” as described in this
Agreement. Each and every reference to the Collateral Agent taking action with
respect to funds on deposit in the Collateral Account shall be deemed a
reference to the Lender taking action with respect to the Lender Deposit Account
until such time, if ever, as the Borrower, the Servicer, the Lender and a
Collateral Agent shall execute and deliver a Collateral Account Agreement,
whereupon the Collateral Account as therein described shall constitute the
Collateral Account referenced and described in this Agreement. So long as the
Lender Deposit Account shall be treated as the Collateral Account for purposes
of this Agreement, the Lender agrees that it will be obligated to distribute
funds on deposit therein upon compliance by the Borrower with all applicable
terms and conditions for distribution described in Section 2.8 of this
Agreement.

 

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ARTICLE III

COLLATERAL FOR LOANS;

CUSTODY, SERVICING AND COLLECTIONS

Section 3.1 Pledge of Asset Pool Collateral. To secure the due and prompt
payment of each Loan, together with all interest thereon and Contingent Payments
payable in connection therewith, and all other Obligations hereunder, the
Borrower shall grant to the Lender a first and prior security interest in, lien
on and pledge of all assets of the Borrower (subject only to Permitted Liens
which shall be subject and subordinate), including all right, title, claim and
interest of the Borrower in and to all Assets of or related to each and every
Asset Pool, of any kind, nature or description, whether now owned or hereafter
acquired, wherever located, howsoever arising or created and whether now
existing or hereafter arising, including without limitation each and every
Account and any and all liens, claims and property securing payment of the
indebtedness evidenced by such Account (if any), and all property realized,
collected or obtained in connection with or as a result of collections made on
account of any Account, and any and all Asset Pool Proceeds paid or received
with respect to any Asset Pool, whether deposited to or held in the Collateral
Account or otherwise, and all rights of the Borrower under each and every
Purchase Agreement (or Forward Flow Purchase Agreement) related to an Asset
Pool, together with such additional property of the Borrower as is set forth and
described in the Security Agreement, as the same may be amended and supplemented
from time to time by the Borrower as additional Asset Pools are purchased by the
Borrower (herein the “Loan Collateral”).

Section 3.2 Perfection of Security Interests in Personal Property Collateral.
The Borrower agrees to deliver to the Lender (or its designated custodial
agent), at any time upon the Lender’s request, each original Account file of or
relating to any Account and each promissory note, chattel paper, installment
sales agreement or other instrument with respect to which perfection may be
obtained by possession, and shall authorize or execute such financing
statements, together with any and all other instruments, assignments or
documents and take such other actions as may be required, to perfect and to
continue the perfection of the Lender’s security interest in all Loan
Collateral.

Section 3.3 Servicing of Asset Pools. The Borrower, the Servicer and the Lender
shall enter into a Servicing Agreement, in form and content acceptable to the
Lender, to provide for the servicing and collection of all Assets (the
“Servicing Agreement”). Immediately upon the occurrence of a Servicer Default as
defined in the Servicing Agreement, the Lender may terminate the Servicer then
acting in such capacity under the Servicing Agreement and may appoint a
replacement servicer, and enter into a replacement servicing agreement,
reasonably acceptable to the Borrower and the Lender.

Section 3.4 Authority to Settle or Sell Loan Collateral. The Borrower shall be
authorized to finally compromise, settle, sell, liquidate, collect or write-down
the balance of, any Asset in its discretion; provided, however, that in no event
will any such compromise, settlement, sale, liquidation, collection or
write-down reduce the remaining unpaid principal balance thereof, together with
accrued and unpaid interest thereon, to an aggregate amount less than three
hundred percent (300%) of the allocated purchase price paid by the Borrower to
acquire such Asset, without first obtaining the prior consent of the Lender. The
Borrower shall not, without

 

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first obtaining the Lender’s prior written consent, agree to any sale,
assignment or other bulk transfer of Accounts (whether in one or more Asset
Pools). In the event the Lender consents to a bulk transfer of Accounts, the
Servicer will be paid a sales fee not to exceed the lesser of (a) the actual
out-of-pocket expenses incurred by the Servicer (and approved by the Lender) in
connection with such bulk sale and (b) five percent (5%) of the net proceeds
realized upon such bulk sale, in lieu of the applicable Servicing Fee, unless
the Lender and the Borrower shall otherwise agree in writing.

Section 3.5 Exchange of Assets with Asset Pool Sellers. In the event that the
Borrower shall exchange or return Assets with any Asset Pool Seller, the
Borrower shall promptly notify the Lender of such exchange or return and shall
provide such information with respect to such exchange or return as Lender shall
reasonably require. The Servicer shall not be entitled to any Servicing Fee with
respect to any such exchange or return.

ARTICLE IV

CONDITIONS OF LENDING

Section 4.1 Conditions Precedent to the Initial Loan. The obligation of the
Lender to make the initial Loan to the Borrower is subject to satisfaction by
the Borrower of the conditions precedent set forth in Sections 4.2 and 4.3 with
respect to such Loan and the further condition precedent that the Lender shall
have received each of the following, dated such date and in form and substance
satisfactory to the Lender:

(a) This Credit Agreement properly executed on behalf of the Borrower;

(b) The Security Agreement, properly executed on behalf of the Borrower;

(c) The Collateral Account Agreement, properly executed on behalf of the
Collateral Agent, the Borrower, the Servicer and the Lender;

(d) The Servicing Agreement, properly executed on behalf of the Servicer, the
Borrower and the Lender;

(e) The Exclusivity Agreement, properly executed on behalf of all the parties
thereto;

(f) Current searches of appropriate filing offices showing that (i) no state or
federal tax liens have been filed and remain in effect against the Borrower or
the Servicer and (ii) no financing statements or other notifications or filings
have been filed and remain in effect against the Borrower, other than those for
which the Lender has received an appropriate release, termination or
satisfaction or those permitted in accordance with Section 7.1;

(g) Certified copies of resolutions of the manager(s) and members, or board of
directors, as appropriate, of the Borrower, evidencing approval of all Loan
Documents to which the Borrower is a party and the other matters contemplated
thereby;

 

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(h) Certified copies of resolutions of the of the board of directors of the
Servicer, evidencing approval of all Loan Documents to which the Servicer is a
party and the other matters contemplated thereby;

(i) Copies of the Articles of Incorporation, Bylaws and Certificates of
Formation of the Borrower, the Parent and the Servicer, as appropriate,
certified by an appropriate officer of each as being a true and correct copy
thereof;

(j) Certificates of good standing of the Borrower and the Servicer,
respectively, dated not more than sixty (60) days prior to the date hereof;

(k) Acknowledgment copies of effective financing statements filed on or prior to
the date of the initial Loan, naming the Lender as secured party and the
Borrower, as debtor, or such other similar instruments or documents as may be
necessary or, in the opinion of the Lender, desirable under the UCC or any
comparable law of all appropriate jurisdictions;

(l) A signed copy of a certificate of the Manager of the Borrower, which shall
certify the names of the officers of the Manager authorized to sign the Loan
Documents on behalf of the Borrower and the other documents or certificates to
be delivered pursuant to this Agreement by the Borrower, including Borrowing
Requests, together with the true signatures of such officers. The Lender may
rely conclusively on such certificate until it shall receive a further
certificate of the Manager of the Borrower canceling or amending the prior
certificate and submitting the signatures of the officers named in such further
certificate;

(m) A signed copy of a certificate of the secretary or assistant secretary of
the Servicer which shall certify the names of the officers of the Servicer
authorized to sign the Servicing Agreement and the other documents or
certificates to be delivered pursuant thereto by the Servicer or any of its
officers, together with true signatures of such officers. The Lender may rely
conclusively on such certificate until it shall receive a further certificate of
the secretary or assistant secretary of the Servicer canceling or amending the
prior certificate and submitting the signatures of the officers named in such
further certificate;

(n) A signed copy of an opinion of counsel for the Borrower, addressed to the
Lender;

(o) Evidence of all insurance required to be maintained by the Servicer under
the provisions of the Servicing Agreement; and

(p) Such other items as shall be reasonably requested by the Lender.

Section 4.2 Conditions Precedent to Each Loan. The obligation of the Lender to
make each Loan (or each advance of a Loan in the case of a Forward Flow Purchase
Agreement) shall be subject to the further conditions precedent that the Lender
shall have issued an Accepted Borrowing Request with respect thereto and shall
have received, on or before the date of such Loan (or such advance of such Loan
in the case of a Forward Flow Purchase Agreement), each

 

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of the following with respect to such Loan, dated such date and in form and
substance satisfactory to the Lender:

(a) A copy of the Purchase Agreement (or Forward Flow Purchase Agreement, if
applicable) for the related Asset Pool, properly executed on behalf of the
Borrower and the Asset Pool Seller, pursuant to which the Asset Pool Seller
shall have agreed to transfer all Assets constituting a part of such Asset Pool
to the Borrower, effective as of the Borrowing Date, free and clear of all
liens, claims and encumbrances except Permitted Liens and those disclosed in the
related Purchase Agreement, together with copies of the UCC-1 Financing
Statement naming the Asset Pool Seller, as seller/debtor, in favor of the
Borrower, as purchaser/secured party, with an adequate description of the Assets
contained in the Asset Pool being acquired (or of the Assets contained in the
portion of the Asset Pool being acquired in the case of a Forward Flow Contract)
and such other items as may be required by the Lender; provided, however, in the
case of a purchase of a portion of an Asset Pool under a Forward Flow Purchase
Agreement, such copy of the UCC-1 Financing Statement may be provided not later
than five (5) Business Days after the date of the advance of the Loan to
purchase such portion of the Asset Pool;

(b) A Note in the principal amount of the related Loan, properly completed and
executed on behalf of the Borrower;

(c) Evidence of receipt by the Lender of the Borrower’s Asset Pool Equity
Contribution with respect to the related Asset Pool, net of any Purchase
Expenses paid or incurred by the Borrower in connection with consummation of its
purchase of such Asset Pool;

(d) A duplicate copy of the computer disk (or other medium reasonably acceptable
to the Lender) showing all relevant information as to the Accounts being
purchased by the Borrower, as provided by the Asset Pool Seller pursuant to the
Purchase Agreement; provided, however, in the case of a purchase of a portion of
an Asset Pool under a Forward Flow Purchase Agreement, such duplicate copy of
the computer disk (or other medium reasonably acceptable to the Lender) may be
provided not later than five (5) Business Days after the date of the advance of
the Loan to purchase such portion of such Asset Pool;

(e) A certificate of a responsible officer of the Servicer in favor of the
Lender and the Borrower stating that, to the Servicer’s best knowledge, no
Servicer Default has occurred and is continuing; and

(f) Such other information as the Lender may request to verify the Total Cost of
the Asset Pool, the nature or amount of the Accounts to constitute a part
thereof or any other matter related thereto.

Section 4.3 Representations and Warranties Upon Making a Loan. The obligation of
the Lender to make each Loan (or each advance of a Loan in the case of a Forward
Flow Purchase Agreement) to finance the purchase of an Asset Pool (or the
applicable portion of an

 

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Asset Pool in the case of a Forward Flow Purchase Agreement) shall be subject to
the further condition precedent that on the date for funding of such Loan (or
such advance of a Loan in the case of a Forward Flow Purchase Agreement) the
following statements shall be true and accurate in all material respects and the
Borrower, by requesting such Loan (or such advance of a Loan in the case of a
Forward Flow Purchase Agreement) shall be deemed to have represented and
certified that:

(a) The representations, warranties and covenants of the Borrower set forth in
Article V are true and correct on and as of such date as though made on such
date and shall be deemed to have been made on such date, except to the extent
that any such representations, warranties and covenants relate solely to an
earlier date.

(b) No event has occurred and is continuing, or would result from the making of
such Loan, which constitutes a Default or an Event of Default, and, to the
Borrower’s actual knowledge, no Servicer Default has occurred and is continuing.

(c) In the case of a Loan made in connection with a purchase under
Section 2.1(g), that all conditions therefor contained in such Section 2.1(g)
and in the Exclusivity Agreement have been fully satisfied.

(d) Upon payment of the purchase price specified in the related Purchase
Agreement to the Asset Pool Seller (or in whole or in part to the Parent or a
Purchase Affiliate, as applicable, in connection with an assignment under
Section 2.1(g), but only as specified in an Accepted Borrowing Request) and
consummation of the purchase contemplated in such Purchase Agreement (or, as
applicable the assignment by the Parent or Purchase Affiliate, as applicable, to
the Borrower), the Borrower will have good title to all Accounts being
transferred thereunder free and clear of all liens, claims and other interests
other than the liens granted to the Lender as contemplated herein and Permitted
Liens.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lender as of the date hereof and as
of each Borrowing Date as follows:

Section 5.1 Existence and Power; Name; Chief Executive Office. The Borrower is
duly formed, validly existing and in good standing under the laws of the Nevada,
and is or has undertaken all reasonable steps to become duly licensed or
qualified to transact business in all jurisdictions where the character of the
property owned or leased or the nature of the business transacted by it makes
such licensing or qualification necessary and where failure to obtain such
licensing or qualification would have a material adverse effect on the Borrower.
The Borrower has all requisite power and authority, to conduct its business, to
own its properties and to execute and deliver, and to perform the Obligations.
Within the last twelve (12) months, the Borrower has done business only under
its name as specified herein. The chief executive office and principal place of
business of the Borrower are located at the address set forth in Section 9.4,
and all of the Borrower’s records relating to its businesses are kept at that
location.

 

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Section 5.2 Authorization for Borrowings; No Conflict as to Law or Agreements.
The execution, delivery and performance by the Borrower of the Loan Documents,
and Loans from time to time obtained hereunder, have been duly authorized by all
necessary legal action and do not and will not (a) require any consent or
approval which has not been obtained prior to the date hereof, (b) require any
authorization, consent or approval by, or registration, declaration or filing
with, or notice to, any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, or any third party, except such
authorization, consent, approval, registration, declaration, filing or notice as
has been obtained, accomplished or given prior to the date hereof, (c) violate
any provision of any material law, rule or regulation or of any order, writ,
injunction or decree presently in effect having applicability to the Borrower or
of the organizational documents of the Borrower, (d) result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other material agreement, lease or instrument to which the Borrower is a party
or by which it or its properties may be bound or affected, or (e) result in, or
require, the creation or imposition of any mortgage, deed of trust, pledge,
lien, security interest or other charge or encumbrance of any nature upon or
with respect to any of the properties now owned or hereafter acquired by the
Borrower, other than those granted to the Lender as contemplated herein.

Section 5.3 Legal Agreements. The Loan Documents constitute, and the Notes, when
and as executed and delivered, will constitute, the legal, valid and binding
obligations and agreements of the Borrower, enforceable against the Borrower in
accordance with their respective terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law).

Section 5.4 Subsidiaries. The Borrower has no subsidiaries.

Section 5.5 Litigation. There are no actions, suits or proceedings pending or,
to the knowledge of the Borrower, threatened against or affecting the Borrower
or the properties of the Borrower before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
which, if determined adversely to the Borrower, could have a material adverse
effect on the financial condition, properties or operations of the Borrower,
except as set forth and described in Schedule 5.5.

Section 5.6 Taxes. The Borrower has paid or caused to be paid to the proper
authorities when due all federal, state and local taxes required to be withheld
by it (other than those being properly contested in accordance with the
procedures set forth in part (i) of the definition of Permitted Liens). The
Borrower has filed all federal, state and local tax returns which to the
knowledge of the officers of the Borrower, are required to be filed, and the
Borrower has paid or caused to be paid to the respective taxing authorities all
taxes as shown on said returns or on any assessment received by it to the extent
such taxes have become due (other than those being properly contested in
accordance with the procedures set forth in part (i) of the definition of
Permitted Liens).

Section 5.7 Title and Liens. The Borrower has good and marketable title to all
Loan Collateral (or will have good and marketable title to all Loan Collateral
on the date of purchase of such Loan Collateral), free and clear of all
mortgages, security interests, liens and

 

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encumbrances, except for Permitted Liens. In addition, no financing statement
naming the Borrower as debtor is on file in any office except to perfect only
security interests permitted by Section 7.1.

Section 5.8 Plans. The Borrower does not maintain and has not in the past
maintained any Plan.

Section 5.9 Default. The Borrower is in compliance with all provisions of all
agreements, instruments, decrees and orders to which it is a party or by which
it or its property is bound or affected, the breach or default of which could
have a material adverse effect on the financial condition, properties or
operations of the Borrower.

Section 5.10 Submissions to Lender. All financial and other information provided
to the Lender (including, but not limited to the completed background
questionnaires) by or on behalf of the Borrower in connection with the
Borrower’s request for any Loan and the credit facilities contemplated hereby is
true and correct in all material respects and, as to projections, valuations or
financial statements, present a good faith opinion as to such projections,
valuations and proforma condition and results. The information provided to the
Lender contains no omissions which would cause such information to be materially
misleading.

ARTICLE VI

AFFIRMATIVE COVENANTS OF THE BORROWER

So long as any Note, Contingent Payment or other Obligation shall remain unpaid
or outstanding, the Borrower will comply with the following requirements, unless
the Lender shall otherwise consent in writing:

Section 6.1 Reporting Requirements. The Borrower will deliver, or cause to be
delivered, to the Lender each of the following, which shall be in form and
detail reasonably acceptable to the Lender:

(a) As soon as available, and in any event within one hundred twenty (120) days
after the end of each fiscal year of the Parent, a copy of the annual audit
report of the Parent with the unqualified opinion of its certified public
accountants, which annual report shall include the consolidated balance sheet of
Parent and its consolidated subsidiaries (including the results of operations
the Borrower), as at the end of such fiscal year and the related statements of
earnings, shareholders’ or members’ equity and cash flows for the fiscal year
then ended, all in reasonable detail and all prepared in accordance with GAAP,
applied on a consistent basis, together with a certificate of the chief
financial officer of the Parent, stating that such financial statements are true
and accurate in all material respects; provided, however, that as to the Parent,
all such reports shall be made available in the form filed by the Parent with
the Securities and Exchange Commission, if any.

(b) As soon as available and in any event within twenty (20) days after the end
of each month, a copy of the monthly and quarterly unaudited consolidated
balance sheets of the Parent and its consolidated subsidiaries and the Borrower,
respectively, as at the end of such month or quarter, as the case may be, and
related statements of earnings-

 

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to-date for each, in reasonable detail and stating in comparative form the
figures for the corresponding date and period in the previous fiscal year, all
prepared in accordance with GAAP (subject to year-end adjustments and without
footnotes), applied on a consistent basis, together with a certificate of the
Manager and the chief financial officer of the Parent, respectively, stating
that such financial statements, subject to year-end audit adjustments, are true
and accurate in all material respects; provided, however, that as to the Parent,
all such reports shall be made available in the form filed by the Parent with
the Securities and Exchange Commission, if any.

(c) As promptly as practicable (but in any event not later than five
(5) Business Days) after an officer of the Borrower obtains knowledge of the
occurrence of any default by the Borrower in the performance of any of its
Obligations or by the Servicer in the performance of any of its obligations
under the Servicing Agreement, notice of such occurrence, together with a
detailed statement by a responsible officer of the Borrower of the steps being
taken by the Borrower to cure the effect of such event.

(d) As promptly as practicable, a copy of each compliance report the Borrower or
the Parent delivers to the Federal Trade Commission and, upon receipt, copies of
any notices, decrees, orders or correspondence from the Federal Trade Commission
relating to FDCPA violations.

(e) Such other information respecting each Asset Pool or the financial condition
of each of the Borrower and the Parent as the Lender may from time to time
reasonably request.

Section 6.2 Books and Records; Inspection and Examination; Verification of
Collection Activity. The Borrower will keep, and will cause the Parent to keep,
accurate books of record and account for itself pertaining to the Asset Pools
and the business and financial condition of the Borrower or the Parent, as
applicable, and such other matters as the Lender may from time to time request
in which true and complete entries will be made in accordance with GAAP
consistently applied (subject to year-end adjustments and without footnotes)
and, upon request of and reasonable notice by the Lender, will permit any
officer, employee, attorney or accountant for the Lender to audit, review, make
extracts from or copy any and all corporate and financial books and records of
the Borrower, or the Parent at all reasonable times during ordinary business
hours, to discuss the affairs of the Borrower and the Parent including the
purchase, servicing, collection or liquidation of assets, with any of its
members, employees or agents and to conduct a review of the Borrower’s and
Parent’s respective books and records with respect to the purchase, servicing,
collection and disposition of Loan Collateral.

Section 6.3 Licenses; Evidence of Qualification to Conduct Business. The
Borrower will be duly licensed or qualified to own the Assets and otherwise to
transact business in all jurisdictions where the character of the property owned
or leased or the nature of the business transacted by the Borrower make such
licensing or qualification necessary.

Section 6.4 Compliance with Laws. The Borrower will (a) comply with the
requirements of applicable laws and regulations, the non-compliance with which
would materially and adversely affect its business or its financial condition,
(b) comply with all

 

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applicable debt collection laws, regulations, ordinances and requirements and
will obtain any and all licenses, permits and similar approvals required for the
collection or servicing of any Account constituting a part of an Asset Pool and
(c) use and keep its assets, and will require that others use and keep its
assets, only for lawful purposes, without violation of any federal, state or
local law, statute or ordinance.

Section 6.5 Payment of Taxes and Other Claims. The Borrower will pay or
discharge, when due, (a) all taxes, assessments and governmental charges levied
or imposed upon it or upon its income or profits, upon any properties belonging
to it prior to the date on which forfeiture of any such property may occur,
(b) all federal, state and local taxes required to be withheld by it, and
(c) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien or charge upon any properties of the Borrower; provided,
that the Borrower shall not be required to pay any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings.

Section 6.6 Preservation of Legal Existence. The Borrower will preserve and
maintain its legal existence and all of its rights, privileges and franchises
necessary or desirable in the normal conduct of its business and shall conduct
its business in an orderly, efficient and regular manner.

Section 6.7 Special Purpose Entity. The Borrower will (a) own no assets, and not
engage in any business, other than the assets and transactions specifically
contemplated by the Loan Documents, (b) not incur any indebtedness or
obligation, secured or unsecured, direct or indirect, absolute or contingent,
other than as contemplated hereby and in connection with an Affiliate
Subordinated Loan pursuant to an Affiliated Party Credit Agreement or the
Exclusivity Agreement, (c) not make any loans or advances to any third party
(other than Assets), and shall not acquire obligations or securities of any
Affiliated Party or Excluded Party, (d) pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses) only from its
own assets, (e) do all things necessary under applicable law and its
organizational documents to observe organizational formalities and to preserve
its existence, and will not amend, modify or otherwise change its articles of
incorporation or bylaws, or suffer the same to be amended, modified or otherwise
changed, without the prior written consent of the Lender, (f) maintain all of
its books, records, financial statements and bank accounts separate from those
of any Affiliated Party or Excluded Party, (g) be, and at all times will hold
itself out to the public as, a legal entity separate and distinct from any other
entity (including any Affiliated Party and any Excluded Party), correct any
known misunderstanding regarding its status as a separate entity, conduct
business in its own name, not identify itself, any Affiliated Party or any
Excluded Party as a division or part of the other and maintain and utilize
separate stationary, invoices and checks, (h) maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations, (i) not engage
in or suffer any dissolution, winding-up, liquidation, consolidation or merger
in whole or in part, (j) not commingle its funds or other assets with those of
any Affiliated Party, any Excluded Party or any other Person (provided that the
Servicer may commingle Asset Pool Proceeds to the extent permitted in the
Servicing Agreement), (k) maintain its assets in such a manner that it will not
be costly or difficult to segregate, ascertain or identify its individual assets
from those of any Affiliated Party, any Excluded Party or any other Person,
(l) not and will not hold itself out to be responsible for the debts or
obligations of any other Person and (m) be

 

27

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formed and organized solely for the purpose of acquiring, collecting and
holding, directly or indirectly, the Assets and not hold or own any assets other
than the Assets, Asset Proceeds and assets related thereto.

Section 6.8 Arms-Length Transactions. The Borrower will use its best efforts to
have all collection activities and all sales, transfers and dispositions
relating to the Assets conducted on an arms-length basis, so as to cause all
collections and all consideration received upon the sale, transfer or
disposition of an Asset to (a) become and constitute Asset Pool Proceeds, and
(b) be distributed as Asset Pool Proceeds in accordance with Article II of this
Agreement.

Section 6.9 Purchase Agreements. The Borrower will comply with each of its
obligations under each of its Purchase Agreements.

Section 6.10 Provision of Copies of Computer Disks in Connection with Forward
Flow Purchase Agreements. The Borrower will provide to the Lender a duplicate
copy of the computer disk (or other medium reasonably acceptable to the Lender)
showing all relevant information as to the Accounts being purchased by the
Borrower in connection with the acquisition of the Assets contained in a portion
of an Asset Pool under a Forward Flow Purchase Agreement not later than five
(5) Business Days after the advance of the applicable Loan is made to purchase
the Assets contained in such portion of such Asset Pool.

Section 6.11 Right of Lender to Place a Sampling of Assets with Independent
Servicer. At any time and from time to time, upon request of the Lender, the
Borrower will permit the Lender to select certain Assets for placement for
servicing with an independent third-party servicer, in accordance with the terms
and conditions set forth and described in Section 3.3(g) of the Servicing
Agreement.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Note, Contingent Payment or other Obligation shall remain unpaid
or outstanding, the Borrower will comply with the following requirements, unless
the Lender shall otherwise consent in writing:

Section 7.1 Liens. Except as permitted in Section 6.11, the Borrower will not
create, incur or suffer to exist any pledge, lien, security interest, assignment
or transfer upon or of any Loan Collateral, now owned or hereafter acquired, or
assign or otherwise convey any right to receive collections or other income with
respect thereto, except for the liens and security interests created in favor of
the Lender under the Security Agreement and Permitted Liens.

Section 7.2 Sale or Transfer of Assets; Suspension of Business Operations.
Except as otherwise permitted in accordance with Section 3.4, the Borrower will
not sell, lease, assign, transfer or otherwise dispose of all or a substantial
part of its assets (whether in one transaction or in a series of transactions)
to any other Person, and will not liquidate, dissolve or suspend its business
operations.

Section 7.3 Consolidation and Merger; Asset Acquisitions. The Borrower will not
consolidate with or merge into any Person, or permit any other Person to merge
into it, or acquire

 

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(in a transaction analogous in purpose or effect to a consolidation or merger)
all or substantially all the assets of any other Person.

Section 7.4 Accounting. The Borrower will not adopt, or permit the Parent to
adopt, any change in its fiscal year or any material change in accounting
principles other than as required by generally accepted accounting principles.

Section 7.5 Modification or Termination of Agreements. The Borrower will not
terminate, amend or modify any of the Loan Documents without the prior written
consent of the Lender.

Section 7.6 No Commissions or Rebates on Dispositions or Collections. The
Borrower will not accept or receive or agree to accept or receive any rebate,
refund, commission, fee, kickback or rakeoff, whether cash or otherwise and
whether paid by or originating with the Obligor or any other party (including
but not limited to brokers and agents), as a result of or in any way in
connection with collection activities related to any asset or in connection with
the sale, disposition, transfer or servicing of any Asset constituting a part of
an Asset Pool.

ARTICLE VIII

EVENTS OF DEFAULT; RIGHTS AND REMEDIES

Section 8.1 Events of Default. “Event of Default”, wherever used herein, means
any one of the following events:

(a) default in the payment of any interest on or principal of any Note when it
becomes due and payable, unless capitalized as provided in Sections 2.4, 2.5 and
2.8; or

(b) default in the payment of any Contingent Payment or any other fees, costs or
expenses required to be paid by the Borrower under this Agreement as provided in
Section 2.8 or any other Loan Document; or

(c) a material default in the performance, or material breach (provided, that,
any failure to provide a report required under Section 6.1 for a period of five
(5) days after the same is due shall be considered “material”), of any covenant
or agreement of the Borrower in this Agreement (other than a covenant or
agreement a default in whose performance or whose breach is elsewhere in this
Section 8.1 specifically dealt with), and the continuance of such default or
breach for a period of ten (10) calendar days after there has been given to the
Borrower a written notice specifying such default or breach and requiring it to
be remedied; or

(d) the Borrower or the Parent shall be or become insolvent, or admit in writing
its inability to pay its debts as they mature, or make an assignment for the
benefit of creditors; or the Borrower or the Parent shall apply for or consent
to the appointment of any receiver, trustee, or similar officer for it or for
all or any substantial part of its property; or such receiver, trustee or
similar officer shall be appointed without the application or consent of the
Borrower, or the Parent; or the Borrower, or the Parent shall institute (by
petition, application, answer, consent or otherwise) any insolvency,
reorganization, arrangement, readjustment of debt, dissolution, liquidation or
similar

 

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proceeding relating to it under the laws of any jurisdiction; or any such
proceeding shall be instituted (by petition, application or otherwise) against
the Borrower or the Parent;

(e) a petition naming the Borrower or the Parent as debtor is filed under the
United States Bankruptcy Code; or

(f) any representation or warranty made by the Borrower in this Agreement or by
the Borrower (or any of its officers) in any Borrowing Request, or in any other
certificate, instrument, or statement contemplated by or made or delivered
pursuant to or in connection with this Agreement, shall prove to have been
incorrect in any material respect when made; or

(g) the rendering against the Borrower of a final judgment, decree, order, writ,
warrant of attachment or execution or similar process for the payment of money
in excess of $250,000 and the Borrower fails within ten (10) days thereafter to
provide evidence reasonably acceptable to the Lender that the same has been
satisfied in full; or

(h) a default under the Security Agreement or the Servicing Agreement, and the
expiration of the applicable period of grace, if any, specified in such
agreement; or

(i) any Affiliated Party shall purchase any Consumer Obligation (as defined in
the Exclusivity Agreement) in violation of the terms of the Exclusivity
Agreement; or

(j) the Borrower or the Parent shall liquidate, dissolve, terminate or suspend
its business operations or otherwise fail to operate its business in the
ordinary course, or shall sell all or substantially all of its assets (excepting
those permitted by Section 3.4), without the prior written consent of the
Lender; or

(k) the Borrower shall fail to pay, withhold, collect or remit any tax or tax
deficiency when assessed or due (other than any tax deficiency which is being
contested in the manner set forth therefor in part (i) of the definition of
Permitted Liens) or notice of any state or federal tax liens shall be filed or
issued; or

(l) a default under any note, agreement or other evidence of indebtedness or
similar obligation of the Borrower or Parent (other than a default whose breach
is elsewhere in this Section 8.1 specifically dealt with) or under any
instrument under which such evidence of indebtedness or similar obligation has
been issued or by which it is governed and the expiration of the applicable
period of grace, if any, specified in such evidence of indebtedness or other
instrument; or

(m) a Change of Control shall occur; or

(n) the actual Asset Pool Proceeds received as of any Distribution Date for all
Asset Pools (on a cumulative and combined basis; provided, that, any individual
Asset Pool shall not be included in such calculation until six (6) months after
the Borrowing Date with respect to such Asset Pool, and provided further, that
any Asset Pool financed by a Distressed Loan purchased by an Affiliated Party
pursuant to Section 2.3 shall not be included in such calculation) is less than
eighty percent (80%) of the Asset Pool Proceeds

 

30

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projected to be collected by the Borrower for such Asset Pools (on a cumulative
and combined basis; provided, that, any individual Asset Pool shall not be
included in such calculation until six (6) months after the Borrowing Date with
respect to such Asset Pool, and provided further, that any Asset Pool financed
by a Distressed Loan purchased by an Affiliated Party pursuant to Section 2.3
shall not be included in such calculation) as of such date in the bid packages
submitted by the Borrower as a part of the Accepted Borrowing Requests for such
Asset Pools; or

(o) failure to comply with Section 6.3 hereof; or

(p) failure by the Borrower or the Servicer (or any subservicer) to comply with
any decree, order or other Federal Trade Commission requirements which, in the
Lender’s sole discretion, has a material adverse effect on the value or
enforceability of the Assets or on the Servicer’s ability to service the Assets;
or

(q) a court order shall be entered which enjoins, restrains or in any way
prevents the Borrower from conducting all or any material part of its business
affairs in the ordinary course of business; or the withdrawal or suspension of
any license required for the conduct of any material part of the business of the
Borrower; or any asset of the Borrower shall become subject to an order or writ
granting a motion or action to replevy, sequester, garnish, attach or levy
against such asset and the Borrower shall fail, within ten (10) days thereafter,
to provide evidence reasonably acceptable to the Lender that the same shall have
been satisfied or dismissed; or

(r) an Event of Default shall occur under any Affiliated Party Credit Agreement.

Section 8.2 Rights and Remedies Upon the Occurrence of an Event of Default. Upon
the occurrence of an Event of Default or at any time thereafter until such Event
of Default is cured or waived to the written satisfaction of the Lender, the
Lender may exercise any or all of the following rights and remedies with respect
to outstanding Loans:

(a) by notice to the Borrower, (i) declare that the Lender will no longer
consider Borrowing Requests and (ii) declare the entire unpaid principal amount
of all Notes, or any of them, all interest accrued and unpaid thereon, and all
other Obligations under this Agreement to be forthwith due and payable whereupon
such Note or Notes, as the case may be, all such accrued interest, all such
Obligations (including, but not limited to and all Contingent Payments to the
extent funds are available therefor in accordance with Section 2.6) shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower;

(b) terminate the existing Servicing Agreement and enter into a new servicing
agreement with a replacement servicer to service and collect all Loan
Collateral, with such replacement servicer acting in its own name, but on behalf
of the Borrower or the Lender and taking direction solely and exclusively from
the Lender;

 

31

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(c) direct the Servicer then in place to take all steps necessary to collect or
otherwise liquidate the Loan Collateral in accordance with such procedures and
for such sale prices as the Lender shall specify and apply all Asset Pool
Proceeds resulting therefrom in accordance with Section 2.8, provided that each
Asset Pool shall be deemed to have an Asset Pool Shortfall Amount in an amount
equal to the unpaid principal balance of, and all accrued interest on, the
related Loan therefor; and

(d) exercise and enforce any and all rights and remedies available to the Lender
under any Loan Document (or otherwise by law or agreement), including, without
limitation, against any or all Loan Collateral securing payment of outstanding
Loans;

provided, however that (i) no Servicing Fee shall be payable with respect to any
Asset Pool Proceeds received as a result of any actions specified above if the
Lender effects collection thereof without the assistance of the Servicer and
(ii) no Asset Pool Proceeds shall be paid to the Borrower pursuant to
Section 2.8(h), (i) or (k) with respect to any Asset Pool until all outstanding
Loans, together with all interest thereon, shall have been paid in full,
whereupon all remaining Asset Pool Proceeds for each Asset Pool shall be
distributed in accordance with Section 2.8. Notwithstanding the foregoing, upon
the occurrence of an Event of Default described in Section 8.1(e), the entire
unpaid principal amount of all Notes, all interest accrued and unpaid thereon,
and all other Obligations under this Agreement (including, but not limited to,
Contingent Payments) shall be immediately due and payable without presentment,
demand, protest or notice of any kind.

ARTICLE IX

MISCELLANEOUS

Section 9.1 No Waiver; Cumulative Remedies. No failure or delay on the part of
the Lender in exercising any right, power or remedy under the Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy under the Loan Documents.
The remedies provided in the Loan Documents are cumulative and not exclusive of
any remedies provided by law.

Section 9.2 Amendments, Requested Waivers, Etc. No amendment, modification,
termination or waiver of any provision of any Loan Document or consent to any
departure by the Borrower therefrom shall be effective unless the same shall be
in writing and signed by the Lender. Any waiver or consent given hereunder shall
be effective only in the specific instance and for the specific purpose for
which given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.

Section 9.3 Severability Clause. Any part, provision representation or warranty
of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without

 

32

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invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate in good faith to develop a structure the economic effect
of which is as nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.

Section 9.4 Notices. Any notices, consents, directions, demands or other
communications given under this Agreement (unless otherwise specified herein)
shall be in writing and shall be deemed to have been duly given when delivered
in person or by overnight delivery at, or telecopied to the respective addresses
or telecopy numbers, as the case may be, set forth below (or to such other
address or telecopy numbers as either party shall give notice to the other party
pursuant to this Section 9.4):

If to the Borrower:

NCOP Capital IV, LLC

507 Prudential Road

Horsham, Pennsylvania 19044

Attention: Michael J. Barrist

Telephone: (215) 441-2101

Telecopy: (215) 441-3908

If to the Lender:

CVI GVF Finco, LLC

c/o CarVal Investors, LLC

Investment Manager for CVI GVF Finco, LLC

12700 Whitewater Drive

Minnetonka, MN 55343

Attention: Greggory S. Haugen

Telephone: (952) 984-3469

Telecopy: (952) 984-3905

With a copy to:

CVI Global Value Fund Cayman L.P.

c/o M & C Corporate Services Limited

P.O. Box 309GT

Ugland House, South Church Street

George Town, Grand Cayman

Cayman Islands

 

33

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Section 9.5 Reimbursement of the Lender’s Costs and Expenses. The Borrower and
the Lender agree that (a) all out-of-pocket costs and expenses incurred by the
Lender in connection with the preparation, execution and delivery of the Loan
Documents (including without limitation reasonable legal fees and expenses of
counsel), UCC searches, recording fees, and other similar expenses paid or
incurred by the Lender in connection with obtaining, perfecting or maintaining
its security interest or lien on or priority in any Loan Collateral shall
constitute Purchase Expenses with respect to an Asset Pool and the Lender and
the Borrower shall be payable as such from Asset Pool Proceeds in accordance
with Section 2.8, provided, however, that in the event (i) any such costs and
expenses are incurred by the Lender with respect to an Asset Pool that the
Lender has committed to finance pursuant to an Accepted Borrowing Request, but
which is not financed with proceeds of a Loan, or which is not purchased by the
Borrower, the Borrower will reimburse the Lender for all such costs and
expenses, and (ii) the Borrower does not submit any Borrowing Requests to the
Lender during the first six (6) months following the execution of this Agreement
or all of the Borrowing Requests submitted by the Borrower during the first six
(6) months following the execution of this Agreement are rejected by the Lender,
then the Lender and the Borrower will reimburse each other for fifty percent
(50%) of such other party’s legal fees incurred in the preparation, execution
and delivery of this Agreement; (b) all out-of-pocket costs and expenses
incurred by the Lender in connection with the administration, amendment,
documentation, recording, filing, insuring, or enforcing any Loan Document or
any Loan Collateral, or perfecting or maintaining the priority of any lien on or
security interest in any Loan Collateral, incurred after funding of the related
Loan shall constitute Loan Costs with respect to the related Asset Pool for
which they were incurred (or pro rata among all Asset Pools if not attributable
to one such Asset Pool) and shall be payable as such as Asset Pool Proceeds in
accordance with Section 2.8; and (c) the Borrower shall reimburse the Lender,
from Asset Pool Proceeds for any and all reasonable out-of-pocket costs and
expenses incurred by the Lender in connection with the enforcement by the Lender
of any of the rights or remedies available to the Lender hereunder or under any
of the Loan Documents or under applicable law, whether or not suit is filed with
respect thereto.

Section 9.6 Indemnity. In addition to the payment of expenses pursuant to
Section 9.5, the Borrower agrees to indemnify, defend and hold harmless the
Lender and each of its respective participants, parent corporations, subsidiary
corporations, affiliated corporations, successor corporations, and all present
and future officers, directors, employees and agents (the “Indemnitees”), from
and against (a) any and all transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the execution and
delivery of this Agreement and the other Loan Documents or the making of any
Loans (except for income or franchise taxes based on the Lender’s income) and
(b) any and all liabilities, losses, damages, penalties, judgments, suits,
claims, costs and expenses of any kind or nature whatsoever (including, without
limitations, the reasonable fees and disbursements of counsel) in connection
with any investigative, administrative or judicial proceedings, whether or not
such Indemnitee shall be designated a party thereto, which may be imposed on,
incurred by or asserted against such Indemnitee, in any manner relating to or
arising out of or in connection with, the making of any Loans or entering into
this Agreement or any other Loan Documents or the use or intended use of the
proceeds of the Loans or the collection of Assets, excepting, however, from the
foregoing any such liabilities, losses, damages, penalties, judgments, suits,
claims, costs and expenses resulting from collection actions undertaken by the
Lender, or by a replacement servicer appointed by the Lender, or the unlawful
conduct, willful misconduct or gross

 

34

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negligence of an Indemnitee. If any investigative, judicial or administrative
proceeding arising from any of the foregoing is brought against any Indemnitee,
upon request of such Indemnitee, the Borrower, or counsel designated by the
Borrower and satisfactory to the Indemnitee, will resist and defend such action,
suit or proceeding to the extent and in the manner directed by the Indemnitee,
at the Borrower’s sole cost and expense. Each Indemnitee will use its best
efforts to cooperate in the defense of any such action, suit or proceeding. If
the foregoing undertaking to indemnify, defend and hold harmless may be held to
be unenforceable because it violates any law or public policy, the Borrower
shall nevertheless make the maximum contribution to the payment and satisfaction
of each of the indemnified liabilities contemplated hereby which is permissible
under applicable law. The obligations of the Borrower under this Section 9.6
shall survive termination of this Agreement.

Section 9.7 Execution in Counterparts. This Agreement and other Loan Documents
may be executed in any number of counterparts, each of which when so executed
and delivered shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same instrument.

Section 9.8 Governing Law; Jurisdiction; Waiver of Jury Trial.

(a) Governing Law. Except as otherwise provided in the Security Agreement, the
Loan Documents shall be governed by, and construed in accordance with, the laws
of the State of Minnesota.

(b) Jurisdiction. The Borrower hereby irrevocably submits to the non-exclusive
jurisdiction of any federal court sitting in Minneapolis or St. Paul, Minnesota,
in any action or proceeding arising out of or relating to this Agreement or any
of the other Loan Documents, and the Borrower hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such federal court. The Borrower hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The Borrower irrevocably consents to
the service of copies of the summons and complaint and any other process which
may be served in any such action or proceeding by the mailing of copies of such
process, by certified mail, return receipt requested, to the Borrower at its
addresses specified in Section 9.4 above. The Borrower agrees 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. Nothing in this Section 9.8(b) shall affect the right of either
party to serve legal process in any other manner permitted by law or affect the
right of either party to bring any action or proceeding against the other party
or its property in the courts of other jurisdictions.

(c) WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY IRREVOCABLY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENT OR ANY INSTRUMENT OR DOCUMENT DELIVERED
THEREUNDER.

 

35

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Section 9.9 Integration. This Agreement comprises the final and complete
integration of all prior expressions by the parties hereto with respect to the
subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to such subject matter, superseding all prior oral
or written understandings.

Section 9.10 Agreement Effectiveness. This Agreement shall become effective upon
delivery of fully executed counterparts hereof to each of the parties hereto.

Section 9.11 Headings Descriptive. The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.

Section 9.12 Assignment. This Agreement shall be binding upon the Borrower and
the Lender and their respective successors and assigns, except that the Borrower
may not transfer or assign any or all of its rights or obligations hereunder
without the prior written consent of the Lender. The Lender may sell, transfer,
assign and convey any Note or any portion thereof and any or all of its rights
or obligations under this Agreement or with respect to any Loan or Note,
including without limitation the right to sell undivided participating interests
in any Loan or Note (provided that such sales of participating interests shall
not provide for a transfer or change of decision-making control with respect to
the administration and enforcement of this Agreement except in the event of a
default by the Lender under the related participation interest sale agreement),
to any CarVal Affiliate without any prior notice to or consent of the Borrower.
So long as no default has occurred pursuant to the Exclusivity Agreement, the
Lender shall not make any such assignment to any Person who is not a CarVal
Affiliate without the prior written consent of the Borrower. Each Note shall
contain the following provision regarding preconditions to the effectiveness of
any such sale, transfer or assignment by the Lender: “This Note shall not be
transferred without providing written notice of the transfer and the identity of
the transferee to the issuer, which notice shall be in the form of a true and
correct copy of the original endorsement of this Note provided to the issuer in
accordance with the notice provisions of the Credit Agreement. Any purported
transfer occurring without providing written notice to the issuer in accordance
with the previous sentence shall be null and void.”

Section 9.13 Advice from Independent Counsel. Each party hereto understands that
this Agreement is a legally binding agreement that may affect such party’s
rights. Each party hereto represents to the other that it has received legal
advice from counsel of its choice regarding the meaning and legal significance
of this Agreement and that it is satisfied with its legal counsel and the advice
received from it.

Section 9.14 Judicial Interpretation. Should any provision of this Agreement
require judicial interpretation, it is agreed that a court interpreting or
construing the same shall not apply a presumption that the terms hereof shall be
more strictly construed against any person by reason of the rule of construction
that a document is to be construed more strictly against the person who itself
or through its agent prepared the same, it being agreed that all parties hereto
have participated in the preparation of this Agreement.

Section 9.15 Use of Lender’s Name. The Borrower hereby agrees that neither the
Borrower nor the Servicer shall refer to or use the name “CVI GVF Finco, LLC,”
“CVI,”

 

36

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“CarVal Investors,” or “CarVal”, or any such name in any manner in any
collection or enforcement activities with respect to any Asset or in any
advertising, printed material, electronic medium or other medium, without first
obtaining the Lender’s prior written consent. The Lender shall have no
obligation to give any such written consent and may withhold the same in its
sole and absolute discretion.

Section 9.16 Confidentiality of Information. Each of the Lender and the Borrower
hereby acknowledges that it will use the Confidential Information (defined
below) solely for the purposes of evaluating, administering and enforcing the
transactions contemplated by this Agreement and making any necessary business
judgments with respect thereto and, in particular, determining whether or not to
make or obtain, as applicable, a Loan with respect to an Asset Pool. In
addition, neither the Lender nor the Borrower will disclose any Confidential
Information without the prior consent of the other, other than to the directors,
employees, auditors, counsel or affiliates of the Lender and the Borrower, as
applicable, each of whom shall be informed of the confidential nature of the
Confidential Information; provided, however, that the Lender and the Borrower
may disclose any such Confidential Information (i) to any party contemplated in
this Agreement or any other Loan Document for the purposes contemplated
hereunder or thereunder (including to any permitted assignee of a Loan), (ii) as
may be required by any municipal, state, federal or other regulatory body having
or claiming to have jurisdiction over such party, (iii) in order to comply with
any law, order, regulation, regulatory request or ruling applicable to such
party or (iv) in the event any such party is legally compelled (by
interrogatories, requests for information or copies, subpoena, civil
investigative demand or similar process) to disclose any such Confidential
Information. For purposes of this Section 9.16, “Confidential Information” shall
include: (a) all information regarding one or more Asset Pools in connection
with a Borrowing Request (including, but not limited to the Borrower’s, any
Excluded Party’s or any Affiliated Party’s pricing, bidding, collections,
returns and profitability) (the “Borrower Confidential Information”), and
(b) all information pertaining to the relationship between the Borrower and the
Lender evidenced by this Agreement and the other Loan Documents (the “Lender
Confidential Information”). This Section 9.16 shall be inoperative as to (A) the
Borrower, with respect to the Borrower Confidential Information, (B) the Lender,
with respect to the Lender Confidential Information, and (C) those portions of
the Confidential Information which are or become generally available to the
public, the Lender or the Borrower on a non-confidential basis from a source
other than the other party or an affiliate of the other party or were known to
the Lender or the Borrower on a non-confidential basis prior to its disclosure
by the other party.

Section 9.17 Full Recourse Obligations; Non-Recourse as to Certain Parties. All
Obligations are full recourse obligations of the Borrower and as to all Assets.
No Affiliated Party or Excluded Party (other than the Borrower and, as
applicable, the Servicer) shall have liability to the Lender under this
Agreement or otherwise for performance of the Obligations or in connection with
the transactions contemplated hereby; provided, however, that nothing in the
foregoing shall relieve any Affiliated Party or any Excluded Party from
liability to the Lender under the Exclusivity Agreement or for any
misapplication or misappropriation of any Asset Pool Proceeds or
misappropriation of any Loan Collateral, or for any act of fraud or any knowing
and intentional misrepresentation by or on behalf of the Borrower, the Servicer
or any such Affiliated Party or Excluded Party.

 

37

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Section 9.18 Effective Date and Termination. This Agreement shall become
effective upon execution and shall remain in force until the Facility
Termination Date.

[SIGNATURE PAGES FOLLOW]

 

38

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Execution Copy

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

 

NCOP CAPITAL IV, LLC

By:

  NCOP Nevada Holdings, Inc., its Manager

By:

 

/s/ Albert Zezulinski

Name:

  Albert Zezulinski

Title:

  President (CEO)

CVI GVF FINCO, LLC

By:

  CarVal Investors, LLC, Attorney-in-Fact

By:

 

/s/ Greggory S. Haugen

Name:

  Greggory S. Haugen

Title:

  Executive Vice President

[signature page to NCOP Capital IV Credit Agreement]

 

38

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Execution Version

EXHIBIT A

BORROWING REQUEST AND ACCEPTANCE

            ,        

CVI GVF Finco, LLC

12700 Whitewater Drive

Minnetonka, Minnesota 55437

Attn:                     

 

Re:

   Request for Loan under our Credit Agreement with you dated as of August 31,
2007 (the “Credit Agreement”)

Ladies and Gentlemen:

Unless otherwise expressly indicated, all capitalized terms used herein but not
otherwise herein defined shall have the respective meanings ascribed to them in
the Credit Agreement. On                     , we intend to submit an offer to
purchase a pool or pools of assets (the “Asset Pool”), which Asset Pool includes
consumer finance receivables and/or other delinquent or deficiency consumer
obligations (the “Assets”) from                                          (the
“Asset Pool Seller”) for a purchase price not to exceed $             (the
“Purchase Price”), such purchase to be effected pursuant to the terms and
conditions of a purchase agreement which, if available, is in substantially the
form attached hereto as Annex I (the “Purchase Agreement”). We anticipate that
the Total Cost of the Asset Pool will be $            .

Pursuant to Section 2.1 of the Credit Agreement, we hereby request that you make
a Loan in the amount of $            , subject to interest at the applicable
Floating Rate, which amount is [             percent (    %)] of the Total Cost
of the Asset Pool. Our Asset Pool Equity Contribution with respect to the Asset
Pool will be $            , which is [             percent (    %)] of the Total
Cost of the Asset Pool.

To induce you to make the Loans requested above, we hereby represent and warrant
to you the following:

(a) No Event of Default has occurred and is continuing, or will result from the
making of this Borrowing Request or the transactions contemplated hereby;

(b) The conditions precedent set forth in Section 4.2 of the Credit Agreement
are fully satisfied as of the date of the Borrowing Request; and

(c) The representations, warranties and covenants of the undersigned set forth
in Article V and Section 4.3 of the Credit Agreement are true and correct as of
the date of the Borrowing Request.

 

A-11

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

Pursuant to Section 2.1 of the Credit Agreement, included with this Borrowing
Request is the following pertinent information and documentation relating to the
Asset Pool:

(a) Attached hereto as Annex II is the related bid package as provided by the
Asset Pool Seller; and

(b) Attached hereto as Annex III is all relevant additional information
regarding the Assets, including without limitation, the aggregate number of
Accounts included in the Asset Pool, projections of Contingent Payments and
projections of Asset Pool Proceeds, Purchase Expenses incurred to date, an
estimate of future Purchase Expenses, a budget for the anticipated costs of
collection to be incurred in collecting the Assets and all related cash flow
models in sufficient detail to accurately describe the anticipated internal rate
of return for the Assets, a projected payment schedule over the expected term of
the Asset Pool as contemplated in Treasury Regulation § 1.12175-4(b) and other
information material to our economic assumptions with respect to the Assets.

We will use our best efforts to promptly supply such additional pertinent
information and documentation as you may request.

In accordance with Section 2.1 of the Credit Agreement, your failure to accept
this Borrowing Request within the Response Period shall be deemed a rejection of
this Borrowing Request by you.

 

Very truly yours,

NCOP CAPITAL IV, LLC

By:

  NCOP Nevada Holdings, Inc., its Manager

By:

 

 

Name:

 

 

Title:

 

 

Accepted, Agreed and Acknowledged this

     day of         , 20    :

 

CVI GVF FINCO, LLC

By:

  CarVal Investors, LLC, its Attorney-in-Fact

By:

 

 

Name:

 

 

Title:

 

 

 

A-25

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

ANNEX I

[PURCHASE AGREEMENT]

 

A-35

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

ANNEX II

[BID PACKAGE]

 

A-45

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

ANNEX III

[ASSET POOL INFORMATION]

 

A-55

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

Execution Version

EXHIBIT B-1

Pool Reference

                     -

________

PROMISSORY NOTE

 

$            

Minnetonka, Minnesota

            ,         

For value received, the undersigned, NCOP CAPITAL IV, LLC, a Nevada limited
liability company (the “Borrower”), hereby promises to pay to the order of CVI
GVF Finco, LLC, a Delaware limited liability company (the “Lender”), at its main
office in Minnetonka, Minnesota, or at any other place designated at any time by
the holder hereof, in lawful money of the United States of America and in
immediately available funds, the principal sum of
                                         dollars and     /100 ($            ),
together with interest on the principal amount hereunder remaining unpaid from
the date hereof until this Note is fully paid, at the interest rate in effect
from time to time under the Credit Agreement (defined below) computed in
accordance with the Credit Agreement, and all Contingent Payments computed in
accordance with the provisions of the Credit Agreement.

The principal hereof and interest accruing thereon shall be due and payable as
provided in the Credit Agreement, but in any event will be due and payable in
full on             ,          (the “Loan Maturity Date”). This Note may be
prepaid only in accordance with the Credit Agreement.

The “Credit Agreement,” as referred to herein, shall mean that certain Credit
Agreement dated as of August 31, 2007, by and among the undersigned and the
Lender. This Note is issued in connection with the acquisition by the Borrower
of a portfolio of assets from                      on (or about) the date hereof
and such portfolio is described and referred to in the Lender’s records as
                    . This Note is subject to and is payable in accordance with
the Credit Agreement and is one of the Notes referred to therein.

This Note is secured, among other things, pursuant to the Security Agreement (as
defined in the Credit Agreement) and the other Loan Documents (as defined in the
Credit Agreement), and may now or hereafter be secured by one or more other
security agreements, pledges, assignments, agreements or other instruments.

 

B-1-11

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

The Borrower hereby agrees to pay all costs of collection, including attorneys’
fees and legal expenses, in the event this Note is not paid when due, whether or
not legal proceedings are commenced. Presentment or other demand for payment,
notice of dishonor and protest are expressly waived.

This Note shall not be transferred without providing written notice of the
transfer and the identity of the transferee to the issuer, which notice shall be
in the form of a true and correct copy of the original endorsement of this Note
provided to the issuer in accordance with the notice provisions of the Credit
Agreement. Any purported transfer occurring without providing written notice to
the issuer in accordance with the previous sentence shall be null and void.

 

NCOP CAPITAL IV, LLC

By:

  NCOP Nevada Holdings, Inc., its Manager

By:

 

 

Name:

 

 

Title:

 

 

 

B-1-22

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

Execution Version

EXHIBIT B-2

Pool Reference

                     -

_________

PROMISSORY NOTE

 

$            

Minnetonka, Minnesota

            ,         

For value received, the undersigned, NCOP CAPITAL IV, LLC, a Nevada limited
liability company (the “Borrower”), hereby promises to pay to the order of CVI
GVF Finco, LLC, a Delaware limited liability company (the “Lender”), at its main
office in Minnetonka, Minnesota, or at any other place designated at any time by
the holder hereof, in lawful money of the United States of America and in
immediately available funds, the principal sum of
                                         dollars and     /100 ($            ),
together with interest on the principal amount hereunder remaining unpaid from
the date hereof until this Note is fully paid, at the interest rate in effect
from time to time under the Credit Agreement (defined below) computed in
accordance with the Credit Agreement, and all Contingent Payments computed in
accordance with the provisions of the Credit Agreement.

The principal hereof and interest accruing thereon shall be due and payable as
provided in the Credit Agreement, but in any event will be due and payable in
full on             ,          (the “Loan Maturity Date”). This Note may be
prepaid only in accordance with the Credit Agreement.

The “Credit Agreement,” as referred to herein, shall mean that certain Credit
Agreement dated as of August 31, 2007, by and among the undersigned and the
Lender. This Note is issued in connection with the acquisition by the Borrower
of a portfolio of assets from                      on (or about) the date hereof
and such portfolio is described and referred to in the Lender’s records as
                    . This Note is subject to and is payable in accordance with
the Credit Agreement and is one of the Notes referred to therein.

This Note is issued in replacement of, and substitution for, but not in payment
of, the undersigned’s Promissory Note dated             ,         , payable to
the order of the Lender in the original principal amount of $            .

This Note is secured, among other things, pursuant to the Security Agreement (as
defined in the Credit Agreement) and the other Loan Documents (as defined in the
Credit Agreement), and may now or hereafter be secured by one or more other
security agreements, pledges, assignments, agreements or other instruments.

 

B-2-11

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The Borrower hereby agrees to pay all costs of collection, including attorneys’
fees and legal expenses, in the event this Note is not paid when due, whether or
not legal proceedings are commenced. Presentment or other demand for payment,
notice of dishonor and protest are expressly waived.

This Note shall not be transferred without providing written notice of the
transfer and the identity of the transferee to the issuer, which notice shall be
in the form of a true and correct copy of the original endorsement of this Note
provided to the issuer in accordance with the notice provisions of the Credit
Agreement. Any purported transfer occurring without providing written notice to
the issuer in accordance with the previous sentence shall be null and void.

 

NCOP CAPITAL IV, LLC

By:

  NCOP Nevada Holdings, Inc., its Manager

By:

 

 

Name:

 

 

Title:

 

 

 

B-2-23

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SCHEDULE 5.5

MATERIAL LITIGATION OF THE BORROWER

NONE

 

B-2-33