Exhibit 10.1




EXECUTION COPY




 




 








 




 









ACAS TRANSFER AGREEMENT




 




 




between




 




 




AMERICAN CAPITAL STRATEGIES, LTD.,




as the Originator,




 




 




and




 




 




ACAS BUSINESS LOAN LLC, 2002–2,




as the Trust Depositor




 




 




Dated

as of August 8, 2002




 




 








 









 




ACAS

Business Loan Trust Notes, Series 2002–2


Class A, Class B and Class C Notes




 





























 




TRANSFER

AGREEMENT




 




THIS  ACAS

TRANSFER AGREEMENT, dated as of August 8, 2002, is between AMERICAN

CAPITAL STRATEGIES, LTD., a Delaware corporation (together with its successors

and assigns, “ACAS”), as the originator (together with its successor and

assigns, the “Originator”) and ACAS BUSINESS LOAN LLC, 2002–2, a

Delaware limited liability company, as the trust depositor (together with its

successor and assigns, the “Trust Depositor”).




 




WHEREAS, in the

regular course of its business, the Originator originates, purchases or

otherwise acquires Loans (as defined in the Transfer and Servicing Agreement);




 




WHEREAS, the Trust

Depositor desires to acquire the Initial Loans from the Originator and may

acquire from time to time thereafter certain Substitute Loans (such Initial

Loans and Substitute Loans, together with certain related property as more

fully described in the Transfer and Servicing Agreement, being the Loan Assets

as defined herein);




 




WHEREAS, it is a

condition to the Trust Depositor’s acquisition of the Initial Loans from the

Originator that the Originator make certain representations and warranties

regarding the Loan Assets for the benefit of the Trust Depositor as well as the

Issuer;




 




WHEREAS, the Trust

Depositor is willing to purchase and accept assignment of the Loan Assets from

the Originator pursuant to the terms hereof; and




 




WHEREAS, on the

Closing Date, the Trust Depositor will sell, convey and assign all its right,

title and interest in the Loan Assets to ACAS Business Loan Trust 2002–2, a

Delaware business trust (together with its successors and assigns, the “Issuer”),

pursuant to a Transfer and Servicing Agreement, dated as of the date hereof (as

amended, modified, restated, replaced, waived, substituted, supplemented or

extended from time to time, the “Transfer and Servicing Agreement”)

among ACAS, as the originator, the servicer and the swap guarantor, the Trust

Depositor, as the trust depositor, the Issuer, as the issuer, and Wells Fargo

Bank Minnesota, National Association, as the indenture trustee and the backup

servicer.




 




NOW, THEREFORE,

based upon the above recitals, the mutual promises and agreements contained

herein, and other good and valuable consideration, the receipt and sufficiency

of which are hereby acknowledged, the parties hereto, intending to be legally

bound, hereby agree as follows:




 




ARTICLE I




 




DEFINITIONS




 




Section 1.01                            Definitions.




 




Whenever

capitalized terms are used but not defined in this Agreement, such terms shall

have the meanings attributed to such terms in the Transfer and Servicing

Agreement, unless the context otherwise requires.




 





























 




Section 1.02                            Other

Terms.




 




All accounting

terms used but not specifically defined herein shall be construed in accordance

with generally accepted accounting principles. 

The symbol “$” shall mean the lawful currency of the United States.  All terms used in Article 9 of the UCC in

the State of New York, and not specifically defined herein, are used herein as

defined in such Article 9.




 




Section 1.03                            Computation

of Time Periods.




 




Unless otherwise

stated in this Agreement, in the computation of a period of time from a

specified date to a later specified date, the word “from” means “from and

including”, the words “to” and “until” each mean “to but excluding”, and the

word “within” means “from and excluding a specified date and to and including a

later specified date”.




 




Section 1.04                            Interpretation.




 




In this Agreement,

unless a contrary intention appears:




 




(i)            the

singular number includes the plural number and vice versa;




 




(ii)           reference

to any Person includes such Person’s successors and assigns but, if applicable,

only if such successors and assigns are permitted by the Transaction Documents;




 




(iii)          reference

to any gender includes each other gender;




 




(iv)          reference

to day or days without further qualification means calendar days;




 




(v)           unless

otherwise stated, reference to any time means New York, New York time;




 




(vi)          references

to “writing” include printing, typing, lithography, electronic or other means

of reproducing words in a visible form;




 




(vii)         reference

to any agreement (including any Transaction Document), document or instrument

means such agreement, document or instrument as amended, modified,

supplemented, replaced, restated, waived or extended and in effect from time to

time in accordance with the terms thereof and, if applicable, the terms of the

other Transaction Documents, and reference to any promissory note includes any

promissory note that is an extension or renewal thereof or a substitute or

replacement therefor; and




 




(viii)        reference

to any Requirement of Law means such Requirement of Law as amended, modified,

codified, replaced or reenacted, in whole or in part, and in effect from time

to time, including rules and regulations promulgated thereunder and reference

to any Section or other provision of any Requirement of Law means that

provision of such Requirement of Law from time to time in effect and

constituting the substantive amendment, modification, codification, replacement

or reenactment of such Section or other provision.




 




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Section

1.05                            References.




 




All section

references (including references to the Preamble), unless otherwise

indicated, shall be to Sections (and the Preamble) in this

Agreement.




 




Section

1.06                            Calculations.




 




Except as

otherwise provided herein, all interest rate and basis point calculations

hereunder will be made on the basis of a 360–day year and the actual days

elapsed in the relevant period and will be carried out to at least three

decimal places.




 




ARTICLE II




 




TRANSFER OF LOAN ASSETS




 




Section 2.01                            Transfer

of Loan Assets.




 




(a)           The Originator shall sell, assign and

convey assets to the Trust Depositor pursuant to the terms and provisions

hereof.




 




(b)           Subject to and upon the terms and

conditions set forth herein, the Originator hereby sells, transfers, assigns,

sets over and otherwise conveys to the Trust Depositor, for a purchase price of

$128,750,250 in cash, all of the right, title and interest of the Originator in

and to the following (the items in (i) – (vi) below, but in each case excluding

the Retained Interest and Excluded Amounts, being collectively referred to

herein as the “Loan Assets”):




 




(i)            the Initial Loans

and all Collections and other monies due or to become due in payment of such

Loans on and after the Initial Cut–Off Date, including any Prepayment amounts,

any Prepayment Premiums, any Late Charges, any payments in respect of a

casualty or early termination, any Insurance Proceeds and any Liquidation

Proceeds received with respect to the foregoing;




 




(ii)           the Collateral

related to such Loans (to the extent the Originator, other than solely in its

capacity as collateral agent under any loan agreement with an Obligor, has been

granted a Lien thereon), including the related security interest granted by the

Obligor under such Loans, all proceeds from any sale or other disposition of

such Collateral, and all Insurance Policies;




 




(iii)          the Loan Files and

all documents and records (including computer records) relating thereto;




 




(iv)          all guarantees,

indemnities, warranties and other agreements or arrangements of whatever

character from time to time supporting or securing payment of such Loans;




 




(v)           the Trust Accounts

and all Trust Account Property (to the extent of the Originator’s interest if

any therein); and




 




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(vi)          all income,

payments, products, proceeds and other benefits of any and all of the

foregoing.




 




To the extent the

purchase price paid to the Originator for any Loan is less than the fair market

value of such Loan, the difference between such fair market value and the

purchase price shall be deemed to be a capital contribution made by the

Originator to the Trust Depositor on the applicable purchase date.




 




(c)           The Originator and the Trust

Depositor acknowledge that the representations and warranties of the Originator

in Section 3.01, 3.02, 3.03, 3.04 and 3.05

will run to and be for the benefit of the Issuer, the Trustees and the Swap

Counterparties, and the Issuer and the Trustees may enforce, directly without

joinder of the Trust Depositor, the repurchase obligations of the Originator

with respect to breaches of such representations and warranties as set forth

herein and in Section 6.01.




 




(d)           The sale, transfer, assignment,

set–over and conveyance of the Loan Assets by the Originator to the Trust

Depositor pursuant to this Agreement does not constitute and is not intended to

result in a creation or an assumption by the Trust Depositor or the Issuer of

any obligation of the Originator in connection with the Loan Assets, or any

agreement or instrument relating thereto, including, without limitation,

(i) any obligation to any Obligor, if any, not financed by the Originator,

(ii) any taxes, fees, or other charges imposed by any Governmental Authority

and (iii) any insurance premiums that remain owing with respect to any

Loan at the time such Loan is sold hereunder. 

Without limiting the foregoing, the Trust Depositor does not assume any

obligation to purchase any additional notes or loans under agreements governing

the Loan Assets.




 




(e)           The Originator and the Trust

Depositor intend and agree that (i) the transfer of the Loan Assets from the

Originator to the Trust Depositor and the transfer of the Loan Assets from the

Trust Depositor to the Issuer are intended to be a sale, conveyance and

transfer of ownership of the Loan Assets rather than the mere granting of a

security interest to secure a borrowing and (ii) such Loan Assets shall

not be part of the Originator’s or the Trust Depositor’s estate in the event of

a filing of a bankruptcy petition or other action by or against such Person

under any Insolvency Law.  In the event,

however, that notwithstanding such intent and agreement, such transfers are

deemed to be a grant of a mere security interest to secure indebtedness, the

Originator shall be deemed to have granted (and hereby does grant) to the Trust

Depositor a perfected first priority security interest in such Loan Assets, and

this Agreement shall constitute a security agreement under Requirements of Law,

securing the repayment of the purchase price paid hereunder, and the

obligations and/or interests represented by the Securities and the obligations

of the Issuer under the Swap Transactions and the Swaps, in the order and

priorities, and subject to the other terms and conditions of, this Agreement,

the Transfer and Servicing Agreement, the Indenture, the Trust Agreement and

the Swaps, together with such other obligations or interests as may arise

hereunder and thereunder in favor of the parties hereto and thereto.




 




(f)            If any such transfer of the Loan

Assets is deemed to be the mere granting of a security interest to secure a

borrowing, the Trust Depositor may, to secure the Trust Depositor’s obligations

under the Transfer and Servicing Agreement (to the extent that the transfer of

the




 




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Loan Assets thereunder is deemed to be a mere granting

of a security interest to secure a borrowing) repledge and reassign (i) all or

a portion of the Loan Assets pledged to the Trust Depositor by the Originator

and with respect to which the Trust Depositor has not released its security

interest at the time of such pledge and assignment, and (ii) all proceeds

thereof.  Such repledge and reassignment

may be made by the Trust Depositor with or without a repledge and reassignment

by the Trust Depositor of its rights under any agreement with the Originator,

and without further notice to or acknowledgment from the Originator.  The Originator waives, to the extent

permitted by Requirements of Law, all claims, causes of action and remedies,

whether legal or equitable (including any right of setoff), against the Trust

Depositor or any assignee of the Trust Depositor relating to such action by the

Trust Depositor in connection with the transactions contemplated by this

Agreement and the Transaction Documents.




 




Section 2.02                            Conditions

to Transfer of Loan Assets to the Trust Depositor.




 




On or before the

Closing Date, the Originator shall deliver or cause to be delivered to the

Trust Depositor, the Owner Trustee and the Indenture Trustee each of the

following documents, certificates and other items:




 




(i)            a certificate of an

officer of the Originator substantially in the form of Exhibit C to

the Transfer and Servicing Agreement;




 




(ii)           copies of

resolutions of the Board of Directors of the Originator and the Servicer or of

the Executive Committee of the Board of Directors of the Originator and the

Servicer approving the execution, delivery and performance of this Agreement

and the transactions contemplated hereunder, certified in each case by the

Secretary or an Assistant Secretary of the Originator, the Servicer and the

member of the Trust Depositor;




 




(iii)          officially

certified recent evidence of due incorporation and good standing of the

Originator, the Servicer and the Trust Depositor under the laws of the State of

Delaware;




 




(iv)          the initial List of

Loans, certified by an officer of the Trust Depositor, together with an

Assignment substantially in the form of Exhibit A (along with the

delivery of any instruments and Loan Documents as required under Section 2.06

of the Transfer and Servicing Agreement);




 




(v)           a letter from each

Rating Agency assigning to each of the Offered Notes the ratings disclosed in

the Private Placement Memorandum;




 




(vi)          a letter from Ernst

& Young, or another nationally recognized accounting firm, addressed to the

Originator and the Trust Depositor, (a) stating that such firm has

reviewed a sample of the Initial Loans and performed specific procedures for

such sample with respect to certain loan terms and (b) identifying those

Initial Loans that do not conform to the procedures;




 




(vii)         [Reserved];




 




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(viii)        evidence of proper

filing with appropriate offices in the UCC Filing Locations of UCC financing

statements delivered by the Originator, as debtor, naming the Trust Depositor

as secured party (and the Issuer as assignee) and identifying the Loan Assets

as collateral;




 




(ix)           an Officer’s

Certificate listing the Servicer’s Servicing Officers;




 




(x)            evidence of deposit

in the Collection Account of all funds received with respect to the Initial

Loans on and after the Initial Cut–Off Date to the date two (2) days preceding

the Closing Date, together with an Officer’s Certificate from the Servicer to

the effect that such amount is correct;




 




(xi)           evidence of deposit

in the Reserve Fund of the Reserve Fund Initial Deposit by the Issuer;




 




(xii)          a fully executed

copy of each Transaction Document;




 




(xiii)         opinions of counsel

for the Originator, in form and substance satisfactory to the Initial Purchaser

(and including as an addressee thereof each Rating Agency);




 




(xiv)        an opinion of Winston

& Strawn to the effect that, for federal income tax purposes, the

Class A Notes and Class B Notes will be characterized as debt and the

Issuer will not be characterized as an association, taxable mortgage pool, or

publicly traded partnership taxable as a corporation; and




 




(xv)         an opinion of Winston

& Strawn to the effect that, for Maryland tax purposes, the Issuer will not

be subject to income tax imposed by the State of Maryland, and holders of the

Class A Notes and Class B Notes that are not otherwise subject to State of

Maryland income tax jurisdiction will not become subject to income taxation by

the State of Maryland solely as a result of their ownership of the Class A

Notes and Class B Notes.




 




Section 2.03                            Acceptance

by the Trust Depositor.




 




On the Closing

Date, if the conditions set forth in Section 2.02 have been satisfied or

waived in writing, the Originator shall deliver, on behalf of the Trust

Depositor, to the Issuer the Loan Assets and such delivery to and acceptance by

the Issuer shall be deemed to be delivery to and acceptance by the Trust Depositor.




 




Section 2.04                            Conveyance

of Substitute Loans.




 




(a)           Subject to subsections 2.01(d)

and (e) and the satisfaction of the conditions set forth in paragraph

(c) of this Section 2.04, the Originator may at its option (but

shall not be obligated to) sell, transfer, assign, set over and otherwise

convey to the Trust Depositor (by delivery of an executed Subsequent Purchase

Agreement substantially in the form attached as Exhibit J to the

Transfer and Servicing Agreement), without recourse other than as expressly

provided herein and therein (and the Trust Depositor shall be required to

purchase through cash payment or by exchange of one or more related Loans

released by the Issuer to the Trust




 




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Depositor on the Subsequent Transfer Date), all of the

right, title and interest of the Originator in and to the following (the

property in clauses (i)–(vi) below, but in each case excluding the

Retained Interest and the Excluded Amounts, upon such transfer, becoming part

of the “Loan Assets”):




 




(i)            the Substitute

Loans identified in the related Addition Notice and all Collections and other

monies received in payment of such Substitute Loans on and after the related

Subsequent Cut–Off Date, including any Prepayment amounts, any Prepayment

Premiums, any Late Charges, any payments in respect of a casualty or early

termination, any Insurance Proceeds and any Liquidation Proceeds received with

respect to the foregoing;




 




(ii)           the Collateral

related to such Loans (to the extent the Originator, other than solely in its

capacity as collateral agent under any loan agreement with an Obligor, has been

granted a Lien thereon), including the related security interest granted by the

Obligor under such Loans, all proceeds from any sale or other disposition of

such Collateral and all Insurance Policies;




 




(iii)          the Loan Files and

all documents and records (including computer records) relating thereto;




 




(iv)          all guarantees,

indemnities, warranties and other agreements or arrangements of whatever

character from time to time supporting or securing payment of such Loans;




 




(v)           the Trust Accounts

and all Trust Account Property (to the extent of the Originator’s interest if

any therein); and




 




(vi)          all income,

payments, products, proceeds and other benefits of any and all of the

foregoing.




 




(b)           Subject to subsections 2.01(d)

and (e) and the conditions set forth in subsection 2.04(c),

the Originator shall sell, transfer, assign, set over and otherwise convey to

the Trust Depositor, without recourse other than as expressly provided in this

Agreement, (i) all the right, title and interest of the Originator in and to

the Substitute Loans sold pursuant to subsection 2.04(a) and (ii)

all other rights and property interests consisting of Loan Assets related to

such Substitute Loans (the property in clauses (i)–(ii) above, upon such

transfer, shall be included in the term “Loan Assets”).




 




(c)           The Originator shall transfer to the

Trust Depositor and the Trust Depositor shall transfer to the Issuer the

Substitute Loans and the other property and rights related thereto described in

subsection 2.04(a), in the case of the Originator, or subsection

2.04(b), in the case of the Trust Depositor, above only upon the

satisfaction of each of the following conditions on or prior to the related

Subsequent Transfer Date (and the delivery of a related Addition Notice by the

Trust Depositor shall be deemed a representation and warranty by the Trust

Depositor and of the Originator that such conditions have been or will be, as of

the related Subsequent Transfer Date, satisfied):




 




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(i)            the Trust Depositor

shall have provided the Issuer and the Indenture Trustee with a timely Addition

Notice complying with the definition thereof contained herein, which notice

shall in any event be no later than five (5) days prior to the date of

addition;




 




(ii)           there shall have

occurred, with respect to each such Substitute Loan, a corresponding

Substitution Event with respect to one or more Loans then in the Loan Pool;




 




(iii)          the Substitute

Loan(s) being conveyed to the Issuer satisfy the Substitute Loan Qualification

Conditions;




 




(iv)          the Originator shall

have delivered to the Trust Depositor a duly executed written Subsequent

Purchase Agreement, which shall include a Subsequent List of Loans listing the

Substitute Loans;




 




(v)           the Trust Depositor

shall have delivered to the Issuer a duly executed written Subsequent Transfer

Agreement, which shall include a Subsequent List of Loans listing the Substitute

Loans;




 




(vi)          the Trust Depositor

shall have deposited or caused to be deposited in the Collection Account all

Collections received with respect to the Substitute Loans on and after the

related Subsequent Cut–Off Date;




 




(vii)         as of each

Subsequent Transfer Date, neither the Originator nor the Trust Depositor was

insolvent nor will either of them have been made insolvent by such transfer nor

is either of them aware of any pending insolvency;




 




(viii)        no selection

procedures believed by the Originator or the Trust Depositor to be adverse to

the interests of the Securityholders or the Swap Counterparties shall have been

utilized in selecting the Substitute Loans;




 




(ix)           each of the

representations and warranties made by the Originator and the Trust Depositor pursuant

to subsections 3.02 (including without limitation that such

Substitute Loan is an Eligible Loan), 3.03(b)(i), (ii) and (iv),

3.04 and 3.05 of the Transfer and Servicing Agreement and, with

respect to the Originator only, this Agreement, and applicable to the

Substitute Loans shall be true and correct as of the related Subsequent

Transfer Date; provided, however, that, (a) with respect to

the representation and warranty made by the Originator and Trust Depositor in subsection 3.05(a)

of the Transfer and Servicing Agreement and, with respect to the Originator

only, this Agreement, such representation and warranty shall only apply to a

Loan that is being substituted for a Loan that is not an Eligible Loan,

(b) the representations and warranties made by the Originator and Trust

Depositor in subsections 3.03(b)(iv) and 3.05 of the

Transfer and Servicing Agreement and, with respect to the Originator only, this

Agreement, shall be determined as if such Substitute Loan were included in the

Loan Pool as of the Initial Cut–Off Date and (c) the representation in

clause 38 of the definition of Eligible Loan shall not apply to Substitute

Loans that are not fully funded Loans;




 




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(x)            the Originator

shall, at its own expense, on or prior to the Subsequent Transfer Date,

indicate in its Computer Records that ownership of the Substitute Loans

identified on the Subsequent List of Loans in the Subsequent Transfer Agreement

has been sold to the Issuer through the Trust Depositor pursuant to this

Agreement; and




 




(xi)           prior to such

substitution the Originator has received written confirmation from the Rating

Agencies (which shall respond to the Originator within five (5) Business Days

after receiving written notice from the Originator of its intention to

substitute a Loan) that the proposed substitution will not result in a Ratings

Effect; provided,

however,

that any failure by each of the Rating Agencies to respond to the Originator

shall be deemed to be a non–approval by the Rating Agencies; provided,

further,

however,

with respect to the substitution of a Prepaid Loan, only notice to, and not

confirmation from, Fitch shall be required.




 




Section 2.05                            Delivery

of Loan Files.




 




The Originator

shall deliver, on behalf of the Trust Depositor, possession of all

“instruments” (within the meaning of Article 9 of the UCC) not

constituting part of “chattel paper” (within the meaning of such

Article 9) that evidence any Loan, including all Underlying Notes, and all

other portions of the Loan Files, to the Indenture Trustee on behalf of the

Issuer and the Swap Counterparties five (5) Business Days prior to the

applicable Assignment Date, in each case endorsed in blank without

recourse.  Pursuant to Section 3.06

of the Indenture, the Issuer is required to deliver such instruments and Loan

Files to the Indenture Trustee as pledgee under the Indenture for the benefit

of the Noteholders and the Swap Counterparties.  Accordingly, the Trust Depositor hereby authorizes and directs

the Originator to deliver possession of all such instruments and the Loan Files

to the Indenture Trustee on behalf of and for the account of the Issuer, as

assignee of the Trust Depositor, and agrees that such delivery shall satisfy

the condition set forth in the first sentence of this Section 2.05.  The Originator shall also identify on the

List of Loans (including any deemed amendment thereof associated with any

Substitute Loans), whether by attached schedule or marking or other effective

identifying designation, all Loans that are or are evidenced by such

instruments.




 




Section 2.06                            Release

of Released Amounts.




 




Immediately upon

the release to the Trust Depositor by the Indenture Trustee of the Released

Amounts, the Trust Depositor hereby irrevocably agrees to release to the

Originator such Released Amounts, which release shall be automatic and shall

require no further act by the Trust Depositor; provided,  that,

the Trust Depositor shall execute and deliver such instruments of release and

assignment, or otherwise confirming the foregoing release of any Released

Amounts, as may be reasonably requested by the Originator.




 




ARTICLE III




 




REPRESENTATIONS AND WARRANTIES




 




The Originator

makes, and upon execution of each Subsequent Purchase Agreement is deemed to

make, the following representations and warranties, on which the Trust

Depositor will




 




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rely in conveying the Loan Assets on the applicable Assignment Date to

the Issuer, and on which the Issuer, the Securityholders and the Swap

Counterparties will rely.  The Trust

Depositor acknowledges that such representations and warranties are being made

by the Originator for the benefit of the Issuer, the Securityholders and the

Swap Counterparties.




 




Such

representations and warranties speak as of the execution and delivery of this

Agreement and as of the applicable Assignment Date, but shall survive the sale,

transfer and assignment of the Loan Assets to the Issuer.  The repurchase obligation or substitution

obligation of the Originator set forth in Section 6.01 constitutes the

sole remedy available for a breach of a representation or warranty of the

Originator set forth in Sections 3.01, 3.02, 3.03, 3.04

or 3.05 of this Agreement. 

Notwithstanding the foregoing, the Originator shall not be deemed to be

remaking any of the representations set forth in Section 3.03 or 3.05

on a Subsequent Transfer Date with respect to the Substitute Loans, as such

representations relate solely to the composition of the Initial Loans conveyed

on the Closing Date; provided, that, any inaccurate

representation as to concentrations contained in any Addition Notice shall be

subject to the same remedies hereunder as if such representation were made

under Section 3.05 on the Closing Date with respect to an Initial Loan.




 




Section

3.01                            Representations

and Warranties Regarding the Originator.




 




By its execution

of this Agreement and each Subsequent Purchase Agreement, the Originator

represents and warrants that:




 




(a)           Organization and Good Standing.  The Originator is a corporation duly

organized, validly existing and in good standing under the laws of the

jurisdiction of its organization and has the requisite corporate power to own

or lease its assets and to transact the business in which it is currently

engaged.  The Originator is duly

qualified to do business as a foreign corporation and is in good standing in

each jurisdiction in which the character of the business transacted by it or

properties owned or leased by it requires such qualification and in which the

failure so to qualify would not reasonably be expected to have a material

adverse effect on the business, properties, assets, or condition (financial or

otherwise) of the Originator or Trust Depositor.  The Originator is properly licensed in each jurisdiction to the

extent required by the laws of such jurisdiction in order to originate, and (if

the Originator is to be the Servicer) service the Loans in accordance with the

terms of the Transfer and Servicing Agreement.




 




(b)           Authorization.  The Originator has the power and authority

to make, execute, deliver and perform this Agreement and the other Transaction

Documents to which the Originator is a party and all of the transactions

contemplated under this Agreement and the other Transaction Documents to which

the Originator is a party, and has taken all necessary corporate action to

authorize the execution, delivery and performance of this Agreement and the

other Transaction Documents to which the Originator is a party.




 




(c)           Valid Sale.  This Agreement and each Subsequent Purchase

Agreement, if any, shall effect a valid sale, transfer and assignment of the

Loan Assets from the Originator to the Trust Depositor, enforceable against the

Originator in accordance with their terms.




 




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(d)           Binding Agreements.  This Agreement and the other Transaction

Documents to which the Originator is a party constitute the legal, valid and

binding obligation of the Originator enforceable in accordance with their

terms, except as enforcement of such terms may be limited by bankruptcy,

insolvency or similar laws affecting the enforcement of creditors’ rights

generally and by the availability of equitable remedies.




 




(e)           No Consent Required.  The Originator is not required to obtain the

consent of any other party or any consent, license, approval or authorization

from, or registration or declaration with, any Governmental Authority in

connection with the execution, delivery, performance, validity or

enforceability of this Agreement and the other Transaction Documents to which

the Originator is a party except (i) for the filing of the UCC financing

statements and (ii) such consents, licenses, approvals, authorizations,

registrations and declarations which have been obtained and are in full force

and effect.




 




(f)            No Violations.  The Originator’s execution, delivery and

performance of this Agreement and the other Transaction Documents to which the

Originator is a party will not violate any provision of any Requirements of Law

or any order or decree of any court or the Certificate of Incorporation or

Bylaws of the Originator, or constitute (with or without notice or lapse of

time or both) a material breach of any mortgage, indenture, contract or other

agreement to which the Originator is a party or by which the Originator or any

of the Originator’s properties may be bound.




 




(g)           Litigation.  No litigation or administrative proceeding

of or before any court, tribunal or governmental body is currently pending, or,

to the knowledge of the Originator, threatened, against the Originator or any

of its respective properties or with respect to this Agreement or any other

Transaction Document to which the Originator is a party that, if adversely

determined, would, in the reasonable opinion of the Originator, be expected to

have a material adverse effect on the business, properties, assets or condition

(financial or other) of the Originator or the transactions contemplated by this

Agreement or any other Transaction Document to which the Originator is a party.




 




(h)           Name and Location; No Changes.  The Originator’s name and location (within

the meaning of Article 9 of the UCC) are as set forth in Section 8.03.  The Originator has not changed its name,

identity, structure, existence or state of incorporation, whether by amendment

of its certificate of incorporation, by reorganization or otherwise, and has

not changed its location (within the meaning of Article 9 of the UCC)

within the four (4) months preceding the Closing Date.




 




(i)            No Bulk Sales.  The execution, delivery and performance of

this Agreement by the Originator do not require compliance with any “bulk

sales” laws by the Originator.




 




(j)            Solvency.  The Originator on each date of, and after

giving effect to, the transfer of the Loans and any Substitute Loans, as the

case may be, to the Trust Depositor pursuant to this Agreement is and will be

Solvent.




 




(k)           Use of Proceeds.  No proceeds of the sale of any Initial Loan

or Substitute Loan hereunder received by the Originator will be used by the

Originator to purchase or carry any




 




11





























 




“margin stock” as such term is defined in

Regulation T, U or X of the Board of Governors of the Federal Reserve

System.




 




(l)            An Investment Company.  The Originator is properly registered as an

“investment company” within the meaning, and is, and after consummation of the

transactions contemplated by this Agreement and the other Transaction Documents

will be, in compliance with all requirements, of the Investment Company Act of

1940, as amended.




 




(m)          Taxes.  To the best of the Originator’s knowledge,

(i) the Originator has filed all tax returns required to be filed in the

normal course of its business and has paid or made adequate provisions for the

payment of all taxes, assessments and other governmental charges due from the

Originator or is contesting any such tax, assessment or other governmental

charge in good faith through appropriate proceedings, (ii) no tax Lien has

been filed with respect thereto, and (iii) no claim is being asserted with

respect to any such tax, fee or other charge.




 




(n)           Sale Treatment.  The Originator has treated the transfer of

Loan Assets to the Trust Depositor for all purposes (other than sale treatment

for financial accounting purposes) as a sale and purchase on all of its

relevant books, records, financial statements and other applicable documents,

except to the extent applicable tax laws require otherwise.




 




(o)           Marking of Files.  The Originator will have, at its own

expense, prior to the close of business on the Closing Date, (i) indicated

in its Computer Records that ownership of the Loans transferred by it to the

Trust Depositor and identified on the List of Loans have been sold to the Trust

Depositor and (ii) cause to be affixed to the original of each Underlying

Note and a copy of each loan agreement the following legend:




 




This loan agreement/note is subject to a security interest granted to

Wells Fargo Bank Minnesota, National Association, as Indenture Trustee on

behalf of the Noteholders and the Swap Counterparties.  UCC–1 Financing Statements covering this

loan agreement/note have been filed with the Secretary of State of the State of

Delaware.  Such Lien will be released

only in connection with appropriate filings in such offices. Consequently,

potential purchasers of this loan agreement/note must refer to such filings to

determine whether such Lien has been released.




 




(p)           Security Interest.




 




(i)            This Agreement

creates a valid, continuing and enforceable security interest (as defined in

the applicable UCC) in the Loan Assets in favor of the Trust Depositor, which

security interest is prior to all other Liens (except for Permitted Liens), and

is enforceable as such against creditors of and purchasers from the Originator;




 




(ii)           such Loans, along

with the related Loan Files, constitute either a “general intangible,” an

“instrument,” an “account,” “investment property,” or “chattel paper,” within

the meaning of the applicable UCC;




 




12





























 




(iii)          the Originator owns

and has good and marketable title to such Loan Assets free and clear of any

Lien, claim or encumbrance of any Person (other than Permitted Liens);




 




(iv)          the Originator has

received all consents and approvals required by the terms of the Loan Assets to

the sale of the Loan Assets hereunder to the Trust Depositor;




 




(v)           the Originator has

caused the filing of all appropriate financing statements in the proper filing

office in the appropriate jurisdictions under Requirements of Law in order to

perfect the security interest in such Loan Assets granted to the Trust

Depositor under this Agreement;




 




(vi)          other than the

security interest granted to the Trust Depositor pursuant to this Agreement and

the Transfer and Servicing Agreement, the Originator has not pledged, assigned,

sold, granted a security interest in or otherwise conveyed any of such Loan

Assets;




 




(vii)         the Originator has

not authorized the filing of and is not aware of any financing statements

against the Originator that include a description of collateral covering such

Loan Assets other than any financing statement (A) relating to the

security interest granted to the Trust Depositor under this Agreement and the

Transfer and Servicing Agreement, or (B) that has been terminated;




 




(viii)        the Originator is

not aware of the filing of any judgment or tax Lien filings against the

Originator;




 




(ix)           all original

executed copies of each Underlying Note that constitute or evidence the Loan

Assets have been delivered to the Indenture Trustee;




 




(x)            the Originator has

received a written acknowledgment from the Indenture Trustee that the Indenture

Trustee or its bailee is holding the Underlying Notes that constitute or

evidence the Loan Assets solely on behalf of and for the benefit of the

Noteholders and the Swap Counterparties; and




 




(xi)           none of the

Underlying Notes that constitute or evidence the Loan Assets has any marks or

notations indicating that they have been pledged, assigned or otherwise

conveyed to any Person other than the Issuer and the Indenture Trustee, as assignees

of the Trust Depositor.




 




(q)           Value Given.  The cash payments received by the Originator

in respect of the purchase price of each Loan sold hereunder constitutes the

face value of such Loan and reasonably equivalent value in consideration for

the transfer to the Trust Depositor of such Loan under this Agreement, such

transfer was not made for or on account of an antecedent debt owed by the

Originator to the Trust Depositor, and such transfer was not and is not

voidable or subject to avoidance under any Insolvency Law.




 




(r)            Mortgages.  Other than the Loan to Cycle Gear, if a Loan

is secured by real property and the Originator, other than solely in its

capacity as collateral agent under any Loan




 




13





























 




Document with an Obligor, is the mortgagee, the

mortgage has been assigned by the Originator to the Trust Depositor and by the

Trust Depositor to the Issuer and the Assignment of Mortgage has been delivered

to the Indenture Trustee.




 




(s)           Selection Procedures.  No selection procedures determined by the

Originator to be materially adverse to the interests of the Trust Depositor

were utilized by the Originator in selecting the Loans to be sold, assigned,

transferred, set–over and otherwise conveyed hereunder.




 




(t)            Environmental.  At the

time of origination of each Loan where real property that is material to the

operations of the related Obligor serves as Collateral for such Loan, the

related mortgaged property was free of contamination from toxic substances or

hazardous wastes requiring action under Requirements of Law or is subject to

ongoing environmental rehabilitation approved by the Servicer, and, as of the

Closing Date, the Originator has no knowledge of any such contamination from

toxic substances or hazardous waste material on any such real property unless

such items are below action levels.




 




The

representations and warranties in subsection 3.01(p) shall survive the

termination of this Agreement and such representations and warranties may not

be waived by any party hereto.




 




Section

3.02                            Representations

and Warranties Regarding Each Loan and as to Certain Loans in the Aggregate.




 




The Originator

represents and warrants (x) with respect to subsections (a)–(b) below,

as to each Loan as of the applicable Cut–Off Date, and (y) with respect to subsections

(c)–(d) below, as to the Loan Pool in the aggregate as of the applicable

Cut–Off Date (after giving effect to the addition of any Substitute Loans to

the Loan Pool), that:




 




(a)           List of Loans.  The information set forth in the List of

Loans (as the same may be amended or deemed amended in respect of a conveyance

of Substitute Loans on a Subsequent Transfer Date) is true, complete and

correct as of the applicable Cut–Off Date.




 




(b)           Eligible Loan.  Such Loan satisfies the criteria for the

definition of Eligible Loan set forth in the Transfer and Servicing Agreement

as of the date of its conveyance hereunder (or, with respect to clause 38 of

the definition of Eligible Loan, as of the Cut–Off Date).




 




(c)           No Fraud.  Each Loan was originated without any fraud

or material misrepresentation by the Originator or, to the best of the

Originator’s knowledge, on the part of the Obligor or the Vendor.




 




(d)           Loans Secured by Real Property.  Less than 40% of the Aggregate Outstanding

Balance of the Loan Pool consists of Loans principally secured by real

property.




 




Section

3.03                            Representations

and Warranties Regarding the Initial Loans in the Aggregate.




 




The Originator

represents and warrants, as of the Closing Date, that:




 




14





























 




(a)           Amounts.  The Aggregate Outstanding Loan Balance of

the Loans as of the Initial Cut–Off Date equals the sum of the principal

balance of the Class A Notes, the Class B Notes, the Class C

Notes and the Certificate on the Closing Date.




 




(b)           Characteristics.  The Initial Loans as of the Initial Cut–Off

Date have the following additional characteristics: (i) no Loan has a

remaining maturity of more than 118 months; (ii) the final Scheduled

Payment on the Loan with the latest maturity is not later than May 20, 2012;

(iii) no Loan was originated after the Initial Cut–Off Date; (iv) not

more than 32.6% of the Initial Loans (as measured by the Aggregate Outstanding

Loan Balance) provide for Scheduled Payments due on a basis other than monthly.




 




Section

3.04                            Representations

and Warranties Regarding the Loan Files.




 




The Originator

represents and warrants as of the applicable Assignment Date that (i) to

the extent that any Loans were pledged as collateral for the CP Transaction,

immediately prior to such date (as applicable), a collateral custodian under

the CP Transaction had possession of each such original Underlying Note and a

copy of the Loan and the related complete Loan File, and there were no other

custodial agreements relating to the same in effect except for a custodial

agreement between ACAS and ACS Funding Trust I under the CP Transaction;

(ii) each of such documents which is required to be signed by the Obligor

has been signed by the Obligor in the appropriate spaces; (iii) all blanks

on any form have been properly filled in and each form has otherwise been

correctly prepared; and (iv) the complete Loan File for each Loan is in

the possession of the Indenture Trustee.




 




Section

3.05                            Representations

and Warranties Regarding Concentrations of Initial Loans.




 




The Originator

represents and warrants as of the Closing Date, as to the composition of the

Initial Loans in the Loan Pool as of the Initial Cut–Off Date, that:




 




(a)           the sum of the Outstanding Loan

Balances of Loans in respect of Obligors that are in the same industry (by SIC

code) shall not exceed 3.8%;




 




(b)           [Reserved]; and




 




(c)           the sum of the Outstanding Loan

Balances of Loans in respect of Obligors that have their principal executive

offices in the same State of the United States shall not exceed 14.3%.




 




Section

3.06                            Representations

and Warranties By the Trust Depositor.




 




By its execution

of this Agreement and each Subsequent Purchase Agreement, the Trust Depositor

represents and warrants to the Originator that:




 




(a)           Organization and Good Standing.  The Trust Depositor is a limited liability

company duly organized, validly existing and in good standing under the laws of

Delaware and has the power to own its assets and to transact the business in

which it is currently engaged.  The

Trust Depositor is duly qualified to do business as a foreign entity and is in

good standing in




 




15





























 




each jurisdiction in which the character of the

business transacted by it or properties owned or leased by it requires such

qualification and in which the failure so to qualify would not reasonably be

expected to have a material adverse effect on the business, properties, assets,

or condition (financial or other) of the Trust Depositor or the Issuer.




 




(b)           Authorization.  The Trust Depositor has the power and

authority to make, execute, deliver and perform this Agreement and the other

Transaction Documents to which it is a party and all of the transactions

contemplated under this Agreement and the other Transaction Documents to which

it is a party, and to create the Issuer and cause it to make, execute, deliver

and perform its obligations under this Agreement and the other Transaction

Documents to which it is a party, and has taken all necessary corporate action

to authorize the execution, delivery and performance of this Agreement and the

other Transaction Documents to which it is a party and to cause the Issuer to

be created.




 




(c)           Valid Sale.  This Agreement and each Subsequent Transfer

Agreement, if any, shall effect a valid sale, transfer and assignment of the

Loan Assets, enforceable against the Trust Depositor and creditors of and

purchasers from the Trust Depositor.




 




(d)           Binding Agreements.  This Agreement and the other Transaction

Documents to which the Trust Depositor is a party constitute the legal, valid

and binding obligation of the Trust Depositor enforceable in accordance with

their terms, except as enforcement of such terms may be limited by applicable

Insolvency Laws and general principles of equity, whether considered in a suit

at law or in equity.




 




(e)           No Consent Required.  The Trust Depositor is not required to

obtain the consent of any other party or any consent, license, approval or

authorization from, or registration or declaration with, any Governmental

Authority in connection with the execution, delivery, performance, validity or

enforceability of this Agreement or the other Transaction Documents to which it

is a party except (i) for the filing of the UCC financing statements and (ii) such

consent, licenses, approvals, authorization registrations and declarations

which have been obtained and are in full force and effect.




 




(f)            No Violations.  The execution, delivery and performance of

this Agreement and the other Transaction Documents to which it is a party by

the Trust Depositor, and the consummation of the transactions contemplated

hereby and thereby, will not violate any Requirement of Law applicable to the

Trust Depositor, or constitute a material breach of any mortgage, indenture,

contract or other agreement to which the Trust Depositor is a party or by which

the Trust Depositor or any of the Trust Depositor’s properties may be bound, or

result in the creation or imposition of any security interest, Lien, charge,

pledge, preference, equity or encumbrance of any kind upon any of its

properties pursuant to the terms of any such mortgage, indenture, contract or

other agreement, other than as contemplated by the Transaction Documents.




 




(g)           Litigation.  No litigation or administrative proceeding

of or before any court, tribunal or governmental body is currently pending, or

to the knowledge of the Trust Depositor threatened, against the Trust Depositor

or any of its properties or with respect to this Agreement, the other

Transaction Documents to which it is a party or the Securities (1) that, if

adversely




 




16





























 




determined, would in the reasonable judgment of the

Trust Depositor be expected to have a material adverse effect on the business,

properties, assets or condition (financial or otherwise) of the Trust Depositor

or the Issuer or the transactions contemplated by this Agreement or the other

Transaction Documents to which the Trust Depositor is a party or (2) seeking to

adversely affect the federal income tax or other federal, state or local tax

attributes of the Certificate or Notes.




 




(h)           Bulk Sales.  The execution, delivery and performance of

this Agreement do not require compliance with any “bulk sales” laws by the

Trust Depositor.




 




(i)            Solvency.  The Trust Depositor, at the time of and

after giving effect to each conveyance of Loan Assets under the Transfer and

Servicing Agreement is and will be Solvent.




 




(j)            Taxes.  The Trust Depositor has filed or caused to

be filed all tax returns that, to its knowledge, are required to be filed and

has paid all taxes shown to be due and payable on such returns or on any

assessments made against it or any of its property and all other taxes, fees or

other charges imposed on it or any of its property by any Governmental

Authority (other than any amount of tax due, the validity of which is currently

being contested in good faith by appropriate proceedings and with respect to

which reserves in accordance with generally accepted accounting principles have

been provided on the books of the Trust Depositor); no tax Lien has been filed

and, to the Trust Depositor’s knowledge, no claim is being asserted, with

respect to any such tax, fee or other charge.




 




(k)           Name and Location; No Changes.  The Trust Depositor’s name and location

(within the meaning of Article 9 of the UCC) are as set forth in Section 13.04.  The Trust Depositor has not changed its

name, identity, structure, existence or state of formation, whether by

amendment of its certificate of formation, by reorganization or otherwise, and

has not changed its location within the four (4) months preceding the Closing

Date.




 




(l)            Not an Investment Company.  The Trust Depositor is not required to be

registered as an “investment company” within the meaning of the Investment

Company Act of 1940, as amended (or the Trust Depositor is exempt from all

provisions of such act).




 




(m)          Sale Treatment.  The Trust Depositor has treated the transfer

of Loan Assets to the Trust Depositor for all purposes (other than for financial

accounting purposes) as a sale and purchase on all of its relevant books,

records, financial statements and other applicable documents, except to the

extent applicable tax laws require otherwise.




 




Such

representations speak as of the execution and delivery of this Agreement and as

of the Closing Date in the case of the Initial Loans, and as of the applicable

Subsequent Transfer Date in the case of the Substitute Loans, but shall survive

the sale, transfer and assignment of the Loans to the Issuer.




 




17





























 




ARTICLE IV




 




PERFECTION OF TRANSFER AND

PROTECTION OF SECURITY INTERESTS




 




Section

4.01                            Custody

of Loans.




 




The contents of

each Loan File shall be held in the custody of the Indenture Trustee under the

terms of the Transfer and Servicing Agreement and the Indenture for the benefit

of, and as agent for, the Securityholders and the Swap Counterparties.




 




Section 4.02                            Filing.




 




On or prior to the

Closing Date, the Originator shall cause the UCC financing statement(s)

referred to in subsection 2.02(viii) hereof to be filed.




 




Section

4.03                            Name

Change or Relocation.




 




(a)           During the term of this Agreement,

the Originator shall not change its name, identity, structure, existence or

location (as defined in Article 9 of the UCC) without first giving at least

thirty (30) days’ prior written notice to the Owner Trustee, the Indenture

Trustee and each Swap Counterparty.




 




(b)           If any change in the Originator’s

name, identity, structure, existence, location (as defined in Article 9 of the

UCC) or other action would make any financing or continuation statement or

notice of ownership interest or Lien relating to any Loan Asset seriously

misleading within the meaning of applicable provisions of the UCC or any title

statute, the Originator, no later than five (5) Business Days after the

effective date of such change, shall file such amendments as may be required to

preserve and protect the Trust Depositor’s, the Issuer’s and the Indenture

Trustee’s interests in the Loan Assets and the proceeds thereof.




 




Section

4.04                            Chief

Executive Office.




 




During the term of

this Agreement, and subject to the other terms and provisions herein relating

to changes in location, the Originator will maintain its chief executive office

in one of the States of the United States.




 




Section

4.05                            Costs

and Expenses.




 




The Originator

hereby confirms that the Servicer will pay all reasonable costs and

disbursements in connection with the perfection and the maintenance of

perfection, as against all third parties, of the Indenture Trustee’s and the

Issuer’s right, title and interest in and to the Loan Assets (including,

without limitation, the security interest in the Collateral related thereto and

the security interests provided for in the Indenture).




 




18





























 




Section

4.06                            Sale

Treatment.




 




The Originator

shall treat the transfer of Loan Assets made hereunder for all purposes (other

than for federal income tax and financial accounting purposes) as a sale and

purchase on all of its relevant books, records, financial statements and other

applicable documents.




 




Section

4.07                            Separateness

from Trust Depositor.




 




The Originator

agrees to take or refrain from taking or engaging in with respect to the Trust

Depositor each of the actions or activities specified in the “substantive

consolidation” opinion of Winston & Strawn (including any certificates of

the Originator attached thereto), delivered on the Closing Date, upon which the

conclusions therein are based.




 




ARTICLE V




 




COVENANTS OF THE ORIGINATOR




 




Section

5.01                            Corporate

Existence.




 




During the term of

this Agreement, the Originator will keep in full force and effect its

existence, rights and franchises as a corporation under the laws of the

jurisdiction of its incorporation and will obtain and preserve its

qualification to do business in each jurisdiction in which such qualification

is or shall be necessary to protect the validity and enforceability of this

Agreement, the other Transaction Documents and each other instrument or

agreement necessary or appropriate to the proper administration of this

Agreement and the transactions contemplated hereby.  In addition, all transactions and dealings between the

Originator, the Trust Depositor and the Issuer will be conducted on an

arm’s–length basis.




 




Section

5.02                            Loans

Not to Be Evidenced by Promissory Notes.




 




The Originator

will take no action to cause any Loan not originally evidenced by an instrument

as described in Section 2.05 hereof, to be evidenced by an instrument

(as defined in the UCC), except in connection with the enforcement or

collection of such Loan.




 




Section

5.03                            Security

Interests.




 




The Originator

will not sell, pledge, assign or transfer to any other Person, or grant,

create, incur, assume or suffer to exist any Lien on any Loan in the Loan Pool

or related Collateral, whether now existing or hereafter transferred to the

Trust Depositor, or any interest therein. 

The Originator will immediately notify the Trust Depositor, the Issuer

and the Indenture Trustee of the existence of any Lien on any Loan in the Loan

Pool or related Collateral, and the Originator shall defend the right, title

and interest of the Trust Depositor, the Issuer and the Indenture Trustee in,

to and under the Loans in the Loan Pool and the related Collateral against all

claims of third parties; provided, however, that nothing

in this Section 5.03 shall prevent or be deemed to prohibit the

Originator from suffering to exist Permitted Liens upon any of the Loans in the

Loan Pool or any related Collateral.




 




19





























 




Section

5.04                            Compliance

with Law.




 




The Originator

hereby agrees to comply in all material respects with all Requirements of Law

applicable to the Originator.




 




Section

5.05                            Liability

of Originator; Indemnities.




 




(a)           The Originator shall be liable in

accordance herewith only to the extent of the obligations specifically

undertaken by the Originator under this Agreement.




 




(b)           The Originator shall indemnify,

defend and hold harmless the Trust Depositor from and against any taxes that

may at any time be asserted against the Trust Depositor with respect to the

transactions contemplated herein and in the other Transaction Documents,

including any sales, gross receipts, general corporation, tangible personal

property, Maryland personal property replacement privilege or license taxes

(but not including any taxes asserted with respect to, and as of the date of,

the sale of the Loans to the Issuer or the issuance and original sale of the

Securities, or asserted with respect to ownership of the Loans, or federal or

other income taxes arising out of distributions on the Certificate or the

Notes) and costs and expenses in defending against the same.




 




(c)           The Originator shall indemnify,

defend and hold harmless the Trust Depositor from and against any loss,

liability or expense incurred by reason of the Originator’s willful

misfeasance, bad faith or gross negligence (other than errors in judgment) in

the performance of its duties under this Agreement, or by reason of reckless

disregard of its obligations and duties under this Agreement.




 




(d)           Indemnification under this Section

shall include, without limitation, reasonable fees and expenses of counsel and

expenses of litigation.  If the

Originator shall have made any indemnity payments pursuant to this Section

5.05, and the Trust Depositor thereafter shall collect any of such amounts

from others, the Trust Depositor shall promptly repay such amounts to the

Originator, without interest.




 




Section

5.06                            Limitation

on Liability of Originator and Others.




 




The Originator and

any director or officer or employee or agent of the Originator may rely in good

faith on any document of any kind, prima facie properly executed and submitted

by any Person respecting any matters arising hereunder.  The Originator and any director or officer

or employee or agent of the Originator shall be reimbursed by the Trust

Depositor for any liability or expense incurred by reason of the Trust

Depositor’s willful misfeasance, bad faith or negligence (except errors in judgment)

in the performance of their respective duties hereunder, or by reason of the

reckless disregard of their respective obligations and duties hereunder.  The Originator shall not be under any

obligation to appear in, prosecute or defend any legal action that shall not be

incidental to its obligations under this Agreement, and that in its opinion may

involve it in any expense or liability.




 




20





























 




ARTICLE VI




 




REMEDIES UPON MISREPRESENTATION;

REPURCHASE OPTION




 




Section 6.01                            Repurchases

of, or Substitution for, Loans for Breach of Representations and Warranties.




 




Upon a discovery

by the Servicer, the Trust Depositor or the Trustees of a breach of a

representation or warranty of the Originator as set forth in Section 3.01,

Section 3.02, Section 3.03, Section 3.04, and Section

3.05, or as made or deemed made in any Addition Notice or any Subsequent

Purchase Agreement relating to Substitute Loans, that materially and adversely

affects the interests of the Noteholders or any Swap Counterparty in such Loan

(in either case without regard to the benefits of the Reserve Fund) (an “Ineligible

Loan”), or of an inaccuracy with respect to the representations as to

concentrations of the Initial Loans made under Section 3.05, the

party discovering the breach shall give prompt written notice to the other

parties (and the Servicer shall, pursuant to Section 11.01 of the

Transfer and Servicing Agreement, with respect to an inaccuracy concerning

concentrations, select one or more Loans, without employing adverse selection,

to be the related Excess Loan for purposes of this Section); provided,

that,

the Trustees shall have no duty or obligation to inquire or to investigate the

breach by the Originator of any of such representations or warranties.  The Originator shall repurchase each such

Ineligible Loan or Excess Loan, at a repurchase price equal to the Transfer

Deposit Amount, not later than the next succeeding Determination Date following

the date the Originator becomes aware of, or receives written notice from any

Trustee, the Servicer or the Trust Depositor of, any such breach or inaccuracy

and which breach or inaccuracy has not otherwise been cured; provided,

however,

that if the Originator is able to effect a substitution for any such Ineligible

Loan or Excess Loan in compliance with Section 2.04, the Originator may,

in lieu of repurchasing such Loan, effect a substitution for such affected Loan

with a Substitute Loan not later than the date a repurchase of such affected

Loan would be required hereunder; provided  further  that,

with respect to a breach of representation or warranty relating to the Loans in

the aggregate and not to any particular Loan, the Originator may select Loans

(without adverse selection) to repurchase (or substitute for) such that, had

such Loans not been included as part of the Loan Assets (and, in the case of a

substitution, had such Substitute Loan been included as part of the Loan Assets

instead of the selected Loan), there would have been no breach of such

representation or warranty. 

Notwithstanding any other provision of this Agreement, the obligation of

the Originator described in this Section 6.01 shall not (a) terminate or

be deemed released by any party hereto upon a Servicer Transfer pursuant to Article

VIII of the Transfer and Servicing Agreement or (b) include any

obligation to make payment on account of a breach of a Loan by an Obligor

subsequent to the date on which such Loan was transferred to the Issuer.  The repurchase obligation described in this Section

6.01 is in no way to be satisfied with monies in the Reserve Fund.




 




Section

6.02                            Reassignment

of Repurchased or Substituted Loans.




 




Upon receipt by

the Indenture Trustee for deposit in the Collection Account of the amounts

described in Section 6.01 (or upon the Subsequent Transfer Date related

to a Substitute Loan described in Section 6.01), and upon receipt of a

certificate of a Servicing Officer in the form attached as Exhibit F to

the Transfer and Servicing Agreement, the Indenture Trustee is




 




21





























 




required under the Transfer and Servicing Agreement to assign to the

Trust Depositor, and the Trust Depositor shall assign to the Originator, all of

the Issuer’s (or Trust Depositor’s, as applicable) right, title and interest in

the repurchased or substituted Loan and related Loan Assets without recourse,

representation or warranty.  Such

reassigned Loan shall no longer thereafter be included in any calculations of

Outstanding Loan Balances required to be made hereunder or otherwise be deemed

a part of the Loan Pool.




 




ARTICLE VII




 




ORIGINATOR INDEMNITIES




 




Section

7.01                            Originator’s

Indemnification.




 




The Originator

will defend and indemnify the Trust Depositor, the Issuer, the Trustees, any

agents of the Trustees and the Securityholders and the Swap Counterparties (any

of which, an “Indemnified Party”) against any and all costs, expenses,

losses, damages, claims and liabilities, joint or several, including reasonable

fees and expenses of counsel and expenses of litigation (collectively, “Costs”)

arising out of or resulting from (i) this Agreement or the use, ownership or

operation of any Collateral by the Originator or the Servicer or any Affiliate

of either, (ii) any representation or warranty or covenant made by the

Originator in this Agreement being untrue or incorrect (subject to the

limitations described in the Preamble to Article III of this

Agreement), and (iii) any untrue statement or alleged untrue statement of a

material fact contained in the Private Placement Memorandum or in any amendment

thereto or the omission or alleged omission to state therein a material fact

necessary to make the statements therein, in light of the circumstances in

which they were made, not misleading, in each case to the extent, but only to

the extent, that such untrue statement or alleged untrue statement was made in

conformity with information furnished to the Trust Depositor by the Originator

specifically for use therein; provided,  however, that the

Originator shall not be required to so indemnify any such Indemnified Party for

such Costs to the extent that such Cost shall be due to or arise from the

willful misfeasance, bad faith or negligence of such Indemnified Party, or the

failure of such Indemnified Party to comply with any express undertaking,

agreement or covenant made by such Indemnified Party in a Transaction Document

to which it is a party or the breach subsequent to the Closing Date by an

Obligor under a Loan.  Notwithstanding

any other provision of this Agreement, the obligation of the Originator under

this Section 7.01 shall not terminate upon a Servicer Transfer pursuant

to Article VIII of the Transfer and Servicing Agreement and shall

survive any termination of that agreement or this Agreement.




 




Section

7.02                            Liabilities

to Obligors.




 




No obligation or

liability to any Obligor under any of the Loans is intended to be assumed by

the Trustees, the Issuer, the Securityholders and the Swap Counterparties under

or as a result of this Agreement and the transactions contemplated hereby.




 




Section

7.03                            Tax

Indemnification.




 




(a)           The Originator agrees to pay, and to

indemnify, defend and hold harmless the Trust Depositor, the Issuer, the

Trustees, the Securityholders and the Swap Counterparties from




 




22





























 




any taxes that may at any time be asserted with

respect to, and as of the date of, the transfer of the Loans to the Trust

Depositor and the transfer by the Trust Depositor of the Loans to the Issuer

and the further pledge by the Issuer to the Indenture Trustee, including,

without limitation, any sales, gross receipts, general corporation, personal

property, privilege or license taxes (but not including any federal, state or

other taxes arising out of the creation of the Issuer and the issuance of the

Notes and Certificates) and costs, expenses and reasonable counsel fees in

defending against the same, whether arising by reason of the acts to be

performed by the Originator or the Servicer under this Agreement or imposed

against the Issuer, any Securityholder, any Swap Counterparty or

otherwise.  Notwithstanding any other

provision of this Agreement, the obligation of the Originator under this Section

7.03 shall not terminate upon a Servicer Transfer pursuant to Article

VIII of the Transfer and Servicing Agreement and shall survive any

termination of this Agreement.




 




(b)           The Originator agrees to pay and to

indemnify, defend and hold harmless the Issuer, the Trust Depositor, the

Trustees, the Securityholders and the Swap Counterparties, on an after–tax

basis (as hereinafter defined), from any state or local personal property

taxes, gross rent taxes, leasehold taxes or similar taxes that may at any time

be asserted with respect to the ownership of the Loans (including security

interests therein) and the receipt of rentals therefrom by the Issuer, and

costs, expenses and reasonable counsel fees in defending against the same,

excluding, however, taxes based upon or measured by gross or net income or

receipts (other than taxes imposed specifically with respect to rentals).  As used in this Section, the term “after–tax

basis” shall mean, with respect to any payment to be received by an indemnified

person, that the amount to be paid by the Originator shall be equal to the sum

of (i) the amount to be received without regard to this sentence, plus

(ii) any additional amount that may be required so that after reduction by all

taxes imposed under any federal, state and local law, and taking into account

any current credits or deductions arising therefrom, resulting either from the

receipt of the payments described in both clauses (i) and (ii)

hereof, such sum shall be equal to the amount described in clause (i)

above.




 




Section

7.04                            Adjustments.




 




(a)           The Originator agrees that, with

respect to each Loan that provides for a Prepayment Amount less than the amount

calculated in accordance with the definition thereof, the Originator shall

indemnify the Trust Depositor or the Issuer as assignee thereof in an amount at

least equal to the excess of the “Prepayment Amount” as calculated in

accordance with the definition thereof over the amount otherwise payable upon

prepayment of such Loan.




 




(b)           The Originator hereby further agrees

that if any real property collateral securing any Loan described in subsection

3.02(d) hereof becomes the subject of any claims, proceedings, Liens or

encumbrances with respect to any material violation or claimed material

violation of any federal or state environmental laws or regulations, such Loan

shall for all purposes hereunder be, at and following the time of discovery by

the Originator, the Trust Depositor, the Servicer or any Trustee of such fact,

deemed an Ineligible Loan subject to the same remedial and recourse provisions

hereunder as other Loans determined to be Ineligible Loans hereunder.




 




23





























 




Section

7.05                            Operation

of Indemnities.




 




Indemnification

under this Article VII shall include, without limitation, reasonable

fees and expenses of counsel and expenses of litigation.  If the Originator has made any indemnity

payments to the Trust Depositor or the Trustees pursuant to this Article VII

and the Trust Depositor or the Trustees thereafter collects any of such amounts

from others, the Trust Depositor or the Trustees will repay such amounts

collected to the Originator, except that any payments received by the Trust

Depositor or the Trustees from an insurance provider as a result of the events

under which the Originator’s indemnity payments arose shall be repaid prior to

any repayment of the Originator’s indemnity payment.




 




ARTICLE VIII




 




MISCELLANEOUS




 




Section

8.01                            Amendment.




 




(a)           This Agreement may be amended by the

Originator and the Trust Depositor, without the consent of any Securityholders,

to cure any ambiguity, to correct or supplement any provisions in this

Agreement that are inconsistent with the provisions herein, or to add any other

provisions with respect to matters or questions arising under this Agreement

that shall not be inconsistent with the provisions of this Agreement; provided,

however, (i) that the consent of the Noteholders will be required

unless the Issuer obtains an Opinion of Counsel stating that the amendment does

not adversely affect in any material respect the interests of any Holder of the

Class A Notes or Class B Notes and (ii) that the consent of each Swap

Counterparty will be required unless the Issuer obtains an Opinion of Counsel

stating that the amendment does not adversely affect in any material respect

the interests of the Swap Counterparties.




 




(b)           This Agreement may also be amended

from time to time by the Originator and the Trust Depositor, with the consent

of the Servicer, the Indenture Trustee, the Owner Trustee on behalf of the

Issuer, each Swap Counterparty and the Required Holders, for the purpose of

adding any provisions to or changing in any manner or eliminating any of the

provisions of this Agreement or of modifying in any manner the rights of the

Securityholders; provided, however, that no such

amendment shall (i) increase or reduce in any manner the amount of, or

accelerate or delay the timing of or change the method of calculating

Collections of payments on the Loans (including by way of amendment of related

definitions), or (ii) change in any manner (including through amendment of related

definitions) the Holders that are required to consent to any such amendment,

without the consent of the Holders of all Notes and Certificates of the

relevant affected Class then outstanding.




 




(c)           Prior to the execution of any such

amendment or consent, the Originator shall cause the Indenture Trustee to

furnish written notification of the substance of such amendment or consent,

together with a copy thereof, to each Rating Agency.




 




(d)           Promptly after the execution of any

such amendment or consent, the Originator shall cause the Owner Trustee and the

Indenture Trustee, as the case may be, to furnish written notification of the

substance of such amendment or consent to each Securityholder and each




 




24





























 




Swap Counterparty, respectively.  It shall not be necessary for the consent of

the Securityholders or the Swap Counterparties pursuant to subsection

8.01(b) to approve the particular form of any proposed amendment or

consent, but it shall be sufficient if such consent shall approve the substance

thereof.  The manner of obtaining such

consents and of evidencing the authorization by the Securityholders and the

Swap Counterparties of the execution thereof shall be subject to such

reasonable requirements as the Owner Trustee or the Indenture Trustee may

prescribe.




 




(e)           Prior to the execution of any

amendment to this Agreement, the Owner Trustee and the Indenture Trustee shall

be entitled to receive and rely upon an Opinion of Counsel stating that the

execution of such amendment is authorized or permitted by this Agreement.  Such Trustee may, but shall not be obligated

to, consent to any such amendment that affects such Trustee’s own rights,

duties or immunities under this Agreement or otherwise.




 




Section

8.02                            Governing

Law.




 




(a)           This Agreement shall be construed in

accordance with the laws of the State of New York and the obligations, rights,

and remedies of the parties under the Agreement shall be determined in

accordance with such laws.




 




(b)           EACH PARTY HERETO HEREBY WAIVES, TO

THE FULLEST EXTENT PERMITTED BY REQUIREMENTS OF LAW, ANY RIGHT IT MAY HAVE TO A

TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT

OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.  Each party hereto (i) certifies that no representative,

agent or attorney of any other party has represented, expressly or otherwise,

that such other party would not, in the event of litigation, seek to enforce

the foregoing waiver and (ii) acknowledges that it and the other parties hereto

have been induced to enter into this Agreement by, among other things, the

mutual waivers and certifications in this subsection 8.02(b).




 




Section 8.03                            Notices.




 




All notices,

demands, certificates, requests and communications hereunder (“notices”) shall

be in writing and shall be effective (a) upon receipt when sent through the

U.S. mails, registered or certified mail, return receipt requested, postage

prepaid, with such receipt to be effective the date of delivery indicated on

the return receipt, or (b) one Business Day after delivery to an overnight

courier, or (c) on the date personally delivered to an Authorized Officer of

the party to which sent, or (d) on the date transmitted by legible telecopier

transmission with a confirmation of receipt, in all cases addressed to the

recipient as follows:




 




(i)            If to the

Originator:




 




American Capital Strategies, Ltd.




2 Bethesda Metro Center




14th Floor




Bethesda, Maryland  20814




Attention:           Compliance Officer




Facsimile No.:     (301) 654–6714




 




25





























 




(ii)           If to the Trust

Depositor:




 




ACAS Business Loan LLC, 2002–2




2 Bethesda Metro Center




14th Floor




Bethesda, Maryland  20814




Attention:           Compliance Officer




Facsimile No.:     (301) 654–6714




 




(iii)          If to S&P:




 




Standard & Poor’s Ratings Services




55 Water Street




41st Floor




New York, New York  10041




Attention:           Surveillance: Asset–Backed Services




Facsimile No.:     (212) 438–2662




 




(iv)          If to Moody’s:




 




Moody’s Investors Service, Inc.




99 Church Street




4th Floor




New York, New York  10007




Attention:           ABS Monitoring Department




Facsimile No.:     (212) 553–0344




 




(v)           If to Fitch:




 




Fitch, Inc.




One State Street Plaza




New York, New York 10004




Attention:           CDO Surveillance




Facsimile No.:     (212) 514–6501




 




(vi)          If to the Initial

Purchaser:




 




Wachovia Securities, Inc.




One Wachovia Center, Mail Code: NC0610




301 South College Street




Charlotte, North Carolina  28288–0610




Attention:           Asset Securitization Division




Facsimile No.:     (704) 383–4012




 




(vii)         If to a Swap

Counterparty:




 




At the address set forth for such party in

the applicable Swap.




 




26





























 




Each party hereto

may, by notice given in accordance herewith to each of the other parties

hereto, designate any further or different address to which subsequent notices

shall be sent.




 




Section

8.04                            Severability

of Provisions.




 




If one or more of

the covenants, agreements, provisions or terms of this Agreement shall be for

any reason whatsoever held invalid, then such covenants, agreements, provisions

or terms shall be deemed severable from the remaining covenants, agreements,

provisions or terms of this Agreement and shall in no way affect the validity

or enforceability of the other provisions of this Agreement, the Notes, the

Certificates or the rights of the Holders thereof, and any such prohibition,

invalidity or unenforceability in any jurisdiction shall not invalidate or

render unenforceable such covenants, agreements, provisions or terms in any

other jurisdiction.




 




Section

8.05                            Third

Party Beneficiaries.




 




Except as

otherwise specifically provided herein, the parties hereto hereby manifest

their intent that no third party, other than each Trustee, each Securityholder

and each Swap Counterparty, shall be deemed a third party beneficiary of this

Agreement, and specifically that the Obligors are not third party beneficiaries

of this Agreement.




 




Section

8.06                            Counterparts.




 




This Agreement may

be executed by facsimile signature and in several counterparts, each of which

shall be an original and all of which shall together constitute but one and the

same instrument.




 




Section

8.07                            Headings.




 




The headings of

the various Articles and Sections herein are for convenience of reference only

and shall not define or limit any of the terms or provisions hereof.




 




Section

8.08                            No

Bankruptcy Petition; Disclaimer.




 




(a)           Each of the Originator and the Trust

Depositor covenants and agrees that, prior to the date that is one (1) year and

one (1) day after the payment in full of all amounts owing in respect of all

outstanding Classes of Notes rated by any Rating Agency, it will not institute

against the Trust Depositor (in the case of the Originator) or the Issuer, or

join any other Person in instituting against the Trust Depositor or the Issuer,

any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings

or other similar proceedings under the laws of the United States or any state

of the United States.  This Section

8.08 will survive the termination of this Agreement.




 




(b)           The provisions of this Section

8.08 shall be for the third party benefit of those entitled to rely

thereon, including the Securityholders and the Swap Counterparties, and shall

survive the termination of this Agreement.




 




27





























 




Section

8.09                            Jurisdiction.




 




Any legal action

or proceeding with respect to this Agreement may be brought in the courts of

the United States for the Southern District of New York, and by execution and

delivery of this Agreement, each party hereto consents, for itself and in

respect of its property, to the non–exclusive jurisdiction of those

courts.  Each such party irrevocably

waives any objection, including any objection to the laying of venue or based

on the grounds of forum non conveniens, which it may now or hereafter have to

the bringing of any action or proceeding in such jurisdiction in respect of

this Agreement or any document related hereto.




 




Section

8.10                            Prohibited

Transactions with Respect to the Issuer.




 




The Originator

shall not:




 




(a)           Provide credit to any Securityholder

for the purpose of enabling such Securityholder to purchase Notes or

Certificates, respectively;




 




(b)           Purchase any Notes or Certificates in

an agency or trustee capacity; or




 




(c)           Except in its capacity as Servicer as

provided in the Transfer and Servicing Agreement, lend any money to the Issuer.




 




Section

8.11                            Merger

or Consolidation of Originator.




 




(a)           The Originator will keep in full

force and effect its existence, rights and franchise as a Delaware corporation,

and the Originator will obtain and preserve its qualification to do business as

a foreign corporation in each jurisdiction in which such qualification is or

shall be necessary to protect the validity and enforceability of this Agreement

and of any of the Loans and to perform its duties under this Agreement.




 




(b)           Any person into which the Originator

may be merged or consolidated, or any corporation resulting from such merger or

consolidation to which the Originator is a party, or any person succeeding by

acquisition or transfer to substantially all of the assets and to the business

of the Originator, shall be the successor to the Originator hereunder, without

execution or filing of any paper or any further act on the part of any of the

parties hereto, notwithstanding anything herein to the contrary.




 




(c)           Upon the merger or consolidation of

the Originator or transfer of substantially all of its assets and its business

as described in this Section 8.11, the Originator shall provide the

Indenture Trustee, each Swap Counterparty and the Rating Agencies notice of

such merger or consolidation within thirty (30) days after completion of the

same.




 




Section

8.12                            Assignment

or Delegation by the Originator.




 




Except as

specifically authorized hereunder, the Originator may not convey and assign or

delegate any of its rights or obligations hereunder absent the prior written

consent of the Trust Depositor, the Trustees and the Swap Counterparties, and

any attempt to do so without such consent shall be void.




 




28





























 




Section 8.13                            Limited Recourse.




 




The obligations of

the Trust Depositor and the Originator under this Agreement are solely the

obligations of the Trust Depositor and the Originator.  No recourse shall be had for the payment of

any amount owing by the Trust Depositor or the Originator under this Agreement

or for the payment by the Trust Depositor or the Originator of any fee in

respect hereof or any other obligation or claim of or against the Trust

Depositor or the Originator arising out of or based upon this Agreement,

against any employee, officer, director, Affiliate, shareholder, partner or

member of the Trust Depositor or the Originator or against the employee,

officer, director, shareholder, partner or member or any Affiliate of such

Person.  The provisions of this

Section 8.13 shall survive termination of this Agreement




 




[Remainder

of Page Intentionally Left Blank]




 




29





























 




IN WITNESS WHEREOF,

the parties hereto have caused this Agreement to be duly executed by their

respective officers as of the day and year first above written.




 




	

   


  	

  AMERICAN CAPITAL STRATEGIES, LTD.,


  as the Originator


  
	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

  Name:


  	

   


  
	

   


  	

  Title:


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  ACAS BUSINESS LOAN LLC, 2002–2,

  as the


  Trust Depositor


  
	

   


  	

   


  
	

   


  	

   


  
	

   


  	

  By:


  	

   


  	

   


  
	

   


  	

  Name:


  	

   


  
	

   


  	

  Title:


  	

   


  
	

   


  	

   


  
							





 




 





























 




Exhibit

A




 




Form of Assignment




 




In accordance with

the ACAS Transfer Agreement (the “ACAS Transfer Agreement”), dated as of

August 8, 2002, made by and between the undersigned, American Capital

Strategies, Ltd., as Originator, and ACAS Business Loan LLC, 2002–2 (the “Trust

Depositor”), as assignee thereunder, the undersigned does hereby sell,

transfer, assign, set over and otherwise convey to the Issuer, on behalf of the

Trust Depositor, (i) the Initial Loans and all Collections and other

monies due or to become due in payment of such Loans on and after the Initial

Cut–Off Date, including any Prepayment amounts, any Prepayment Premiums, any

Late Charges, any payments in respect of a casualty or early termination, any

Insurance Proceeds and any Liquidation Proceeds received with respect to the

foregoing; (ii) the Collateral related to such Loans (to the extent the

Originator, other than solely in its capacity as collateral agent under any

loan agreement with an Obligor, has been granted a Lien thereon), including the

related security interest granted by the Obligor under such Loans, all proceeds

from any sale or other disposition of such Collateral, and all Insurance

Policies; (iii) the Loan Files and all documents and records (including

computer records) relating thereto; (iv) all guarantees, indemnities,

warranties and other agreements or arrangements of whatever character from time

to time supporting or securing payment of such Loans; (v) the Trust

Accounts and all Trust Account Property (to the extent of the Originator’s

interest if any therein); and (vi) all income, payments, products,

proceeds and other benefits of any and all of the foregoing.




 




Capitalized terms

used herein have the meanings given such terms in the ACAS Transfer Agreement.




 




This Assignment is

made pursuant to and in reliance upon the representation and warranties on the

part of the undersigned contained in Article III of the ACAS Transfer

Agreement and no others.




 




IN WITNESS

WHEREOF, the undersigned has caused this Assignment to be duly executed this

8th day of  August, 2002.




 




	

   


  	

  AMERICAN CAPITAL STRATEGIES, LTD.


  
	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

   


  
	

   


  	

  Name:


  	

   


  
	

   


  	

  Title:


  	

   


  
						





 




A-1





























 




TABLE OF CONTENTS




 




	

  ARTICLE

  I


  	

  DEFINITIONS


  
	

   


  	

   


  
	

  Section 1.01


  	

  Definitions


  
	

  Section 1.02


  	

  Other Terms


  
	

  Section 1.03


  	

  Computation

  of Time Periods


  
	

  Section 1.04


  	

  Interpretation


  
	

  Section 1.05


  	

  References


  
	

  Section 1.06


  	

  Calculations


  
	

   


  	

   


  
	

  ARTICLE II


  	

  TRANSFER OF LOAN

  ASSETS


  
	

   


  	

   


  
	

  Section 2.01


  	

  Transfer of Loan

  Assets


  
	

  Section

  2.02


  	

  Conditions

  to Transfer of Loan Assets to the Trust Depositor


  
	

  Section

  2.03


  	

  Acceptance

  by the Trust Depositor


  
	

  Section

  2.04


  	

  Conveyance

  of Substitute Loans


  
	

  Section 2.05


  	

  Delivery of Loan

  Files


  
	

  Section 2.06


  	

  Release of

  Released Amounts


  
	

   


  	

   


  
	

  ARTICLE III


  	

  REPRESENTATIONS

  AND WARRANTIES


  
	

   


  	

   


  
	

  Section

  3.01


  	

  Representations

  and Warranties Regarding the Originator


  
	

  Section

  3.02


  	

  Representations

  and Warranties Regarding Each Loan and as to Certain Loans in the Aggregate


  
	

  Section

  3.03


  	

  Representations

  and Warranties Regarding the Initial Loans in the Aggregate


  
	

  Section

  3.04


  	

  Representations

  and Warranties Regarding the Loan Files


  
	

  Section

  3.05


  	

  Representations

  and Warranties Regarding Concentrations of Initial Loans


  
	

  Section

  3.06


  	

  Representations

  and Warranties By the Trust Depositor


  
	

   


  	

   


  
	

  ARTICLE

  IV


  	

  PERFECTION

  OF TRANSFER AND PROTECTION OF SECURITY INTERESTS


  
	

   


  	

   


  
	

  Section 4.01


  	

  Custody of Loans


  
	

  Section 4.02


  	

  Filing


  
	

  Section 4.03


  	

  Name Change or

  Relocation


  
	

  Section 4.04


  	

  Chief Executive

  Office


  
	

  Section 4.05


  	

  Costs and Expenses


  
	

  Section 4.06


  	

  Sale Treatment


  
	

  Section

  4.07


  	

  Separateness

  from Trust Depositor


  
	

   


  	

   


  
	

  ARTICLE V


  	

  COVENANTS OF

  THE ORIGINATOR


  
	

   


  	

   


  
	

  Section 5.01


  	

  Corporate Existence


  
	

  Section

  5.02


  	

  Loans

  Not to Be Evidenced by Promissory Notes


  
	

  Section 5.03


  	

  Security Interests


  
	

  Section 5.04


  	

  Compliance with Law


  
	

  Section

  5.05


  	

  Liability

  of Originator; Indemnities


  





 




i





























 




	

  Section

  5.06


  	

  Limitation

  on Liability of Originator and Others


  
	

   


  	

   


  
	

  ARTICLE

  VI


  	

  REMEDIES

  UPON MISREPRESENTATION; REPURCHASE OPTION


  
	

   


  	

   


  
	

  Section 6.01


  	

  Repurchases of, or Substitution for, Loans

  for Breach of Representations and Warranties


  
	

  Section

  6.02


  	

  Reassignment

  of Repurchased or Substituted Loans


  
	

   


  	

   


  
	

  ARTICLE VII


  	

  ORIGINATOR

  INDEMNITIES


  
	

   


  	

   


  
	

  Section

  7.01


  	

  Originator’s

  Indemnification


  
	

  Section 7.02


  	

  Liabilities to

  Obligors


  
	

  Section 7.03


  	

  Tax Indemnification


  
	

  Section 7.04


  	

  Adjustments


  
	

  Section 7.05


  	

  Operation of

  Indemnities


  
	

   


  	

   


  
	

  ARTICLE VIII


  	

  MISCELLANEOUS


  
	

   


  	

   


  
	

  Section 8.01


  	

  Amendment


  
	

  Section 8.02


  	

  Governing Law


  
	

  Section 8.03


  	

  Notices


  
	

  Section 8.04


  	

  Severability

  of Provisions


  
	

  Section 8.05


  	

  Third Party

  Beneficiaries


  
	

  Section 8.06


  	

  Counterparts


  
	

  Section 8.07


  	

  Headings


  
	

  Section

  8.08


  	

  No

  Bankruptcy Petition; Disclaimer


  
	

  Section 8.09


  	

  Jurisdiction


  
	

  Section

  8.10


  	

  Prohibited

  Transactions with Respect to the Issuer


  
	

  Section

  8.11


  	

  Merger

  or Consolidation of Originator


  
	

  Section

  8.12


  	

  Assignment

  or Delegation by the Originator


  
	

  Section 8.13


  	

  Limited Recourse


  
	

   


  	

   


  
	

   


  	

   


  
	

  EXHIBITS


  
	

   


  	

   


  
	

  Exhibit A


  	

  Form of Assignment


  





 




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