Document:

Exhibit 10.38

 

	
  

  	
   

  
	
   

  
	
   

  	
   

  
	
  1726
  Cole Blvd., Suite 115

  
	
  Lakewood,
  CO 80401

  
	
  Phone:

  	
  303-928-8599

  
	
  Fax:

  	
  303-928-8598

  
	
  Website:

  	
  www.generalmoly.com

  
	
   

  	
   

  
				

 

December 18,
2008

 

Daniel
G Zang

4298
W. Lake Circle S.

Littleton, CO  80123

 

Re:          Amendment
to Offer Letter and Change of Control Letter

 

Previously General Moly (the “Company”)
furnished you with an offer letter and a Change Of Control Letter, both dated June 20,
2008, which you accepted (the “Offer Letter” and “the Change of Control
Letter”).

 

The time and form of payment provided in
the Offer Letter and the Change of Control Letter must now be amended to comply
with the requirements for nonqualified deferred compensation arrangements under
Section 409A of the Internal Revenue Code of 1986, as amended and the
final Treasury Regulations thereunder and other applicable guidance (“Section 409A”).

 

Offer Letter

 

The eligibility for annual bonus is hereby amended to add the following
sentence at the end of the first paragraph of the Offer Letter:

 

All bonuses shall be paid in a lump sum, on a date
determined by the Company, on or before March 15 of the calendar year
following the calendar year in which Employee earned such bonus payment,
pursuant to the terms of the Annual Incentive Bonus Plan.

 

Change Of Control

 

If your employment is terminated by the Company as a result of a “Change
of Control,” the time and form of payment for the amount set forth in your
Offer Letter shall be as follows:

 

Time and Form of Payment.  The annual salary amount payable as a result
of a Change of Control, if any, shall be paid in a lump sum, on a date
determined by the Company, within 60 days following your separation from
service within two years following the effective date of the closing of the
Change of Control event, provided such event also constitutes a “change in
control” event for purposes of Treasury Regulation Section 1.409A-3(i)(5) otherwise, such payment shall be made in a
lump sum, on a date determined by the Company, within 60 days following your
separation from service after the effective date of the closing of the Change
of Control, except as required below.

 

 

Delay in Payment.  Notwithstanding anything in the Offer Letter
to the contrary, if you are deemed by the Company at the time of your “separation
from service” to be a “specified employee,” any non-exempt deferred
compensation which would otherwise be payable hereunder, shall not be paid
until the date which is the first business day following the six-month period
after your separation from service (or if earlier, your death).  Such delay in payment shall only be effected
with respect to each separate payment of non-exempt deferred compensation to
the extent required to avoid adverse tax treatment to you under Section 409A.

 

Key Definitions.  For purposes of the Offer Letter, the term “termination
of employment” means “separation from service” and the terms “separation from
service,” “specified employee” and “nonqualified deferred compensation” shall
have the meanings determined under Section 409A.

 

Interpretation.  You and the Company intend that all payments
or benefits payable under the Offer Letter and Change of Control will not
subject you to the additional tax imposed by Section 409A of the Code, and
the provisions of the documents shall be construed and administered consistent
with such intent.  To the extent such
potential payments could become subject to Section 409A, the Company and
you agree to work together to modify the documents to the minimum extent
necessary to reasonably comply with the requirements of Section 409A,
provided that the Company shall not be required to provide any additional
compensation amounts or benefits.

 

The Company and you hereby agree to this amendment
to your Offer Letter and Change of Control, to be effective as of January 1,
2009.

 

	
  GENERAL
  MOLY, INC.

  	
  Employee

  
	
  The
  Company

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  David A. Chaput

  	
   

  	
  By:

  	
  /s/
  Daniel G. Zang

  
	
   

  	
  Dave
  Chaput, CFO

  	
   

  	
   

  	
  Daniel
  G Zang

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  December 18,
  2008

  	
   

  	
  Date:Exhibit 10.1

 

JOINT
FILING AGREEMENT PURSUANT TO RULE 13d-1(k)

 

The undersigned
acknowledge and agree that the foregoing statement on Schedule 13D is filed on
behalf of each of the undersigned in the capacities set forth below.  The
undersigned acknowledge that each shall be responsible for the timely filing of
such amendments, and for the completeness and accuracy of the information
concerning it contained therein, but shall not be responsible for the
completeness and accuracy of the information concerning the others, except to
the extent it knows or has reason to believe that such information is
inaccurate.  This Joint Filing Agreement may be executed in any number of
counterparts and all of such counterparts taken together shall constitute one
and the same instrument.

 

Date:                    February 27,
2009

 

 

	
   

  	
  DC Investments, llc

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy S. Durham

  
	
   

  	
   

  	
  Timothy S. Durham,

  
	
   

  	
   

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FAIR holdings, inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy S. Durham

  
	
   

  	
   

  	
  Timothy S. Durham,

  
	
   

  	
   

  	
  Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FAIR FINANCE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy S. Durham

  
	
   

  	
   

  	
  Timothy S. Durham,

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Timothy S. Durham

  
	
   

  	
  Timothy S.
  Durham, in his individual capacity

  

 

1Exhibit 10.2

 

PURCHASE AND SALE AGREEMENT

 

by
and between

 

FAIR
FINANCE COMPANY,

JAMES
F. COCHRAN, and

TIMOTHY
S. DURHAM 
 as
the Sellers

 

and

 

CLST
ASSET III, LLC
 as
the Buyer

 

Dated
as of February 13, 2009

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I.

  	
  GENERAL

  	
  1

  
	
   

  
	
  Section 1.1.

  	
  Defined
  Terms

  	
  1

  
	
  Section 1.2.

  	
  Other Terms

  	
  14

  
	
  Section 1.3.

  	
  Computation
  of Time Periods

  	
  14

  
	
  Section 1.4.

  	
  Interpretation

  	
  14

  
	
   

  
	
  ARTICLE II.

  	
  SALE, TRANSFER AND ASSIGNMENT

  	
  15

  
	
   

  
	
  Section 2.1.

  	
  Sale,
  Transfer and Assignment

  	
  15

  
	
  Section 2.2.

  	
  Purchase Price

  	
  17

  
	
  Section 2.3.

  	
  Payment of
  Purchase Price

  	
  17

  
	
   

  
	
  ARTICLE III.

  	
  CONDITIONS PRECEDENT

  	
  18

  
	
   

  
	
  Section 3.1.

  	
  Conditions Precedent
  to Buyer’s Obligations

  	
  18

  
	
   

  
	
  ARTICLE IV.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  18

  
	
   

  
	
  Section 4.1.

  	
  The Seller’s
  Representations and Warranties

  	
  18

  
	
  Section 4.2.

  	
  Representations
  and Warranties of the Seller Relating to the Agreement and the Sale Assets

  	
  23

  
	
  Section 4.3.

  	
  Representations
  and Warranties of Buyer

  	
  23

  
	
   

  
	
  ARTICLE V.

  	
  COVENANTS

  	
  25

  
	
   

  
	
  Section 5.1.

  	
  Affirmative Covenants of Seller

  	
  25

  
	
  Section 5.2.

  	
  Negative Covenants of Seller

  	
  28

  
	
   

  
	
  ARTICLE VI.

  	
  GUARANTY OF COLLECTION;
  REPURCHASE OBLIGATION

  	
  29

  
	
   

  
	
  Section 6.1.

  	
  Guaranty of
  Collection; Setoff

  	
  29

  
	
  Section 6.2.

  	
  Ineligible
  Receivables

  	
  30

  
	
  Section 6.3.

  	
  Repurchase
  Limitations

  	
  30

  
	
  Section 6.4.

  	
  Retransfer
  of Sale Assets

  	
  30

  
	
   

  
	
  ARTICLE VII.

  	
  ADDITIONAL RIGHTS AND
  OBLIGATIONS IN RESPECT OF THE SALE ASSETS

  	
  31

  
	
   

  
	
  Section 7.1.

  	
  Rights of the Buyer

  	
  31

  
	
   

  
	
  ARTICLE VIII.

  	
  ADMINISTRATION AND SERVICING OF
  CONTRACTS

  	
  31

  
	
   

  
	
  Section 8.1.

  	
  Designation
  of the Servicer

  	
  31

  
	
  Section 8.2.

  	
  Duties of
  the Servicer

  	
  32

  
	
  Section 8.3.

  	
  Authorization
  of the Servicer

  	
  33

  
	
  Section 8.4.

  	
  Collection
  of Payments; Accounts

  	
  33

  
				

 

i

 

	
  Section 8.5.

  	
  Realization
  Upon Defaulted Receivables

  	
  34

  
	
  Section 8.6.

  	
  Servicing
  Compensation

  	
  35

  
	
  Section 8.7.

  	
  Payment of Certain
  Expenses by the Servicer

  	
  35

  
	
  Section 8.8.

  	
  Reports

  	
  35

  
	
  Section 8.9.

  	
  Annual
  Statement as to Compliance

  	
  35

  
	
  Section 8.10.

  	
  Servicer
  Resignation; Termination

  	
  36

  
	
  Section 8.11.

  	
  Appointment
  of Successor Servicer

  	
  36

  
	
   

  
	
  ARTICLE IX.

  	
  INDEMNIFICATION

  	
  37

  
	
   

  
	
  Section 9.1.

  	
  Indemnification
  by the Seller

  	
  37

  
	
   

  
	
  ARTICLE X.

  	
  MISCELLANEOUS

  	
  38

  
	
   

  
	
  Section 10.1.

  	
  Amendments
  and Waivers

  	
  38

  
	
  Section 10.2.

  	
  Notices, Etc

  	
  38

  
	
  Section 10.3.

  	
  Limitation
  of Liability

  	
  39

  
	
  Section 10.4.

  	
  Binding
  Effect; Benefit of Agreement

  	
  39

  
	
  Section 10.5.

  	
  GOVERNING
  LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE

  	
  39

  
	
  Section 10.6.

  	
  WAIVER OF
  JURY TRIAL

  	
  39

  
	
  Section 10.7.

  	
  Costs,
  Expenses and Taxes

  	
  39

  
	
  Section 10.8.

  	
  Recourse
  Against Certain Parties

  	
  40

  
	
  Section 10.9.

  	
  Protection
  of Right, Title and Interest in the Sale Assets; Further Action Evidencing
  the Purchase

  	
  40

  
	
  Section 10.10.

  	
  Execution in
  Counterparts; Severability; Integration

  	
  41

  
	
  Section 10.11.

  	
  Heading and
  Exhibits

  	
  42

  
	
  Section 10.12.

  	
  Confidentiality

  	
  42

  
	
  Section 10.13.

  	
  Assignment

  	
  43

  
	
  Section 10.14.

  	
  No Waiver;
  Cumulative Remedies

  	
  43

  
	
  Section 10.15.

  	
  Termination

  	
  43

  
	
  Section 10.16.

  	
  Survival of
  Certain Provisions

  	
  43

  
				

 

ii

 

	
  ANNEXES

  
	
   

  
	
  ANNEX A

  	
  Notice Addresses

  
	
   

  	
   

  
	
  SCHEDULES

  
	
   

  
	
  SCHEDULE I

  	
  Approved Dealers

  
	
  SCHEDULE II

  	
  Approved Purchase and Sale Agreements

  
	
  SCHEDULE III

  	
  Form of Closed-End Consumer Contracts

  
	
  SCHEDULE IV

  	
  Form of Open-Ended Consumer Contracts

  
	
  SCHEDULE V

  	
  Credit and Collection Policy

  
	
  SCHEDULE VI

  	
  Approved Lockbox Bank and Account

  
	
  SCHEDULE VII

  	
  Form of Voucher

  
	
   

  	
   

  
	
  EXHIBITS

  
	
   

  
	
  EXHIBIT A

  	
  Form of Promissory Note (Portfolio A)

  
	
  EXHIBIT B

  	
  Form of Promissory Note (Portfolio B)

  
	
  EXHIBIT C

  	
  Form of Sale Assignment

  
	
  EXHIBIT D

  	
  Form of Servicer’s Certificate

  
	
   

  	
   

  
	
  APPENDICES

  
	
   

  
	
  APPENDIX A

  	
  Condition Precedent Documents

  

 

iii

 

THIS PURCHASE AND SALE AGREEMENT (such
agreement as amended, modified, supplemented or restated from time to time, the
“Agreement”) is dated as of February 13, 2009, by and between FAIR
FINANCE COMPANY, an Ohio corporation, TIMOTHY S. DURHAM, a natural person, and
JAMES F. COCHRAN, a natural person, as the sellers, and CLST ASSET III, LLC,
Delaware limited liability company, as the buyer (the “Buyer”).

 

W  I  T  N  E  S  S
E  T  H:

 

WHEREAS, the Buyer desires to purchase from
the Seller and the Seller desires to sell to the Buyer certain receivables and
installment sales contracts originated or acquired by the Seller in the
ordinary course of its business, together with, among other things, certain
related security and rights of payment thereunder;

 

NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, agree as follows:

 

ARTICLE I.

GENERAL

 

Section 1.1.                                                        Defined
Terms.

 

As used
herein, the following terms have the meanings provided below.

 

“Affiliate”: With respect to a Person,
means any other Person that, directly or indirectly, controls, is controlled by
or is under common control with such Person. For purposes of this definition, “control,”
when used with respect to any specified Person means the possession, directly
or indirectly, of the power to vote 25% or more of the voting securities of such
Person or to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.

 

“Aggregate
Outstanding Receivable Balance”: As of any date of determination, the sum of
all Outstanding Receivable Balances of all Receivables other than those (a) that
have been repurchased by the Seller pursuant to Section 6.4 and (b) that
are deemed to be satisfied in full with respect to the Buyer as a result of
such Receivables having become Defaulted Receivables following the Closing Date
and the Seller having paid an amount equal to the Outstanding Receivable
Balances of such Receivables pursuant to Section 6.1.

 

“Agreement”:
Defined in the Preamble.

 

“Applicable
Law”: For any Person or property of such Person, all then-existing laws,
rules, regulations (including income tax regulations), statutes, treaties,
codes, ordinances, permits, certificates, orders and licenses of and
interpretations by any Governmental Authority which are applicable to such
Person or property (including, without limitation, predatory lending laws,
usury laws, the Federal Truth in Lending Act, and Regulation Z and Regulation B
of the Board of Governors of the Federal Reserve System), and applicable
judgments, decrees, 

 

 

injunctions, writs, awards or orders of any court, arbitrator or other
administrative, judicial, or quasi-judicial tribunal or agency of competent
jurisdiction.

 

“Approved Dealer”: A Dealer identified
on Schedule I hereto.

 

“Approved Purchase and Sale Agreement”:
A Purchase and Sale Agreement identified on Schedule II hereto (or a
Purchase and Sale Agreement in a form materially similar to those identified on
such Schedule).

 

“Bankruptcy Code”: The United States
bankruptcy code, as set forth in Title 11 of the United States Code, as amended
from time to time.

 

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

 

“Buyer”:
Defined in the Preamble.

 

“Change of Control”: Any change in the
management of Fair (including by resignation, termination, disability or death)
the result of which is that two or more Key Employees are no longer under the
employ of Fair or fail to provide active and material participation in the
activities of Fair (including, but not limited to, general management,
underwriting and the credit approval process and credit monitoring activities).

 

“Change of Tax Law”: Any change in
application or public announcement of an official position under or any change
in or amendment to the laws (or any regulations or rulings promulgated
thereunder) of any jurisdiction, or any political subdivision or taxing
authority of any of the foregoing, affecting taxation, or any change in the
official application, enforcement or interpretation of such laws, regulations
or rulings (including a holding by a court of competent jurisdiction), or any
other action taken by a taxing authority or court of competent jurisdiction in
the relevant jurisdiction.

 

“Closed End Consumer Contract”: Means
a contract with an Obligor pursuant to which a Receivable was issued or created
in a form substantially similar to that attached hereto as Schedule III.

 

“Closing
Date”: February 13, 2009.

 

“Cochran”:
James F. Cochran, a natural person.

 

“Collection Account”:  Defined in Section 8.4(f).

 

“Collections”: (a) All cash
collections and other cash proceeds of any Receivable, including, without
limitation or duplication, any (i) Interest Collections, (ii) Principal
Collections, (iii) amendment fees, late fees, prepayment fees or waiver
fees payable in accordance with the Underlying Instruments with respect to such
Receivable, (iv) Recoveries or (v) other amounts received in respect
thereof (including any insurance proceeds but excluding any Excluded Amounts), (b) any
cash proceeds or other funds received by the Buyer or the 

 

2

 

Servicer with respect to any Related Security (including from any
guarantors of the Receivables), (c) all payments from a Dealer pursuant to
any of its indemnity and repurchase obligations under the related Purchase and
Sale Agreements, and (d) interest earnings on deposits in the Collection
Account.

 

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

 

“Credit and Collection Policy”: The
written credit policies and procedures manual of the Servicer set forth on Schedule
V, as such credit and collection policy may be amended or supplemented from
time to time with the consent of the Buyer; provided,
that if the Buyer has approved the credit and collection policy of the
applicable Dealer, the “Credit and Collection Policy” shall be the credit and
collection policy of such Dealer with respect to the Receivables originated by
such Dealer.

 

“Dealer”: Each Person party to a
Purchase and Sale Agreement with the Seller.

 

“Defaulted Receivable”: A Receivable
as to which any of the following has occurred: (i) all or any portion of a
contractual payment due under such Receivable is 91 or more days past due, (ii) the
payment terms related to such Receivable have been restructured or modified
(other than (A) as permitted by the Credit and Collection Policy or (B) with
the written consent of the Buyer, in its sole discretion) in any way due to
credit reasons or for the purpose of preventing such Receivable from becoming a
Defaulted Receivable after its acquisition by the Buyer, (iii) a
charge-off has been taken with respect to such Receivable as a result of a
bankruptcy proceeding or otherwise, (iv) the related Obligor is subject to
an Insolvency Event (without giving effect to any cure period specified in the
definition thereof), (v) to the knowledge of the Servicer, the related
Obligor is not Solvent, or (vi) the Servicer has determined (or should
have determined) in accordance with the Credit and Collection Policy or the
Servicing Standard that such Receivable is not collectible (including, without
limitation, as a result of any claim by the applicable Obligor that the related
goods or services with respect to such Receivable were not delivered or
performed in a satisfactory manner).

 

“Delinquent Receivable”: Means a
Receivable with respect to which all or any portion of a required payment
thereunder is delinquent more than 30 days from the payment due date, but in no
event more than 90 days after the payment due date.

 

“Dollars”: Means, and the conventional
“$” signifies, the lawful currency of the United States.

 

“Durham”:  Timothy S. Durham, a natural person.

 

“Eligible Obligor”: Any Obligor that,
as of the Closing Date, (a) is a natural person and (b) is not an
employee, principal, director or equity holder of the Seller.

 

3

 

“Eligible Receivable”: Each Receivable
that satisfies each of the following eligibility requirements as of the Closing
Date:

 

(a) as of the Closing Date, such
Receivable is not a Delinquent Receivable;

 

(b) such Receivable, together with the
Underlying Instruments related thereto, (i) is in full force and effect
and constitutes the legal, valid and binding obligation of the related Obligor
enforceable against such Obligor in accordance with its terms, except as such
enforceability may be limited by Insolvency Laws and by principles of equity
(whether considered in a suit at law or in equity), (ii) is not subject to
any pending or threatened litigation, material dispute or offset and (iii) contains
provisions substantially to the effect that the Obligor’s payment obligations
thereunder are absolute and unconditional without any right of rescission,
setoff, counterclaim or defense for any reason (except as required by
Applicable Law) against the applicable originator or any assignee thereof;

 

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

 

(d) such Receivable is not a Defaulted
Receivable or a Receivable which should be written off in accordance with the
Credit and Collection Policy;

 

(e) either (i) all products and
services associated with such Receivable have been sold, delivered, rendered
and completed and no further action or event needs to occur in order for such
Receivable to be the enforceable obligation of the related Obligor; and, if
appropriate, such delivery and completion is evidenced by completion
certificates or delivery confirmations from the related Obligor, (ii) if
any such products or services were not delivered, rendered or completed, the
applicable Purchase and Sale Agreement provides recourse to the Dealer for any
related dispute associated therewith (i.e., any claims by the applicable
Obligor that the amounts due under such Receivable are not payable) or (iii) the
related Underlying Instruments evidencing such Receivable contemplate for the
timed delivery of products thereunder, in which case for purposes of this
Agreement only the Outstanding Receivable Balance related to the products which
have been delivered shall be included in all calculations hereunder;

 

(f) the vendor of the products or the
service provider of the services associated with such Receivables has been paid
in full; provided that with
respect to Receivables described in clause (e) above, such Receivables
shall not be Eligible Receivables pursuant to this clause (f) only to the
extent such vendor or service provider has not been paid;

 

(g) the Seller is the sole owner of such
Receivable and no participation interests have been granted to any Person with
respect to such Receivable;

 

(h) such Receivable was originated in
compliance in all material respects with all Applicable Laws and the related
Underlying Instruments comply in all material respects with all Applicable
Laws;

 

4

 

(i) such Receivable is eligible under
its Underlying Instruments to be acquired by the Seller as contemplated by the
applicable Purchase and Sale Agreement and to be acquired by the Buyer as
contemplated by this Agreement, and such Receivable does not contain any restrictions
that would prohibit the further assignment or transfer of such Receivable by
the Buyer;

 

(j) such Receivable does not contain a
confidentiality provision that restricts or purports to restrict the ability of
the Buyer or any servicer to exercise its rights under this Agreement or any
separate servicing agreement that may be entered into hereafter related to the
Receivables, including, without limitation, their rights to review the related
Servicing File and Underlying Instruments;

 

(k) such Receivable provides for
periodic payments of interest and/or principal no less frequently than monthly
(provided that a Receivable shall
not be ineligible pursuant to this clause (k) where the initial required
payment occurs more than one month after the contract date so long as the first
required payment to the Buyer is due and payable no later than 45 days after
the date such Receivable is purchased by the Buyer) and is either (A) fully
amortizing over its term or (B) a revolving charge contract with a
specified amortizing term established with respect to the related
products/services acquired at the origination of such Receivable;

 

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

 

(m) such Receivable has not had any of
its terms, conditions or provisions amended, modified or waived in any manner
inconsistent with the Credit and Collection Policy and has not been
restructured at any time other than in accordance with the Credit and
Collection Policy;

 

(n) such Receivable has not been
selected for conveyance to the Buyer in any manner adverse to the Buyer;

 

(o) the related Obligor has been or,
within thirty (30) days following the Closing Date will be, instructed to make
all payments into a Lockbox Account;

 

(p) there are no facts, events or
occurrences existing which materially impair the validity, enforceability or
collectability of such Receivable or reduce the amount payable or delay payment
thereunder;

 

(q) (i) the Seller has good and
marketable title to, and is the sole owner of, such Receivable, and (ii) the
Required Receivable File with respect to such Receivable has been delivered to
the Buyer;

 

(r) the Obligor with respect to such
Receivable is an Eligible Obligor;

 

5

 

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

 

(t) the
acquisition of such Receivable will not cause the Buyer to be required to
register as an investment company under the 1940 Act;

 

(u) such
Receivable does not constitute “margin stock” as defined under Regulation U;

 

(v) such
Receivable is not subject to U.S. withholding tax and is not subject to any
foreign withholding tax unless the Obligor thereon is required under the terms
of the related Underlying Instrument to make “gross-up” payments that cover the
full amount of such withholding tax on an after-tax basis in the event of a
Change of Tax Law; and

 

(w) the
Receivable is included in a pool of Receivables originated by an Approved
Dealer and was purchased by Fair from such Approved Dealer pursuant to an
Approved Purchase and Sale Agreement.

 

“Excepted Persons”:
Defined in Section 10.12(a).

 

“Excluded
Amounts”: (a) Any amount received in a Lockbox Account with respect to
any Receivable, which amount is attributable to the payment of any tax, fee or
other charge imposed by any Governmental Authority on such Receivable or (b) any
amount received in a Lockbox Account or other Account representing (i) a
reimbursement of insurance premiums, or (ii) any escrows relating to
Taxes, insurance and other amounts in connection with Receivables which are
held in an escrow account for the benefit of the Obligor (or its client) and
the secured party pursuant to escrow arrangements under the Underlying
Instruments.

 

“Fair”:
Fair Finance Company, an Ohio corporation.

 

“Governmental
Authority”: With respect to any Person, any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator having jurisdiction over such Person.

 

“Inconsistent Determination”:
Defined in Section 2.1(g).

 

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

 

6

 

assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, (d) the failure by such Person
generally to pay its debts as such debts become due, or (e) the taking of
action by such Person in furtherance of any of the foregoing.

 

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

 

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

 

“Interest
Collections”: Any and all amounts received with respect to the Receivables
other than Principal Collections that are deposited into the Collection
Account, or received by or on behalf of the Buyer or the Seller for the benefit
of the Buyer  in respect of a Receivable
whether in the form of cash, checks, wire transfers, electronic transfers or
any other form of cash payment.

 

“Key
Employees”: Each of John Head, Doug DeRose and Keith Schaffter.

 

“LIBOR Rate” means, a fluctuating rate of interest equal to the
one month London interbank offered rate from day to day in effect as published
in the “Money Rates” section of The Wall Street Journal
(or if such rate from such source is not available for any day, that rate
reasonably determined by the Seller using any other reasonable source or method
reasonably acceptable to the Buyer).

 

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

 

“Lockbox
Accounts”: Each of the separate lockbox accounts or blocked accounts
maintained at the applicable Lockbox Account Bank for the purpose of receiving
Collections, the details of which are set forth on Schedule VI, as such
schedule may be amended from time to time.

 

“Lockbox
Account Banks”: The financial institutions listed as Lockbox Account Banks
on Schedule VI, and such other financial institutions that may from time
to time become Lockbox Account Banks hereunder.

 

“Material
Adverse Effect”: With respect to any event or circumstance, means a
material adverse effect on (a) the business, financial position, results
of operations, performance or properties of the Seller or the Buyer, (b) the
validity or enforceability of this Agreement or any other Transaction Document
against the Seller or the Buyer or the validity, enforceability or
collectability of the Sale Assets taken as a whole or any material portion of
the Sale Assets, (c) the rights and remedies of the Buyer with respect to
matters arising under this Agreement or 

 

7

 

any other Transaction Document, or (d) the
ability of the Seller or the Buyer to perform their obligations under this
Agreement or any other Transaction Document.

 

“Maximum Lawful Rate” means the maximum non-usurious interest
rate, if any (or, if the context so requires, an amount calculated at such
rate), that at any time or from time to time may be contracted for, taken,
reserved, charged, or received by the Seller under applicable laws of the State
of Texas or the United States of America, as such laws are presently in effect
or, to the extent allowed by Applicable Law, as such laws may hereafter be in
effect.

 

“Notes”:
The following unsecured promissory notes, each of which shall be executed by
the Buyer and shall bear interest at a per annum rate
equal to the LIBOR Rate plus four percent (4.0%), but subject to the Maximum
Lawful Rate:

 

(a) a
note executed in favor of Fair in the stated principal amount of $543,820.33,
in substantially the form attached hereto as Exhibit A;

 

(b) a
note executed in favor of Fair in the stated principal amount of $165,047.61,
in substantially the form attached hereto as Exhibit B;

 

(c) a
note executed in favor of Cochran in the stated principal amount of $20,713.52,
in substantially the form attached hereto as Exhibit A;

 

(d) a
note executed in favor of Cochran in the stated principal amount of $6,286.48,
in substantially the form attached hereto as Exhibit B;

 

(e) a
note executed in favor of Durham in the stated principal amount of $124,833.51,
in substantially the form attached hereto as Exhibit A;  and

 

(f) a
note executed in favor of Durham in the stated principal amount of $37,886.54,
in substantially the form attached hereto as Exhibit B.

 

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

 

“Open Ended
Consumer Contract”: Means a contract with an Obligor pursuant to which a
Receivable has been issued or created in a form substantially similar to that
attached hereto as Schedule IV.

 

“Opinion of
Counsel”: A written opinion of counsel, which opinion and counsel are
acceptable to the Buyer in its reasonable discretion.

 

“Outstanding
Receivable Balance”: As of any determination date, with respect to any
Receivable, an amount equal to (i) the principal balance for such
Receivable as of the date it is transferred to the Buyer, minus (ii) all
Principal Collections on such Receivable, to the extent deposited by the
Servicer in the Collection Account.  The
Outstanding Receivable Balance of any Prepaid Receivable which has been prepaid
in full shall equal $0.

 

8

 

“Parent Stock”: Defined
in Section 2.3(a).

 

“Person”:
An individual, partnership, corporation, limited liability company, joint stock
company, trust (including a statutory or business trust), unincorporated
association, sole proprietorship, joint venture, government (or any agency or
political subdivision thereof) or other entity.

 

“Portfolio
A”: Those Receivables identified as “Portfolio A” on Schedule I of the Sale
Assignment, together with all Sale Assets related thereto.

 

“Portfolio
B”: Those Receivables identified as “Portfolio B” on Schedule I of the Sale
Assignment, together with all Sale Assets related thereto.

 

“Prepaid
Receivable”: Any Receivable (other than a Defaulted Receivable) that has
been terminated or has been prepaid in full or in part prior to its scheduled
expiration date.

 

“Principal
Collections”: Any and all amounts of Collections received in respect of any
principal due and payable under the Receivables, from or on behalf of Obligors
that are deposited into the Collection Account (including, without limitation,
the principal portion of any Scheduled Payment or of any repurchase amount paid
by the applicable Dealer to repurchase a Receivable pursuant to the applicable
Purchase and Sale Agreement), or received by or on behalf of the Buyer by the
Seller in respect of a Receivable and all Recoveries, whether in the form of
cash, checks, wire transfers, electronic transfers or any other form of cash
payment.

 

“Protective Filing”:
Defined in Section 2.1(g).

 

“Purchase”: The purchase
by the Buyer of Sale Assets pursuant to Section 2.1.

 

“Purchase
and Sale Agreement”: Individually, each receivables purchase agreement
among a Dealer, Fair (as originator) and the other parties thereto pursuant to
which Fair acquires Receivables.

 

“Purchase
Price”:  Defined in Section 2.2.

 

“Receivables”: All of
the Buyer’s interest in and rights under the receivables and installment sales
contracts listed on Schedule I to the Sale Assignment (which is incorporated
herein by reference).

 

“Receivables
List”: A list of Receivables in the form of the initial Receivables list
attached as Schedule I to the Sale Assignment that, for each Receivable,
identifies (i) the Obligor name, (ii) the original principal balance
of the Receivable, (iii) the contract number or other identifying number, (iv) the
applicable Dealer name (if applicable), (v) whether such Receivable is a
Closed End Contract or Open Ended Contract, (vi) an indication of the
security documents, if any, executed by the Obligor in connection with the
Receivable, (vii) a description of any financing statements filed with
respect to the Receivable, including the state(s) where such financing
statement(s) were filed and (viii) for any updated Receivables List
provided in 

 

9

 

connection with a Servicing Report, the Outstanding
Receivable Balance of such Receivable as of the reporting date.

 

“Records”:
All documents relating to the Receivables, including books, records and other
information executed in connection with the origination or acquisition of the
Receivables and Related Security or maintained with respect to the Receivables
and Related Security and the related Obligors that the Seller has generated or
in which the Seller has otherwise obtained an interest.

 

“Recoveries”:
With respect to any Defaulted Receivable, the proceeds from the sale or other
disposition of the Receivable (including any amounts received from a Dealer
under any buyback obligations under its Purchase and Sale Agreement), any other
recoveries with respect to such Defaulted Receivable, the Related Security and
amounts representing late fees and penalties, net of amounts, if any, received
that are required under such Defaulted Receivable, to be refunded to the
related Obligor.

 

“Related
Security”: All right, title and interest (but none of the obligations) of
the Seller in and to the property described in the following:

 

(a) any
and all Recoveries related to a Receivable, all payments paid in respect
thereof and all monies due, to become due and paid in respect thereof and all
liquidation proceeds;

 

(b) the
Required Receivable Files and Servicing Files related to any Receivable, any
Records, and the documents, agreements, and instruments included in the
Servicing File or Records;

 

(c) all
Liens, guaranties, indemnities, warranties, letters of credit, accounts, bank
accounts and property subject thereto from time to time purporting to secure or
support payment of any Receivable, together with all UCC financing statements,
mortgages or similar filings signed or authorized by an Obligor relating
thereto;

 

(d) any
and all accounts to which Collections or other payments due by the Obligors
have been directed prior to the Closing Date, along with the Collection
Accounts and the Lockbox Accounts, to the extent amounts on deposit therein or
credited thereto relate to the Receivables, together with all cash and
investments in each of the foregoing other than amounts earned on investments
therein (excluding any Excluded Amounts that may be on deposit therein);

 

(e) each
Purchase and Sale Agreement and the assignment of such Purchase and Sale
Agreement (including, without limitation, rights of recovery of the Originator
against the Dealer and any guaranty, indemnity and repurchase obligations of
the Dealer thereunder);

 

(f) all
records (including computer records) with respect to the foregoing; and

 

(g) all
collections, income, payments, proceeds and other benefits of each of the
foregoing.

 

10

 

“Reporting
Date”: The 10th
day of each calendar month, or, if such day is not a Business Day, the
next succeeding Business Day, commencing March 10, 2009.

 

“Required
Receivable File”: For each Receivable, (i) the original executed (A) Closed
End Consumer Contract or (B) the original executed Open Ended Consumer
Contract and any associated Vouchers (provided
that a copy of an associated Voucher shall be sufficient to the
extent that such Voucher evidences two separate financings and the original
Voucher has been furnished to the Buyer in connection with a different
financing, and that a Voucher without the original executed Open Ended Consumer
Contract shall be sufficient if the original executed Open Ended Consumer
Contract is otherwise furnished to the Buyer, (ii) all principal security
documents related thereto as indicated on the Receivables List, (iii) the
original executed Purchase and Sale Agreement with respect to such Receivable,
and (iv) to the extent applicable for the related Receivable, the original
executed (a) guaranty, (b) credit agreement, (c) loan agreement,
(d) note purchase agreement, (e) promissory note, (f) acquisition
agreement (or similar agreement), (g) security agreement and (h) UCC
financing statement(s), in each case as set forth on the Receivables List.

 

“Required
Reports”: Collectively, the Servicing Reports, the Servicer’s Certificates
required pursuant to Section 8.8(b), and the annual statements as
to compliance required pursuant to Section 8.9.

 

“Responsible
Officer”: With respect to any entity, any duly authorized officer of such
entity with direct responsibility for the administration of this Agreement and
also, with respect to a particular matter, any other duly authorized officer of
such entity to whom such matter is referred because of such officer’s knowledge
of and familiarity with the particular subject and, for purposes of the Seller
(including Fair, Durham and Cochran) and the Servicer, the Responsible Officers
shall be the Key Employees.

 

“Retransfer
Date”:  Defined in Section 6.4.

 

“Retransfer
Price”:  Defined in Section 6.2.

 

“Sale Assets”: Defined
in Section 2.1(a).

 

“Sale Assignment”:
Defined in Section 2.1(b).

 

“Scheduled
Payment”: Each scheduled payment of principal and/or interest required to
be made by an Obligor on the related Receivable, as adjusted pursuant to the
terms of the related Required Receivable File.

 

“Seller”: Collectively,
Fair, Durham and Cochran.  For avoidance
of doubt, all representations and warranties made by “Seller” in this
Agreement, any other Transaction Document or in any certificate or other
deliverable related hereto shall be deemed made by each of Fair, Durham and
Cochran, and all covenants and obligations of “Seller” shall apply to Fair,
Durham and Cochran, and each shall be jointly and severally liable for the
performance thereof.  Any references to
knowledge of the Seller shall include the knowledge of any of Durham, Cochran
and/or any officer, manager, director, executive, employee, agent or
representative of 

 

11

 

Fair.  Any notice to be provided under this Agreement
by the Seller to the Buyer may be made by any of Fair, Durham or Cochran, but
any notice to be provided under this Agreement by the Buyer to the Seller must
be made to each of Fair, Durham and Cochran.

 

“Servicer Default”: The
occurrence of any one of the following events:

 

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

 

(b)           any failure on the part of the
Servicer duly to observe or perform in any material respect any other covenants
or agreements of the Servicer set forth in this Agreement or the other
Transaction Documents to which the Servicer is a party and the same continues
unremedied for a period of fifteen (15) Business Days (if such failure can be
remedied) after the earlier to occur of (i) the date on which written
notice of such failure requiring the same to be remedied shall have been given
to a Responsible Officer of the Servicer by the Buyer or (ii) the date on
which a Responsible Officer of the Servicer acquires actual knowledge thereof;

 

(c)           (i) the failure of the initial
Servicer to make any payment when due with respect to any of its debt or other
obligations (which payment default relates to debt facilities or other
obligations in excess of $250,000 in the aggregate) or (ii) the occurrence
of any event or condition that would cause or permit acceleration of such debt
or other obligations in excess of $250,000 in the aggregate, unless (A) such
event or condition has been waived and (B) any such debt or other
obligations shall have not been declared to be due and payable or required to
be prepaid (other than by scheduled payment) prior to maturity, in the case of
each of clauses (i) and (ii) (x) subject to the initial Servicer’s
right to contest in good faith any claim which could lead to acceleration and (y) after
all applicable cure and grace periods have expired;

 

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

 

(e)           the Servicer fails in any material
respect to comply with the Credit and Collection Policy and the Servicing
Standard regarding the servicing of the Receivables and the same continues
unremedied for a period of ten (10) Business Days (if such failure can be
remedied) after the earlier to occur of (i) the date on which written
notice of such failure requiring the same to be remedied shall have been given
to a Responsible Officer of the Servicer by the Buyer or (ii) the date on
which a Responsible Officer of the Servicer acquires actual knowledge thereof;

 

(f)            the occurrence or existence of any
event which causes a Material Adverse Effect with respect to the Servicer;

 

(g)           any failure by the Servicer to
deliver any required Servicing Report or other Required Reports hereunder and
the same continues unremedied for a period of one Business Day after the
earlier to occur of (i) the date on which written notice of such failure
shall have been given to a Responsible Officer of the Servicer by the Buyer, or
(ii) the date on which a Responsible Officer of the Servicer has actual
knowledge thereof; or

 

12

 

(h)           any representation, warranty or
certification made by the Servicer in any Transaction Document or in any
certificate delivered pursuant to any Transaction Document shall prove to have
been incorrect in any material respect when made and continues to be unremedied
for a period of thirty (30) Business Days after the earlier to occur of (i) the
date on which written notice of such incorrectness requiring the same to be
remedied shall have been given to the a Responsible Officer of the Servicer by
the Buyer or (ii) the date on which a Responsible Officer of the Servicer
acquires knowledge thereof.

 

“Servicer Termination Notice”:
Defined in Section 8.10(c).

 

“Servicer’s Certificate”:
Defined in Section 8.8(b).

 

 “Servicing File”: For each Receivable, (i) copies
(as opposed to originals) of each of the documents included in the Required
Receivable File definition, and (ii) to the extent applicable for the
related Receivable, copies of (a) the phone verification form confirming
that goods financed were received by the Obligor, (b) the Obligor’s credit
report, (c) the related credit application and (d) any and all other
items required by the credit and underwriting guidelines of the applicable
Dealer.

 

“Servicing
Report”: Defined in Section 8.8(a).

 

“Servicing
Standard”: With respect to any Receivables, to service and administer such
Receivables in accordance with the Underlying Instruments and all customary and
usual servicing practices (a) which are consistent with the higher of: (i) the
customary and usual servicing practices that a prudent loan lender would use in
servicing loans like the Receivables for its own account, and (ii) the
same care, skill, prudence and diligence with which the Servicer services and
administers loans for its own account or for the account of others; (b) with
a view to maximize the value of the Receivables; and (c) without regard
to: (i) any relationship that the Servicer or any Affiliate of the
Servicer may have with any Obligor or any Affiliate of any Obligor, (ii) the
Servicer’s obligations to incur servicing and administrative expenses with
respect to a Receivable, (iii) the Servicer’s right to receive
compensation for its services hereunder or with respect to any particular
transaction, (iv) the ownership by the Buyer of any Receivables, (v) the
ownership, servicing or management for others by the Servicer of any other
loans or property by the Servicer or (vi) any relationship that the
Servicer or any Affiliate of the Servicer may have with any holder of other
loans of the Obligor with respect to such Receivables.

 

“Solvent”:
As to any Person at any time, having a state of affairs such that all of the
following conditions are met: (a) the fair value of the property of such
Person is greater than the amount of such Person’s liabilities (including
disputed, contingent and unliquidated liabilities) as such value is established
and liabilities evaluated for purposes of Section 101(32) of the
Bankruptcy Code; (b) the present fair saleable value of the property of
such Person in an orderly liquidation of such Person is not less than the
amount that will be required to pay the probable liability of such Person on
its debts and other liabilities as they become absolute and matured; (c) such
Person is able to realize upon its property and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in
the normal course of business; (d) such Person does not intend to, and
does not believe that it will, incur debts or 

 

13

 

liabilities beyond such Person’s ability to
pay as such debts and liabilities mature; and (e) such Person is not
engaged in a business or a transaction, and does not propose to engage in a
business or a transaction, for which such Person’s property would constitute
unreasonably small capital.

 

“Taxes”:
Any present or future taxes, levies, imposts, duties, charges, assessments or
fees of any nature (including interest, penalties, and additions thereto) that
are imposed by any Governmental Authority.

 

“Transaction Documents”:
This Agreement, the Sale Assignment, the Notes and any other documents,
agreements or instrument executed in connection with the foregoing.

 

“Underlying
Instruments”: With respect to any Receivable, each agreement that governs
the terms of or secures the obligations represented by such Receivable or of
which the holders of such Receivable are the beneficiaries.

 

“Voucher”:
A contractual addendum to an Open Ended Consumer Contract with an Obligor
pursuant to which a Receivable has been issued or created in a form
substantially similar to that attached hereto as Schedule VII.

 

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 Texas, and used but not
specifically defined herein, are used herein as defined in such Article 9.

 

Section 1.3.                                                        Computation
of Time Periods.

 

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

 

Section 1.4.                                                        Interpretation.

 

In this Agreement, unless a
contrary intention appears:

 

(i)            the singular number
includes the plural number and vice versa;

 

(ii)           reference to any
Person includes such Person’s successors and assigns but, if applicable, only
if such successors and assigns are permitted by the Transaction Documents;

 

(iii)          reference to any
gender includes each other gender and the neuter, as applicable;

 

(iv)          reference to day or
days without further qualification means calendar days;

 

(v)           reference to any
time means Central Time;

 

14

 

(vi)          reference to any
agreement (including any Transaction Document), document or instrument means
such agreement, document or instrument as amended, modified, supplemented,
restated or replaced and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms of the other Transaction Documents,
and reference to any promissory note includes any promissory note that is an
extension or renewal thereof or a substitute or replacement therefor; and

 

(vii)         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)           On
the terms and subject to the conditions set forth in this Agreement (including
the conditions to Purchase set forth in Article III), the Seller
hereby sells, transfers, assigns, sets over and otherwise conveys to the Buyer,
and the Buyer hereby purchases and takes from the Seller, all right, title and
interest of the Seller in the property identified in clauses (i) through
(iii) below, whether constituting accounts, cash and currency,
chattel paper, tangible chattel paper, electronic chattel paper, copyrights,
copyright licenses, equipment, fixtures, contract rights, general intangibles,
instruments, certificates of deposit, certificated securities, uncertificated
securities, financial assets, securities entitlements, commercial tort claims,
deposit accounts, inventory, investment property, letter-of-credit rights,
software, supporting obligations, accessions or other property of the Seller,
including the following (in each case excluding any Excluded Amounts) (collectively,
the “Sale Assets”):

 

(i)            the Receivables
listed on Schedule I to the Sale Assignment, together with all monies due or to
become due in payment under such Receivables on and after the Closing Date,
including, but not limited to, all Collections and all interest accrued with
respect to the Receivables but unpaid as of the Closing Date;

 

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

 

(iii)          all income and
Proceeds of the foregoing.

 

For avoidance of doubt, each of Fair, Durham
and Cochran, as the collective “Seller” hereunder, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Buyer all of such Person’s
undivided interest in the Sale Assets, which collectively constitute one
hundred percent (100%) of the undivided interests in the Sale Assets.

 

15

 

(b)                                 The
Seller shall, on the Closing Date, execute and deliver to the Buyer a
certificate of assignment (the “Sale Assignment”) in the form of Exhibit C
hereto.

 

(c)                                  The
Buyer shall not have any obligation or liability to any Obligor (including any
obligation to perform any of the obligations of the Seller (including any
obligation with respect to any other related agreements)). No such obligation
or liability is intended to be assumed by the Buyer, and any such assumption is
expressly disclaimed.

 

(d)                                 In
connection with the Purchase of Sale Assets hereunder, the Seller shall have
delivered the Required Receivable Files to the Buyer prior to the Closing.

 

(e)                                  In
connection with the transfers contemplated by this Agreement, the Seller hereby
grants to the Buyer an irrevocable, non–exclusive license to use, without
royalty or payment of any kind, all software used by the Seller to account for
the Sale Assets, to the extent necessary to administer the Sale Assets, whether
such software is owned by the Seller or is owned by others and used by the
Seller under license agreements with respect thereto; provided
that should the consent of any licensor of such software be required for the
grant of the license described herein to be effective or for the Seller to
assign such license to the Buyer, the Seller hereby agrees that upon the
request of the Buyer, the Seller will use its best efforts to obtain the
consent of such third—party licensor. 
The license granted hereby shall be irrevocable. The Seller (i) shall
take such action requested by the Buyer from time to time hereafter that may be
necessary or appropriate to ensure that the Buyer and its assigns have an
enforceable ownership or security interest in the Sale Assets purchased by the
Buyer as contemplated by this Agreement, and (ii) shall use its best
efforts to ensure that each of the Buyer has an enforceable right (whether by
license or sublicense or otherwise) to use all of the computer software used to
account for the Sale Assets and/or to recreate the related Servicing Files.

 

(f)                                    In
connection with the purchases by the Buyer of the Sale Assets as contemplated
by this Agreement, the Seller further agrees that it will, at its own expense,
indicate clearly and unambiguously in its computer files on or prior to the
Closing Date, and in the footnotes to its financial statements, that such Sale
Assets have been purchased by the Buyer in accordance with this Agreement.

 

(g)                                 It
is the intention of the parties hereto that the conveyances of all right, title
and interest of the Seller in and to any Sale Assets to the Buyer as provided
in this Section 2.1 shall constitute absolute transfers conveying
good title, free and clear of any Lien and that the Sale Assets shall not be
part of the bankruptcy estate of the Seller (or, for avoidance of doubt, any
member of Seller, being Fair, Cochran and Durham) in the event of an Insolvency
Event with respect to the Seller. Furthermore, it is not intended that any such
conveyance be deemed a pledge of the Receivables and the other Sale Assets to
the Buyer to secure a debt or other obligation of the Seller. If, however,
notwithstanding the intention of the parties, any conveyance provided for in
this Section 2.1 is determined by a court of competent jurisdiction
or other Governmental Authority to be a transfer for security (an “Inconsistent
Determination”), then this Agreement shall also be deemed to be, and hereby
is, a “security agreement” within the meaning of Article 9 of the UCC and
the Seller hereby grants to the Buyer a “security interest” within the meaning
of Article 9 of the UCC in all of its right, title and interest in, to and
under the related Sale Assets, now existing and hereafter created, to secure
the prompt and complete payment of a 

 

16

 

loan deemed to
have been made in an amount equal to the Purchase Price of such Sale Assets
together with all of the other obligations of the Seller hereunder. The Buyer
shall have, in addition to the rights and remedies which it may have under this
Agreement, all other rights and remedies provided to a secured creditor under
the UCC and other Applicable Law, which rights and remedies shall be
cumulative. In connection herewith, the Buyer shall be permitted to file
protective UCC financing statements necessary for the Buyer to have a perfected
security interest in the Sale Assets in the event of an Inconsistent
Determination (each a “Protective Filing”). Furthermore, automatically
upon an Inconsistent Determination and without any further action by the Seller
or the Buyer, or any amendment to this Agreement being required, each
representation or warranty by the Seller attesting as to the valid conveyance
of Sale Assets shall be deemed to be a representation and warranty that the
Seller has granted the Buyer a valid and continuing security interest in the
Sale Assets, free and clear of all Liens.

 

Section 2.2.                                                        Purchase
Price.

 

The purchase
price for the Sale Assets sold to the Buyer by the Seller under this Agreement
shall be an amount equal to $3,594,354 (the “Purchase Price”), which is
made up of the sum of (a) for Sale Assets comprising Portfolio A,
$2,757,471, plus (b) for Sale Assets comprising
Portfolio B, $836,883, in each case to be paid in accordance with Section 2.3.

 

Section 2.3.                                                        Payment
of Purchase Price.

 

(a)                                  The
Purchase Price for the Sale Assets shall be paid as follows: (i) $1,797,178.00
of the aggregate Purchase Price shall be paid to the Seller on the Closing Date
in immediately available funds to the accounts specified by the Seller (which
specification shall be furnished to the Buyer in writing prior to the Closing),
of which $1,417,737.46 shall be paid to the account specified by Fair,
$54,000.08 shall be paid to the account specified by Cochran, and $325,440.46
shall be paid to the account specified by Durham, (ii) $898,588.00 shall
be financed by the Seller and paid pursuant to the terms of the Notes, and (iii) the
Buyer shall transfer to the Seller on the Closing Date 2,496,077 shares of
common stock, $0.01 par value per share, of CLST Holdings, Inc. at a
deemed sale price of $0.36 per share, of which 1,969,077 shares shall be issued
to Fair, 75,000 shares shall be issued to Cochran, and 452,000 shares shall be
issued to Durham, all for an aggregate deemed purchase price for such shares of
$898,588.00 (the “Parent Stock”).

 

(b)                                 Upon
(i) the payment of that portion of the Purchase Price which is to be paid
in cash, (ii) the execution and delivery by the Buyer to each of Fair,
Cochran and Durham of their respective Notes, and (iii) the issuance to
each of Fair, Cochran and Durham of the Parent Stock, title to the Sale Assets
shall rest 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 that the Buyer shall not be
deemed to have waived any claim it may have under this Agreement for the
failure by the Seller in fact to satisfy any such condition precedent, covenant
or agreement.

 

17

 

ARTICLE III.

 

CONDITIONS PRECEDENT

 

Section 3.1.                                                        Conditions
Precedent to Buyer’s Obligations.

 

The
obligations of the Buyer to Purchase the Sale Assets and pay the Purchase Price
as contemplated by this Agreement shall be subject to the satisfaction of the
following conditions precedent, which conditions may be waived by the Buyer:

 

(a)                                  all
representations and warranties of the Seller contained in Section 4.1
shall be true and correct in all material respects on and as of the Closing
Date (except those representations and warranties qualified by materiality or
by reference to a Material Adverse Effect, which shall be true and correct in
all respects);

 

(b)                                 the
Seller shall have delivered to the Buyer a duly executed and completed Sale
Assignment along with a Schedule I thereto that is true, accurate and
complete in all material respects (except those representations and warranties
referenced therein which are qualified by materiality or by reference to a
Material Adverse Effect shall be true, accurate and complete in all respects);

 

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

 

(d)                                 on
or prior to the Closing Date, the Seller shall have delivered to the Buyer each
of the items specified on Appendix A hereto in form and substance satisfactory
to the Buyer.

 

ARTICLE IV.

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.1.                                                        The
Seller’s Representations and Warranties.

 

As of the
Closing Date, the Seller 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. Fair has been duly organized, and is validly existing as
a corporation in good standing under the laws of the state of Ohio with all
requisite corporate power and authority to own or lease its properties and
conduct its business as such business is presently conducted, and had at all
relevant times, and now has, all necessary power, authority and legal right to
conduct its business as such business is presently conducted, to acquire, own,
sell and pledge the Sale Assets and to enter into and perform its obligations
pursuant to this Agreement.

 

(b)                                 Due
Qualification. Fair is duly qualified to do business and is in good
standing as a corporation and has obtained all necessary qualifications,
licenses and approvals, in all jurisdictions in which the conduct of its
business requires such qualifications, licenses or 

 

18

 

approvals
except to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.

 

(c)                                  Power
and Authority; Due Authorization; Execution and Delivery. Fair (i) has
all necessary corporate 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 this Agreement and the other
Transaction Documents to which it is a party and (ii) has duly authorized
by all necessary corporate action the execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is a party and
the sale of the Sale Assets on the terms and conditions herein provided. This
Agreement and each other Transaction Document to which the Seller is a party
have been duly executed and delivered by the Seller.

 

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

 

(e)                                  No
Violation. The consummation of the transactions contemplated by this
Agreement and the other Transaction Documents to which it is a party and the
fulfillment of the terms hereof and thereof will not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under, Fair’s
organizational documents or any Contractual Obligation of any of Fair, Cochran
or Durham, (ii) result in the creation or imposition of any Lien (other
than Liens in favor of the Buyer) upon any of the Sale Assets pursuant to the
terms of any such Contractual Obligation, other than this Agreement, or (iii) violate
in any material respects any Applicable Law applicable to the Seller, in each
case except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.

 

(f)                                    No
Proceedings. There is no litigation, proceeding or investigation pending
or, to the best knowledge of the Seller, threatened against any of Fair,
Cochran or Durham before any Governmental Authority (i) asserting the
invalidity of this Agreement or any other Transaction Document to which the
Seller 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 Seller is a party or (iii) seeking any determination or
ruling that could reasonably be expected to have a Material Adverse Effect.

 

(g)                                Consents. All
approvals, authorizations, consents, orders, licenses or other actions of any
Person or of any Governmental Authority (if any) required to be made or
obtained by the Seller for the due execution, delivery and performance by the
Seller of this Agreement and any other Transaction Document to which the Seller
is a party have been obtained except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect.

 

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

 

19

 

(i)                                    Solvency.
None of Fair, Cochran or Durham is the subject of any Insolvency Proceedings or
Insolvency Event.  The transactions under
this Agreement and any other Transaction Document to which the Seller is a
party will not cause any of Fair, Cochran or Durham to cease being Solvent.

 

(j)                                    Selection
Procedures. No procedures adverse to the interests of the Buyer were
utilized by the Seller in identifying and/or selecting the Receivables included
in the Sale Assets.

 

(k)                                 Taxes. The
Seller has filed or caused to be filed all tax returns that are required to be
filed by it (or has been granted appropriate extensions). The Seller has paid
or made adequate provisions for the payment of all Taxes and all assessments
made against it or any of its properties (other than (i) any amount of Tax
the validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have
been provided on the books of the Seller, (ii) any Tax less than thirty
(30) days overdue and (iii) any filings that the failure to so file could
not reasonably be expected to have a Material Adverse Effect), and no tax lien
has been filed against the Seller or any of its properties and, to the Seller’s
knowledge, no claim is being asserted by an applicable Governmental Authority,
with respect to any such Tax, assessment or other charge.

 

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

 

(m)                              Security Interest.

 

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

 

(ii)                                 the
Receivables and Related Security constitute “instruments”, “general
intangibles”, “tangible chattel paper” or “accounts” (each as defined in the
applicable UCC);

 

(iii)                              Fair,
Cochran and Durham collectively own and have good and marketable title to the
Sale Assets free and clear of any Lien of any Person (other than the Liens
created by this Agreement);

 

(iv)                             the
Seller has received all consents and approvals required by the terms of any
Receivable, if any, to the sale and granting of a security interest in the Sale
Assets hereunder to the Buyer;

 

20

 

(v)                                all
appropriate financing statements in connection with the Protective Filings have
been filed in the proper filing office in the appropriate jurisdictions under
Applicable Law in order to perfect the ownership or security interest in the
Receivables and in the other Sale Assets, to the extent that ownership or a
security interest in such other Sale Assets may be perfected by the filing of a
financing statement;

 

(vi)                             other
than the security interest granted to the Buyer, the Seller has not pledged,
assigned, sold, granted a security interest in or otherwise conveyed any of the
Sale Assets. The Seller has not authorized the filing of and is not aware of
any financing statements against the Seller that include a collateral
description covering the Sale Assets other than any financing statement (A) relating
to the ownership of or security interest granted to the Buyer under this
Agreement, or (B) that has been terminated and/or fully and validly
assigned to the Buyer on or prior to the Closing Date. The Seller is not aware
of the filing of any judgment or tax lien filings against the Seller;

 

(vii)                          all
original executed copies of each instrument that constitutes or evidences each
Receivable have been delivered to the Buyer, and copies thereof have been
delivered to the Servicer; and

 

(viii)                       none
of the Underlying Instruments that constitute or evidence the Receivables has
any marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Buyer.

 

(n)                                Reports Accurate.
All information, exhibits, schedules, financial statements, documents, books,
records or reports furnished by the Seller to the Buyer pursuant to or in
connection with this Agreement are true, correct and complete in all material
respects.

 

(o)                                Location of Seller.

 

(i)                                    Fair’s
location (within the meaning of Article 9 of the UCC) is Ohio.  Fair has not changed its name (whether by
amendment of its certificate of formation, by reorganization or otherwise) or
its jurisdiction of organization and has not changed its location for purposes
of the applicable UCC within the four (4) months preceding the Closing
Date.

 

(ii)                                 Durham’s
location (within the meaning of Article 9 of the UCC) is Indiana.  Durham has not changed his name or the state
of his primary residence for purposes of the applicable UCC within the four
(4) months preceding the Closing Date.

 

(iii)                              Cochran’s
location (within the meaning of Article 9 of the UCC) is Indiana.  Durham has not changed his name or the state
of his primary residence for purposes of the applicable UCC within the four
(4) months preceding the Closing Date.

 

(p)                                Lockbox Account.
The name and address of each Lockbox Account Bank, together with the account
number of each Lockbox Account are specified in Schedule VI.  Following notice by the Seller to the
Obligors of appropriate payment instructions, which shall occur within thirty
(30) days following the Closing Date, the Lockbox Accounts shall be the only 

 

21

 

accounts to which Collections on the Sale
Assets are sent.  The Seller has not
granted any Person an interest in the Lockbox Accounts, except as contemplated
by the Transaction Documents.

 

(q)                                Trade Names.
Fair has no trade names, fictitious names, assumed names or “doing business as”
names or other names under which it has done or is doing business.

 

(r)                                   Sale Agreement.
This Agreement is the only agreement or arrangement pursuant to which the
Seller sells the Sale Assets to the Buyer.

 

(s)                                 Value Given.
The Buyer shall have given reasonably equivalent value to the Seller in
consideration for the transfer to the Buyer of the Sale Assets as contemplated
by this Agreement. No such transfer shall have been made for or on account of
an antecedent debt owed by the Seller to the Buyer, and no such transfer is or
may be voidable or subject to avoidance as to the Seller under any section of
the Bankruptcy Code.

 

(t)                                   Accounting.
Fair accounts for the transfers to the Buyer of interests in Sale Assets as a
sale for legal purposes on its books, records and financial statements, in each
case in accordance with GAAP.

 

(u)                                Investment Company
Act. Fair is not, and is not controlled by, an “investment company” within
the meaning of, or is exempt from the provisions of, the 1940 Act, as amended.

 

(v)                                ERISA. Neither
Fair nor any ERISA Affiliate thereof has any Benefit Plans or Multiemployer
Plans.

 

(w)                              Compliance with Law.
The Seller has complied in all material respects with all Applicable Laws to
which it may be subject, and no Receivable in the Sale Assets contravenes in
any material respect any Applicable Law (including, without limitation, all
Applicable Laws relating to predatory and abusive lending 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) in each case except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.

 

(x)                                  Collections.
The Seller acknowledges that any Collections received by it or its Affiliates
with respect to the Sale Assets are held and shall be held in trust for the
benefit of the Buyer until deposited into the Collection Account within one
Business Day after receipt as required herein.

 

(y)                                Set–Off, etc. No
Sale Assets have been compromised, adjusted, extended, satisfied, subordinated,
rescinded, set–off or modified by the Seller, the Obligor thereof or the Dealer
thereof, and no Sale Assets are 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 Sale Assets or
otherwise, by the Seller, the Obligor or the Dealer thereof with respect
thereto, except for amendments, extensions or modifications to such Sale Assets
otherwise permitted under the Transaction Documents and in accordance with the
Credit and Collection Policy and the Servicing Standard.

 

22

 

(z)                                  USA PATRIOT Act.
To the best of the knowledge of each of Fair, Durham and Cochran, none of Fair,
Durham or Cochran nor any Affiliate of any of them is (i) a country,
territory or Person named on an Office of Foreign Asset Control (OFAC) list;
(ii) a Person that resides or has a place of business in a country or
territory named on such lists or which is designated as a “Non-Cooperative
Jurisdiction” by the Financial Action Task Force on Money Laundering, or whose
subscription funds are transferred from or through such a jurisdiction;
(iii) a “Foreign Shell Bank” within the meaning of the USA PATRIOT Act,
i.e., a foreign bank that does not have a physical presence in any country and
that is not affiliated with a bank that has a physical presence and an
acceptable level of regulation and supervision; or (iv) a Person that
resides in or is organized under the laws of a jurisdiction designated by the
United States Secretary of the Treasury under Sections 311 or 312 of the USA
PATRIOT Act as warranting special measures due to money laundering concerns.

 

It is understood and agreed that the representations and warranties
provided in this Section 4.1 shall survive (x) the sale and
assignment of the Sale Assets to the Buyer and (y) any subsequent transfer
of the Sale Assets by the Buyer. Upon discovery by a Responsible Officer of the
Seller or the Buyer 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.

 

Section 4.2.                                                        Representations
and Warranties of the Seller Relating to the Agreement and the Sale Assets.

 

The Seller hereby represents and warrants to the Buyer as of the
Closing Date as follows:

 

(a)                                 Valid Transfer and
Security Interest. This Agreement constitutes a valid transfer to the Buyer
of all right, title and interest of the Seller in, to and under all of the Sale
Assets, free and clear of any Lien of any Person claiming through or under the
Seller or its Affiliates, except for the Liens created in favor of the Buyer
under this Agreement.

 

(b)                                Eligibility of
Receivables. (i) Schedule I attached to the Sale Assignment is an
accurate and complete listing of all the Sale Assets to be transferred on the
Closing Date and the information contained therein with respect to the identity
of such Sale Assets and the amounts owing thereunder is true, correct and
complete in all material respects, and (ii) each Receivable included in
the Sale Assets is an Eligible Receivable.

 

(c)                                 No Fraud. Each
Receivable included in the Sale Assets was originated without any fraud or
material misrepresentation by the Seller or, to the best of the Seller’s
knowledge, on the part of a Dealer or the related Obligor.

 

It is understood and agreed that the representations and warranties
provided in this Section 4.2 shall survive (x) the sale and
assignment of the Sale Assets to the Buyer and (y) any subsequent transfer
of the Sale Assets by the Buyer.  Upon
discovery by the Seller or the Buyer 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.

 

Section 4.3.                                                        Representations
and Warranties of Buyer.

 

The Buyer hereby represents and warrants to the Seller as of the
Closing Date that:

 

23

 

(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 power and authority to own or lease its properties
and conduct its business as such business is presently conducted, and had at
all relevant times, and now has, all necessary power, authority and legal right
to acquire and own the Sale Assets.

 

(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 qualifications, licenses and
approvals in all jurisdictions in which the conduct of its business requires
such qualifications, licenses or approvals except to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect.

 

(c)                                 Power and
Authority; Due Authorization; Execution and Delivery. 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, (b) carry out the terms of this Agreement and the other Transaction
Documents to which it is a party, and (ii) has duly authorized by all
necessary limited liability company action the execution, delivery and
performance of this Agreement and the other Transaction Documents to which it
is a party and the purchase of the Sale Assets on the terms and conditions
herein provided. This Agreement and each other Transaction Document to which
the Buyer is a party have been duly executed and delivered by the Buyer.

 

(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 by general
principles of equity (whether considered in a suit at law or in equity).

 

(e)                                 No Violation.
The consummation of the transactions contemplated by this Agreement and the
other Transaction Documents to which it is a party and the fulfillment of the
terms hereof and thereof will not (i) conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or without notice or
lapse of time or both) a default under, the Buyer’s organizational documents or
any material 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, in each case except to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

 

(f)                                   No Proceedings.
There is no litigation, proceeding or investigation 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.

 

24

 

(g)                                Consents. All
approvals, authorizations, consents, orders, licenses or other actions of any
Person or of any Governmental Authority (if any) required to be made or
obtained by the Buyer 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 except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect.

 

(h)                                Value Given. The
Buyer has given reasonably equivalent value to the Seller in consideration for
the transfer to the Buyer of the Sale Assets as contemplated by this Agreement.

 

No such transfer has been made for or on account of an antecedent debt
owed by the Seller to the Buyer, and no such transfer is or may be voidable or
subject to avoidance as to the Buyer under any section of the Bankruptcy Code.

 

ARTICLE V.

COVENANTS

 

Section 5.1.                                                        Affirmative
Covenants of Seller.

 

From the date hereof until the Aggregate Outstanding Receivable Balance
has reduced to zero, each of Durham, Cochran and Fair, in its capacity as both
a seller and as the Servicer, as appropriate (irrespective of any reference to
Fair simply as “Seller” (collectively with Durham and Cochran) or “Servicer” in
this Section 5.1), hereby covenants and agrees as follows:

 

(a)                                 Compliance with
Laws. The Seller will comply in all material respects with all Applicable
Laws applicable to it, including those with respect to the Sale Assets or any
part thereof, except if the failure to comply could not reasonably be expected
to have a Material Adverse Effect.

 

(b)                                Preservation of
Organizational Existence.  Fair will
preserve and maintain its organizational existence, rights, franchises and
privileges in the jurisdiction of its formation, and qualify and remain
qualified in good standing as a 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.

 

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

 

(d)                                Keeping of Records
and Books of Account. The Seller will maintain and implement administrative
and operating procedures (including, without limitation, an ability to recreate
records evidencing the Sale Assets conveyed by it in the event of the
destruction of the originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or advisable for the
collection of all or any portion of the Sale Assets.  It will mark its master data processing
records (which marking may take the form of flagging the data processing
records with the appropriate status code) and other books and records relating
to the Sale Assets with a legend, acceptable to the Buyer, describing the sale
of the Sale Assets to 

 

25

 

the Buyer, and at all times following the
Closing Date, will otherwise clearly indentify on its books and records that
the Sale Assets are the property solely of the Buyer.

 

(e)                                 Protection of
Interest in Sale Assets. All Sale Assets acquired by the Buyer from the
Seller will be acquired pursuant to and in accordance with the terms of this
Agreement and the Seller will (at its own expense) take all action necessary to
perfect, protect and more fully evidence the Buyer’s or its assignee’s
ownership or security interest in such Sale Assets free and clear of any Lien
other than the Lien created hereunder, including, without limitation, (i) with
respect to the Receivables and that portion of the Sale Assets in which
ownership or a security interest may be perfected by filing, maintaining
effective financing statements against the Seller in all necessary or
appropriate filing offices (including any amendments thereto or assignments
thereof), and filing continuation statements, amendments or assignments with
respect thereto in such filing offices (including any amendments thereto or
assignments thereof), (ii) executing or causing to be executed such other
instruments or notices as may be reasonably necessary or appropriate, (iii) permit
the Buyer or its agents or representatives to visit the offices of the Seller
during normal office hours and upon reasonable notice examine and make copies
of all documents, books, records and other information concerning the Sale
Assets and discuss matters related thereto with Durham, Cochran and any of the
officers or executive employees of Fair having knowledge of such matters (the
Seller shall pay the reasonable costs and expenses for all such visits up to
four times each calendar year), and (iv) take all additional action that
the Buyer may reasonably request to perfect, protect and more fully evidence
the respective interests of the parties to this Agreement in the Sale Assets.

 

(f)                                   Deposit of
Collections. Within thirty (30) days following the Closing Date, the Seller
will instruct all Obligors to make payments with respect to the Receivables to
the Lockbox Account(s) listed on Schedule VI.  The Seller shall promptly (but in no event
later than one (1) Business Day after receipt) transfer into the
Collection Account any amounts deposited in the Lockbox Account or otherwise
received by the Seller relating to any Sale Assets, and at all times prior to
such remittance, the Seller will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of the Buyer. Until so
deposited, all such Collections shall be held in trust for the Buyer or its
assignees by the Seller.

 

(g)                                Credit and
Collection Policy.  The Seller will (i) comply
in all material respects with the Credit and Collection Policy in regard to the
Sale Assets, and (ii) furnish to the Buyer, prior to its effective date,
written notice of any proposed changes in the Credit and Collection Policy.

 

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

 

(i)                                    Obligor
Notification Forms. The Seller shall furnish the Buyer with an appropriate
power of attorney to send Obligor notification forms to give notice to the
Obligors of the Buyer’s interest in the Sale Assets and the obligation to make
payments as directed by the Buyer.

 

26

 

(j)                                    Notices. The
Seller will furnish to the Buyer:

 

(i)                                    Income
Tax Liability. Within ten (10) Business Days after the receipt by a
Responsible Officer of revenue agent reports or other written proposals,
determinations or assessments of the Internal Revenue Service or any other
taxing authority which propose, determine or otherwise set forth positive
adjustments to the Tax liability of any “affiliated group” (within the meaning
of Section 1504(a)(1) of the Code) of which the Seller is a member
which equal or exceed $100,000 in the aggregate, telephonic or facsimile notice
(confirmed in writing within five (5) Business Days thereafter) specifying
the nature of the items giving rise to such adjustments and the amounts
thereof;

 

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

 

(iii)                              Representations
and Warranties. Forthwith upon a Responsible Officer receiving knowledge of
same, the Seller shall notify the Buyer if any representation or warranty set
forth in Section 4.1 or Section 4.2 was incorrect in
any material respect (or, with respect to any representation or warranty
qualified by materiality or by reference to a Material Adverse Effect, was
incorrect in any respect) at the time it was given or deemed to have been given
and at the same time deliver to the Buyer a written notice setting forth in
reasonable detail the nature of such facts and circumstances;

 

(iv)                             Proceedings.
As soon as possible and in any event within five (5) Business Days after a
Responsible Officer of the Seller receives notice or obtains knowledge thereof,
notice of any settlement of, judgment (including a judgment with respect to the
liability phase of a bifurcated trial) in or commencement of any labor
controversy, litigation, action, suit or proceeding before any Governmental Authority,
domestic or foreign, which could reasonably be expected to have a Material
Adverse Effect; provided that notwithstanding the
foregoing, any settlement, judgment, labor controversy, litigation, action,
suit or proceeding affecting the Sale Assets in an amount in excess of
$250,000, the Transaction Documents, the Buyer’s interest in the Sale Assets or
otherwise in an amount in excess of $250,000 shall be required to be reported;

 

(v)                                Change
of Control.  Upon the occurrence of a
Change of Control of Fair, as soon as possible and in any event within two (2) Business
Days after the occurrence of same, Fair will provide the Buyer with written
notice thereof;

 

(vi)                             Events
of Default.  Upon the occurrence of
each Servicer Default of which a Responsible Officer of Seller has knowledge or
has received notice (other than any knowledge obtained from the Buyer), it will
provide the Buyer with prompt (and in any event within one Business Day)
written notice of the occurrence thereof. 
In addition, no later than three (3) Business Days following a
Responsible Officer having knowledge or notice of the occurrence of any
Servicer Default, it will provide to the Buyer a written statement of its chief
financial officer or chief accounting officer setting forth the details of such
event and the action that it proposes to take with respect thereto; and

 

27

 

(vii)                          Notice
of Material Events. Promptly upon a Responsible Officer of the Seller
becoming aware thereof, notice of any other event or circumstances that, in the
reasonable judgment of the Seller, could reasonably be expected to have a
Material Adverse Effect.

 

(k)                                 Cooperation with
Requests for Information or Documents. The Seller 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 Buyer and its assignees to carry out their responsibilities under
the Transaction Documents.

 

(l)                                    Access to Credit
Facilities.  In connection with Fair’s
existing $50,000,000 credit facility with Fortress Credit Corp., as the
administrative agent and a lender, pursuant to a loan agreement by and among
Fair, such lender and certain other parties dated February 12, 2008, which
loan agreement provides for the payment of interest on any advances thereunder
at a per annum interest rate equal to the
LIBOR Rate (as defined in the credit agreement for such facility and not as
defined herein) plus six and three-quarters percent (6.75%), Fair shall use its
best efforts to facilitate negotiations among itself, the Buyer, and such
lender to add the Buyer or one of the Buyer’s Affiliates as an additional
borrower under such loan agreement, or to otherwise give the Buyer and/or its
Affiliates access to at least $15,000,000 of such credit line.

 

(m)                              Other. The Seller
will furnish to the Buyer promptly, from time to time, such other information,
documents, records or reports respecting the Sale Assets or the condition or
operations, financial or otherwise, of the Seller as the Buyer may from time to
time reasonably request in order to protect the interests of the Buyer under or
as contemplated by this Agreement.

 

Section 5.2.                                                        Negative
Covenants of Seller.

 

From the date hereof until the Aggregate Outstanding Receivable Balance
has reduced to zero, each of Durham, Cochran and Fair, in its capacity as both
a seller and as the Servicer, as appropriate (irrespective of any reference to
Fair simply as “Seller” (collectively with Durham and Cochran) or “Servicer” in
this Section 5.2), hereby covenants and agrees as follows:

 

(a)                                 Sale Assets Not to
be Evidenced by Instruments.  The
Seller will take no action to cause any Sale Assets conveyed by it that are
not, as of the Closing Date, evidenced by an instrument, to be so evidenced
except in connection with the enforcement or collection of such Sale Assets.

 

(b)                                Security Interests.  The Seller will not sell, pledge, assign,
transfer, grant, create, incur, assume or suffer to exist any Lien (except for
Liens in favor of the Buyer) on any Sale Assets conveyed by it, whether now
existing or hereafter transferred hereunder, or any interest therein.  The Seller will promptly notify the Buyer of
the existence of any Lien (other than Liens in favor of the Buyer) on any Sale
Assets conveyed by it and the Seller shall defend the right, title and interest
of the Buyer in, to and under the Sale Assets against all claims of third parties.

 

(c)                                 Change in Payment
Instructions to Obligors.  The Seller
will not add or terminate any bank as a Lockbox Account Bank or any Lockbox
Account listed in Schedule VI or make any change in its instructions to
Obligors regarding payments to be made to the applicable 

 

28

 

Lockbox Account, except as provided in the
immediately preceding sentence, unless the Buyer has consented to such
addition, termination or change.

 

(d)                                Deposits to
Collection Account.  The Seller will
not deposit or otherwise credit, or cause or permit to be so deposited or
credited, to the Collection Account cash or cash proceeds other than
Collections in respect of Sale Assets.

 

(e)                                 Change of Name or
Location of Servicing Files. Fair shall not change its name, move the
location of its principal place of business and chief executive office, change
its jurisdiction of organization or change the offices where it keeps the
records from its address on Annex A hereto, and neither of Durham or
Cochran will move his principal place of residence to a state other than that
shown on Annex A hereto, unless, in each case, the applicable party has
given at least ten (10) days’ written notice to the Buyer and has taken
all actions required under the UCC of each relevant jurisdiction in order to
continue the first priority perfected security interest of the Buyer in the
Sale Assets with respect to Protective Filings.

 

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

 

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

 

(h)                                Extension or
Amendment of Sale Assets.  The Seller
will not, except as otherwise permitted in Section 8.4 hereof in
connection with its role as the Servicer, extend, amend or otherwise modify the
material terms of any Receivable (including the Related Security).

 

(i)                                    Credit and
Collection Policy.  The Seller will
not agree to or otherwise permit to occur any material change in the Credit and
Collection Policy without the prior written consent of the Buyer; provided that no consent shall be required from the Buyer in
connection with any change mandated by Applicable Law or a Governmental
Authority as evidenced by an Opinion of Counsel to that effect delivered to the
Buyer.

 

ARTICLE VI.

LIMITED GUARANTY OF COLLECTION; REPURCHASE OBLIGATION

 

Section 6.1.                                                        Guaranty
of Collection; Setoff.

 

(a)                                 Each of Fair, Durham
and Cochran hereby jointly and severally guarantee to the Buyer that the
Outstanding Receivable Balance of each Receivable as of the Closing Date shall
be collectible in full.  For each
Receivable that becomes a Defaulted Receivable following the Closing Date,
Fair, Durham and Cochran shall be jointly and severally obligated to pay to the
Buyer an amount equal to the Outstanding Receivable Balance of such Receivable
as of the day it became a Defaulted Receivable. 
Notwithstanding the foregoing, the dollar amount of Fair’s liability
under this Section 6.1(a) shall be limited to the aggregate
stated principal amount of the Notes issued by the Buyer in favor of Fair, the
dollar amount of Durham’s liability under this 

 

29

 

Section 6.1(a) shall
be limited to the aggregate stated principal amount of the Notes issued by the
Buyer in favor of Durham, and the dollar amount of Cochran’s liability under
this Section 6.1(a) shall be limited to the aggregate stated
principal amount of the Notes issued by the Buyer in favor of Cochran; provided, however, that the manner of the Buyer’s recourse
against any of the foregoing Persons up to the applicable liability amount
shall not be limited.

 

(b)                                For each Receivable
that becomes a Defaulted Receivable following the Closing Date, the Buyer shall
be entitled to offset from all amounts owed by the Buyer to Fair, Durham and
Cochran under their respective Notes an aggregate amount equal to the
Outstanding Receivable Balance of each such Receivable as of the date such
Receivable became a Defaulted Receivable. 
The setoff rights provided by this Section 6.1(b) shall
apply irrespective of whether, at the time of any proposed setoff, Fair is
continuing to serve as the Servicer of the Receivables that are the subject of
such setoff.

 

Section 6.2.                                                        Ineligible
Receivables.

 

For each Receivable that did not constitute an Eligible Receivable on
the Closing Date in violation of the representation of the Seller in Section 4.2(b) hereof,  the Seller shall, within ten (10) Business Days of the
earlier of Durham, Cochran or a Responsible Officer of the Seller obtaining
actual knowledge of such circumstance or receipt by Durham, Cochran or the
Seller from the Buyer of written notice thereof, make a deposit to the
Collection Account in immediately available funds in an amount equal to the sum
of (a) the Outstanding Receivable Balance with respect to such Receivable
and any interest accrued thereon through the applicable Retransfer Date, and (b) any
costs and damages incurred by the Buyer in connection with any violation in
connection with the servicing or collection of such Receivable of any predatory
or abusive lending law (collectively, the “Retransfer Price”).  In the foregoing instance, the Seller shall
accept retransfer of each such Receivable and any Related Security.

 

Section 6.3.                                                        Repurchase
Limitations.

 

The Seller and Buyer agree that the Seller may only repurchase any Sale
Assets from the Buyer in the case of a repurchase or retransfer of any
Receivable pursuant to Section 6.2.

 

Section 6.4.                                                        Retransfer
of Sale Assets.

 

Upon confirmation of the deposit of the Retransfer Price of a
Receivable pursuant to Section 6.2 into the Collection Account (the
date of such delivery for such Receivable, the “Retransfer Date”), the
Buyer shall, automatically and without further action be deemed to transfer,
assign and set–over to the Seller, without recourse, representation or
warranty, all the right, title and interest of the Buyer in, to and under such
Receivable and all future monies due or to become due with respect thereto and
the Related Security (including all proceeds of such Receivable and Recoveries
relating thereto, all rights to security for any such Receivable and all
Proceeds and products of the foregoing). The Buyer shall, at the sole expense
of the Seller, execute such documents and instruments of transfer as may be
prepared by the Seller to evidence such retransfer.  The Seller shall, at its own expense, execute
such instruments and documents (in recordable form if necessary) and take any
other actions with respect to such Receivable as the Buyer may reasonably
request to effect the transfer of such Receivable.

 

30

 

ARTICLE VII.

ADDITIONAL RIGHTS AND OBLIGATIONS IN RESPECT OF THE SALE ASSETS

 

Section 7.1.                                                        Rights
of the Buyer.

 

(a)                                 The Seller hereby
authorizes the Buyer and/or its designees or assignees to take any and all
steps in the Seller’s name and on behalf of the Seller that the Buyer and/or
its designees or assignees determine are necessary or appropriate to collect
all amounts due under any and all Sale Assets, including indorsing the name of
each of Fair, Durham and Cochran, as appropriate, on checks and other
instruments representing Collections and enforcing such Sale Assets.

 

(b)                                Except as set forth in Section 6.4
with respect to the retransfer of certain Receivables, the Buyer shall have no
obligation to account for or to return any Sale Assets to the Seller.  The Buyer shall have no obligation to account
for or to return Collections, or any interest or other finance charge collected
pursuant thereto, to the Seller, irrespective of whether such Collections and
charges are in excess of the Purchase Price for such Sale Assets.

 

(c)                                 The Buyer shall have
the unrestricted right to further assign, transfer, deliver, hypothecate,
subdivide or otherwise deal with the Sale Assets and all of the Buyer’s right,
title and interest in, to and under this Agreement, on whatever terms the Buyer
shall determine.

 

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

 

ARTICLE VIII.

ADMINISTRATION AND SERVICING OF CONTRACTS

 

Section 8.1.                                                        Designation
of the Servicer.

 

(a)                                 Initial Servicer.  The servicing, administering and collection
of the Receivables shall be conducted by Fair as the initial Servicer in
accordance with this Section 8.1. 
Until the Buyer gives to the Servicer a Servicer Termination Notice,
Fair is hereby appointed as, and hereby accepts such appointment and agrees to
perform the duties and responsibilities of, the Servicer pursuant to the terms
hereof (in such capacity, the “Servicer”).

 

(b)                                Subcontracts.  The Servicer may, with the prior written
consent of the Buyer, subcontract with any other Person for servicing,
administering or collecting the Receivables; provided that the Servicer shall remain
liable for the performance of the duties and obligations of the Servicer
pursuant to the terms hereof without regard to any subcontracting arrangement.

 

(c)                                 Servicing Programs.  In the event that the initial Servicer uses
any software program in servicing the Receivables that it licenses from a third
party, the initial Servicer shall use commercially reasonable efforts to
obtain, either before the Closing Date or as soon as 

 

31

 

possible thereafter, whatever licenses or
approvals are necessary to allow the initial Servicer to assign such licenses
to any successor servicer appointed as provided in this Agreement.

 

Section 8.2.                                                        Duties
of the Servicer.

 

(a)                                 Appointment.  The Buyer hereby appoints Fair as Servicer to
service the Receivables and enforce the Buyer’s rights in, to and under such
Receivables.  Fair hereby accepts such
appointment and agrees to perform the duties and obligations with respect
thereto as set forth herein.

 

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

 

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

 

(ii)                                 maintaining
all reasonably necessary servicing records with respect to the Receivables and
providing such reports, information and servicing records to the Buyer in
respect of the servicing of the Receivables (including information relating to
the Servicer’s performance under this Agreement) as the Buyer may reasonably
request;

 

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

 

(iv)                             identifying
each Receivable clearly and unambiguously in its servicing records to reflect
that such Receivable is owned by the Buyer;

 

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

 

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

 

(vii)                          maintaining
the Servicing Files with respect to Receivables; and

 

(viii)                       remitting
to the appropriate Governmental Authorities and Obligors any Excluded Amounts
from time to time that are held in the Collection Account.

 

(c)                                 Any payment by an
Obligor in respect of any indebtedness owed by it to the Buyer shall, except as
otherwise specified by such Obligor or otherwise required by contract or 

 

32

 

law, be applied as a collection of a payment
by such Obligor (starting with the oldest such outstanding payment due) to the
extent of any amounts then due and payable thereunder before being applied to
any other receivable or other obligation of such Obligor.

 

Section 8.3.                                                        Authorization
of the Servicer.

 

The Buyer hereby authorizes the Servicer to
take any and all reasonable steps in the Buyer’s name and on the Buyer’s behalf
necessary or desirable in the determination of the Servicer to collect all
amounts due under any and all Receivables, including, without limitation,
endorsing any of their names on checks and other instruments representing
Collections, executing and delivering any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Receivables and, after the
delinquency of any Receivables and to the extent permitted under and in
compliance with Applicable Law, to commence proceedings with respect to
enforcing payment thereof.  The Buyer
shall furnish the Servicer with any powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder, and shall cooperate with the Servicer to the
fullest extent in order to ensure the collectability of the Receivables.  In no event shall the Servicer be entitled to
make the Buyer a party to any litigation without the Buyer’s express prior
written consent.

 

Section 8.4.                                                        Collection
of Payments; Accounts.

 

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

 

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

 

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

 

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

 

33

 

such amounts to the appropriate Governmental
Authority or insurer as required by the Underlying Instruments.

 

(e)                                 Payments to Lockbox
Account.  Within thirty (30) days following
the Closing Date, the Servicer shall instruct all Obligors to make all payments
in respect of the Receivables directly to the applicable Lockbox Account.

 

(f)                                   Establishment of
the Collection Account.  The Servicer
shall cause to be established, on or before the Closing Date, with Texas
Capital Bank, N.A. or any other bank designated by the Buyer, and maintained in
the name of the Buyer, a segregated account entitled “Collection Account for
CLST Asset III, LLC” (the “Collection Account”), over which the Buyer
shall have control.  Notwithstanding the foregoing, the
Servicer shall be entitled to access and make withdrawals from the Collection
Account only (a) as needed to prepare its Servicing Reports and other
Required Reports pursuant to Section 8.8, (b) to withdraw
Excluded Amounts, which the Servicer shall be responsible for remitting to the
appropriate Governmental Authorities and/or Obligors pursuant to Section 8.2(b)(viii),
and (c) to make adjustments pursuant to Section 8.4(g).  The Buyer shall be entitled to terminate the
Servicer’s access to the Collection Account at any time for any reason or for
no reason.

 

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

 

Section 8.5.                                                        Realization
Upon Defaulted Receivables.

 

The Servicer will use commercially reasonable efforts in accordance
with the Credit and Collection Policy and consistent with the Servicing
Standard and Applicable Law in realizing upon each Defaulted Receivable and
Related Security, and employ practices and procedures including commercially
reasonable efforts to enforce all obligations of Obligors.  Without limiting the generality of the
foregoing, the Servicer may (a) unless the Buyer has specifically given
instruction to the contrary, (i) foreclose upon any property securing the
Defaulted Receivable and cause the sale of any such property, or (ii) turn
the Defaulted Receivable over to a collection agency for collection, or (b) with
the consent of the Buyer, sell the Defaulted Receivable for its fair market
value (as determined by the Servicer in good faith) to an independent
third-party purchaser.  Provided that the
Seller has satisfied its obligation to pay to the Buyer an amount equal to the
Outstanding Receivable Balance of a Defaulted Receivable as of the day it
became a Defaulted Receivable, the Servicer may remit any subsequent
collections with respect to such Defaulted Receivable to the Seller.

 

34

 

Section 8.6.                                Servicing
Compensation.

 

The value of
the Servicer’s services have been factored into Fair’s allocable portion of the
Purchase Price, and therefore, Fair shall not be entitled to any additional
compensation for its servicing activities hereunder.

 

Section 8.7.                                Payment
of Certain Expenses by the Servicer.

 

The Servicer
will be required to pay all expenses incurred by it in connection with its
activities under this Agreement, including fees and disbursements of its
independent accountants, Taxes imposed on the Servicer, expenses incurred by
the Servicer in connection with payments pursuant to this Agreement, and all
other fees and expenses not expressly stated under this Agreement for the
account of the Buyer.  The initial
Servicer shall be required to pay such expenses for its own account and shall
not be entitled to any payment therefor.

 

Section 8.8.                                Reports.

 

(a)                                  Servicing
Report.  On each Reporting Date, the
Servicer will provide to the Buyer a monthly statement (a “Servicing Report”),
which report shall include (i) an updated Receivables List, (ii) account
balance and daily cash collection information, and (iii) such other pool
portfolio data, information and reports as may be needed for the Buyer to
satisfy its internal and external financial reporting requirements and/or as
otherwise reasonably requested by the Buyer from time to time, signed by a
Responsible Officer of the Servicer and in form and substance reasonably
acceptable to the Buyer.

 

(b)                                 Servicer’s
Certificate.  Together with each
Servicing Report, the Servicer shall submit to the Buyer a certificate
substantially in the form of Exhibit D (a “Servicer’s
Certificate”), signed by a Responsible Officer of the Servicer, which shall
include a certification by such Responsible Officer that, to its knowledge, no
Servicer Default has occurred during the period between the date of such
Servicing Report and the date of the prior Servicing Report.

 

(c)                                  Financial
Statements.  The Servicer will submit
to the Buyer (i) within thirty (30) days after the end of each of its
fiscal quarters (excluding the fiscal quarter ending on the date specified in subclause
(ii) below), commencing March 31, 2009, its consolidated
unaudited financial statements for the most recent fiscal quarter and (ii) within
one hundred twenty (120) days after the end of each fiscal year, commencing
with the fiscal year ended December 31, 2009, its consolidated financial
statements, each internally prepared by the Servicer.

 

(d)                                 Additional
Information.  In addition to the
foregoing, the Servicer will promptly provide to the Buyer such additional
information, reports and financial statements as may be requested from time to
time by the Buyer or its auditors.

 

Section 8.9.                                Annual
Statement as to Compliance.

 

The Servicer
will provide to the Buyer, within ninety (90) days following the end of each
fiscal year of the Servicer, commencing with the fiscal year ending on December 31,
2009, a fiscal report signed by a Responsible Officer of the Servicer
certifying that (a) a review of the activities of the Servicer, and the
Servicer’s performance pursuant to this Agreement, for the 

 

35

 

fiscal period ending on the
last day of such fiscal year has been made under such Person’s supervision and (b) the
Servicer has performed or has caused to be performed in all material respects
all of its obligations under this Agreement throughout such year and no
Servicer Default has occurred during such period (written notice of which has
not otherwise been delivered to the Buyer) or then exists at the end of such
period.

 

Section 8.10.                         Servicer
Resignation; Termination.

 

(a)                                The
Servicer shall not resign from the obligations and duties hereby imposed on it
except (a) upon providing at least one hundred and twenty (120) days’
prior written notice to the Buyer, or (b) upon the Servicer’s earlier
determination that the performance of its duties hereunder is or has become
illegal under Applicable Law.  Any such
determination permitting the resignation of the Servicer under clause (b) of
the immediately preceding sentence shall be evidenced by an Opinion of Counsel
to such effect addressed and delivered to the Buyer.  No such resignation shall become effective
until a successor servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 8.11.

 

(b)                                 Notwithstanding
anything herein to the contrary, the Buyer, upon providing written notice to
the Servicer, may terminate all of the rights and obligations of the Servicer as
servicer under this Agreement and appoint a successor servicer to perform its
duties pursuant to the terms of this Agreement.

 

(c)                                  A
resignation notice delivered by the Servicer to the Buyer pursuant to Section 8.10(a) and
a termination notice delivered by the Buyer to the Servicer pursuant to Section 8.10(b) shall
each be referred to as a “Servicer Termination Notice.”

 

Section 8.11.                         Appointment
of Successor Servicer.

 

(a)                                  On
and after the receipt by the Servicer or the Buyer, as applicable, of a Servicer
Termination Notice pursuant to Section 8.10, the Servicer shall
continue to perform all servicing functions under this Agreement until the date
specified in the Servicer Termination Notice or as otherwise specified by the
Servicer or the Buyer, as applicable, in writing (but subject to the 120 day
notice requirement of Section 8.10(a)) or, if no such date is
specified in such Servicer Termination Notice, until a date mutually agreed
upon by the Servicer and the Buyer.  The
Buyer may, at any time following delivery of a Servicer Termination Notice,
appoint any other Person as the successor Servicer hereunder, and such
successor shall on such date assume all obligations of the Servicer hereunder
with respect to servicing of the Receivables, and all authority and power of
the Servicer under this Agreement shall pass to and be vested in the successor
servicer.

 

(b)                                 The
Servicer agrees to cooperate and use commercially reasonable efforts in
effecting the smooth transition of the responsibilities and rights of servicing
of the Receivables, including, without limitation, the transfer to the
successor servicer for the administration by it of all cash amounts that shall
at the time be held by the Servicer for deposit, or have been deposited by the
Servicer, or thereafter received with respect to the Receivables and the
delivery to the successor servicer in an orderly and timely fashion of all
files and records with respect to the Receivables and a computer tape in
readable form containing all information necessary to enable the successor
servicer to service the Receivables.  In
addition, the Servicer agrees to cooperate 

 

36

 

and use commercially reasonable
efforts in providing at the Servicer’s expense to the successor servicer, a
list of key servicing personnel and contact information, reasonable access
(including at the premises of the Servicer) to the Servicer’s employees, and
any and all of the books, records (in electronic or other form) or other
information reasonably requested by it to enable the successor servicer to
assume the servicing functions hereunder.

 

ARTICLE IX.

INDEMNIFICATION

 

Section 9.1.                                Indemnification
by the Seller.

 

(a)                                  Without
limiting any other rights that the Buyer or any assignee of the Buyer (or any
of such Persons’ respective shareholders, officers, employees, agents, or
Affiliates (each an “Indemnified Party”)) may have hereunder or under
Applicable Law, Fair, Durham and Cochran hereby jointly and severally agree 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”), awarded against or incurred by
such Indemnified Party arising out of or as a result of any of the
following:

 

(A)                              any
representation or warranty made by the Seller (including Fair in its role as
Servicer) or any of Fair’s officers under or in connection with this Agreement,
any other Transaction Document, any Servicing Report, any Servicer’s
Certificate or any other information or report delivered by or on behalf of the
Seller pursuant hereto shall have been false, incorrect or misleading when made
or delivered;

 

(B)                                the
failure by the Seller to comply with any term, provision or covenant contained
in this Agreement, any of the other Transaction Documents or any agreement
executed in connection therewith, or with any Applicable Law, including with
respect to any Sale Assets or the nonconformity of any Sale Assets with any
such Applicable Law, and including any such failure by Fair in its capacity as
the Servicer hereunder;

 

(C)                                any
claim, dispute, defense or offset by an Obligor with respect to a Receivable
(other than a bankruptcy discharge of such Obligor) arising from origination or
servicing of that Receivable prior to the Closing Date (including a defense
based on the Receivable not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms);

 

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

 

(E)                                 any
action taken by Fair, in its role as the Servicer, in the enforcement or
collection of any Collateral;

 

(F)                                 the
commingling of Collections by any of Fair, Durham or Cochran at any time with
other funds; or

 

37

 

(G)                                any
investigation, litigation or proceeding related to the Sale Assets arising in
connection with the origination or servicing of the Receivables prior to the
Closing Date.

 

Notwithstanding
the foregoing, the parties hereto acknowledge and agree that the Seller shall
not owe indemnification to an Indemnified Party for any (x) Indemnified
Amounts to the extent resulting from the gross negligence, bad faith, breach of
contract or willful misconduct on the part of the applicable Indemnified Party,
and (y) disputes among Indemnified Parties.

 

(b)                                 Any
amounts subject to the indemnification provisions of this Section 9.1
shall be paid by the Seller to the Indemnified Party within ten (10) Business
Days following such Person’s demand therefor setting forth the basis for such
Indemnified Amounts in reasonable detail. If any Indemnified Party receives any
Indemnified Amount from the Buyer and is subsequently reimbursed for such
amounts by another party, such Indemnified Party hereby agrees to reimburse the
Buyer for such reimbursed amounts.

 

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

 

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

 

ARTICLE X.

MISCELLANEOUS

 

Section 10.1.                         Amendments
and Waivers.

 

No amendment,
waiver or other modification of any provision of this Agreement shall be
effective unless signed by each of the Buyer, Fair, Durham and Cochran.

 

Section 10.2.                         Notices,
Etc.

 

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

 

38

 

Section 10.3.                         Limitation
of Liability.

 

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

 

Section 10.4.                         Binding
Effect; Benefit of Agreement.

 

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

 

Section 10.5.                         GOVERNING
LAW; CONSENT TO JURISDICTION; WAIVER OF OBJECTION TO VENUE.

 

THIS
AGREEMENT, THE ENTIRE RELATIONSHP OF THE PARTIES HERETO, AND ANY LITIGATION
BETWEEN THE PARTIES (WHETHER GROUNDED IN TORT, CONTRACT, LAW OR IN EQUITY)
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF TEXAS.  EACH OF THE PARTIES HERETO
HEREBY AGREES TO THE NON—EXCLUSIVE JURISDICTION OF THE STATE DISTRICT COURTS OF
DALLAS COUNTY, TEXAS AND THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS, DALLAS DIVISION. EACH OF THE PARTIES HERETO HEREBY WAIVES
ANY OBJECTION BASED ON PERSONAL JURISDICTION OR 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 10.6.                         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 10.7.                         Costs,
Expenses and Taxes.

 

(a)                                  In
addition to the rights of indemnification granted to the Indemnified Parties
under Article IX hereof, the Seller agrees to pay on demand all
commercially reasonable costs and expenses of the Buyer or its assignees
incurred in connection with the preparation, execution, delivery, third-party
administration (such term to include periodic auditing), renewal, 

 

39

 

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, reasonable expenses for travel and lodging, background
checks, auditor fees and the reasonable fees and out—of—pocket expenses of
counsel with respect thereto and with respect to advising the Buyer or its
assignees as to their respective rights and remedies under this Agreement and
the other documents to be delivered hereunder or in connection herewith, and
all costs and out-of-pocket expenses, if any (including reasonable counsel fees
and expenses), incurred by the Buyer or its assignees in connection with the
enforcement of this Agreement and the other documents to be delivered hereunder
or in connection herewith.

 

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

 

(c)                                  The
Seller shall pay on demand all other reasonable costs, expenses and Taxes
(excluding income taxes) incurred by the Buyer or its assignees in connection
with the execution, delivery, filing and recording of this Agreement and the
other documents to be delivered hereunder, including, without limitation, all
costs and expenses incurred by the Buyer or its assignees in connection with
periodic audits (subject to the limitations set forth in Section 5.1(e))
of the Seller’s books and records.

 

Section 10.8.                         Recourse
Against Certain Parties.

 

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 incorporator, officer, employee or director of the Buyer, 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 company obligations of the Buyer, and that no personal
liability whatsoever shall attach to or be incurred by any incorporator,
officer, employee or director of the Buyer, as such, or any of 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 each incorporator, officer, employee or director of the Buyer, 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.

 

Section 10.9.                         Protection
of Right, Title and Interest in the Sale Assets; Further Action Evidencing the
Purchase.

 

(a)                                  The
Seller hereby authorizes the Buyer to file, and shall cooperate with the Buyer
with respect to executing and/or filing, all financing statements, financing
statement amendments 

 

40

 

or assignments, and
continuation statements and any other necessary documents covering the right,
title and interest of the Buyer to the Sale Assets, and in causing the same 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 ownership or first priority security
interest of the Buyer hereunder to all property comprising the Sale Assets. The
Seller 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 10.9.

 

(b)                                 The
Seller agrees that from time to time, at the Buyer’s expense, it will promptly
authorize, 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 Receivables hereunder and the ownership or first
priority perfected security interest granted in the Sale Assets, or to enable
the Buyer to exercise and enforce its rights and remedies hereunder or under
any other Transaction Document.

 

(c)                                  If
the Seller fails to perform any of its obligations hereunder with respect to
the maintenance of the perfection and priority of the interests of the Buyer in
the Sale Assets, or if the Seller fails to perform any of its other obligations
hereunder for ten (10) days following receipt of notice from the Buyer,
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 Seller as provided in Article IX.  The Seller 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 Seller (i) to
file Protective Filings on behalf of the Seller, as debtor, 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 Sale Assets in the
event of an Inconsistent Determination, and (ii) to file a carbon,
photographic or other reproduction of this Agreement or any financing statement
with respect to the Sale 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 Sale
Assets. This appointment is coupled with an interest and is irrevocable.

 

Section 10.10.                  Execution in
Counterparts; Severability; Integration.

 

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

 

41

 

Section 10.11.                  Heading and
Exhibits.

 

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

 

Section 10.12.                  Confidentiality.

 

(a)                                  Each
of Durham, Cochran, the Buyer and Fair shall maintain and, as applicable, shall
cause each of its employees, directors, officers, members, partners, agents and
affiliates to maintain the confidentiality of this Agreement and all information
with respect to the other parties, including all information regarding the
business of the Buyer and the Seller obtained by it or them in connection with
the structuring, negotiating and execution of the transactions contemplated
herein, except that each such party and its employees, directors, officers,
members, partners, agents and affiliates may (i) disclose such information
to its external accountants, attorneys, investors, potential investors, credit
enhancers and the agents and advisors of such Persons (“Excepted Persons”);
provided, however,
that each Excepted Person shall be notified of the confidentiality restrictions
hereof and shall, as a condition to any such disclosure, agree for the benefit
of the parties hereto that such information shall be used solely in connection
with such Excepted Person’s evaluation of, or relationship with, the Buyer and
the Seller and their affiliates, (ii) disclose the existence of this
Agreement, but not the financial terms thereof, (iii) disclose such
information as is required by Applicable Law and (iv) disclose this
Agreement and such information in any suit, action, proceeding or investigation
(whether in law or in equity or pursuant to arbitration) involving any of the
Transaction Documents for the purpose of defending itself, reducing its
liability, or protecting or exercising any of its claims, rights, remedies, or
interests under or in connection with any of the Transaction Documents. It is
understood that the financial terms that may not be disclosed except in
compliance with this Section 10.12(a) include, without
limitation, all fees and other pricing terms. If any Excepted Person discloses
any confidential information pursuant to this Section 10.12(a), it
shall provide prompt notice thereof to the Buyer or the Seller, as appropriate.

 

(b)                                 Notwithstanding
anything herein to the contrary, the foregoing shall not be construed to
prohibit (i) disclosure of any and all information that is or becomes
publicly known (other than through the violation of this Agreement), (ii) disclosure
of any and all information (A) if required to do so by any applicable
statute, law, rule or regulation, (B) to any government agency or
regulatory body having or claiming authority to regulate or oversee the
disclosing entity or its affiliates, or (C) pursuant to any subpoena,
civil investigative demand or similar demand or request of any court,
regulatory authority, arbitrator or arbitration to which the disclosing entity
or an officer, members, partners, director, employer, shareholder or Affiliate
of any of the foregoing is a party (so long as the disclosing Person provides
prompt notice thereof to the applicable party with respect to which such
information relates), or (iii) any other disclosure authorized by the
Buyer or the Seller in the case of information with respect to it.

 

42

 

Section 10.13.                  Assignment.

 

Notwithstanding
anything to the contrary contained herein, this Agreement may not be assigned
by the Buyer or the Seller without the prior written consent of the other
party.

 

Section 10.14.                  No Waiver;
Cumulative Remedies.

 

No failure to
exercise and no delay in exercising, on the part of the Buyer or the Seller,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law. Any waiver of this
Agreement shall be effective only in the specific instance and for the specific
purpose for which given.

 

Section 10.15.                  Termination.

 

Either the Seller, on the one hand, or the
Buyer, on the other hand, may, in their respective sole discretion at any time
after February 23, 2009, terminate this Agreement by furnishing at least
ten (10) days’ written notice to the non-terminating party; provided, however, that following the Closing Date, any
termination by the Seller shall additionally be subject to the minimum notice
period specified in Section 8.10(a) hereof.

 

Section 10.16.                  Survival of
Certain Provisions.

 

Notwithstanding
any provision contained herein to the contrary, (a) the Seller’s
representations and warranties set forth in Article IV hereof, (b) the
parties’ respective rights, covenants and obligations set forth in Articles
V, VI, VII, VIII and IX hereof, and (c) the
provisions of this Article X shall all survive any termination of
this Agreement.

 

[Signature page follows]

 

43

 

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

 

	
   

  	
  SELLERS:

  
	
   

  	
   

  
	
   

  	
  FAIR FINANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James Cochran

  
	
   

  	
  Name: James Cochran

  
	
   

  	
  Title: Chairman

  
	
   

  	
   

  
	
   

  	
  /s/ Timothy S. Durham

  
	
   

  	
  Timothy S. Durham, in his individual
  capacity

  
	
   

  	
   

  
	
   

  	
  /s/ James Cochran

  
	
   

  	
  James F. Cochran, in his individual
  capacity

  

 

[Signature pages continue]

 

 

Signature Page to Purchase Agreement

 

 

	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  CLST ASSET III, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Kaiser

  
	
   

  	
   

  	
  Robert Kaiser

  
	
   

  	
   

  	
  President and Manager

  

 

 

Signature Page to Purchase Agreement

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