Exhibit
10.1




EXECUTION
VERSION







U.S.
$25,000,000




REVOLVING
CREDIT AGREEMENT




by and
among




SPARTA
COMMERCIAL SERVICES, INC.,


as the Originator and the
Servicer




SPARTA
FUNDING LLC,


as the
Borrower




AUTOBAHN
FUNDING COMPANY LLC,


as a
Lender




DZ
BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK, FRANKFURT


AM
MAIN, NEW YORK BRANCH,


as the Administrative Agent
and as the Liquidity Agent




U.S.
BANK NATIONAL ASSOCIATION,


as
the Collateral Custodian and as the Collection Account Bank




and




LYON
FINANCIAL SERVICES, INC.,


(d/b/a
U.S. Bank Portfolio Services),


as the Backup
Servicer




Dated as
of December 19, 2008





1


TABLE
OF CONTENTS





PageARTICLE
      I         DEFINITION
                    8Section
      1.1.
                    Certain
      Defined Terms
                    8Section
      1.2.
                    Other
      Terms
                    39Section
      1.3.
                    Computation
      of Time Periods
                    40Section
      1.4.
                    Interpretation
                    40ARTICLE
      II        THE
    FACILITY
                    40Section
      2.1.
                    Borrowings
                    40Section
      2.2.
                    Procedures
      for Advances by Lenders
                    41Section
      2.3.
                    Reduction
      of the Maximum Facility Amount; Optional Repayments
                    42Section
      2.4.
                    Determination
      and Payment of Interest
                    43Section
      2.5.
                    Notations
                    43Section
      2.6.
                    Principal
      Repayments
                    43Section
      2.7.
                    Settlement
      Procedures During the Revolving Period
                    43Section
      2.8.
                    Settlement
      Procedures During the Amortization Period
                    45Section
      2.9.
                    Collections
      and Allocations
                    46Section
      2.10.
                    Payments,
      Computations, Etc
                    47Section2.11.
                    Fees
                    47Section
      2.12.
                    Increased
      Costs; Capital Adequacy; Illegality
                    48Section
      2.13.
                    Taxes
                    49Section 2.14.
                    Assignment
      of the Sale Agreement
                    51Section
      2.15.
                    Repurchase
      of Receivables
                    51ARTICLE
      III       CONDITIONS TO CLOSING AND
      ADVANCES
                    51Section
      3.1.
                    Conditions
      to Closing and Initial Advance
                    51Section
      3.2.
                    Conditions
      Precedent to All Advances
                    53ARTICLE
      IV       REPRESENTATIONS AND
      WARRANTIES
                    54Section
      4.1.
                    Representations
      and Warranties of the Borrower
                    54Section
      4.2.
                    Reserved
                    62Section
      4.3.
                    Representations
      and Warranties of the Servicer and the Originator
                    62Section
      4.4.
                    Representations
      and Warranties of the Backup Servicer
                    66


2


TABLE
OF CONTENTS


(continued)





PageSection
      4.5.
                    Representations
      and Warranties of the Collateral Custodian
                    66ARTICLE
      V        GENERAL
      COVENANTS
                    67Section
      5.1.
                    Affirmative
      Covenants of the Borrower
                    67Section
      5.2.
                    Negative
      Covenants of the Borrower
                    72Section
      5.3.
                    [Reserved.]
                    74Section
      5.4.
                    Affirmative
      Covenants of the Servicer and the Originator
                    74Section
      5.5.
                    Negative
      Covenants of the Servicer and the Originator
                    78Section
      5.6.
                    Affirmative
      Covenants of the Backup Servicer
                    79Section
      5.7.
                    Negative
      Covenants of the Backup Servicer
                    79Section
      5.8.
                    Affirmative
      Covenants of the Collateral Custodian
                    79Section
      5.9.
                    Negative
      Covenants of the Collateral Custodian
                    80ARTICLE
      VI       ADMINISTRATION AND SERVICING
      OF RECEIVABLES
                    80Section
      6.1.
                    Designation
      of the Servicer
                    80Section
      6.2.
                    Duties
      of the Servicer
                    82Section
      6.3.
                    Authorization
      of the Servicer
                    83Section
      6.4.
                    Collection
      of Payments; Accounts
                    84Section
      6.5.
                    [Reserved.]
                    86Section
      6.6.
                    Realization
      Upon Defaulted Receivables
                    86Section
      6.7.
                    Servicing
      Compensation
                    87Section
      6.8.
                    Payment
      of Certain Expenses by Servicer
                    87Section
      6.9.
                    Reports
                    87Section
      6.10.
                    Annual
      Statement as to Compliance
                    88Section
      6.11.
                    Annual
      Independent Public Accountant’s/Consultant’s Servicing
    Reports
                    89Section
      6.12.
                    The
      Servicer Not to Resign
                    89Section
      6.13.
                    Servicer
      Defaults
                    89Section
      6.14.
                    Appointment
      of Successor Servicer
                    90ARTICLE
      VII     THE BACKUP SERVICER
                    93Section
      7.1.
                    Designation
      of the Backup Servicer
                    93Section
      7.2.
                    Duties
      of the Backup Servicer
                    94


3


TABLE
OF CONTENTS





(continued)





PageSection
      7.3.
                    Merger
      or Consolidation
                    95Section
      7.4.
                    Backup
      Servicing Compensation
                    95Section
      7.5.
                    Backup
      Servicer Removal
                    96Section
      7.6.
                    Limitation
      on Liability
                    96Section
      7.7.
                    Resignation
      by the Backup Servicer
                    97ARTICLE
      VIII    THE COLLATERAL CUSTODIAN
                    97Section
      8.1.
                    Designation
      of Collateral Custodian
                    97Section
      8.2.
                    Duties
      of Collateral Custodian
                    98Section
      8.3.
                    Merger
      or Consolidation
                    99Section
      8.4.
                    Collateral
      Custodian Compensation
                    99Section
      8.5.
                    Collateral
      Custodian Removal
                    100Section
      8.6.
                    Limitation
      on Liability
                    100Section
      8.7.
                    The
      Collateral Custodian Not to Resign
                    101Section
      8.8.
                    Release
      of Documents
                    102Section
      8.9.
                    Return
      of Required Loan Files and Servicing Files
                    102Section
      8.10.
                    Access
      to Certain Documentation and Information Regarding the Collateral;
      Audits
                    103ARTICLE
      IX      SECURITY INTEREST
                    103Section
      9.1.
                    Grant
      of Security Interest
                    103Section
      9.2.
                    Release
      of Lien on Collateral
                    104Section
      9.3.
                    Further
      Assurances
                    104Section
      9.4.
                    Remedies
                    104Section
      9.5.
                    Waiver
      of Certain Laws
                    104Section
      9.6.
                    Power
      of Attorney
                    105ARTICLE
      X        TERMINATION
      EVENTS
                    105Section
      10.1.
                    Termination
      Events
                    105Section
      10.2.
                    Remedies
                    108ARTICLE
      XI      INDEMNIFICATION
                    109Section 11.1.
                    Indemnities
      by the Borrower
                    109Section
      11.2.
                    Indemnities
      by the Servicer
                    112


4


TABLE
OF CONTENTS


(continued)





PageARTICLE
      XII     THE ADMINISTRATIVE AGENT
                              113Section
      12.1.
                              The
      Administrative Agent
                              113ARTICLE
      XIII    MISCELLANEOUS
                              115Section
      13.1.
                              Amendments
      and Waivers
                              116Section
      13.2.
                              Notices,
      Etc
                              116Section
      13.3.
                              Ratable
      Payments
                              116Section
      13.4.
                              No
      Waiver; Remedies
                              116Section
      13.5.
                              Binding
      Effect; Benefit of Agreement
                              116Section
      13.6.
                              Term
      of this Agreement
                              116Section
      13.7.
                              Governing
      Law; Consent to Jurisdiction; Waiver of Objection to Venue
                              117Section
      13.8.
                              Waiver
      of Jury Trial
                              117Section 13.9.
                              Costs,
      Expenses and Taxes
                              117Section
      13.10.
                              No
      Proceedings
                              118Section
      13.11.
                              Recourse
      Against Certain Parties
                              118Section
      13.12.
                              Protection
      of Right, Title and Interest in the Collateral; Further Action Evidencing
      Advances
                              119Section
      13.13.
                              Confidentiality
                              120Section
      13.14.
                              Execution
      in Counterparts; Severability; Integration
                              121Section
      13.15.
                              Waiver
      of Setoff
                              121Section
      13.16.
                              Assignments
      by the Lenders
                              122Section
      13.17.
                              Heading
      and Exhibits
                              122Section
      13.18.
                              No
      Proceedings Against Lenders; Limitations on Payments
                              122Section
      13.19.
                              Exclusivity
                              123Section
      13.20.
                              Qualified
      Purchaser
                              123Section 13.21.
                              Force
      Majeure
                              124


5


EXHIBITS





EXHIBIT
      A-1
                    Form
      of Borrowing NoticeEXHIBIT
      A-2
                    Form
      of Borrowing Base CertificateEXHIBIT
      B
                    ReservedEXHIBIT
      C
                    Form
      of Servicing ReportEXHIBIT
      D-1
                    Form
      of Officer’s Certificate as to Solvency (Borrower)EXHIBIT
      D-2
                    Form
      of Officer’s Certificate as to Solvency
    (Servicer/Originator)EXHIBIT
      E-1
                    Form
      of Officer’s Closing Certificate (Borrower)EXHIBIT
      E-2
                    Form
      of Officer’s Closing Certificate (Servicer/Originator)EXHIBIT
      F-1
                    Form
      of Power of Attorney (Borrower)EXHIBIT
      F-2
                    Form
      of Power of Attorney (Servicer/Originator)EXHIBIT
      G
                    Form
      of Release of Required Loan FileEXHIBIT
      H
                    Form
      of Servicer’s CertificateEXHIBIT
      I
                    Form
      of Joinder SupplementEXHIBIT
      J
                    ReservedEXHIBIT
      K
                    Form
      of Backup Servicer Monthly CertificationEXHIBIT
      L
                    Form
      of Collateral ReceiptEXHIBIT
      M
                    Form
      of Approved LeaseEXHIBIT
      N
                    Form
      of Approved LoanSCHEDULESSCHEDULE
      I
                    Condition
      Precedent DocumentsSCHEDULE
      II
                    Lockbox
      Account InformationSCHEDULE
      III
                    Location
      of Required Loan FilesSCHEDULE
      IV
                    Loan
      ListSCHEDULE
      V
                    Credit
      and Collection PolicySCHEDULE VI
                    Approved
      Financing ArrangementsANNEXESANNEX
      A
                    Addresses
      for NoticesANNEX
      B
                    Commitments


6


REVOLVING CREDIT
AGREEMENT




THIS REVOLVING CREDIT AGREEMENT(as amended, modified, waived, supplemented, restated or replaced from
time to time, this “Agreement”)is made
as of this December 19, 2008, by and among:




SPARTA COMMERCIAL SERVICES, INC.,a Nevada corporation, as the originator (together with its successors and
assigns in such capacity, the “Originator”)and as
the servicer (together with its successors and assigns in such capacity, the
“Servicer”);




SPARTA FUNDING LLC,a Delaware
limited liability company, as the borrower (together with its successors and
assigns in such capacity, the “Borrower”);




AUTOBAHN FUNDING COMPANY LLC(“Autobahn”),as a lender (together with its successors and assigns in such capacity, a
“Lender”,and
together with such other lenders from time to time party hereto, the “Lenders”);




DZ BANK AG DEUTSCHE
ZENTRAL-GENOSSENSCHAFTSBANK,FRANKFURT AM MAIN, NEW YORK BRANCH(“DZ Bank”),as the administrative agent (together with its successors and assigns in
such capacity, the “Administrative Agent”)and as liquidity agent for the Liquidity Banks (in such capacity, the
“Liquidity
Agent”);




LYON FINANCIAL SERVICES, INC. (d/b/a
U.S. Bank Portfolio Services),a Minnesota corporation (“Lyon”),not in its
individual capacity but as the backup servicer (together with its successors and
assigns in such capacity, the “Backup Servicer”);and




U.S. BANK NATIONAL ASSOCIATION,a national banking association (“U.S.Bank”),not in its individual
capacity but as the collateral custodian (together with its successors and
assigns in such capacity, the “Collateral Custodian”)and as collection account bank (together with its successors and assigns
in such capacity, the “Collection Account
Bank”).




RECITALS




WHEREAS,the Borrower has
acquired, and may from time to time in the future acquire, certain Eligible
Receivables from the Originator pursuant to a separate Sale
Agreement;




WHEREAS,the Borrower has
requested the Lenders, and the Lenders have agreed, subject to the terms and
conditions contained in this Agreement, to extend financing to the Borrower on
the terms and conditions set forth in this Agreement to be secured by the
Collateral from time to time during the term of this Agreement.




NOW, THEREFORE,based upon the
foregoing Recitals, the mutual premises and agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:


7


ARTICLE
I




DEFINITION




Section
1.1.         Certain Defined
Terms.




(a)
Certain capitalized terms used throughout this Agreement are defined in this
Section 1.1.As
used in this Agreement and its schedules, exhibits and other attachments, unless
the context requires a different meaning, the following terms shall have the
following meanings:




“1940 Act”:  The
Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder.




“Accounts”:The
Collection Account, the Lockbox Account, the Spread Account and any sub-accounts
thereof deemed appropriate or necessary by the Administrative Agent for
convenience in administering the Collection Account, the Lockbox Account or the
Spread Account.




“Accrual Period”:(a)
With respect to the first Payment Date, the period from and including the
initial Funding Date to and including the last day of the calendar month
immediately preceding the first Payment Date and (b) with respect to any
subsequent Payment Date, the immediately preceding calendar month; providedthat on the date of
any repayment in full of the Advances Outstanding, the final Accrual Period
shall extend to the date of repayment.




“Additional Amount”:Defined in Section 2.13(a).




“Administrative Agent”:Defined in the Preamble.




“Advance”:Defined in
Section
2.1(a).




“Advances Outstanding”:On any day, the aggregate principal amount of all Advances of all Lenders
outstanding on such day, after giving effect to all repayments of Advances and
the making of new Advances on such day.




“Affiliate”:With
respect to a Person, means any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person. For
purposes of this definition, “control,” when used with respect to any specified
Person means the possession, directly or indirectly, of the power to vote 10% or
more of the voting securities of such Person or to direct or cause the direction
of the management or policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.




“Aggregate Outstanding
Receivable Balance”:On any date of determination, the sum of the
Outstanding Receivable Balances of all Eligible Receivables on such
date.




“Alternative Rate”:A
per annuminterest rate
equal to (i) the LIBOR Rate; or (ii) if a Eurodollar Disruption Event has
occurred, the Base Rate (until the applicable Liquidity Bank or Lender shall
have notified the Borrower that such Eurodollar Disruption Event has ceased, at
which time the Alternative Rate shall again be equal to the LIBOR
Rate).


8




“Amortization Period”:The period beginning on the day on which the Termination Date is declared
or automatically occurs and ending on the Collection Date.




“Applicable Law”:For
any Person or property of such Person, all then-existing (as of any date of
determination) laws, rules, regulations (including income tax regulations),
statutes, treaties, codes, ordinances, permits, certificates, orders and
licenses of and interpretations by any Governmental Authority which are
applicable to such Person or property (including, without limitation, predatory
lending laws, usury laws, the Federal Truth in Lending Act, and Regulation Z and
Regulation B of the Board of Governors of the Federal Reserve System), and
applicable judgments, decrees, injunctions, writs, awards or orders of any
court, arbitrator or other administrative, judicial, or quasi-judicial tribunal
or agency of competent jurisdiction.




“Application for Certificate
of Title”:With regard to each Powersports Vehicle that is subject to any
certificate of title laws for which a Certificate of Title has not been issued,
a true and complete copy of the application for a Certificate of Title
(satisfying the requirements set forth in the definition of such term), as
evidence that such application has been submitted with the appropriate
authority.




“Approved Lease”:A
non-cancelable, unconditional, fixed rate, level payment “operating lease” (as
such term is defined under the Statement of Financial Accounting Standards No.
13 as published by the Financial Accounting Standards Board) in one of the forms
attached hereto as Exhibit M(as such
Exhibit Mmay
be updated from time to time with the consent of the Administrative Agent
secured by interests in Powersports Vehicles.




“Approved Loan”:A
fixed rate retail installment contract in one of the forms attached hereto as
Exhibit N(as
such Exhibit Nmay be updated from time to time with the consent of the Administrative
Agent) secured by an interest in a Powersports Vehicle, which require the
related Obligor to repay principal monthly over the term of such
contract.




“APR”:
With respect to any Approved Lease, the annual percentage interest rate listed
on the books of the Servicer or the Borrower, as applicable, as established on
the date of origination of such Approved Lease.




“Availability”:At
any time, an amount equal to the excess, if any, of (i) the Maximum Availability
over (ii) the Advances Outstanding at such time plus aggregate accrued but
unpaid Interest and fees payable to the Lenders or the Administrative Agent at
such time; providedthat at all times during the Amortization Period, the Availability shall
be zero.




“Available Funds”:With respect to any Payment Date, all amounts on deposit in the
Collection Account (including, without limitation, any
Collections).




“Backup Servicer”:Defined in the Preamble.


9


“Backup Servicer Fee
Letter”:The Backup Servicer Fee Letter, dated as of the date hereof, by
and between the Borrower, the Servicer, the Administrative Agent and the Backup
Servicer.




“Backup Servicer Monthly
Certification”:Defined in Section
7.2.




“Backup Servicer Termination
Notice”:Defined in Section
7.5.




“Backup Servicing Fee”:The fee set forth as such in the Backup Servicer Fee Letter.




“Bailee”:Defined in
Section
8.2(b).




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




“Base Rate”:On any
date, the rate set forth in The Wall Street Journalas
the “Prime Rate” for such day. If the “Prime Rate” is not published in the Wall
Street Journal, then the Base Rate will be determined by calculating the
arithmetic mean of the rates of interest publicly announced by JPMorgan Chase
Bank N.A. and Citibank N.A. as such bank’s U.S. dollar prime rate or base
lending rate as in effect on such day at 3:30 p.m.




“Benefit Plan”:Any
“employee benefit plan” as defined in Section 3(3) of ERISA in respect of which
the Borrower or any ERISA Affiliate of the Borrower is, or at any time during
the preceding six years was, an “employer” as defined in Section 3(5) of
ERISA.




“Borrower”:Defined
in the Preamble.




“Borrowing Base”:As
of any Measurement Date, an amount equal to the sum of (i) the product of (A)
the Maximum Advance Rate and (B) the Net Aggregate Outstanding Receivable
Balance and (ii) all Available Funds in excess of accrued interest, fees and
expenses due under the Transaction Documents.




“Borrowing Base
Certificate”:Each certificate, in the form of Exhibit A-2,required
to be delivered by the Borrower on each Measurement Date.




“Borrowing Notice”:Each notice required to be delivered by the Borrower in respect of each
Advance pursuant to Section 3.2,in the
form of Exhibit
A-1.




“Breakage Costs”:With respect to any Lender, any amount or amounts as shall compensate
such Lender for any loss, cost or expense incurred by such Lender (as determined
by the applicable Lender or its Liquidity Agent, on behalf of such Lender) as a
result of a prepayment by the Borrower of Advances Outstanding on any day other
than the maturity date of the related Commercial Paper Notes or other funding
source used by the applicable Lender to fund such Advances Outstanding. All
Breakage Costs shall be due and payable hereunder on the date of prepayment and
as a condition precedent to any optional prepayment hereunder. The determination
by the applicable Lender or its Liquidity Agent of the amount of any such loss,
cost or expense shall be conclusive absent manifest error.


10


“Business Day”:Any
day (other than a Saturday or a Sunday) on which banks are not required or
authorized to be closed in New York, New York or St. Paul,
Minnesota.




“Carrying Costs”:As
of any date of determination, for the most recently ended Collection Period, the
sum of the following to the extent then accrued and unpaid (i) Interest, (ii)
the Unused Fee, (iii) the Servicing Fee, (iv) the Backup Servicer Fee, (v) the
Collateral Custodian Fee, (vi) the Lockbox Bank Fees and (vii) the Collection
Account Bank Fee.




“Certificate of Title”:With regard to each Powersports Vehicle that is subject to any
certificate of title laws, the original certificate of title relating thereto,
which shall name (i) with respect to Powersports Vehicles related to Approved
Loans, the related Obligor as the owner of such Powersports Vehicle and Sparta
or the Borrower, as named lienholder or (ii) with respect to Powersports
Vehicles related to Approved Leases, the Borrower as the owner of such
Powersports Vehicle and the Lienholder Agent, as named lienholder, acting under
the related Lienholder Nominee Agreement on behalf of the Secured
Parties.




“Certificated Security”:The meaning specified in Section 8-102(a)(4) of the UCC.




“Change of Control”:Any of the following:




(a)            the
failure of Sparta to own, directly or indirectly, 100% of the equity interests
in the Borrower free and clear of any Lien;




(b)            any
change in the management of Sparta (including by resignation, termination,
disability or death) the result of which is that any of Anthony W. Adler,
Anthony L. Havens or Richard Trotter is no longer under the employ of Sparta or
is unable to participate in the day to day activities of Sparta for a period of
four consecutive calendar months, and in such event, reputable, experienced
personnel, reasonably satisfactory to the Administrative Agent, has not been
appointed to fulfill the duties of the above named individual within 120 days
after the end of such four-month period; providedthat such consent by
the Administrative Agent shall be based on the Administrative Agent’s reasonable
efforts to conduct background checks of such new personnel, and the
Administrative Agent shall have 30 days to confirm whether such individual is
reasonably satisfactory after the Administrative Agent has received all
necessary release forms required by it in order to conduct appropriate
background checks on such individual; or




(c)
except for Anthony L. Havens, Glenn Little and Kristian Srb, any Person or group
of Persons (within the meaning of Section 13 or 14 of the Exchange Act) shall
have acquired beneficial ownership (within the meaning of Rule 1 3d-3
promulgated by the Securities and Exchange Commission under the Exchange Act) of
10% or more of the total outstanding shares of common stock of
Sparta.




“Clearing Agency”:An
organization registered as a “clearing agency” pursuant to Section 17A of the
Exchange Act.




“Clearing Corporation”:The meaning specified in Section 8-102(a)(5) of the UCC.




“Closing Date”:December 19, 2008.


11


“Code”:
The Internal Revenue Code of 1986, as amended from time to time.




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




(i)            the
Receivables (regardless of whether any such Receivable has been identified on
any Loan List and regardless of whether any Required Loan File with respect
thereto has been delivered to the Collateral Custodian), and all monies due or
to become due in payment under such Receivables, including, but not limited to,
all Collections;




(ii)            all
Eligible Receivables and other Related Security with respect to the Receivables
referred to in clause
(i);and




(iii)            all
income and Proceeds of the foregoing.




“Collateral Custodian”:Defined in the Preamble.




“Collateral Custodian Fee”:The fee set forth as such in the Collateral Custodian Fee
Letter.




“Collateral Custodian Fee
Letter”:The Collateral Custodian Fee Letter, dated as of the date
hereof, by and among the Borrower, the Servicer, the Administrative Agent and
the Collateral Custodian.




“Collateral Custodian
Termination Notice”:Defined in Section
8.5.




“Collateral Receipt”:Defined in Section 8.2(b).




“Collection Account”:Defined in Section 6.4(h).




“Collection Account Bank”:Defined in the Preamble.




“Collection Account Bank
Fee”:The fees for administration of the Collection Account as set forth
in the Collateral Custodian Fee Letter.




“Collection Date”:The date following the Termination Date on which the Facility Amount has
been reduced to zero and indefeasibly paid in full.




“Collection Period”:With respect to the first Payment Date, the period from and including the
initial Funding Date to and including the last day of the calendar month
immediately preceding the calendar month in which the first Payment Date occurs;
and thereafter, the calendar month immediately preceding the then current
Payment Date.


12


“Collections”:(a)
All cash collections and other cash proceeds of any Receivable, including,
without limitation or duplication, any (i) Interest Collections, (ii) Principal
Collections, (iii) amendment fees, late fees, prepayment fees, waiver fees and
all other fees payable with respect to such Receivable in accordance with the
Underlying Instruments of such Receivable, (iv) Recoveries or (v) other amounts
received in respect thereof (but excluding any Excluded Amounts), (b) interest
earnings on Permitted Investments or otherwise in any Account, (c) any cash
proceeds or other funds received by the Borrower or the Servicer with respect to
any Related Security (including from any guarantors) and (d) any cash proceeds
or other funds received by the Borrower under any Hedging
Agreement.




“Commercial Fleet Leasing
Program”:A program in which the related Obligor is a commercial business
and the related leased Powersports Vehicle is used for short term
rental.




“Commercial Paper Notes”:Any short-term promissory notes issued or to be issued directly or
indirectly by a Lender in the U.S. commercial paper market to fund investments
in financial assets.




“Commitment”:With
respect to each Lender, the commitment of such Lender to make Advances in
accordance herewith in an amount not to exceed the dollar amount set forth
opposite such Lender’s name on Annex Bhereto or the
amount set forth as such Lender’s “Commitment” on Schedule I to the Joinder
Supplement relating to such Lender, as applicable, as such Commitment may be
adjusted in connection with any assignment under Section
13.16.




“Commitment Fee”:The
fee set forth as such in the Lender Fee Letter.




“Concentration Limits”:As of any Measurement Date, for purposes of determining the Excess
Concentration Amount, the following concentration limitations shall apply to the
Aggregate Outstanding Receivable Balance (without duplication):




(a)            No
more than 20% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Approved Leases
(excluding Commercial Fleet Leasing Programs);




(b)            No
more than 10% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
the related Obligors (or the related co-borrower, if such co-borrower’s FICO
score is higher than the related Obligor’s FICO score) of which have a FICO
score less than 660;




(c)            No
more than 10% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
having an initial Outstanding Receivable Balance in excess of
$20,000;




(d)            No
more than 15% of the greater of (i) 20% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
having an original term greater than 60 months;




(e)            No
more than 40% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
with respect to which the related Powersports Vehicle was not a new Powersports
Vehicle at origination;




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(f)            No
more than 15% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
with respect to which the related Powersports Vehicle are all-terrain
vehicles;




(g)            No
more than 10% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
with respect to which the related Powersports Vehicle are Scooters;




(h)            No
more than 5% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
originated by a single dealership (excluding municipalities or agencies of any
State of the United States and dealerships participating in Commercial Fleet
Leasing Programs);




(i)            No
more than 3% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
originated by a single independent dealership (i.e., that is not affiliated with
the manufacturer of the related Powersports Vehicle) (excluding municipalities
or agencies of any State of the United States and dealerships participating in
Commercial Fleet Leasing Programs);




(j)            No
more than 45% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
originated by the top ten dealerships (calculated based on the aggregate
Outstanding Receivable Balance of Eligible Receivables originated by such
dealerships);




(k)            No
more than 2% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
the related Obligor of which is a single municipality or agency of any State of
the United States;




(l)            No
more than 20% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
originated pursuant to a Commercial Fleet Leasing Program;




(m)            No
more than 10% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
the related Obligors of which have a current mailing address in any single state
in the United States of America (other than California, Colorado, Florida,
Georgia, Ohio and Texas);




(n) No
more than 20% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
the related Obligors of which have a current mailing address in California,
Colorado, Florida, Georgia, Ohio and Texas; and


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(o)            No
more than 2% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance is related to Eligible Receivables
the Scheduled Payments with respect to which the related Obligor has requested
adjustment pursuant to the Servicemembers Civil Relief Act of 2003 (or other
similar law); and




(p)            No
more than 10% of the greater of (i) 50% of the Maximum Facility Amount and (ii)
the Aggregate Outstanding Receivable Balance relates to the Residual Value
(calculated as of the related date of origination of each applicable Receivable)
of the related Powersports Vehicles.




“Continued Errors”:Defined in Section
6.14(g).




“Contractual Obligation”:With respect to any Person, any material provision of any securities
issued by such Person or any indenture, mortgage, deed of trust, contract,
undertaking, agreement, instrument or other document to which such Person is a
party or by which it or any of its property is bound or to which either is
subject.




“CP Rate”:With
respect to any Fixed Period and any Lender, the per annumrate equal to the
weighted average of the per
annumrates paid or payable by such Lender from time to time as interest
on (or resulting from converting discount rates) or otherwise (by means of
interest rate hedges or otherwise) in respect of the Commercial Paper Notes (or
other borrowings to fund small or odd commercial paper amounts) that is
allocated, in whole or in part, by such Lender to fund or maintain its Advances
during such period, as determined by such Lender or its administrator or agent
on its behalf; provided,the “CP Rate” shall be calculated in a manner which includes the costs
and expenses of such Lender of issuing the related Commercial Paper Notes,
including all dealer commissions thereon and note issuance costs in connection
therewith.




“Credit and Collection
Policy”:With respect to the initial Servicer, the written credit
policies and procedures manual of Sparta set forth on Schedule V,as such
credit and collection policy may be as amended or supplemented from time to time
in accordance with Section 5.4(f),or,
with respect to any Successor Servicer, the customary written collection
policies and procedures of such Successor Servicer.




“Default Rate”:A
per annuminterest rate
equal to the sum of the applicable Base Rate plus the applicable Program
Fee.




“Default Ratio”:As
of the last calendar day of each Collection Period, the percentage equivalent of
a fraction, (i) the numerator of which is equal to the product of (a) the sum of
(1) the aggregate Outstanding Receivable Balances of all Receivables that became
Defaulted Receivables during such Collection Period and (2) the aggregate
Outstanding Receivable Balances of all Receivables that were repurchased by the
Originator and subsequently became Defaulted Receivables during such Collection
Period and (b) 12, and (ii) the denominator of which is equal to the Aggregate
Outstanding Receivable Balance at the beginning of such Collection
Period.




“Defaulted Receivable”:A Receivable as to which any of the following has occurred: (i) the
Obligor related to such Receivable fails to make the first Scheduled Payment
with respect to such Receivable when due under the applicable Underlying
Instruments (exclusive of any advance payments or security deposits), (ii) 10%
or more of any Scheduled Payment under such Receivable is two (2) calendar
months past due, (iii) the payment terms related to such Receivable have been
restructured, extended, waived or modified in any way due to credit reasons or
for the purpose of preventing such Receivable from becoming a Delinquent
Receivable or Defaulted Receivable after its acquisition by the Borrower, (iv)
the related Obligor is subject to an Insolvency Event (without giving effect to
any cure period specified in the definition thereof), (v) the related
Powersports Vehicle has been repossessed, or (vi) the Servicer has determined
(or should have determined) in accordance with the Credit and Collection Policy
or the Servicing Standard that such Receivable is not collectible.




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“Deficiency”:Defined
in Section
8.2(b).




“Delinquency Ratio”:As of the last calendar day of each Collection Period, the percentage
equivalent of a fraction, (i) the numerator of which is equal to the sum of the
Outstanding Receivable Balances of the Receivables that were Delinquent
Receivables as of such day (including any Delinquent Receivables that are
repurchased by the Originator during such Collection Period), and (ii) the
denominator of which is equal to the Aggregate Outstanding Receivable Balance as
of such day.




“Delinquent Receivable”:A Receivable with respect to which 10% or more of a Scheduled Payment
thereunder is delinquent more than one (1) calendar month from the payment due
date and is not a Defaulted Receivable.




“Dollars”:The lawful
currency of the United States, as also signified by the conventional “$”.




“Due Diligence Fee”:The fee set forth as such in the Lender Fee Letter.




“Early Termination Fee”:With respect to any reduction or termination of the Maximum Facility
Amount by the Borrower pursuant to Section 2.3,the fee
set forth in the Lender Fee Letter. For the avoidance of doubt, no Early
Termination Fee shall be applicable with respect to distributions of Collections
pursuant to Sections
2.7or 2.8.




“Eligible Receivable”:As of any date of determination (except as otherwise noted), each
Receivable that satisfies each of the following eligibility requirements (unless
otherwise approved by the Administrative Agent in its sole
discretion):




(a)            such
Receivable was acquired by the Borrower from the Originator pursuant to the Sale
Agreement;




(b)            such
Receivable, together with the Underlying Instruments related thereto, (i) is in
full force and effect and constitutes the legal, valid and binding obligation of
the related Obligor enforceable against such Obligor in accordance with its
terms, except as such enforceability may be limited by Insolvency Laws and by
principles of equity (whether considered in a suit at law or in equity), (ii)
contains provisions substantially to the effect that the Obligor’s payment
obligations thereunder are absolute and unconditional without any right of
rescission, setoff, counterclaim or defense for any reason against the
originator or any assignee, and (iii) does not provide for the substitution,
exchange or addition of any other Powersports Vehicles related to such
Receivable;


16




(c)            such
Receivable (i) was originated and underwritten by the Originator in the ordinary
course of its business through the Originator’s approved dealership network or
referred to the Originator by the Originator’s Capital One or netLoan programs;
including, without limitation, the completion of customary due diligence and
collateral assessment and in compliance with the Credit and Collection Policy
and its underwriting guidelines, (ii) is properly documented by the Underlying
Instruments, and (iii) has been serviced by the Servicer at all times (since the
origination or acquisition of such Receivable by the Originator) in accordance
with the Credit and Collection Policy and the Servicing Standard;




(d)            such
Receivable is secured by a first priority perfected security interest in the
related Powersports Vehicle (except, as to priority, for liens which by
operation of law take priority over a previously perfected security
interest);




(e)            such
Receivable was not a Delinquent Receivable as of the date it was acquired by the
Borrower and is not and has not been a Defaulted Receivable at any
time;




(f)            such
Receivable is denominated and payable only in Dollars (and not in another
currency or in kind) in the United States and does not permit the currency or
country in which such Receivable is payable to be changed;




(g)            such
Receivable (i) has an original term to maturity that does not exceed 72 months,
(ii) does not permit the related Obligor to apply any part of any security
deposit paid under such Receivable to the Scheduled Payments due under such
Receivable and (iii) prohibits any assignment of the Receivable by the related
Obligor or any lease or sublease of the related Powersports Vehicle by the
related Obligor;




(h)            such
Receivable (including the creation or origination thereof) and the related
Underlying Instruments comply in all material respects with all Applicable
Laws;




(i)            such
Receivable is eligible under its Underlying Instruments (giving effect to the
provisions of Sections 9-406 and 9-408 of the UCC) to be acquired by the
Borrower as contemplated by the Sale Agreement and to have a security interest
therein granted to the Administrative Agent, as agent for the Secured Parties,
and the Receivable does not contain any restrictions that would prohibit the
further assignment or transfer of such Receivable by the Borrower;




(j)            such
Receivable does not contain a confidentiality provision that restricts or
purports to restrict the ability of any Secured Party to exercise its rights
under this Agreement, including, without limitation, its rights to review the
related Servicing File and Underlying Instruments;




(k) all
consents, licenses, approvals or authorizations of, or registrations or
declarations with, any Governmental Authority or any other Person required to be
obtained, effected or given in connection with the making, acquisition, transfer
or performance of such Receivable have been duly obtained, effected or given and
are in full force and effect;




17




(l)            (i)
the Borrower has good and marketable title to, and is the sole owner of, such
Receivable free and clear of all Liens (other than Permitted Liens), (ii) the
Borrower has granted to the Administrative Agent a valid first priority,
perfected security interest, free and clear of all other Liens (other than
Permitted Liens) in the Receivable and Related Property, for the benefit of the
Secured Parties, and (iii) the Required Loan File with respect to such
Receivable has been or will be delivered to the Collateral Custodian on or prior
to the related Funding Date;




(m)            the
Obligor with respect to such Receivable is a resident of the United States or a
municipality or agency of any State of the United States;




(n)            all
information, representations and warranties provided in writing by the Borrower,
the Originator and the Servicer with respect to such Receivable are true,
correct and complete in all material respects;




(o)            the
acquisition of such Receivable will not cause the Borrower or the pool of
Collateral to be required to register as an investment company under the 1940
Act;




(p)            the
Obligor with respect to such Receivable has been directed in writing to remit
payments to the Lockbox Account or other account approved in writing by the
Administrative Agent in its sole discretion;




(q)            at
the origination of such Receivable, the Loan-to-Value Ratio of such Receivable
does not exceed 115%;




(r)            immediately
following the addition of such Receivable to the Collateral, the weighted
average Loan-to-Value Ratio of all Receivables in the Collateral (calculated at
the origination of each such Receivable) does not exceed 110%;




(s)            neither
such Receivable nor the terms of the related Underlying Instruments (except as
noted in the Required Loan File) have been amended, waived, modified, deferred,
altered, satisfied, impaired, canceled, subordinated or rescinded and such
Receivable has not been restructured at any time as a result of an actual or
pending delinquency or other default;




(t)            the
Obligor (or the co-borrower, if the co-borrower’s FICO score is higher than the
Obligor’s FICO score) with respect to such Receivable had a FICO score greater
than or equal to 640 at the time such Receivable was originated;




(u)            immediately
following the addition of each Receivable to the Collateral, the weighted
average FICO score (at the time of origination of each such Receivable) of all
Obligors (or the co-borrower, if the co-borrower’s FICO score is higher than the
Obligor’s FICO score) is greater than or equal to 680;




(v) such
Receivable is not subject to, nor has there been asserted, any litigation or any
right of rescission, set-off, offset counterclaim or other defense of the
Obligor related to such Receivable;


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(w)            such
Receivable had an original Outstanding Receivable Balance of less than or equal
to $40,000;




(x)            the
Obligor related to such Receivable is not a Governmental Authority (other than a
municipality or agency of any State of the United States);




(y)            to
the extent the related Powersports Vehicle is subject to any certificate of
title laws, the Originator (i) has received a Certificate of Title to the
related Powersports Vehicle or (ii) has filed an Application for Certificate of
Title and receives such Certificate of Title within 60 days (or, in the case of
Receivables originated in Colorado or Georgia, 90 days; or in the case of
Receivables originated in Missouri, Minnesota, Nevada, New York and Tennessee,
12 weeks) after the origination of such Receivable;




(z)            the
Underlying Instrument related to such Receivable constitutes “chattel paper”
within the meaning of the applicable UCC and there exists only one (1) original
copy of the Approved Loan or Approved Lease, as applicable, and such sole
original copy is in the possession of the Collateral Custodian;




(aa) the
related Underlying Instruments evidencing such Receivable require the related
Obligor to maintain collision, fire and theft insurance covering the related
Powersports Vehicle;




(bb)            no
Receivable has been adversely selected by the Originator;




(cc) the
related Obligor with respect to such Receivable (and any guarantor of the
Obligor’s obligations thereunder) had full legal capacity to execute and deliver
the related Underlying Instruments evidencing such Receivable and any other
documents related thereto;




(dd) such
Receivable was originated or acquired by the Originator without any fraud or
material misrepresentation on the part of the Originator or, to the Originator’s
knowledge, the related Obligor and was sold or contributed by the Originator to
the Borrower without any fraud or material misrepresentation on the part of the
Originator;




(ee) such
Receivable, together with the Underlying Instruments related thereto, (i)
contains “triple net” provisions in the case of any Approved Lease, (ii)
requires the related Obligor to assume all risk of loss or malfunction of the
related Powersports Vehicle, (iii) requires the related Obligor to pay all
maintenance, repair, insurance and taxes, together with all other ancillary
costs and expenses, with respect to the related Powersports Vehicle and (iv)
requires the related Obligor to pay, in full, when due, all Scheduled Payments
notwithstanding any casualty, loss or other damage to the related Powersports
Vehicle;




(ff) in
the case of any Approved Lease, the related Obligor of such Receivable is
required to maintain the Powersports Vehicle leased thereunder in good and
workable order and obtain and maintain physical damage insurance and general
liability insurance covering the related Powersports Vehicle;


19


(gg) the
origination, acquisition and collection practices used by the Originator with
respect to each such Receivable have been in all respects legal, proper, prudent
and customary in the equipment financing and servicing business;




(hh) the
Powersports Vehicle related to such Receivable was properly delivered to the
Obligor in good repair, without defects and in proper working order and the
Obligor accepted the related Powersports Vehicle and, after reasonable
opportunity to inspect and test such Powersports Vehicle, has not notified the
Borrower, the Servicer or the Originator of any material defects
therein;




(ii) the
Obligor with respect to such Receivable is not a merchant offering the related
Powersports Vehicle for sale and is not a partner, member or Affiliate of the
Borrower, Originator or Servicer;




(jj) the
Borrower and Originator have each duly fulfilled all obligations on its
respective part to be fulfilled under or in connection with the origination,
acquisition and assignment of the Receivable, including, giving any notices or
consents necessary to effect the acquisition of the Receivable by the Borrower,
and have done nothing to impair the rights of the Borrower or the Administrative
Agent in the Receivable or payments with respect thereto;




(kk) the
transfer, assignment and conveyance of the Receivable and the Related Security
from the Originator to the Borrower pursuant to the Sale Agreement are not
subject to and will not result in any tax, fee or governmental charge payable by
the Borrower or any other Person to any federal, state or local
government;




(ll) no
Person (including any dealer, vendor or broker) other than, if applicable, the
related Obligor or guarantor has provided any funds to the Originator or the
Borrower as a deposit, cash collateral or reserve to secure the obligations of
the Obligor under such Receivable;




(mm) such
Receivable was payable to the Originator immediately prior to its sale and
assignment under the Sale Agreement and has not been endorsed by the Originator
to any Person other than the Borrower;




(nn) none
of the Originator, the Servicer, the Borrower or any Affiliate thereof (i) is a
guarantor of such Receivable and (ii) has established any specific credit
reserve with respect to the related Obligor of such Receivable;




(oo)            the
vendor of the Powersports Vehicle related to such Receivable has received
full payment from the Originator or the related Obligor for such Powersports
Vehicle;




(pp) in
the case of any Approved Lease (excluding Approved Leases where the related
Obligor is a municipality or agency of any State of the United States), as of
the date of origination thereof, no more than 70% of the original Outstanding
Receivable Balance of such Receivable is related to the Residual
Value;




(qq)            the
Required Loan File related to such Receivable has been delivered to the
Collateral Custodian pursuant to the terms of this Agreement;
and


20


(rr) with
respect to any Receivable acquired by the Borrower from the Originator on a date
when the Advances Outstanding are less than 50% of the Maximum Facility Amount,
if the FICO score of the Obligor related to such Receivable is less than 660,
such Obligor paid a down payment in an amount not less than 15% of the sales
price of the related Powersports Vehicle.




“Eligible Repurchase
Obligations”:Repurchase obligations with respect to any security that is
a direct obligation of, or fully guaranteed by, the United States or any agency
or instrumentality thereof the obligations of which are backed by the full faith
and credit of the United States, in either case entered into with a depositary
institution or trust company (acting as principal).




“Entitlement Holder”:The meaning specified in Section 8-102(a)(7) of the UCC.




“ERISA”:The United
States Employee Retirement Income Security Act of 1974, as amended from time to
time, and the regulations promulgated and rulings issued
thereunder.




“ERISA Affiliate”:(a) Any corporation that is a member of the same controlled group of
corporations (within the meaning of Section 4 14(b) of the Code) as the
Borrower, (b) a trade or business (whether or not incorporated) under common
control (within the meaning of Section 414(c) of the Code) with the Borrower, or
(c) a member of the same affiliated service group (within the meaning of Section
4 14(m) of the Code) as the Borrower, any corporation described in clause (a)above or
any trade or business described in clause (b)above.




“Errors”:Defined in
Section
6.14(g).




“Eurocurrency Liabilities”:Defined in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.




“Eurodollar Disruption
Event”:The occurrence of any of the following: (a) any Liquidity Bank or
Lender shall have notified the Administrative Agent of a determination by such
Liquidity Bank or Lender that it would be contrary to law or to the directive of
any central bank or other Governmental Authority (whether or not having the
force of law) to obtain United States dollars in the London interbank market to
fund any Advance, (b) any Liquidity Bank or Lender shall have notified the
Administrative Agent of the inability, for any reason, of such Liquidity Bank or
Lender, as applicable, to determine the LIBOR Rate, (c) any Liquidity Bank or
Lender shall have notified the Administrative Agent of a determination by such
Liquidity Bank or Lender, as applicable, that the rate at which deposits of
Dollars are being offered to such Liquidity Bank or Lender in the London
interbank market does not accurately reflect the cost to such Liquidity Bank or
Lender of making, funding or maintaining any Advance, or (d) any Liquidity Bank
or Lender shall have notified the Administrative Agent of the inability of such
Liquidity Bank or Lender, as applicable, to obtain United States dollars in the
London interbank market to make, fund or maintain any Advance.




“Excepted Persons”:Defined in Section
13.13(a).




“Excess Concentration
Amount”:With respect to all Eligible Receivables included in the
Collateral, the amount by which the sum of the Outstanding Receivable Balances
of such Eligible Receivables exceeds any applicable Concentration Limits; providedthat any such excess
amounts shall be calculated in such order and attributed to the particular
Outstanding Receivable Balances necessary to ensure that (i) there is no
duplication of amounts disallowed due to separate Concentration Limits and (ii)
the minimum aggregate amount which could be disallowed while still complying
with the Concentration Limits is so determined.




21




“Excess Spread”:With
respect to the last day of each Collection Period, a per annumpercentage equal to
(i) the Interest Collections for such Collection Period divided by the daily
average Aggregate Outstanding Receivables Balance for such Collection Period
minus(ii) the sum of
(a) the weighted average of the Interest Rate (weighted by the outstanding
principal amount of the applicable Advances) (or, to the extent the Eligible
Receivables have been hedged pursuant to one or more Hedging Agreements, the
applicable weighted average per annumrate associated
with the applicable hedging transaction(s)) for such Collection Period, and (b)
the sum of the per annumrates at which the following fees accrue: (A) the Servicing Fee, (B) the
Backup Servicing Fee and (C) the Collateral Custodian Fee.




“Exchange Act”:The
United States Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.




“Excluded Amounts”:(a) Any amount received in the Lockbox Account with respect to any
Receivable, which amount is attributable to the payment of any tax, fee or other
charge imposed by any Governmental Authority on such Receivable or on any
Related Property and (b) any amount received in the Lockbox Account or other
Account representing (i) a reimbursement or payment of insurance premiums or
other amounts paid or payable to third parties, (ii) any escrows relating to
taxes, insurance and other amounts in connection with Receivables which are held
in an escrow account for the benefit of the Obligor and the secured party
pursuant to escrow arrangements under the Underlying Instruments and (iii) any
amount received in the Collection Account with respect to any Receivable
retransferred or substituted for upon the occurrence of a Warranty Event, to the
extent such amount is attributable to a time after the effective date of such
retransfer, substitution, replacement or sale.




“Exit Fee”:The
meaning provided in the Lender Fee Letter.




“Facility Amount”:As
of any date, an amount equal to (i) the Advances Outstanding, plus (ii) all due
and unpaid Interest, Unused Fees, Make-Whole Fees, Early Termination Fees and
Breakage Costs (including, without limitation, all Indemnified Amounts, other
amounts payable under Article XIand
amounts required to be paid under Section 2.7, Section 2.8,
Section2.12 and Section 2.13to any
Indemnified Party).




“Facility Termination Date”:December 18, 2009, or such later date as the Administrative Agent and
each Lender shall notify the Borrower of in writing in accordance with Section 2.1(b);provided,if the Advances
Outstanding equal or exceed $15,000,000 on the ninetieth (90th) day
prior to the first anniversary date of the Closing Date and no Termination Event
has occurred, the Facility Termination Date shall automatically be extended to
December 17, 2010.




“FDIC”:The Federal
Deposit Insurance Corporation, and any successor thereto.


22


“Federal Funds Rate”:For any period, a fluctuating per annuminterest rate
equal, for each day during such period, to the weighted average of the overnight
federal funds rates as in H.15 or, if H.15 is not published, any successor or
substitute publication selected by the Administrative Agent (or, if such day is
not a Business Day, for the next preceding Business Day), or, if for any reason
such rate is not available on any day, the rate determined, in the sole
discretion of the Administrative Agent, to be the rate at which overnight
federal funds are being offered in the national federal funds market at 9:00
a.m. on such day.




“Financial Asset”:The meaning specified in Section 8-1 02(a)(9) of the UCC.




“Fitch”:Fitch, Inc.
or any successor thereto.




“Fixed Period”:With
respect to any Advance (or portion thereof) made by a Lender that is funded via
the issuance of Commercial Paper Notes, a period of up to but not exceeding 270
days, as selected by the Administrative Agent in its sole discretion, commencing
on the date of issuance of the Commercial Paper Notes and ending on the date of
maturity of such Commercial Paper Notes; providedthat any Fixed
Period which would otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day. For the avoidance of doubt, with
respect to any Advance (or portion thereof) made by a Lender that is not funded
via the issuance of Commercial Paper Notes, the “Fixed Period” shall be a period
of one (1) Business Day, unless otherwise agreed upon by the Administrative
Agent and the Borrower.




“Funding Date”:With
respect to any Advance, the Business Day on which the related Advance has been
made.




“GAAP”:Generally
accepted accounting principles as in effect from time to time in the United
States.




“Governmental Authority”:Any nation or government, any state or other political subdivision
thereof, any central bank (or similar monetary or regulatory authority) thereof,
any body or entity exercising executive, legislative, judicial, taxing,
regulatory or administrative functions of or pertaining to
government.




“Hedge Counterparty”:(1) The Administrative Agent, (2) any other entity, if such other entity
(a) on the date of entering into a Hedging Agreement (i) is an interest rate
swap dealer that has been approved in writing by the Administrative Agent, (ii)
has a long-term unsecured debt rating of not less than “A2” by Moody’s (if such
entity is rated by Moody’s), not less than “A” by Fitch (if such entity is rated
by Fitch) and not less than “A” by S&P (if such entity is rated by S&P)
(the “Long-term Rating
Requirement”)and a short-term unsecured debt rating of not less than
“P-1” by Moody’s (if such entity is rated by Moody’s), not less than “F-1” by
Fitch (if such entity is rated by Fitch) and not less than “A-1” by S&P (if
such entity is rated by S&P) (the “Short-term Rating
Requirement”),and (iii) has at least $500,000,000 in stockholders’
equity, and (b) in a Hedging Agreement (i) consents to the assignment of the
Borrower’s rights under the Hedging Agreement to the Administrative Agent and
(ii) agrees that in the event that Moody’s, Fitch or S&P reduces its
long-term unsecured debt rating below the Long-term Rating Requirement, or
reduces its short-term unsecured debt rating below the Short-term Rating
Requirement, it shall either collateralize its obligations in a manner
satisfactory to the Administrative Agent or transfer its rights and obligations
under each hedge transaction thereunder to an entity that meets the requirements
of clause (a)and (b) hereof and which has entered into a Hedging Agreement with the
Borrower on or prior to the date of such transfer or (3) any other entity
acceptable to the Administrative Agent.




23




“Hedging Agreement”:Any interest rate swap agreement, interest rate cap agreement, interest
rate floor agreement, interest rate collar agreement or other interest rate
hedging instrument or agreement entered into by the Borrower with the prior
written consent of the Administrative Agent, which agreement shall consist of a
“Master Agreement” in a form published by the International Swaps and
Derivatives Association, Inc., together with a “Schedule” thereto and each
“Confirmation” thereunder confirming the specific terms of each hedge
transaction thereunder, which such Hedging Agreement will be entered into at the
Borrower’s sole expense.




“Highest Required Investment
Category”:(i) With respect to ratings assigned by Moody’s, “Aa3”, (ii)
with respect to ratings assigned by S&P, “AA-”, and (iii) with respect to
ratings assigned by Fitch, “AA-”.




“Increased Costs”:Any amounts required to be paid by the Borrower to a Lender pursuant to
Section
2.12.




“Indebtedness”:With
respect to any Person at any date, (a) all indebtedness of such Person for
borrowed money or for the deferred purchase price of property or services (other
than current liabilities incurred in the ordinary course of business and payable
in accordance with customary trade practices) or that is evidenced by a note,
bond, debenture or similar instrument or other evidence of indebtedness
customary for indebtedness of that type, (b) all obligations of such Person
under leases that have been or should be, in accordance with GAAP, recorded as
capital leases, (c) all obligations of such Person in respect of acceptances
issued or created for the account of such Person and all letters of credit for
which such Person is the account party, (d) all liabilities secured by any Lien
on any property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof, (e) all net obligations or
liabilities of that Person in respect of derivatives, and (f) all obligations
under direct or indirect guaranties in respect of obligations (contingent or
otherwise) to purchase or otherwise acquire, or to otherwise assure a creditor
against loss in respect of, indebtedness or obligations of others of the kind
referred to in clauses
(a)through (e) above.




“Indemnified Amounts”:Defined in Section 11.1.




“Indemnified Parties”:Defined in Section
11.1.




“Indorsement”:The
meaning specified in Section 8-102(a)(1 1) of the UCC, and “Indorsed” has a
corresponding meaning.




“Insolvency Event”:With respect to a specified Person, (a) the filing of a decree or order
(i) for relief by a court having jurisdiction over such Person or any
substantial part of its property in an involuntary case under any applicable
Insolvency Law now or hereafter in effect, or (ii) appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or (iii) ordering the
winding-up or liquidation of such Person’s affairs, provided that such decree or
order shall remain unstayed and in effect for a period of 60 consecutive days,
(b) the commencement by such Person of a voluntary case under any applicable
Insolvency Law now or hereafter in effect, or the consent by such Person to the
entry of an order for relief in an involuntary case under any such law, (c) the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, (d) the failure
by such Person generally to pay its debts as such debts become due, or (e) the
taking of action by such Person in furtherance of any of the
foregoing.


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“Insolvency Laws”:The Bankruptcy Code and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, suspension of payments, or similar debtor relief
laws from time to time in effect affecting the rights of creditors
generally.




“Insolvency Proceeding”:Any case, action or proceeding before any court or other Governmental
Authority relating to any Insolvency Event.




“Instrument”:The
meaning specified in Section 9-102(a)(47) of the UCC.




“Insurance Policy”:With respect to any Receivable, each of (i) an insurance policy covering
liability and physical damage to, or loss of, the related Powersports Vehicle,
(ii) a lender’s single interest insurance policy covering any lapse or
cancellation of the related Obligor’s liability and physical damage insurance
policy and (iii) a financial gap protection covering the full amount of (x) the
value of the related Powersports Vehicle minus (y) the amount payable under the
related Approved Loan or Approved Lease, as the case may be.




“Insurance Proceeds”:Any amounts received on or with respect to a Receivable under any
Insurance Policy which is neither required to be used to restore, improve or
repair the related Powersports Vehicle nor required to be paid to the Obligor
under the Underlying Instruments.




“Interest”:For each
Accrual Period and each Advance outstanding, the sum of (A) the sum of the
products (for each day or Fixed Period during such Accrual Period)
of:




IRxPx
1


D




where:




IR          =    
      the CP Rate or the Alternative Rate
applicable on such day;




P            =           the
principal amount of such Advance on such day; and




D           =    
      360;




and (B)
the sum of the products (for such Accrual Period) of:


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IRxPxM




where:




IR          =           the
Program Fee Rate applicable during such Accrual Period;




P            =           the
weighted average principal amount of such Advance during such Accrual
Period; and




M          =          
the actual number of days in such Accrual Period divided by 360;




providedthat (i) no
provision of this Agreement shall require the payment or permit the collection
of Interest in excess of the maximum permitted by Applicable Law, (ii) Interest
shall not be considered paid by any distribution if at any time such
distribution is rescinded or must otherwise be returned for any reason and (iii)
if a Termination Event has occurred, Interest shall be calculated at the Default
Rate, compounded daily on any accrued but unpaid Base Rate component thereof.
For the avoidance of doubt, the intent of the above calculation is to capitalize
accrued interest on a daily basis on each day of such Accrual Period but not to
capitalize the Program Fee (although it is applied to the Advances, which
includes the capitalized interest component).




“Interest Collections”:Any and all amounts received with respect to the Collateral other than
Principal Collections, taxes or indemnity payments that are deposited into the
Collection Account, or received by or on behalf of the Borrower, the Servicer or
the Originator in respect of a Receivable, including, without limitation,
whether in the form of cash, checks, wire transfers, electronic transfers or any
other form of cash payment.




“Interest Rate”:For
any Accrual Period and for each portion of an Advance outstanding made by a
Lender:




(i)            to
the extent the Lender has funded the applicable Advance through the issuance of
Commercial Paper Notes, a rate equal to the sum of (i) the weighted average
applicable CP Rate for each Fixed Period, compounded daily on any unpaid accrued
Interest and (ii) the Program Fee Rate, compounded monthly on any unpaid accrued
Program Fee; or




(ii)            to
the extent the Lender did not fund the applicable Advance through the issuance
of Commercial Paper, a rate equal to the sum of (i) the weighted average
Alternative Rate, compounded daily on any unpaid accrued Interest and (ii) the
Program Fee Rate, compounded monthly on any unpaid accrued Program
Fee;




providedthat if a
Termination Event has occurred, the Interest Rate shall be equal to the Default
Rate, compounded daily on any accrued but unpaid Base Rate component thereof and
compounded monthly on any unpaid accrued Program Fee Rate component
thereof.




“Investment”:With
respect to any Person, any direct or indirect loan, advance or investment by
such Person in any other Person, whether by means of share purchase, capital
contribution, loan or otherwise, excluding the acquisition of Receivables
pursuant to a Sale Agreement.


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“Joinder Supplement”:An agreement among the Borrower, a Lender and the Administrative Agent in
the form of Exhibit Ito this Agreement (appropriately completed) delivered in connection with
a Person becoming a Lender hereunder after the Closing Date, as contemplated by
Section
2.1(c).




“Lender”:Defined in
the Preamble.




“Lender Fee Letter”:Each fee letter agreement that shall be entered into by and among the
Borrower, the Originator and the applicable Lender in connection with the
transactions contemplated by this Agreement.




“Leverage Ratio”:As
of the last calendar day of each Collection Period as calculated for the
Originator and its consolidated subsidiaries, the percentage equivalent of a
fraction, equal to the Tangible Net Worth divided by the aggregate
Indebtedness.




“LIBOR Rate”:For any
day during any Accrual Period and any Advance, or portion thereof, aper annuminterest rate equal
to:




(i)            the
posted rate for one-month deposits in United States Dollars appearing on the
Bloomberg money rates section screen, or any successor screen thereto, as of
11:00 a.m. (London time) on such day, or if such rate is not published for such
date, then the most recently published rate; or




(ii)            if
no such rate appears on the Bloomberg money rates section screen, or any
successor screen thereto, at such time and day, then the LIBOR Rate shall be the
arithmetic mean of the offered rates for one-month deposits in United States
Dollars appearing on the Reuters Screen LIBO Page as of 11:00 a.m. (London time)
on such day, or if such rate is not published for such date, then the most
recently published rate.




“Lien”:
Any mortgage, lien, pledge, charge, right, claim, security interest or
encumbrance of any kind of or on any Person’s assets or properties in favor of
any other Person (including any UCC financing statement or any similar
instrument filed against such Person’s assets or properties).




“Lienholder Agent”Defined in Section 5.1
(k)(viii).




“Lienholder Nominee
Agreement”:That certain vehicle lienholder nominee agreement, dated on
or after the Closing Date, among the Borrower, the Administrative Agent and the
Lienholder Agent, as amended from time to time.




“Liquidation Expenses”:With respect to any Receivable, the aggregate amount of all out-of-pocket
expenses reasonably incurred by the Servicer in accordance with the Servicer’s
customary procedures in connection with the repossession, refurbishing and
disposition of any Powersports Vehicle securing such Receivable, upon or after
the expiration or earlier termination of such Receivable (including without
limitation any brokerage or legal fees), and other out-of-pocket costs related
to the liquidation of any such assets, including the attempted collection of any
amount owing under such Receivable, as documented by the Servicer upon the
request of the Administrative Agent, in writing providing a breakdown of the
Liquidation Expenses for such Receivable, along with any supporting
documentation therefor.


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“Liquidity Agent”:Defined in the Preamble.




“Liquidity Agreement”:Any agreement entered into in connection with this Agreement pursuant to
which a Liquidity Bank agrees to make purchases from or advances to, or purchase
assets from, any Lender in order to provide liquidity support for such Lender’s
Advances hereunder.




“Liquidity Bank”:The
Person or Persons, including DZ Bank, who provide liquidity support to any
Lender pursuant to a Liquidity Agreement in connection with the issuance by such
Lender of Commercial Paper Notes.




“Liquidity Ratio”:As
of the last calendar day of each Collection Period as calculated for the
Originator (and its consolidated subsidiaries), the percentage equivalent of a
fraction, (a) the sum of (i) unrestricted cash, (ii) amounts available under all
lines of credit (without having to pledge additional collateral), (iii) the
Originator’s expected net proceeds from the sale of Receivables (net of any debt
secured by such Receivables), which are less than 30 days past due in any
Scheduled Payment and which are subject to a sale agreement with a third party
purchaser, and (iv) 80% of the net investment in all unencumbered Receivables,
which have not been pledged to any lender, which are less than 30 days
delinquent, and which are not otherwise deemed uncollectible by the Servicer in
accordance with its standard collection procedures at the date of determination
divided by (b) the current accrued liabilities (excluding any current accrued
liabilities classified as non-cash liabilities in accordance with GAAP) and
accounts payable calculated in accordance with GAAP.




“Loan List”:The list
of Receivables provided by the Borrower to the Administrative Agent and the
Collateral Custodian, in the form of Schedule IVhereto,
as such list may be amended, supplemented or modified from time to time in
accordance with this Agreement.




“Loan-to-Value Ratio”:With respect to any Receivable, a fraction, expressed as a percentage,
the numerator of which is equal to the original Outstanding Receivable Balance
of such Receivable, and the denominator of which is equal to (A) the lesser of
(i) the manufacturer’s suggested retail price and (ii) the actual sales price of
the related Powersports Vehicle (for new vehicles) or (B) the lesser of (i) the
NADA average retail value of the related Powersports Vehicle and (ii) the actual
sales price of the related Powersports Vehicle (for used vehicles) (inclusive,
in each case, of any “hard add-ons” that are permanently attached to the
vehicle, but exclusive of any “soft add-ons”, such as warranty premiums,
licensing and registration fees and any other expenses for items that are not
permanently attached to the vehicle).




“Lockbox”:Defined in
the Lockbox Agreement.


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“Lockbox Account”:The lockbox account or blocked account maintained at the Lockbox Account
Bank, subject to the Lockbox Agreement, for the purpose of receiving
Collections, the details of which are set forth on Schedule
II.




“Lockbox Account Bank”:U.S. Bank and such other financial institution that may from time to time
become the Lockbox Account Bank hereunder with the prior written consent of the
Administrative Agent.




“Lockbox Agreement”:The lockbox account agreement or account control agreement, among the
Borrower, the Lockbox Account Bank and the Administrative Agent and pertaining
to the Lockbox Account.




“Lockbox Bank Fees”:Fees payable to the Lockbox Bank for providing the Lockbox Account as set
forth in the Lockbox Agreement.




“Lockbox Collection
Percentage”:For any Collection Period, a fraction (expressed as a
percentage and rounded up to the next 0.00 1%), (i) the numerator of which is
the sum of payments made by Obligors with respect to the Receivables directly
into the Lockbox Account during such Collection Period, and (ii) the denominator
of which is all payments made by Obligors during such Collection
Period.




“Make-Whole Fee”:The
fee set forth as such in the Lender Fee Letter.




“Margin Stock”:“Margin Stock” as defined under Regulation U.




“Material Adverse Effect”:With respect to any event or circumstance, means a material adverse
effect on (a) the business, condition (financial or otherwise), operations,
performance or properties of the Originator, the Servicer or the Borrower, (b)
the validity or enforceability of this Agreement or any other Transaction
Document to which such entity is a party against the Originator, the Servicer or
the Borrower or the validity, enforceability or collectibility of the Collateral
taken as a whole or any material portion of the Collateral, (c) the rights and
remedies of the Secured Parties with respect to matters arising under this
Agreement or any other Transaction Document, (d) the ability of the Borrower,
the Originator or the Servicer to perform its obligations under this Agreement
or any Transaction Document, or (e) the status, existence, perfection, priority
(except for Permitted Liens) or enforceability of the Administrative Agent’s
Lien on the Collateral.




“Maximum Advance Rate”:80%.




“Maximum Availability”:At any time, an amount equal to the lesser of (i) the Maximum Facility
Amount and (ii) the Borrowing Base.




“Maximum Facility Amount”:$25,000,000, as such amounts may be amended from time to time in
accordance with the provisions hereof; providedthat on or after the
Termination Date, the Maximum Facility Amount shall mean zero.


29


“Measurement Date”:Each of the following: (i) the Closing Date; (ii) each Reporting Date;
(iii) the date of any Borrowing Notice and (iv) the date of any notice that the
Borrower intends to reduce the Advances Outstanding or the Maximum Facility
Amount.




“Minimum Excess Spread
Requirement”:As of any date of determination, 3.50%.




“Moody’s”:Moody’s
Investors Service, Inc., and any successor thereto.




“Multiemployer Plan”:A “multiemployer plan” as defined in Section 4001(a)(3) of ERISA that is
or was at any time during the current year or the preceding five years
contributed to by the Borrower or any ERISA Affiliate thereof on behalf of its
respective employees.




“Net Aggregate Outstanding
Receivable Balance”:As of any determination date, an amount equal to the
Aggregate Outstanding Receivable Balance less the Excess Concentration
Amount.




“Net Loss Ratio”:As
of the last calendar day of each Collection Period, the percentage equivalent of
a fraction, (i) the numerator of which is equal to the product of (a) the
difference between (1) the aggregate Outstanding Receivable Balance for all
Receivables that became Defaulted Receivables during such Collection Period plus
the aggregate Outstanding Receivable Balances for all repurchased Receivables
which were Delinquent Receivables at the time of repurchase and subsequently
became Defaulted Receivables during such Collection Period and (2) the aggregate
Recoveries received during such Collection Period on any Receivables previously
or currently pledged as Collateral and (b) 12, divided by (ii) the Aggregate
Outstanding Receivable Balance at the beginning of such Collection Period. For
the avoidance of doubt, if the Net Loss Ratio, as calculated pursuant to this
definition, is a negative percentage for any Collection Period, such negative
percentage (rather than zero) shall be used in calculating the three-month
rolling average Net Loss Ratio.




“Obligor”:With
respect to any Receivable, any Person or Persons obligated to make payments
pursuant to or with respect to such Receivable, including any guarantor
thereof.




“Officer’s Certificate”:A certificate signed by a Responsible Officer of the Person providing the
applicable certification.




“Opinion of Counsel”:A written opinion of counsel, which opinion and counsel are reasonably
acceptable to the Administrative Agent.




“Originator”:Defined
in the Preamble.




“Outstanding Receivable
Balance”:As of any date of determination, (i) with respect to any
Approved Loan, the outstanding principal balance of such Approved Loan and (ii)
with respect to any Approved Lease, the book value of such Approved Lease (which
shall equal the sum of (a) present value of the remaining Scheduled Payments
under such Approved Lease discounted at the applicable APR for such Approved
Lease and (b) the present value of the Residual Value of the related Powersports
Vehicle discounted at the applicable APR for such Approved Lease). The
Outstanding Receivable Balance of (i) any Prepaid Receivable which has been
prepaid in full and (ii) any Defaulted Receivable (other than for the purpose of
any repurchase obligation of the Borrower, the Servicer or the Originator or for
the purpose of calculating the Net Loss Ratio) shall equal $0.


30




“Payment Date”:Monthly on the 20th day of each calendar month, or, if such day is not a
Business Day, the next succeeding Business Day, commencing January 20,
2009.
  “Permitted Investments”:Negotiable instruments or securities or other investments that (i) except
in the case of demand or time deposits, investments in money market funds and
Eligible Repurchase Obligations, are represented by instruments in bearer or
registered form or ownership of which is represented by book entries by a
Clearing Agency or by a Federal Reserve Bank in favor of depository institutions
eligible to have an account with such Clearing Agency or such Federal Reserve
Bank who hold such investments on behalf of their customers, (ii) as of any date
of determination, mature by their terms on or prior to the Business Day
preceding the next Payment Date, and (iii) evidence:
  (a)            direct
obligations of, and obligations fully guaranteed as to full and timely payment
by, the United States (or by any agency thereof to the extent such obligations
are backed by the full faith and credit of the United States);
  (b)            demand
deposits, time deposits or certificates of deposit of depository institutions or
trust companies incorporated under the laws of the United States or any state
thereof and subject to supervision and examination by federal or state banking
or depository institution authorities; providedthat at the time of
the Borrower’s investment therein, the commercial paper, if any, and short-term
unsecured debt obligations (other than such obligation whose rating is based on
the credit of a Person other than such institution or trust company) of such
depository institution or trust company shall have a credit rating from each
Rating Agency in the Highest Required Investment Category granted by each such
Rating Agency;
  (c)            commercial
paper, or other short term obligations, having, at the time of the Borrower’s
investment or contractual commitment to invest therein, a rating in the Highest
Required Investment Category granted by each Rating Agency;
  (d)            demand
deposits, time deposits or certificates of deposit that are fully insured by the
FDIC and either have a rating on their certificates of deposit or short-term
deposits from Moody’s of“P-1”, S&P of“A-1”, and Fitch of“F-1+”;
  (e)            notes
that are payable on demand or bankers’ acceptances issued by any depository
institution or trust company referred to in clause (b)above;
  (f)            
investments in taxable money market funds or other regulated investment
companies having, at the time of the Borrower’s investment therein, a rating of
the Highest Required Investment Category from each Rating Agency; any such fund
may be managed by the Collateral Custodian or its Affiliates;
  (g) time
deposits (having maturities of not more than 90 days) with an entity the
commercial paper of which has, at the time of the Borrower’s investment therein,
a rating of the Highest Required Investment Category granted by each Rating
Agency (including Fitch if rated by Fitch);
  31
  (h)            Eligible
Repurchase Obligations with a rating from Moody’s of “P-1”, S&P of“A-1”, and
Fitch of“F-1+”; or
  (i)            each
Permitted Investment that may be purchased by or through the Collateral
Custodian or its Affiliates.
  “Permitted Liens”:Any of the following as to which no execution, levy or foreclosure
proceeding shall have been commenced (a) with respect to any Related Property,
Liens for state, municipal or other local taxes if such taxes shall not at the
time be due and payable or if a Person shall currently be contesting the
validity thereof in good faith by appropriate proceedings and with respect to
which reserves in accordance with GAAP have been provided on the books of such
Person, (b) with respect to any Related Property, Liens imposed by law, such as
materialmen’s, warehousemen’s, mechanics’, carriers’, workmen’s and repairmen’s
Liens and other similar Liens, arising by operation of law in the ordinary
course of business for sums that are not overdue or are being contested in good
faith, and (c) Liens granted pursuant to or by the Transaction
Documents.
  “Person”:An
individual, partnership, corporation, limited liability company, joint stock
company, trust (including a statutory or business trust), unincorporated
association, sole proprietorship, joint venture, government (or any agency or
political subdivision thereof) or other entity.
  “Powersports Vehicles”:(i) Motorcycles having an engine size/displacement equal to or in excess
of 5 50cc, (ii) all-terrain vehicles having a four-stroke engine, and (iii)
select Scooters.
  “Predecessor Servicer Work
Product”:Defined in Section
6.14(g).
  “Prepaid Receivable”:Any Receivable (other than a Defaulted Receivable) that has been
terminated or has been prepaid in full or in part prior to its scheduled
expiration date.
  “Prepayment Amount”:Defined in Section
6.4(b).
  “Prepayments”:Any
and all partial or full prepayments on or with respect to a Receivable
(including, with respect to any Receivable and any Collection Period, any
Scheduled Payment or portion thereof that is due in a subsequent Collection
Period that the Servicer has received, and pursuant to the terms of Section 6.4(b)expressly permitted the related Obligor to make, in advance of its
scheduled due date, and that will satisfy such Scheduled Payment on such due
date).
  “Principal Collections”:Any and all amounts of Collections received in respect of any principal
due and payable under the Receivables or any portion of a rent payment allocable
to principal, from or on behalf of Obligors that are deposited into the
Collection Account (including, without limitation, Insurance Proceeds and the
principal portion of any Scheduled Payment or of any repurchase amount paid by
the Originator to repurchase a Receivable pursuant to the Sale Agreement or
other sale of a Receivable in accordance with Section 5.2(m)),or
received by or on behalf of the Borrower by the Servicer or the Originator in
respect of a Receivable and all Recoveries, whether in the form of cash, checks,
wire transfers, electronic transfers or any other form of cash
payment.
  32
  “Proceeds”:With
respect to any Collateral, all property that is receivable or received when such
Collateral is collected, sold, liquidated, foreclosed, exchanged, or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes
all rights to payment with respect to any insurance relating to such
Collateral.
  “Program Fee”:The
meaning provided in the Lender Fee Letter.
  “Program Fee Rate”:The meaning provided in the Lender Fee Letter.
  “Pro Rata Share”:With respect to a Lender, the percentage obtained by dividing the
Commitment of such Lender by the aggregate Commitments of all the Lenders or,
following the termination of all Commitments, the percentage obtained by
dividing the outstanding principal amount of the Advances of such Lender by the
aggregate Advances Outstanding.
  “Qualified Institution”:A depository institution or trust company reasonably acceptable to the
Administrative Agent, that is organized under the laws of the United States of
America or any one of the States thereof or the District of Columbia (or any
domestic branch of a foreign bank), (i) that has a debt rating equivalent to at
least the Highest Required Investment Category or is otherwise acceptable to the
Administrative Agent and (ii) the deposits of which are insured by the
FDIC.
  “Rating Agency”:Each
of S&P, Moody’s and Fitch.
  “Receivable”:The
Borrower’s right to all payments under (i) an Approved Loan or (ii) an Approved
Lease, as applicable, including, without limitation, the right to receive
Scheduled Payments, Prepayments, Recoveries and other Collections with respect
thereto.
  “Receivable Checklist”:The list delivered by or on behalf of the Borrower to the Collateral
Custodian that identifies the following with respect to each Receivable: (i)
name, mailing address and FICO score of the related Obligor, (ii) original
Outstanding Receivable Balance, (iii) loan/lease number, (iv) Receivable Rate,
(v) maturity date, (vi) the underlying type of Powersports Vehicle, (vii) each
of the items contained in the related Required Loan File, (viii) whether the
Receivable is an Approved Loan or an Approved Lease, (ix) the actual sales price
of the underlying Powersports Vehicle, (x) if different than the actual sales
price thereof, the manufacturer’s suggested retail price (for new vehicles) or
NADA Average Retail value (for used vehicles) of the underlying Powersports
Vehicle and (xi) whether the related Powersports Vehicle is subject to any
certificate of title laws.
  “Receivable Rate”:For any Collection Period, (i) with respect to each Approved Loan, the
current cash pay interest rate of such Receivable in such period, as specified
in the related Underlying Instruments and (ii) with respect to each Approved
Lease, the applicable APR.
  “Records”:All
documents relating to the Receivables, including books, records and other
information executed in connection with the origination or acquisition of the
Receivables and Related Security or maintained with respect to the Receivables
and Related Security and the related Obligors that the Borrower, the Originator
or the Servicer have generated, in which the Borrower has acquired an interest
pursuant to the Sale Agreement or in which the Borrower or the Servicer have
otherwise obtained an interest.
  33
  “Recoveries”:With
respect to any Defaulted Receivable, the positive difference between (i) any
proceeds from the sale or other disposition of the related Powersports Vehicle,
the proceeds of any related Insurance Policy (other than proceeds due to the
Originator or the Borrower relating to liability coverage in excess of amounts
necessary to make Scheduled Payments with respect to the related Receivable),
any amounts received from the related Obligor or a personal guarantor after the
Receivable becomes a Defaulted Receivable (including any recoveries from the
related Obligor as a result of litigation), any other recoveries with respect to
such Defaulted Receivable, the Related Property, and amounts representing late
fees and penalties, and (ii) any Liquidation Expenses and amounts, if any,
received that are required under such Defaulted Receivable to be refunded to the
related Obligor.
  “Register”:Defined
in Section
13.16.
  “RegulationU”:
Regulation U of the Board of Governors of the Federal Reserve System, 12 C.F.R.
§22 1, or any successor regulation.
  “Related Property”:With respect to a Receivable, any property or other assets designated and
pledged as collateral to secure repayment of such Receivable including, without
limitation, the related Powersports Vehicle (whether subject to an Approved
Lease or an Approved Loan) and all Proceeds from any sale or other disposition
of such property or other assets.
  “Related Security”:As used (1) in the Sale Agreement, all right, title and interest of the
Originator in and to the items set forth in clauses (a)through
(d) and (h) hereof, and (2) herein, all of the Borrower’s right, title and
interest in and to:
  (a)            all
Related Property securing the Receivables and all Recoveries related thereto,
all payments paid in respect thereof and all monies due, to become due and paid
in respect thereof and all liquidation proceeds;
  (b)            the
Required Loan Files and Servicing Files related to the Receivables and all
Records;
  (c)            all
Insurance Policies with respect to any Receivable;
  (d)            the
Accounts, together with all cash and investments therein;
  (e)            the
Sale Agreement (including, without limitation, rights of recovery of the
Borrower against the Originator);
  (f)            the
assignment to the Administrative Agent, as agent for the Secured Parties, of all
UCC financing statements filed by the Borrower against the Originator under or
in connection with Sale Agreement;
  (g)            all
records (including computer records) with respect to the foregoing;
and
  (h)            all
collections, income, payments, proceeds and other benefits of each of the
foregoing.
  34
  “Reporting Date”:The
date that is five (5) Business Days prior to each Payment Date, or, if such day
is not a Business Day, the immediately preceding Business Day.
  “Request for Release”:Defined in Section
8.8(a).
  “Required Lenders”:The Lenders representing an aggregate of more than 66.67% of the
aggregate Commitments of the Lenders then in effect or, following termination of
the Commitments, of the aggregate Advances Outstanding.
  “Required Loan File”:For each Receivable, the following documents or instruments:
  (a)            the
Underlying Instruments evidencing such Receivable (including any amendments
thereto);
  (b)            a
true and complete copy of each related guaranty or security
agreement;
  (c)            if
the related Powersports Vehicle is not subject to any certificate of title laws,
the file stamped or acknowledged UCC financing statement(s) or, if the
Originator has not received the file stamped or acknowledged UCC financing
statement(s), a true and complete copy of the UCC financing statement(s)
delivered to the related filing office with respect to the related Powersports
Vehicle; providedthat
if a true and complete copy of the applicable UCC financing statement(s) is
provided pursuant to this clause (c),a file
stamped or acknowledged UCC financing statement(s) shall be provided within
sixty (60) days of the date of origination of the related
Receivable;
  (d)            if
the related Powersports Vehicle is subject to any certificate of title laws, the
Certificate of Title related to such Powersports Vehicle or, if the Originator
has not received the Certificate of Title related to such Powersports Vehicle,
an Application for Certificate of Title;
  (e)            a
true and complete copy of the Insurance Policy or insurance certificate
evidencing that an Insurance Policy is in place, in each case to the extent
applicable for the related Receivable, as set forth on the Receivable
Checklist;
  (f)            the
credit file relating to such Receivable and the related Obligor (including the
FICO score of the related Obligor); and
  (g) such
other documents as the Administrative Agent may reasonably require in response
to changes in the Approved Loan or Approved Lease origination or documentation
process of the Originator after the Closing Date (as indicated to the Collateral
Custodian in writing).
  “Required Reports”:Collectively, the Servicing Report, the Servicer’s Certificate required
pursuant to Section
6.9(c),the annual statements as to compliance required pursuant to Section 6.10,and the
annual independent public accountant’s report required pursuant to Section
6.11.
  35
  “Residual Value”:For
each Approved Lease, the residual value of the applicable Powersports Vehicle
stated on the Underlying Instruments related to such Approved Lease, subject to
the Originator’s underwriting guidelines.
  “Responsible Officer”:With respect to any Person, any president, vice president, corporate
secretary or treasurer of such Person and also, with respect to a particular
matter, any other duly authorized officer of such Person to whom such matter is
referred because of such officer’s knowledge of and familiarity with the
particular subject.
  “Review Criteria”:Defined in Section
8.2(b)(i).
  “Revolving Period”:The period commencing on the Closing Date and ending on the day preceding
the Termination Date.
  “S&P”:
Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any
successor thereto.
  “Sale Agreement”:The
Purchase and Contribution Agreement, dated as of the date hereof, between the
Originator and the Borrower.
  “Scheduled Payment”:With respect to a Receivable, each monthly scheduled payment of principal
and/or interest or rent required to be made by the related Obligor thereunder,
which fully redeem the repayment obligations of the related Obligor by the
stated maturity date of such Receivable.
  “Scooter”:A
two-wheeled gasoline or electric powered vehicle having (i) a platform for the
operator’s feet or integrated footrests, (ii) a step-through architecture, (iii)
engine size/displacement greater than 50cc or the equivalent and (iv) a
classification as a “motorcycle” by the U.S. Department of
Transportation.
  “Secured Party”:(i)
Each Lender, (ii) the Administrative Agent and (iii) each Liquidity Bank.
  “Securities Account”:The meaning specified in Section 8-50 1 of the UCC.
  “Securities Account Control
Agreement”:The Securities Account Control Agreement, dated as of the
date hereof, among the Borrower, the Servicer, the Administrative Agent and U.S.
Bank, as the Securities Intermediary.
  “Securities Act”:The
U.S. Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
  “Securities and Exchange
Commission”:The U.S. Securities and Exchange Commission.
  “Securities Intermediary”:(i) A Clearing Corporation; or (ii) a Person, including a bank or broker,
that in the ordinary course of its business maintains Securities Accounts for
others and is acting in that capacity.
  36
  “Security”:The
meaning specified in Section 9-102(a)(15) of the UCC.
  “Security Certificate”:The meaning specified in Section 8-102(a)(16) of the UCC.
  “Security Entitlement”:The meaning specified in Section 8-102(a)(17) of the UCC.
  “Servicer”:Sparta
and each successor thereto appointed as Successor Servicer (including, for the
avoidance of doubt, the Backup Servicer upon its appointment as successor
Servicer) pursuant to Section
6.14(a).
  “Servicer Default”:Defined in Section
6.13.
  “Servicer Termination
Notice”:Defined in Section 6.13.
  “Servicer’s Certificate”:Defined in Section
6.9(c).
  “Servicing Fee”:The
servicing fee payable to the Servicer on each Payment Date in arrears in respect
of the immediately preceding Collection Period, which fee shall be equal to the
product of (i) 1.00%, (ii) the average daily Aggregate Outstanding Receivable
Balance during the related Collection Period and (iii) the actual number of days
in such Collection Period divided by 360; providedthat, if Lyon
becomes the Successor Servicer pursuant to the terms of this Agreement, the
Servicing Fee shall equal the “Successor Servicer Administration Fee” set forth
in the Backup Servicer Fee Letter.
  “Servicing File”:For
each Receivable, copies of each of the documents included in the Required Loan
File definition.
  “Servicing Report”:Defined in Section
6.9(b).
  “Servicing Standard”:With respect to any Receivables, to service and administer such
Receivables in accordance with the Underlying Instruments and all customary and
usual servicing practices (a) which are consistent with the higher of: (i) the
customary and usual servicing practices that a prudent lender would use in
servicing loans and leases like the Receivables for its own account, and (ii)
the same care, skill, prudence and diligence with which the Servicer services
and administers loans and leases for its own account or for the account of
others; and (b) with a view to maximize the value of the Receivables; providedthat, with respect
to any Successor Servicer, the “Servicing Standard” shall be the same care,
skill and diligence with which such Successor Servicer services and administers
loans for its own account or for the account of others.
  “Servicing Term”:Defined in Section
6.1(e).
  “Servicing Term Renewal
Notice”:Defined in Section
6.1(e).
  “Solvent”:As to any
Person at any time, having a state of affairs such that all of the following
conditions are met: (a) the fair value of the property of such Person is greater
than the amount of such Person’s liabilities (including disputed, contingent and
unliquidated liabilities) as such value is established and liabilities evaluated
for purposes of Section 10 1(32) of the Bankruptcy
Code; (b) the present fair saleable value of the property of such Person in an
orderly liquidation of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts and other
liabilities as they become absolute and matured; (c) such Person is able to
realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person’s ability to pay as
such debts and liabilities mature; and (e) such Person is not engaged in a
business or a transaction, and does not propose to engage in a business or a
transaction, for which such Person’s property assets would constitute
unreasonably small capital.
  37
  “Sparta”:Sparta
Commercial Services, Inc., a Nevada corporation.
  “Spread Account”:The
trust account created pursuant to Section
6.4(j).
  “Subsidiary”:As to
any Person, a corporation, partnership or other entity of which shares of stock
or other ownership interests having ordinary voting power (other than stock or
such other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time owned,
or the management of which is otherwise controlled, directly or indirectly,
through one or more intermediaries, or both, by such Person.
  “Successor Servicer”:Defined in Section
6.14(a).
  “Tangible Net Worth”:With respect to any Person, as of any date of determination, the total
equity of such Person as of such date (including all subordinated debt maturing
after the Facility Termination Date) less the goodwill and other intangibles, if
any, all determined on a consolidated basis in accordance with
GAAP.
  “Tangible Net Worth Floor”:Defined in Section 5.4(q).
  “Tape”:Defined in
Section
7.2(b)(ii).
  “Taxes”:Any present
or future taxes, levies, imposts, duties, charges, deductions, withholdings,
assessments or fees of any nature (including interest, penalties, and additions
thereto) that are imposed by any Governmental Authority.
  “Termination Date”:The earliest of (a) the date of the termination by the Borrower in whole
of the Maximum Facility Amount pursuant to Section 2.3(a),(b)
the Business Day designated by the Borrower to the Administrative Agent as the
Termination Date at any time following two (2) Business Days’ prior written
notice thereof to the Administrative Agent, (c) the Facility Termination Date or
such other date to which such date is extended in accordance with Section 2.1(b),and
(d) the date of the declaration of the Termination Date or the date of the
automatic occurrence of the Termination Date pursuant to Section 10.2(a)as a
result of the occurrence of a Termination Event.
  “Termination Event”:Defined in Section
10.1.
  “Transaction”:Defined in Section
3.2.
  38
  “Transaction Documents”:This Agreement, the Sale Agreement, the Securities Account Control
Agreement, any Joinder Supplement, the Lockbox Agreement, the Lender Fee Letter,
the Backup Servicer Fee Letter, the Collateral Custodian Fee Letter, the
Collection Account Bank Fee Letter, each Hedging Agreement, each Lienholder
Nominee Agreement and any additional document the execution of which is
necessary or incidental to carrying out the terms of the foregoing
documents.
  “Transition Expenses”:The reasonable costs (including reasonable attorneys’ fees) and
engagement fees of the Backup Servicer incurred in connection with transferring
the servicing obligations under this Agreement and amending this Agreement to
reflect such transfer, in an amount not to exceed $50,000.
  “UCC”:
The Uniform Commercial Code as from time to time in effect in the applicable
jurisdiction or jurisdictions.
  “Uncertificated Security”:The meaning specified in Section 8-102(a)(l8) of the UCC.
  “Underlying Instruments”:The retail installment contract, motor vehicle lease agreement or other
agreement pursuant to which a Receivable has been issued or created and each
other agreement that governs the terms of or secures the obligations represented
by such Receivable or of which the holders of such Receivable are the
beneficiaries.
  “United States”:The
United States of America.
  “Unmatured Termination
Event”:Any event that, which with the giving of notice or the lapse of
time, or both, would become a Termination Event.
  “Unused Fee”:The fee
set forth as such in the Lender Fee Letter.
  “Upfront Fee”:The
fee set forth as such in the Lender Fee Letter.
  “U.S. Bank”:Defined
in the Preamble.
  “Warranty Event”:As
to any Receivable, the discovery that, as of the Funding Date for such
Receivable, such Receivable did not constitute an Eligible Receivable and the
failure of the Borrower to cure such breach, or cause the same to be cured,
within thirty (30) days after the earlier to occur of the Borrower’s receipt of
notice thereof from the Administrative Agent or the Borrower becoming aware
thereof.
  “Warranty Receivable”:Any Receivable that fails to satisfy any criteria of the definition of
Eligible Receivable as of the applicable Funding Date of such Receivable or any
Receivable with respect to which a Warranty Event has occurred.
  Section
1.2.       Other
Terms.
  All
accounting terms used but not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC in the State of New
York, and used but not specifically defined herein, are used herein as defined
in such Article 9.
  39
  Section
1.3.       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” and the words “to” and “until” each mean “to but
excluding.”
  Section
1.4.       Interpretation.
  In each
Transaction Document, unless a contrary intention appears:
  (a)            the
singular number includes the plural number and vice versa;
  (b)            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;
  (c)            reference
to any gender includes each other gender;
  (d)            reference
to day or days without further qualification means calendar days;
  (e)            reference
to any time means New York City time;
  (f)            reference
to any agreement (including any Transaction Document), document or instrument
means such agreement, document or instrument as amended, modified, waived,
supplemented, restated or replaced 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
  (g)
reference to any Applicable Law means such Applicable 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 Applicable Law means that provision of
such Applicable Law from time to time in effect and constituting the substantive
amendment, modification, codification, replacement or reenactment of such
Section or other provision.
  ARTICLE
II
  THE
FACILITY
 Section
2.1.       Borrowings.
  (a)
During the Revolving Period, the Borrower may, at its option, request the
Lenders to make advances of funds (each, an “Advance”)pursuant
to a Borrowing Notice delivered to the Administrative Agent. Following the
receipt of a Borrowing Notice, the Administrative Agent shall promptly notify
the Lenders of receipt thereof, and subject to the terms and conditions
hereinafter set forth, the Lenders shall fund such Advance. Notwithstanding
anything to the contrary herein, no Lender shall be obligated to provide the
Borrower with aggregate funds in connection with an Advance that would exceed
the Lender’s unused Commitment then in effect.
  40
  (b)            The
Borrower may, within 90 days but not less than 60 days prior to the Facility
Termination Date, by written notice to the Administrative Agent, make a request
for each Lender to extend the Facility Termination Date for an additional period
of 364 days. The Administrative Agent shall promptly notify each Lender of
receipt of such notice. The Administrative Agent and each Lender shall make a
determination, in their sole discretion, within 30 days of the date of the
Borrower’s request for such extension, as to whether or not it will agree to the
applicable extension requested, and shall notify the Borrower if they have
agreed to the applicable extension requested. The failure of the Administrative
Agent or any Lender to provide timely notice of its decision to the Borrower
shall be deemed to constitute a refusal by the Administrative Agent or such
Lender, as applicable, to extend the applicable date. The Borrower confirms that
the Administrative Agent and each Lender, in their sole and absolute discretion,
without regard to the value or performance of the Collateral or any other
factor, may elect not to extend the Facility Termination Date. The
Administrative Agent shall give prompt notice to the Backup Servicer and the
Collateral Custodian as to whether or not the Facility Termination Date has been
extended.
  (c)            The
Borrower may, with the written consent of the Administrative Agent and the
applicable Lender, add additional Persons as Lenders or cause an existing Lender
to increase its Commitment in connection with a corresponding increase in the
Maximum Facility Amount. Each additional Lender shall become a party hereto by
executing and delivering to the Administrative Agent and the Borrower a Joinder
Supplement.
  (d) Upon
request of the Administrative Agent, the Borrower shall promptly deliver to the
Administrative Agent, on behalf of the Lenders, a duly executed variable funding
note in form and substance acceptable to the Administrative Agent in its sole
discretion.
  Section
2.2.       Procedures for Advances by
Lenders.
  (a)            No
later than 11:00 a.m. two (2) Business Days prior to the related Funding
Date, the Borrower (or the Servicer on its behalf) shall deliver:
  (i)            to
the Administrative Agent, the Backup Servicer and the Collateral Custodian,
written notice of such proposed Funding Date (including a duly completed
Borrowing Base Certificate updated to the date such Advance is requested and
giving pro forma effect to the Advance requested and the use of the proceeds
thereof);
  (ii)            to
the Administrative Agent, a wire disbursement and authorization form, to the
extent not previously delivered; and
  (iii) to
the Administrative Agent and the Collateral Custodian, a duly completed
Borrowing Notice which shall (a) specify the desired amount of such Advance
(which amount must be at least equal to $250,000), to be allocated to each
Lender in accordance with its Pro Rata Share, (b) specify the proposed Funding
Date of such Advance, (c) specify the Receivables to be financed on such Funding
Date (including the appropriate Receivable number and Outstanding Receivable
Balance for each Receivable) and (d) include a representation that all
conditions precedent for an Advance described in Article III hereof have been
met.
  41
  (b)            Each
Borrowing Notice shall be irrevocable. If any Borrowing Notice is received by
the Administrative Agent after 11:00 a.m. two (2) Business Days prior to the
related Funding Date or on a day that is not a Business Day, such Borrowing
Notice shall be deemed to be received by the Administrative Agent at 9:00 a.m.
on the next Business Day.
  (c)            On
the proposed Funding Date, subject to the limitations set forth in Section 2.1(a)and
upon satisfaction of the applicable conditions set forth in Article III,each
Lender shall make available to the Borrower in immediately available funds, at
such bank or other location reasonably designated by the Borrower in the
Borrowing Notice given pursuant to this Section 2.2,an
amount equal to such Lender’s Pro Rata Share of the least of (i) the amount
requested by the Borrower for such Advance, and (ii) an amount equal to the
Availability on  such Funding Date. Each Lender may fund an Advance
hereunder through the issuance of Commercial Paper Notes or pursuant to a draw
under a Liquidity Agreement, as determined in such Lender’s sole and absolute
discretion. The Lender acknowledges that, as of the Closing Date, it intends to
fund the Advances through the issuance of Commercial Paper Notes.
  (d) On
each Funding Date, the obligation of each Lender to remit its Pro Rata Share of
any such Advance shall be several from that of each other Lender and the failure
of any Lender to so make such amount available to the Borrower shall not relieve
any other Lender of its obligation hereunder.
  Section
2.3.       Reduction of the Maximum
Facility Amount; Optional Repayments.
  (a)            The
Borrower shall be entitled at its option, at any time, to terminate in whole or
reduce in part the portion of the Maximum Facility Amount that exceeds the
Advances Outstanding and accrued and unpaid Carrying Costs; providedthat (i) the
Borrower shall give 10 Business Days’ prior written notice of such termination
or reduction to the Administrative Agent, (ii) any partial reduction of the
Maximum Facility Amount shall be in an amount equal to $5,000,000 and in
integral multiples of $1,000,000 in excess thereof, and (iii) the Borrower shall
pay to the Administrative Agent, for the benefit of the Lenders, any applicable
Early Termination Fee and any applicable Exit Fee with respect thereto. Any
request for a reduction or termination pursuant to this Section 2.3(a)shall
be irrevocable. The Commitment of each Lender shall be reduced by an amount
equal to its Pro Rata Share of the aggregate amount of any reduction under this
Section
2.3(a).
  (b)            The
Borrower shall be entitled at its option, at any time, to reduce the Advances
Outstanding; providedthat (i) the Borrower shall give two (2) Business Days’ prior written
notice of such reduction to the Administrative Agent and Collateral Custodian
and (ii) any reduction of the Advances Outstanding shall be in a minimum amount
of $250,000 and in integral multiples of $1,000 in excess thereof; providedthat the Advances
Outstanding shall not be less than $250,000 at any time (unless the Advances
Outstanding are being reduced to $0). In connection with any such reduction of
Advances Outstanding, the Borrower shall deliver to the Administrative Agent (i)
instructions to reduce such Advances Outstanding and (ii) funds sufficient to
repay such Advances Outstanding and all due and unpaid Interest, Unused Fees,
Make-Whole Fees, Early Termination Fees and Breakage Costs (if any) related to
such reduced Advances Outstanding. The Administrative Agent shall promptly
notify the Lenders of receipt of such instructions and shall apply amounts
received from the Borrower pursuant to this Section2.3(b)to the payment
of the Facility Amount related to the Advances Outstanding being repaid pursuant
to this Section
2.3(b).Any such written notice of a reduction relating to any repayment
pursuant to this Section 2.3(b)shall
be irrevocable.
  42
  Section
2.4.       Determination and Payment of
Interest.
  The
Administrative Agent shall determine, in accordance with the terms of this
Agreement, the Interest Rate and the Interest to be paid by the Borrower with
respect to each Advance on each Payment Date for the related Accrual Period and
shall advise the Servicer, the Borrower and each Lender thereof not later than
5:00 p.m. on the fifth (5th)Business
Day following the end of each Collection Period.
  Section
2.5.       Notations.
  The
Administrative Agent is hereby authorized to enter on a schedule attached to any
note delivered by the Borrower pursuant to Section 2.1a
notation (which may be computer generated) or to otherwise record in its
internal books and records or computer system with respect to each Advance made
by each Lender of (a) the date and principal amount thereof and (b) each payment
and repayment of principal thereof. Any such recordation shall, absent manifest
error, constitute prima facie evidence of the Advances Outstanding. The failure
of the Administrative Agent to make any such recordation shall not limit or
otherwise affect the obligation of the Borrower to repay the Advances in
accordance with the terms set forth herein.
  Section
2.6.       Principal
Repayments.
  (a)            Unless
sooner prepaid pursuant to Section 2.3(b), Section 2.7,
Section 2.8or Section 10.2,the
Advances Outstanding shall be due and payable in full on the Termination
Date.
  (b)            If
at any time the Advances Outstanding exceed the Maximum Availability (including
as a result of an Eligible Receivable becoming a Defaulted Receivable), the
Borrower shall within two (2) Business Days of its knowledge of such occurrence
deposit such amount into the Collection Account required to reduce the Advances
Outstanding to an amount less than or equal to the Maximum
Availability.
  Section
2.7.       Settlement Procedures During
the Revolving Period.
  On each
Payment Date during the Revolving Period, the Servicer shall direct the
Collection Account Bank, subject to the consent of the Administrative Agent, to
pay pursuant to the Servicing Report (and the Collection Account Bank shall make
payment from the Collection Account to the extent of Available Funds in reliance
on the information set forth in such Servicing Report) to the following Persons,
the following amounts in the following order of priority:
  43
  (1)            to
any Hedge Counterparty, if applicable, amounts due under any outstanding Hedging
Agreement (other than breakage costs) except for any unpaid fees, expenses or
amounts owed as a consequence of an event of default or termination event under
an outstanding Hedging Agreement or otherwise due upon termination of such
Hedging Agreement;
  (2)           pro ratain accordance with
the amounts due under this clause, to the Backup Servicer, the Collateral
Custodian, the Lockbox Bank and the Collection Account Bank, in an amount equal
to (a) any accrued and unpaid Backup Servicing Fees, Collateral Custodian Fees,
Collection Account Bank Fees, Lockbox Bank Fees and Transition Expenses, and (b)
up to an amount not to exceed $100,000 in the aggregate since the Closing Date,
incurred but unreimbursed reasonable third-party, out-of-pocket expenses
relating to their respective duties as Backup Servicer, Collateral Custodian,
the Lockbox Bank or Collection Account Bank hereunder, in respect of which the
Backup Servicer, the Collateral Custodian, the Lockbox Bank or the Collection
Account Bank, as applicable, has provided prior written notice to each of the
Servicer and the Administrative Agent, for the payment thereof;
  (3)           pro ratain accordance with
the amounts due under this clause, to the Servicer, in an amount equal to any
accrued and unpaid Servicing Fees and, if Lyon becomes the Successor Servicer,
with the prior written consent of the Administrative Agent, any unreimbursed
out-of-pocket expenses of such Successor Servicer;
  (4)            to
the Administrative Agent, on behalf of the Lenders, in an amount equal to any
accrued and unpaid Interest, the Unused Fee, the Make-Whole Fee and any other
fees, expenses or other amounts due and payable to the Administrative
Agent;
  (5)            to
each applicable Hedge Counterparty, any unpaid fees, expenses or amounts owed as
a consequence of an event of default or termination event under an outstanding
Hedging Agreement or otherwise due upon termination of such Hedging
Agreement;
  (6)            to
the Lenders, in an amount equal to (if any) the positive difference between the
Advances Outstanding on such Payment Date over the Borrowing Base;
  (7)            to
the extent not paid in clause (2)above,
pro ratain accordance
with the amounts due under this clause to the Administrative Agent, any
applicable Lender, the Backup Servicer, the Collateral Custodian, the Lockbox
Bank, the Collection Account Bank, the Successor Servicer, the Indemnified
Parties or the Secured Parties, all other amounts, including any Increased
Costs, Taxes or Indemnified Amounts, but other than the principal of Advances
Outstanding, then due under this Agreement or the other Transaction
Documents;
  (8)            to
the Spread Account, the amount, if any, equal to the cost of entering into one
or more Hedging Agreement(s) with respect to that portion of the Aggregate
Outstanding Receivable Balance either (i) that is not subject to one or more
Hedging Agreement(s) on such Payment Date or (ii) with respect to which
sufficient proceeds to enter into one or more Hedging Agreement(s) are not in
the Spread Account on such Payment Date, in each case pursuant to the terms of
Section
5.1(n);
  44
  (9)           pro ratain accordance with
the amounts due under this clause, to any Successor Servicer, any reimburseable
expenses of such Successor Servicer and to the Servicer (and any Successor
Servicer), any outstanding, unreimbursed Liquidation Expenses; and
  (10)            after
giving effect to the acquisition of any Receivables to be made on such date, to
the extent that, after giving effect to such release, the Availability would
exceed $0, any remaining amounts shall be distributed (i) to the Borrower to
fund the acquisition of any Receivables pledged as Collateral or (ii) as
directed by the Borrower, to the reduction of the Advances Outstanding or
otherwise.
  Section
2.8.       Settlement Procedures During
the Amortization Period.
  On each
Payment Date during the Amortization Period, the Servicer shall direct the
Collection Account Bank, subject to the consent of the Administrative Agent, to
pay pursuant to the Servicing Report (and the Collection Account Bank shall make
payment from the Collection Account to the extent of Available Funds in reliance
on the information set forth in such Servicing Report) to the following Persons,
the following amounts in the following order of priority:
  (1)            to
any Hedge Counterparty, if applicable, amounts due under any outstanding Hedging
Agreement (other than breakage costs);
  (2)           pro ratain accordance with
the amounts due under this clause, to the Backup Servicer, the Collateral
Custodian, the Lockbox Bank and the Collection Account Bank in an amount equal
to (a) any accrued and unpaid Backup Servicing Fees, Collateral Custodian Fees,
Collection Account Bank Fees, Lockbox Bank Fees and Transition Expenses, and (b)
up to an amount not to exceed $100,000 in the aggregate since the Closing Date,
incurred but unreimbursed reasonable third-party, out-of-pocket expenses
relating to their respective duties as Backup Servicer, Collateral Custodian,
the Lockbox Bank or Collection Account Bank hereunder, in respect of which the
Backup Servicer, the Collateral Custodian, the Lockbox Bank and the Collection
Account Bank, as applicable, has provided prior written notice to the Servicer
and the Administrative Agent, for the payment thereof;
  (3)           pro ratain accordance with
the amounts due under this clause, to the Servicer, in an amount equal to any
accrued and unpaid Servicing Fees and, if Lyon becomes the Successor Servicer,
with the prior written consent of the Administrative Agent, any unreimbursed
out-of-pocket expenses of such Successor Servicer;
  (4)            to
the Administrative Agent, on behalf of the Lenders, in an amount equal to any
accrued and unpaid Interest, the Unused Fee, the Make-Whole Fee and any other
fees, expenses or other amounts due and payable to the Administrative
Agent;
  (5)            to
each applicable Hedge Counterparty, any unpaid fees, expenses or amounts owed as
a consequence of an event of default or termination event under an outstanding
Hedging Agreement or otherwise due upon termination of such Hedging
Agreement;
  (6)            to
the Administrative Agent, for the account of each applicable Lender, in an
amount necessary to reduce the Advances Outstanding to zero;
  45
  (7)            to
the extent not paid in clause (2)above,
pro ratain accordance
with the amounts due under this clause to the Administrative Agent, any
applicable Lender, the Backup Servicer, the Collateral Custodian, the Lockbox
Bank, the Collection Account Bank, the Successor Servicer, the Indemnified
Parties or the Secured Parties, all other amounts, including any Increased
Costs, Taxes or Indemnified Amounts, then due under this Agreement or the other
Transaction Documents;
  (8)           pro ratain accordance with
the amounts due under this clause, to any Successor Servicer, any reimburseable
expenses of such Successor Servicer and to the Servicer (and any Successor
Servicer), any outstanding, unreimbursed Liquidation Expenses; and
  (9)            any
remaining amounts shall be distributed to the Borrower.
  Section
2.9.       Collections and
Allocations.
  (a)            Collections.The
Servicer shall direct each Obligor on any Receivables owned by the Borrower to
make payments only to the Lockbox or the Lockbox Account listed on Schedule II.The
Lockbox Account shall be subject to the Lockbox Agreement. The Borrower and the
Servicer shall transfer, or cause to be transferred, all Collections received in
the Lockbox Account or received directly by it to the Collection Account by the
close of business on the Business Day after such Collections are received (or,
in the case of Lyon as the Successor Servicer, on the second Business Day after
receipt). The Servicer shall further include a statement as to the amount of
Collections received into the Lockbox Account and on deposit in the Collection
Account on each Reporting Date in the Servicing Report delivered pursuant to
Section
6.9(b).
  (b)            Excluded Amounts.With the prior written consent of the Administrative Agent (such consent
not to be unreasonably withheld), the Servicer may withdraw from the Collection
Account any deposits thereto constituting Excluded Amounts if the Servicer has,
prior to such withdrawal and consent, delivered to the Administrative Agent a
report (a copy of which (together with the written consent of the Administrative
Agent) will be provided by the Servicer to the Backup Servicer and Collateral
Custodian) setting forth the calculation of such Excluded Amounts in form and
substance reasonably satisfactory to the Administrative Agent.
  (c)            Initial Deposits.On
the Funding Date with respect to any Receivable, the Servicer will direct the
Collection Account Bank in writing to deposit into the Collection Account all
Collections received in respect of such Receivable after the applicable cut-off
date established in connection with the acquisition thereof (if other than the
Funding Date) and delivered to the Collection Account Bank.
  (d)            Investment of Funds.Until the occurrence of a Termination Event, to the extent there are
uninvested amounts deposited in the Collection Account and the Spread Account,
all such amounts may be invested in Permitted Investments selected by the
initial Servicer in written instructions delivered to the Collection Account
Bank (which may be in the form of standing instructions); from and after the
occurrence of a Termination Event, to the extent there are uninvested amounts in
the Collection Account or the Spread Account, all such amounts may be invested
in Permitted Investments selected by the Administrative Agent. All earnings (net
of losses and investment expenses) thereon shall be retained or deposited into
the Collection Account or the Spread Account, as applicable, and shall be
applied on each Payment Date pursuant to the provisions of Section 2.7and Section 2.8,as
applicable. All investments shall be subject to availability. Absent receipt of
instructions as contemplated herein, the Collection Account Bank shall have no
obligation to invest any funds. The Collection Account Bank shall have no
responsibility for the performance of any Permitted Investment.
  46
  Section
2.10.       Payments, Computations,
Etc.
  (a)            Unless
otherwise expressly provided herein, all amounts to be paid or deposited by the
Borrower or the initial Servicer hereunder shall be paid or deposited in
accordance with the terms hereof no later than 2:00 p.m. on the day when due in
lawful money of the United States in immediately available funds and any amount
not received before such time shall be deemed received on the next Business Day.
The Borrower or the initial Servicer, as applicable, shall, to the extent
permitted by law, pay to the Secured Parties interest on all amounts not paid or
deposited when due hereunder at the Default Rate upon written notice of same, as
applicable, payable on demand; providedthat such interest
rate shall not at any time exceed the maximum rate permitted by Applicable Law.
Such interest shall be for the account of the applicable Secured Party. All
computations of interest and other fees hereunder shall be made on the basis of
a year consisting of 360 days for the actual number of days
elapsed.
  (b)            Whenever
any payment hereunder shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of the
payment of Interest or any fee payable hereunder, as the case may
be.
  (c) If
any Advance requested by the Borrower pursuant to Section 2.2is not
effectuated as a result of the Borrower’s actions or failure to fulfill any
condition under Section3.2, as the
case may be, on the date specified therefor, the Borrower shall indemnify the
applicable Lenders against any reasonable direct loss, cost or expense actually
incurred by such Lenders (or their related Liquidity Banks), including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by the applicable Lender to
fund or maintain such Advance.
  Section
2.11.       Fees.
  (a)            The
Originator or the Borrower, as applicable, agrees to pay to the Administrative
Agent the Upfront Fee, the Commitment Fee, the Due Diligence Fee and such other
and further fees as set forth in the Lender Fee Letter at the dates and times
set forth therein, including but not limited to the Unused Fee, the Make-Whole
Fee, the Exit Fee, the Increase Fee and the Early Termination Fee.
  (b)            The
Borrower shall pay to Mayer Brown LLP as counsel to the Administrative Agent on
the Closing Date, its reasonable fees and out-of-pocket expenses (which are
estimated in good faith to be between $125,000 and $150,000)). The Borrower
shall pay, on the Closing Date, the acceptance fees and reasonable legal fees of
the Collateral Custodian, the Lockbox Bank and the Backup
Servicer.
  47
  Section
2.12.       Increased Costs Capital
Adequacy Illegality.
  (a)            If
either (i) the introduction of or any change (including, without limitation, any
change by way of imposition or increase of reserve requirements) in or in the
interpretation of any Applicable Law after the date of this Agreement or (ii)
the compliance by a Lender with any guideline or request from any central bank
or other Governmental Authority (whether or not having the force of law) issued
after the date of this Agreement, shall (a) impose, modify or deem applicable
any reserve requirement (including, without limitation, any reserve requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
any reserve requirement, if any, included in the determination of Interest),
special deposit or similar requirement against assets of, deposits with or for
the amount of, or credit extended by, any Lender under this Agreement or any
other Transaction Document or (b) impose any other condition affecting the
ownership or security interest in the Collateral conveyed to the Lenders
hereunder or any Lender’s rights hereunder or under any other Transaction
Document, the result of which is to increase the cost to any Lender or to reduce
the amount of any sum received or receivable by a Lender under this Agreement or
under any other Transaction Document, then on the Payment Date following demand
by such Lender (which demand shall be accompanied by a statement setting forth
the basis for such demand), the Borrower shall pay directly to such Lender such
additional amount or amounts as will compensate such Lender for such additional
or increased cost incurred or such reduction suffered.
  (b)            If
either (i) after the date of this Agreement the introduction of or any change in
or in the interpretation of any law, guideline, rule, regulation, directive or
request or (ii) compliance by any Lender with any law, guideline, rule,
regulation, directive or request from any central bank or other governmental
authority or agency (whether or not having the force of law) arising from a
change after the date of this Agreement, including, without limitation,
compliance by a Lender with any request or directive regarding capital adequacy,
has or would have the effect of reducing the rate of return on the capital of
any Lender as a consequence of its obligations hereunder or arising in
connection herewith to a level below that which any such Lender could have
achieved but for such introduction, change or compliance (taking into
consideration the policies of such Lender with respect to capital adequacy) by a
material amount, then on the Payment Date following demand by such Lender (which
demand shall be accompanied by a statement setting forth the basis for such
demand), the Borrower shall pay directly to such Lender such additional amount
or amounts as will compensate such Lender for such reduction. For the avoidance
of doubt, if the issuance after the date of this Agreement of any amendment or
supplement to Interpretation No. 46 or to Statement of Financial Accounting
Standards No. 140 by the Financial Accounting Standards Board or any other
change in accounting standards or the issuance of any other pronouncement,
release or interpretation, causes or requires the consolidation of all or a
portion of the assets and liabilities of the Originator or the Borrower with the
assets and liabilities of any Lender, or shall otherwise impose on any Lender
any loss, cost, expense, reduction of return on capital or other loss, such
event shall constitute a circumstance on which such Lender may base a claim for
reimbursement under this Section 2.12.
  (c) If as
a result of any event or circumstance such as those described in clause (a)or (b) of
this Section 2.12,any Lender is required to compensate a bank or other financial
institution providing liquidity support, credit enhancement or other similar
support to such Lender in connection with this Agreement or the funding or
maintenance of Advances hereunder, then on the Payment Date at least ten (10)
days after demand by such Lender, the Borrower shall pay to such Lender such
additional amount or amounts as may be necessary to reimburse such Lender for
any amounts payable or paid by it.
  48
  (d)            In
determining any amount provided for in this Section 2.12,the
Lender may use any reasonable averaging and attribution methods. Any Lender
making a claim under this Section 2.12shall
submit to the Servicer a written description in reasonable detail as to such
additional or increased cost or reduction and the calculation thereof, which
written description shall be conclusive absent manifest error.
  (e)            Failure
or delay on the part of any Lender to demand compensation pursuant to this Section 2.12shall
not constitute a waiver of such Lender’s right to demand or receive such
compensation. The Borrower shall not be required to compensate any Person for
any loss, cost or expense under this Section unless a claim therefor has been
made within 180 days of knowledge (or, the date on which such Person reasonably
should have known) thereof by such Person.
  Section
2.13.       Taxes.
  (a)            All
payments made by the Borrower or the Servicer (on behalf of the Borrower) under
this Agreement will be made free and clear of and without deduction or
withholding for or on account of any Taxes. If any Taxes are required by law to
be withheld from any amounts payable hereunder, then the amount payable to such
Person will be increased (the amount of such increase, the “Additional Amount”)such that every net payment made under this Agreement after withholding
for or on account of any Taxes (including, without limitation, any Taxes on such
increase) is not less than the amount that would have been paid had no such
deduction or withholding been made; providedthat no Additional
Amount shall be payable hereunder to any Person to the extent such amount is
payable as a result of the failure of such Person to comply with Sections 2.13(d)or
(e). The Borrower shall withhold the full amount of such Taxes from such payment
(as increased by the Additional Amounts) and shall pay such amount to the
Governmental Authority imposing such Taxes in accordance with Applicable Law.
The foregoing obligation to pay Additional Amounts with respect to payments
required to be made by the Borrower under this Agreement will not, however,
apply with respect to net income taxes, franchise taxes or branch profits taxes
imposed on the Administrative Agent or any Lender.
  (b)            The
initial Servicer will indemnify (and to the extent the indemnification provided
by the Servicer is insufficient, the Borrower will indemnify) each Lender for
the full amount of Taxes payable by such Persons in respect of Additional
Amounts and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto; providedthat no
indemnification shall be payable hereunder to any Person to the extent such
amount is payable as a result of the failure of such Person to comply with Sections 2.13(d)or
(e). All payments in respect of this indemnification shall be made on the
Payment Date following the date a written invoice therefor is delivered to the
Borrower.
  49
  (c)            Within
30 days after the date of any payment by the Borrower of any Taxes, the Borrower
will furnish to the Administrative Agent appropriate evidence of payment
thereof.
  (d)            If
any Lender is not a “United States person” within the meaning of Section
7701(a)(30) of the Code, such Lender shall deliver to the Borrower, with a copy
to the Administrative Agent, the Collateral Custodian and the Servicer, (i) on
or before the date such Lender becomes party to the applicable Transaction
Documents and thereafter upon the reasonable request of the Borrower or
Administrative Agent, two (2) (or such other number as may from time to time be
prescribed by Applicable Law) duly completed originals of IRS Form W-8BEN or
Form W-8ECI (or any successor forms or other certificates or statements that may
be required from time to time by the relevant United States taxing authorities
or Applicable Law), as appropriate, to permit the Borrower to make payments
hereunder for the account of such Lender without deduction or withholding of
United States federal income or similar Taxes and (ii) upon the obsolescence of,
or within 15 days after the occurrence of any event requiring a change in, any
form or certificate previously delivered pursuant to this Section 2.13(d),originals (in such numbers as may from time to time be prescribed by
Applicable Law or regulations) of such additional, amended or successor forms,
certificates or statements as may be required under Applicable Law to permit the
Borrower to make payments hereunder for the account of such Lender without
deduction or withholding of United States federal income or similar Taxes (and,
in either case, the Borrower shall be permitted to withhold, without penalty or
liability, amounts it deems reasonably necessary if such documentation is not
delivered hereunder).
  (e)            If
any Lender is a “United States person” within the meaning of Section 7701(a)(30)
of the Code, such Lender shall deliver to the Borrower, with a copy to the
Administrative Agent, the Collateral Custodian and the Servicer, (i) on or
before the date such Lender becomes party to the applicable Transaction
Documents and thereafter upon the reasonable request of the Borrower or
Administrative Agent, two (or such other number as may from time to time be
prescribed by Applicable Law) duly completed originals of IRS Form W-9 (or any
successor forms or other certificates or statements that may be required from
time to time by the relevant United States taxing authorities or Applicable
Law), as appropriate, to permit the Borrower to make payments hereunder for the
account of such Lender without deduction for backup withholding of United States
federal income or similar Taxes and (ii) upon the obsolescence of, or within 15
days after the occurrence of any event requiring a change in, any form or
certificate previously delivered pursuant to this Section 2.13(e),originals (in such numbers as may from time to time be prescribed by
Applicable Law or regulations) of such additional, amended or successor forms,
certificates or statements as may be required under Applicable Law to permit the
Borrower to make payments hereunder for the account of such Lender without
deduction for backup withholding of United States federal income or similar
Taxes (and, in either case, the Borrower shall be permitted to withhold, without
penalty or liability, amounts it deems reasonably necessary if such
documentation is not delivered hereunder).
  (f)            If,
in connection with an agreement or other document providing liquidity support,
credit enhancement or other similar support to the Lenders in connection with
this Agreement or the funding or maintenance of Advances hereunder, the Lenders
are required to compensate a bank or other financial institution in respect of
Taxes under circumstances similar to those described in this Section 2.13,then,
on the Payment Date following any written demand by each applicable Lender, the
Borrower shall pay to each applicable Lender such additional amount or amounts
as may be necessary to reimburse each such Lender for any amounts paid by them
to such bank or financial institution.
  50
  (g)
Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower and the Servicer
contained in this Section 2.13 shall survive the termination of this
Agreement.
  Section
2.14.       Assignment of the Sale
Agreement.
  The
Borrower hereby collaterally assigns to the Administrative Agent, for the
ratable benefit of the Secured Parties hereunder, all of the Borrower’s right,
title and interest in and to, but none of its obligations under, the Sale
Agreement and any UCC financing statements filed under or in connection
therewith. In furtherance and not in limitation of the foregoing, the Borrower
hereby collaterally assigns to the Administrative Agent for the benefit of the
Secured Parties its right to indemnification under the Sale Agreement. The
Borrower confirms that at any time on or after the occurrence of a Termination
Event, the Administrative Agent on behalf of the Secured Parties, shall have the
sole right to enforce the Borrower’s rights and remedies under the Sale
Agreement and any UCC financing statements filed thereunder or for the benefit
of the Secured Parties in connection therewith.
  Section
2.15.       Repurchase of
Receivables.
  Within
two (2) Business Days of the earlier to occur of (i) the date on which written
notice that a Receivable has become subject to a Warranty Event shall have been
received by the Servicer from any Person or (ii) the date on which a Responsible
Officer of the Servicer, the Borrower or the Originator acquires actual
knowledge thereof, the Originator (or the Borrower on its behalf) shall make a
deposit to the Collection Account (for allocation pursuant to Section2.7 or Section 2.8,as
applicable) in immediately available funds in an amount equal to the Outstanding
Receivable Balance of such Receivable on the date of such payment, and any
accrued and unpaid interest and fees thereon.
  ARTICLE
III
  CONDITIONS
TO CLOSING AND ADVANCES
  Section
3.1.        Conditions to Closing and
Initial Advance.
  No Lender
shall be obligated to make the initial Advance hereunder nor shall any Lender,
the Administrative Agent, the Backup Servicer, the Collateral Custodian or the
Collection Account Bank be obligated to take, fulfill or perform any other
action hereunder, until the following conditions have been satisfied, in the
sole discretion of, or waived in writing by the Administrative
Agent:
  (a) Each
Transaction Document shall have been duly executed by, and delivered to, the
parties thereto, and the Administrative Agent shall have received such other
documents, instruments, agreements and legal opinions as the Administrative
Agent shall reasonably request in connection with the transactions contemplated
by this Agreement, including, without limitation, all those specified in the
schedule of condition precedent documents attached hereto as Schedule I,each in
form and substance reasonably satisfactory to the Administrative
Agent;
  51
  (b)            The
Administrative Agent shall have received (i) reasonably satisfactory evidence
that the Borrower, the Originator and the Servicer have obtained all required
consents and approvals of all Persons, including all requisite Governmental
Authorities, to the execution, delivery and performance of this Agreement and
the other Transaction Documents to which each is a party and the consummation of
the transactions contemplated hereby or thereby or (ii) an Officer’s Certificate
from each of the Borrower, the Originator and the Servicer in form and substance
reasonably satisfactory to the Administrative Agent affirming that no such
consents or approvals are required;
  (c)            The
Borrower, the Servicer and the Originator shall each be in compliance in all
material respects with all Applicable Laws and shall have delivered to the
Administrative Agent and each Lender as to this and other closing matters a
certification in the form of Exhibits E-1and E-2,
as applicable;
  (d)            The
Borrower and the Servicer shall have delivered to the Administrative Agent duly
executed Powers of Attorney in the form of Exhibits F-1and F-2,
as applicable;
  (e)            The
Borrower, the Servicer and the Originator shall each have delivered to the
Administrative Agent a certificate as to Solvency in the form of Exhibits D-1and D-2,
as applicable;
  (f)            The
Collection Account and the Lockbox Account shall be opened and the Borrower
shall have delivered to the Administrative Agent fully-executed copies of the
Securities Account Control Agreement and the Lockbox Agreement;
  (g)            The
Servicer shall have delivered to the Administrative Agent and the Backup
Servicer its current Credit and Collection Policy, and the Administrative Agent
shall have received acceptable results from its due diligence examinations and
background checks (including without limitation, legal, regulatory and
accounting reviews);
  (h)            All
fees and expenses due and payable by the Borrower, the Servicer and the
Originator as of the Closing Date pursuant to Section 2. 11and the
Lender Fee Letter shall have been received by the applicable party;
  (i)            The
Servicer shall have delivered a sample Servicing File to the Administrative
Agent which shall be reasonably satisfactory to the Administrative
Agent;
  (j)            A
confirmation letter shall have been received by the Administrative Agent from
S&P confirming that its rating of Autobahn Funding Company LLC’s Commercial
Paper Notes will remain “A-1 ”; and
  (k)            The
Borrower shall have delivered to the Administrative Agent executed copies of (i)
the Lienholder Nominee Agreement prior to the initial Funding Date and (ii) an
ISDA master agreement (and related schedule) with a Hedge Counterparty to be
used to govern any confirmations to be entered into on the initial Funding
Date.
  52
  Section
3.2.        Conditions Precedent to All
Advances.
  Each
Advance under this Agreement (each, a “Transaction”)shall
be subject to the further conditions precedent that:
  (a) The
Servicer shall have delivered to the Administrative Agent (with a copy to the
Collateral Custodian and the Backup Servicer) no later than 11:00 a.m. two (2)
Business Days prior to the related Funding Date:
  (i)            a
Borrowing Notice, a Borrowing Base Certificate and a Loan List;
  (ii)           all
Required Reports when due; and
  (iii) a
Certificate of Assignment in the form of Exhibit A to the Sale Agreement
including Schedule I thereto and containing such additional information as may
be reasonably requested by the Administrative Agent.
  (b) On
the date of such Transaction, the following shall be true and correct (both
before and immediately after giving effect to such Transaction) and the Borrower
and the Servicer shall have certified in the related Borrowing Notice that all
conditions precedent to the requested Transaction have been satisfied and shall
thereby be deemed to have certified that:
  (i)            The
representations and warranties contained in Section 4.1and Section 4.3are true
and correct in all material respects on and as of such day as though made on and
as of such day and shall be deemed to have been made on such day;
  (ii)            No
event has occurred, or would result from such Transaction, that constitutes a
Termination Event (unless such Termination Event has been waived in writing
by  the Administrative Agent) or Unmatured Termination Event (unless
such Unmatured Termination Event is no longer continuing);
  (iii)            On
and as of such day, after giving effect to such Transaction, the Availability
shall be greater than or equal to $0;
  (iv)            No
Applicable Law shall prohibit or enjoin such Transaction; and
 
 (v)             The
Originator is in compliance with each of the financial covenants
set forth in Sections
5.4(q), (u), (v), (w) and (x).
  (c) The
Borrower shall have delivered to the Collateral Custodian (with a copy to the
Administrative Agent), no later than 11:00 a.m. three (3) Business Days prior to
the related Funding Date, the Required Loan Files, the Collateral Custodian
shall have delivered to the Administrative Agent a Collateral Receipt with no
exceptions or with exceptions acceptable to the Administrative Agent in its sole
discretion by 6:30 p.m. one Business Day prior to the Funding
Date;
  53
  (d)            The
Amortization Period shall not have commenced;
  (e)            The
Internal Revenue Service shall not have filed notice of a lien pursuant to
Section 6323 of the Code with regard to any assets of the Borrower, the Servicer
or the Originator, and the Pension Benefit Guaranty Corporation shall not have
filed notice of a lien pursuant to Section 4068 of ERISA with regard to any of
the assets of the Borrower, the Servicer or the Originator, or, in either case,
if such a lien has been filed, it has been released;
  (f)            On
the date of such Transaction, the Administrative Agent shall have received such
other opinions or documents as the Administrative Agent may reasonably
require;
  (g)            The
Borrower shall have entered into one or more Hedging Agreements or amendments to
existing Hedging Agreements or deposited such amounts into the Spread Account
such that, after giving effect thereto and such proposed Advance, the covenant
set forth in Section
5.1(n)is satisfied;
  (h)            The
Borrower shall have delivered to the Administrative Agent executed copies of the
documents required pursuant to the Lienholder Nominee Agreement in order for the
Lienholder Agent to be acting as secured party on behalf of the Administrative
Agent with respect to all Powersports Vehicles subject to the Approved Leases to
be acquired on such Funding Date and to release any existing lenders’ interests
in such Powersports Vehicles; and
  (i) Prior
to the initial Funding Date, the Servicer shall have delivered to the
Administrative Agent a comfort letter acceptable to the Administrative Agent in
its sole discretion from RBSM LLP, certified public accountants, stating that,
based on the Servicer’s recent improvements in liquidity and equity financing,
RBSM LLP’s qualified opinion in the Servicer’s ability to continue as a going
concern would be changed to an unqualified opinion on the Servicer’s financial
statements and its ability to continue as a going concern.
  ARTICLE
IV
  REPRESENTATIONS
AND WARRANTIES
  Section
4.1.         Representations and
Warranties of the Borrower.
  The
Borrower represents and warrants as to itself and the Collateral as follows as
of the Closing Date, each Funding Date, and each Reporting Date and as of each
other date provided under this Agreement or the other Transaction Documents on
which such representations and warranties are required to be (or deemed to be)
made:
  (a)            Organization and Good
Standing.The Borrower has been duly organized, and is validly existing
as a limited liability company in good standing, under the laws of the State of
Delaware, with all requisite power and authority to own or lease its properties
and conduct its business as such business is presently conducted, and had at all
relevant times, and now has all necessary power, authority and legal right to
acquire, own, sell and pledge the Collateral.
  54
  (b)            Due Qualification.The Borrower is duly qualified to do business and is in good standing as
a limited liability company, and has obtained all necessary qualifications,
licenses and approvals, in all jurisdictions in which the ownership or lease of
property or the conduct of its business requires such qualifications, licenses
or approvals, except where failure to obtain any such qualification, license or
approval could not reasonably be expected to have a Material Adverse
Effect.
  (c)            Power and Authority Due
Authorization Execution and Delivery.The Borrower (i) has all necessary
power, authority and legal right to (a) execute and deliver this Agreement and
the other Transaction Documents to which it is a party, and (b) carry out the
terms of the Transaction Documents to which it is a party, and (ii) has duly
authorized by all necessary limited liability company action, the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which it is a party and the assignment of a security interest in the
Collateral on the terms and conditions herein provided. This Agreement and each
other Transaction Document to which the Borrower is a party have been duly
executed and delivered by the Borrower.
  (d)            Binding Obligation.This Agreement and each other Transaction Document to which the Borrower
is a party constitutes a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its respective terms, except
as such enforceability may be limited by Insolvency Laws and by general
principles of equity (whether considered in a suit at law or in
equity).
  (e)            No Violation.The
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents to which it is a party and the fulfillment of the terms
hereof and thereof will not (i) conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, the Borrower’s certificate of formation,
operating agreement or any Contractual Obligation of the Borrower, (ii) result
in the creation or imposition of any Lien (other than Permitted Liens) upon any
of the Borrower’s properties pursuant to the terms of any such Contractual
Obligation, other than this Agreement, or (iii) violate in any material respect
any Applicable Law applicable to the Borrower.
  (f)            No Proceedings.There
is no litigation, proceeding or investigation pending or, to the knowledge of
the Borrower, threatened against the Borrower, before any Governmental Authority
(i) asserting the invalidity of this Agreement or any other Transaction Document
to which the Borrower is a party, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or any other Transaction
Document to which the Borrower is a party or (iii) seeking any determination or
ruling that could reasonably be expected to have Material Adverse
Effect.
  (g) No Governmental
Restrictions.There is no injunction, writ, restraining order or other
similar order applicable to the Borrower or the conduct of its business or that
is inconsistent with the due consummation of the transactions contemplated by
the Transaction Documents that has been issued by a Governmental Authority (i)
asserting the invalidity of this Agreement or any other Transaction Document to
which the Borrower is a party, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or any other Transaction
Document to which the Borrower is a party or (iii) seeking any determination or
ruling that could reasonably be expected to have Material Adverse
Effect.
  55
  (h)            Consents.All
approvals, authorizations, consents, orders, licenses or other actions of any
Person or of any Governmental Authority (if any) required for the due execution,
delivery and performance by the Borrower of this Agreement and any other
Transaction Document to which the Borrower is a party have been
obtained.
  (i)            Solvency.The
Borrower is not the subject of any Insolvency Proceedings or Insolvency Event.
The transactions under this Agreement and any other Transaction Document to
which the Borrower is a party do not render the Borrower not
Solvent.
  (j)            Taxes.The Borrower
has filed or caused to be filed all tax returns that are required to be filed by
it and has paid or made adequate provisions for the payment of all material
Taxes and assessments made against it or any of its property (other than any
amount of Tax the validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in accordance with
GAAP have been provided on the books of the Borrower), and no tax lien has been
filed and no claim is being asserted, with respect to any such Tax, assessment
or other charge.
  (k)            Exchange Act Compliance;
Regulations T, U and X.None of the transactions contemplated herein or
in the other Transaction Documents will cause the Borrower to violate or result
in a violation by the Borrower of Section 7 of the Exchange Act, or any
regulations issued pursuant thereto, including, without limitation, Regulations
T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II. The Borrower does not own or intend to carry or purchase, and no
proceeds from the Advances will be used to carry or purchase, any “margin stock”
within the meaning of Regulation U or to extend “purpose credit” within the
meaning of Regulation U.
  (l)            Security
Interest.
  (i)            This
Agreement creates a valid and continuing security interest (as defined in the
applicable UCC) in the Collateral of the Borrower in favor of the Administrative
Agent, on behalf of the Secured Parties, 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 Borrower;
  (ii)            the
Approved Loans and the Approved Leases constitute “instruments” or “chattel
paper” (each as defined in the applicable UCC);
  (iii)           with
respect to Collateral that constitute “security entitlements”:
  (1)            all
of such security entitlements have been credited to one of the Accounts and
pursuant to the Securities Account Control Agreement the securities intermediary
for each Account has agreed to treat all assets credited to such Account as
“financial assets” within the meaning of the applicable UCC;
  (2)            the
Borrower has taken all steps necessary to cause the securities intermediary to
identify in its records the Administrative Agent as the Person having a security
entitlement against the securities intermediary in each of the Accounts;
and
  56
  (3) the
Accounts are not in the name of any Person other than the Borrower. The Borrower
has not authorized or allowed the securities intermediary of any Account to
comply with the entitlement order of any Person other than the Administrative
Agent; providedthat
until the Administrative Agent delivers a notice of exclusive control under the
Securities Account Control Agreement, the Borrower and the Servicer may cause
cash in the Accounts to be invested in Permitted Investments.
  (iv)           all
Accounts constitute “securities accounts” as defined in the applicable
UCC;
  (v)            the
Borrower owns and has good and marketable title to the Collateral free and clear
of any Lien (other than Permitted Liens) of any Person;
  (vi)           the
Borrower has received all consents and approvals required by the terms of any
Receivable to the granting of a security interest in such Receivable hereunder
to the Administrative Agent, on behalf of the Secured Parties;
  (vii)          all
appropriate financing statements have been filed in the proper filing office in
the appropriate jurisdictions under Applicable Law in order to perfect the
security interest in the Collateral granted to the Administrative Agent, on
behalf of the Secured Parties, under this Agreement;
  (viii)         other
than the security interest granted to the Administrative Agent, on behalf of the
Secured Parties, pursuant to this Agreement, the Borrower has not pledged,
assigned, sold, granted a security interest in or otherwise conveyed any of the
Collateral. The Borrower has not authorized the filing of and is not aware of
any financing statements against the Borrower that include a description of
collateral covering the Collateral other than any financing statement that has
been terminated and/or fully and validly assigned to the Administrative Agent on
or prior to the date hereof. The Borrower is not aware of the filing of any
judgment or tax lien filings against the Borrower;
  (ix)            all
original executed copies of each Underlying Instrument that constitute or
evidence each Receivable has been or, subject to the delivery requirements
contained herein, will be delivered to the Collateral Custodian;
  (x)            
the Borrower has received, or subject to the delivery requirements contained
herein will receive, a written acknowledgment from the Collateral Custodian that
the Collateral Custodian or its bailee is holding the Underlying Instruments
that constitute or evidence the Receivables solely on behalf of and for the
benefit of the Secured Parties;
  (xi)            none
of the Underlying Instruments that constitute or evidence the Receivables has
any marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Administrative Agent, on behalf
of the Secured Parties;
  (xii)           with
respect to Collateral that constitutes a “certificated security,” such
certificated security has been delivered to the Collateral Custodian on behalf
of the Administrative Agent and, if in registered form, has been specially
Indorsed to the Administrative Agent or in blank by an effective Indorsement or
has been registered in the name of the Administrative Agent upon original issue
or registration of transfer by the Borrower of such certificated security;
and
  57
  (xiii)           with
respect to Collateral that constitutes an “uncertificated security”, the
Administrative Agent is registered as the registered owner of such
uncertificated security.
  (m)            Reports Accurate.All
Servicing Reports (if prepared by the Borrower, or to the extent that
information contained therein is supplied by the Borrower), information,
exhibits, financial statements, documents, books, records or reports furnished
or to be furnished by the Borrower to the Administrative Agent, Backup Servicer,
Collateral Custodian, Collection Account Bank, and each or any Secured Party in
connection with this Agreement are true, complete and correct in all material
respects.
  (n)            Location of Offices.The Borrower’s location (within the meaning of Article 9 of the UCC) is
Delaware. The office where the Borrower keeps all the Records is at the address
of the Borrower referred to in Annex Ahereto (or at
such other locations as to which the notice and other requirements specified in
Section 5.2(g)shall have been satisfied). The Borrower’s Federal Employee
Identification Number is correctly set forth on Exhibit E-1.The
Borrower has not changed its name (whether by amendment of its certificate of
formation, by reorganization or otherwise) or its jurisdiction of organization
and has not changed its location for purposes of the applicable UCC within the
four months preceding the Closing Date.
  (o)            Tradenames.The
Borrower has no trade names, fictitious names, assumed names or “doing business
as” names or other names under which it has done or is doing
business.
  (p)            Sale Agreement.The
Sale Agreement is the only agreement pursuant to which the Borrower acquires
Receivables and Related Security.
  (q)            Value Given.The
Borrower shall have given reasonably equivalent value to the Originator in
consideration for the transfer to the Borrower of the Receivables and Related
Security as contemplated by the Sale Agreement, no such transfer shall have been
made for or on account of an antecedent debt, and no such transfer is or may be
voidable or subject to avoidance as to the Borrower under any section of the
Bankruptcy Code.
  (r)            Accounting.Other
than for tax purposes, the Borrower accounts for the transfers to it of
interests in Receivables and Related Property under the Sale Agreement as sales
for legal and all other purposes.
  (s)            Special Purpose Entity.The Borrower has not and shall not:
  (i)            engage
in any business or activity other than the purchase and receipt of Receivables
and related assets, the pledge of Collateral under the Transaction Documents,
and such other activities as are incidental thereto;
  (ii)           acquire
or own any material assets other than (a) the Receivables and rights in the
Related Property and (b) incidental property as may be necessary for the
operation of the Borrower and the performance of its obligations under the
Transaction Documents;
  58
   (iii)          merge
into or consolidate with any Person or dissolve, terminate or liquidate in whole
or in part, transfer or otherwise dispose of all or substantially all of its
assets or change its legal structure, without in each case first obtaining the
consent of the Administrative Agent;
  (iv)          fail
to preserve its existence as an entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization or
formation, or, without the prior written consent of the Administrative Agent,
make any material amendment or modification, or terminate or fail to comply with
the material provisions of its operating agreement (which includes the special
purpose entity limitations), or fail to observe limited liability company
formalities;
  (v)           own
any Subsidiary or make any Investment in any Person without the consent of the
Administrative Agent;
  (vi)          commingle
its assets or liabilities with the assets or liabilities of any of its
Affiliates or any other Person;
  (vii)         incur
any debt, secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than indebtedness to the Secured Parties hereunder or in
conjunction with a repayment of all Advances owed hereunder;
  (viii)        become
insolvent or fail to pay its debts and liabilities from its assets as the same
shall become due (unless otherwise contested in good faith by appropriate
proceedings);
  (ix)           fail
to maintain its records, books of account and bank accounts separate and apart
from those of any other Person;
  (x)            enter
into any Approved Loan or Approved Lease or agreement with any Person, except
upon terms and conditions that are commercially reasonable and intrinsically
fair and substantially similar to those that would be available on an
arms-length basis with third parties;
  (xi)           seek
its dissolution or winding up in whole or in part;
  (xii)          fail
to correct any known misunderstandings regarding the separate identity of the
Borrower and the Originator or any other Person;
  (xiii)         make
any loan or advances to any third party, including any principal or Affiliate,
or hold evidence of indebtedness issued by any other Person (other than the
Receivables, cash and Permitted Investments);
  59
  (xiv)         fail
to file its own separate tax return or a consolidated federal income tax return
with one or more of its Affiliates, except as may be permitted by the Code and
regulations;
  (xv)          actively
hold itself out to the public such to represent that it is not a legal entity
separate and distinct from any other Person or to suggest that it is responsible
for the debts of any third party (including any of its principals or
Affiliates);
  (xvi)         fail
to maintain adequate capital for the reasonably foreseeable obligations of its
business and contemplated business operations;
  (xvii)        file
or consent to the filing of any petition, either voluntary or involuntary, to
take advantage of any applicable insolvency, bankruptcy, liquidation or
reorganization statute, or make an assignment for the benefit of
creditors;
  (xviii)       permit
any transfer (whether in any one or more transactions) of any direct or indirect
ownership interest in the Borrower to the extent it has the ability to control
the same, unless the Borrower delivers to the Administrative Agent an acceptable
non-consolidation opinion and the Administrative Agent consents to such
transfer;
  (xix)          fail
to pay the salaries of its own employees, if any, in light of its contemplated
business operations;
  (xx)           acquire
the securities of its Affiliates or stockholders;
  (xxi)          fail
to allocate fairly and reasonably any overhead expenses that are shared with an
Affiliate, including paying for office space and services performed by any
employee of an Affiliate;
  (xxii)         fail
to use separate invoices bearing its own name;
  (xxiii)        pledge
or permit the pledge of its assets for the benefit of any other Person, other
than with respect to payment of the indebtedness to the Secured Parties
hereunder;
  (xxiv)        fail
at any time to have at least one independent manager or independent director (an
“Independent Manager”or “Independent
Director”)acceptable to the Administrative Agent who is not currently a
director, officer, employee, trade creditor shareholder, manager or member (or
spouse, parent, sibling or child of the foregoing) of (a) the Servicer, (b) the
Borrower or (c) any principal or Affiliate of the Servicer or the Borrower;
providedthat such
Independent Manager may be an independent manager or an independent director of
another special purpose entity affiliated with the Servicer; or fail to ensure
that all limited liability company action relating to the selection or
replacement of the Independent Manager or Independent Director, as applicable,
are duly authorized by the unanimous vote of the board of managers (including
the Independent Manager or Independent Director, as
applicable);
  60




(xxv)  fail
to provide in its operating agreement that the unanimous consent of all
managers, as applicable (including the consent of the Independent Manager or
Independent Director, as applicable) is required for the Borrower to (a)
dissolve or liquidate, in whole or part, or institute proceedings to be
adjudicated bankrupt or insolvent, (b) institute or consent to the institution
of bankruptcy or insolvency proceedings against it, (c) file a petition seeking
or consent to reorganization or relief under any applicable federal or state law
relating to bankruptcy or insolvency, (d) seek or consent to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator, custodian or any
similar official for the Borrower, (e) make any assignment for the benefit of
the Borrower’s creditors, and (f) take any action in furtherance of any of the
foregoing; and




(xxvi)
take or refrain from taking, as applicable, each of the activities specified in
the non-consolidation opinion of Thacher Proffitt & Wood LLP, dated as of
the date hereof, upon which the conclusions expressed therein are
based.




(t)            Investment Company Act.The execution, delivery and performance of this Agreement and the
Transaction Documents by the Borrower do not require the approval of, or filing
with, any Governmental Authority under the 1940 Act or the regulations
thereunder.




(u)            ERISA.Neither the
Borrower nor any ERISA Affiliate thereof has any Benefit Plans or Multiemployer
Plans.




(v)            Compliance with Law.The Borrower has complied in all material respects with all Applicable
Laws to which it may be subject, and no item of Collateral contravenes in any
material respect any Applicable Law (including, without limitation, all
applicable predatory and abusive lending laws, laws, rules and regulations
relating to licensing, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy).




(w)            Lockbox Account.The
name and address of the Lockbox Account Bank, together with the account number
of the Lockbox Account at the Lockbox Account Bank, is specified in Schedule II.
The Lockbox Account (or the Collection Account) is the only account to which the
Borrower, the Servicer or any Affiliate of the Borrower or Servicer have
directed Collections on the Collateral are to be sent. Except as contemplated by
the Lockbox Agreement, the Borrower has not granted any Person other than the
Administrative Agent an interest in the Lockbox Account.




(x)            Amendments.No
Receivable has been amended, modified or waived following inclusion in the
Collateral, except for amendments, modifications or waivers, if any, to such
Receivable otherwise permitted under Section 6.4(a) of this
Agreement.




(y)            Grant of Security Interest.The grant of the security interest in the Collateral by the Borrower to
the Administrative Agent, on behalf of the Secured Parties, pursuant to this
Agreement, is in the ordinary course of business for the Borrower and is not
subject to the bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction. No such Collateral has been sold, transferred,
assigned or pledged by the Borrower to any Person, other than the pledge of such
assets to the Administrative Agent, for the benefit of the Secured Parties,
pursuant to the terms of this Agreement.


61


(z) USA PATRIOT Act.Neither the Borrower nor any Affiliate of the Borrower is (i) a country,
territory, organization, person or entity named on an Office of Foreign Asset
Control (OFAC) list; (ii) a Person that resides or has a place of business in a
country or territory named on such lists or which is designated as a
“Non-Cooperative Jurisdiction” by the Financial Action Task Force on Money
Laundering, or whose subscription funds are transferred from or through such a
jurisdiction; (iii) a “Foreign Shell Bank” within the meaning of the USA PATRIOT
Act, i.e., a foreign bank that does not have a physical presence in any country
and that is not affiliated with a bank that has a physical presence and an
acceptable level of regulation and supervision; or (iv) a person or entity that
resides in or is organized under the laws of a jurisdiction designated by the
United States Secretary of the Treasury under Sections 311 or 312 of the USA
PATRIOT Act as warranting special measures due to money laundering
concerns.




(aa)
Eligibility of
Collateral.As of each Funding Date, the Loan List and the information
contained in each Borrowing Notice delivered pursuant to Section 2.2is an
accurate and complete listing of all Receivables as of the related Funding Date
and the information contained therein with respect to the identity of such
Receivables and the amounts owing thereunder is true, correct and complete in
all material respects as of the related Funding Date. Each Receivable included
in the Borrowing Base (on the most recent date that the Borrowing Base was
determined by the Borrower, the initial Servicer or an Affiliate thereof and
provided to the Administrative Agent) as an Eligible Receivable is in fact an
Eligible Receivable.




(bb)            Termination Event.No
Termination Event or Unmatured TerminationEvent has occurred and is
continuing.




(cc)
Ordinary Course of
Business.The Borrower represents and warrants as to itself, each
remittance of Collections by the Borrower to the Lender under this Agreement
will have been (i) in payment of a debt incurred by the Borrower in the ordinary
course of business or financial affairs of the Borrower and (ii) made in the
ordinary course of business or financial affairs of the Borrower.




Section
4.2.          Reserved.




Section
4.3.          Representations and
Warranties of the Servicer and the Originator.




The
Originator and the Servicer represent and warrant as follows as of the Closing
Date, each Funding Date, each Reporting Date and as of each other date provided
under this Agreement or the other Transaction Documents on which such
representations and warranties are required to be (or deemed to be)
made:




(a)           Organization and Good
Standing.It has been duly organized and is validly existing as a
corporation, in good standing under the laws of its jurisdiction of
organization, with all requisite corporate power and authority to own or lease
its properties and to conduct its business as such business is presently
conducted and to enter into and perform its obligations pursuant to the
Transaction Documents to which it is a party.




(b)           Due Qualification.It
is duly qualified to do business as a corporation, is in good standing as a
corporation, and has obtained all necessary qualifications, licenses and
approvals in all jurisdictions in which the ownership or lease of its property
and or the conduct of its business requires such qualifications, licenses or
approvals, except where failure to obtain any such qualification, license or
approval does not have a Material Adverse Effect.


62




(c)            Power and Authority Due
Authorization Execution and Delivery.It (i) has all necessary power,
authority and legal right to (a) execute and deliver this Agreement and the
other Transaction Documents to which it is a party, (b) carry out the terms of
the Transaction Documents to which it is a party, and (ii) has duly authorized
by all necessary organizational action the execution, delivery and performance
of this Agreement and the other Transaction Documents to which it is a party.
This Agreement and each other Transaction Document to which it is a party have
been duly executed and delivered by it.




(d)            Binding Obligation.This Agreement and each other Transaction Document to which it is a party
constitutes a legal, valid and binding obligation of it enforceable against it
in accordance with its respective terms, except as such enforceability may be
limited by Insolvency Laws and general principles of equity (whether considered
in a suit at law or in equity).




(e)            No Violation.The
consummation of the transactions contemplated by this Agreement and the other
Transaction Documents to which it is a party and the fulfillment of the terms
hereof and thereof will not (i) conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without notice or lapse of
time or both) a default under, the organizational documents or any material
Contractual Obligation of it, or (ii) violate any Applicable Law in any material
respect.




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




(g)            Governmental Restrictions.There is no injunction, writ, restraining order or other order of any
nature adverse to it or the conduct of its business or that is inconsistent with
the due consummation of the transactions contemplated by the Transaction
Documents to which it is a party that has been issued by a Governmental
Authority nor been sought by any Person (i) asserting the invalidity of this
Agreement or any other Transaction Document to which it is a party, (ii) seeking
to prevent the consummation of any of the transactions contemplated by this
Agreement or any other Transaction Document to which it is a party or (iii)
seeking any determination or ruling that could reasonably be expected to have
Material Adverse Effect.




(h)            Consents.All
approvals, authorizations, consents, orders, licenses or other actions of any
Person or of any Governmental Authority (if any) required for the due execution,
delivery and performance by it of this Agreement and any other Transaction
Document to which it is a party have been obtained.


63




(i)            Reports Accurate.All
Servicer Certificates, Servicing Reports, BorrowingNotices, Borrowing Base
Certificates and other written or electronic information, exhibits, financial
statements, documents, books, records or reports furnished by it to the
Administrative Agent or any Lender pursuant to or in connection with this
Agreement are true, correct and complete in all material respects.




(j)            Credit and Collection
Policy.It has complied in all material respects with the Credit and
Collection Policy with regard to the origination, underwriting and servicing of
the Receivables.




(k)            Collections.It
acknowledges that all Collections received by it or its Affiliates with respect
to the Collateral are held and shall be held in trust for the benefit of the
Secured Parties until deposited into the Collection Account within one Business
Day from receipt as required herein (two Business Days in the event Lyon is
successor Servicer).




(l)            Solvency.It is not
the subject of any Insolvency Proceedings or Insolvency Event.




(m)            Taxes.It has filed
or caused to be filed all tax returns that are required to be filed by it. It
has paid or made adequate provisions for the payment of all material Taxes and
assessments made against it or any of its property (other than any amount of Tax
the validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have been
provided on its books), and no tax lien has been filed with respect to any such
Tax, assessment or other charge.




(n)            Security Interest.It
will cooperate with the Administrative Agent to ensure that the Administrative
Agent has a security interest (as defined in the UCC) in the Collateral, which
is enforceable in accordance with Applicable Law upon execution and delivery of
this Agreement. Upon the filing of UCC-1 financing statements naming the
Administrative Agent as secured party and the Borrower as debtor, the
Administrative Agent, as agent for the Secured Parties, shall have a valid and
first priority perfected security interest in the Receivables and that portion
of the Collateral in which a security interest may be perfected by filing
(except for any Permitted Liens).




(o)            Lockbox Account.It
has sent the name and address of the Lockbox Account Bank, together with the
account number of the Lockbox Account at the Lockbox Account Bank, to the
Collateral Custodian, the Backup Servicer, the Collection Account Bank and the
Administrative Agent. It has not granted and shall not grant any Person other
than the Administrative Agent an interest in the Lockbox Account, other than any
such interest that has been terminated or fully and validly assigned to the
Administrative Agent on or prior to the date hereof.




(p) USA PATRIOT Act.Neither it nor any of its Affiliates is (i) a country, territory,
organization, person or entity named on an OFAC list; (ii) a Person that resides
or has a place of business in a country or territory named on such lists or
which is designated as a “Non-Cooperative Jurisdiction” by the Financial Action
Task Force on Money Laundering, or whose subscription funds are transferred from
or through such a jurisdiction; (iii) a “Foreign Shell Bank” within the meaning
of the USA PATRIOT Act, i.e., a foreign bank that does not have a physical
presence in any country and that is not affiliated with a bank that has a
physical presence and an acceptable level of regulation and supervision; or (iv)
a person or entity that resides in or is organized under the laws of a
jurisdiction designated by the United States Secretary of the Treasury under
Sections 311 or 312 of the USA PATRIOT Act as warranting special measures due to
money laundering concerns.


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(q)            Grant of Security Interest.The grant of the security interest in the Collateral by the Originator to
the Borrower, pursuant to the Sale Agreement, is in the ordinary course of
business for the Originator and is not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction. No such
Collateral has been sold, transferred, assigned or pledged by the Originator to
any Person, other than the pledge of such assets to the Administrative Agent,
for the benefit of the Secured Parties, pursuant to the terms of this
Agreement.




(r)            Compliance with Law.It has complied in all material respects with all Applicable Laws to
which it may be subject, and no Receivable in the Collateral contravenes any
Applicable Laws (including, without limitation, laws, rules and regulations
relating to licensing, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy).




(s)            Eligibility of Collateral.As of each Funding Date, the Loan List and the information contained in
each Borrowing Notice delivered pursuant to Section 2.2,is an
accurate and complete listing of all Receivables as of the related Funding Date
and the information contained therein with respect to the identity of such
Receivables and the amounts owing thereunder is true, correct and complete in
all material respects as of the related Funding Date. Each Receivable included
in the Borrowing Base (on the most recent date that the Borrowing Base was
determined by the Borrower, the initial Servicer or an Affiliate thereof and
provided to the Administrative Agent) as an Eligible Receivable is in fact an
Eligible Receivable.




(t)            No Fraud.Each
Receivable was originated without any fraud or material misrepresentation by the
Originator or, to the best knowledge of the Originator, on the part of the
Obligor.




(u)            Principal Location.Its location for purposes of Article 9 of the UCC has been the State of
Nevada at all times since the date that is five (5) years prior to the Closing
Date.




(v)            Material Adverse Effect.There has been no Material Adverse Effect in the condition (financial or
otherwise), business, operations, results of operations, or properties of it
since April 30, 2008.




(w)            Termination Event.No
Termination Event or Unmatured Termination Event has occurred and is
continuing.




(x)            No Fraud.Each
Receivable was originated without any fraud or material misrepresentation by the
Originator or, to the best knowledge of the Originator, on the part of the
Obligor.


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Section
4.4.          Representations and
Warranties of the Backup Servicer.




The
Backup Servicer in its individual capacity and as Backup Servicer represents and
warrants as follows:




(a)            Organization; Power and
Authority.It is a duly organized and validly existing corporation in
good standing under the laws of the State of Minnesota. It has full corporate
power, authority and legal right to execute, deliver and perform its obligations
as Backup Servicer under this Agreement.




(b)            Due Authorization.The execution and delivery of this Agreement and the consummation of the
transactions provided for herein have been duly authorized by all necessary
action on its part, either in its individual capacity or as Backup Servicer, as
the case may be.




(c)            No Conflict.The
execution and delivery of this Agreement, the performance of the transactions
contemplated hereby and the fulfillment of the terms hereof will not conflict
with, result in any breach of its organizational documents or any of the
material terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under any indenture, loan, agreement, mortgage, deed
of trust, or other instrument to which the Backup Servicer is a party or by
which it or any of its property is bound.




(d)            No Violation.The
execution and delivery of this Agreement, the performance of the transactions
contemplated hereby and the fulfillment of the terms hereof will not conflict
with or violate, in any material respect, any Applicable Law.




(e)            Consents.All
approvals, authorizations, consents, orders or other actions of any Person or
Governmental Authority applicable to the Backup Servicer, required in connection
with the execution and delivery of this Agreement, the performance by the Backup
Servicer of the transactions contemplated hereby and the fulfillment by the
Backup Servicer of the terms hereof have been obtained.




(f)            Validity, Etc.This
Agreement constitutes the legal, valid and binding obligation of the Backup
Servicer, enforceable against the Backup Servicer in accordance with its terms,
except as such enforceability may be limited by applicable Insolvency Laws or
general principles of equity (whether considered in a suit at law or in
equity).




Section
4.5.          Representations and
Warranties of the Collateral Custodian.




The
Collateral Custodian in its individual capacity and as Collateral Custodian
represents and warrants as follows:




(a) Organization; Power and
Authority.It is a duly organized and validly existing national banking
association in good standing under the laws of the United States. It has full
corporate power, authority and legal right to execute, deliver and perform its
obligations as Collateral Custodian under this Agreement.


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(b)           Due Authorization.The execution and delivery of this Agreement and the consummation of the
transactions provided for herein have been duly authorized by all necessary
action on its part, either in its individual capacity or as Collateral
Custodian, as the case may be.




(c)            No Conflict.The
execution and delivery of this Agreement, the performance of the transactions
contemplated hereby and the fulfillment of the terms hereof will not conflict
with, result in any breach of its organizational documents or any of the
material terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under any indenture, loan, agreement, mortgage, deed
of trust, or other instrument to which the Collateral Custodian is a party or by
which it or any of its property is bound.




(d)            No Violation.The
execution and delivery of this Agreement, the performance of the transactions
contemplated hereby and the fulfillment of the terms hereof will not conflict
with or violate, in any material respect, any Applicable Law.




(e)            Consents.All
approvals, authorizations, consents, orders or other actions of any Person or
Governmental Authority applicable to the Collateral Custodian, required in
connection with the execution and delivery of this Agreement, the performance by
the Collateral Custodian of the transactions contemplated hereby and the
fulfillment by the Collateral Custodian of the terms hereof have been
obtained.




(f) Validity, Etc.The
Agreement constitutes the legal, valid and binding obligation of the Collateral
Custodian, enforceable against the Collateral Custodian in accordance with its
terms, except as such enforceability may be limited by applicable Insolvency
Laws and general principles of equity (whether considered in a suit at law or in
equity).




ARTICLE
V




GENERAL
COVENANTS




Section
5.1.           Affirmative Covenants of the
Borrower.




From the
date hereof until the Collection Date, the Borrower hereby covenants and agrees
as follows:




(a)            Compliance with Laws.The Borrower will comply in all material respects with all Applicable
Laws, including those with respect to the Collateral or any part
thereof.




(b)            Preservation of Company
Existence.The Borrower will preserve and maintain its limited liability
company existence, rights, franchises and privileges in the jurisdiction of its
formation, and qualify and remain qualified in good standing as a limited
liability company, in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification has
had, or could reasonably be expected to have, a Material Adverse
Effect.


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(c)            Performance and Compliance
with Collateral.The Borrower will, at its expense, timely and fully
perform and comply (or cause the Originator to perform and comply pursuant to
the Sale Agreement) in all material respects with all provisions, covenants and
other promises required to be observed by it under the Collateral.




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




(e)            Protection of Interest in
Collateral.With respect to the Receivables and Related Security, the
Borrower will (i) acquire such Receivables and Related Security pursuant to and
in accordance with the terms of the Sale Agreement, (ii) take all reasonable
action necessary to perfect, protect and more fully evidence the Borrower’s
ownership of such Receivables and Related Security free and clear of any Lien
other than Permitted Liens, including, without limitation, (a) with respect to
the Receivables and that portion of the Collateral in which a security interest
may be perfected by filing, maintaining effective financing statements against
the Originator in all necessary or appropriate filing offices (including any
amendments thereto or assignments thereof) and filing continuation statements,
amendments or assignments with respect thereto in such filing offices,
(including any amendments thereto or assignments thereof) and (b) executing or
causing to be executed such other instruments or notices as may be reasonably
necessary or appropriate, (iii) subject to Section 13.9,permit
the Administrative Agent or its respective agents or representatives to visit
the offices of the Borrower during normal office hours and upon reasonable
notice examine and make copies of all documents, books, records and other
information concerning the Collateral and discuss matters related thereto with
any of the officers of the Borrower having knowledge of such matters, and (iv)
take all additional action that the Administrative Agent may reasonably request
to perfect, protect and more fully evidence the respective interests of the
parties to this Agreement in the Collateral.




(f)            Deposit of Collections.The Borrower shall direct each Obligor to make all payments directly into
the Lockbox or the Lockbox Account and shall promptly (but in no event later
than one Business Day after receipt) deposit all Collections received by the
Borrower into the Collection Account.




(g)            Special Purpose Entity.The Borrower shall take all necessary action required to maintain
compliance with the Special Purpose Entity requirements set forth in Section
4.1(s).




(h)            Taxes.The Borrower
will file all appropriate tax returns and pay any and all material Taxes (other
than the amount of any Taxes the validity of which is currently being contested
in good faith by appropriate proceedings and with respect to which reserve in
accordance with GAAP have been provided on the books of the
Borrower).




(i)            Use of Proceeds.The
Borrower will use the proceeds of the Advances only to acquire Collateral or pay
transaction expenses related hereto or other expenses of the Borrower (including
any expenses incurred by the Servicer and fairly allocated to the Borrower in
accordance with the terms of the Transaction Documents).




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(j)            Obligor Notification Forms.The Borrower shall furnish the Administrative Agent with an appropriate
power of attorney to send (at the Administrative Agent’s discretion after the
occurrence of a Termination Event which has not been otherwise waived) Obligor
notification forms to give notice to the Obligors of the Secured Parties’
interest in the Collateral and the obligation to make payments as directed by
the Administrative Agent.




(k)            Notices.The Borrower
will furnish to the Administrative Agent;




(i)            Income Tax Liability.Within ten Business Days after the receipt of revenue agent reports or
other written proposals, determinations or assessments of the Internal Revenue
Service or any other taxing authority which propose, determine or otherwise set
forth positive adjustments to the Tax liability of any affiliated group (within
the meaning of Section 1 504(a)(l) of the Code) of which Borrower is a member
which equal or exceed $100,000 in the aggregate, telephonic or facsimile notice
(confirmed in writing within five Business Days thereafter) specifying the
nature of the items giving rise to such adjustments and the amounts
thereof;




(ii)            Auditors’ Management
Letters.Promptly after the receipt thereof,any auditors’ management
letters that are received by the Borrower;




(iii)            Representations and
Warranties.Promptly upon receiving knowledge of the same, the Borrower
shall notify the Administrative Agent if any representation or warranty set
forth in Section 4.1 was incorrect in any material respect at the time it was
given or deemed to have been given and at the same time deliver to the
Administrative Agent a written notice setting forth in reasonable detail the
nature of such facts and circumstances;




(iv)            Proceedings.As soon
as possible and in any event within three Business Days after the Borrower
receives notice or obtains knowledge thereof, notice of any settlement of,
judgment (including a judgment with respect to the liability phase of a
bifurcated trial) in or commencement of any labor controversy, litigation, suit
or proceeding before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which could reasonably
be expected to have a Material Adverse Effect; providedthat notwithstanding
the foregoing, any settlement, judgment, labor controversy, litigation, suit or
proceeding (A) in an amount in excess of $50,000, or (B) affecting the
Collateral, the Transaction Documents or the Secured Parties’ interest in the
Collateral that may result in a loss of $5,000 or greater, shall be required to
be reported;




(v)            Notice of Material Events.Promptly upon a Responsible Officer of the Borrower becoming aware
thereof, notice of any other event or circumstances that, in the reasonable
judgment of the Borrower, could reasonably be expected to have a Material
Adverse Effect (including, for the avoidance of doubt, prompt notice if the
Lockbox Account becomes subject to any writ, judgment, warrant of attachment,
execution or similar process);




(vi)            Termination Events.Immediate written notice (and in no event later than one (1) Business
Day) of the occurrence of each Termination Event and each Unmatured Termination
Event of which the Borrower has knowledge or has received notice. In addition,
no later than two (2) Business Days following the Borrower’s knowledge or notice
of the occurrence of any Termination Event or Unmatured Termination Event, the
Borrower will provide to the Administrative Agent a written statement of a
Responsible Officer of the Borrower setting forth the details of such event and
the action that the Borrower proposes to take with respect thereto;
and


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(vii)            Accounting Changes.As soon as possible and in any event within five Business Days after the
effective date thereof, notice of any material change in the accounting policies
of the Borrower.




(viii)            Resignation of Lienholder
Agent.Following receipt by the Borrower of written notice from a Person
acting as the lienholder agent under the Lienholder Nominee Agreement (the “Lienholder Agent”)of such Person’s resignation as the Lienholder Agent under the Lienholder
Nominee Agreement, the Borrower shall promptly thereafter provide a copy of such
notice to the Administrative Agent and each Lender.




(l)            Compliance With Transaction
Documents and the Credit and Collection Policy.The Borrower will comply
in all respects with the terms of this Agreement and the other Transaction
Documents to which it is a party and with the material terms of the Credit and
Collection Policy with respect to each Receivable that is part of the
Collateral.




(m)            Other.
The Borrower will furnish to the Administrative Agent promptly, from time to
time, such other information, documents, records or reports respecting the
Collateral or the condition or operations, financial or otherwise, of the
Borrower or the Originator as the Administrative Agent or any Lender may from
time to time reasonably request in order to protect the interests of the Secured
Parties under or as contemplated by this Agreement.




(n) Hedging Agreements.On or prior to the Closing Date, enter into an ISDA master agreement (and
the related schedule) with a Hedge Counterparty, which ISDA master agreement
(and related schedule) will be used to govern any confirmations to be entered
into on or prior to the initial Funding Date. On or prior to the initial Funding
Date, enter into one or more Hedging Agreements acceptable to the Administrative
Agent with respect to 100% of the Aggregate Outstanding Receivable Balance as of
the initial Funding Date or deposit sufficient proceeds into the Spread Account
to defease the cost of entering into a Hedging Agreement with respect to 100% of
the Aggregate Outstanding Receivable Balance (as specified by the Administrative
Agent in its reasonable discretion). On the date of each Advance and each
Reporting Date, the Borrower shall either (i) enter into one or more new Hedging
Agreements acceptable to the Administrative Agent or amend the existing Hedging
Agreements with respect to the Aggregate Outstanding Receivable Balance or (ii)
deposit sufficient proceeds into the Spread Account to defease the cost of
entering into a Hedging Agreement with respect to all or a portion of the
Aggregate Outstanding Receivable Balance, such that collectively at such time
such that the aggregate notional amount of all applicable Hedging Agreements
(together with that portion of the Aggregate Outstanding Receivable Balance the
related hedging costs with respect to which have been defeased) at such time
shall not be greater than 105% of the Aggregate Outstanding Receivable Balance
nor less than 95% of the Aggregate Outstanding Receivable Balance. If at any
time the aggregate notional amount of the Hedging Agreements (together with that
portion of the Aggregate Outstanding Receivable Balance the related hedging
costs with respect to which have been defeased) is less than 95% of the
Aggregate Outstanding Receivable Balance, the Borrower shall enter into a new
Hedging Agreement (or deposit additional funds into the Spread Account) to
increase such percentage to at least 100% within two (2) Business Days. If at
any time the aggregate notional amount of the Hedging Agreements (together with
that portion of the Aggregate Outstanding Receivable Balance the related hedging
costs with respect to which have been defeased) is greater than 105% of the
Aggregate Outstanding Receivable Balance, the Borrower shall reduce such
percentage below 105% (but not below 100%) within fifteen (15) days; provided,
however, that the applicable Hedging Agreement(s) with the lowest close out
amounts being owed by either party (as agreed in good faith by the applicable
Hedge Counterparty and the Borrower, and if such parties cannot agree, then as
determined in good faith by the Administrative Agent) shall be terminated by the
Borrower in order to effectuate such reduction. Each Hedging Agreement shall be
with a Hedge Counterparty. The aggregate schedules of amortizing notional
amounts under the Hedging Agreements shall be established by the Hedge
Counterparties with the consent of the Administrative Agent to correspond to the
projected repayment of the Aggregate Outstanding Receivable Balance based on the
contractual repayment schedule.




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(o) Non-Consolidation Opinion.The Borrower shall comply with all factual assumptions contained in the
non-consolidation opinion delivered by Thacher Proffitt & Wood LLP on the
Closing Date in connection with the transactions contemplated by the Transaction
Documents.




Section
5.2.          Negative Covenants of the
Borrower.




From the
date hereof until the Collection Date, the Borrower hereby covenants and agrees
as to itself and the Collateral as follows:




(a)           Other Business.The
Borrower will not (i) engage in any business other than the transactions
contemplated by the Transaction Documents, (ii) incur any Indebtedness,
obligation, liability or contingent obligation of any kind other than pursuant
to or permitted by this Agreement or under the other Transaction Documents, or
(iii) form any Subsidiary or make any Investment in any other Person (other than
Permitted Investments).




(b)           Collateral Not to be
Evidenced by Instruments.The Borrower will take no action to cause any
Receivable that is not, as of the Closing Date or the related Funding Date, as
the case may be, evidenced by an Instrument, to be so evidenced except in
connection with the enforcement or collection of such Receivable.




(c) Security Interests.Except as otherwise permitted herein, the Borrower will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien (except for Permitted Liens) on any Collateral, whether
now existing or hereafter transferred hereunder, or any interest therein. The
Borrower will promptly notify the Administrative Agent of the existence of any
Lien (except for Permitted Liens) on any Collateral and the Borrower shall
defend the right, title and interest of the Administrative Agent, as agent for
the Secured Parties, in, to and under the Collateral against all claims of third
parties.


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(d)            Mergers, Acquisitions,
Sales, etc.The Borrower will not be a party to any merger or
consolidation, or purchase or otherwise acquire any of the assets or any stock
of any class of, or any partnership or joint venture interest in, any other
Person, or sell, transfer, convey or lease any of its assets, or sell or assign
with or without recourse any Collateral or any interest therein (other than as
expressly permitted pursuant to this Agreement or the Sale Agreement), without
the prior written consent of the Administrative Agent.




(e)            Deposits to Collection
Account.Except as otherwise contemplated by the Transaction Documents,
the Borrower will not deposit or otherwise credit, or cause or permit to be so
deposited or credited, to the Collection Account cash or cash proceeds other
than Collections in respect of the Collateral.




(f)            Restricted Payments.The Borrower shall not declare or pay any dividends or distributions (i)
except as permitted under its organizational documents, and (ii) at any time
when a Termination Event or Unmatured Termination Event has occurred or would
result therefrom.




(g)            Change of Name or Location
of Servicing Files.The Borrower shall not (x) change its name, move the
location of its principal place of business and chief executive office, change
the offices where it keeps the records from the location referred to on Annex Ahereto, or
change the jurisdiction of its organization, or (y) move, or consent to the
Collateral Custodian or Servicer moving, the Required Loan Files or the
Servicing Files from the location referred to on Annex Ahereto,
unless the Borrower has given at least five (5) days’ written notice to the
Administrative Agent and has taken all actions required under the UCC of each
relevant jurisdiction in order to continue the first priority perfected security
interest of the Administrative Agent, as agent for the Secured Parties, in the
Collateral.




(h)            Accounting of Purchases.Other than for tax and consolidated accounting purposes, the Borrower
will not account for or treat (whether in financial statements or otherwise) the
transactions contemplated by the Sale Agreement in any manner other than as a
sale and/or contribution of the Receivables and Related Security to the Borrower
from the Originator.




(i)            ERISA Matters.The
Borrower will not establish or permit any ERISA Affiliate to establish any
Benefit Plan or Multiemployer Plan.




(j)            Sale Agreement;
Organizational Documents.The Borrower will not amend, modify, waive or
terminate any provision of the Sale Agreement without the prior written consent
of the Administrative Agent. In addition, the Borrower, will not amend any
material portion of its limited liability company agreement or its other
organizational documents without the prior written consent of the Administrative
Agent.




(k)            Changes in Payment
Instructions to Obligors.The Borrower will not add or terminate any bank
as the Lockbox Account Bank or the Lockbox Account listed in Schedule II or make
any material change, or permit the Servicer to make any material change, in its
instructions to Obligors regarding payments to be made with respect to the
Collateral to the Lockbox Account, unless the Administrative Agent has consented
to such addition, termination or change and has received duly executed copies of
the Lockbox Agreement (incorporating appropriate amendments), with any new
Lockbox Account Bank being a party thereto.




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(l)            Extension or Amendment of
Collateral.The Borrower will not, except as otherwise permitted in Section 6.4(a),extend, amend or otherwise modify, or permit the Servicer to extend,
amend or otherwise modify, the material terms of any Receivable (including the
Related Security).




(m)            Sales of Collateral.The Borrower will not sell any Receivable that is part of the Collateral,
or any portion of such a Receivable, unless, in connection with such sale, (A)
after giving effect to such sale, the Advances Outstanding do not exceed the
Maximum Availability, or (B) such sale is otherwise consented to by the Lenders
in their sole discretion, providedthat the Borrower
may sell any Warranty Receivable back to the Originator in accordance with the
terms of the Sale Agreement.




Section
5.3.          [Reserved.]




Section
5.4.          Affirmative Covenants of the
Servicer and the Originator.




From the
date hereof until the Collection Date, the Originator and the Servicer,
respectively, covenant and agree as follows:




(a)            Compliance with Law.It will comply in all material respects with all Applicable Laws,
including those with respect to the Collateral or any part thereof.




(b)            Preservation of Company
Existence.It will preserve and maintain its corporate existence, rights,
franchises and privileges in the jurisdiction of its formation, and qualify and
remain qualified in good standing as a corporation (or other applicable entity
in the case of a Successor Servicer), in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification has had, or could reasonably be expected to have, a Material
Adverse Effect.




(c)            Obligations and Compliance
with Collateral.It will duly fulfill and comply with all obligations on
the part of the Originator or the Servicer, as applicable, to be fulfilled or
complied with under or in connection with the Collateral and will do nothing to
impair the rights of the Administrative Agent, as agent for the Secured Parties,
in, to and under the Collateral.




(d)            Keeping of Records and Books
of Account.




(i)            It
will maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Collateral in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection and the identification of the
Collateral.


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(ii)            It
shall permit the Administrative Agent, the Backup Servicer, each Lender or their
respective agents or representatives to visit the offices of the Borrower, the
Servicer and the Originator, respectively, during normal office hours and upon
reasonable notice and examine and make copies of all documents, books, records
and other information concerning the Collateral and discuss matters related
thereto with any of its officers or executive employees having knowledge of such
matters; it shall pay the costs and expenses for all such visits (subject to the
cap referenced in Section 13.9);providedthat in the event
Lyon becomes the successor Servicer it shall not be required to pay any such
costs and expenses, Lyon shall be given five (5) days notice of any such visit
and such visits shall be limited to two (2) per calendar year unless, in each
case, it has breached its obligations as successor Servicer
hereunder.




(iii)            On
or prior to the date hereof, it will mark its master data processing records and
other books and records relating to the Collateral with a legend, acceptable to
the Administrative Agent, describing (A) the sale of the Collateral to the
Borrower pursuant to the Sale Agreement and (B) the grant of a security interest
by the Borrower to the Administrative Agent as agent for the Secured Parties
hereunder.




(iv)            The
Administrative Agent shall have the right to send confirmation letters to, or
otherwise reasonably inquire with, any Obligor with respect to the outstanding
principal balance, interest rate, remaining term and other material feature of
the Underlying Instruments, the Powersports Vehicle or Approved Loan or Approved
Lease, as applicable.




(e)            Preservation of Security
Interest.It will cooperate with the Administrative Agent with respect to
filing such financing and continuation statements and any other documents that
may be required by any law or regulation of any Governmental Authority to
preserve and protect the first priority perfected security interest of the
Administrative Agent, as agent for the Secured Parties, in, to and under the
Receivables and that portion of the Collateral in which a security interest may
be perfected by filing.




(f)            Credit and Collection
Policy.It will (i) comply in all material respects with the Credit and
Collection Policy in regard to the Collateral, and (ii) furnish to the
Administrative Agent, prior to its effective date, prompt written notice of any
changes in the Credit and Collection Policy. It will not agree to or otherwise
permit to occur any material change in the Credit and Collection Policy without
the prior written consent of the Administrative Agent.




(g)            Termination Events.It will provide the Administrative Agent with immediate written notice of
the occurrence of each Termination Event and each Unmatured Termination Event of
which it has knowledge or has received notice. In addition, no later than two
(2) Business Days following its knowledge or notice of the occurrence of any
Termination Event or Unmatured Termination Event, it will provide to the
Administrative Agent a written statement of its chief financial officer or chief
accounting officer setting forth the details of such event and the action that
it proposes to take with respect thereto.




(h)            Taxes.It will file
all appropriate tax returns and pay any and all material Taxes owed by the
Servicer (other than the amount of any Taxes the validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which reserve in accordance with GAAP have been provided on its
books).


75


(i)            Other.
It will promptly furnish to the Administrative Agent and each Lender such other
information, documents, records or reports respecting the Collateral or the
condition or operations, financial or otherwise of the Borrower or it as the
Administrative Agent or any Lender may from time to time reasonably request in
order to protect the interests of the Administrative Agent and the Secured
Parties under or as contemplated by this Agreement.




(j)            Proceedings.It will
furnish to the Administrative Agent notice promptly, and in any event within two
(2) Business Days after any executive officer receives notice or obtains
knowledge thereof, of any settlement of, judgment (including a material judgment
with respect to the liability phase of a bifurcated trial) in or commencement of
any labor controversy, litigation, action, suit or proceeding before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, in each case, relating to it or the
Borrower, which could reasonably be expected to have a Material Adverse
Effect.




(k)            Deposit of Collections.It shall direct each Obligor to make payments directly to the Lockbox
Account and shall promptly (but in no event later than one (1) Business Day
after receipt (two (2) Business Days in the event that Lyon is the successor
Servicer)) deposit into the Collection Account any and all Collections received
directly by it or by the Borrower (in the case of the initial Servicer, in which
case the initial Servicer will be acting on the Borrower’s behalf).




(l)            Change of Control.Thirty (30) days prior to (or such advance notice as is possible under
the circumstances but no later than two (2) Business Days prior to) the
occurrence of a Change of Control, it shall provide the Administrative Agent and
each Lender with notice of such expected Change of Control.




(m)            Special Purpose Entity
Requirements.In the case of the Originator, it shall take such actions
as are necessary to cause the Borrower to be in compliance with the Special
Purpose Entity requirements set forth in Section
4.1(s).




(n)            Servicing System Changes.As soon as possible and in any event within forty-five (45) days prior to
the effective date thereof, the initial Servicer will provide the Backup
Servicer and the Administrative Agent notice of any material changes to its
servicing systems.




(o)            Notices.It will
furnish to the Administrative Agent and the Backup Servicer prior written notice
of any changes to its name or location of its principal place of business or
chief executive office.




(p)            Lockbox Collection
Percentage.In the case of the initial Servicer, it shall maintain a
Lockbox Collection Percentage of at least 90% for each Collection
Period.




(q) Minimum Tangible Net Worth.On the date of the initial Advance hereunder (and as a condition
precedent thereto) and on the last day of each Collection Period, the
Originator’s Tangible Net Worth shall at no time be less than $2,000,000, plus
(i) 50% of the aggregate amount of consolidated net income of such company
(computed without deducting therefrom any cumulative, consolidated net deficit
for any prior fiscal year) for each Collection Period after the Closing Date and
(ii) 90% of the net proceeds (new capital less expenses and distributions) of
any new equity contributions raised by the Originator, including any
subordinated debt (the “Tangible Net Worth Floor”).For the avoidance of doubt, when calculating the consolidated net income
of the Originator pursuant to clause (i)above with
respect to a given Collection Period, if the consolidated net income of the
Originator is negative in such Collection Period, the consolidated net income of
the Originator shall be deemed to be zero for purposes of clause (i)above.


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(r)            E&O Insurance.On
and after the initial Funding Date, the Servicer shall at all times maintain an
errors and omissions insurance policy, in form and substance reasonably
acceptable to the Administrative Agent (including applicable coverage of the
Borrower), of the type customarily maintained by entities engaged in the
Servicer’s industry, with at all times a principal face amount of no less than
$1,000,000 under which, with respect to the initial Servicer (or any Servicer
that is an Affiliate thereof), the Administrative Agent, for the benefit of the
Secured Parties, will be named as the loss payee and additional insured. The
initial Servicer shall, no less than annually, provide the Administrative Agent
with written evidence of policy renewal and payment of premiums.




(s)            Minimum Net Income.The Originator shall maintain positive net income in accordance with GAAP
on a fiscal year basis, commencing with the fiscal year ending on April 30,
2010.




(t)            Fidelity Bond.On and
after the initial Funding Date, the Servicer shall at all times maintain a
fidelity bond, in form and substance reasonably acceptable to the Administrative
Agent (including applicable coverage of the Borrower), of the type customarily
maintained by entities engaged in the Servicer’s industry, with at all times a
principal face amount of no less than $1,000,000 under which, with respect to
the initial Servicer or any Affiliate thereof, the Administrative Agent, for the
benefit of the Secured Parties, will be named as the loss payee and additional
insured. The Servicer shall, no less than annually, provide the Administrative
Agent with written evidence of policy renewal and payment of
premiums.




(u)            Minimum Committed Capital.On the date of the initial Advance hereunder (and as a condition
precedent thereto) and on the last day of each Collection Period, the Originator
shall maintain and demonstrate to the Administrative Agent minimum committed
capital in form and substance and committed by Persons acceptable to the
Administrative Agent in its sole discretion, including equity and unsecured
subordinated debt, of at least (i) $5,000,000 minus (ii) its Tangible Net
Worth.




(v)            Minimum Leverage Ratio.On the date of the initial Advance hereunder (and as a condition
precedent thereto) and on the last day of each Collection Period (commencing
with the last day of the sixth Collection Period after the date of the initial
Advance hereunder), the Originator shall maintain and demonstrate to the
Administrative Agent a Leverage Ratio of at least 10%.




(w)            Minimum Liquidity Ratio.On the date of the initial Advance hereunder (and as a condition
precedent thereto) and on the last day of each Collection Period (commencing
with the last day of the sixth Collection Period after the date of the initial
Advance hereunder), the Originator shall maintain and demonstrate to the
Administrative Agent a three-month rolling average Liquidity Ratio (calculated
monthly) of at least 125%.


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(x) Minimum Unrestricted Cash.On the date of the initial Advance hereunder (and as a condition
precedent thereto) and on the last day of each Collection Period, the Originator
shall maintain unrestricted cash of at least $300,000.




Section
5.5.          Negative Covenants of the
Servicer and the Originator.




From the
date hereof until the Collection Date, the Originator and the Servicer,
respectively, hereby covenant and agree as follows:




(a)           Deposits to Collection
Account.Except as otherwise contemplated by the applicable Transaction
Documents, it will not deposit or otherwise credit, or cause or agree to allow
to be so deposited or credited, to the Lockbox Account cash or cash proceeds
other than Collections in respect of the Collateral.




(b)           Mergers, Acquisition, Sales,
etc.It will not consolidate with or merge into any other Person or
convey or transfer its properties and assets substantially as an entirety to any
Person (other than the Borrower in accordance with the Transaction Documents),
unless it is the surviving entity and unless:




(i)           it
has delivered to the Administrative Agent an Officer’s Certificate stating that
any such consolidation, merger, conveyance or transfer and any supplemental
agreement executed in connection therewith comply with this Section 5.5and that
all conditions precedent herein provided for relating to such transaction have
been complied with and, in the case of a supplemental agreement, the delivery of
an Opinion of Counsel stating that such supplemental agreement is legal, valid
and binding with respect to it and such other matters as the Administrative
Agent may reasonably request;




(ii)           it
shall have delivered notice of such consolidation, merger, conveyance or
transfer to the Administrative Agent and obtained the consent of the
Administrative Agent; and




(iii)           after
giving effect thereto, no Unmatured Termination Event or Termination
Event shall have occurred.




Notwithstanding
the foregoing, Lyon as successor Servicer may merge into, or convey or transfer
its assets to, another entity if such transaction complies with the requirements
for the Backup Servicer set forth in Section 7.3hereof.




(c) Change of Location of
Servicing Files.It shall not (x) change the offices where it keeps
records concerning the Collateral from the location referred to on Annex Ahereto, or
(y) move, or consent to the Collateral Custodian moving, the Required Loan Files
or Servicing Files from the location referred to on Annex Ahereto,
unless it has given at least five (5) days’ written notice to the Administrative
Agent.


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(d)            Change in Payment
Instructions to Obligors.It will not add or terminate any bank as the
Lockbox Account Bank or any Lockbox Account listed in Schedule IIor make
any change in its instructions to Obligors regarding payments to be made to the
Lockbox Account, unless the Administrative Agent has consented to such addition,
termination or change and has received duly executed copies of each Lockbox
Agreement (incorporating appropriate amendments), with each new Lockbox Account
Bank being a party thereto.




(e)            Extension or Amendment of
Receivables.It will not, except as otherwise permitted in Section 6.4(a),extend, amend or otherwise modify the material terms of any Receivable
(including the Related Security).




(f) Exclusivity; Restricted
Sales of Collateral.Until the Facility Termination Date, except in
connection with the approved financing arrangements specified on Schedule VI,the
Originator will not sell any Eligible Receivable to any Person other than the
Borrower without obtaining the prior written consent of the Administrative
Agent; providedthat
such restriction shall not apply with respect to any Receivable which does not
constitute an Eligible Receivable pursuant to the terms of this Agreement; provided, furtherthat if the
Lenders refuse to increase their respective Commitments (and, as a result,
increase the Maximum Facility Amount) pursuant to Section 2.1(c)in
order to fund sufficient Eligible Receivables, the Originator may obtain
financing for such origination from a third party (and, in connection therewith,
the Originator may sell such Eligible Receivables to a Person other than the
Borrower).




Section
5.6.          Affirmative
Covenants of the Backup Servicer.




From the
date hereof until the Collection Date:




(a)            Compliance with Law.The Backup Servicer will comply in all material respects with all
Applicable Law.




(b)            Preservation of Existence.The Backup Servicer will preserve and maintain its existence, rights,
franchises and privileges in the jurisdiction of its incorporation, and qualify
and remain qualified in good standing in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification has had, or could reasonably be expected to have, a Material
Adverse Effect.




Section
5.7.           Negative Covenants of the
Backup Servicer.




From the
date hereof until the Collection Date, the Backup Servicer will not make any
changes to the Backup Servicer Fee set forth in the Backup Servicer Fee Letter
without the prior written approval of the Administrative Agent and the
Borrower.




Section
5.8.           Affirmative
Covenants of the Collateral Custodian.




From the
date hereof until the Collection Date:




(a)            Compliance with Law.The Collateral Custodian will comply in allmaterial respects with all
Applicable Law.


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(b)           Preservation of Existence.The Collateral Custodian will preserve and maintain its existence,
rights, franchises and privileges in the jurisdiction of its formation and
qualify and remain qualified in good standing in each jurisdiction where failure
to preserve and maintain such existence, rights, franchises, privileges and
qualification has had, or could reasonably be expected to have, a Material
Adverse Effect.




(c)           Location of Required Loan
Files.Subject to Section 8.8,the
Required Loan Files shall remain at all times in the possession of the
Collateral Custodian at the address set forth on Annex Ato this
Agreement unless notice of a different address is given in accordance with the
terms hereof or unless the Administrative Agent agrees to allow certain Required
Loan Files to be released to the Servicer on a temporary basis in accordance
with the terms hereof, except as such Required Loan Files may be released
pursuant to the terms of this Agreement.




Section 5.9.Negative
Covenants of the Collateral Custodian.




From the
date hereof until the Collection Date:




(a)           Required Loan Files.The Collateral Custodian will not dispose of any Required Loan File
documents in any manner that is inconsistent with the performance of its
obligations as the Collateral Custodian pursuant to this Agreement and will not
dispose of any Collateral except as contemplated by this Agreement.




(b)           No Changes to Collateral
Custodian Fee.The Collateral Custodian will not make any changes to the
Collateral Custodian Fee set forth in the Collateral Custodian Fee Letter
without the prior written approval of the Administrative Agent.




ARTICLE
VI




ADMINISTRATION
AND SERVICING OF RECEIVABLES




Section
6.1.           Designation of the
Servicer.




(a)           Initial Servicer.The
servicing, administering and collection of the Collateral shall be conducted by
the Person designated as the Servicer hereunder from time to time in accordance
with this Section 6.1.Until (i) the Administrative Agent gives to Sparta a Servicer Termination
Notice or (ii) the non-renewal of the Servicing Term, Sparta is hereby appointed
as, and hereby accepts such appointment and agrees to perform the duties and
responsibilities of, the Servicer pursuant to the terms hereof.




(b)           Successor Servicer.Upon (i) the Servicer’s and the Backup Servicer’s receipt of a Servicer
Termination Notice from the Administrative Agent pursuant to Section
6.13or (ii) the non-renewal of the Servicing Term pursuant to
Section 6.1(e), the Servicer agrees that it will terminate its activities as
Servicer hereunder in a manner that will facilitate the transition of the
performance of such activities to a successor Servicer, as reasonably determined
by the Administrative Agent, and the successor Servicer shall assume each and
all of the Servicer’s obligations to service and administer the Collateral, on
the terms and subject to the conditions herein set forth, and the Servicer shall
use its best efforts to assist the successor Servicer in assuming such
obligations.


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(c)            Subcontracts.The
Servicer may, with the prior written consent of the Administrative Agent (which
consent shall not be required in connection with the Servicer’s engaging of
repossession agents in connection with the underlying Powersports Vehicles) and
with notice to the Backup Servicer, subcontract with any other Person for
servicing, administering or collecting the Collateral; providedthat (i) the
Servicer shall remain liable for the performance of the duties and obligations
of the Servicer pursuant to the terms hereof without regard to any
subcontracting arrangement, (ii) any such subcontract shall be terminable upon
the occurrence of a Servicer Default, and (iii) any subservicer under such a
subcontract shall be paid by the Servicer.




(d)            Servicing Programs.In the event that the initial Servicer commences using any new software
program in servicing the Collateral that it licenses from a third party, the
initial Servicer shall perform such actions with respect to such software as
reasonably required by the Administrative Agent and the Backup
Servicer.




(e)            Servicing Term.Sparta’s duties as the “Servicer” under this Agreement shall be effective
for an initial term, commencing on the Closing Date and ending on March 19,
2009, which term shall be extendible by the Administrative Agent as hereinafter
set forth. The Administrative Agent, in its sole discretion, may direct, by
delivery of a written notice as described below, that the term of Sparta as the
initial Servicer hereunder be renewed for successive monthly terms ending on the
last day of each successive calendar month (each such term, together with the
initial servicing term, a “Servicing Term”)until the Facility Amount is paid in full. Each written notice renewing
the Servicing Term (each, a “Servicing Term
RenewalNotice”)shall be
delivered by the Administrative Agent, on behalf of the Lenders, to the Borrower
and the Servicer. Sparta, as the initial Servicer, hereby agrees that, as of the
date hereof and upon its receipt of any such Servicing Term Renewal Notice, it
shall become bound, for the initial term beginning on the Closing Date and for
the duration of the term covered by each such Servicing Term Renewal Notice (or
such shorter period as set forth in a Servicer Termination Notice), to continue
as the Servicer subject to and in accordance with the other provisions of this
Agreement (unless the Administrative Agent delivers a Servicer Termination
Notice to Sparta). If the Administrative Agent elects not to extend the
Servicing Term, the Administrative Agent shall deliver written notice thereof to
the Backup Servicer and, until receipt of such notice, the Backup Servicer shall
not commence any servicing functions hereunder. After the end of the Servicing
Term, the Servicer shall continue to service the Collateral until the Backup
Servicer or another Successor Servicer has been appointed in writing by the
Administrative Agent. If a Servicing Term Renewal Notice is delivered after the
expiration of any Servicing Term, the Administrative Agent and the Servicer
hereby agree that such notice shall be deemed to relate back and that such
Servicing Term Renewal Notice is binding on the other parties hereto as if
timely delivered. Sparta hereby acknowledges that its rights to perform as the
Servicer with respect to the Receivables hereunder, any rights of any
subservicers to whom it has delegated any duties hereunder, and its rights to
receive the Servicing Fee in respect thereof, are limited to the existing
Servicing Term without, except as otherwise provided in this Section 6.1,any
contractual or property right ensuring continuation of such Servicing Term
beyond its expiration date.


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Section
6.2.             
Duties of the
Servicer.




(a)            Appointment.The
Borrower hereby appoints the Servicer as its agent, as from time to time
designated pursuant to Section 6.1,to
service the Collateral and enforce its rights in, to and under such Collateral.
The Servicer hereby accepts such appointment and agrees to perform the duties
and obligations with respect thereto as set forth herein. The Servicer and the
Borrower hereby acknowledge that the Administrative Agent and the other Secured
Parties are third party beneficiaries of the obligations undertaken by the
Servicer hereunder.




(b)            Duties.The Servicer
shall take or cause to be taken all such actions as may be reasonably necessary
or advisable to collect on the Collateral from time to time, all in accordance
with Applicable Law, the Credit and Collection Policy and the Servicing
Standard. Without limiting the foregoing, the duties of the Servicer shall
include the following:




(i)            preparing
and submitting claims to, and acting as post-billing liaison with, Obligors on
the Receivables;




(ii)           maintaining
all reasonably necessary servicing records with respect to the Collateral and
providing such reports, information and servicing records to the Administrative
Agent, the Backup Servicer and Collateral Custodian in respect of the servicing
of the Collateral (including information relating to its performance under this
Agreement) as may be required hereunder or as the Administrative Agent, the
Backup Servicer or the Collateral Custodian may reasonably request;




(iii)          maintaining
and implementing administrative and operating procedures (including, without
limitation, an ability to recreate servicing records evidencing the Collateral
in the event of the destruction of the originals thereof) and keeping and
maintaining all documents, books, records and other information reasonably
necessary or advisable for the collection of the Collateral;




(iv)          identifying
each Receivable clearly and unambiguously in its servicing records to reflect
that such Receivable is owned by the Borrower and that the Borrower has granted
a security interest therein to the Administrative Agent for the benefit of the
Secured Parties pursuant to this Agreement;




(v)           notifying
the Administrative Agent of any material action, suit, proceeding, dispute,
offset, deduction, defense or counterclaim (1) that is, or to the Servicer’s
knowledge threatened to be, asserted by an Obligor with respect to any
Receivable (or portion thereof) of which it has knowledge or has received
notice; or (2) that could reasonably be expected to have a Material Adverse
Effect;




(vi)          providing
the prompt written notice to the Administrative Agent, prior to the effective
date thereof, of any material proposed changes in the Credit and Collection
Policy;




(vii)        
cooperate with the Administrative Agent in connection with maintaining the first
priority perfected security interest of the Administrative Agent, as agent for
the Secured Parties, in the Collateral;


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(viii)       maintaining
the Servicing Files with respect to Receivables; providedthat so long as the
Servicer is in possession of any Required Loan File or Servicing File, the
Servicer will hold such Required Loan File or Servicing File in a fire resistant
safe or fire resistant file cabinet; and




(ix)          directing
the Collection Account Bank to make payments pursuant to the terms of the
Servicing Report in accordance with Section 2.7and Section
2.8.




(c)            Notwithstanding
anything to the contrary contained herein, the exercise by the Secured Parties
of their rights hereunder shall not release the Servicer, the Originator or the
Borrower from any of their duties or responsibilities with respect to the
Collateral. The Secured Parties, the Backup Servicer and the Collateral
Custodian shall not have any obligation or liability with respect to any
Collateral (except as otherwise provided herein in the case of the Collateral
Custodian and the Backup Servicer), nor shall any of them be obligated to
perform any of the obligations of the Servicer hereunder.




(d)            Any
payment by an Obligor in respect of any indebtedness owed by it to the Borrower
shall, except as otherwise specified by such Obligor or otherwise required by
contract or law and unless otherwise instructed by the Administrative Agent, be
applied as a collection of a payment by such Obligor (starting with the oldest
such outstanding payment due) to the extent of any amounts then due and payable
thereunder before being applied to any other receivable or other obligation of
such Obligor.




Section
6.3.             
Authorization of the
Servicer.




(a)            Each
of the Borrower and the Administrative Agent hereby authorizes the Servicer
(including any successor thereto) to take any and all reasonable steps in its
name and on its behalf necessary or desirable in the determination of the
Servicer and not inconsistent with the sale of the Collateral to the Borrower
under the Sale Agreement and, thereafter, the pledge by the Borrower to the
Administrative Agent, on behalf of the Secured Parties, hereunder, to collect
all amounts due under any and all Collateral, including, without limitation,
endorsing any of their names on checks and other instruments representing
Collections, executing and delivering any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Collateral and, after the
delinquency of any Collateral and to the extent permitted under and in
compliance with Applicable Law, to commence proceedings with respect to
enforcing payment thereof, to the same extent as the Originator could have done
if it had continued to own such Collateral. The Originator, the Borrower and the
Administrative Agent, on behalf of the Secured Parties, shall furnish the
Servicer (and any successors thereto) with any powers of attorney and other
documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder, and shall cooperate with the
Servicer to the fullest extent in order to ensure the collectibility of the
Collateral. In no event shall the Servicer be entitled to make any Secured
Party, the Collateral Custodian or the Administrative Agent a party to any
litigation without such party’s express prior written consent, or to make the
Borrower a party to any litigation (other than any routine foreclosure or
similar collection procedure) without the Administrative Agent’s
consent.


83


(b)            After
the declaration of the Termination Date, at the direction of the Administrative
Agent, the Servicer shall take such action as the Administrative Agent may
reasonably deem necessary or advisable to enforce collection of the Collateral;
providedthat the
Administrative Agent may, at any time following the occurrence of a Termination
Event (unless otherwise waived in writing), notify any Obligor with respect to
any Collateral of the assignment of such Collateral to the Administrative Agent,
on behalf of the Secured Parties, and direct that payments of all amounts due or
to become due be made directly to the Administrative Agent or any servicer,
collection agent or account designated by the Administrative Agent and, upon
such notification and at the expense of the Borrower, the Administrative Agent
may enforce collection of any such Collateral, and adjust, settle or compromise
the amount or payment thereof.




Section
6.4.             
Collection of
Payments; Accounts.




(a)            Collection Efforts,
Modification of Collateral.The Servicer will use commercially reasonable
efforts to collect, or cause to be collected, all payments called for under the
terms and provisions of the Receivables included in the Collateral as and when
the same become due in accordance with the Credit and Collection Policy and the
Servicing Standard. The Servicer may not waive, modify or otherwise vary any
provision of an item of Collateral in a manner that would impair the
collectibility of the Collateral or in any manner contrary to the Credit and
Collection Policy and the Servicing Standard.




(b)            Prepaid Receivable.The Servicer may not consent to a Receivable becoming a Prepaid
Receivable, in whole or in part, unless such prepayment (plus any concurrent
deposits made by the Servicer) (i) will not result in the Collection Account
receiving an amount less than the sum of (a) the Outstanding Receivable Balance
(or portion thereof to be prepaid) on the date of such payment, and (b) any
accrued and unpaid interest thereon (such sum, the “Prepayment Amount”)or (ii) is in compliance with the Underlying Instruments for the
applicable Receivable and such prepayment is consented to by the Servicer in
accordance with the Servicing Standard.




(c)            Acceleration.If
required by the Credit and Collection Policy or if consistent with the Servicing
Standard and the related Underlying Instruments, the Servicer shall accelerate
the maturity of all or any Scheduled Payments and other amounts due under any
Receivable promptly after such Receivable becomes a Defaulted
Receivable.




(d)            Taxes and other Amounts.The Servicer will use commercially reasonable efforts in accordance with
the Servicing Standard to collect all payments with respect to amounts due for
Taxes, assessments and insurance premiums relating to each Receivable to the
extent required to be paid to the Borrower for such application under the
Underlying Instrument and remit such amounts to the appropriate Governmental
Authority or insurer as required by the Underlying Instruments.




(e)            Payments to Lockbox Account.On or before the applicable Funding Date, the Servicer shall have
instructed all Obligors related to the Receivables to be pledged on such Funding
Date to make all payments in respect of their respective Collateral directly to
the Lockbox Account.


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(f)            Accounts.Each of the
parties hereto hereby agrees that (i) each Account shall be deemed to be a
Securities Account and (ii) except as otherwise expressly provided herein, the
Administrative Agent shall be exclusively entitled to exercise the rights that
comprise each Financial Asset held in each Account. Each of the parties hereto
hereby agrees to cause the Collection Account Bank or any other Securities
Intermediary that holds any money or other property for the Borrower in an
Account to agree with the parties hereto that (A) the cash and other property
(subject to Section
6.4(g)below with respect to any property other than investment property,
as defined in Section 9-102(a)(49) of the UCC) is to be treated as a Financial
Asset under Article 8 of the UCC and (B) the “securities intermediary’s
jurisdiction” (within the meaning of Section 8-110 of the UCC) for that purpose
shall be the State of New York. In no event may any Financial Asset held in any
Account be registered in the name of, payable to the order of, or specially
Indorsed to, the Borrower, unless such Financial Asset has also been Indorsed in
blank to the Collection Account Bank or other Securities Intermediary that holds
such Financial Asset in such Account.




(g)            Underlying Instruments.Notwithstanding any term hereof (or any term of the UCC that might
otherwise be construed to be applicable to a “securities intermediary” as
defined in the UCC) to the contrary, neither the Collection Account Bank nor any
Securities Intermediary shall be under any duty or obligation in connection with
the acquisition by the Borrower of or the grant by the Borrower to the
Administrative Agent of a security interest in any Receivable to examine or
evaluate the sufficiency of the documents or instruments delivered to it by or
on behalf of the Borrower under the related Underlying Instruments, or otherwise
to examine the Underlying Instruments, in order to determine or compel
compliance with any applicable requirements of or restrictions on transfer
(including without limitation any necessary consents). The Collateral Custodian
shall hold any Underlying Instrument delivered to it evidencing any Receivable
hereunder as custodial agent for the Administrative Agent in accordance with the
terms of this Agreement.




(h)            Establishment of the
Collection Account; Surplus Withdrawals.The Servicer shall cause to be
established, on or before the Closing Date, with the Collection Account Bank,
and maintained in the name of the Borrower, subject to the Lien of the
Administrative Agent, a segregated corporate trust account entitled “Collection Account forSparta Funding LLC, subject to the
lien of DZ Bank AG Deutsche Zentral-Genossenschaftsbank,Frankfurt am Main, New York Branch,
as Administrative Agent for the Secured Parties”(the “Collection Account”),over which the Administrative Agent as agent for the Secured Parties,
shall have control and from which none of the Borrower, the Originator or the
Servicer shall have any right of withdrawal.




(i)            Adjustments.If (i)
the Servicer makes a deposit into the Collection Account in respect of a
Collection of a Receivable and such Collection was received by the Servicer in
the form of a check that is not honored for any reason or (ii) the Servicer
makes a mistake with respect to the amount of any Collection and deposits an
amount that is less than or more than the actual amount of such Collection, the
Servicer shall appropriately adjust the amount subsequently deposited into the
Collection Account to reflect such dishonored check or mistake. Any Scheduled
Payment in respect of which a dishonored check is received shall be deemed not
to have been paid.


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(j)            
Establishment of the
Spread Account.The Borrower shall, prior to the Closing Date, establish
a single, segregated trust account with the Collection Account Bank, which shall
be in the name of the Borrower (subject to the Lien of the Administrative Agent)
and designated as the Spread Account. If, for any Collection Period, the Excess
Spread is less than 4% per
annum,the Borrower shall use the amounts on deposit in the Spread
Account to enter into one or more Hedging Agreements in an amount sufficient to
maintain the Minimum Excess Spread Requirement. Funds may be deposited into the
Spread Account in accordance with the priority of payment provisions herein to
satisfy the requirements set forth in Section 5.1(n).In
addition, on each Funding Date and each Payment Date, the Borrower shall deposit
funds into the Spread Account so that the balance of funds in the Spread Account
equals or exceeds the amount necessary to satisfy the requirements set forth in
Section 5.1(n)and to enter into one or more Hedging Agreements in an amount sufficient
to maintain the Minimum Excess Spread Requirement (as determined by the
Administrative Agent in its reasonable discretion). Pending withdrawal of funds
from the Spread Account pursuant to this Section 6.4(j),the
Collection Account Bank may invest and reinvest the funds in the Spread Account
in Permitted Investments pursuant to the terms of Section 2.9(d).At
any time following the occurrence of a Termination Event or the Termination
Date, the Administrative Agent may direct the withdrawal of amounts from the
Spread Account for application to the acquisition of a Hedging Agreement in form
and substance acceptable to the Administrative Agent.




Section
6.5.             
[Reserved.]




Section
6.6.              Realization Upon Defaulted
Receivables.




The
Servicer will use commercially reasonable efforts in accordance with the Credit
and Collection Policy and consistent with the Servicing Standard to foreclose
upon or repossess, as applicable, or otherwise comparably convert the ownership
of any Related Property relating to a Defaulted Receivable as to which no
satisfactory arrangements can be made for collection of delinquent payments. The
Servicer will comply with the Credit and Collection Policy, the Servicing
Standard and Applicable Law in realizing upon such Related Property, and employ
practices and procedures including commercially reasonable efforts to enforce
all obligations of Obligors, foreclosing upon, repossessing and causing the sale
of such Related Property at public or private sale in circumstances other than
those described in the preceding sentence. Without limiting the generality of
the foregoing, unless the Administrative Agent has specifically given
instruction to the contrary, the Servicer may (i) cause the sale of any such
Related Property to the Servicer or its Affiliates for a purchase price equal to
the then fair market value thereof, any such sale to be evidenced by a
certificate of a Responsible Officer of the Servicer delivered to the
Administrative Agent setting forth the Receivable, the Related Property, the
sale price of the Related Property and an appraisal supporting the fair market
value of such Related Property or (ii) bid on or purchase any Related Property
at a private or public sale, in which case the deliverables required under clause (i)above will
not be necessary. In any case in which any such Related Property has suffered
damage, the Servicer will not expend funds in connection with any repair or
toward the foreclosure or repossession of such Related Property unless it has a
reasonable expectation that such repair and/or foreclosure or repossession will
increase the Recoveries by an amount greater than the amount of such expenses.
The Servicer will remit to the Collection Account the Recoveries received in
connection with the sale or disposition of Related Property relating to a
Defaulted Receivable.


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Section
6.7.             
Servicing
Compensation.




As
compensation for its servicing activities hereunder and reimbursement for its
expenses, the Servicer shall be entitled to receive the Servicing Fee to the
extent of funds available therefor pursuant to the provisions of Section 2.7and Section 2.8,as
applicable.




Section
6.8.             
Payment of Certain
Expenses by Servicer.




The
Servicer will be required to pay all expenses incurred by it in connection with
its activities under this Agreement, including fees and disbursements of its
independent accountants, Taxes imposed on the Servicer, expenses incurred by the
Servicer in connection with payments and reports pursuant to this Agreement, and
all other fees and expenses not expressly stated under this Agreement for the
account of the Borrower, but excluding Liquidation Expenses incurred as a result
of activities contemplated by Section 6.6.The
initial Servicer will be required to pay all reasonable fees and expenses owing
to any bank or trust company in connection with the maintenance of the Accounts.
The initial Servicer shall be required to pay such expenses for its own account
and shall not be entitled to any payment therefor other than the Servicing Fee.
Notwithstanding the foregoing, if the Backup Servicer is appointed successor
Servicer hereunder, such successor Servicer shall be entitled to reimbursement
from the Borrower for all reasonable out-of-pocket expenses incurred by it in
connection with its servicing activities hereunder.




Section
6.9.             
Reports.




(a)            Borrowing Notice.The
Borrower (or the Servicer on its behalf) will provide the Administrative Agent,
the Backup Servicer and the Collateral Custodian a Borrowing Notice within the
time frame provided in Section 2.2(a),with
respect to each Advance, with a Borrowing Base Certificate, updated as of such
date.




(b)            Servicing Report.On
each Reporting Date, the Servicer will provide to the Borrower, the
Administrative Agent, the Collection Account Bank, the Backup Servicer and the
Collateral Custodian a monthly statement (a “Servicing Report”),including a calculation of the Borrowing Base and calculations of the
financial covenants set forth in Sections 5.4(q), (u),(v), (w) and (x)) as of the last day of the
immediately preceding Collection Period signed by a Responsible Officer of the
Servicer and the Borrower and substantially in the form of Exhibit
C.


(c)            Servicer’s Certificate.Together with each Servicing Report, the Servicer shall submit to the
Administrative Agent (with a copy to the Collection Account Bank, the Backup
Servicer and the Collateral Custodian) a certificate substantially in the form
of Exhibit H(a
“Servicer’s
Certificate”),signed by a Responsible Officer of the Servicer, which
shall include a certification by such Responsible Officer that, to its
knowledge, no Termination Event or Unmatured Termination Event has
occurred.


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(d)           Financial Statements.For so long as the Servicer is Sparta or an Affiliate thereof, the
Servicer will submit to the Administrative Agent, (A) within forty-five (45)
days after the end of each fiscal quarter (or such longer period as Sparta is
given to file its Form 10-Q disclosure with the U.S. Securities and Exchange
Commission but in no event longer than sixty (60) days after the end of such
fiscal quarter), commencing with the fiscal quarter ending on January 31, 2009,
consolidated unaudited financial statements of the Originator (including
consolidating schedules for the Borrower) for the most recent fiscal quarter,
(B) within ninety (90) days after the end of each fiscal year (or such longer
period as Sparta is given to file its Form 10-K disclosure with the U.S.
Securities and Exchange Commission but in no event longer than one hundred
twenty (120) days after the end of such fiscal year), commencing with the fiscal
year ending on April 30, 2009, consolidated audited financial statements of the
Originator (including consolidating schedules for the Borrower), audited by a
firm of nationally recognized independent public accountants reasonably
acceptable to the Administrative Agent and (C) on each Reporting Date, unaudited
financial statements of the Originator for the most recent Collection Period so
that the Administrative Agent can verify that the Originator is in compliance
with the financial covenants set forth in Sections 5.4(u),(v), (w) and (x). The Borrower will submit to the
Administrative Agent, (A) within forty-five (45) days after the end of each
fiscal quarter, commencing with the fiscal year ending on January 31, 2009,
unaudited financial statements of the Borrower for the most recent fiscal
quarter and (B) within ninety (90) days after the end of each fiscal year,
commencing with the fiscal year ending on April 30, 2009, audited financial
statements of the Borrower, audited by a firm of nationally recognized
independent public accountants reasonably acceptable to the Administrative
Agent.





(e)        
   Servicing System.The
initial Servicer shall provide the Administrative Agent and the Backup Servicer
on an ongoing basis with live on-line access to its loan servicing system
together with any requisite license with respect to such access.




(f)           
Historical Delinquency
and Default Information.On each Reporting Date in February, May, August
and November, the Servicer will provide to the Backup Servicer, the
Administrative Agent and the Lenders, a quarterly statement, including
historical portfolio delinquency, static pool default and net loss information
on its managed portfolio, with respect to the related calendar quarter, signed
by a Responsible Officer of the Servicer and the Borrower in form and substance
acceptable to the Administrative Agent in its discretion.




Section
6.10.            Annual Statement as to
Compliance.




The
Servicer will provide to the Administrative Agent and the Backup Servicer,
within 30 days following the end of each fiscal year of the Servicer, commencing
with the fiscal year ending on April 30, 2009, a certificate signed by a
Responsible Officer of the Servicer certifying that (a) a review of the
activities of the Servicer, and the Servicer’s performance pursuant to this
Agreement, for the fiscal period ending on the last day of such fiscal year has
been made under such Person’s supervision and (b) the Servicer has performed or
has caused to be performed in all material respects all of its obligations under
this Agreement throughout such year and no Servicer Default has
occurred.


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Section
6.11.            Annual Independent Public
Accountant’s/Consultant’s ServicingReports.




For so
long as Sparta or an Affiliate thereof is the Servicer, the Servicer will cause
a firm of nationally recognized independent public accountants or a third party
advisory or consulting firm reasonably acceptable to the Administrative Agent
(who may also render other services to the Servicer) to furnish to the
Administrative Agent, within 90 days following the end of each fiscal year of
the Servicer, commencing with the fiscal year ending on April 30, 2009: (i) a
report relating to such fiscal year to the effect that (a) such firm has
reviewed such Servicer Reports, Servicer Certificates and the supporting
documentation and records therefor relating to the servicing of the Collateral
as it deemed necessary in order to issue such report, and (b) based on such
examination, such firm is of the opinion that the Servicer’s assertion that it
has satisfied the minimum servicing standards set forth in this Agreement as of
and for such fiscal year is fairly stated, in all material respects, except for
such exceptions as it believes to be immaterial and such other exceptions as
will be set forth in such firm’s report and (ii) a report covering such fiscal
year to the effect that such accountants have applied certain agreed-upon
procedures (including, but not limited to, cash reconciliation) to such Servicer
Reports, Servicer Certificates and the supporting documentation and records
therefor relating to the Collateral and compared the information contained in
such Servicing Reports and the Servicer’s Certificates delivered during the
period covered by such report with the related supporting documentation and
records and that no matters came to the attention of such accountants that
caused them to believe that such servicing was not conducted in compliance with
this Article VI,except for such exceptions as such accountants shall believe to be
immaterial and such other exceptions as shall be set forth in such statement. In
the event such independent public accountants require the Backup Servicer to
agree to the procedures to be performed by such firm in any of the reports
required to be prepared pursuant to this Section 6.11,the
Servicer shall direct the Collateral Custodian or Backup Servicer, as
applicable, in writing to so agree; it being understood and agreed that the
Backup Servicer will deliver such letter of agreement in conclusive reliance
upon the direction of the Servicer, and the Backup Servicer has not made any
independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures.




Section
6.12.            The Servicer Not to
Resign.




The
Servicer shall not resign from the obligations and duties hereby imposed on it
except upon the Servicer’s determination that the performance of its duties
hereunder is or has become illegal under Applicable Law. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion of
Counsel to such effect addressed and delivered to the Administrative Agent. No
such resignation shall become effective until a Successor Servicer shall have
assumed the responsibilities and obligations of the Servicer in accordance with
Section
6.2.




Section
6.13.            Servicer
Defaults.




If any
one of the following events (a “Servicer Default”)shall occur (and is not waived in writing by the Administrative
Agent):




(a)            any
failure by the Servicer to make any payment, transfer or deposit into the
Collection Account, or, if applicable, to give instructions or notice to the
Collection Account Bank to make such payment, transfer or deposit (including,
without limitation, with respect to the remittance of Collections) as required
by this Agreement or the other Transaction Documents which continues unremedied
for a period of two (2) Business Days;


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(b)            any
failure on the part of the Servicer duly to observe or perform in any material
respect any other covenants or agreements of the Servicer set forth in this
Agreement or the other Transaction Documents to which the Servicer is a party
and the same continues unremedied for a period of five (5) Business Days (if
such failure can be remedied) after the earlier to occur of (i) the date on
which written notice of such failure shall have been received by the Servicer
from the Administrative Agent or any Lender or (ii) the date on which a
Responsible Officer of the Servicer, the Originator or the Borrower acquires
actual knowledge thereof;




(c)            an
Insolvency Event with respect to the Servicer;




(d)            any
failure by the Servicer to deliver any required report or certificate
hereunder;




(e)            any
representation, warranty or certification made by the Servicer in any
Transaction Document or in any certificate delivered pursuant to any Transaction
Document shall prove to have been incorrect in any material respect when made
and continues to be unremedied for a period of five (5) Business Days (if such
failure can be remedied) after the earlier to occur of (i) the date on which
written notice of such incorrectness shall have been received by the Servicer
from the Administrative Agent or any Lender or (ii) the date on which a
Responsible Officer of the Servicer, the Borrower or the Originator acquires
actual knowledge thereof; or




(f)            
any Termination Event shall have occurred;




then
notwithstanding anything herein to the contrary, the Administrative Agent, by
written notice to the Servicer (with a copy to the Collection Account Bank and
the Backup Servicer) (a “Servicer Termination
Notice”),may terminate all of the rights and obligations of the Servicer
as Servicer under this Agreement (other than fees or expenses owed to the
Servicer which have accrued or been incurred prior to the delivery of the
Servicer Termination Notice).




Section
6.14.            Appointment of Successor
Servicer.




(a)            On
and after (i) the receipt by the Servicer and the Backup Servicer of a Servicer
Termination Notice pursuant to Section 6.13or (ii)
the non-renewal of the Servicing Term pursuant to Section 6.1(e), the Servicer
shall continue to perform all servicing functions under this Agreement until the
date specified in the Servicer Termination Notice or otherwise specified by the
Administrative Agent in writing and shall be entitled to receive, to the extent
of funds available therefor pursuant to Section 2.7or Section 2.8,as
applicable, the Servicing Fee therefor until such date; providedthat any fees or
expenses owed to the Servicer attributable to the period prior to such date
shall accrue and remain payable. The Administrative Agent may at any time
following delivery of a Servicer Termination Notice to the Backup Servicer in
writing or the non-renewal of the Servicing Term, in its sole discretion,
appoint the Backup Servicer as the Servicer hereunder, and the Backup Servicer
shall on such date assume all obligations of the Servicer hereunder with respect
to servicing of the Collateral, and all authority and power of the Servicer
under this Agreement shall pass to and be vested in the Backup Servicer; providedthat unless
otherwise specified in the Servicer Termination Notice or the notice of the
non-renewal of the Servicing Term, the Backup Servicer shall assume all
obligations of the Servicer no later than five (5) Business Days after its
receipt of the Servicer Termination Notice or the notice of the non-renewal of
the Servicing Term. As compensation therefor, the Backup Servicer shall
thereafter be entitled to the Servicing Fee together with any other rights to
reimbursement to which the Servicer is entitled as specified herein, plus
Transition Expenses. In the event that the Administrative Agent does not so
appoint the Backup Servicer, there is no Backup Servicer or the Backup Servicer
is unable to assume such obligations on such date (other than in connection with
the Backup Servicer declining to continue to act as Servicer, in which case, the
terms of Section
6.14(f)shall govern), the Administrative Agent shall as promptly as
possible appoint a successor Servicer (the “Successor Servicer”),and such Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Administrative Agent and each Lender. In
the event that a Successor Servicer has not accepted its appointment at the time
when the Servicer ceases to act as Servicer, the Administrative Agent may
petition a court of competent jurisdiction to appoint any established financial
institution, having a net worth of not less than United States $50,000,000 and
whose regular business includes the servicing of loans, as the Successor
Servicer hereunder pursuant to the process set forth in Section
6.14(f).




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(b)            The
Backup Servicer as successor Servicer undertakes to perform only such duties and
obligations as are specifically set forth in this Agreement, it being expressly
understood by all parties hereto that there are no implied duties or obligations
of the successor Servicer hereunder.




(c)            The
Servicer agrees to cooperate and use its best efforts in effecting the
transition of the responsibilities and rights of servicing of the Receivables,
including, without limitation, the transfer to the Backup Servicer as successor
Servicer for the administration by it of all cash amounts that shall at the time
be held by Servicer for deposit, or have been deposited by the Servicer, or
thereafter received with respect to the Receivables and the delivery to the
Backup Servicer as successor Servicer in an orderly and timely fashion of all
files and records with respect to the Receivables and a computer tape in
readable form containing all information necessary to enable the Backup Servicer
as successor Servicer to service the Receivables. In addition, the Servicer
agrees to cooperate and use its best efforts in providing at the Servicer’s
expense to the Backup Servicer, as successor Servicer, with a list of key
servicing personnel and contact information, reasonable access (including at the
premises of the Servicer) to the Servicer’s employees, and any and all of the
books, records (in electronic or other form) or other information reasonably
requested by it to enable the Backup Servicer, as successor Servicer, to assume
the servicing functions hereunder.




(d)            The
Backup Servicer as successor Servicer is authorized and empowered to execute and
deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do so or accomplish all other acts
or things necessary or appropriate to effect the purposes of such Servicer
Termination Notice or non-renewal of the Servicing Term or to perform the duties
of the Servicer. The Servicer will provide the Backup Servicer, as successor
Servicer, with a power of attorney stating such (at such time as the Backup
Servicer becomes successor Servicer).




91




(e)            Upon
its appointment, the Backup Servicer (subject to Section 6.14(a)) or the
Successor Servicer, as applicable, shall be the successor in all respects to the
Servicer with respect to servicing functions under this Agreement and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof, and all references in
this Agreement to the Servicer shall be deemed to refer to the Backup Servicer
or the Successor Servicer, as applicable; providedthat the Backup
Servicer or Successor Servicer, as applicable, shall have (i) no liability with
respect to any action performed by the terminated Servicer prior to the date
that the Backup Servicer or Successor Servicer, as applicable, becomes the
successor to the Servicer or any claim of a third party based on any alleged
action or inaction of the terminated Servicer, (ii) no obligation to perform any
repurchase or advancing obligations, if any, of the Servicer unless it elects to
in its sole discretion, (iii) no obligation to pay any taxes required to be paid
by the Servicer (provided that the Backup Servicer or Successor Servicer, as
applicable, shall pay any income taxes for which it is liable), (iv) no
obligation to pay any of the fees and expenses of any other party to the
transactions contemplated hereby, (v) no liability or obligation with respect to
any Servicer indemnification obligations of any prior Servicer, (vi) no
obligation to make payments with respect to any losses on investments made by or
at the direction of the Servicer, (vii) no obligation to take any legal action
which the Backup Servicer in its reasonable opinion believes subjects it to any
liability in connection with such legal action unless it shall have been assured
to its reasonable satisfaction that it will be indemnified for such liabilities,
and (viii) no liability with respect to any action performed, or breaches or
defaults caused, by any prior Servicer prior to its appointment, or any claim of
a third party based on any alleged action of any prior Servicer. The
indemnification obligations of the Backup Servicer or the Successor Servicer, as
applicable, upon becoming a successor Servicer, are expressly limited to those
arising on account of its gross negligence, bad faith or willful misconduct. In
addition, the Backup Servicer or Successor Servicer, as applicable, shall have
no liability relating to the representations and warranties of the initial
Servicer contained in Article IVor the
covenants of the Servicer set forth in Sections 5.4(d)(ii),
(d)(iii), (i), (j), (k), (m), and (p)(insofar as such covenants relate
to the Borrower or the initial Servicer).




(f)            Upon
the Backup Servicer receiving notice that it is required to serve as the
Servicer hereunder pursuant to the foregoing provisions of this Section 6.14,the
Backup Servicer will promptly begin the transition to its role as Servicer. In
the event the Backup Servicer declines to continue to act as Servicer hereunder,
the Backup Servicer shall solicit, by public announcement, bids from banks and
specialty finance companies meeting the qualifications set forth in Section 6.14(a).Such
public announcement shall specify that the Successor Servicer shall be entitled
to the full amount of the Servicing Fee as servicing compensation. Within thirty
(30) days after any such public announcement, the Backup Servicer shall
negotiate and effect the sale, transfer and assignment of the servicing rights
and responsibilities hereunder to a qualified party acceptable to the
Administrative Agent submitting a qualifying bid. The Backup Servicer shall
deduct from any sum received by the Backup Servicer from the successor to the
Servicer in respect of such sale, transfer and assignment, all costs and
expenses of any public announcement, of conducting such sale and of any sale,
transfer and assignment of the servicing rights and responsibilities hereunder.
After such deductions, the remainder of such sum shall be paid by the Backup
Servicer to the Servicer at the time of such sale, transfer and assignment to
the Servicer’s successor. If no bid from a qualified potential Successor
Servicer is received or if no sale, transfer and assignment of the servicing
rights and responsibilities hereunder shall have been concluded within thirty
(30) days after such public announcement, the Backup Servicer may, in its
discretion, appoint, or petition a court of competent jurisdiction to appoint,
any established servicing institution as the successor to the Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer hereunder. As compensation, any Successor Servicer
(including, without limitation, the Administrative Agent) so appointed shall be
entitled to receive the Servicing Fee, including, without limitation, Transition
Expenses. The Backup Servicer and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. No appointment of a successor to the Servicer hereunder shall be
effective until written notice of such proposed appointment shall have been
provided by the Backup Servicer to the Borrower, the Administrative Agent and
each Lender and the Backup Servicer shall have consented thereto. The Backup
Servicer shall not resign as Servicer until a Successor Servicer has been
appointed and accepted such appointment. Notwithstanding anything to the
contrary contained herein, in no event shall Lyon, in any capacity, be liable
for any Servicing Fee or for any differential in the amount of the Servicing Fee
paid hereunder and the amount necessary to induce any Successor Servicer under
this Agreement and the transactions set forth or provided for by this
Agreement.




92




(g)            Notwithstanding
anything contained in this Agreement to the contrary, a Successor Servicer is
authorized to accept and rely on all of the accounting, records (including
computer records) and work of the prior Servicer relating to the Receivables
(collectively, the “Predecessor Servicer Work
Product”)without any audit or other examination thereof, and such
Successor Servicer shall have no duty, responsibility, obligation or liability
for the acts and omissions of the prior Servicer. If any error, inaccuracy,
omission or incorrect or non-standard practice or procedure (collectively, “Errors”)exists in
any Predecessor Servicer Work Product and such Errors make it materially more
difficult to service or should cause or materially contribute to the Successor
Servicer making or continuing any Errors (collectively, “ContinuedErrors”),such
Successor Servicer shall have no duty, responsibility, obligation or liability
for such Continued Errors; providedthat such Successor
Servicer agrees to use commercially reasonable efforts to prevent further
Continued Errors. In the event that the Successor Servicer becomes aware of
Errors or Continued Errors, it shall, with the prior consent of the
Administrative Agent, use commercially reasonable efforts to reconstruct and
reconcile such data as is commercially reasonable to correct such Errors and
Continued Errors and to prevent future Continued Errors. Such Successor Servicer
shall be entitled to recover its costs thereby expended in accordance with Section 2.7or Section 2.8,as
applicable.




ARTICLE
VII




THE
BACKUP SERVICER




Section
7.1.            Designation of the Backup
Servicer.




(a)            Initial Backup Servicer.The backup servicing role with respect to the Collateral shall be
conducted by the Person designated as Backup Servicer hereunder from time to
time in accordance with this Section 7.1.Until
the Administrative Agent shall give to Lyon a Backup Servicer Termination
Notice, Lyon is hereby designated as, and hereby agrees to perform the duties
and obligations of, a Backup Servicer pursuant to the terms hereof.




(b)            Successor Backup Servicer.Upon the Backup Servicer’s receipt of Backup Servicer Termination Notice
from the Administrative Agent of the designation of a replacement Backup
Servicer pursuant to the provisions of Section 7.5,the
Backup Servicer agrees that it will terminate its activities as Backup Servicer
hereunder.


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Section
7.2.          
   Duties of the Backup
Servicer.




(a)           Appointment.The
Borrower and the Administrative Agent, as agent for the Secured Parties, each
hereby appoints Lyon to act as Backup Servicer, for the benefit of the Secured
Parties, as from time to time designated pursuant to Section 7.1.The
Backup Servicer hereby accepts such appointment and agrees to perform the duties
and obligations with respect thereto set forth herein.




(b)           Duties.From the
Closing Date and until its removal pursuant to Section7.5, the
Backup Servicer shall perform, on behalf of the Administrative Agent and the
Secured Parties, the following duties and obligations:




(i)           Before
the Closing Date, the Servicer shall deliver and the Backup Servicer shall
accept from the Servicer delivery of the information required to be set forth in
the Servicing Reports (if any) in hard copy and in Microsoft EXCEL® or a
comparable format.




(ii)           Not
later than 12:00 noon on each Reporting Date, the Servicer shall deliver to the
Backup Servicer the loan tape, which shall include any information relating to
the Receivables reasonably requested by the Backup Servicer and shall include,
but not be limited to, the following information: (x) for each Receivable, the
name and number of the related Obligor, the collection status, the loan status,
the Powersports Vehicle category, the date of each Scheduled Payment and the
Outstanding Receivable Balance, (y) the Borrowing Base and (z) the Aggregate
Outstanding Receivable Balance (collectively, the “Tape”). The Backup Servicer
shall accept delivery of the Tape.




(iii)          Provided
that the Backup Servicer has received all reports, data and information from the
Servicer within the time frames set forth in this Section and Section 6.9, prior
to the related Payment Date, the Backup Servicer shall review the Servicing
Report to ensure that it is complete on its face and that the following items in
such Servicing Report have been accurately calculated, if applicable, and
reported: (A) the Borrowing Base, (B) the Backup Servicing Fee, (C) the
Receivables that are Delinquent Receivables or Defaulted Receivables and (D) the
Aggregate Outstanding Receivable Balance. The Backup Servicer shall provide the
Administrative Agent and the Servicer with a monthly certification substantially
in the form attached hereto as Exhibit K(the “Backup Servicer Monthly
Certification”)confirming the accurate calculation of such items in the
Servicing Report and that the Servicing Report is complete on its face within
two (2) Business Days of receiving all of such reports, data and information for
the related Payment Date. In the event of any discrepancy with the Servicing
Report based on such review, the Backup Servicer shall notify the Administrative
Agent and the Servicer of such discrepancy not later than the Business Day
preceding such Payment Date.


94




(iv)         
If the Servicer disagrees with the certification provided under paragraph (iii)above
by the Backup Servicer or if the Servicer has not reconciled any material
discrepancy, the Backup Servicer agrees to confer with the Servicer to resolve
such disagreement on or prior to the next succeeding date of determination and
shall settle such discrepancy with the Servicer if possible, and notify the
Administrative Agent of the resolution thereof. The Servicer hereby agrees to
cooperate at its own expense with the Backup Servicer in reconciling any
discrepancies herein. If within twenty (20) days after the delivery of the
certification provided under paragraph (iii)above
by the Backup Servicer such discrepancy is not resolved, the Backup Servicer
shall promptly notify the Administrative Agent of the continued existence of
such discrepancy. Following receipt of such notice by the Administrative Agent,
the Servicer shall deliver to the Administrative Agent and the Backup Servicer
no later than the next Payment Date a certificate describing the nature and
amount of such material discrepancies and the actions the Servicer proposes to
take with respect thereto.




(c)            Reliance on Tape.With respect to the duties described in Section 7.2(b),except as expressly set forth herein, the Backup Servicer, is entitled to
rely conclusively, and shall be fully protected in so relying, on the contents
of each Tape, including, but not limited to, the completeness and accuracy
thereof, provided by the Servicer.




Section
7.3.            
 Merger or
Consolidation.




Any
Person (i) into which the Backup Servicer may be merged or consolidated, (ii)
that may result from any merger or consolidation to which the Backup Servicer
shall be a party, or (iii) that may succeed to the properties and assets of the
Backup Servicer substantially as a whole, which Person in any of the foregoing
cases executes an agreement of assumption to perform every obligation of the
Backup Servicer hereunder, shall be the successor to the Backup Servicer under
this Agreement without further act on the part of any of the parties to this
Agreement, provided (A) such Person is organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or any domestic branch of a foreign bank), and (B)(a) has either (1) a
long-term unsecured debt rating of “A” or better by S&P and “A2” or better
by Moody’s or (2) a short-term unsecured debt rating or certificate of deposit
rating of “A-1” or better by S&P or “P-1” by Moody’s, (b) has a parent
corporation which has either (1) a long-term unsecured debt rating of “A” or
better by S&P and “A2” or better by Moody’s or (2) a short-term unsecured
debt rating or certificate of deposit rating of “A1” or better by S&P and
“P-1” by Moody’s or (c) is otherwise acceptable to the Administrative
Agent.




Section 7.4.         
    Backup Servicing
Compensation.




As
compensation for its backup servicing activities hereunder, the Backup Servicer
shall be entitled to receive the Backup Servicing Fee and other amounts payable
in accordance with the Backup Servicer Fee Letter to the extent of funds
available therefor pursuant to Section
2.7and Section 2.8,as
applicable. The Backup Servicer’s entitlement to receive the Backup Servicing
Fee shall cease (excluding any unpaid outstanding amounts as of that date) on
the  earliest to occur of: (i) it becoming the successor Servicer,
(ii) its removal as Backup Servicer pursuant to Section 7.5,or (iii)
the termination of this Agreement. In each such case, the Backup Servicer shall
be entitled to its Backup Servicer Fee earned and reimbursable expenses incurred
through the date of such event. Upon becoming successor Servicer pursuant to
Section 6.14,the Backup Servicer shall be entitled to the Servicing Fee, Transition
Expenses and reimbursement rights to which the successor Servicer is entitled
hereunder.


95


Section
7.5.Backup Servicer
Removal.
  The
Backup Servicer may be removed, with or without cause, by the Administrative
Agent by notice given in writing to the Backup Servicer (the “Backup Servicer TerminationNotice”).In the event of any such removal, a replacement Backup Servicer may be
appointed by  the Administrative Agent; providedthat if no Servicer
Default is then existing, the Administrative Agent shall obtain the prior
written consent of the Servicer of such new Backup Service, such consent not to
be unreasonably withheld or delayed.
  Section
7.6.      Limitation on
Liability.
  (a)       The
Backup Servicer undertakes to perform only such duties and obligations as are
specifically set forth in this Agreement, it being expressly understood by all
parties hereto that there are no implied duties or obligations of the Backup
Servicer hereunder. Without limiting the generality of the foregoing, the Backup
Servicer, except as expressly set forth herein, shall have no obligation to
supervise, verify, monitor or administer the performance of the Servicer. The
Backup Servicer may act through its agents, nominees, attorneys and custodians
in performing any of its duties and obligations under this Agreement, it being
understood by the parties hereto that the Backup Servicer will be responsible
for any misconduct or negligence on the part of such agents, attorneys or
custodians. Neither the Backup Servicer nor any of its officers, directors,
employees or agents shall be liable, directly or indirectly, for any damages or
expenses arising out of the services performed under this Agreement other than
damages or expenses that result from the gross negligence, willful misconduct or
bad faith of it or them or the failure to perform materially in accordance with
this Agreement. In no event shall the Backup Servicer be required to expend or
risk its own funds or otherwise incur any financial liability in the performance
of its duties hereunder or in the exercise of any of its rights and powers
hereunder if, in its sole judgment, it shall believe that repayment of such
funds or adequate indemnity against such risk or liability is not assured to
it.
  (b)      The
Backup Servicer shall not be liable for any obligation of the Servicer contained
in this Agreement or for any errors of the Servicer contained in any computer
tape, certificate or other data or document delivered to the Backup Servicer
hereunder or on which the Backup Servicer must rely in order to perform its
obligations hereunder, and the Secured Parties, the Administrative Agent and the
Collateral Custodian each agree to look only to the Servicer to perform such
obligations. Except as expressly set forth herein, the Backup Servicer shall
have no responsibility and shall not be in default hereunder or incur any
liability for any failure, error, malfunction or any delay in carrying out any
of its duties under this Agreement if such failure or delay results from the
Backup Servicer acting in accordance with information prepared or provided by a
Person other than the Backup Servicer or the failure of any such other Person to
prepare or provide such information. The Backup Servicer shall have no
responsibility, shall not be in default and shall incur no liability for (i) any
act or failure to act of any third party, including the Servicer, (ii) any
inaccuracy or omission in a notice or communication received by the Backup
Servicer from any third party, (iii) the invalidity or unenforceability of any
Collateral under Applicable Law, (iv) the breach or inaccuracy of any
representation or warranty made by any third party with respect to any
Collateral, or (v) the acts or omissions of any successor Backup
Servicer.
  96
  (c)     
Notwithstanding anything to the contrary herein, the Backup Servicer shall not
be liable for any delays in performance for causes beyond its control,
including, but not limited to, acts of war or terrorism, powerline failures,
fire, flood, epidemic, acts of the Borrower, the Servicer or the Administrative
Agent or restriction by civil or military authority in their sovereign or
contractual capacities. In the event of any such delay, performance shall be
extended for so long as such period of delay.
  Section
7.7.Resignation by the Backup
Servicer.
  Prior to
its appointment as the Successor Servicer pursuant to this Agreement, the Backup
Servicer may resign as Backup Servicer under this Agreement upon not less than
ninety (90) days notice to the Borrower and the Administrative Agent. In the
event of such resignation, the Backup Servicer shall return to the Servicer any
and all documents, materials, work products and all copies made thereof, which
were obtained by the Backup Servicer from the Servicer (other than such copies
that the Backup Servicer is required to retain by law rule or regulation) within
three (3) Business Days of its resignation.
  If the
Backup Servicer is appointed to be the Successor Servicer, after such date, the
Backup Servicer (as the Successor Servicer) may at any time resign and terminate
its obligations under this Agreement upon at least ninety (90) days’ prior
written notice to the Borrower and the Administrative Agent; providedthat no such
resignation or termination shall be effective until a replacement Successor
Servicer is appointed (and accepts such appointment) pursuant to the terms of
Section 6.14.Promptly after receipt of notice of the Backup Servicer’s intended
resignation as the Successor Servicer, the Administrative Agent shall appoint a
replacement Successor Servicer pursuant to the terms of Section 6.14,and the
Administrative Agent will use its commercially reasonable efforts to appoint
such a replacement Successor Servicer. If the Administrative Agent has not
appointed a replacement Successor Servicer within sixty (60) days after receipt
of the Backup Servicer’s notice of resignation as the Successor Servicer, the
Backup Servicer, at the expense of the Borrower, may petition any court of
competent jurisdiction to appoint a replacement Successor Servicer. One original
counterpart of any aforementioned instrument of appointment shall be delivered
to each of the Borrower, the Administrative Agent and the replacement Successor
Servicer.
  ARTICLE
VIII
  THE
COLLATERAL CUSTODIAN
  Section
8.1.      Designation of Collateral
Custodian.
  (a)    
 Initial
Collateral Custodian.The role of collateral custodian with respect to
the Required Loan Files shall be conducted by the Person designated as
Collateral Custodian hereunder from time to time in accordance with this Section 8.1.Until
the Administrative Agent shall give to U.S. Bank a Collateral Custodian
Termination Notice, U.S. Bank is hereby appointed as, and hereby accepts such
appointment and agrees to perform the duties and obligations of, Collateral
Custodian pursuant to the terms hereof.
  97
  (b)    
 Successor
Collateral Custodian.Upon the Collateral Custodian’s receipt of a
Collateral Custodian Termination Notice from the Administrative Agent of the
designation of a successor Collateral Custodian pursuant to the provisions of
Section 8.5,the Collateral Custodian agrees that it will terminate its activities as
Collateral Custodian hereunder.
  Section
8.2.      Duties of Collateral
Custodian.
  (a)       Appointment.The
Borrower and the Administrative Agent each hereby appoints U.S. Bank to act as
Collateral Custodian, for the benefit of the Administrative Agent, as agent for
the Secured Parties. The Collateral Custodian hereby accepts such appointment
and agrees to perform the duties and obligations with respect thereto set forth
herein.
  (b)      Duties.On or before
the initial Funding Date, and until its removal pursuant to Section 8.5,the
Collateral Custodian shall perform, on behalf of the Administrative Agent and
the Secured Parties, the following duties and obligations:
  (i)  
The Collateral Custodian shall take and retain custody of the Required Loan
Files delivered by the Borrower pursuant to Section 3.2hereof in
accordance with the terms and conditions of this Agreement, as bailee for the
purposes of the relevant UCC (a “Bailee”),all for
the benefit of the Secured Parties and subject to the Lien thereon in favor of
the Administrative Agent, as agent for the Secured Parties. Within three (3)
Business Days of its receipt of any Required Loan File, the Collateral Custodian
shall review such Required Loan File to confirm that (A) the loan documents and
instruments in such Required Loan File have been properly executed and have no
missing or mutilated pages, (B) there is evidence that UCC and other filings (to
extent identified on the related Receivable Checklist as being required by the
Required Loan File) have been made, (C) if listed on the Receivable Checklist,
an Insurance Policy exists with respect to any real or personal property
constituting the Related Property, and (D) the related original Outstanding
Receivable Balance, loan/lease number, maturity date identified in the
Underlying Instruments, FICO score of the related Obligor and Obligor name and
mailing address with respect to such Receivable is referenced on the related
Receivable Checklist and is not a duplicate Receivable (based on the loan/lease
number) (such items (A) through (D) collectively, the “Review Criteria”).In order to facilitate the foregoing review by the Collateral Custodian,
in connection with each delivery of Required Loan File hereunder to the
Collateral Custodian, the Servicer shall provide to the Collateral Custodian an
electronic file (in Microsoft EXCEL® or a comparable format) that contains the
Receivable number, Obligor name, original Outstanding Receivable Balance and the
related Receivable Checklist. At the conclusion of such review, the Collateral
Custodian shall deliver to the Servicer, the Borrower and the Administrative
Agent a collateral receipt in the form of Exhibit Lattached
hereto (a “Collateral Receipt”).If any Collateral Receipt discloses any deficiencies (a “Deficiency”)in any
of the Required Loan Files, the Collateral Custodian shall promptly notify the
Administrative Agent and the Servicer of such Deficiency and provide them with
an exception report specifying the Receivables which have a Deficiency and the
Review Criteria that they fail to satisfy. The Servicer shall have fifteen (15)
Business Days to correct any non-compliance with any Review Criteria. If after
the conclusion of such time period the Servicer has still not cured any
non-compliance by a Receivable with any Review Criteria, the Collateral
Custodian shall promptly notify the Borrower and the Administrative Agent of
such determination by providing an updated exception report to such Persons
identifying, with particularity, each Receivable
and each of the applicable Review Criteria that such Receivable fails to
satisfy. In addition, if requested in writing by the Servicer and approved by
the Administrative Agent within fifteen (15) Business Days of the Collateral
Custodian’s delivery of such report, the Collateral Custodian shall return any
Receivable which fails to satisfy a Review Criteria to the Borrower or its
designee. Other than the foregoing, the Collateral Custodian shall not have any
responsibility for reviewing, inspecting or examining any Required Loan File to
determine that the contents thereof are genuine, enforceable or appropriate for
the represented purpose or that they are other than what they purport to be on
their face.
  98
  (ii)            In
taking and retaining custody of the Required Loan Files, the Collateral
Custodian shall be deemed to be acting as the Bailee of the Secured Parties;
providedthat the
Collateral Custodian makes no representations as to the enforceability of any
Required Loan File documents or the existence, perfection or priority of any
Lien on the Required Loan Files or the instruments therein; and provided furtherthat the
Collateral Custodian’s duties as agent shall be limited to those expressly
contemplated herein.
  (iii)           All
Required Loan File documents that are originals or copies shall be kept in fire
resistant facilities in accordance with the Collateral Custodian’s customary
standards for such custody, at the locations specified on Schedule IIIattached
hereto, or at such other office as shall be specified to the Administrative
Agent and the Servicer by the Collateral Custodian in a written notice delivered
at least forty-five (45) days prior to such change. All Required Loan Files
shall be identified using a barcode system and maintained in such a manner so as
to permit retrieval and access.
  (iv)           On
the third Business Day of each month, the Collateral Custodian shall provide to
the Administrative Agent and the Servicer (in a form acceptable to the
Administrative Agent and the Collateral Custodian) an updated list of
Receivables in its possession and an updated exceptions report.
  (v)            In
performing its duties, the Collateral Custodian shall use the same degree of
care and attention as it employs with respect to similar collateral that it
holds as collateral custodian for others.
  Section
8.3.Merger or
Consolidation.
  Any
Person (i) into which the Collateral Custodian may be merged or consolidated,
(ii) that may result from any merger or consolidation to which the Collateral
Custodian shall be a party, or (iii) that may succeed to the properties and
assets of the Collateral Custodian substantially as a whole, which Person in any
of the foregoing cases executes an agreement of assumption to perform every
obligation of the Collateral Custodian hereunder, shall be the successor to the
Collateral Custodian under this Agreement without further act of any of the
parties to this Agreement.
  Section
8.4.      Collateral Custodian
Compensation.
  As
compensation for its collateral custodian activities hereunder, the Collateral
Custodian shall be entitled to a Collateral Custodian Fee and other amounts
payable to it pursuant to the Collateral Custodian Fee Letter and pursuant to
the provision of Section 2.7or Section 2.8,as applicable.
The Collateral Custodian’s entitlement to receive the Collateral Custodian Fee
and such other amounts shall cease (excluding any outstanding amounts unpaid as
of such date) on the earlier to occur of: (i) its removal as Collateral
Custodian pursuant to Section 8.5or (ii)
the termination of this Agreement.
  99
  Section
8.5.      Collateral Custodian
Removal.
  The
Collateral Custodian may be removed, with or without cause, by the
Administrative Agent by notice given in writing to the Collateral Custodian (the
“Collateral CustodianTermination
Notice”)at least sixty (60) days prior to the effective date of such
removal; providedthat
notwithstanding its receipt of a Collateral Custodian Termination Notice, the
Collateral Custodian shall continue to act in such capacity until a successor
Collateral Custodian has been appointed, has agreed to act as Collateral
Custodian hereunder, and has received all Required Loan Files held by the
previous Collateral Custodian; provided,that the Collateral
Custodian shall not be required to deliver the Loan Files to a successor until
it has received all contractually due fees and reasonable out-of-pocket expenses
then owing to it pursuant to the Transaction Documents.
  Section
8.6.      Limitation on
Liability.
  (a)       The
Collateral Custodian may conclusively rely on and shall be fully protected in
acting upon, and need not verify, any certificate, instrument, opinion, notice,
letter, telegram or other document delivered to it and that in good faith it
reasonably believes to be genuine and that has been signed by the proper party
or parties. The Collateral Custodian may rely conclusively on and shall be fully
protected in acting upon the written instructions of any designated officer of
the Administrative Agent.
  (b)     
The Collateral Custodian may consult counsel satisfactory to it and the advice
or opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the advice or opinion of such
counsel.
  (c)       The
Collateral Custodian shall not be liable for any error of judgment, or for any
act done or step taken or omitted by it, in good faith, or for any mistakes of
fact or law, or for anything that it may do or refrain from doing in connection
herewith except, notwithstanding anything to the contrary contained herein, in
the case of its willful misconduct, lack of good faith or grossly negligent
performance or omission of its duties and in the case of its negligent
performance of its duties in taking and retaining custody of the Required Loan
Files.
  (d)     
The Collateral Custodian makes no warranty or representation and shall have no
responsibility (except as expressly set forth in this Agreement) as to the
content, enforceability, completeness, validity, sufficiency, value,
genuineness, ownership or transferability of the Collateral, and will not be
required to and will not make any representations as to the validity or value of
any of the Collateral. The Collateral Custodian shall not be obligated to take
any legal action hereunder that might in its judgment involve any expense or
liability unless it has been furnished with an indemnity reasonably satisfactory
to it.
  100
  (e)            The
Collateral Custodian shall have no duties or responsibilities except such duties
and responsibilities as are specifically set forth in this Agreement and no
covenants or obligations shall be implied in this Agreement against the
Collateral Custodian.
  (f)            The
Collateral Custodian shall not be required to expend or risk its own funds in
the performance of its duties hereunder.
  (g)            It
is expressly agreed and acknowledged that the Collateral Custodian is not
guaranteeing performance of or assuming any liability for the obligations of the
other parties hereto or any parties to the Collateral.
  (h)            Notwithstanding
anything to the contrary herein, the Collateral Custodian shall not be liable
for any delays in performance for causes beyond its control, including, but not
limited to, acts of war or terrorism, powerline failures, fire, flood, epidemic,
acts of the Borrower, the Servicer or the Administrative Agent or restriction by
civil or military authority in their sovereign or contractual capacities. In the
event of any such delay, performance shall be extended for so long as such
period of delay.
  (i) The
Collateral Custodian shall not be responsible for preparing or filing any
reports or returns relating to federal, state or local income taxes with respect
to this Agreement on behalf of the Borrower, the initial Servicer or the Secured
Parties.
  Section
8.7.     The Collateral Custodian Not
to Resign.
  The
Collateral Custodian may at any time resign and terminate its obligations under
this Agreement upon at least ninety (90) days’ prior written notice to the
Borrower, the Servicer and the Administrative Agent; providedthat no such
resignation or termination shall be effective until a successor Collateral
Custodian is appointed (and accepts such appointment) pursuant to the terms of
this Section 8.7.Promptly after receipt of notice of the Collateral Custodian’s intended
resignation, the Borrower shall appoint, by written instrument, a successor
Collateral Custodian which shall be acceptable to the Administrative Agent, such
acceptance not to be unreasonably withheld. If the Borrower fails to appoint a
successor custodian pursuant to the terms hereof within thirty (30) days after
receipt of the Collateral Custodian’s notice of resignation, the Administrative
Agent shall have the exclusive right to appoint by written instrument, a
successor Collateral Custodian, and the Administrative Agent will use its
commercially reasonable efforts to appoint such a Collateral Custodian. If
neither the Borrower nor the Administrative Agent has appointed a successor
Collateral Custodian within sixty (60) days after receipt of the Collateral
Custodian’s notice of resignation, the Collateral Custodian, at the expense of
the Borrower, may petition any court of competent jurisdiction to appoint a
successor Collateral Custodian. One original counterpart of any aforementioned
instrument of appointment shall be delivered to each of the Borrower, the
Administrative Agent, the Servicer and the successor Collateral
Custodian.
  101
  Section
8.8.      Release of
Documents.
  (a)          
 Release for
Servicing.From time to time and as appropriate for the enforcement
or servicing of any of the Collateral, the Collateral Custodian is hereby
authorized, upon
written receipt from the Servicer of a request for release in the form annexed
hereto as Exhibit G(a “Request for
Release”)and consented to by the Administrative Agent, to release to the
Servicer within two (2) Business Days of receipt of such request, the related
Required Loan Files set forth in such Request for Release to the Servicer. All
documents so released to the Servicer shall be held by the Servicer in trust for
the benefit of the Administrative Agent in accordance with the terms of this
Agreement. The Servicer shall return to the Collateral Custodian the Required
Loan Files (i) promptly upon the request of the Administrative Agent, or (ii)
when the Servicer’s need therefor in connection with such servicing no longer
exists, unless the Receivable shall be liquidated, in which case, upon receipt
of an additional Request for Release, the Servicer’s Request for Release
submitted pursuant to the first sentence of this subsection shall be released by
the Collateral Custodian to the Servicer.
  (b)           Release for Payment.Upon receipt by the Collateral Custodian of the Servicer’s Request for
Release (which certification shall include a statement to the effect that all
amounts received in connection with such payment or repurchase have been
credited to the Collection Account as provided in this Agreement), the
Collateral Custodian shall promptly release the related Required Loan File to
the Servicer.
  Section
8.9.      Return of Required Loan
Files and Servicing Files.
  The
Borrower may, with the prior written consent of the Administrative Agent,
require that the Collateral Custodian return each Required Loan File (a)
delivered to the Collateral Custodian in error, (b) as to which the lien on the
Related Property has been so released pursuant to Section 9.2,(c) for
which the Borrower has paid all required amounts pursuant to Section
2.15with respect to the related Receivables, or (d) that is
required to be redelivered to the Borrower in connection with the termination of
this Agreement, in each case by submitting to the Collateral Custodian and the
Administrative Agent a written request in the form of Exhibit Ghereto
(signed by both the Borrower and the Administrative Agent) specifying the
Collateral to be so returned and reciting that the conditions to such release
have been met (and specifying the Section or Sections of this Agreement being
relied upon for such release). The Collateral Custodian shall upon its receipt
of each such request for return executed by the Borrower and the Administrative
Agent promptly, but in any event within two (2) Business Days, return the
Required Loan File so requested to the Borrower.
  102
   Section
8.10. Access to Certain
Documentation and Information Regarding the Collateral;
Audits.
  The
Servicer, the Originator, the Borrower and the Collateral Custodian shall
provide to the Administrative Agent access to the Required Loan Files and all
other documentation regarding the Collateral including in such cases where the
Administrative Agent and each Lender are required in connection with the
enforcement of the rights or interests of the Secured Parties, or by applicable
statutes or regulations, to review such documentation, such access being
afforded without charge but only (i) upon two (2) Business Days prior written
request, (ii) during normal business hours and (iii) subject to the Servicer’s
and Collateral Custodian’s normal security and confidentiality procedures (or,
in the case of Lyon as the successor Servicer, upon five (5) Business Day’s
notice). Periodically at the discretion of the Administrative Agent, the
Administrative Agent may review the Servicer’s collection and administration of
the Collateral in order to assess compliance by the Servicer with the Credit and
Collection Policy and the Servicing Standard, as well as with this Agreement and
may conduct an audit of the Collateral and Required Loan Files in conjunction
with such a review. The Borrower, the Servicer and the Originator shall permit
the Administrative Agent, or its respective agents or representatives, to visit
the offices of each such Person during normal office hours and upon reasonable
notice to examine and make copies of all documents, books, records and other
information concerning the Collateral and discuss matters related thereto with
any of the officers of the Borrower, the Servicer or the Originator having
knowledge of such matters, and the Borrower shall pay the costs and expenses for
all such visits, subject to the limitations in Section 13.9.The
Borrower, the Servicer and the Originator shall permit the Administrative Agent
or its respective agents or representatives to directly contact any Obligor for
the purpose of conducting confirmation of collateral due diligence, in
accordance with procedures mutually acceptable to the Servicer and the
Administrative Agent. Without limiting the foregoing provisions of this Section 8.10,from
time to time on request of the Administrative Agent, the Collateral Custodian
shall permit certified public accountants or other independent auditors
acceptable to the Administrative Agent to conduct a review of the Required Loan
Files and all other documentation regarding the Collateral.
  ARTICLE
IX
  SECURITY
INTEREST
  Section
9.1.       Grant of Security
Interest.
  This
Agreement constitutes a security agreement and the transactions effected hereby
constitute secured loans by the Lenders to the Borrower under Applicable Law.
For such purpose, the Borrower hereby transfers, conveys, assigns and grants as
of the Closing Date to the Administrative Agent, as agent for the Secured
Parties, a lien and continuing security interest in all of the Borrower’s right,
title and interest in, to and under (but none of the obligations under) all
Collateral and all loans, securities, chattel paper, financial assets,
investment property, instruments, general intangibles, payment intangibles,
accounts, deposit accounts, money, documents, agreements, investments and all
other property and assets of any type or nature in which the Borrower has an
interest, whether now existing or hereafter arising or acquired by the Borrower,
and wherever the same may be located, to secure the prompt, complete and
indefeasible payment and performance in full when due, whether by lapse of time,
acceleration or otherwise, of the entire Facility Amount arising in connection
with this Agreement and each other Transaction Document, whether now or
hereafter existing, due or to become due, direct or indirect, or absolute or
contingent. The grant of a security interest under this Section 9.1does not
constitute and is not intended to result in a creation or an assumption by any
of the Secured Parties of any obligation of the Borrower or any other Person in
connection with any or all of the Collateral or under any agreement or
instrument relating thereto. Anything herein to the contrary notwithstanding,
(a) the Borrower shall remain liable under the Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (b) the exercise by the
Administrative Agent, as agent for the Secured Parties, of any of its rights in
the Collateral shall not release the Borrower from any of its duties or
obligations under the Collateral, and (c) no Secured Party shall have any
obligations or liability under the Collateral by reason of this Agreement, nor
shall any Secured Party be obligated to perform any of the obligations or duties
of the Borrower thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
  103
  Section
9.2.       Release of Lien on
Collateral.
  On the
date (i) any Receivable has been paid in full by the related Obligor and
deposited in the Collection Account, (ii) any Receivable becomes a Prepaid
Receivable and all amounts in respect thereof have been paid in full by the
related Obligor and deposited in the Collection Account, (iii) for which the
Borrower has paid all required amounts pursuant to Section
2.15with respect to the related Receivable, or (iv) this
Agreement terminates in accordance with the terms hereof upon full and final
payment of the Facility Amount and any other related obligations payable
hereunder, the Administrative Agent, as agent for the Secured Parties, shall
automatically and without further action be deemed to transfer, assign and
set-over to the Borrower, without recourse, representation or warranty, all the
right, title and interest of the Administrative Agent, as agent for the Secured
Parties in, to and under such Receivable (or all Receivables in the case of
clause (iv)),all related Collateral and all future monies due or to become due with
respect thereto. The Administrative Agent, as agent for the Secured Parties,
shall, at the sole expense of the Borrower, (i) execute such instruments of
release in favor of the Borrower with respect to the portion of the Collateral
to be released from the Lien of this Agreement as the Borrower may reasonably
request (in recordable form if necessary), (ii) deliver any portion of the
Collateral to be released from the Lien of this Agreement in its possession to
the Borrower and (iii) otherwise take such actions, and cause or permit the
Collateral Custodian to take such actions, as are necessary and appropriate to
release the Lien of the Administrative Agent and the Secured Parties on the
portion of the Collateral to be released and deliver to the Borrower such
portion of the Collateral to be released to the Borrower.
  Section
9.3.       Further
Assurances.
  The
provisions of Section
13.12shall apply to the security interest granted under Section 9.1as well
as to the Advances hereunder.
  Section
9.4.       Remedies.
  Subject
to the provisions of Section 10.2,upon
the occurrence of a Termination Event (which has not been waived in writing by
the Lenders), the Administrative Agent shall have, with respect to the
Collateral granted pursuant to Section 9.1,and in
addition to all other rights and remedies available to the Administrative Agent
and Secured Parties under this Agreement or other Applicable Law, all rights and
remedies of a secured party upon default under the UCC.
  Section
9.5.       Waiver of Certain
Laws.
  The
Borrower, the Originator and the Servicer each agree, to the full extent that it
may lawfully so agree, that neither it nor anyone claiming through or under it
will set up, claim or seek to take advantage of any appraisal, valuation, stay,
extension or redemption law now or hereafter in force in any locality where any
Collateral may be situated in order to prevent, hinder or delay the enforcement
or foreclosure of this Agreement, or the absolute sale of any of the Collateral
or any part thereof, or the final and absolute putting into possession thereof,
immediately after such sale, of the purchasers thereof, and each of the
Borrower, the Originator and the
Servicer, for itself and all who may at any time claim through or under it,
hereby waives, to the full extent that it may be lawful so to do, the benefit of
all such laws, and any and all right to have any of the properties or assets
constituting the Collateral marshaled upon any such sale, and agrees that the
Administrative Agent or any court having jurisdiction to foreclose the security
interests granted in this Agreement may sell the Collateral as an entirety or in
such parcels as the Administrative Agent or such court may
determine.
  104
  Section
9.6.      Power of
Attorney.
  Each of
the Borrower and the initial Servicer hereby irrevocably appoints the
Administrative Agent to act upon and during the occurrence and continuation of a
Termination Event as its true and lawful attorney (with full power of
substitution) in its name, place and stead and at its expense, in connection
with the enforcement of the rights and remedies provided for in this Agreement,
in each case to the extent so permitted hereunder, the following powers: (a) to
give any necessary receipts or acquittance for amounts collected or received
hereunder, (b) to make all necessary transfers of the Collateral in connection
with any sale or other disposition made pursuant to Section 9.4,(c) to
execute and deliver for value all necessary or appropriate bills of sale,
assignments and other instruments in connection with any such sale or other
disposition, (d) to sign any agreements, orders or other documents in connection
with or pursuant to any Transaction Document, the Borrower and the initial
Servicer hereby ratifying and confirming all that such attorney (or any
substitute) shall lawfully do hereunder and pursuant hereto and (e) such other
and further actions as the Administrative Agent reasonably may deem to be
appropriate in connection with the enforcement of all rights and remedies with
respect to the Collateral. Nevertheless, if so requested by the Administrative
Agent, the Borrower shall ratify and confirm any such sale or other disposition
by executing and delivering to the Administrative Agent or such purchaser all
proper bills of sale, assignments, releases and other instruments as may be
designated in any such request.
  ARTICLE
X
  TERMINATION
EVENTS
  Section
10.1.    Termination
Events.
  If any
one of the following termination events (“Termination Events”)shall occur:
  (a)            failure
on the part of the Borrower or the Servicer (for purposes of this Section 10.1,references to the “Servicer” shall only apply while Sparta or an
Affiliate thereof is the Servicer) to make any payment or deposit (including,
without limitation, the payment in full of all Advances Outstanding and other
Obligations on the Termination Date and any failure to remit Collections or make
any other payment or deposit required to be made by the terms of the Transaction
Documents) on the day such payment or deposit is required to be made and the
same continues unremedied for two (2) Business Days;
  (b)            the
failure of the Borrower, the Originator or the Servicer to make any payment when
due with respect to any of its Indebtedness or other obligations (after giving
effect to any applicable grace period) or such Indebtedness or other obligations
have been accelerated for any
reason or a default occurs with respect to any outstanding term securitization
issued by the Originator or an Affiliate of the Originator; or
  105
  (c)            any
representation, warranty or certification made by the Borrower, the Servicer or
the Originator in any Transaction Document or in any certificate delivered
pursuant to any Transaction Document shall prove to have been incorrect in any
material respect when made, and which continues to be unremedied for a period of
five (5) Business Days after the earlier to occur of (i) the date on which
written notice of such incorrectness shall have been received by the Borrower,
the Servicer or the Originator, as applicable, from the Administrative Agent or
(ii) the date on which a Responsible Officer of the Borrower, the Servicer or
the Originator, as applicable, acquires knowledge thereof; or
  (d)            any
failure on the part of the Borrower, the Originator or the Servicer duly to
observe or perform in any material respect any of its respective covenants or
agreements set forth in this Agreement or the other Transaction Documents,
including without limitation making a material change to the Credit and
Collection Policy or other underwriting guidelines (subject to Section 5.4(f)),and
the same continues unremedied for a period of five (5) Business Days after the
earlier to occur of (i) the date on which written notice of such failure shall
have been received by the Borrower, the Originator or the Servicer, as
applicable, from the Administrative Agent or (ii) the date on which a
Responsible Officer of the Borrower, the Originator or the Servicer, as
applicable, acquires knowledge thereof; or
  (e)            the
occurrence of an Insolvency Event relating to the Borrower or the Originator;
or
  (f)            the
rendering of one or more final judgments, decrees or orders by a court or
arbitrator of competent jurisdiction for the payment of money, in excess
individually or in the aggregate of $50,000 against the Borrower or $500,000
against either the Originator or the Servicer, and the Borrower, the Originator
or the Servicer, as applicable, shall not have either (i) discharged, paid or
provided for the discharge of any such judgment, decree or order in accordance
with its terms by the time required in such judgment, decree or order, or (ii)
perfected a timely appeal of such judgment, decree or order and caused the
execution of same to be stayed during the pendency of the appeal;
or
  (g)
(1)     other than with respect to terminations or releases
authorized by the Administrative Agent or otherwise permitted pursuant to the
terms of the Transaction Documents, any Transaction Document, or any Lien
granted thereunder, shall, in whole or in material part, terminate, cease to be
effective or cease to be the legally valid, binding and enforceable obligation
of the Borrower, the Originator or the Servicer,
  (2)       the
Borrower, the Originator or the Servicer shall, directly or indirectly, contest
in writing in any manner the effectiveness, validity, binding nature or
enforceability of any Transaction Document or any lien or security interest on
any of the Collateral, or
  106
  (3)       any
security interest on any of the Collateral securing any obligation under any
Transaction Document shall, in whole or in part, cease to be a first priority
perfected security interest (subject to Permitted Liens) except as otherwise
expressly permitted to be released in accordance with the applicable Transaction
Document for more than two (2) Business Days after the earlier to occur of (i)
the date on which written notice of such failure shall have been received by the
Borrower, the Originator or the Servicer, as applicable, from the Administrative
Agent or any other party to any Transaction Document or (ii) the date on which a
Responsible Officer of the Borrower, the Originator or the Servicer, as
applicable, acquires knowledge thereof; or
  (h)          
 the aggregate Advances Outstanding on any day exceeds the Maximum
Availability on such day and the same continues unremedied for three (3)
consecutive Business Days; or
  (i)          
  the occurrence of any event which (as determined by the
Administrative Agent in its sole discretion) causes or could reasonably be
expected to cause a Material Adverse Effect; or
  (j)            
the occurrence of a Change of Control; or
  (k)            the
annual audited financial statements of the Borrower or the Originator are
qualified in any manner; or
  (l)           
 as of the last day of each Collection Period commencing with the third
(3rd)Collection
Period immediately following the initial Funding Date, the three-month rolling
Excess Spread is less than the Minimum Excess Spread Requirement;
or
  (m)           the
Borrower shall become required to register as an “investment company” within the
meaning of the 1940 Act or the arrangements contemplated by the Transaction
Documents shall require registration of the Borrower as an “investment company”
within the meaning of the 1940 Act; or
  (n)            the
Borrower shall become taxable as a corporation or other entity for federal or
state income tax purposes; or
  (o)            the
Borrower’s or the Servicer’s business activities are terminated (other than in
connection with the Administrative Agent’s exercising its rights in connection
with a Servicer Default) for any reason, including any termination thereof by a
regulatory, tax or accounting body; or
  (p)            failure
of the Borrower to duly observe or perform in any material respect any terms,
covenants or agreements set forth under any Hedging Agreement (including the
requirements for such Hedging Agreements set forth in Section 5.1(n));or
  (q)            failure
of any Hedge Counterparty (other than the Administrative Agent or any Affiliate
of the Administrative Agent) to maintain the Long-term Rating Requirement or the
Short-term Rating Requirement and such Hedge Counterparty is not replaced with a
Hedge Counterparty acceptable to the Administrative Agent in its sole discretion
within thirty (30) days after the earlier to occur of (i) the date on which
written notice of such failure shall have been received by the Borrower, the
Originator or the Servicer, as applicable, from the Hedge Counterparty
or (ii) the date on which a Responsible Officer of the Borrower, the Originator
or the Servicer, as applicable, acquires knowledge thereof; or
  107
  (r)           the
three-month rolling average Delinquency Ratio of the Borrower exceeds 5.00%;
or
  (s)          the
three-month rolling average Default Ratio of the Borrower exceeds 3.00%;
or
  (t)           the
three-month rolling average Net Loss Ratio of the Borrower exceeds 2.50%;
or
  (u)          as
of the applicable determination dates set forth therein, the failure of the
Originator to duly observe any of its covenants set forth in Sections 5.4(q), (s),
(u), (v), (w) and (x).
  Section
10.2.    Remedies.
  (a)           Upon
the occurrence of a Termination Event, the Administrative Agent shall, at the
request of, or may, with the consent of, the Required Lenders, by notice to the
Borrower (with copies to the Backup Servicer, the Servicer and the Collateral
Custodian), declare the Termination Date to have occurred and the Facility
Amount to be immediately due and payable in full (without presentment, demand,
protest or notice of any kind all of which are hereby waived by the Borrower);
providedthat in the
case of any event described in Section  10.1(e),the Facility Amount shall be immediately due and payable in full (without
presentment, demand, notice of any kind, all of which are hereby expressly,
waived by the Borrower) and the Termination Date shall be deemed to have
occurred automatically upon the occurrence of any such event.
  (b)           Upon
the declaration or occurrence of the Termination Date, the Revolving Period
shall end and the Amortization Period shall commence. Thereafter, the Collateral
Custodian shall follow the commercially reasonable written instructions of the
Administrative Agent with respect to the exercise of remedies on the Collateral.
On and after the declaration or occurrence of the Termination Date, the
Administration Agent, for the benefit of the Secured Parties, shall have, in
addition to all other rights and remedies under this Agreement or otherwise, all
other rights and remedies provided under the UCC of each applicable jurisdiction
and other Applicable Laws, which rights shall be cumulative, and also may
require the Collateral Custodian, the Borrower and the initial Servicer to, and
the Collateral Custodian, the Borrower and the initial Servicer hereby agree
that they will at the initial Servicer’s expense and upon request of the
Administrative Agent forthwith, (i) assemble all or any part of the Collateral
as directed by the Administrative Agent and make the same available to the
Administrative Agent at a place to be designated by the Administrative Agent and
(ii) without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at a public or private sale, at any of the
Administrative Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Administrative Agent may deem
commercially reasonable. In the event that the Administrative Agent elects to
sell the Collateral or any part thereof, bids will be accepted for a period of
no less than thirty (30) days and the Collateral
shall be sold to the highest bidder. The Borrower agrees that, to the extent
notice of sale shall be required by law, at least thirty (30) days’ notice to
the Borrower of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. The
Administrative Agent shall not be obligated to make any sale of the Collateral
regardless of notice of sale having been given. The Administrative Agent may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. All cash Proceeds received by
the Administrative Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral (after payment of any
amounts incurred in connection with such sale) shall be deposited into the
Collection Account and to be applied pursuant to Section
2.8.
  108
  ARTICLE
XI
  INDEMNIFICATION
  Section
11.1.    Indemnities by the
Borrower.
  (a)
Without limiting any other rights that any such Person may have hereunder or
under Applicable Law, the Borrower hereby agrees to indemnify the Backup
Servicer, the Collateral Custodian, the Lockbox Bank, the Collection Account
Bank, any Successor Servicer, the Secured Parties and each of their respective
assigns and officers, directors, employees and agents (collectively, the “Indemnified Parties”),forthwith on demand, from and against any and all damages (exclusive of
consequential damages), losses, claims, liabilities and related costs and
expenses, including reasonable attorneys’ fees and disbursements (all of the
foregoing being collectively referred to as the “Indemnified Amounts”)awarded against or incurred by such Indemnified Party arising out of or
as a result of this Agreement or the other Transaction Documents or the
Collateral or in respect of any Receivable included in the Collateral,
excluding, however, (A) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of such Indemnified Party, and (B)
any income or franchise taxes incurred by such Indemnified Party arising out of
or as a result of this Agreement. Without limiting the foregoing, the Borrower
shall indemnify each Indemnified Party for Indemnified Amounts relating to or
resulting from:
  (i)            any
representation or warranty made or deemed made by the Borrower or any of its
officers under or in connection with this Agreement or any other Transaction
Document, which shall have been false or incorrect when made or deemed made or
delivered;
  (ii)           the
failure by the Borrower to comply with any term, provision or covenant contained
in this Agreement, any of the other Transaction Documents or any agreement
executed in connection therewith, or with any Applicable Law, including with
respect to any Collateral or the nonconformity of any Collateral with any such
Applicable Law;
  (iii) the
failure to vest and maintain vested in the Administrative Agent, as agent for
the Secured Parties, a first priority perfected security interest in the
Collateral, free and clear of any Lien (other than Permitted Liens) whether
existing at the time of any Advance or at any
time thereafter (including, without limitation, as the result of the failure to
file, or any delay in filing, financing statements, continuation statements or
other similar instruments or documents under the UCC of any applicable
jurisdiction or other Applicable Law with respect to any
Collateral);
  109
  (iv)       any
dispute, claim, offset or defense (other than the discharge in bankruptcy of any
Obligor) of any Obligor to the payment with respect to any Collateral
(including, without limitation, a defense based on the Collateral not being a
legal, valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim related to such
Collateral;
  (v)        any
failure of the Borrower to perform its duties under the Transaction Documents
with respect to any Collateral;
  (vi)       the
failure of any Receivable represented by the Borrower to be an Eligible
Receivable to be an Eligible Receivable on the date of the applicable
representation;
  (vii)      the
failure of any Lockbox Account Bank to remit any amounts held in the Lockbox
Account pursuant to the instructions of the Servicer or the Administrative Agent
(to the extent such Person is entitled to give such instructions in accordance
with the terms hereof) whether by reason of the exercise of set-off rights or
otherwise;
  (viii)     any
inability to obtain any judgment in, or utilize the court or other adjudication
system of, any state in which an Obligor may be located as a result of the
failure of the Borrower to qualify to do business or file any notice or business
activity report or any similar report;
  (ix)        any
action taken by the Borrower in the enforcement, servicing or collection of any
Collateral;
  (x)         any
claim, suit or action of any kind arising out of or in connection with any
products liability or other claim by an Obligor or other third party with
respect to any merchandise sold or services rendered with respect to any
Collateral;
  (xi)        any
claim, suit or action of any kind arising out of or in connection with the
breach of any Applicable Law with respect to the Collateral or the Transaction
Documents or the ownership or operation of any Powersports Vehicle, including
any vicarious liability;
  (xii)       the
failure by the Borrower to pay when due any Taxes for which the Borrower is
liable, including without limitation, sales, excise or personal property taxes
payable in connection with the Collateral;
  (xiii)      any
repayment by a Secured Party of any amount previously distributed in reduction
of Advances Outstanding or payment of Interest or any other amount due hereunder
or under any other Transaction Document, in each case which amount such Secured
Party believes in good faith is required to be
repaid;
  110


(xiv)          any
claim, suit or action arising from the origination of any Receivable in
violation of Applicable Law;




(xv)           the
commingling of Collections on the Collateral by the Borrower at any time with
other funds;




(xvi)          any
investigation, litigation or proceeding related to this Agreement or the use of
proceeds of Advances or the security interest in the Collateral;




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




(xviii)      
 the use of the proceeds of any Advance in a manner other than as provided
in this Agreement and the Sale Agreement.




(b)           Any
amounts subject to the indemnification provisions of this Section
11.1shall be paid by the Borrower to the Indemnified Party on
the Payment Date following such Person’s written demand therefor setting forth
the basis for the related Indemnified Amounts.




(c)           If
for any reason the indemnification provided above in this Section
11.1is unavailable to the Indemnified Party or is
insufficient to hold an Indemnified Party harmless, then the Borrower shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by such Indemnified Party on the
one hand and the Borrower on the other hand but also the relative fault of such
Indemnified Party as well as any other relevant equitable
considerations.




(d) The
obligations of the Borrower under this Section 11.1shall
survive the resignation or removal of the Administrative Agent, the Servicer,
the Collection Account Bank, the Backup Servicer, Successor Servicer, or the
Collateral Custodian and the termination of this Agreement.


111




Section
11.2. Indemnities by
the Servicer.




(a)
Without limiting any other rights that any such Person may have hereunder or
under Applicable Law, the Servicer hereby agrees to indemnify each Indemnified
Party, forthwith on demand, from and against any and all Indemnified Amounts
awarded against or incurred by any such Indemnified Party by reason of any acts
or omissions of the Servicer, excluding, however, (A) Indemnified Amounts to the
extent resulting from gross negligence or willful misconduct on the part of such
Indemnified Party, (B) Indemnified Amounts that have the effect of recourse for
uncollectible Collateral, the creditworthiness of Obligors or for future
diminution of value of any Collateral, and (C) any income or franchise taxes
incurred by such Indemnified Party arising out of or as a result of this
Agreement, including, but not limited to (i) any representation or warranty made
or deemed made by the Servicer under or in connection with any Transaction
Document, any Servicing Report, Servicer’s Certificate or any other information
or report delivered by or on behalf of the Servicer pursuant hereto, which shall
have been false, incorrect or misleading in any respect when made or deemed
made, (ii) the failure by the Servicer to comply with any Applicable Law, (iii)
the failure of the Servicer to comply with its covenants under this Agreement or
the other Transaction Documents, (iv) any litigation, proceedings or
investigation against the Servicer (v) the failure to vest (in the case of the
initial Servicer) and maintain vested in the Administrative Agent (in the case
of the initial Servicer and each Successor Servicer (if any)), as agent for the
Secured Parties, a first priority perfected security interest in the Collateral,
free and clear of any Lien (other than Permitted Liens) whether existing at the
time of any Advance or at any time thereafter (including, without limitation, as
the result of the failure to file, or any delay in filing, financing statements,
continuation statements or other similar instruments or documents under the UCC
of any applicable jurisdiction or other Applicable Law with respect to any
Collateral), (vi) any failure of the Servicer to perform its duties under the
Transaction Documents with respect to any Collateral, (vii) solely with respect
to the initial Servicer, the failure of any Receivable represented by the
initial Servicer to be an Eligible Receivable to be an Eligible Receivable on
the date of the applicable representation, (viii) any inability to obtain any
judgment in, or utilize the court or other adjudication system of, any state in
which an Obligor may be located as a result of the failure of the Servicer to
qualify to do business or file any notice or business activity report or any
similar report, (ix) any action taken by the Servicer in the enforcement,
servicing or collection of any Collateral, (x) solely with respect to the
initial Servicer, any claim, suit or action of any kind arising out of or in
connection with the breach of any Applicable Law with respect to the Collateral
or the Transaction Documents or the ownership or operation of any Powersports
Vehicle, including any vicarious liability, (xi) the failure by the Servicer to
pay when due any Taxes for which the Servicer is liable, including without
limitation, sales, excise or personal property taxes payable in connection with
the Collateral, or (xii) the commingling of Collections on the Collateral by the
Servicer at any time with other funds.




(b)           Any
amounts subject to the indemnification provisions of this Section
11.2shall be paid by the Servicer to the Indemnified Party
within five (5) Business Days following such Person’s written demand therefor
setting forth the basis for the related Indemnified Amounts to the
Servicer.




(c)           The
obligations of the Servicer under this Section 11.2shall
survive the resignation or removal of the Administrative Agent, the Backup
Servicer, the Collection Account Bank or Successor Servicer or the Collateral
Custodian and the termination of this Agreement.




(d)           Any
indemnification payable by the Servicer pursuant to this Section 11.2 shall not
be payable from the Collateral.


112




ARTICLE
XII




THE
ADMINISTRATIVE AGENT




Section
12.1. The
Administrative Agent.




(a)           Appointment.Each
Secured Party hereby appoints and authorizes the Administrative
Agent as its agent and bailee for purposes of perfection pursuant to the
applicable UCC and hereby further authorizes the Administrative Agent to appoint
additional agents and bailees to act on its behalf and for the benefit of each
Secured Party. Each Secured Party further authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and the other Transaction Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
as are reasonably incidental thereto. In furtherance, and without limiting the
generality, of the foregoing, each Secured Party hereby appoints the
Administrative Agent as its agent to execute and deliver all further instruments
and documents, and take all further action that the Administrative Agent may
deem necessary or appropriate or that a Secured Party may reasonably request in
order to perfect, protect or more fully evidence the security interests granted
by the Borrower hereunder, or to enable any of them to exercise or enforce any
of their respective rights hereunder, including, without limitation, the
execution by the Administrative Agent as secured party/assignee of such
financing or continuation statements, or amendments thereto or assignments
thereof, relative to all or any of the Collateral now existing or hereafter
arising, and such other instruments or notices, as may be necessary or
appropriate for the purposes stated hereinabove. The Lenders may direct the
Administrative Agent to take any such incidental action hereunder. With respect
to other actions which are incidental to the actions specifically delegated to
the Administrative Agent hereunder, the Administrative Agent shall not be
required to take any such incidental action hereunder, but shall be required to
act or to refrain from acting (and shall be fully protected in acting or
refraining from acting) upon the direction of the Required Lenders; providedthat the
Administrative Agent shall not be required to take any action hereunder if the
taking of such action, in the reasonable determination of the Administrative
Agent, shall be in violation of any Applicable Law or contrary to any provision
of this Agreement or shall expose the Administrative Agent to liability
hereunder or otherwise. In the event the Administrative Agent requests the
consent of a Lender pursuant to the foregoing provisions and the Administrative
Agent does not receive a consent (either positive or negative) from such Person
within ten (10) Business Days of such Person’s receipt of such request, then
such Lender shall be deemed to have declined to consent to the relevant
action.




(b)           Standard of Care.The
Administrative Agent shall exercise such rights and powers vested in it by this
Agreement and the other Transaction Documents, and use the same degree of care
and skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs.




(c)           Administrative Agent’s
Reliance, Etc.Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them as Administrative Agent under or in connection with this
Agreement or any of the other Transaction Documents, except for its or their own
gross negligence or willful misconduct. Without limiting the foregoing, the
Administrative Agent: (i) may consult with legal counsel (including counsel for
the Borrower, the Servicer or the Originator), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (ii) makes no warranty or representation and
shall not be responsible for any statements, warranties or representations made
in or in connection with this Agreement; (iii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or any of the other Transaction
Documents on the part of the Borrower, the Originator or the Servicer or to
inspect the property (including the books and records) of the Borrower, the
Originator or the Servicer; (iv) shall not be responsible for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any of the other Transaction Documents or any other instrument or
document furnished pursuant hereto or thereto; and (v) shall incur no liability
under or in respect of this Agreement or any of the other Transaction Documents
by acting upon any notice (including notice by telephone), consent, certificate
or other instrument or writing (which may be by facsimile) believed by it to be
genuine and signed or sent by the proper party or parties.


113




(d)           Credit Decision with Respect
to the Administrative Agent.Each Secured Party acknowledges that it has,
independently and without reliance upon the Administrative Agent, or any of the
Administrative Agent’s Affiliates, and based upon such documents and information
as it has deemed appropriate, made its own evaluation and decision to enter into
this Agreement and the other Transaction Documents to which it is a party. Each
Secured Party also acknowledges that it will, independently and without reliance
upon the Administrative Agent, or any of the Administrative Agent’s Affiliates,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own decisions in taking or not taking action under
this Agreement and the other Transaction Documents to which it is a
party.




(e)           Indemnification of the
Administrative Agent.Each Lender agrees to indemnify the Administrative
Agent (to the extent not reimbursed by the Borrower, the Servicer or the
Originator), ratably in accordance with its Pro Rata Share from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any of the other Transaction Documents, or any action taken or omitted by the
Administrative Agent hereunder or thereunder; providedthat, the Lenders
shall not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent’s gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Administrative Agent, ratably in accordance with its Pro Rata Share promptly
upon demand for any out-of-pocket expenses (including counsel fees) incurred by
the Administrative Agent in connection with the administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement and the other Transaction Documents, to the extent that such
expenses are incurred in the interests of or otherwise in respect of the Lenders
hereunder and/or thereunder and to the extent that the Administrative Agent is
not reimbursed for such expenses by the Borrower, the Servicer or the
Originator.


114




(f) Successor Administrative
Agent.The Administrative Agent may resign at any time, effective upon
the appointment and acceptance of a successor Administrative Agent as provided
below, by giving at least five (5) days’ written notice thereof to each Lender
and the Borrower and may be removed at any time with cause by the Lenders acting
jointly. Upon any such resignation or removal, the Lenders acting jointly shall
appoint a successor Administrative Agent reasonably acceptable to the Borrower.
Each Lender agrees that it shall not unreasonably withhold or delay its approval
of the appointment of a successor Administrative Agent. If no such successor
Administrative Agent shall have been so appointed, and shall have accepted such
appointment, within thirty (30) days after the retiring Administrative Agent’s
giving of notice of resignation or the removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the Secured
Parties, appoint a successor Administrative Agent which successor Administrative
Agent shall be either (i) a commercial bank or other financial institution
organized under the laws of the United States or of any state thereof and have a
combined capital and surplus of at least $50,000,000 or (ii) an Affiliate of
such a bank or financial institution. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Administrative Agent’s
resignation or removal hereunder as Administrative Agent, the provisions of this
Article
XIIshall continue to inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.




(g) Payments by the
Administrative Agent.Unless specifically allocated to a specific Lender
pursuant to the terms of this Agreement, all amounts received by the
Administrative Agent on behalf of the Lenders shall be paid by the
Administrative Agent to the Lenders in accordance with their related Pro Rata
Shares, on the Business Day received by the Administrative Agent, unless such
amounts are received after 12:00 noon on such Business Day, in which case the
Administrative Agent shall use its reasonable efforts to pay such amounts to
each Lender on such Business Day, but, in any event, shall pay such amounts to
such Lenders not later than the following Business Day.




ARTICLE
XIII




MISCELLANEOUS


Section
13.1. Amendments and
Waivers.




Except as
provided in this Section 13.1,no
amendment, waiver or other modification of any provision of this Agreement shall
be effective without the written agreement of the Borrower, the Servicer, the
Administrative Agent and each Lender; providedthat, (i) any
amendment of the Agreement that is solely for the purpose of adding a Lender may
be effected with the written consent of the Administrative Agent and the
Borrower; and (ii) no such amendment, waiver or modification adversely affecting
the rights or obligations of the Backup Servicer (in such role or as successor
Servicer), the Collection Account Bank, the Lockbox Bank or the Collateral
Custodian shall be effective without the written agreement of such Person. The
Borrower shall deliver promptly to the Backup Servicer, the Collection Account
Bank and the Collateral Custodian a copy of any amendment, waiver or other
modification of this Agreement not executed by the Backup Servicer, the
Collection Account Bank, the Lockbox Bank or Collateral Custodian in accordance
with this Section.


115




Section
13.2. Notices,
Etc.




All
notices, reports and other communications provided for hereunder shall, unless
otherwise stated herein, be in writing (including communication by facsimile
copy or electronic mail) and
mailed, e-mailed, faxed, transmitted or delivered, as to each party hereto, at
its address (or specified addresses) set forth on Annex Ato this
Agreement or at such other address as shall be designated by such party in a
written notice to the other parties hereto. All such notices and communications
shall be effective upon receipt, or in the case of (a) notice by e-mail, when
verbal or electronic communication of receipt is obtained, or (b) notice by
facsimile copy, when verbal communication of receipt is obtained.




Section
13.3. Ratable
Payments.




If any
Secured Party, whether by setoff or otherwise, has payment made to it with
respect to any portion of the Facility Amount owing to such Secured Party (other
than payments received pursuant to Article XI)in a
greater proportion than that received by any other Secured Party, such Secured
Party agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of the Facility Amount held by the other Secured Parties so
that after such purchase each Secured Party will hold its ratable proportion of
the Facility Amount; provided,that if all or any portion of such excess amount is thereafter recovered
from such Secured Party, such purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest.




Section
13.4. No Waiver;
Remedies.




No
failure on the part of the Administrative Agent, the Lenders, the Collateral
Custodian, the Collection Account Bank, the Backup Servicer or a Secured Party
to exercise, and no delay in exercising, any right or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right. The rights and remedies herein provided are
cumulative and not exclusive of any rights and remedies provided by
law.




Section
13.5. Binding Effect;
Benefit of Agreement.




This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
the Secured Parties and their respective successors and permitted
assigns.




Section
13.6. Term of this
Agreement.




This
Agreement, including, without limitation, the Borrower’s representations,
warranties and covenants set forth in Articles IVand V,
and the Servicer’s and the Originator’s representations, warranties and
covenants set forth in Articles IV,V, VI,
VII and VIII, create and constitute the continuing obligation of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until the Collection Date; providedthat the rights and
remedies with respect to any breach of any representation and warranty made or
deemed made by the Borrower or the Servicer, the indemnification and payment
provisions of Article
XIand the provisions of Section 13.9, Section 13.10,
Section 13.11and Section 13.18shall
be continuing and shall survive any termination of this
Agreement.


116


Section
13.7. Governing Law
Consent to Jurisdiction Waiver of Objection toVenue.




THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PROVISIONS
THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK). EACH OF THE PARTIES HERETO HEREBY AGREES TO THE
NONEXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW
YORK. EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY
OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.




Section
13.8. Waiver of Jury
Trial.




TO THE
EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY WAIVES ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF
THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.




Section
13.9. Costs, Expenses
and Taxes.




(a) In
addition to the rights of indemnification granted to the Indemnified Parties
under Article XIhereof, the Originator agrees to pay on demand all reasonable costs and
expenses of the Administrative Agent, the Lenders, the Backup Servicer, the
Collection Account Bank, the Lockbox Bank, the Successor Servicer, the
Collateral Custodian and the Secured Parties
incurred in connection with the preparation, execution, delivery, third party
administration (such term to include, subject to the proviso below, periodic
auditing), renewal, amendment or modification of, or any waiver or consent
issued in connection with, this Agreement and the other documents to be
delivered hereunder or in connection herewith, including, without limitation,
Rating Agency fees, reasonable expenses for travel and lodging, background
checks, auditor fees and the reasonable fees and out-of-pocket expenses of
counsel for such Persons with respect thereto and with respect to advising such
Persons as to their respective rights and remedies under this Agreement and the
other documents to be delivered hereunder or in connection herewith, and all
costs and expenses (including reasonable counsel fees, out-of-pocket expenses
and bank account fees related to the administration of the facility), incurred
in connection with the enforcement of this Agreement and the other documents to
be delivered hereunder or in connection herewith; providedthat, prior to a
Termination Event or Unmatured Termination Event, any expenses in connection
with periodic audits by the Administrative Agent and the Lenders shall be
limited to $30,000 per calendar year.


117


(b) The
Borrower covenants to pay on demand any and all stamp, sales, excise
documentary, property and other similar taxes and fees arising from any payment
made hereunder or under any other Transaction Document, or in connection with
the execution, delivery, filing and recording or enforcement of this Agreement
and the other documents to be delivered hereunder payable or determined to be
payable to any Governmental Authority.




Section
13.10.  No
Proceedings.




Each of
the parties hereto (other than the Administrative Agent) hereby agrees that it
will not institute against, or join any other Person in instituting against, the
Borrower any Insolvency Proceeding so long as there shall not have elapsed one
year and one day (or such longer preference period as shall then be in effect)
since the Collection Date.




Section
13.11.  Recourse
Against Certain Parties.




(a)           No
recourse under or with respect to any obligation, covenant or agreement of any
party hereto as contained in this Agreement or any other agreement, instrument
or document entered into by it pursuant hereto or in connection herewith shall
be had against any incorporator, affiliate, stockholder, officer, employee or
director of any party hereto, by the enforcement of any assessment or by any
legal or equitable proceeding, by virtue of any statute or otherwise; it being
expressly agreedand understoodthat the agreements of each party hereto contained in this Agreement and
all of the other agreements, instruments and documents entered into by it
pursuant hereto or in connection herewith are, in each case, solely the
corporate obligations of such party hereto, and that no personal liability
whatsoever shall attach to or be incurred by any incorporator, stockholder,
affiliate, officer, employee or director of such party under or by reason of any
of the obligations, covenants or agreements of such party hereto contained in
this Agreement or in any other such instruments, documents or agreements, or
that are implied therefrom, and that any and all personal liability of each
incorporator, stockholder, affiliate, officer, employee of such party, or any of
them, for breaches by any party hereto of any such obligations, covenants or
agreements, which liability may arise either at common law or at equity, by
statute or constitution, or otherwise, is hereby expressly waived as a condition
of and in consideration for the execution of this Agreement. Notwithstanding the
foregoing, the Administrative Agent and the Lenders shall not be deemed to have
waived any legal rights which they may have and, to the extent of such rights,
shall have recourse against any incorporator, affiliate, stockholder, officer,
employee or director of the Borrower, the initial Servicer or the Originator to
the extent of any loss, cost or expense incurred in whole or in part from any
such Person’s (A) willful misconduct; (B) fraud; (C) theft or misappropriation
of funds; (D) criminal acts; (E) intentional interference with the
Administrative Agent’s Lien in the Collateral or rights with respect thereto;
(F) disposition of any Eligible Receivables or other Collateral in violation of
the terms of this Agreement; (G) action in furtherance of an Insolvency Event
with respect to the Borrower; (IT) action in furtherance of the consolidation of
the Borrower’s assets with the assets of any other Person; or (I) action in
furtherance of the dissolution or liquidation of the Borrower.


118




(b)           Notwithstanding
any contrary provision set forth herein, no claim may be made by any party
hereto against any other party hereto or their respective Affiliates, directors,
officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect to any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in
connection therewith; and each of the parties hereto hereby waives, releases,
and agrees not to sue upon any claim for any such damages, whether or not
accrued and whether or not known or suspected.




(c) 
No obligation or liability to any Obligor under any of the Receivables is
intended to be assumed by the Secured Parties under or as a result of this
Agreement and the transactions contemplated hereby.




Section 13.12.
              Protection of Right,
      Title and Interest in the Collateral; FurtherAction Evidencing
      Advances.




(a)           The
Servicer shall cooperate with the Administrative Agent with respect to, and
shall cause, all financing statements and continuation statements and any other
necessary documents covering the right, title and interest of the Administrative
Agent, as agent for the Secured Parties, to the Collateral to be promptly
recorded, registered and filed, and at all times to be kept recorded, registered
and filed, all in such manner and in such places as may be required by law fully
to preserve and protect the first priority security interest of the
Administrative Agent, as agent the Secured Parties, hereunder to all property
comprising the Collateral. The Servicer shall deliver to the Administrative
Agent and the Collateral Custodian file-stamped copies of, or filing receipts
for, any document such document recorded, registered or filed as provided above
and in the possession of the Servicer, as soon as available following such
recording, registration or filing. The Borrower shall cooperate fully with the
Servicer in connection with the obligations set forth above and will execute any
and all documents reasonably required to fulfill the intent of this Section
13.12(a).




(b)           The
Borrower (and the initial Servicer on its behalf) agrees that from time to time,
at its expense, it will promptly authorize, execute and deliver all instruments
and documents, and take all actions, that the Administrative Agent may
reasonably request in order to perfect, protect or more fully evidence the
Advances hereunder and the first priority perfected security interest granted in
the Collateral, or to enable the Administrative Agent or the Secured Parties to
exercise and enforce their rights and remedies hereunder or under any other
Transaction Document.




(c) If
the Borrower or the Servicer fails to perform any of its obligations hereunder,
the Administrative Agent or any Secured Party may (but shall not be required to)
perform, or cause performance of, such obligation; and the Administrative
Agent’s or such Secured Party’s costs and expenses incurred in connection
therewith shall be payable by the Borrower. The Borrower irrevocably authorizes
the Administrative Agent and appoints the Administrative Agent as its
attorney-in-fact to act on behalf of the Borrower (i) to execute on behalf of
the Borrower as debtor and to file financing statements necessary or desirable
in the Administrative Agent’s sole discretion to perfect and to maintain the
perfection and priority of the interest of the Secured Parties in the
Collateral, including those that describe the Collateral as “all assets,” or
words of similar effect, and (ii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Collateral as a financing statement in such offices as the Administrative Agent
in its sole discretion deems necessary or desirable to perfect and to maintain
the perfection and priority of the interests of the Secured Parties in the
Collateral. This appointment is coupled with an interest and is
irrevocable.


119




(d)
Without limiting the generality of the foregoing, the Borrower will, not earlier
than six months and not later than three-months prior to the fifth anniversary
of the date of filing of any financing statement filed pursuant to this
Agreement, unless the Collection Date shall have occurred:




(i)            
authorize, execute (if necessary) and deliver and file or cause to be filed an
appropriate continuation statement with respect to such financing statement;
and




(ii)            deliver
or cause to be delivered to the Administrative Agent an opinion of the counsel
for the Borrower, in form and substance reasonably satisfactory to the
Administrative Agent, confirming and updating the opinion delivered pursuant to
Section
3.1with respect to perfection and otherwise to the effect
that the security interest hereunder continues to be an enforceable and
perfected security interest, subject to no other Liens of record except as
expressly permitted hereunder, which opinion may contain usual and customary
assumptions, limitations and exceptions.




Section
13.13. Confidentiality.




(a)           Each
of the Secured Parties, the Servicer, the Collateral Custodian, the Backup
Servicer, the Collection Account Bank, the Originator and the Borrower shall
maintain and shall cause each of its employees and officers to maintain the
confidentiality of the Agreement and all information with respect to the other
parties, including all information regarding the business of the Borrower and
the Originator obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
each such party and its directors, officers and employees may (i) disclose such
information to its external accountants, attorneys, investors, potential
investors, creditors, potential creditors, credit enhancers, potential credit
enhancers and the agents and advisors of such Persons (“Excepted Persons”);provided, however,that each Excepted Person shall be notified of the confidentiality
restrictions hereof and shall, as a condition to any such disclosure, agree that
such information shall be used solely in connection with such Excepted Person’s
evaluation of, or relationship with, the Borrower and the Originator and their
affiliates, (ii) disclose the existence of the Agreement, but not the financial
terms thereof, (iii) disclose such information as is required by Applicable Law
and (iv) disclose the Agreement and such information in any suit, action,
proceeding or investigation (whether in law or in equity or pursuant to
arbitration) involving any of the Transaction Documents for the purpose of
defending itself, reducing its liability, or protecting or exercising any of its
claims, rights, remedies, or interests under or in connection with any of the
Transaction Documents. It is understood that the financial terms that may not be
disclosed except in compliance with this Section 13.13(a)include, without limitation, all fees and other pricing terms, and all
Termination Events, Servicer Defaults, and the priority of payment provisions
herein.


120




(b)           Anything
herein to the contrary notwithstanding, the Borrower, the Originator and the
Servicer each hereby consents to the disclosure of any nonpublic information
with respect to it (i) to the Collateral Custodian, the Collection Account Bank,
the Backup Servicer or the Secured Parties by each other, (ii) by the Collateral
Custodian, the Collection Account Bank, the Backup Servicer and the Secured
Parties to any prospective or actual assignee or participant of any of them, or
(iii) by the Secured Parties to any Rating Agency, any provider of a surety,
guaranty or credit enhancement to any Lender or any Person providing financing
to, or holding equity interests in, any Lender, as applicable, and to any
officers, directors, employees, outside accountants, advisors and attorneys of
any of the foregoing, provided each such Person in the case of clauses (ii)and
(iii) is informed of the confidential nature of such information.




(c)
Notwithstanding anything herein to the contrary, the foregoing shall not be
construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known, (ii) disclosure of any and all information (A) if
required to do so by any applicable statute, law, rule or regulation, (B) to any
government agency or regulatory body having or claiming authority to regulate or
oversee the disclosing entity or its affiliates, (C) pursuant to any subpoena,
civil investigative demand or similar demand or request of any court, regulatory
authority, arbitrator or arbitration to which the disclosing entity or an
officer, director, employer, shareholder or affiliate of any of the foregoing is
a party, or (D) in connection with filings with securities exchanges or
regulators or (iii) any other disclosure authorized by any Borrower, the
Servicer or the Originator in the case of information with respect to
it.




Section
13.14. Execution in
Counterparts Severability Integration.




This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts (including by facsimile), each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby. This
Agreement and any agreements or letters (including fee letters) executed in
connection herewith contain the final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof and
shall constitute the entire agreement among the parties hereto with respect to
the subject matter hereof, superseding all prior oral or written
understandings.




Section
13.15. Waiver of
Setoff.




Each of
the parties hereto hereby waives any right of setoff it may have or to which it
may be entitled under this Agreement from time to time against any Lender or its
assets.


121




Section
13.16. Assignments by
the Lenders.




With the
prior written consent of the Borrower (which consent shall not be unreasonably
withheld), any Lender may at any time assign, or grant a security interest or
sell a participation interest in, any Advance or Commitment (or portion thereof)
to any Person; providedthat (i) no such consent of the Borrower shall be required following the
occurrence of a Termination Event, (ii) in the case of an assignment of the
Commitment with respect to such Lender, the assignee (other than any assignee
that is a Liquidity Bank) shall execute and deliver to the Servicer and the
Administrative Agent a fully executed Joinder Supplement substantially in the
form of Exhibit Ihereto, and (iii) no Lender shall need prior consent to at any time
assign, or grant a security interest or sell a participation interest in, any
Advance (or portion thereof) to an Affiliate, to a Liquidity Bank or to any
commercial paper conduit sponsored by DZ Bank or an Affiliate of DZ Bank. The
parties to any such assignment or sale of a participation interest by a Lender
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in its books and records, such agreement or document as may be
satisfactory to such parties and the Administrative Agent. Neither the Borrower,
the Originator nor the Servicer shall assign or delegate, or grant any interest
in, any of its rights, obligations or duties under this Agreement without the
prior written consent of the Administrative Agent.




The
Borrower hereby designates the Administrative Agent to serve as the Borrower’s
agent, solely for the purpose of this Section 13.16,to
maintain a register (the “Register”)on which
the Administrative Agent will record each Lender’s Commitment, the Advances made
by each Lender and each repayment in respect of the principal amount of the
Advances (and any interest thereon) of each Lender, and annexed to which the
Administrative Agent shall retain a copy of each Joinder Supplement delivered to
the Administrative Agent pursuant to this Section. Failure to make any
recordation, or any error in such recordation, shall not affect the Borrower’s
or any other Person’s obligations in respect of such Advances. The entries in
the Register shall be conclusive (provided, however, that any failure to make
any recordation or any error in such recordation shall be corrected by the
Administrative Agent upon notice or discovery thereof), and the Borrower, the
Administrative Agent and the Lenders shall treat each Person in whose name an
Advance is registered as the owner thereof for all purposes of this Agreement,
notwithstanding notice or any provision herein to the contrary. A Lender’s
Commitment and the Advances made pursuant thereto may be assigned or otherwise
transferred in whole or in part only by registration of such assignment or
transfer in the Register. Any assignment or transfer of a Lender’s Commitment or
the Advances made pursuant thereto shall be registered in the Register only upon
delivery to the Administrative Agent of a Joinder Supplement duly executed by
the assignor thereof. No assignment or transfer of a Lender’s Commitment or the
Advances made pursuant thereto shall be effective unless such assignment or
transfer shall have been recorded in the Register by the Administrative Agent as
provided in this Section.




Section
13.17. Heading and
Exhibits.




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




Section
13.18. No Proceedings
Against Lenders; Limitations on Payments.




(a) Each
of the parties hereto (other than the applicable Lender) (by accepting the
benefits of this Agreement) hereby agrees that it will not institute against, or
join any other Person in instituting against, such applicable Lender any
Insolvency Proceeding so long as any commercial paper issued by such Lender
pursuant to the Transaction Documents shall be outstanding and there shall not
have elapsed one year and one day (or such longer preference period as shall
then be in effect) since the last day on which any such commercial paper shall
have been outstanding.


122




(b)           Notwithstanding
any provisions contained in this Agreement to the contrary, the parties hereto
acknowledge and agree that (i) all amounts payable by the Borrower under this
Agreement and under the other Transaction Documents shall be paid in accordance
with the priorities set forth in Sections 2.7and 2.8
and (ii) the Borrower shall only be required to pay amounts payable by the
Borrower under this Agreement and under the other Transaction Documents from
funds of the Borrower other than the proceeds of the Collateral to the extent it
has such funds. Any amount which the Borrower does not pay pursuant to the
operation of clause
(ii)of the immediately preceding sentence shall not constitute a claim
(as defined in Section 101(5) of the Bankruptcy Code) against or corporate
obligation of the Borrower for any such insufficiency unless and until the
Borrower satisfies the provisions of clause (ii)above.




(c)           Notwithstanding
any other provision to the contrary contained in this Agreement, the Lenders’s
obligations under this Agreement and under the other Transaction Documents shall
be payable by the Lender solely from (and no recourse shall be had against the
Lender for the payment of any of the foregoing except from) excess cash flow
from the Lender’s operations which is not required to pay when due the principal
of or interest on Commercial Paper Notes. Any amount which the Lender does not
pay pursuant to the operation of the immediately preceding sentence shall not
constitute a claim (as defined in Section 101(5) of the Bankruptcy Code) against
or corporate obligation of the Company for any such insufficiency unless and
until the Lender does have excess cash flow.




Section
13.19. Exclusivity.




Each of
the Borrower, the Originator and the initial Servicer hereby agrees, from the
Closing Date until the Facility Termination Date, to finance 100% of the
Eligible Receivables owned by it (subject to the Concentration Limits set forth
herein) through this facility unless the Administrative Agent consents otherwise
(in its sole discretion) except for its respective ability to do so in
connection with the approved financing arrangements specified on Schedule VI;providedthat any Eligible
Receivables financed through the Originator’s equity capital and/or subordinated
debt shall be exempt from this requirement; provided, furtherthat if the
Lenders refuse to increase their Commitments (and, as a result, increase the
Maximum Facility Amount) pursuant to Section 2.1(c)in
order to fund such Eligible Receivable, the Originator may sell or obtain
financing for such origination from a third party (and, in connection therewith,
the Originator may sell such Eligible Receivable to a Person other than the
Borrower).




Section
13.20. Qualified
Purchaser.




As of the
Closing Date and each Funding Date, each Lender represents and warrants to the
Borrower that it is a “qualified purchaser” within the meaning of Section 2(a)(5
1) of the 1940 Act.


123


Section
13.21. Force
Majeure.





If any
party hereto is prevented from fulfilling its obligations hereunder (other than
any payment obligations hereunder) as a result of any terrorist attack, act of
war, bank moratorium, or act of God, its obligations (other than any payment
obligations hereunder) shall be suspended for a reasonable time during which
such condition continues to exist not to exceed five (5) Business Days; providedthat, in the case of
the Borrower, the Originator and the initial Servicer, whether such party has
been prevented from fulfilling its obligations hereunder shall be determined in
accordance with its written disaster recovery policy approved by the
Administrative Agent prior to the initial Funding Date.




[Remainder
of Page Intentionally Left Blank.]


124


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




THE
BORROWER:




By:
                  /s/ Anthony L.
      HavensName:   
      Anthony L. HavensTitle      
      President





THE
      ORIGINATOR AND THE
                    SPARTA
      COMMERCIAL SERVICES, INC.,SERVICER:
                    as
      the Originat r and the Ser leerBy:
                    /s/ Anthony L. HavensName:
      Anthony L. HavensTitle:
      Chairman &
CEO




[Signatures
Continued on the Following Page]


Revolving
Credit Agreement








LENDER:
                AUTOBAHN
      FUNDING COMPANY LLC,as
      a LenderBy:
                /s/ Daniel
      MarinoName:       Daniel
      MarinoTitle:       First Vice
      PresidentBy:
                /s/ Christopher
      TuckerName:      Christopher
      TuckerTitle:Vice
President




THE
      ADMINISTRATIVE AGENT:
                DZ BANKAG DEUTSCHE
      ZENTRAL-GENOSSENSCHAFTSBANK,
      FRANKFURTAM
      MAIN, NEW YORK BRANCH,as
      the Administrative Agent and the LiquidityAgentBy:
                /s/Daniel
      MarinoName:        Daniel
      MarinoTitle:        First Vice
      PresidentBy:
                /s/ Christopher
      TuckerName:        Christopher
      TuckerTitle:        Vice
      President




[Signatures
Continued on the Following Page]


Revolving
Credit Agreement








THE
      BACKUP SERVICER:
                        LYON
      FINANCIAL SERVICES, INC.(d/b/a
      U.S. Bank Portfolio Services),not
      in its individual capacity butsolely
      as the Backup Service;By:
                        /s/
      Joseph AndriesName:        Joseph
      AndriesTitle:Senior Vice
President





THE
      COLLATERAL CUSTODIAN
                U.S.BANK NATIONAL
      ASSOCIATION,AND
      THE COLLECTION ACCOUNT
                not in its individual capacity but solely as theBANK:
                Collateral Custodian and the Collection AccountBankBy:Name:Title:




Revolving
Credit Agreement








rmi.1BACKUP
      SERVICER:
                          LYON
      FINANCIAL SERVICES,INC.(d/bia U.S. Bank Portfolio
      Services),not
      in its individual capacity butsolely
      as the Backup ServicctBy:Name:Title:THE
      COLLATERAL CUSTODIAN
                          U.S.
      BANK. NATIONAL ASSOCIATION,AND
      THE COLLECTION ACCOUNT
                          not
      in its individual capacity but solely as theBANK:
                          Collateral Custodian andthe Collection AccountBankBy:
                          /s/ Toby RobillardName:          Toby
      RobillardTitle:           
      Vice
President




Revolving
Credit Agreement





SPARTA
FUNDING LLC


c/o
Sparta Commercial Services, Inc.


462
Seventh Avenue, 20th Floor


New York,
New York 10018


Attention:
A.W. Adler


Facsimile
No.: (646) 514-4437


Confirmation
No.: (212) 239-2666 ext. 213




SPARTA COMMERCIAL SERVICES,
INC.


462
Seventh Avenue, 20th Floor


New York,
New York 10018


Attention:
A.W. Adler


Facsimile
No.: (646) 514-4437


Confirmation
No.: (212) 239-2666 ext. 213




AUTOBAHN
FUNDING COMPANY LLC


c/o DZ
Bank AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main, New York
Branch


609 Fifth
Avenue


New York,
New York 10017


Attention:
Christopher Tucker/Jeffrey Willner


Facsimile
No.: (212) 745-1651


Confirmation
No.: (212) 745-1663 or (212) 745-1671




DZ
BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN, NEW YORK
BRANCH


609 Fifth
Avenue


New York,
New York 10017


Attention:
Christopher Tucker/Jeffrey Willner


Facsimile
No.: (212) 745-1651


Confirmation
No.: (212) 745-1663 or (212) 745-1671





Annex B


Annex A


(Continued)


Collateral
Custodian:




U.S. BANK NATIONAL
ASSOCIATION


60
Livingston Avenue


EP-MN-WS3D


St. Paul,
Minnesota 55107


Attention:
Structured Finance/Sparta


Telephone
No.: (651) 495-3855




and for
custodial matters, with a copy to:




1133
Rankin Street, Suite 100


St. Paul,
Minnesota 55116


Attention:
Account Management/Sparta


Telephone
No.: (651) 695-5912


Facsimile
No.: (651) 695-6102




LYON FINANCIAL SERVICES,
INC.


(d/b/a
U.S. Bank Portfolio Services)


1310
Madrid Street, Suite 103


Marshall,
Minnesota 56258


Attention:
Joe Andries


Facsimile
No.: (866) 806-0775


Confirmation
No.: (507) 532-7129







COMMITMENTS




Lender
                    
                    CommitmentAutobahn
      Funding Company LLC
                    
                    $
                    25,000,000