Document:

Purchase and Sale Agreement

 Exhibit 10.2 
 EXECUTION VERSION 
  

 
  

PURCHASE AND SALE AGREEMENT 
 Dated as of January 25, 2011 
 Between 

NEWSTAR EQUIPMENT FINANCE I, LLC, 
 as Buyer 
 and 

NEWSTAR FINANCIAL, INC., 
 as Originator 
  

 
  

 TABLE OF CONTENTS 

 

							
	 	  	 	  	Page	 
	 ARTICLE I GENERAL
	  	 	1	  
	 Section 1.1
	  	Certain Defined Terms	  	 	1	  
	 Section 1.2
	  	Other Terms	  	 	2	  
	 Section 1.3
	  	Interpretation	  	 	2	  
		
	 ARTICLE II SALE, TRANSFER AND ASSIGNMENT
	  	 	3	  
	 Section 2.1
	  	Sale, Transfer and Assignment	  	 	3	  
	 Section 2.2
	  	Purchase Price	  	 	4	  
	 Section 2.3
	  	Payment of Purchase Price	  	 	4	  
	 Section 2.4
	  	Deliveries and Undertakings in Connection with Sale	  	 	5	  
		
	 ARTICLE III CONDITIONS PRECEDENT
	  	 	6	  
	 Section 3.1
	  	Conditions Precedent to Closing	  	 	6	  
	 Section 3.2
	  	Conditions Precedent to all Purchases	  	 	6	  
		
	 ARTICLE IV REPRESENTATIONS AND WARRANTIES
	  	 	7	  
	 Section 4.1
	  	Originator’s Representations and Warranties	  	 	7	  
	 Section 4.2
	  	Originator’s Representations and Warranties Regarding the Contracts	  	 	15	  
	 Section 4.3
	  	Representations and Warranties of the Buyer	  	 	16	  
		
	 ARTICLE V COVENANTS
	  	 	17	  
	 Section 5.1
	  	Affirmative Covenants of the Originator	  	 	17	  
	 Section 5.2
	  	Negative Covenants of Originator	  	 	21	  
		
	 ARTICLE VI REPURCHASE OBLIGATION
	  	 	23	  
	 Section 6.1
	  	Retransfer of Ineligible Contracts	  	 	23	  
	 Section 6.2
	  	Substitution of Contracts	  	 	24	  
	 Section 6.3
	  	Originator’s Optional Right to Repurchase Release-Eligible Contracts	  	 	25	  
		
	 ARTICLE VII TERM AND TERMINATION
	  	 	26	  
	 Section 7.1
	  	Termination	  	 	26	  
		
	 ARTICLE VIII INDEMNIFICATION
	  	 	26	  
	 Section 8.1
	  	Indemnification by the Originator	  	 	26	  
	 Section 8.2
	  	Assignment of Indemnities	  	 	28	  
		
	 ARTICLE IX MISCELLANEOUS PROVISIONS
	  	 	28	  
	 Section 9.1
	  	Amendment	  	 	28	  
	 Section 9.2
	  	Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue	  	 	28	  
	 Section 9.3
	  	Waiver of Jury Trial	  	 	29	  
	 Section 9.4
	  	Notices	  	 	29	  
	 Section 9.5
	  	Execution in Counterparts; Severability; Integration	  	 	29	  
	 Section 9.6
	  	Assignment	  	 	30	  
	 Section 9.7
	  	Further Assurances	  	 	30	  
	 Section 9.8
	  	No Waiver; Cumulative Remedies	  	 	30	  
	 Section 9.9
	  	Binding Effect; Third-Party Beneficiaries	  	 	31	  
	 Section 9.10
	  	Heading and Exhibits	  	 	31	  
	 Section 9.11
	  	[Reserved]	  	 	31	  

  
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	 Section 9.12
	  	Costs, Expenses and Taxes	  	 	31	  
	 Section 9.13
	  	Recourse Against Certain Parties	  	 	31	  
	 Section 9.14
	  	Setoff	  	 	32	  
	 Section 9.15
	  	No Proceedings	  	 	32	  
	 Section 9.16
	  	Protection of Right, Title and Interest in the Purchased Assets; Further Action Evidencing Advances	  	 	33	  
	 Section 9.17
	  	Subordination	  	 	34	  
	 Section 9.18
	  	Confidentiality	  	 	34	  

 LIST OF EXHIBITS AND SCHEDULES

  

			
	 Schedule I
	  	List of Contracts
	 Schedule II
	  	Location of Records
	 Exhibit A
	  	Form of Assignment Agreement

  
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 PURCHASE AND SALE AGREEMENT 

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is dated as of January 25, 2011, by and between NewStar
Financial, Inc. (“NewStar”), a Delaware corporation (together with its successors and permitted assigns, the “Originator”), and NewStar Equipment Finance I, LLC, a Delaware limited liability company (together with
its successors and permitted assigns, the “Buyer”). 
 ARTICLE I 

GENERAL 

Section 1.1 Certain Defined Terms. 
 Certain capitalized terms used throughout this Agreement are defined above or in this Section 1.1. In addition, capitalized terms used but not defined herein have the meanings given to such
terms in the Note Purchase Agreement (as defined below). 
 Agreement: This Agreement, as amended, supplemented, restated or replaced
from time to time. 
 Assignment Agreement: Defined in Section 2.1(b). 

Buyer: Defined in the preamble hereof. 
 Indemnified Amounts: Defined in Section 8.1. 
 Indemnified Party:
Defined in Section 8.1. 
 Material Defect: Defined in Section 2.4(b). 

Note Purchase Agreement: The Note Purchase Agreement, dated as of January 25, 2011, by and among the Buyer, as the Borrower, NewStar, as the
Servicer and Originator, Wells Fargo Bank, National Association, as Lender, Wells Fargo Securities, LLC, as the Deal Agent, Wells Fargo Bank, National Association, as the Backup Servicer and as the Trustee, as the same may be amended, supplemented,
restated or replaced from time to time. 
 Originator: Defined in the preamble hereof. 

Purchase: A purchase by the Buyer of Eligible Contracts from the Originator pursuant to Section 2.1. 

Purchase Date: The Initial Advance Date and any day on which any Purchased Asset is acquired by the Buyer pursuant to the terms of this Agreement,
including any Substitution Date. 
 Purchase Price: Defined in Section 2.2. 

Purchased Assets: Defined in Section 2.1(a). 
 Replaced Contract: Defined in Section 6.2. 
 Retransferred Contract:
Defined in Section 6.1. 

 Schedule I: The schedule of all Purchased Assets that are sold or contributed, transferred and
assigned by the Originator to the Buyer on a Purchase Date, which schedule is attached hereto and as to any subsequent Purchase Date is supplemented by “Schedule I” attached to the applicable Assignment Agreement, and incorporated herein
by reference, as such schedule may be supplemented and amended from time to time pursuant to the terms hereof. 
 Servicer: Initially,
NewStar, in its capacity as the Servicer under the Note Purchase Agreement, and its permitted successors and assigns, and thereafter any Person appointed as successor as provided therein to service the Purchased Assets thereunder. 

Substitute Contract: Defined in Section 6.2. 
 Substitution Date: Any date on which the Originator transfers a Substitute Contract to the Buyer. 
 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 not used but specifically defined herein, are used herein as defined in such Article 9. 

Section 1.3 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 Charlotte, North Carolina time; 
 (f) the term “including” means “including, without limitation;” 
 (g) the term “through” means “to and including;” 
 (h) the
term “from” means “from and including;” 
 (i) the terms “to” and “until” each mean
“to but excluding;” 
 (j) unless the context clearly requires or the language provides otherwise, reference to a
section, subsection, paragraph, subparagraph, clause, exhibit, schedule, annex, appendix, attachment, rider or other attachment means a section, subsection, paragraph, subparagraph, clause, exhibit, schedule, annex, appendix, attachment, rider or
other attachment of or to this Agreement; 
 (k) unless the context clearly requires or the language provides otherwise, the
words “herein,” “hereof,” “hereunder” or similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; 

  
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 (l) unless otherwise expressly provided in this Agreement, reference to any notice, request,
approval, consent or determination provided for, permitted or required under the terms of hereof with respect to the Lender, the Deal Agent or any other Secured Party means, in order for such notice, request, approval, consent or determination to be
effective hereunder, such notice, request, approval or consent must be in writing; 
 (m) reference herein to the Lender’s
or the Deal Agent’s discretion shall mean, unless otherwise stated herein or therein, the Lender’s or the Deal Agent’s (as the case may be) sole and absolute discretion, and the exercise of such discretion shall be final and
conclusive. In addition, whenever the Lender or the Deal Agent has a decision or right of determination or request, exercises any right given to it to agree, disagree, accept, consent, grant waivers, take action or no action or to approve or
disapprove, or any arrangement or term is to be satisfactory or acceptable to or approved by (or any similar language or terms) the Lender or the Deal Agent (as the case may be), the decision of the Lender or the Deal Agent with respect thereto
shall be in the sole and absolute discretion of the Lender or the Deal Agent (as the case may be), and such decision shall be final and conclusive, except as may be otherwise specifically provided herein; 

(n) reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument
as amended, supplemented or modified 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 
 (o) 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 

SALE, TRANSFER AND ASSIGNMENT 
 Section 2.1 Sale, Transfer and Assignment. 
 (a) Subject to the
terms and conditions of this Agreement, on each Purchase Date, the Originator will sell, transfer, assign, set over and otherwise convey to the Buyer, and the Buyer will purchase and take from the Originator, all right, title and interest (whether
now owned or hereafter acquired or arising and wherever located) of the Originator in, to and under all accounts, general intangibles, instruments, chattel paper, documents, money, letters of credit, advices of credit, deposit accounts, certificates
of deposit, investment property, goods and other property consisting of, arising from or related to any of the following property, whether now existing or hereafter created or acquired (the “Purchased Assets”): 

(i) the Contracts that are identified by the Originator and are listed on the applicable Schedule I, together with
all Collections, Excluded Amounts and all monies due or to become due in payment of such Contracts after the related Cut-Off Date, including, but not limited to, any prepayment amounts and any payments in respect of a Casualty Loss or early
termination, any 

  
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Recoveries received with respect thereto, but excluding any Scheduled Payments due prior to the related Cut-Off Date and any Origination Fees; and 

(ii) all Related Security. 
 (b) The Originator shall on or prior to each Purchase Date (including the Initial Advance Date) execute and deliver to the Buyer an assignment agreement (the “Assignment Agreement”) from
the Originator to the Buyer substantially in the form of Exhibit A hereto. From and after such Purchase Date, the Purchased Assets listed in such Assignment Agreement shall be deemed to be Purchased Assets hereunder. The foregoing sale,
transfer, assignment, set-over and conveyance does not constitute and is not intended to result in a creation or an assumption by the Buyer of any obligation of the Originator or any other Person in connection with the Purchased Assets or under any
agreement or instrument relating thereto including, without limitation, any obligation to any Lessee. 
 (c) On or before any
Purchase Date with respect to the Purchased Assets to be acquired by the Buyer on that date, the Originator shall provide the Buyer with an Officer’s Certificate certifying as follows: (i) each such Contract to be acquired on that date is,
as of such Purchase Date, an Eligible Contract, (ii) no selection procedures believed by the Originator to be materially adverse to the interest of the Buyer were utilized in selecting such Contracts from the available Eligible Contracts in the
Originator’s portfolio, (iii) such Contracts and all proceeds thereof will be conveyed to the Buyer free and clear of any Lien of any Person claiming through or under the Originator or any of its Affiliates, except for Permitted Liens,
(iv) as of such Purchase Date, (A) no Insolvency Event with respect to the Originator has occurred and (B) the sale of such Purchased Assets to the Buyer has not been made in contemplation of the occurrence of any Insolvency Event
with respect to the Originator, and (v) as of such Purchase Date, no Event of Default, Unmatured Event of Default (other than with respect to a Purchase Date which is a Substitution Date) or Servicer Default has occurred. 

(d) Except as specifically provided in this Agreement, the sale and purchase of Purchased Assets under this Agreement shall be without
recourse to the Originator; it being understood that the Originator shall be liable to the Buyer for all representations, warranties, covenants and indemnities made by the Originator pursuant to the terms of this Agreement, all of which
obligations are hereby expressly limited so as not to constitute recourse to the Originator for the credit risk of any Lessee. 

(e) The Buyer, the Deal Agent and the Lender shall not have any obligation or liability to any Lessee or client of the Originator
(including any obligation to perform any of the obligations of the Originator (including any obligation with respect to Contracts or any other related purchase orders or other agreements)). No such obligation or liability is intended to be assumed
by the Buyer, the Deal Agent or the Lender hereunder and any such assumption is expressly disclaimed. 
 Section 2.2
Purchase Price. 
 The purchase price for each Contract sold to the Buyer by the Originator under this Agreement (the
“Purchase Price”) shall be a dollar amount equal to the Discounted Contract Balance determined as of the related Cut-Off Date and set forth in the related Assignment Agreement. 

Section 2.3 Payment of Purchase Price. 
 (a) The Purchase Price for any portion of the Purchased Assets sold by the Originator on any Purchase Date shall be paid (i) first, in immediately available funds to the extent the Buyer has
available cash therefor, and (ii) second, by means of a capital contribution by the Originator to the Buyer in an amount equal to the unpaid portion of the Purchase Price. 

  
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 (b) Originator, by accepting the Purchase Price paid for each purchase of Purchased Assets,
shall be deemed to have certified, with respect to the Purchased Assets to be sold by it on such day, that its (i) representations and warranties contained in Article IV are true and correct on and as of such day, with the same effect as
though made on and as of such day, (ii) no event has occurred and is continuing, or would result from such purchase, that constitutes (A) a Turbo Event, (B) an Event of Default or Unmatured Event of Default (exclusive of either
thereof relating to a Servicer Default or Unmatured Servicer Default) or (C) a Servicer Default, and (iii) no Unmatured Servicer Default of the type set forth in Section 6.15(k) or 6.15(l) of the Note Purchase Agreement
exists; 
 (c) Upon the payment of the Purchase Price for any Purchase, title to the Purchased Assets included in such Purchase
shall vest in the Buyer, whether or not the conditions precedent to such Purchase and the other covenants and agreements contained herein were in fact satisfied; provided, however, that the Buyer shall not be deemed to have waived any
claim it may have under this Agreement for the failure by the Originator in fact to satisfy any such condition precedent, covenant or agreement. 
 Section 2.4 Deliveries and Undertakings in Connection with Sale. 

(a) The Originator agrees (i) to record and file, at its own expense, any financing statements (and continuation statements with
respect to such financing statements when applicable) with respect to the Purchased Assets meeting the requirements of Applicable Law in such manner and in such jurisdictions as are necessary to perfect and maintain the perfection of the sale of the
Purchased Assets from the Originator to the Buyer, (ii) that such financing statements shall name the Originator, as debtor, the Buyer, as secured party, and the Trustee, as assignee of the Buyer, and shall identify the Purchased Assets as
collateral, and (iii) to deliver a file-stamped copy of such financing statements or other evidence of such filings (excluding continuation statements, which shall be delivered as filed) to the Buyer on or prior to the initial Purchase Date and
(if any additional filing is applicable) on or prior to any subsequent Purchase Date. Upon or prior to the occurrence of each Purchase, the Originator will deliver to the Trustee (as designee of Buyer) all Trustee Contract Files (including all
chattel paper and instruments being transferred by the Originator to the Buyer on such Purchase Date) representing or evidencing any of the Contracts or other Purchased Assets being transferred by the Originator to the Buyer on such Purchase Date.

 (b) If the Originator discovers or is notified by the Buyer, the Trustee or the Deal Agent, with respect to any Contract File
required to be delivered by the Originator to the Buyer or the Trustee hereunder, that (i) any of the Contract Files are missing, (ii) that any item required to be in a Contract File is missing, or (ii) that any Contract or Contract
File is defective (for example, but not by way of limitation, mutilated, damaged, defaced, incomplete, improperly dated, clearly forged or otherwise physically altered) in a manner that materially and adversely affects the Contract (a
“Material Defect”), the Originator shall deliver the missing Contract File, or any item missing from the Contract File, and/or correct or cure such Material Defect within thirty (30) days from the date the Originator discovered
or is so notified of such missing item or Material Defect. Otherwise, the Originator shall repurchase such Contract or replace such Contract with a Substitute Contract in accordance with Article VI hereof. 

(c) In connection with the sale of the Purchased Assets, the Originator further agrees that it will, at its own expense, indicate clearly
and unambiguously in its computer files, on or prior to each Purchase Date, that such Purchased Assets have been sold to the Buyer pursuant to this Agreement. The Originator further agrees to deliver to the Buyer on each Purchase Date a computer
file containing a true and complete list of all Contracts, identified by account number and Discounted Contract Balance as of the related Cut-Off Date. Such file or list shall be marked as Schedule I to this Agreement, shall be

  
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delivered to the Buyer as confidential and proprietary, and is hereby incorporated into and made a part of this Agreement as such Schedule I may be supplemented and amended from time
to time. 
 (d) It is the intention of the parties hereto that the conveyance of the Originator’s right, title and interest
in and to the Contracts and the other Purchased Assets by the Originator to the Buyer as provided in Section 2.1 shall constitute an absolute sale conveying good title, free and clear of any Lien other than Permitted Liens, and that the
Purchased Assets shall not be part of the Originator’s bankruptcy estate in the event of an Insolvency Event with respect to the Originator. Furthermore, it is not intended that such conveyance be deemed a pledge of the Contracts and the other
Purchased Assets by the Originator to the Buyer to secure a debt or other obligation of the Originator. If, however, notwithstanding the intention of the parties, the conveyance provided for in Section 2.1 is determined to be a transfer
for security purposes, then this Agreement shall also be deemed to be a “security agreement” within the meaning of Article 9 of the UCC and the Originator hereby grants to the Buyer a “security interest” within the meaning
of Article 9 of the UCC in all of the Originator’s right, title and interest in and to the Contracts and the other Purchased Assets, now existing and hereafter created, to secure the prompt and complete payment of a loan deemed to have
been made in an amount equal to the aggregate Purchase Price. The Buyer shall have, in addition to the rights and remedies that it may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other
Applicable Law, which rights and remedies shall be cumulative. Upon the occurrence of an Event of Default and during the continuation thereof, whether or not the Buyer has exercised any or all if its rights and remedies hereunder, the Buyer shall
have the right to enforce the Originator’s rights against any account debtors (as such term is defined in the UCC) and obligors on the Purchased Assets. 
 (e) In order to secure the performance by the Originator of its covenants and obligations hereunder, the Originator irrevocably authorizes the Buyer at any time and from time to time in the sole
discretion of the Buyer, and appoints the Buyer as its attorney-in-fact to act on behalf of the Originator to take all such steps or actions and to execute and deliver all instruments, agreements, deeds, memoranda and other documents that may be
necessary to perfect and protect the Buyer’s title to and interest in the specific Purchased Assets that have been transferred to the Buyer or to enable the Buyer to exercise or enforce any of its rights hereunder. This appointment is coupled
with an interest and is irrevocable. 
 (f) In connection with each such Purchase, on or prior to the initial Purchase Date and
each subsequent Purchase Date, the Originator hereby authorizes the Buyer to prepare and file, at the Originator’s expense, financing statements (including renewal statements) or amendments thereof or supplements thereto or other instruments as
the Buyer or its assignees may from time to time deem necessary or appropriate in order to perfect and maintain the security interest granted hereunder in accordance with the UCC. 

ARTICLE III 
 CONDITIONS PRECEDENT 
 Section 3.1 Conditions Precedent to
Closing. 
 The closing is subject to the satisfaction of the conditions precedent set forth in Section 3.1
of the Note Purchase Agreement. 
 Section 3.2 Conditions Precedent to all Purchases. 

  
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 The obligations of the Buyer to purchase Purchased Assets from the Originator on any
Purchase Date (including the initial Purchase Date) shall be subject to the satisfaction of the following conditions precedent that: 
 (a) all representations and warranties of the Originator contained in Sections 4.1 and 4.2 shall be true and correct on and as of such date before and after giving effect to such
Purchase and the application of proceeds thereof as though made on and as of such date and shall be deemed to have been made on and of such day; 
 (b) the Originator shall have delivered to the Buyer, or its designee, a Schedule I and an Assignment Agreement with respect to the Purchased Assets to be purchased on such Purchase Date;

 (c) on and as of such Purchase Date, the Originator shall have performed all of the covenants, agreements and obligations
required to be performed by it on or prior to such date pursuant to the provisions of this Agreement; 
 (d) no event has
occurred and is continuing, or would result from such purchase, that constitutes (i) a Turbo Event or (ii) an Event of Default or Unmatured Event of Default (exclusive of either thereof relating to a Servicer Default or Unmatured Servicer
Default) or (iii) a Servicer Default, and no Unmatured Servicer Default of the type set forth in Section 6.15(k) or 6.15(l) of the Note Purchase Agreement exists; 

(e) no Applicable Law shall prohibit or enjoin, and no order, judgment or decree of any federal, state or local court or Governmental
Authority shall prohibit or enjoin, the making of any such Purchase by the Buyer in accordance with the provisions hereof; 

(f) the Facility Termination Date shall not have occurred; 
 (g) UCC financing statements as described in Section 3.2(g) of the Note Purchase Agreement shall have been filed as of the Closing Date or the initial Purchase Date and otherwise as needed to
maintain the security interest of the Buyer; 
 (h) UCC financing statement terminations shall have been filed if necessary; and

 (i) as of the Closing Date or the initial Purchase Date, opinions of counsel shall have been delivered. 

ARTICLE IV 

REPRESENTATIONS AND WARRANTIES 
 Section 4.1 Originator’s Representations and Warranties. 

As of each Purchase Date, the Originator represents and warrants to the Buyer for the benefit of the Buyer and each of its successors and
assigns that: 
 (a) Organization and Good Standing. The Originator has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with all requisite corporate power, authority and legal right to own or lease its properties and to conduct its business as such properties are presently owned and as such
business is presently conducted and has had at all 

  
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relevant times, and now has, all necessary power, authority and legal right to acquire, own and sell, pledge or otherwise transfer the Purchased Assets, and to execute, deliver and perform its
obligations under this Agreement and each other Transaction Document to which the Originator is a party. 
 (b) Due
Qualification. The Originator is duly qualified to do business as a corporation and is in good standing as a corporation, and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its property
and or the conduct of its business requires such qualification, licenses or approvals, except to the extent that the failure to obtain any such qualification, license or approval could not reasonably be expected to result in a Material Adverse
Effect. 
 (c) Power and Authority; Due Authorization. The Originator (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 (C) sell and assign an ownership
interest in the Purchased Assets, and (ii) has duly authorized by all necessary corporate 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 the Originator is a party has been duly executed and delivered by the Originator. 
 (d)
Binding Obligation. This Agreement and each other Transaction Document to which the Originator is a party constitutes a legal, valid and binding obligation of the Originator enforceable against the Originator in accordance with its respective
terms, except as such enforceability may be limited by Insolvency Laws and except as such enforceability may be limited by general principals of equity (whether considered in a suit of law or in equity). 

(e) No Violation. The execution and delivery of this Agreement and the other Transaction Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby and the fulfillment of the terms hereof and thereof (including, without limitation, the sale of Purchased Assets by the Originator or remittance of Collections in accordance with the
provisions of this Agreement) 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 Originator’s certificate of
incorporation, bylaws or any Contractual Obligation of the Originator, (ii) result in the creation or imposition of any Lien (other than Permitted Liens) upon any of the Originator’s properties pursuant to any Applicable Law or the terms
of any such Contractual Obligation, other than this Agreement, or (iii) violate any Applicable Law. 
 (f) No
Proceedings. There is no litigation, proceedings or investigations pending or, to the best knowledge of the Originator, threatened against the Originator, its properties or any Purchased Asset before any Governmental Authority (i) asserting
the invalidity of this Agreement or any other Transaction Document to which the Originator 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 Originator is a party, (iii) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect, (iv) asserting the invalidity of any Purchased Asset, or (v) seeking the payment of such
Purchased Asset or the payment and enforcement of the related Contract File. The Originator is not in default with respect to any order of any Governmental Authority. 
 (g) All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or of any Governmental Authority (if any) required for the due execution, delivery and
performance by the Originator of this Agreement and any other Transaction Document to which the Originator is a party, the performance of the transactions contemplated by this Agreement and the other Transaction Documents to which the Originator is
a party and the fulfillment of or terms hereof and 

  
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thereof have been obtained. No consent from any Lessee or any other Person shall be required to effect the sale of any Purchased Asset. No Purchased Asset requires any other means of assignment
of the Purchased Assets other than as set forth in this Agreement. 
 (h) Solvency. The Originator is not the subject of
any Insolvency Proceedings or Insolvency Event. The transactions under this Agreement and the other Transaction Documents to which the Originator is a party do not and will not render the Originator not Solvent. The Originator hereby confirms to the
Buyer that, so long as the Buyer is Solvent, the Originator will not cause the Buyer to file a petition under the Bankruptcy Code or any other Insolvency Law. 
 (i) Selection Procedures. No selection procedures adverse to the interests of the Buyer were utilized by the Originator in identifying and/or selecting the Purchased Assets to be sold, assigned,
transferred, set-over and otherwise conveyed hereunder. In addition, each Contract shall have been underwritten in accordance with and satisfy the standards of the Credit and Collection Policy which has been established by the Originator as in
effect at the time of underwriting. Without limiting the foregoing, the Credit and Collection Policy conforms in all material respects with the requirements of all applicable federal and state laws and regulations. 

(j) Use of Proceeds. No proceeds of the sale of any Purchased Asset hereunder received by the Originator will be used by the
Originator to purchase or carry any margin security within the meaning of Regulation U. 
 (k) Investment Company Act.
The Originator is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or the Originator is otherwise exempt from all provisions of such act. 

(l) Other Names. The legal name of the Originator is as set forth in this Agreement and within the preceding five years the
Originator has not used, and the Originator currently does not use, any tradenames, fictitious names, assumed names or “doing business as” names other than those set forth on Schedule II to the Note Purchase Agreement.

 (m) Name Change or Relocation. The Originator’s exact legal name is as shown in this Agreement and its
state of formation is (and for the prior four months has been) Delaware. The principal place of business and chief executive office of the Originator and the offices where the Originator keeps all the Records are located at the addresses of the
Originator referred to in Schedule II hereof (or at such other locations as to which the notice and other requirements specified in Section 5.2(f) shall have been satisfied). 

(n) No Liens. The Originator owns each Purchased Asset to be sold by it hereunder free and clear of any Lien except for Permitted
Liens, and upon the sale, transfer or assignment hereunder, the Buyer shall (i) become the owner of each Purchased Asset then existing or thereafter arising, free and clear of any Lien except for Permitted Liens or (ii) acquire a first
priority perfected security interest in such Purchased Asset then existing or thereafter arising free and clear of any Lien except Permitted Liens or otherwise as provided herein. No effective financing statement or other instrument similar in
effect covering any Purchased Asset or the proceeds thereof shall at any time be on file in any recording office except such as may be filed (i) in favor of the Buyer relating to this Agreement or (ii) in favor of the Trustee in accordance
with the Note Purchase Agreement. 
 (o) Type of Collateral. The Purchased Assets constitute goods, instruments, tangible
chattel paper, electronic chattel paper, accounts, general intangibles or equipment within the meaning of the 

  
 9 

 
applicable UCC. None of the Purchased Assets consist of, or is the proceeds of, (i) as-extracted collateral, (ii) consumer goods, (iii) farm products, (iv) manufactured homes
or (v) standing timber. 
 (p) Documentation. Each Contract that constitutes part of the Purchased Assets is
evidenced by an original paper document, a faxed copy, or an electronically imaged document, in each case signed by the Lessee with respect thereto. To Originator’s knowledge, upon the sale, assignment and transfer thereof of the related
Purchased Asset to the Buyer hereunder, no original chattel paper or instruments with respect thereto is in the possession of any Person other than the Buyer or the Trustee. The Contracts that constitute or evidence the Purchased Assets do not have
any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than to the Buyer and/or to the Trustee (for the benefit of the Secured Parties). 

(q) Security Interest. The parties to this Agreement intend that the conveyance of the Purchased Assets by the Originator to the
Buyer be treated as a sale for legal and, where relevant, tax and all other purposes on its books, records and financial statements (provided that the conveyance shall be treated as a financing of such Purchased Assets for consolidated
accounting purposes consistent with GAAP), in each case, consistent with the requirements set forth herein. If, despite such intention, a determination is made that such transaction shall not be treated as a sale, then this Purchase Agreement shall
also be deemed to be a “security agreement” within the meaning of Article 9 of the UCC, and the Originator hereby grants to the Buyer a “security interest” within the meaning of Article 9 of the UCC in all of the
Originator’s right, title and interest in and to the Purchased Assets, now existing and hereafter created, in an amount equal to the aggregate Purchase Price and each of the Originator’s other payment obligations under this Purchase
Agreement. Upon the filing of financing statements naming the Buyer as secured party and the Originator as debtor, the Buyer shall have a first priority perfected security interest in the Purchased Assets under the UCC with respect to that portion
of the Purchased Assets that can be perfected by filing a financing statement. All filings (including, without limitation, such UCC filings) as are necessary in any jurisdiction to perfect such security interest of the Buyer in the Purchased Assets
have been (or prior to the applicable Purchase hereunder will be) made. 
 (r) Separate Entity. The Buyer is operated as
an entity with assets and liabilities distinct from those of the Originator and any Affiliates thereof, and the Originator hereby acknowledges that the Trustee, the Deal Agent and the Lender under the Note Purchase Agreement are entering into the
transactions contemplated by the Note Purchase Agreement in reliance upon the Buyer’s identity as a separate legal entity from the Originator and from each such Affiliate of the Originator. Therefore, from and after the date of execution and
delivery of this Agreement, the Originator shall take all reasonable steps, including, without limitation, all steps that the Deal Agent or the Lender may from time to time reasonably request, to maintain the Buyer’s identity as a separate
legal entity and to make it manifest to third parties that the Buyer is an entity with assets and liabilities distinct from those of the Originator and any Affiliate thereof and not just a division of the Originator or any such Affiliate. Without
limiting the generality of the foregoing and in addition to the other covenants set forth herein, Originator shall take all reasonable steps to ensure that the Buyer has not and will not from the Closing Date to the Paid-in-Full Date: 

(i) engage in any business or activity other than the purchase and receipt of Purchased Assets from the Originator under
the Purchase Agreement, the pledge of Purchased Assets under the Transaction Documents, the issuance of the Note and the borrowing and securing of Advances under the Note Purchase Agreement and such other activities as are incidental thereto;

  
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 (ii) acquire or own any material assets other than (A) the Purchased
Assets, (B) the Hedge Agreements and (C) incidental property as may be necessary for the operation of the Buyer; 
 (iii) merge into or consolidate with any Person or dissolve (except as otherwise expressly permitted in the Note Purchase Agreement), terminate or liquidate in whole or in part, transfer or otherwise
dispose of all or substantially all of its assets (except as otherwise expressly permitted in the Note Purchase Agreement) or change its legal structure, without in each case first obtaining the Deal Agent’s consent; 

(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 Deal Agent, amend, modify, terminate, fail to comply with the provisions of its Certificate of Formation or its limited liability company agreement, or
fail to observe limited liability company formalities; 
 (v) own any subsidiary or make any investment in any
Person without the consent of the Deal Agent; 
 (vi) commingle its assets with the assets of any of its
Affiliates or of any other Person; 
 (vii) incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation), other than Indebtedness to the Secured Parties under the Note Purchase Agreement except for trade payables in the ordinary course of its business, provided that such trade payables are not evidenced by a note and
are paid when due; 
 (viii) become insolvent or fail to pay its debts and liabilities from its assets as the
same shall become due; 
 (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 contract or agreement with any of its Affiliates,
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 unrelated 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 Buyer or any Affiliate thereof or
any other Person; 
 (xiii) guarantee, become obligated for, or hold itself out to be responsible for the debt of
another Person; 
 (xiv) 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 Purchased Assets, the Hedge Agreements, cash and Permitted Investments); 

  
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 (xv) fail to file its own separate tax return, or file a consolidated
federal income tax return with any other Person, except as may be required by the Code and regulations issued thereunder; 
 (xvi) fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in order not (A) to mislead others
as to the identity with which such other party is transacting business, or (B) to suggest that it is responsible for the debts of any third party (including any of its principals or Affiliates); 

(xvii) fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations; 
 (xviii) file or consent to the filing or any
petition, either voluntary or involuntary, to take advantage of any applicable Insolvency Law or make an assignment for the benefit of creditors; 
 (xix) except as may be required by the Code and regulations issued thereunder, hold itself out as or be considered as a department or division of (A) any of its principals or Affiliates, (B) any
Affiliate of a principal or (C) any other Person; 
 (xx) other than as expressly permitted by the Note
Purchase Agreement, permit any transfer (whether in any one or more transactions) of any direct ownership interest in the Buyer to the extent it has the ability to control the same, unless the Buyer delivers to the Deal Agent an acceptable
non-consolidation opinion; 
 (xxi) fail to maintain separate financial statements, showing its assets and
liabilities separate and apart from those of any other Person (without limiting the foregoing, it is acknowledged that for accounting purposes, the Buyer may be consolidated with another Person as required by GAAP and included in such Person’s
consolidated financial statements); 
 (xxii) fail to pay its own liabilities and expenses only out of its own
funds; 
 (xxiii) fail to pay the salaries of its own employees, if any, in light of its contemplated business
operations; 
 (xxiv) acquire the obligations or securities of its Affiliates or members; 

(xxv) 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; 
 (xxvi) fail to use separate invoices and
checks bearing its own name; 
 (xxvii) pledge its assets for the benefit of any other Person, other than with
respect to payment of the indebtedness to the Secured Parties under the Note Purchase Agreement; 
 (xxviii) fail
at any time to have at least one (1) Independent Manager; 
 (xxix) fail to provide that the consent of the
Independent Manager is required for the Buyer to (A) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated 

  
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bankrupt or insolvent, (B) institute or consent to the institution of Insolvency Proceedings against it, (C) file a petition seeking or consent to reorganization or relief under any
applicable Insolvency Law, (D) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Buyer, (E) make any assignment for the benefit of the Buyer’s
creditors, (F) admit in writing its inability to pay its debts generally as they become due, or (G) take any action in furtherance of any of the foregoing; and 

(xxx) take or refrain from taking, as applicable, each of the activities specified in the non-consolidation opinion of
Dechert LLP, delivered on the Closing Date, upon which the conclusions expressed therein are based. 
 (s) Value Given.
The cash payments received by the Originator in respect of the Purchase Price of each Purchased Asset sold hereunder constitutes reasonably equivalent value in consideration for the transfer to the Buyer of such Purchased Asset under this Agreement,
such transfer was not made for or on account of an antecedent debt owed by the Originator to the Buyer or with intent to hinder, delay or defraud any of its creditors. 
 (t) Reports Accurate. Each report, information, exhibit, financial statement, document, book, or record furnished or to be furnished by the Originator to the Buyer in connection with this Agreement
is and will be true, complete and correct in all respects as of the date it is or shall be dated. 
 (u) Exchange Act
Compliance; Regulations T, U and X. No proceeds of the sale of any Purchased Assets will be used by the Originator to acquire any security in any transaction which is subject to Section 13 or 14 of the Securities Exchange Act of 1934,
as amended. None of the transactions contemplated herein (including, without limitation, the use of the Purchase Price) will violate or result in a violation of Section 7 of the Securities 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. 
 (v) Lockbox. The name and address of the Lockbox Bank, together with the account number of the Lockbox Account, is specified in Schedule I of the Note Purchase Agreement. 

(w) Accounting. The Originator accounts for the transfers by it to the Buyer of interests in Purchased Assets under this Purchase
Agreement as financings of the Purchased Assets for consolidated accounting purposes (with a notation that its treating the transfers as a sale for legal and, where relevant, tax and all other purposes on its books, records and financial statements,
in each case consistent with GAAP and with the requirements set forth herein). 
 (x) Accuracy of Representations and
Warranties. Each representation or warranty by the Originator contained herein or in any certificate or other document furnished by the Originator pursuant hereto or in connection herewith is true and correct in all material respects as of the
date it was made. 
 (y) Compliance with Laws; Consents. The Originator complies and has complied in all material
respects with all Applicable Law with respect to it and no Purchased Asset contravenes any Applicable Laws (including, without limitation, all Applicable Laws relating to predatory and abusive lending laws and all 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). 
 (z) Taxes. The Originator has filed on a timely basis all tax returns (federal, state and local) required to be filed by it and has paid or made adequate provisions for the payment of all taxes,
fees, assessments and other governmental charges due from the Originator, except such taxes, fees, 

  
 13 

 
assessments or other governmental charges that are being contested in good faith and as to which adequate provisions for payment have been made. No tax lien or similar Lien has been filed, and no
claim is being asserted, with respect to any such tax, fee, assessment, or other governmental charge. Any taxes, fees, assessments and other governmental charges payable by the Originator in connection with the execution and delivery of this
Agreement and the other Transaction Documents to which the Originator is a party and that have been executed and delivered on or prior to such Purchase Date and the transactions contemplated hereby or thereby have been paid or shall have been paid
when due, at or prior to such Purchase Date. 
 (aa) [Reserved]. 

(bb) Intellectual Property. The Originator is licensed or otherwise has the lawful right to use all patents, trademarks, service
marks, tradenames, copyrights, technology, know-how and processes used in or necessary for the conduct of its business as currently conducted which are material to its financial condition, business, operations and assets, individually or taken as a
whole. 
 (cc) Financial Statements. (A) The audited balance sheets of the NewStar as of December 31, 2009 have
been certified without qualification by the NewStar’s independent certified public accountants, and copies of which have been furnished to the Buyer and to the Lender, the Hedge Counterparty and the Deal Agent, are complete and correct in all
material respects and fairly present the financial condition, business, operations and assets of the NewStar as of the date thereof, all in accordance with GAAP, (B) the unaudited balance sheets for each fiscal quarter in the period since the
most recent balance sheets referred to in clause (A) above and ended at least sixty (60) days prior to the date thereof, copies of which have been furnished to the Buyer, the Hedge Counterparty, the Lender and the Deal Agent, are complete
and correct in all material respects and fairly present the financial condition, business, operations and assets of the NewStar as of the last day of such fiscal quarters for the periods ended on such dates, all in accordance with GAAP, and
(C) since the last date for which a balance sheet of the NewStar has been delivered to the Buyer, the Hedge Counterparty, the Lender and the Deal Agent, there has been no material adverse change in any such condition, business, operations or
assets. Notwithstanding the foregoing, to the extent that any of the foregoing reports or registration statements are available on the SEC website, the Originator shall be deemed to satisfy the delivery requirements of this
Section 4.1(cc) upon filing with the SEC 
 (dd) ERISA Liabilities. The Originator has not incurred and does
not expect to incur any liabilities (except for premium payments arising in the ordinary course of business) to the Pension Benefit Guaranty Corporation under ERISA, each pension plan or profit sharing plan to which the Originator or any Affiliate
is a party has been administered in all material respects and fully funded in accordance with the obligations of the Originator under law and as set forth in such plan, and the Originator has complied in all material respects with the applicable
provisions of ERISA in effect as of such Purchase Date. 
 (ee) [Reserved]. 

(ff) [Reserved]. 
 (gg) Full Payment: As of the Purchase Date thereof, the Originator has no knowledge of any fact that should lead it to expect that any Purchased Asset will not be paid in full. 

(hh) Representations and Warranties for Benefit of Deal Agent. Each of the representations and warranties of the Originator
contained in this Agreement and the other Transaction Documents to which it is a party and that have been executed and delivered on or prior to such Purchase Date is true and correct in all material respects as of the date such representation or
warranty was made, and the Originator 

  
 14 

 
hereby makes each such representation and warranty to, and for the benefit of the Deal Agent, the Hedge Counterparty, the Trustee and the Lender as if the same were set forth in full herein.

 (ii) Covenants. All covenants, agreements and undertakings of the Originator hereunder have been fully performed in
all material respects. 
 (jj) Compliance with Anti–Terrorism Laws. The Originator (i) is not nor will be in
violation of any Anti–Terrorism Law, (ii) is not or will not be a Prohibited Person, (iii) does not conduct any business or engage in any transaction or dealing with any Prohibited Person, including the making or receiving any
contribution of funds, goods or services to or for the benefit of any Prohibited Person, (iv) does not deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to Executive Order
No. 13224, (v) does not engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti–Terrorism Law,
(vi) does not have more than 10% of its assets in a Prohibited Person and does not derive more than 10% of its operating income from direct or indirect investments in, or transactions with, any Prohibited Person, and (vii) does not engage
in or will not engage in any of the foregoing activities in the future. To the extent applicable, the Originator has established an adequate anti–money laundering compliance program as required by the Anti–Terrorism Laws, has conducted the
requisite due diligence in connection with the origination or acquisition of each Purchased Asset for purposes of the Anti–Terrorism Laws, including with respect to the legitimacy of the applicable Lessee and the origin of the assets used by
the said Lessee to purchase or lease the property in question, and maintains, and will maintain, sufficient information to identify the applicable Lessee for purposes of the Anti–Terrorism Laws. No Purchased Asset is subject to nullification
pursuant to any Anti–Terrorism Law, no Purchased Asset is in violation of any Anti–Terrorism Law, and no Lessee listed as a Prohibited Person. The proceeds of the sale of any Purchased Asset have not been used and shall not be used to fund
any operations in, finance any investments or activities in or make any payments to a Prohibited Person. 
 It is understood and
agreed that the representations and warranties provided in this Section 4.1 shall survive (w) the sale or contribution and assignment of the Purchased Assets to the Buyer, (x) the grant of a first priority perfected security
interest in, to and under the Purchased Assets by the Buyer pursuant to the Note Purchase Agreement and (y) the termination of this Agreement and the Note Purchase Agreement, and shall continue so long as any Purchased Asset shall remain
outstanding. Upon discovery by the Originator or the Buyer, as applicable, of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice thereof to the other and to the Deal
Agent immediately upon obtaining knowledge of such breach. 
 Section 4.2 Originator’s Representations and
Warranties Regarding the Contracts. 
 The Originator hereby represents and warrants to the Buyer, as of each related
Purchase Date with respect to the Purchased Assets transferred by the Originator to the Buyer on such Purchase Date: 
 (a)
Valid Transfer and Security Interest. This Agreement constitutes a valid transfer to the Buyer of all right, title and interest of the Originator in, to and under all Purchased Assets, free and clear of any Lien of any Person claiming through
or under the Originator or its Affiliates, except for Permitted Liens. When the Buyer makes a purchase of such Purchased Assets hereunder, it shall acquire ownership of each such Purchased Asset, free and clear of any Lien (other than any Lien
arising solely as the result of any action taken by the Buyer and Permitted Liens), and no effective financing statement or other instrument similar in effect covering any such Purchased Asset transferred on such Purchase Date hereunder or any
interest therein is on file in any recording office except such as may be filed in favor of the Buyer in accordance with this Purchase Agreement or in connection with any Lien arising solely as

  
 15 

 
the result of any action taken by the Buyer. If, notwithstanding the intention of the parties that the conveyance of the Purchased Assets be an absolute sale thereof by the Originator to the
Buyer, the conveyance is determined to be a transfer for security purposes, then on the related Purchase Date, upon the filing of the financing statements described in Section 2.4(a) and delivery of any chattel paper and instruments
relating to the Purchased Assets as required by Section 2.4(a), the Buyer (or the Trustee, as its designee) shall have a first priority perfected security interest in all such Purchased Assets, subject only to Permitted Liens, with
respect to the Purchased Assets transferred by the Originator to the Buyer on such Purchase Date. Neither the Originator nor any Person claiming through or under the Originator shall have any claim to or interest in the Collections. 

(b) Eligibility of Contracts. As of each related Purchase Date with respect to the Purchased Assets transferred by the Originator
to the Buyer on such Purchase Date, (i) Schedule I to the applicable Assignment Agreement is an accurate and complete listing in all material respects of such Purchased Assets conveyed to the Buyer as of such Purchase Date and the
information contained therein with respect to the identity of such Purchased Assets and the amounts owing thereunder is true and correct in all material aspects as of the related Cut-Off Date, (ii) each such Contract satisfies the Eligible
Contract Criteria, (iii) the representations and warranties set forth in Section 4.2(a) are true and correct with respect to each Contract transferred on such day as if made on such day, and (iv) with respect to each such
Purchased Asset, all consents, licenses, approvals or authorizations of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by the Originator in connection with the transfer of an interest in
such Purchased Asset to the Buyer have been duly obtained, effected or given and are in full force and effect. 
 (c)
Set-Off. With respect to the Purchased Assets transferred by the Originator to the Buyer on such Purchase Date, such Purchased Assets, as of such Purchase Date, have not been compromised, adjusted, extended, satisfied, subordinated,
rescinded, set-off or modified by the Lessee, including any governmental Lessee, and are not subject to compromise, adjustment, extension, satisfaction, subordination, rescission, set-off, counterclaim, defense, abatement, suspension, deferment,
deduction, reduction, termination or modification, whether arising out of transactions concerning the Purchased Assets or otherwise, by the Lessee, including any governmental Lessee. 

It is understood and agreed that the representations and warranties provided in this Section 4.2 shall survive (w) the
sale or contribution and assignment of the Purchased Assets to the Buyer, (x) the grant of a first priority perfected security interest in, to and under the Purchased Assets by the Buyer pursuant to the Note Purchase Agreement and (y) the
termination of this Agreement and the Note Purchase Agreement, and shall continue so long as any Purchased Asset shall remain outstanding. Upon discovery by the Originator or the Buyer, as applicable, of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give prompt written notice thereof to the other and to the Deal Agent immediately upon obtaining knowledge of such breach. 

Section 4.3 Representations and Warranties of the Buyer. 

The Buyer hereby represents and warrants to the Originator, as of each Purchase Date, that: 

(a) Organization and Good Standing. The Buyer 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 limited liability company power, authority and legal right to own or lease its properties and to conduct its business as such properties are presently owned and as such
business is presently conducted and has had at all relevant times, and now has, all necessary power, authority and legal right to acquire, own and sell, pledge or otherwise transfer the Purchased Assets, and to execute, deliver and perform its
obligations under this Agreement and each other Transaction Document to which the Buyer is a party. 

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

 (c) Power and Authority; Due Authorization. The Buyer (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, (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. This Agreement and each other Transaction Document to which the Borrower is a party has been duly executed
and delivered by the Borrower. 
 (d) Binding Obligation. This Agreement and each other Transaction Document to which the
Buyer is a party constitutes a legal, valid and binding obligation of the Buyer enforceable against the Buyer in accordance with its respective terms, except as such enforceability may be limited by Insolvency Laws and except as such enforceability
may be limited by general principals of equity (whether considered in a suit of law or in equity). 
 (e) No Violation.
The execution and delivery of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby 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 Buyer’s certificate of formation, organizational documents, bylaws or any
Contractual Obligation of the Buyer, (ii) result in the creation or imposition of any Lien upon any of the Buyer’s properties pursuant to the terms of any such Contractual Obligation, other than this Agreement, or (iii) violate any
Applicable Law. 
 (f) No Proceedings. There is no litigation, proceedings or investigations pending or, to the best
knowledge of the Buyer, threatened against the Buyer, before any Governmental Authority (i) asserting the invalidity of this Agreement or any other Transaction Document to which the Buyer 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 Buyer is a party or (iii) seeking any determination or ruling that could reasonably be expected to have a Material Adverse
Effect. 
 (g) All Consents Required. All approvals, authorizations, consents, orders or other actions of any Person or
of any Governmental Authority (if any) required for the due execution, delivery and performance by the Buyer of this Agreement and any other Transaction Document to which the Buyer is a party have been obtained. 

ARTICLE V 

COVENANTS 

Section 5.1 Affirmative Covenants of the Originator. 

  
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 From the Closing Date until the Paid-in-Full Date: 

(a) Compliance with Laws; Preservation of Corporate Existence; Maintenance of Licenses. The Originator hereby agrees to comply in
all material respects with all Applicable Laws and all laws applicable to the Contracts and the other Purchased Assets which are applicable to the Originator. The Originator shall perform each of its obligations under this Agreement and the other
Transaction Documents to which it is a party as Originator thereunder and that have been executed and delivered and that remain in full force and effect. Except as otherwise permitted under the Transaction Documents, the Originator 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 foreign corporation 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. 
 (b) Delivery of Collections. The Originator agrees to deliver to the Buyer or otherwise deposit or cause to be deposited into the Collection Account promptly (but in no event later than
two (2) Business Days after receipt) all Collections received by the Originator. Until so deposited, all such Collections shall be held in trust for the Trustee (for the benefit of the Secured Parties) by the Originator. 

(c) Fulfill Contract Obligations. The Originator will duly fulfill in all material respects all obligations on its part to be
fulfilled under or in connection with each Purchased Asset as Originator hereunder, will not change or modify the terms of the Purchased Assets except as expressly permitted by the terms of the Transaction Documents and will do nothing to impair the
rights of the Buyer, the Deal Agent, the Trustee or the Secured Parties in the Contracts or the other Purchased Assets. In the event that the rights of the Originator under any Contract, any guaranty of the related Lessee’s obligations under
any Contract, or any Insurance Policy are not assignable or have not, in fact, been assigned to the Buyer or to the Trustee, the Originator will enforce such rights on behalf of the Buyer and the Trustee. 

(d) Accounting of Transfers. The Originator will account for the transfers by it to the Buyer of interests in Purchased Assets
under this Purchase Agreement as financings of such Purchased Assets for consolidated accounting purposes (with a notation that its treating the transfers as a sale for legal and, where relevant, tax and all other purposes on its books, records and
financial statements, in each case consistent with GAAP and with the requirements set forth herein). 
 (e) Notice of
Lien. The Originator shall advise the Buyer, the Trustee and the Deal Agent promptly, in reasonable detail, (i) of any material Lien known to it which is made or asserted against any of the Purchased Assets, (ii) of any determination
that a Contract was not an Eligible Contract at the time of transfer hereunder, and (iii) of the occurrence of any event that would have a material adverse effect on the aggregate value of the Purchased Assets or on the validity of the
transfers under this Agreement. 
 (f) Reporting Requirements. The Originator shall promptly inform the Buyer and the
Deal Agent in writing of the occurrence of any of the following: 
 (i) Events of Default, Servicer Defaults
and Turbo Events. The Originator will provide the Deal Agent, the Hedge Counterparty, the Backup Servicer and the Trustee with immediate written notice of its knowledge of the occurrence of each Event of Default, each Unmatured Event of Default,
each Servicer Default, each Unmatured Servicer Default or each Turbo Event and, no later than the greater of five (5) days and three (3) Business Days following the occurrence of any such event, the Originator will provide to the Deal
Agent a written statement of the chief executive officer or treasurer or the chief financial officer of Originator setting forth the details of such event and the action that the Originator proposes to take with respect thereto. 

  
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 (ii) Representations. Forthwith upon receiving knowledge of same, the
Originator shall notify the Deal Agent if any representation or warranty set forth in Section 4.1 or 4.2 was incorrect at the time it was given or deemed to have been given and at the same time deliver to the Deal Agent, the
Trustee and the Lender a written notice setting forth in reasonable detail the nature of such facts and circumstances. In particular, but without limiting the foregoing, the Originator shall notify the Lender, the Trustee and the Deal Agent in the
manner set forth in the preceding sentence before any Purchase Date of any facts or circumstances within the knowledge of the Originator which would render any of the said representations and warranties untrue at the date when such representations
and warranties were made or deemed to have been made; 
 (iii) Proceedings. As soon as possible and in any
event within the greater of five (5) days and three (3) Business Days after any executive officer of the Originator receives notice or obtains knowledge thereof, any settlement of, material judgment (including a material judgment with
respect to the liability phase of a bifurcated trial) in or commencement of any material labor controversy, material litigation, material action, material suit or material proceeding before any Governmental Authority, affecting the Borrower, the
initial Servicer or the Originator, the Asset Pool, the Transaction Documents or the Trustee’s interest in the Asset Pool; provided that, notwithstanding the foregoing, any settlement, judgment, labor controversy, litigation, action,
suit or proceeding affecting any of such matters in excess of $10,000, with respect to the Borrower, or $1,000,000 in all other cases, shall be deemed material for purposes of this clause (iii); 

(iv) Notice of Material Events. Promptly upon becoming aware thereof, the Originator shall provide the Deal Agent
notice of any other event or circumstances that, in the reasonable judgment of the Originator, is likely to have a Material Adverse Effect; 
 (v) Credit Memos. From and after the initial Purchase Date until the initial Revolving Period Termination Date (without regard to any extension), the Originator shall furnish to the Deal Agent all
internal underwriting memo used to approve Contracts (A) with a Discounted Contract Balance of $1,000,000 or more or (B) with a Lessee with an aggregate exposure (calculated by reference to Discounted Contract Balance) of $1,000,000 or
more; 
 (vi) SEC Reporting. Promptly, but in any event within ten (10) Business Days after the
filing date (it being understood that the filing date with respect to any registration statement shall be deemed the date such registration statement is declared effective by the SEC, the Originator shall provide the Deal Agent a copy of
(a) each quarterly, annual or current report filed by the Originator with the SEC, and (b) each registration statement, if any, of the Originator filed with and declared effective by the SEC. Notwithstanding the foregoing, to the extent
that any of the foregoing reports or registration statements are available on the SEC website, the Originator shall be deemed to satisfy the delivery requirements of this Section 5.1(f)(vi) upon filing with the SEC; and 

(vii) Other Information. Promptly, from time to time, the Originator shall provide the Deal Agent with such other
information, documents, records or reports respecting the Purchased Assets or the conditions or operations, financial or otherwise, of the Originator (including, without limitation, reports and notices relating to the Originator’s actions under
and compliance with ERISA and the Investment Company Act of 1940, as amended) as the Buyer or the Deal Agent may from time to time reasonably request in order to perform their obligations hereunder or under any other Transaction Document or to
protect the interests of the Buyer under or as contemplated by this Agreement and the other Transaction Documents. 

  
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 (g) Control. The Originator shall execute and deliver all agreements, assignments,
instruments or other documents as reasonably requested by the Buyer or its assignees for the purpose of obtaining and maintaining control within the meaning of the UCC with respect to any Purchased Assets consisting of the Originator’s interest
in any (i) deposit accounts, (ii) investment property, and (iii) letter-of-credit rights which constitute part of such Purchased Assets. 
 (h) Separate Identity. The Originator agrees that: 
 (i) the
Originator shall maintain corporate records and books of account separate from those of the Buyer (except to the extent the Buyer is required to be consolidated with the Originator for accounting, tax or financial reporting purposes); 

(ii) the annual financial statements of the Originator shall disclose the effects of the Originator’s transactions in
accordance with GAAP and the annual financial statements of the Originator shall not reflect in any way that the assets of the Buyer could be available to pay creditors of the Originator or any other Affiliate of the Originator; 

(iii) the resolutions, agreements and other instruments underlying the transactions described in this Agreement shall be
continuously maintained by the Originator as official records; 
 (iv) the Originator shall maintain an
arm’s-length relationship with the Buyer and will not hold itself out as being liable for the debts of the Buyer; 
 (v) the Originator shall keep its assets and its liabilities wholly separate from those of the Buyer; 
 (vi) the Originator will conduct its business solely in its own name or registered assumed name through its duly authorized officers or agents so as not to mislead others as to the identity of the
Originator; and 
 (vii) the Originator will avoid the appearance of conducting business on behalf of the Buyer
or that the assets of the Originator are available to pay the creditors of the Buyer. 
 (i) Cooperation with Requests for
Information or Documents. The Originator will cooperate fully with all reasonable requests of the Buyer regarding the provision of any information or documents, necessary or desirable, including the provision of such information or documents in
electronic or machine-readable format, to allow each of the Lender and the Deal Agent to carry out their responsibilities under the Transaction Documents. 
 (j) Payment Performance and Discharge of Obligations. The Originator will pay, perform in all material respects and discharge its obligations and liabilities, including, without limitation, all
taxes, assessments and governmental charges upon its income and properties when due the nonpayment, performance or discharge of which would have a Material Adverse Effect, unless and to the extent only that such obligations, liabilities, taxes,
assessments and governmental charges shall be contested in good faith and by appropriate proceedings and that, to the extent required by GAAP, proper and adequate book reserves relating thereto are established by the Originator. 

(k) Credit and Collection Policies. The Originator shall comply in all material respects with its Credit and Collection Policy
with respect to its origination, acquisition and servicing of the Purchased Assets on and prior to the related Purchase Date. 

  
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 (l) Compliance with Anti–Terrorism Laws. The Originator shall comply with all
applicable Anti–Terrorism Laws. The Originator shall conduct the requisite due diligence in connection with the origination or acquisition of each Purchased Asset for purposes of complying with the Anti–Terrorism Laws, including with
respect to the legitimacy of the applicable Lessee and the origin of the assets used by the said Lessee to purchase or lease the property in question, and will maintain sufficient information to identify the applicable Lessee for purposes of the
Anti–Terrorism Laws. The Originator shall not engage in any conduct described in Section 4.1(jj). The Originator shall, upon the request of the Deal Agent from time to time, provide certification and other evidence of the
Originator’s compliance with this Subsection 5.1(l). 
 Section 5.2 Negative Covenants of
Originator. 
 From the Closing Date until the Paid-in-Full Date: 

(a) Assets Not to be Evidenced by Promissory Notes. The Originator will take no action to cause any Purchased Asset that is not as
of the applicable Purchase Date evidenced by an instrument to be so evidenced except, so long as it is the Servicer under the Note Purchase Agreement and in its capacity as such, in connection with the enforcement or collection of such Purchased
Asset. 
 (b) Security Interests. Except for the transfers hereunder, the Originator will not sell pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on any Purchased Asset transferred hereunder (other than Permitted Liens), whether now existing or hereafter transferred hereunder, or any interest therein,
and Originator will not sell, pledge, assign or suffer to exist any Lien on its interest, if any, hereunder, other than Permitted Liens. Promptly upon the Originator becoming aware thereof, the Originator will notify the Buyer of the existence of
any Lien (other than Permitted Liens) on any Purchased Asset transferred hereunder; and the Originator shall defend the right, title and interest of the Buyer, the Trustee and the Lender in, to and under the Purchased Assets transferred hereunder,
against all claims of third parties claiming through or under the Originator or the Buyer; provided, however, that nothing in this Section 5.2(b) shall prevent or be deemed to prohibit the Originator from suffering to exist
Permitted Liens upon any of the Purchased Assets transferred hereunder. 
 (c) Activities of the Originator. The
Originator shall not engage in any business or activity of any kind with the Buyer, or enter into any transaction or indenture, mortgage, instrument, agreement, contract, lease or other undertaking with the Buyer, that is not directly related to the
transactions contemplated and authorized by this Agreement, the other Transaction Documents and the limited liability company agreement of the Buyer. 
 (d) Guarantees. The Originator shall not become or remain liable, directly or contingently, in connection with any Indebtedness or other liability of the Buyer, whether by guarantee, endorsement
(other than endorsements of negotiable instruments for deposit or collection in the ordinary course of business), agreement to purchase or repurchase, agreement to supply or advance funds (other than in its capacity as initial Servicer in accordance
with the Note Purchase Agreement), or otherwise. 
 (e) Merger, Sales. The Originator 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, unless the Originator is the surviving entity and unless: 

(i) the Originator has delivered to the Deal Agent and the Backup Servicer an Officer’s Certificate and an Opinion of
Counsel each stating that any consolidation, merger, 

  
 21 

 
conveyance or transfer and such supplemental agreement comply with this Section 5.2(e) and that all conditions precedent herein provided for relating to such transaction have been
complied with and, in the case of the Opinion of Counsel, that such supplemental agreement is legal, valid and binding with respect to the Originator and such other matters as the Deal Agent may reasonably request; 

(ii) the Originator shall have delivered notice of such consolidation, merger, conveyance or transfer to the Deal Agent;

 (iii) after giving effect thereto, no Event of Default, Servicer Default, Unmatured Event of Default or
Unmatured Servicer Default shall have occurred; and 
 (iv) the Deal Agent shall have consented in writing to
such consolidation, merger, conveyance or transfer. 
 (f) UCC Actions; Maintenance of Records. The Originator
(x) shall not change its name or its jurisdiction of organization without thirty (30) days’ prior written notice to the Servicer, the Trustee, the Buyer, the Hedge Counterparty and the Deal Agent and (z) will promptly take all
actions required (including, but not limited to, all filings and other acts necessary or advisable under the UCC, if applicable, of each relevant jurisdiction) in order to continue the first priority perfected security interest of the Buyer in all
Purchased Assets transferred hereunder. The Originator will give the Buyer and the Deal Agent prompt notice of a change of the location of its chief executive office. The Originator shall, for not less than two (2) years or for such longer
period as may be required by law, from the date on which any Purchased Asset arose, maintain the Records with respect to each Purchased Asset, including records of all payments received. The Originator will permit representatives of the Buyer, the
Servicer, the Trustee or the Deal Agent at any time and from time to time to make the inspections permitted by Section 2.16 of the Note Purchase Agreement, in accordance with the terms specified therein. 

(g) ERISA Matters. The Originator will not (a) engage in any prohibited transaction for which an exemption is not available
or has not previously been obtained from the United States Department of Labor; (b) fail to satisfy the minimum funding standards under Section 302(a) of ERISA and Section 412(a) of the Code; (c) fail to make any payments to a
Multiemployer Plan that the Originator may be required to make under the agreement relating to such Multiemployer Plan or any law pertaining thereto; (d) terminate any Benefit Plan so as to result in any material liability to the Originator; or
(e) permit to exist any occurrence of any reportable event described in Title IV of ERISA that represents a material risk of a liability of the Originator under ERISA or the Code. 

(h) Non-Petition. The Originator agrees that, for a period of two years and one day after the Aggregate Unpaids have been paid in
full, the Originator will not cause the Buyer to file a voluntary petition or institute, cause to be instituted or join in any involuntary petition or proceeding under the Bankruptcy Code or any other Insolvency Laws. It is the intention of the
Originator that the Purchased Assets be acquired by the Buyer and that the beneficial interest in and legal title to the Purchased Assets not be part of the Originator’s estate in the event of the filing of a bankruptcy petition by or against
the Originator under any Insolvency Laws. 
 (i) No Further Transfers. The Originator shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Lien (other than Permitted Liens) upon or with respect to, or assign any right to receive income in respect of any Purchased Asset transferred hereunder, or
upon or with respect to the account in which any Collections of any such Purchased Asset are deposited. 

  
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 (j) No Modification. Except in its capacity as Servicer pursuant to
Section 6.4(a) of the Note Purchase Agreement, the Originator shall not extend, amend, forgive, discharge, compromise, cancel or otherwise modify the terms of any Purchased Asset from and after its Purchase Date (provided the Originator
has not repurchased the related Purchased Asset from the Buyer in accordance with the Transaction Documents). 
 (k) No
Change in Payment Instructions. Unless the Deal Agent has given its prior written consent, the Originator shall not, after any Purchase Date, make any change in its instructions to Lessees regarding payments to be made to the Buyer or payments
to be deposited to the account into which any Collections in respect of any Purchased Assets are deposited unless such change is to an account listed on Schedule I of the Note Purchase Agreement (provided the Originator has not
repurchased the related Purchased Asset from the Buyer in accordance with the Transaction Documents). 
 (l) Failure to Take
Action. The Originator shall not fail to pay any tax, assessment, charge, fee or other obligation of the Originator with respect to the Purchased Assets, or fail to defend any action, if such failure to pay or defend may adversely affect the
validity or enforceability of the assignment of the Purchased Assets to the Buyer hereunder or the right, title or interest which the Originator had in the Purchased Assets prior to their assignment to the Buyer hereunder. 

(m) Credit and Collection Policy. The Originator will not materially amend, modify, supplement, restate or replace the Credit and
Collection Policy without the prior written consent of the Deal Agent (such consent to be granted or denied within ten (10) Business Days of request); provided, that such prior written consent shall not be required in the case of an
amendment which was mandated by any Applicable Law or Governmental Authority. 
 (n) Adverse Claims. The Originator will
not create, or participate in the creation of, or permit to exist, any Liens (other than Permitted Liens) in relation to the Lockbox Account. 
 ARTICLE VI 
 REPURCHASE OBLIGATION 

Section 6.1 Retransfer of Ineligible Contracts. 

In the event of the discovery that a Contract transferred hereunder is an Ineligible Contract, no later than thirty (30) Business
Days following the earlier of (i) knowledge of such ineligibility on the part of the Originator and (ii) receipt by the Originator of written notice thereof given by the Buyer, the Trustee or the Deal Agent, the Originator shall
(a) repurchase each such Contract and any related Purchased Assets on the terms and conditions set forth below in exchange for the payment by the Originator of the Prepayment Amount for such Ineligible Contract or, (b) subject to the
satisfaction of the conditions in Section 6.2, substitute for such Ineligible Contract a Substitute Contract. In any of the foregoing instances whether by repurchase or substituting, pursuant to this Article VI the Originator
shall accept a retransfer of each such Contract repurchased or substituted by the Originator pursuant to this Article VI (each a “Retransferred Contract”), and there shall be deducted from the ADCB the Discounted Contract
Balance of each such Retransferred Contract and, if applicable, increased by the Discounted Contract Balance of each Substitute Contract. On and after the date of such retransfer, each Retransferred Contract shall not be included in the pool of
Purchased Assets and, as applicable, the Substitute Contracts shall be included in the pool of Purchased Assets. In consideration of any such repurchase the Originator shall, on the date of retransfer of such Retransferred Contract, make a deposit
in the Collection Account (for allocation pursuant to Section 2.7 or 2.8 of the Note Purchase Agreement, as applicable) in 

  
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immediately available funds in an amount equal to the Prepayment Amount for such Retransferred Contract. To the extent that the Prepayment Amount or the fair market value with respect to any
Substitute Contract exceeds the fair market value of any such Ineligible Contract so repurchased or replaced, such excess amount will be deemed to be a capital contribution from the Originator to the Buyer. Upon each retransfer to the Originator of
any such Retransferred Contract, the Buyer shall automatically and without further action be deemed to, and hereby does, transfer, assign and set-over to the Originator, free and clear of any Lien created pursuant to this Agreement and any other
Transaction Document, all the right, title and interest of the Buyer in, to and under each such Retransferred Contract, all monies due or to become due with respect thereto, the Excluded Amounts related thereto and all proceeds thereof and all
rights to security for any such Retransferred Contract, and all proceeds and products of the foregoing, and the Buyer shall, in connection with such transfer, assignment and set-over and without further action, be deemed to, and hereby does,
represent and warrant that it has the limited liability company authority and has taken all necessary limited liability company action to accomplish such transfer, assignment and set-over, but without any other representation or warranty, express or
implied. Upon any transfer of a Retransferred Contract, the Buyer shall cause the Trustee to release its Lien thereon and shall delivery thereof to the Originator in accordance with the applicable provisions of the Note Purchase Agreement. The Buyer
shall, at the sole expense of the Originator, execute such documents and instruments of transfer as may be prepared by the Originator and take such other actions as shall reasonably be requested by the Originator to effect the transfer of any such
Retransferred Contract pursuant to this Article VI. 
 Section 6.2 Substitution of Contracts.

 On any day prior to the occurrence of an Event of Default (and thereafter with the prior consent of the Deal Agent), the
Originator may, subject to the conditions set forth in this Section 6.2, replace any Contract that is an Ineligible Contract or that is a Release-Eligible Contract with one or more Eligible Contracts (each, a “Substitute
Contract”), provided that no such replacement shall occur unless each of the following conditions is satisfied as of the date of such replacement and substitution: 

(a) the Buyer has notified the Deal Agent in writing that the Contract to be replaced is an Ineligible Contract or a
Release-Eligible Contract (each a “Replaced Contract”); 
 (b) each Substitute Contract is an
Eligible Contract on the date of substitution; 
 (c) after giving effect to any such substitution, the
Outstanding Amount does not exceed the lesser of (i) the Advance Limit and (ii) the Borrowing Base; 

(d) the aggregate Discounted Contract Balance (at the applicable Discount Rate) of such Substitute Contracts shall be
equal to or greater than the aggregate Discounted Contract Balance (at the Blended Discount Rate as of the date of the substitution) of such Replaced Contracts; 
 (e) during the Amortization Period, such Substitute Contracts, at the time of substitution by the Originator, shall not have a longer Weighted Average Life than the replaced Contracts; 

(f) all representations and warranties of the Originator contained in Sections 4.1 and 4.2 shall be
true and correct as of the date of substitution of any such Substitute Contract; 
 (g) the substitution of any
Substitute Contract does not cause an Event of Default to occur; 

  
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 (h) the aggregate Discounted Contract Balance of all Defaulted Contracts or
delinquent Contracts repurchased or substituted by the Originator does not exceed 10% of the highest ADCB of any month during the twelve (12) month period immediately preceding such date of determination (calculated without regard to the
repurchase or substitution of an Ineligible Contract); 
 (i) the aggregate Discounted Contract Balance of all
Contracts repurchased or substituted by the Originator pursuant to its optional right to repurchase or substitute pursuant to this Agreement does not exceed 15% of the highest ADCB of any month during the twelve (12) month period immediately
preceding such date of determination (calculated without regard to the repurchase or substitution of Ineligible Contracts and inclusive of any Defaulted Contract or delinquent Contracts repurchased or substituted by the Originator); 

(j) during the Revolving Period, after giving effect to any such substitution, the Portfolio Concentration Criteria are
maintained or improved; 
 (k) during the Amortization Period, before or after giving effect to any such
substitution, none of the Portfolio Concentration Criteria are exceeded; 
 (l) the Originator shall deliver to
the Buyer on the date of such substitution a revised Schedule I that shall include such Substitute Contract and shall have deleted such Replaced Contracts; and 
 (m) the Originator shall deliver to the Buyer and the Deal Agent on the date of such substitution a certificate of a Responsible Officer certifying that each of the foregoing is true and correct as of
such date and an Assignment Agreement with respect to such Substitute Contracts. 
 Section 6.3 Originator’s
Optional Right to Repurchase Release-Eligible Contracts. 
 In addition to its right of substitution hereunder, the
Originator has the right, but not the obligation, to repurchase any Release-Eligible Contract and the Related Security with respect thereto provided that (i) the aggregate Discounted Contract Balance of all Defaulted Contracts or delinquent
Contracts repurchased or substituted by the Originator does not exceed 10% of the highest ADCB of any month during the twelve (12) month period immediately preceding such date of determination (calculated without regard to the repurchase or
substitution of Ineligible Contracts) and (ii) the aggregate Discounted Contract Balance of all Contracts repurchased or substituted by the Originator pursuant to its optional right to repurchase or substitute pursuant to this Agreement does
not exceed 15% of the highest ADCB of any month during the twelve (12) month period immediately preceding such date of determination (calculated without regard to the repurchase or substitution of Ineligible Contracts and inclusive of any
Defaulted Contract or delinquent Contracts repurchased or substituted by the Originator). In the event of such a repurchase, the Originator shall deposit in the Collection Account the Option Price with respect to such Release-Eligible Contract and
Related Security as of the date of such repurchase. Promptly upon request of the Originator to do so, the Buyer (or the Servicer on its behalf) shall determine the Fair Market Value and the Prepayment Amount with respect to any Release-Eligible
Contract and Related Security specified by the Originator and notify the Originator of each thereof and of the Option Price with respect thereto should the Originator elect to exercise its purchase option. No later than ten (10) Business Days
after receipt of such information, the Originator may, at its option, by written notice to the Buyer, the Servicer, the Deal Agent, the Hedge Counterparty and the Trustee, elect to exercise its right to purchase such Release-Eligible Contract and
Related Security and, on such date or within five (5) Business Days thereafter, repurchase such Release-Eligible Contract and Related Security. Failure by the Originator to 

  
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exercise such option to repurchase any Release-Eligible Contract and Related Security at any time shall not affect the ability of the Originator to exercise such right at a later date with
respect to such Release-Eligible Contract and Related Security provided the Option Price is redetermined at such later time. 

ARTICLE VII 
 TERM AND TERMINATION 
 Section 7.1 Termination.

 This Agreement shall commence as of the date of execution and delivery hereof and shall continue in full force and effect
until the occurrence of the Paid-in-Full Date pursuant to the Note Purchase Agreement; provided, however, that the termination of this Agreement pursuant to this Section 7.1 shall not discharge any Person from obligations
incurred prior to any such termination of this Agreement, including, without limitation, any obligations to repurchase Contracts sold prior to such termination pursuant to Section 6.1 or 6.3 hereof. The Originator’s
representations, covenants and obligations set forth in Articles IV, V, and VI 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 Paid-in-Full Date; provided, however, that the indemnification provisions of Article VIII and the provisions of Sections 9.6, 9.7, 9.9, 9.13, 9.14 and 9.16 shall be
continuing and shall survive any termination of this Agreement. 
 ARTICLE VIII 

INDEMNIFICATION 
 Section 8.1 Indemnification by the Originator. 
 (a) Without
limiting any other rights that the Buyer, the Lender, the Deal Agent, the Backup Servicer, any Successor Servicer, the Trustee, the Hedge Counterparty, the Secured Parties, any assignee of any such Persons or any of such Persons’ respective
Affiliates, shareholders, officers, directors, employees or agents (each an “Indemnified Party”) may have hereunder or under Applicable Law, the Originator hereby agrees to indemnify each Indemnified Party from and against any and
all damages, losses, claims, liabilities and related costs and expenses, including reasonable attorneys’ fees and disbursements (all of the foregoing being collectively referred to as “Indemnified Amounts”), but excluding
allocations of overhead expenses or other non-monetary damages, arising out of or as a result of this Agreement or the ownership of the Note or in respect of any Purchased Asset, excluding, however, (i) Indemnified Amounts to the extent
resulting from the gross negligence or willful misconduct on the part of the applicable Indemnified Party, and (ii) recourse (except with respect to payment and performance of obligations provided for in this Agreement) for Defaulted Contracts
or other recourse for non-payment of Contracts due to credit problems of the Lessees. Without limiting the foregoing, the Originator shall indemnify each Indemnified Party for Indemnified Amounts relating to or resulting from: 

(A) fraud, willful malfeasance or negligence on the part of the Originator in connection with the transactions
contemplated under this Agreement; 
 (B) reliance on any representation or warranty made or deemed made by the
Originator or any of its officers under or in connection with this Agreement, which shall have been false or incorrect in any material respect when made or deemed made or delivered (provided 

  
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that this clause (B) shall not apply to any Ineligible Contract, the only remedy for which is set forth in Section 6.1 and Section 6.2, as applicable); 

(C) the failure by the Originator to comply with any term, provision or covenant contained in this Agreement or any
agreement executed by the Originator in such capacity in connection with this Agreement, or with any Applicable Law with respect to any Purchased Asset, the related Contract, or the nonconformity of any Purchased Asset, the related Contract with any
such Applicable Law (provided that this clause (C) shall not apply to any Ineligible Contract, the only remedy for which is set forth in Section 6.1 and Section 6.2, as applicable); 

(D) the failure of the Purchased Assets to have been originated in compliance with the Credit and Collection Policy;

 (E) the Purchased Assets not being serviced in compliance with the Credit and Collection Policy prior to the
Purchase Date thereof; 
 (F) the failure to vest and maintain vested in the Buyer (or the Trustee, as its
designee) or to transfer to the Buyer the Purchased Assets, free and clear of any Lien, other than Permitted Liens, whether existing at the time of any Purchase or at any time thereafter (including, without limitation, any such failure arising from
the existence of more than one original or authoritative copy of any Contract; 
 (G) the failure to file, or any
delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other Applicable Law with respect to any Purchased Assets as required under this Agreement, whether at the time of any
Purchase or at any subsequent time; 
 (H) any dispute, claim, offset or defense (other than payment by the
Lessee or the discharge in bankruptcy of the Lessee) of the Lessee to the payment of any Purchased Asset that is, or is purported to be, a Purchased Asset (including, without limitation, a defense based on such Purchased Asset or the related
Contract not being a legal, valid and binding obligation of such Lessee enforceable against it in accordance with its terms), or any other claim resulting from the sale of the merchandise or services related to such Purchased Asset or the furnishing
or failure to finish such merchandise or services; 
 (I) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of whatever sort arising out of or in connection with merchandise or services which are the subject of any Purchased Asset or Contract; 

(J) the failure by Originator to pay when due any Taxes for which the Originator is liable, including, without limitation,
sales, excise, transfer or personal property taxes payable in connection with the Purchased Assets; 
 (K) the
commingling of Collections of Purchased Assets at any time with other funds; 
 (L) any Lessee being in violation
of or adversely affected by the provisions of any Anti-Terrorism Law; 
 (M) any investigation, litigation or
proceeding related to this Agreement, the Originator or the use of proceeds of Purchases by the Originator or reinvestments or the 

  
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ownership of the Purchased Assets or in respect of any Purchased Asset or Contract in accordance with this Agreement; 

(N) any attempt by any Person to void or otherwise avoid any Purchase hereunder any statutory provision or common law or
equitable action, including, without limitation, any provision of the Bankruptcy Code. 
 The parties hereto agree that the
provisions of this Section 8.1 shall not be interpreted to provide, and hereby excludes, recourse to the Originator against loss by reason of the bankruptcy or insolvency (or other credit condition) of, or default by, the related Lessee
on or with respect to any Purchased Asset. 
 (b) Any amounts subject to the indemnification provisions of this
Section 8.1 shall be paid by the Originator to the Deal Agent within five (5) Business Days following the Deal Agent’s demand therefor. 
 (c) If for any reason other than the exclusions set forth in the first paragraph of Section 8.1(a) the indemnification provided above in this Section 8.1 is unavailable to the
Indemnified Party or is insufficient to hold an Indemnified Party harmless, then the Originator 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 Originator on the other hand but also the relative fault of such Indemnified Party as well as any other relevant equitable
considerations. The parties agree that the provisions of this Section 8.1(c) shall not be interpreted to provide recourse to the Originator against loss by reason of the bankruptcy, insolvency or lack of creditworthiness of a Lessee with
respect to any Contract. 
 Section 8.2 Assignment of Indemnities. 

The Originator acknowledges that the Buyer may assign its rights of indemnity granted hereunder to the Trustee and the other Secured
Parties pursuant to the Note Purchase Agreement. Upon such assignments, the Trustee and the other Secured Parties, as applicable, shall have all rights of the Buyer hereunder and may in turn assign such rights as provided in the Note Purchase
Agreement. The Originator agrees that, upon such assignment, any of the Trustee, the Secured Parties or the assignee of any such Person, as applicable, may enforce directly, without joinder of the Buyer, the indemnities set forth in this
Article VIII. 
 ARTICLE IX 
 MISCELLANEOUS PROVISIONS 
 Section 9.1 Amendment.

 This Agreement and the rights and obligations of the parties hereunder may not be amended, waived or changed orally, but
only by an instrument in writing signed by the Buyer and the Originator, with the prior written consent of the Deal Agent. The Buyer shall provide not less than ten (10) Business Days’ prior written notice of any such proposed amendment to
the Deal Agent. 
 Section 9.2 Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue.

 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK INCLUDING
SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO THE 

  
 28 

 
CONFLICT OF LAWS PRINCIPLES THEREOF. EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR 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 9.3 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 9.4
Notices. 
 All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in
writing (including communication by facsimile copy) and mailed, emailed, faxed, transmitted or delivered, as to each party hereto, at its address set forth below 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 mail, five days after being deposited in the United States mail, first class postage prepaid, (b) notice by
email, when verbal or electronic communications of receipt is obtained, or (c) notice by facsimile copy, when verbal or electronic communication of receipt is obtained. 

 

					
	If to Originator:	 	NewStar Financial, Inc.
		 	500 Boylston Street, Suite 1250
		 	Boston, Massachusetts 02116
		 	Attention:	 	Brian Forde
		 	Facsimile No.:	 	(617) 848-4373
		 	Confirmation No.:	 	(617) 848-4300
		 	Email:	 	bforde@newstarfin.com
		
	If to the Buyer:	 	NewStar Equipment Finance I, LLC
		 	500 Boylston Street, Suite 1250
		 	Boston, Massachusetts 02116
		 	Attention:	 	Brian Forde
		 	Facsimile No.:	 	(617) 848-4373
		 	Confirmation No.:	 	(617) 848-4300
		 	Email:	 	bforde@newstarfin.com

 Section 9.5
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 or pdf), 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

  
 29 

 
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 contains 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 9.6 Assignment. 

(a) Notwithstanding anything to the contrary contained herein, this Agreement may not be assigned by the Buyer or the Originator except as
permitted by this Section 9.6 or by the Note Purchase Agreement. Simultaneously with the execution and delivery of this Agreement, the Buyer shall assign all of its right, title and interest herein to the Trustee for the benefit of the
Secured Parties under the Note Purchase Agreement as provided in the Note Purchase Agreement, to which assignment the Originator hereby expressly consents. Upon assignment, the Originator agrees to perform its obligations hereunder for the benefit
of the Deal Agent and the Trustee (for the benefit of the Secured Parties) under the Note Purchase Agreement and such Persons shall be third party beneficiaries hereof. Upon such assignment, the Trustee (for the benefit of the Secured Parties) may
enforce the provisions of this Agreement, exercise the rights of the Buyer and enforce the obligations of the Originator hereunder without joinder of the Buyer. 
 (b) This Agreement may not be assigned by the Originator except in connection with a merger or consolidation of the Originator with or into, or disposition of the Originator’s properties and assets
relating to its equipment leasing business or its business as a whole, as applicable, substantially in its entirety to another Person; provided, however, that any such merger, consolidation or disposition shall satisfy the applicable
requirements of Section 5.2(e). In connection with any permitted assignment of this Agreement by the Originator, the Originator shall deliver to the Buyer and the Deal Agent an Officer’s Certificate that such assignment complies
with this Section 9.6, and shall cause such assignee to execute an agreement supplemental hereto, in form and substance reasonably satisfactory to the Deal Agent, pursuant to which such assignee shall expressly assume and agree to the
performance of every covenant and obligation of the Originator hereunder, to provide for the delivery of an Opinion of Counsel that such supplemental agreement is legal, valid and binding with respect to such assignee, and to take such other actions
and execute such other instruments as may reasonably be required to effectuate such assignment. 
 Section 9.7
Further Assurances. 
 The Buyer and the Originator agree to do and perform, from time to time, any and all acts and
to execute any and all further instruments required or reasonably requested by the other party more fully to effect the purposes of this Agreement and the Transaction Documents, including, without limitation, the execution of any financing
statements, continuation statements, termination statements, releases or equivalent documents relating to the Contracts for filing under the provisions of the UCC or other laws of any applicable jurisdiction. The Originator hereby authorizes the
Buyer and the Deal Agent to file one or more financing or continuation statements, and amendments thereto, relating to all or any one of the Purchased Assets without the signature of the Originator where permitted by law. A carbon, photographic or
other reproduction of this Agreement or any notice or financing statement covering the Purchased Assets or any part thereof shall be sufficient as a notice or financing statement where permitted by Applicable Law. 

Section 9.8 No Waiver; Cumulative Remedies. 

  
 30 

 No failure on the part of the Buyer or Originator 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 9.9 Binding
Effect; Third-Party Beneficiaries. 
 This Agreement shall inure to the benefit of and the obligations hereunder shall be
binding upon the parties hereto and their respective successors and permitted assigns. The Trustee for the benefit of the Secured Parties and the Deal Agent pursuant to Section 9.6, and their respective permitted assigns shall be
third-party beneficiaries of this Agreement, but, no other party (other than as provided in Section 8.2) is intended as a third party beneficiary hereof. 
 Section 9.10 Heading and Exhibits. 
 The headings herein are for
purposes of reference 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 9.11 [Reserved]. 

Section 9.12 Costs, Expenses and Taxes. 
 (a) In addition to the rights of indemnification granted to the Buyer and its Affiliates and officers, directors, employees and agents thereof under Article VIII hereof, the Originator agrees to
pay on demand all reasonable costs and expenses of the Buyer, the Deal Agent, the Trustee and the Secured Parties incurred in connection with the amendment or modification of, or any waiver or consent issued in connection with, this Agreement and
the other documents to be delivered hereunder or in connection herewith, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Buyer with respect thereto and with respect to advising the Buyer as to its
rights and remedies under this Agreement and the other documents to be delivered hereunder or in connection herewith, and all reasonable costs and out-of-pocket expenses, if any (including reasonable counsel fees and expenses), incurred by the Buyer
in connection with the enforcement of this Agreement and the other documents to be delivered hereunder or in connection herewith. 
 (b) The Originator shall pay on demand any and all stamp, sales, excise, transfer and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and
recording of this Agreement or any agreement or other document delivered in connection with this Agreement. 

Section 9.13 Recourse Against Certain Parties. 

(a) No recourse under or with respect to any obligation, covenant or agreement (including, without limitation, the payment of any fees or
any other obligations) of the Originator 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, shareholder, officer, employee
or director of the Originator by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise it being expressly agreed and understood that the agreements of the Originator 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 the 

  
 31 

 
Originator, and that no personal liability whatsoever shall attach to or be incurred by any incorporator, shareholder, officer, employee or director of the Originator, or any other them, under or
by reason of any of the obligations, covenants or agreements of the Originator contained in this Agreement or in any other such instruments, documents or agreements, or which are implied therefrom, and that any and all personal liability of each
incorporator, shareholder, officer, employee or director of the Originator, or any of them, for breaches by the Originator 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. The provisions of this Section 9.13(a) shall survive the termination of this Agreement. 

(b) No recourse under or with respect to any obligation, covenant or agreement (including, without limitation, the payment of any
fees or any other obligations) of the Buyer 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 manager of the Buyer or any member,
stockholder, officer, employee or director of the Buyer or of any such manager, as such, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise it being expressly agreed and
understood that the agreements of the Buyer 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 limited liability
company obligations of the Buyer, and that no personal liability whatsoever shall attach to or be incurred by any manager of the Buyer or any member, stockholder, officer, employee or director of the Buyer or of any such member, as such, or any
other them, under or by reason of any of the obligations, covenants or agreements of the Buyer contained in this Agreement or in any other such instruments, documents or agreements, or which are implied therefrom, and that any and all personal
liability of every such manager of the Buyer and each member, stockholder, officer, employee or director of the Buyer or of any such administrator, or any of them, for breaches by the Buyer 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. The provisions of this
Section 9.13(b) shall survive the termination of this Agreement. 
 Section 9.14 Setoff.

 (a) The Originator’s obligations under this Agreement shall not be affected by any right of setoff the Originator
might have against the Buyer, the Deal Agent, any Secured Party or any assignee, all of which rights are hereby waived by the Originator. 
 (b) The Buyer shall have the right to set-off against the Originator any amounts to which the Originator may be entitled and to apply such amounts to any claims the Buyer may have against the Originator
from time to time under this Agreement. Upon any such set-off, the Buyer shall give notice of the amount thereof and the reasons therefor to the Originator. 
 Section 9.15 No Proceedings. 
 The Originator hereby agrees that
it will not institute against, or join any other Person in instituting against the Buyer any Insolvency Proceeding so long as there shall not have elapsed two years and one day since the Paid-in-Full Date. 

  
 32 

 Section 9.16 Protection of Right, Title and Interest in the Purchased Assets;
Further Action Evidencing Advances. 
 (a) The Originator shall cause this Agreement, all amendments hereto and/or all
financing statements and continuation statements and any other necessary documents covering the Buyer’s right, title and interest to the Purchased Assets 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 right, title and interest of the Buyer hereunder to all property comprising the Purchased Assets. The Originator shall deliver to
the Buyer the file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing. The Originator shall cooperate fully with the Buyer in
connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this Section 9.16(a). 
 (b) The Originator agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that the Buyer may reasonably request in order
to perfect, protect or more fully evidence the Purchases hereunder and the security and/or ownership interest granted in the Purchased Assets, or to enable the Buyer to exercise and enforce its rights and remedies hereunder or under any Transaction
Document. At any time the Buyer may direct the Originator to notify the Lessees, at Originator’s expense, of the Buyer’s interest in the Purchased Asset under this Agreement and may direct that payments of all amounts due or that become
due under any or all of the Purchased Assets be made directly to the Lockbox Account or such other account as the Deal Agent may direct in accordance with the Note Purchase Agreement. 

(c) If the Originator fails to perform any of its obligations hereunder, the Buyer may (but shall not be required to) perform, or cause
performance of, such obligation; and the Buyer’s costs and expenses incurred in connection therewith shall be payable by the Originator as provided in Article VIII, as applicable. The Originator irrevocably authorizes the Buyer at
any time and from time to time at the Buyer’s sole discretion and appoints the Buyer as its attorney-in-fact to act on behalf of the Originator (i) to execute on behalf of the Originator as debtor and to file financing statements necessary
or desirable in the Buyer’s sole discretion to perfect and to maintain the perfection and priority of the interest of the Buyer in the Purchased Assets and (ii) to file a carbon, photographic or other reproduction of this Agreement or any
financing statement with respect to the Purchased Assets as a financing statement in such offices as the Buyer in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the interests of the Buyer
in the Purchased Assets. This appointment is coupled with an interest and is irrevocable. 
 (d) Without limiting the generality
of the foregoing, Originator will, not earlier than six (6) months and not later than three (3) months prior to the fifth anniversary of the date of filing of the financing statement referred to in Section 3.1 or 3.2 or
any other financing statement filed pursuant to this Agreement or in connection with any Purchase hereunder, unless the Paid-in-Full Date shall have occurred: 
 (i) 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 Buyer an opinion of the counsel for Originator, in form and substance
reasonably satisfactory to the Buyer, confirming and updating the opinion delivered pursuant to Section 3.1 or 3.2 with 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 provided herein or otherwise 

  
 33 

 
permitted hereunder, which opinion may contain usual and customary assumptions, limitations and exceptions. 
 Section 9.17 Subordination. 
 The Originator shall have the
right to receive, and the Buyer shall make, any and all payments relating to any indebtedness, obligation or claim the Originator may from time to time hold or otherwise have against the Buyer or any assets or properties of the Buyer, whether
arising hereunder or otherwise existing, provided that, after giving effect to any such payment, the Borrowing Base at such time exceeds the Aggregate Unpaids under the Note Purchase Agreement. The Originator hereby agrees that at any time
during which the condition set forth in the proviso of the immediately preceding sentence shall not be satisfied, the Originator shall be subordinate in right of payment to the prior payment of any indebtedness or obligation of the Buyer owing to
the Lender, the Deal Agent or any other Secured Party under the Note Purchase Agreement. 
 Section 9.18
Confidentiality. 
 The Buyer and the Originator shall maintain and shall cause each of its employees and officers to
maintain the confidentiality of this Agreement and all information with respect to the Deal Agent, the Secured Parties, the Trustee and the Backup Servicer as provided in Section 13.13 of the Note Purchase Agreement, which provision is
hereby incorporated herein, mutatis mutandis. 
 [Signatures to Follow] 

  
 34 

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

			
	NEWSTAR FINANCIAL, INC.
		
	By:	 	/s/ John J. Frishkopf
	Name:	 	John J. Frishkopf
	Title:	 	Treasurer

  

			
	NEWSTAR EQUIPMENT FINANCE I, LLC
		 	
	By:	 	 NewStar Financial, Inc.,

its Designated Manager

  

			
		
	By:	 	/s/ John J. Frishkopf
	Name:	 	John J. Frishkopf
	Title:	 	Treasurer

  
 S-1

 SCHEDULE I 
 LIST OF CONTRACTS 
 To Be Provided and Updated As of the Date of Each Assignment
Agreement and in Connection with any 
 Repurchase or Substitution 

Schedule I, Page 1 

 SCHEDULE II 
 LOCATION OF RECORDS 
 Chief Executive Office, Principal Place of Business and Location of Records
in Electronic Form 
 500 Boylston Street, Suite 1250 
 Boston, MA 02116 
 Following delivery to the Trustee, the Records are maintained at the offices of
the Trustee specified in the Note Purchase Agreement. 
 Schedule II, Page 1 

 EXHIBIT A 
 FORM OF ASSIGNMENT AGREEMENT 
 ASSIGNMENT AGREEMENT, dated as of
                    , from NewStar Financial, Inc. (the “Originator”) to NewStar Equipment Finance I, LLC (the
“Buyer”). 
 1. We refer to the Purchase and Sale Agreement, dated as of January 25, 2011 (the
“Agreement”), by and between the Originator and the Buyer. All capitalized terms used herein shall have the meanings set forth in the Agreement. 
 2. The Purchase Price for the Purchased Assets subject to this Assignment Agreement is $[            ]. Such Purchase Price shall be paid in
accordance with Section 2.3(a) of the Agreement. 
 3. The Cut-Off Date for the Purchased Assets subject to this
Assignment Agreement is [            ]. 
 4. The Originator does
hereby sell, contribute, transfer, assign, set over and otherwise convey to the Buyer, and the Buyer will [purchase/accept as a capital contribution] and take from the Originator, without recourse, all right, title and interest of the
Originator in, to and under the following property, whether now existing or hereafter created or acquired (the “Purchased Assets”): 
 (i) the Contracts that are identified by the Originator that are listed on Schedule I attached hereto, together with all Collections, Excluded Amounts and all monies due or to become due in payment
of such Contracts after the related Cut-Off Date, including, but not limited to, any prepayment amounts and any payments in respect of a Casualty Loss or early termination, any Recoveries received with respect thereto, but excluding any
Scheduled Payments due prior to the related Cut-Off Date and any Origination Fees; and 
 (ii) all Related
Security. 
 5. Simultaneously with the execution and delivery hereof the Originator has delivered to or at the direction of the
Buyer such endorsements and assignments, made without recourse, of the Contract Files as are necessary to properly complete the absolute assignment of the Purchased Assets to the Buyer. 

6. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK INCLUDING SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF 

Exhibit A, Page 1 

 IN WITNESS WHEREOF, the Originator and the Buyer have caused this Assignment to be executed
by its authorized officer as of the date first above written. 
  

			
	NEWSTAR FINANCIAL, INC., as Originator
		
	By:	 	 
	Name:	 	 
	Title:	 	 

  

			
	NEWSTAR EQUIPMENT FINANCE I, LLC
		
	By:	 	 NewStar Financial, Inc.,
 its
Designated Manager

  

			
		
	By:	 	 
	Name:	 	 
	Title:	 	 

 Exhibit A, Page 2Unassociated Document

 

EXHIBIT 4.1

 

BAYTEX 

ENERGY CORP.

 

DIVIDEND REINVESTMENT PLAN

 

(amended and restated effective January 24, 2011)

IMPORTANT NOTICE

As a holder of common shares of Baytex Energy Corp. ("Baytex" or the "Corporation"), you should read this document carefully before making any decision regarding the Dividend Reinvestment Plan (the "Plan").

If you are a holder of common shares of Baytex ("Shares") and resident of the United States and have received this document, please see the prospectus relating to the Plan, including the United States federal income tax considerations and risk factors included therein and the documents incorporated by reference therein, which forms part of the Registration Statement on Form F-3 (the "Registration Statement"), filed with the United States Securities and Exchange Commission (the "SEC") on January 24, 2011.  The Registration Statement and our U.S. filings are electronically available from the SEC's Electronic Document Gathering and Retrieval System, which is commonly known by the acronym EDGAR and may be accessed at www.sec.gov.

PURPOSE

The Plan provides eligible holders of Shares ("Shareholders") the advantage of accumulating additional Shares by reinvesting their dividends.

The Corporation will determine prior to each dividend payment date the amount of equity, if any that will be made available under the Plan on that date. No assurances can be made that Shares will be made available on a regular basis, or at all.

At the discretion of the Corporation, Shares will either be issued from treasury at 95% of the Average Market Price or acquired at prevailing market prices.

The Directors of the Corporation may, in their sole discretion, at any time, with effect at the time of declaration of the next dividend payment, determine to change the Plan by changing or eliminating the then-applicable discount.

Shareholders are not required to participate in the Plan.  A Shareholder who does not elect to participate or is not deemed to be a participant in the Plan will continue to receive their dividends in the normal manner.

TRANSITION FROM PREVIOUS PLAN OF BAYTEX ENERGY TRUST

This Plan amends, restates and supersedes the Distribution Reinvestment Plan of Baytex Energy Trust ("BET") dated July 22, 2004 ("BET Plan").

If you were an eligible registered holder of trust units of BET and a participant in the BET Plan prior to December 31, 2010, and as a result of the conversion of BET to a corporation on December 31, 2010 you became an eligible Shareholder who is a registered holder of Shares and you continue to hold such Shares at the relevant time, then you will be deemed to be a participant in the Plan without further action on your part.

  

1

  

 

If you were an eligible beneficial holder of trust units of BET (i.e., a holder of trust units whose trust units were not registered in their own name, but were instead held through a broker, investment dealer, financial institution or other nominee) and a participant in the Plan through the nominee holder through which you held your trust units prior to December 31, 2010, and as a result of the conversion of BET to a corporation on December 31, 2010, you became an eligible beneficial holder of Shares and you continue to hold such Shares at the relevant time, you should contact your nominee holder to confirm your continued participation in the Plan.

DEFINITIONS

"Agent" means Valiant Trust Company, or such other company as is appointed by Baytex from time to time to act as Agent under the Plan.

"Authorization Form" means the authorization form established by Baytex and the Agent for time to time for the purpose of enrolling eligible registered holders of the Shares, other than the Depositary, in the Plan.

"Average Market Price" means the arithmetic average of the daily volume weighted average trading prices of the Shares on the Toronto Stock Exchange (in respect of Participants resident in Canada or any jurisdiction other than the United States) or the New York Stock Exchange (in respect of Participants resident in the United States) for the trading days in the Trading Period on which at least one board lot of Shares is traded, appropriately adjusted for certain capital changes (including Share subdivisions, Share consolidations, certain rights offerings and certain dividends).

"Depositary" means, collectively or individually, as the case may be, The Canadian Depositary for Securities, which acts as a nominee for many Canadian brokerage firms, and Depository Trust Company, which acts as a nominee for many United States securities brokerage firms and other financial institutions, or its nominee, as applicable.

"Participants" mean registered or beneficial holders of at least one Share who, on the applicable record date for a cash dividend, are eligible to participate in the Plan and have elected to do so in accordance with the terms of the Plan.

"Trading Period" means the period commencing on the second business day after the dividend record date and ending on the second business day immediately prior to the dividend payment date. Such period will not include more than 20 trading days and the last trading day of the period will be the second business day prior to the dividend payment date.

ADVANTAGES

The Plan provides eligible Shareholders with the advantage of acquiring additional Shares at potentially lower prices by reinvesting their dividends without paying any commissions, service charges or brokerage fees. An eligible Shareholder may, by enrolling in the Plan, direct that cash dividends on all Shares registered in the name of such Shareholder, together with cash dividends on Shares held for the account of such Shareholder under the Plan, be applied to the purchase of additional Shares, and may elect to have the additional Shares held for the account of such Shareholder under the Plan.  Shares will, in the discretion of the Corporation, either be issued from treasury at 95% of the Average Market Price or acquired at prevailing market prices.

Additional Shares that are purchased pursuant to the Plan will be purchased by the Agent, who acts on behalf of the Participants.  Where a Participant directs that additional Shares be purchased with the dividends on the Participant's existing Shares, the Agent will hold the additional Shares under the Plan for the account of the Participant.

 

  

2

  

 

Dividends paid on additional Shares purchased with reinvested dividends that are held under the Plan will automatically be reinvested in additional Shares in accordance with the Plan and the current election of the Participant.

No commissions, service charges or brokerage fees are payable by Participants in connection with the purchase of additional Shares under the Plan. Full investment of funds is possible because the Plan permits fractions of Shares (to four decimal places) as well as whole Shares to be credited to Participants' accounts.

The Corporation will determine prior to each dividend payment date the amount of equity, if any, that will be made available for issuance from treasury under the Plan on that date and the Corporation will also determine if additional Shares will be purchased in the market.  No assurances can be made that Shares will be made available for issuance from treasury on a regular basis, or at all or whether Shares will be purchased in the market.  No assurances can be made that if the determination is made to purchase additional Shares in the market that a sufficient number of additional Shares will be available for purchase in the market. In such an event, dividends will be paid in cash.

ADMINISTRATION

Valiant Trust Company has been appointed as Agent under the Plan. If Valiant Trust Company ceases to act as Agent for any reason, another company will be designated by Baytex to act as Agent and Participants will be promptly notified of the change.

The Agent acts for and on behalf of the Participants. On each dividend payment date, Baytex will pay to the Agent all cash dividends made on the Shares registered in the name of, or held under the Plan for the account of, Participants who have enrolled in the Plan. Subject to proration described below under the heading "Proration In Certain Events", the Agent will use such funds, to purchase additional Shares. Additional Shares purchased under the Plan will be registered in the name of the Agent, or its nominee, as agent for the Participants, and will be credited to the Participant's account.

Under the Plan, the Agent will purchase (at the express direction of the Corporation), on each dividend payment date, for each Participant's account the additional Shares, including fractions computed to four decimal places in the following manner:

	
  

	
(a)

	
in the case of a market purchase, the average of the actual price paid (excluding brokerage commissions, fees and transaction costs) per Share by the Agent on the Toronto Stock Exchange (in respect of Participants resident in Canada or any jurisdiction other than the United States) or the New York Stock Exchange (in respect of Participants resident in the United States) (or other applicable market) during the ten (10) business days following the dividend payment date; or

	
  

	
(b)

	
in the case of a treasury purchase, the Average Market Price less a discount, determined as described herein, of five percent (5%) at the Corporation's election.

Any reinvestment of dividends will, at the discretion of the Corporation, either be purchased from treasury or invested in additional Shares purchased through the market.

All funds received by the Agent under the Plan will be applied to the purchase of additional Shares. In no event will interest be paid to Participants on any funds held for investment under the Plan.

 

  

3

  

 

PARTICIPATION

Registered Holders

A registered holder is a shareholder that holds a physical share certificate to evidence their ownership of Shares.  Except as noted below under "General", registered holders of at least one Share may enroll in the Plan at any time.

An eligible registered Shareholder becomes a Participant by completing and delivering to the Agent a duly completed Authorization Form. The Authorization Form directs Baytex to forward to the Agent all cash dividends on Shares registered in the name of the Participant, and directs the Agent to reinvest such dividends, together with cash dividends on Shares held by the Agent for the Participant's account under the Plan, in additional Shares in accordance with the Plan.

An initial Authorization Form must be received by the Agent on or before 3:00 p.m. (Calgary time) on the business day immediately preceding a dividend record date in order for the cash dividend to which such record date relates to be reinvested under the Plan.  If an initial Authorization Form is received by the Agent after such deadline, it will not take effect until the next following dividend payment date.

Registered holders can access a copy of the Authorization Form on the Agent's website at www.valiantrust.com or on Baytex's website at www.baytex.ab.ca.

Beneficial Owners

A beneficial owner is a shareholder whose Shares are held through a broker, investment dealer, financial institution or other nominee (who in turn may hold such Shares through a Depositary).  To participate in the Plan, beneficial owners of Shares must arrange for their broker, investment dealer, financial institution or other nominee to enroll in the Plan on their behalf (either directly or indirectly through the Depositary).  Alternatively, a beneficial owner of Shares may transfer their Shares into their own name and then enroll in the Plan directly (as a registered holder).

Beneficial owners should also be aware that certain brokers, investment dealers, financial institutions or other nominees may not allow participation in the Plan, and neither Baytex nor the Agent is responsible for monitoring or advising which brokers, investment dealers, financial institutions or other nominees allow participation.

Beneficial owners of Shares wishing to enroll in the Plan should contact their broker, investment dealer, financial institution or other nominee to provide instructions regarding their participation in the Plan and to inquire about any applicable deadlines that the nominee may impose or be subject to.  The Agent may establish a separate deadline for receipt of enrolment instructions from a Depositary.

Beneficial owners of Shares who enroll in the Plan through a broker, investment dealer, financial institution or other nominee may be subject to fees charged by their nominee.

General

Once a Shareholder has enrolled in the Plan, participation in the manner elected by the Participant continues automatically until the Participant's participation in the Plan is terminated. The time at which a termination of Plan participation becomes effective is described under "Termination of Participation" below.

  

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The Corporation reserves the right to determine, from time to time, a minimum number of Shares that a Participant must hold in order to qualify for or continue enrolment in the Plan and reserves the right to refuse participation to, or cancel participation of, any person who, in the opinion of the Corporation, is participating in the Plan primarily with a view to arbitrage trading or whose participation in the Plan is part of a scheme to avoid applicable legal requirements or engage in unlawful behaviour or has been artificially accumulating securities of the Corporation for the purpose of taking undue advantage of the Plan to the detriment of the Corporation.  The Corporation may also deny the right to participate in the Plan to any person or terminate the participation of any Participant in the Plan if the Corporation deems it advisable under any laws or regulations.

SHAREHOLDERS OUTSIDE OF CANADA AND THE UNITED STATES

Shareholders who are resident in a jurisdiction outside of Canada and the United States may participate in the Plan only if permitted by the laws of the jurisdiction in which they reside. Dividends to be reinvested under the Plan on behalf of Shareholders who are not residents of Canada will be subject to applicable non-resident withholding tax.

The Corporation and the Agent reserve the right to deny participation in the Plan to, and to not accept an Authorization Form from, any person or agent of such person who appears to be or who the Corporation or the Agent has reason to believe is a resident of any jurisdiction the laws of which do not permit participation in the Plan in the manner sought by or on behalf of such person.

PRORATION IN CERTAIN EVENTS

The Corporation will determine on or before each dividend record date the amount of equity, if any, that will be made available under the Plan on the dividend payment date to which such record date relates.

If, in respect of any dividend payment date, fulfilling all of the elections under the Plan would result in Baytex exceeding the limit on new equity set by the Corporation in its discretion, then elections for the purchase of new Shares on that dividend payment date will be prorated among all Participants according to the number of additional Shares sought to be purchased.

If the Corporation determines not to issue any equity through the Plan on a particular dividend payment date and the Corporation has not instructed the Agent to otherwise purchase Shares in the market at prevailing market prices in accordance with the Plan, all Participants will receive the cash dividend to which they would otherwise be entitled to on such dividend payment date.

PRICE OF NEW SHARES

Dividends due to Participants will be paid to the Agent and will be applied to the purchase of Shares. Subject to the restrictions on the acquisition of additional Shares described below, additional Shares may be acquired, at the election of the Corporation, either from treasury or through the facilities of the Toronto Stock Exchange (in respect of Participants resident in Canada or any jurisdiction other than the United States) or the New York Stock Exchange (in respect of Participants resident in the United States) or other exchanges on which the Shares may be listed for trading.  Additional Shares can be acquired through the facilities of the Toronto Stock Exchange (in respect of Participants resident in Canada or any jurisdiction other than the United States) or the New York Stock Exchange (in respect of Participants resident in the United States) or other exchanges on which the Shares may be listed for trading at any time during the ten (10) business day period next following the relevant dividend payment date at prevailing market prices not exceeding 115% of the volume weighted average trading price of the Shares.  At the discretion of the Corporation, additional Shares may be issued from treasury, at a price equal to 95% of the Average Market Price or the Corporation may purchase additional Shares through the facilities of the Toronto Stock Exchange (in respect of Participants resident in Canada or any jurisdiction other than the United States) or the New York Stock Exchange (in respect of Participants resident in the United States) or other exchanges on which the Shares may be listed for trading.

 

  

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COSTS

No commissions, service charges or brokerage fees are payable by Participants in connection with the purchase of additional Shares under the Plan. All administrative costs of the Plan, including the fees and expenses of the Agent, will be borne by Baytex.  However, Participants who enrol in the Plan through a broker, trust company, bank or other nominee may be subject to fees charged by their nominee.

ACCOUNTS AND REPORTS TO PARTICIPANTS

An account will be maintained by the Agent for each registered Participant.  Unaudited statements of account will be mailed to each Participant on a quarterly basis. These statements are a Participant's continuing record of purchases of Shares made for such Participant's account under the Plan and should be retained for income tax purposes. The Agent will also send annually to each Participant certain tax forms for tax reporting purposes. Adjusted cost base calculations for tax reporting purposes will be the responsibility of each Participant as the averaging rules may apply so that such calculations may depend on the cost of other Shares held by the Participant.

CERTIFICATES FOR SHARES

Shares purchased and held under the Plan will be registered in the name of the Agent or its nominee, as agent for the Participants, and certificates for such Shares will not normally be issued to Participants unless specifically requested in writing.

A Participant may, upon written request to the Agent and without terminating participation in the Plan, have a Share certificate issued and registered in the Participant's name for any number of whole Shares held for the Participant's account under the Plan. Certificates will normally be issued within three weeks of receipt by the Agent of the Participant's written request for a certificate. Any remaining whole Shares and any fraction of a Share will continue to be held for the Participant's account under the Plan.

Certificates representing Shares purchased and held under the Plan, whether registered in the name of the Agent or its nominee or whether registered in the name of the Participant may, if required by the securities regulatory authorities, contain a legend indicating restrictions on the resale of the Shares represented by such certificates.

Accounts under the Plan are maintained in the names in which Shares are registered at the time the Participants entered the Plan, and certificates for whole Shares will be similarly registered when issued.

Shares held by the Agent for a Participant under the Plan may not be pledged, hypothecated, assigned, sold or otherwise disposed of or transferred by the Participant.  Participants who wish to sell, pledge, hypothecate, assign, or otherwise dispose of or transfer all or any portion of their Plan Shares must withdraw such Shares from the Plan prior to such sale, pledge, hypothecation, assignment, disposal or transfer.

TERMINATION OF PARTICIPATION

A Participant may voluntarily terminate participation in the Plan by delivering to the Agent or by having such Participant's broker or other nominee deliver to the Agent (through the Depositary, if applicable, on its behalf) a written notice of termination signed by such Participant (or by such Participant's broker or other nominee, as applicable). In such event, the Participant will receive a certificate for the number of whole Shares held by the Agent in such Participant's account and a cheque in payment for any remaining fraction of a Share so held. Any fractional Share interest will be paid based on the closing market price of a Share on the Toronto Stock Exchange (in respect of Participants resident in Canada or any jurisdiction other than the United States) or the New York Stock Exchange (in respect of Participants resident in the United States) on the date notice of termination is received by the Agent.

 

  

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Participation in the Plan will be terminated automatically following receipt by the Agent of evidence satisfactory to the Agent of the death of a Participant; thereafter all dividends paid in respect of the Shares of the deceased Participant will be paid in cash. A certificate for the number of whole Shares held for the account of a deceased Participant under the Plan will be issued by Baytex in the name of the deceased Participant, the estate of the deceased Participant or the deceased Participant's broker or nominee, as appropriate, and the Agent will send to the legal representative or broker or nominee of the deceased Participant such certificate and a cheque in payment for any remaining fraction of a Share in the deceased Participant's account.

If a written termination notice or notice of a Participant's death is not received by the Agent before a dividend record date, then the Participant's account will not be closed, and participation in the Plan will not be terminated, until after the dividend payment date to which such record date relates.

Certificates representing Shares that are delivered to Participants whose participation in the Plan is terminated may, if required by the securities regulatory authorities, contain a legend indicating restrictions on the resale of the Shares represented by such certificates.

RISK OF MARKET PRICE FLUCTUATIONS

Participants should recognize that Shares acquired under the Plan are no different from an investment in Shares directly held.  Accordingly, neither the Corporation nor the Agent can assure a profit or protect Participants against a loss on the Shares purchased under the Plan.

RIGHTS OFFERING

In the event that Baytex makes available to its Shareholders rights to subscribe for additional Shares or other securities, rights certificates will be issued by Baytex to each Participant in respect of whole Shares held in a Participant's account under the Plan on the record date for such rights issue.

Rights issuable on a fraction of a Share held for a Participant's account will be sold for such Participant by the Agent and the net proceeds of such sale paid to the Participant.

SUBDIVISIONS

If Shares of Baytex are distributed pursuant to a subdivision of Shares, such Shares received by the Agent for Participants under the Plan will be held by the Agent and credited by the Agent proportionately to the accounts of the Participants in the Plan. A certificate for any Shares resulting from such a subdivision of Shares that are registered in the name of a Participant, rather than the name of the Agent, will be sent directly to the Participant in the same manner as to Shareholders who are not participating in the Plan.

SHAREHOLDER VOTING

Whole Shares held for a Participant's account under the Plan on the record date for a vote of Shareholders will be voted in accordance with the instructions of the Participant given on a form to be furnished to the Participant. Shares for which instructions are not received will not be voted. No voting rights will attach to any fraction of a Share held for a Participant's account under the Plan.

RESPONSIBILITIES OF BAYTEX AND THE AGENT

Neither Baytex nor the Agent shall be liable for any act or for any omission to act in connection with the operation of the Plan including, without limitation, any claims for liability:

 

	
  

	
(a)

	
arising out of the failure to terminate a Participant's account upon such Participant's death prior to receipt of notice in writing of such death;

	
  

	
(b)

	
with respect to the prices and times at which Shares are purchased for the account of or on behalf of a Participant;

 

  

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(c)

	
with respect to decisions by the Corporation to raise or not raise equity through the Plan in any given month, or the amount of equity raised, if any; and

	
  

	
(d)

	
arising out of a prorating, for any reason, of the amount of equity available under the Plan in the circumstances described herein.

Participants should recognize that neither Baytex nor the Agent can assure a profit or protect them against a loss on the Shares purchased under the Plan.

Shareholders should also be aware that certain brokers, investment dealers, financial institutions or other nominees may not allow participation in the Plan, and neither Baytex nor the Agent is responsible for monitoring or advising which brokers, investment dealers, financial institutions or other nominees allow participation.

AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN

Baytex reserves the right to amend, suspend or terminate the Plan at any time, but such action shall have no retroactive effect that would prejudice the interests of the Participants. Where required, amendments to the Plan will be subject to the prior approval of the Toronto Stock Exchange and the New York Stock Exchange. All Participants will be sent written notice of any such amendment, suspension or termination. In the event of termination of the Plan by Baytex, the Agent will send to the Participants (or to their brokers or other nominees, as applicable) certificates for whole Shares held for Participants' accounts under the Plan (which may contain a legend indicating restrictions on the resale of the Shares represented by the certificates) and cheques in payment for any remaining fractions of Shares in Participants' accounts. In the event of suspension of the Plan by Baytex, no investment will be made by the Agent on the dividend payment date immediately following the effective date of such suspension.

INTERPRETATION

Any issues of interpretation arising in connection with the Plan or its application shall be conclusively determined by the Corporation.

NOTICES

All notices or other documents required to be given to Participants under the Plan, including certificates for Shares and cheques, shall be mailed to Participants at the addresses shown on the records of the Agent.

Notices to the Agent or the Corporation shall be sent to:

Valiant Trust Company

310, 606 – 4th Street S.W.

Calgary, Alberta T2P 1T1

Attention:  Account Manager

Fax:             403-233-2857

GOVERNING LAW

The Plan will be governed by, and administered and construed in accordance with, the laws of the Province of Alberta and the federal laws of Canada applicable herein.

EFFECTIVE DATE OF THE PLAN

The effective date of the Plan is January 24, 2011.

 

  

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BAYTEX ENERGY CORP.

 

Authorization Form

 

Relating to the Dividend Reinvestment Plan (the "Plan") of Baytex Energy Corp. ("Baytex") dated January 24, 2011 (as amended from time to time).

To be completed by the REGISTERED HOLDER of common shares ("Shares") of Baytex

If you are a beneficial owner of Shares of Baytex and wish to participate in the Plan, contact your broker, investment dealer, financial institution or other nominee who holds your Shares to provide instructions on how you would like to participate in the Plan.

	
If you wish to participate in the Plan, please complete the authorization below.

	
DIVIDEND REINVESTMENT AUTHORIZATION

	
Please complete this section, sign below and return this form to Valiant Trust Company at the address or facsimile number set forth below if you wish to reinvest your dividends in accordance with the Plan and have the additional Shares of Baytex issued on such reinvestment held for your account under the Plan.

	
I have received and read a copy of the text describing the Plan. I hereby apply to participate in the Plan and direct Baytex to forward to Valiant Trust Company, as Agent under the Plan, all cash dividends paid on all Shares of Baytex registered in my name now or in the future, and direct Valiant Trust Company to reinvest such dividends, together with cash dividends on Shares held by the Agent for my account under the Plan, in additional Shares of Baytex all in accordance with the Plan and subject to proration and any applicable withholding tax as provided therein.

For residents of the United States: I have received and read the prospectus relating to the Plan, including the United States federal income tax considerations and risk factors included therein and the documents incorporated by reference therein, which forms part of the Registration Statement on Form F-3, filed with the United States Securities and Exchange Commission on January 24, 2011.

 

	
SIGNATURE OF REGISTERED SHAREHOLDER

 

	
NAME OF REGISTERED SHAREHOLDER (PLEASE PRINT)

	
DATE

	
ADDRESS (INCLUDING MUNICIPALITY OF RESIDENCE)

	  	
TELEPHONE #

 

	
SOCIAL INSURANCE NUMBER OR SOCIAL SECURITY NUMBER OF REGISTERED SHAREHOLDER

	  	  

If a shareholder has Shares held in more than one account, a separate Authorization Form must be completed for each account participating in the Plan.

This Authorization Form must be received by Valiant Trust Company on or prior to 3:00 p.m. (Calgary time) on the business day immediately preceding a dividend record date in order for the dividend to which such record date relates to be reinvested in additional Shares of Baytex in accordance with the Plan.

 

  

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For further information, please contact:

	
VALIANT TRUST COMPANY

310, 606 – 4th Street S.W.

Calgary, Alberta  T2P 1T1

	
or

	
BAYTEX ENERGY CORP.

Suite 2800, 520 – 3rd Avenue S.W.

Calgary, Alberta  T2P 0R3

 

	
Attention:

Toll-Free:

Fax:

	
Account Manager

1-866-313-1872

403-233-2857

	  	
Attention:

Toll-Free:

Fax:

	
Investor Relations

1-800-524-5521

587-952-3029

 

Note:  where an Authorization Form is executed on behalf of a corporation, partnership, association, agency, estate, trust, etc., the Agent may require submission of satisfactory evidence of authority of the person executing the form.

 

	PRIVACY NOTE:  At Valiant Trust Company, we take privacy seriously.  In the course of providing services to you in connection with the Plan we receive non-public, personal information about you. We receive this information through transactions we perform for you, from this Authorization Form and through other communications with you.  We may also receive information about you by virtue of your transaction with affiliates of Valiant Trust Company or other parties. This information may include your name, social insurance or social security number, stock/share ownership information and other financial information. With respect both to current and former customers, Valiant Trust Company does not share non-public personal information with any non-affiliated third parties except as necessary to process a transaction, service your account or as permitted by law.  Our affiliates and outside service providers with whom we share information are legally bound not to disclose the information in any manner, unless permitted by law or other governmental process. We strive to restrict access to your personal information to those employees who need to know the information to provide our services to you, and we maintain physical, electronic and procedural safeguards to protect your personal information. Valiant Trust Company realizes that you entrust us with confidential personal and financial information and we take that trust very seriously. By providing your personal information to us and signing this form, we will assume, unless we hear from you to the contrary, that you have consented and are consenting to this use and disclosure. A complete copy of our Privacy Code, may be accessed at http://www.valianttrust.com/privacy/, or you may request a copy in writing to Suite 310, 606 – 4th Street S.W., Calgary, Alberta T2P 1T1.

  

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