Document:

EX-10.49

Exhibit 10.49

INDEMNIFICATION AGREEMENT

     This Indemnification Agreement (“Agreement”) is made effective as of January 1, 2009,
by and between CVR Energy, Inc., a Delaware corporation (“Company”), and the individual
designated on the signature page to this Agreement (“Indemnitee”).

RECITALS

     WHEREAS, the Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve the Company;

     WHEREAS, in order to induce Indemnitee to continue to provide services to the Company, the
Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to
the maximum extent permitted by applicable law;

     WHEREAS, the Company’s Certificate of Incorporation (the “Charter”) allows and the
Company’s Bylaws (the “Bylaws”) require indemnification of the officers and directors of
the Company, and Indemnitee may also be entitled to indemnification pursuant to the General
Corporation Law of the State of Delaware (the “DGCL”);

     WHEREAS, the Bylaws and the DGCL expressly provide that the indemnification provisions set
forth therein are not exclusive, and thereby contemplate that contracts may be entered into between
the Company and members of the board of directors, officers and other persons with respect to
indemnification;

     WHEREAS, the Company and Indemnitee recognize the continued difficulty in obtaining liability
insurance for the Company’s directors, officers, employees, agents and fiduciaries, the significant
and continual increases in the cost of such insurance and the general trend of insurance companies
to reduce the scope of coverage of such insurance;

     WHEREAS, the Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting directors, officers, employees, agents and fiduciaries to
expensive litigation risks at the same time as the availability and scope of coverage of liability
insurance provide increasing challenges for the Company;

     WHEREAS, Indemnitee does not regard the protection currently provided by applicable law, the
Company’s governing documents and available insurance as adequate under the present circumstances,
and the Indemnitee and certain other directors, officers, employees, agents and fiduciaries of the
Company may not be willing to continue to serve in such capacities without additional protection;

     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the
increased difficulty in attracting and retaining highly qualified persons such as Indemnitee is
detrimental to the best interests of the Company’s stockholders and that the Company should act to
assure such persons that there will be increased certainty of such protection in the future;

 

 

     WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the Company free from
undue concern that they will not be so indemnified; and

     WHEREAS, this Agreement is a supplement to and in furtherance of the indemnification provided
in the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

     NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the
Company and Indemnitee do hereby covenant and agree as follows:

     Section 1. Services to the Company. Indemnitee agrees to serve as a director and/or
officer of the Company. Indemnitee may at any time and for any reason resign from such position
(subject to any other contractual obligation or any obligation imposed by operation of law), in
which event the Company shall have no obligation under this Agreement to continue Indemnitee in
such position. This Agreement shall not be deemed an employment contract between the Company (or
any of its subsidiaries or affiliates) and Indemnitee. The foregoing notwithstanding, this
Agreement shall continue in force after Indemnitee has ceased to serve as a director and/or officer
of the Company.

     Section 2. Definitions

     As used in this Agreement:

          (a) “Corporate Status” describes the status of a person who is or was a director,
officer, employee or agent of the Company or of any other corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise which such person is
or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.

          (b) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, any federal, state, local or
foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments
under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of
the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness in, or otherwise participating in, a
Proceeding. Expenses also shall include (i) Expenses incurred in connection with any appeal
resulting from any Proceeding, including without limitation the premium, security for, and other
costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii)
Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of
Indemnitee’s rights under this Agreement, by litigation or otherwise. The parties agree that for
the purposes of any advancement of Expenses for which Indemnitee has made written demand to the
Company in accordance with this Agreement, all Expenses included in such demand that are certified
by affidavit of Indemnitee’s counsel as being

-2-

 

           reasonable shall be presumed conclusively to be reasonable. Expenses, however, shall not
include amounts paid in settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.

          (c) “Independent Counsel” means a law firm, or a partner (or, if applicable, member)
of such a law firm, that is experienced in matters of corporation law and neither presently is, nor
in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning the Indemnitee under
this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any
other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding
the foregoing, the term “Independent Counsel” shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under
this Agreement.

          (d) The term “Proceeding” shall include any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, whether brought in the right of
the Company or otherwise and whether of a civil, criminal, administrative, legislative or
investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was,
is or will be involved as a party, potential party, non-party witness or otherwise by reason of the
fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken
by Indemnitee or of any action on Indemnitee’s part while acting as director or officer of the
Company, or by reason of the fact that Indemnitee is or was serving at the request of the Company
as a director, officer, employee or agent of another corporation, limited liability company,
partnership, joint venture, trust, employee benefit plan or other enterprise, in each case whether
or not serving in such capacity at the time any liability or expense is incurred for which
indemnification, reimbursement, or advancement of expenses can be provided under this Agreement.
If the Indemnitee believes in good faith that a given situation may lead to or culminate in the
institution of a Proceeding, such situation shall be considered a Proceeding under this paragraph.

     Section 3. Indemnity in Third-Party Proceedings. The Company shall indemnify
Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened
to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the
right of the Company to procure a judgment in its favor (which is covered by Section 4 of this
Agreement). Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent
permitted by applicable law against all Expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such
Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and, in
the case of a criminal proceeding, had no reasonable cause to believe that Indemnitee’s conduct was
unlawful. Indemnitee shall not enter into any settlement in connection with a Proceeding without
ten (10) days prior notice to the Company.

-3-

 

     Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or
is threatened to be made, a party to or a participant in any Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be
indemnified to the fullest extent permitted by applicable law against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or
any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the Company. No
indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or
matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the
Company, unless and only to the extent that the Delaware Court of Chancery (the “Delaware
Court”) or any court in which the Proceeding was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee
is fairly and reasonably entitled to indemnification for such expenses as the Delaware Court or
such other court shall deem proper.

     Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
To the extent that Indemnitee is a party to and is successful, on the merits or otherwise, in any
Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably incurred by Indemnitee in
connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful,
on the merits or otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against (a) all Expenses actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved
claim, issue or matter and (b) any claim, issue or matter related to any such successfully resolved
claim, issue or matter. For purposes of this Section and without limitation, the termination of
any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter. Nothing in this Section 5 is
intended to limit Indemnitee’s rights provided for in Sections 3 and 4.

     Section 6. Indemnification For Expenses of a Witness. To the extent that Indemnitee
is, by reason of Indemnitee’s Corporate Status, a witness or otherwise asked to participate in any
Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
Nothing in this Section 6 is intended to limit Indemnitee’s rights provided for in Sections 3 and
4.

     Section 7. Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of Expenses, but not,
however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled.

     Section 8. Additional Indemnification.

          (a) Notwithstanding any provisions of Sections 3, 4, or 5, the Company shall indemnify
Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to

-4-

 

           or is threatened to be made a party to any Proceeding (including a Proceeding by or in the
right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with such
Proceeding.

          (b) For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted
by applicable law” shall include, but not be limited to:

               (i) to the fullest extent permitted by the provision of the DGCL that authorizes or
contemplates additional indemnification by agreement, or the corresponding provision of any
amendment to or replacement of the DGCL or such provision thereof; and

               (ii) to the fullest extent authorized or permitted by any amendments to or replacements of the
DGCL adopted after the date of this Agreement that increase the extent to which a corporation may
indemnify its officers and directors.

          Section 9. Exclusions. Notwithstanding any provision in this Agreement to the
contrary, the Company shall not be obligated under this Agreement to make any indemnity:

          (a) subject to Section 15(c), for which payment has actually been made to or on behalf of
Indemnitee under any insurance policy or other indemnity provision, except with respect to any
excess beyond the amount paid under any insurance policy or other indemnity provision;

          (b) for any disgorgement of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company under Section 16(b) of the Securities Exchange Act of 1934,
as amended, or similar provisions of state statutory law or common law;

          (c) for claims initiated or brought by Indemnitee against the Company or its directors,
officers, employees or other indemnitees, except (i) with respect to actions or proceedings brought
to establish or enforce a right to receive Expenses or indemnification under this Agreement or any
other agreement or insurance policy or under the Charter or Bylaws now or hereafter in effect
relating to indemnification, (ii) if the Board has approved the initiation or bringing of such
claim, or (iii) as otherwise required under Delaware law; or

          (d) for which payment is prohibited by applicable law.

     Section 10. Advances of Expenses. Notwithstanding any provision of this Agreement to
the contrary, the Company shall advance, to the extent not prohibited by applicable law, all
Expenses incurred by or on behalf of Indemnitee (or which Indemnitee determines are reasonably
likely to be paid or incurred by Indemnitee within three (3) months) in connection with any
Proceeding, and such advancement shall be made within twenty (20) days after the receipt by the
Company of a statement or statements requesting such advances (which shall include invoices
received by Indemnitee in connection with such Expenses but, in the case of invoices in connection
with legal services, any references to legal work performed or to expenditures made that would
cause Indemnitee to waive any privilege accorded by applicable law shall not be included with the
invoice) from time to time, whether prior to or after final disposition of any Proceeding. Advances
shall be unsecured and interest free. Advances shall be

-5-

 

made without regard to Indemnitee’s ability to repay the expenses and without regard to
Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.
Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this
right of advancement, including Expenses incurred preparing and forwarding statements to the
Company to support the advances claimed. The Indemnitee shall qualify for advances upon the
execution and delivery to the Company of this Agreement which shall constitute an undertaking
providing that the Indemnitee undertakes to the fullest extent required by applicable law to repay
the amounts advanced (without interest) if and to the extent that it is ultimately determined by a
court of competent jurisdiction in a final judgment, not subject to appeal, that Indemnitee is not
entitled to be indemnified by the Company. No other form of undertaking shall be required other
than the execution of this Agreement. This Section 10 shall not apply to any claim made by
Indemnitee for which indemnity is excluded pursuant to Section 9. The right to advances under this
paragraph shall in all events continue until final disposition of any Proceeding.

     Section 11. Procedure for Notification and Defense of Claim.

          (a) To obtain indemnification or advancement of Expenses under this Agreement, Indemnitee
shall submit to the Company a written request therefor. The omission by Indemnitee to notify the
Company hereunder will not relieve the Company from any liability which it may have to Indemnitee
hereunder, under the Charter, the Bylaws, any resolution of the Board providing for indemnification
or otherwise, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee
of any rights under this Agreement. The Secretary of the Company shall, promptly upon receipt of
such a request for indemnification, advise the Board in writing that Indemnitee has requested
indemnification.

          (b) The Company will be entitled to participate in any Proceeding at its own expense.

     Section 12. Procedure Upon Application for Indemnification.

          (a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a), a
determination, only if required by applicable law, with respect to Indemnitee’s entitlement thereto
shall be made in the specific case by Independent Counsel in a written opinion to the Board, a copy
of which shall be delivered to Indemnitee and, if it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten (10) days after such
determination. Indemnitee shall cooperate with the Independent Counsel making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such counsel
upon reasonable advance request any documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably
necessary to such determination. Any costs or expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the Independent Counsel shall be
deemed “Expenses” hereunder and shall be borne by the Company (irrespective of the determination as
to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to
hold Indemnitee harmless therefrom.

-6-

 

          (b) The Independent Counsel shall be selected by Indemnitee, and Indemnitee shall give written
notice to the Company advising it of the identity of the Independent Counsel so selected. The
Company may, within ten (10) days after such written notice of Indemnitee’s selection shall have
been given, deliver to the Indemnitee a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2
of this Agreement, and the objection shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person or firm so selected shall act as
Independent Counsel. If such written objection is so made and substantiated, the Independent
Counsel so selected may not serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without merit. If, within twenty (20)
days after the later of submission by Indemnitee of a written request for indemnification pursuant
to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall
have been selected and not objected to, the Indemnitee may petition a court of competent
jurisdiction for resolution of any objection which shall have been made by the Company to the
selection of Independent Counsel and/or for the appointment as Independent Counsel of a person
selected by the court or by such other person as the court shall designate, and the person with
respect to whom all objections are so resolved or the person so appointed shall act as Independent
Counsel under Section 12(a) hereof. Upon the due commencement of any judicial proceeding or
arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel shall be discharged
and relieved of any further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing). The Company agrees to pay the reasonable fees and expenses
of the Independent Counsel and to fully indemnify such counsel against any and all Expenses,
claims, liabilities and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.

     Section 13. Presumptions and Effect of Certain Proceedings.

          (a) In making a determination with respect to entitlement to indemnification hereunder, the
Independent Counsel making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for indemnification in
accordance with Section 11(a) of this Agreement, and the Company shall have the burden of proof to
overcome that presumption in connection with the making by the Independent Counsel of any
determination contrary to that presumption. Neither the failure of the Company or of Independent
Counsel to have made a determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because Indemnitee has met the
applicable standard of conduct, nor an actual determination by the Company or by Independent
Counsel that Indemnitee has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that Indemnitee has not met the applicable standard of conduct.

          (b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of guilty, nolo contendere or its
equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself
adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee
did not act in good faith and in a manner which Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company or, with respect to any criminal

-7-

 

           Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful.

          (c) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted
in good faith if Indemnitee’s action is based on the records or books of account of the Company,
its subsidiaries or affiliates, including financial statements, or on information supplied to
Indemnitee by the officers of the Company, its subsidiaries or affiliates in the course of their
duties, or on the advice of legal counsel for the Company, its subsidiaries or affiliates or the
Board or counsel selected by any committee of the Board or on information or records given or
reports made to the Company, its subsidiaries or affiliates by an independent certified public
accountant or by an appraiser, investment banker or other expert selected with reasonable care by
the Company or the Board or any committee of the Board. The provisions of this Section 13(c) shall
not be deemed to be exclusive or to limit in any way the other circumstances in which the
Indemnitee may be deemed to have met the applicable standard of conduct set forth in this
Agreement.

          (d) The knowledge and/or actions, or failure to act, of any director, officer, agent or
employee of the Company, its subsidiaries or affiliates shall not be imputed to Indemnitee for
purposes of determining the right to indemnification under this Agreement.

     Section 14. Remedies of Indemnitee.

          (a) Subject to Section 14(e), in the event that (i) a determination is made pursuant to
Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this
Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this
Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant
to Section 12(a) of this Agreement within sixty (60) days after receipt by the Company of the
request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6
or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by
the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4
or 8 of this Agreement is not made within ten (10) days after a determination has been made that
Indemnitee is entitled to indemnification, or (vi) the Company or any other person takes or
threatens to take any action to declare this Agreement void or unenforceable, or institutes any
litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the
benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be
entitled to an adjudication by a court of his or her entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his or her option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of
the American Arbitration Association. Indemnitee shall commence such proceeding seeking an
adjudication or an award in arbitration within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 14(a); provided,
however, that the foregoing clause shall not apply in respect of a proceeding brought by
Indemnitee to enforce his or her rights under Section 5 of this Agreement. The Company shall not
oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

          (b) In the event that a determination shall have been made pursuant to Section 12(a) of this
Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 14 shall be conducted in all

-8-

 

           respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be
prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration
commenced pursuant to this Section 14, the Company shall have the burden of proving Indemnitee is
not entitled to indemnification or advancement of Expenses, as the case may be.

          (c) If a determination shall have been made pursuant to Section 12(a) of this Agreement that
Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement
by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for indemnification, or (ii) a
prohibition of such indemnification under applicable law.

          (d) The Company shall be precluded from asserting in any judicial proceeding or arbitration
commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are
not valid, binding and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Agreement. It is the intent of
the Company that, to the fullest extent permitted by applicable law, the Indemnitee not be required
to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of
Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense
thereof would substantially detract from the benefits intended to be extended to the Indemnitee
hereunder. To the fullest extent permitted by applicable law, the Company shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10)
days after receipt by the Company of a written request therefor) advance such Expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee
for indemnification or advance of Expenses from the Company under this Agreement or under any
directors’ and officers’ liability insurance policies maintained by the Company, regardless of
whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of
Expenses or insurance recovery, as the case may be, in the suit for which indemnification or
advances is being sought.

          (e) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement of Indemnitee to indemnification under this Agreement shall be required to be made
prior to the final disposition of the Proceeding.

     Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

          (a) The rights of indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Charter, the Bylaws, any agreement, a vote of stockholders or a
resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of
any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in
respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to
such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by
statute or judicial decision, permits greater indemnification or advancement of Expenses than would
be afforded currently under the Charter, Bylaws and this Agreement, it is the intent of the parties
hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such
change. No right or remedy herein

-9-

 

           conferred is intended to be exclusive of any other right or remedy, and every other right and
remedy shall be cumulative and in addition to every other right and remedy given hereunder or now
or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any
other right or remedy.

          (b) To the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents of the Company, its subsidiaries
or affiliates, Indemnitee shall be covered by such policy or policies in accordance with its or
their terms to the maximum extent of the coverage available for any such director, officer,
employee or agent under such policy or policies. If, at the time of the receipt of a notice of a
claim pursuant to the terms hereof, the Company has director and officer liability insurance in
effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers
in accordance with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such
policies.

          (c) The Company acknowledges that Indemnitee has or may obtain rights to indemnification,
advancement of expenses and/or insurance provided by third parties (collectively, the “Other
Indemnitors”). The Company agrees (i) that it is the indemnitor of first resort (i.e., its
obligations to Indemnitee are primary and any obligation of the Other Indemnitors to advance
expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee
are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by
Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and
amounts paid in settlement to the extent legally permitted and as required by the terms of this
Agreement and the Charter or the Bylaws (or any other agreement between the Company and
Indemnitee), without regard to any rights Indemnitee may have against the Other Indemnitors, and
(iii) that it irrevocably waives, relinquishes and releases the Other Indemnitors from any and all
claims against the Other Indemnitors for contribution, subrogation or any other recovery of any
kind in respect thereof. The Company further agrees that no advancement or payment by the Other
Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought
indemnification from the Company shall affect the foregoing and the Other Indemnitors shall have a
right of contribution and/or be subrogated to the extent of such advancement or payment to all of
the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree that
the Other Indemnitors are express third party beneficiaries of the terms of this Section 15(c).

          (d) Except as provided in Section 15(c), in the event of any payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee (other than against the Other Indemnitors), who shall execute all papers required and
take all action necessary to secure such rights, including execution of such documents as are
necessary to enable the Company to bring suit to enforce such rights.

          (e) Except as provided in Section 15(c), the Company shall not be liable under this Agreement
to make any payment of amounts otherwise indemnifiable hereunder (or

-10-

 

           for which advancement is provided hereunder) if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy, contract, agreement or
otherwise.

          (f) Except as provided in Section 15(c), the Company’s obligation to indemnify or advance
Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director,
officer, employee or agent of any other corporation, limited liability company, partnership, joint
venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee
has actually received as indemnification or advancement of Expenses from such other corporation,
limited liability company, partnership, joint venture, trust, employee benefit plan or other
enterprise.

     Section 16. Duration of Agreement. This Agreement shall continue until and terminate
upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as
a director and/or officer of the Company or (b) one (1) year after the final termination of any
Proceeding, including any appeal, then pending in respect of which Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 14 of this Agreement relating thereto. This Agreement shall be binding upon the
Company and its successors and assigns and shall inure to the benefit of Indemnitee and
Indemnitee’s heirs, executors and administrators. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all or a substantial part, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to the Indemnitee, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the Company would be required
to perform if no such succession had taken place.

     Section 17. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality
and enforceability of the remaining provisions of this Agreement (including without limitation,
each portion of any Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any
way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by
law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform
to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to
the fullest extent possible, the provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held to be invalid, illegal
or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested thereby.

     Section 18. Enforcement.

          (a) The Company expressly confirms and agrees that it has entered into this Agreement and
assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director
and/or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this
Agreement in serving as a director and/or officer of the Company.

-11-

 

          (b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof; provided,
however, that this Agreement is a supplement to and in furtherance of the Charter, the
Bylaws, any resolution of the Board providing for indemnification and applicable law, and shall not
be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

     Section 19. Modification and Waiver. No supplement, modification or amendment, or
waiver of any provision, of this Agreement shall be binding unless executed in writing by the
parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a
continuing waiver.

     Section 20. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in
writing upon being served with any summons, citation, subpoena, complaint, indictment, information
or other document relating to any Proceeding or matter which may be subject to indemnification or
advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall
not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement
or otherwise.

     Section 21. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom said notice or other communication shall have been
directed, (b) mailed by certified or registered mail with postage prepaid, on the third business
day after the date on which it is so mailed, (c) mailed by reputable overnight courier and
receipted for by the party to whom said notice or other communication shall have been directed or
(d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has
been received:

          (a) If to Indemnitee, at such address as Indemnitee shall provide to the Company.

          (b) If to the Company to:

CVR Energy, Inc.

10 East Cambridge Circle Dr., Ste. 250

Kansas City, KS 66103

Attn: General Counsel

Facsimile: (913) 982-5651

or to any other address as may have been furnished to Indemnitee by the Company.

     Section 22. Contribution. To the fullest extent permissible under applicable law, if
the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason
whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount
incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to
be paid in settlement and/or for Expenses, in connection with any claim relating to an

-12-

 

indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable
in light of all of the circumstances of such Proceeding in order to reflect (i) the relative
benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s)
giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s) and/or
transaction(s).

     Section 23. Applicable Law and Consent to Jurisdiction. This Agreement and the legal
relations among the parties shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware, without regard to its conflict of laws rules. Except with
respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the
Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or
proceeding arising out of or in connection with this Agreement shall be brought only in the
Delaware Court, and not in any other state or federal court in the United States of America or any
court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware
Court for purposes of any action or proceeding arising out of or in connection with this Agreement,
(iii) appoint, to the extent such party is not otherwise subject to service of process in the State
of Delaware, The Corporation Trust Company, Wilmington, Delaware as its agent in the State of
Delaware as such party’s agent for acceptance of legal process in connection with any such action
or proceeding against such party with the same legal force and validity as if served upon such
party personally within the State of Delaware, (iv) waive any objection to the laying of venue of
any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware Court has been brought
in an improper or inconvenient forum.

     Section 24. Identical Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement. Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the existence of this
Agreement.

     Section 25. Miscellaneous. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this Agreement or to
affect the construction thereof.

[signature page follows]

-13-

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed on the dates set forth
below, but effective as of the day and year first above written.

	 	 	 	 	 
	 	COMPANY:

CVR ENERGY, INC.

 	 
	 	By:  	 	 
	 	Name:	 	 
	 	Date:	 	 

	 

	 	 	 	 	 
	 	INDEMNITEE:

 	 
	 	By:  	 	 
	 	Name:	 	 
	 	Date:EX-10.4

Exhibit 10.4

SUBSERVICING AGREEMENT

dated as of March 2, 2007

between

PALISADES COLLECTION, L.L.C.,

as the Servicer,

and

WOLPOFF & ABRAMSON, L.L.P.,

as the Subservicer

 

 

SUBSERVICING AGREEMENT

     THIS SUBSERVICING AGREEMENT is entered into effective as of March 2, 2007 (as amended,
supplemented or otherwise modified from time to time, the “Subservicing Agreement”),
between PALISADES COLLECTION, L.L.C., a Delaware limited liability company (together with its
successors and assigns, the “Servicer”), and WOLPOFF & ABRAMSON, L.L.P (the
“Subservicer”).

RECITALS

          1. The Servicer has entered into a servicing agreement, of even date herewith (as amended,
supplemented or modified from time to time, the “Servicing Agreement”), with Palisades
Acquisition XVI, LLC (the “Borrower”) and BMO Capital Markets Corp. (“BMO CM”)
pursuant to which, on the terms and subject to the conditions set forth therein, the Servicer has
agreed to service, among other receivables, the Receivables for the benefit of the Borrower.

          2. The Borrower and BMO CM, as collateral agent for the benefit of certain secured parties
(the “Collateral Agent”) pursuant to the Receivables Financing Agreement, have entered into
a security agreement, of even date herewith, pursuant to which the Borrower has granted to the
Collateral Agent, security interest in, among other things, collections on the Receivables.

          3. The Servicer has requested Subservicer to undertake certain collecting and servicing
responsibilities in respect of the Receivables, and the Subservicer is willing to undertake such
responsibilities and accept such bailment, acknowledging that such subservicing activities are
undertaken for the benefit of both the Borrower and, for as long as a security interest is
outstanding, the Collateral Agent, for the benefit of secured parties.

     NOW, THEREFORE, in consideration of the mutual agreements herein contained, the Servicer and
the Subservicer hereby agree as follows:

ARTICLE 1.

DEFINITIONS

     Section 1.01 Definitions.

     Whenever used in this Subservicing Agreement, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article (such meanings to be
equally applicable to both the singular and plural forms of the terms defined and to all genders):

     “Administrator” means BMO CM in such capacity under the Receivables Financing
Agreement.

     “Accepted Servicing Practices” means those accepted, customary and prudent servicing
practices in the industry for the same type of assets as the Receivables and designed in a manner
to maximize the value of the Receivables.

 

 

     “Bankruptcy Code” means Title 11 of the United States Code, as amended.

     “Borrower” has the meaning set forth in the first Recital.

     “Business Day” means any day on which commercial banks in Chicago, Illinois, New
Jersey or New York City are not authorized or required to be closed.

     “Collateral” means all property of the Borrower wherever located, whether now or
hereafter existing, owned, licensed, leased, consigned, arising or acquired, including, without
limitation, all of the Borrower’s right, title and interest in and to all Receivables and other
Receivable Assets; all funds on deposit in the Collection Account to the extent constituting
payments or other proceeds of the Receivables, together with all certificates and instruments, if
any, from time to time evidencing the foregoing, and all investments made with such funds, all
claims thereunder or in connection therewith, and interest, dividends, moneys, instruments,
securities and other property from time to time received or receivable in respect of any or all of
the foregoing; and all products and proceeds (including, without limitation, insurance proceeds and
Liquidation Proceeds) of, and additions, improvements and accessions to, and books and records
describing or used in connection with, all and any of the property described above.

     “Collateral Agent” has the meaning set forth in the second Recital.

     “Collection Account” means that certain bank account numbered 379-573-9 maintained
with the Collection Account Bank, which is identified as the “Palisades Acquisition XVI, LLC
Collection Account.”

     “Collection Account Bank” means Harris N.A. or any replacement therefor pursuant to
the Receivables Financing Agreement.

     “Collections” means, with respect to any Receivable, all funds (net of any Liquidation
Expenses) (a) received by the Subservicer from or on behalf of the related Obligors in payment of
any amounts owed (including, without limitation, principal, finance charges, interest and all other
amounts and charges) in respect of such Receivable from and after the Cutoff Date or (b) applied to
such amounts owed by such Obligors (including, without limitation, through the liquidation of
Collateral or insurance payments or proceeds on account of any casualty loss with respect to any
collateral or property of the Obligor or any other party directly or indirectly liable for payment
of such Receivable and available to be applied thereon).

     “Collection Period” means with respect to a Distribution Date, the period from and
including the first day of the month preceding the month in which such Distribution Date occurs to
and including the last day of the month preceding the month of such Distribution Date. Each
Collection Period shall consist of a calendar month.

     “Cutoff Date” mean the date set forth in the Purchase Agreement.

     “Exempted Receivables” means Judgment Asset Receivables and Paying Receivables.

     “Judgment Asset Receivables” means each Receivable (a) that is in active litigation
or (b) for which a judgment has been rendered within the preceding 120 days or (c) that is in post

2

 

judgment enforcement or (d) at any time prior the second anniversary of this Subservicing
Agreement, that has been identified by the Subservicer as subject to litigation; provided, however,
in the case of a sale by the Borrower of Receivables that are judgments that are non-liquidating
and have no post-judgment enforcement activity occurring or imminent, such Receivables shall not be
deemed to be Judgment Asset Receivables.

     “Liquidation Expenses” means all court costs, arbitration fees and costs and
reasonable out-of-pocket expenses that are incurred by the Subservicer or a vendor in connection
with the collection or liquidation of any Receivable or related collateral, if any, such expenses
including, without limitation, legal and arbitration fees and expenses (including, but not limited
to, service of process fees), any file fees and foreclosure or repossession expenses and any
unreimbursed amount expended by the Subservicer or any vendor pursuant to Section 3.02 (to
the extent such amount is reimbursable under the terms of Section 3.02) respecting the
related Receivable.

     “Liquidation Proceeds” means cash received in connection with the collection or
liquidation of Receivables or related collateral, if any, whether through sale or otherwise.

     “List of Receivables” means each of the list of Receivables attached as Schedule 2
hereto, as the same may be amended, supplemented or replaced from time to time.

     “Material Adverse Effect” means with respect to any event or circumstance, a material
adverse effect on: (a) the business, assets, financial condition or operations of Subservicer; (b)
the ability of any of the Subservicer to perform its obligations under the Subservicing Agreement;
(c) the validity, enforceability or collectibility of this Subservicing Agreement; (d) the status,
existence, perfection or priority of (i) the Borrower’s ownership interest, or the Collateral
Agent’s security interest, in the Receivables or the other Collateral or (e) the validity,
enforceability or the level of collectibility of a material amount of the Receivables.

     “Obligor” means a Person obligated to make payments with respect to a Receivable.

     “Officer’s Certificate” means a certificate signed by the Chief Executive Officer, the
President, the Chief Financial Officer, a Manager or any Vice President of the Subservicer, as the
case may be, and delivered to the Servicer , as required by this Subservicing Agreement.

     “Paying Receivables” means each Receivable, the Obligor of which (a) is currently
paying under a payment plan or (b) accounts that have active garnishments, attachments, lien
proceedings or other involuntary, judicial executions or (c) has committed to enter into a payment
plan or to remit the full or agreed settlement amount thereof within the next 60 days.

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

     “Purchase Agreement” means the purchase and sale agreement, dated as of February 5,
2007, between Great Seneca Financial Corporation, Platinum Financial Services Corporation, Monarch
Capital Corporation, Colonial Credit Corporation, Centurion Capital Corporation, Sage Financial
Limited and Hawker Financial Corporation and Palisades Acquisition XV, LLC.

3

 

     “Receivable” means those credit card and other consumer installment credit agreement
accounts and receivables (including, without limitation, judgments) included on the List of
Receivables.

     “Receivables Assets” means the assets consisting of (i) the Receivables, including
all interest, finance charges, principal and other amounts received on or with respect to the
Receivables (other than payments received on the Receivables before the applicable Cut-off Date);
(ii) the Receivable Files; (iii) collateral, if any, that secures a Receivable; (iv) all rights to
insurance proceeds and Liquidation Proceeds; and (v) the proceeds of the foregoing and the rights
to enforce the foregoing.

     “Receivable Files” means, with respect to each Receivable, the file (on paper or
electronic medium) containing any original documents, agreements, judgments or instruments relating
to such Receivable in the Subservicer’s possession or control including, without limitation, any
bill of sale, loan agreement, any guarantees, any security agreement, any UCC financing statement,
any pledge agreements, any indemnification agreements, any judgment or court orders and any
assignment, supplement, reinstatement, extension, endorsement or modification thereof.

     “Receivables Financing Agreement” shall mean that certain receivables financing
agreement, of even date herewith, among the Borrower, the Servicer, BMO CM, as collateral agent and
administrator, Fairway Finance Company, LLC and Bank of Montreal.

     “Servicer” has the meaning set forth in the Preamble.

     “Subservicer Termination Event” has the meaning set forth in Section 5.01.

     “Servicing Agreement” has the meaning set forth in the Preamble.

     “Subservicer” has the meaning set forth in the Preamble.

     “Subservicing Agreement” has the meaning set forth in the Preamble.

     “Subservicing Fee” means as to any Collection Period and any Receivable, the monthly
fee payable to the Subservicer, which shall be the product of the percentage applicable to the
class of Receivable for such Receivable, as set forth on Schedule 1 hereto, multiplied by the
Collections on such Receivable received during such Collection Period.

     “Transfer Date” means the Closing Date, as set forth in the Purchase Agreement.

     “Unmatured Subservicer Termination Event” shall mean any event that, if it continues
uncured, will, with lapse of time or notice or lapse of time and notice, constitute a Subservicer
Termination Event.

4

 

ARTICLE 2.

REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 2.01 Representations, Warranties and Covenants of Subservicer. (a) The
Subservicer hereby represents, warrants and covenants to the Servicer that:

               (i) the Subservicer is duly organized, validly existing and in good standing as a limited
liability partnership under the laws of the District of Columbia and is qualified to transact
business in and is in good standing under the laws of each state in which it is necessary for it to
be so qualified in order to carry on its business as now being conducted and has all licenses
necessary to carry on its business as now being conducted; the Subservicer has the full power and
authority to own its property, to carry on its business as presently conducted, and to execute,
deliver and perform this Subservicing Agreement; the execution, delivery and performance of this
Subservicing Agreement and the consummation of the transactions contemplated hereby have been duly
and validly authorized by all necessary limited liability parntership action on the part of the
Subservicer; and this Subservicing Agreement evidences the legal, valid, binding and enforceable
obligation of the Subservicer, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally and by
general principles of equity;

               (ii) except for such consents, licenses, approvals or authorizations obtained on or prior to
the date hereof, the Subservicer is not required to obtain the consent of any other party or obtain
the consent, license, approval or authorization of, or make any registration or declaration with,
any governmental authority, bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Subservicing Agreement;

               (iii) the consummation of the transactions contemplated by this Subservicing Agreement and
the fulfillment of the terms hereby will not result in the breach of any term or provision of the
organizational documents of the Subservicer or result in the breach of any term or provision of, or
conflict with or constitute a default under or result in the acceleration of any obligation under,
any agreement, indenture or loan or credit agreement or other instrument to which the Subservicer
or its property is subject, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Subservicer or its property are subject;

               (iv) the Subservicer is not a party to, bound by or in breach or violation of any indenture
or other agreement or instrument, or subject to or in violation of any statute, order or regulation
of any court, regulatory body, administrative agency or governmental body having jurisdiction over
it, that materially and adversely affects, or may in the future be reasonably expected to
materially and adversely affect, the ability of the Subservicer to perform its obligations under
this Subservicing Agreement;

               (v) there are no actions, suits or proceedings pending or, to the knowledge of the
Subservicer, threatened against the Subservicer, before or by any court, administrative agency,
arbitrator or governmental body with respect to any of the transactions contemplated by

5

 

this Subservicing Agreement, that will, if determined adversely to the Subservicer, affect the
validity or enforceability hereof or materially and adversely affect the Subservicer’s ability to
perform its obligations under this Subservicing Agreement;

               (vi) [reserved];

               (vii) as of the Transfer Date, the Subservicer (i) is not “insolvent” (as such terms is
defined in §101(32)(A) of the Bankruptcy Code), (ii) is able to pay its debts as they become due,
and (iii) does not have unreasonably small capital for the business in which it is engaged or for
any business or transaction in which it is about to engage;

               (viii) all certificates, reports, financial statements and similar writings furnished by the
Subservicer at anytime to the Servicer under or in connection with this Subservicing Agreement have
been, and all such certificates, reports, financial statements and similar writings hereafter
furnished by the Subservicer to such parties will be, true and accurate in every respect material
to the transactions contemplated hereby on the date as of which any such certificate, report,
financial statement or similar writing was or will be delivered, and shall not omit to state any
material facts or any facts necessary to make the statements contained therein, in light of the
circumstances under which they were made, not materially misleading;

               (ix) the Subservicer will comply in all material respects with all applicable laws, rules,
regulations and orders of all governmental authorities (including those which relate to the
Receivables) the violation of which could have a Material Adverse Effect;

               (x) the Subservicer will preserve and maintain its limited liability partnership existence,
rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain
qualified in good standing as a foreign organization in the jurisdiction where its principal place
of business and its chief executive office are located and in each other jurisdiction where the
failure to preserve and maintain such existence, rights, franchises, privileges and qualifications
could have a Material Adverse Effect.

               (xi) the Subservicer will keep books and records that accurately reflect all of Subservicer’s
business affairs and transactions, maintain and implement administrative and operating procedures
(including, without limitation, an ability to re-create records evidencing the Receivables 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
Receivables;

               (xii) except in connection with litigation, actions and proceedings in the ordinary course
and relating to the Receivables relating to the Subservicer’s servicing duties as contemplated by
the Accepted Servicing Practices, the Subservicer will furnish to the Servicer:

          (1) As soon as possible, and in any event within three Business Days after, the
Subservicer receives notice thereof, any settlement of, judgment

6

 

(including a judgment with respect to the liability phase of a bifurcated
trial) in or commencement of, any labor controversy, litigation, investigation,
action or proceeding of the type described in Section 2.01(v) and, upon the
Servicer’s request, copies of all non-confidential or non-privileged documentation
relating thereto;

          (2) As soon as possible and in any event within three Business Days of the
Subservicer’s knowledge thereof, notice of any material adverse development in
previously disclosed litigation, investigation or proceeding;

          (3) Promptly and in any event within three Business Days of the Subservicer’s
knowledge thereof, notice of any other event or circumstance that, in the reasonable
judgment of the Subservicer, could have a Material Adverse Effect on the
Subservicer;

          (4) As soon as possible and in any event within three Business Days after the
occurrence of each Subservicer Termination Event and each Unmatured Subservicer
Termination Event, notice of such occurrence setting forth details of such event and
the action that Subservicer proposes to take with respect thereto; and

          (5) Promptly, from time to time, such other information, documents, records or
reports respecting the Receivables, or the condition or operations, financial or
otherwise, of the Subservicer as the Servicer may from time to time reasonably
request.

               (xiii) subject to Section 2.01(a)(x), the Subservicer will maintain all licenses,
permits, charters and registrations which are material to the performance of its obligations under
this Subservicing Agreement;

               (xiv) except pursuant to, or as contemplated by, this Subservicing Agreement, the Subservicer
shall not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist voluntarily or, for a period in excess of 10 days, involuntarily any Adverse Claims
naming the Subservicer as debtor upon or with respect to any of the Collateral;

               (xv) the Subservicer will not make any change in its instructions to Obligors regarding
payments to be made to the Subservicer that could adversely affect the collectibility of any
Receivable;

               (xvi) the Subservicer shall ensure that, with respect to each Receivable (excluding up to
$100,000 of Receivables in the aggregate) related to judgments, all required notices and recordings
with respect to the related transfer of such Receivable have been filed or otherwise made of record
with the applicable court on the first date after the Transfer Date when

7

 

the Subservicer makes any filings or appearances with such court, except where in the
reasonable judgment of the Subservicer, filing of such notices and recordings is not cost-effective
and in the best interests of the Borrower; and

               (xvii) the Subservicer will maintain with responsible insurance companies, such insurance as
may be required by any law or governmental regulation or court decree or order applicable to it and
such other insurance, to such extent and against such hazards and liabilities, as is customarily
maintained by companies similarly situated, including, without limitation (1) an errors and
omissions insurance policy and (2) a blanket employee dishonest coverage.

     (b) Upon discovery by the Servicer of a breach of any of the representations and warranties
set forth in this Section 2.01, the party discovering such breach shall give prompt written
notice thereof to the other parties.

     Section 2.02 Servicer Indemnity. The Subservicer hereby agrees to indemnify the
Servicer (the “Servicer Indemnified Party”) forthwith on demand, from and against any and
all damages, losses, claims, liabilities and related costs and expenses, including reasonable
attorneys’ fees and disbursements (“Servicer Indemnified Amounts”) awarded against or
incurred by such Servicer Indemnified Party arising out of or relating to (a) actions taken or
omitted by the Subservicer with respect to the Receivables, including the failure of the
Subservicer to perform its obligations in accordance with the provisions of this Subservicing
Agreement, excluding, however, Servicer Indemnified Amounts to the extent determined by a court of
competent jurisdiction to have resulted from the negligence, bad faith or willful misconduct on the
part of the Servicer Indemnified Party and (b) the breach of any representation or warranty made by
the Subservicer under this Agreement.

     Section 2.03 Subservicer Indemnity. Palisades Collection, L.L.C. hereby agrees to
indemnify the Subservicer (the “Subservicer Indemnified Party”) forthwith on demand, from
and against any and all damages, losses, claims, liabilities and related costs and expenses,
including reasonable attorneys’ fees and disbursements (“Subservicer Indemnified Amounts”)
awarded against or incurred by such Subservicer Indemnified Party arising out of or relating
actions taken or omitted by Palisades Collection, L.L.C. with respect to the Receivables,
excluding, however, Subservicer Indemnified Amounts (i) to the extent determined by a court of
competent jurisdiction to have resulted from the negligence, bad faith or willful misconduct on the
part of the Subservicer Indemnified Party or (ii) arising out of or relating to errors or omissions
in connection with the servicing of the Receivables prior to the Transfer Date or the origination
of the Receivables.

ARTICLE 3.

ADMINISTRATION AND SERVICING OF RECEIVABLES

     Section 3.01 Subservicer to Service. The Subservicer shall service and administer the
Receivables on behalf of the Borrower and the Collateral Agent (for the benefit of the Secured
Parties) and shall have full power and authority, acting alone and/or through third party

8

 

vendors as provided in Section 4.01, to do any and all things that it may deem
reasonably necessary or desirable in connection with such servicing and administration and that do
not violate any of the material terms of this Subservicing Agreement or the Accepted Servicing
Practices. Consistent with the terms of this Subservicing Agreement and the Accepted Servicing
Practices, the Subservicer may waive, modify or vary any term of any Receivable or consent to the
postponement of strict compliance with any such term or in any manner, grant indulgence to any
Obligor under a Receivable if, in the Servicer’s reasonable determination, such waiver,
modification, postponement or indulgence is not adverse to the interests of the Borrower, the
Collateral Agent or any of the Secured Parties. The Subservicer shall have 75% settlement
authority on the full balance owed inclusive of interest and costs unless given other settlement
authority by the Servicer in writing. Without limiting the generality of the foregoing, the
Subservicer in the name of the Servicer or in the name of the Borrower is hereby authorized and
empowered by the Servicer when the Subservicer believes it appropriate in its best judgment to
execute and deliver, on behalf of the Borrower, 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. The Subservicer shall maintain on its electronic system of record,
data on the accounts containing complete notes and documentation of all payments, credits, and any
other servicing activities.

     The Subservicer shall service and administer the Receivables in accordance with applicable
law, including the Fair Debt Collection Practices Act of 1968, as amended, and comparable state
statutes, and by employing such procedures (including collection procedures) and degree of care, in
each case as are customarily employed by the Subservicer in servicing and administering contracts
owned or serviced by the Subservicer comparable to the Receivables. The Subservicer shall take all
actions that are necessary or desirable to maintain continuous perfection of security interests
granted by the Obligors in any collateral securing the Receivables, including, but not limited to,
recording, registering, giving notice, obtaining consents, filing, re-recording, re-registering and
refiling security agreements, financing statements, continuation statements, notices, recordings or
communications with court or other instruments as are necessary to maintain the security interest
granted by the Obligors under the respective Receivables. The Subservicer shall comply at all
times in all material respects with the Accepted Servicing Practices and shall not take any action
to impair the Collateral Agent’s security interest in any Receivable or related collateral, if any,
except to the extent allowed under this Subservicing Agreement, consistent with Accepted Servicing
Practices or required by law.

     The Subservicer may perform any of its duties pursuant to this Subservicing Agreement,
including those delegated to it pursuant to this Subservicing Agreement, through third party
vendors appointed by the Subservicer; provided, that, in each such delegation (i) the
Servicer shall have the right to look solely to the Subservicer for performance, and (iii) the
terms of each third party vendor agreement shall provide that, except with respect to Exempted
Receivables, such agreement and the rights and obligations of the related vendor thereunder shall
automatically, and without any further action by any other Person, terminate upon the termination
of the Subservicer hereunder and that the Subservicer shall provide appropriate notice to each such
vendor). Notwithstanding any such delegation of a duty, the Subservicer shall remain obligated and
liable for the performance of such duty as if the Subservicer were performing such duty.

9

 

     The Subservicer may take such actions as are necessary to discharge its duties as the
Subservicer in accordance with this Subservicing Agreement, including the power to execute and
deliver on behalf of the Borrower such instruments and documents as may be customary, necessary or
desirable in connection with the performance of the Subservicer’s duties under this Subservicing
Agreement (including consents, waivers and discharges relating to the Receivables and related
collateral, if any, and such instruments or documents as may be necessary to effect liquidation of
any Receivable or related collateral, if any). In furtherance thereof, the Servicer hereby
irrevocably appoints the Subservicer as its attorney-in-fact to execute on its behalf such
documents or instruments as are necessary to effect the liquidation of any Receivable or related
collateral, if any.

     Section 3.02 Collection of Receivable Payments; Collection Account. The Subservicer
shall comply in all material respects with generally accepted collection industry standards and
policies and procedures of the Subservicer and shall at all times in all material respects follow
the Accepted Servicing Practices in collecting and attempting to collect all payments called for
under the terms and provisions of the Receivables, and shall use servicing procedures generally
accepted in the collection industry for similar accounts and as otherwise expressly provided by
this Subservicing Agreement; provided, however, that the Subservicer shall not be
obligated to institute any action unless it determines in its good faith judgment that Liquidation
Proceeds that would be realized in connection therewith would be sufficient for the reimbursement
in full of the Liquidation Expenses related thereto. If the Subservicer determines that it shall
not commence any legal action with respect to a Receivable pursuant to the provisions of the prior
sentence, notwithstanding anything else in this Subservicing Agreement to the contrary, the
Servicer shall have the right to remove such Receivable from this Subservicing Agreement at any
time thereafter. With respect to 335,161 Receivables in the amount of $896,543,655.18 identified
as priority and non-priority in the “pre-litigation” category of the Diligence File (as defined in
the Purchase Agreement), if the Subservicer does not initiate litigation within eighteen months of
the date of this Subservicing Agreement, notwithstanding anything else in this Subservicing
Agreement to the contrary, the Servicer shall have the right to remove such applicable Receivables
from this Subservicing Agreement at any time thereafter. With respect to all other Receivables in
the “pre-litigation” category, upon written notice from one party to this Subservicing Agreement to
the other that litigation should be initiated with respect to any such Receivable, if the
Subservicer does not initiate litigation within 180 days of such notice, notwithstanding anything
else in this Subservicing Agreement to the contrary, the Servicer shall have the right to remove
such applicable Receivables from this Subservicing Agreement at any time thereafter. In connection
with such action, the Subservicer shall follow such practices and procedures required by
Section 3.01 and make advances of its own funds for any out-of-pocket expenses incurred.
The Subservicer shall be reimbursed for Liquidation Expenses (including advances) by retention of
the required reimbursement from Liquidation Proceeds and shall deposit the excess of such proceeds
in the Collection Account.

     Subject to Section 3.06 (which provides that, except in the instances set forth therein,
the remittance of Collections shall net the related Servicing Fees), the Subservicer shall
deposit in an attorney trust account no later than 1 Business Day following receipt thereof and in
the Collection Account no later than 1 Business Day thereafter:

10

 

               (i) All Liquidation Proceeds, including, without limitation, all principal, finance charges,
interest, late payment fees and extension fees, insurance proceeds and all other amounts and
charges but net of (x) charge backs (attributable to errors in posting, returned checks), (y)
rights of offset for amounts that should not have been paid or that must be refunded as the result
of a successful claim or defense under bankruptcy or similar laws and (z) proceeds to be retained
by the Servicer for reimbursement of Liquidation Expenses; and

               (ii) Any other proceeds of any Receivables or property acquired in respect thereof and any
other Collections received by the Subservicer.

From the time of receipt of any of the amounts specified in the preceding two clauses of this
paragraph until deposit thereof in the Collection Account, the Subservicer shall keep such funds in
an attorney trust account. The Subservicer shall not deposit or otherwise credit to the Collection
Account, or cause or permit to be so deposited or credited by any Person, any amounts not
representing proceeds of the Collateral. The Subservicer agrees that it has no ownership right or
interest in amounts on deposit in the Collection Account, except that which may arise indirectly
through a right to receive distributions from the Collection Account under this Subservicing
Agreement. The Subservicer shall have the right to request the Servicer request the Collateral
Agent to withdraw the following amounts from the Collection Account for payment to the Subservicer
on a monthly basis after such time as the Servicer is permitted to request such amounts: (a)
chargebacks attributable to errors in posting, returned checks, or rights of offset for amounts
that should not have been paid or that must be refunded as a result of a successful claim or
defense under bankruptcy or similar laws (to the extent such amounts have not already been retained
by the Subservicer pursuant to clause (i) and (ii) of this paragraph) and (b)
amounts deposited in error by the Subservicer (and the Servicer may rely on the Subservicer’s
calculation of such chargebacks and amounts).

     In those cases where a vendor is subservicing a Receivable pursuant to a vendor agreement, the
Subservicer shall cause the vendor, pursuant to such agreement, to deposit all Collections received
by such vendor (in respect of the Receivables being subserviced by such vendor) with the
Subservicer within, using reasonable efforts, seven days, but in no event later than one month, and
the Subservicer shall deposit such Collections within 1 Business Day of receipt thereafter into the
Collection Account (net of any servicing fee (not in excess of the Subservicing Fee with respect
thereto)).

     Section 3.03 Custodial Arrangements.

          (a) Subject to the terms and conditions of this Section, the Subservicer shall maintain
custody and possession of the Receivable Files with respect to the Receivables (for the benefit of
the Secured Parties).

          (b) To the extent any Receivable Files or any portion thereof are held by the Subservicer in
accordance with Section 3.03(a), the Subservicer agrees to act with reasonable care, using
that degree of skill and care that it exercises with respect to similar contracts owned and/or
serviced by it. The Subservicer shall promptly report to the Servicer any material failure by it
to hold such Receivable Files as herein provided and shall promptly take appropriate action

11

 

to remedy such failure. In connection with holding any Receivable Files, the Subservicer
agrees not to assert, and shall cause each related vendor not to assert any beneficial ownership
interests in the Receivables. The Subservicer agrees to indemnify the Servicer, Collateral Agent,
the other Secured Parties and the Borrower, and their respective officers, directors, employees,
partners and agents for any and all liabilities, obligations, losses, damages, payments, costs, or
expenses of any kind whatsoever that may be imposed on or incurred by any such Person arising from
the negligence or willful misconduct of the Subservicer in holding of the Receivable Files pursuant
to Section 3.03(a); provided, however, that the Subservicer will not be
liable to the extent that any such amount resulted from the gross negligence or willful misconduct
of such Person.

          (c) The Subservicer shall not, without the prior consent of the Servicer, deliver or release
to the Borrower or any other Person any Receivable Files (or the security interest in the related
collateral, if any) except (i) to vendors, (ii) in the ordinary course of its business in
connection with the release of collateral securing such Receivable after satisfaction of the
related indebtedness thereunder and (iii) in connection with a sale of a Receivable by the
Borrower. Upon the request of the Servicer following the occurrence of a Subservicer Termination
Event, the Subservicer shall deliver to the Servicer all Receivable Files held by the Subservicer
unless the Subservicer is terminated as a result of a termination of the Servicer under the
Servicing Agreement, in which case the Subservicer shall deliver all Receivables Files to the
Collateral Agent.

     Section 3.04 Reports to Servicer.

          (a) On a weekly basis, the Subservicer shall prepare and deliver a collection report, showing,
among other things, (i) collections, (ii) proceeds from sales and (iii) cost reimbursements and
cost advance, in each case in the aggregate and by type of Receivable, in a form mutually
acceptable to the parties hereto.

          (b) Upon reasonable request by Servicer, in a format reasonably acceptable to the Servicer,
the Subservicer shall furnish the names, addresses and phone numbers of any attorney, collector or
other person who is not an employee of the Subservicer and, as of the last day of such calendar
quarter, was seeking to collect any account and a list of the accounts that are being collected by
such person. The Subservicer shall make available on a secure website information with respect to
the accounts containing data available in fields, and in a format, acceptable to the Servicer,
including job, bank and pertinent collection information, and shall provide the Servicer with
secure, remote access to such website. From time to time, upon reasonable request, the
Administrator shall have the right to obtain information about the Receivables from the
Subservicer. In addition, the Subservicer will monitor all judgments and, on a monthly basis, the
Subservicer will identify which of such judgments will and will not be renewed by the Subservicer
120 days prior to date of renewal of such Judgments.

          (c) The Subservicer shall notify the Servicer immediately in writing if any of the following
shall occur: (i) any Subservicer Termination Event or Unmatured Subservicer Termination Event;
(ii) any class action or coordinated multiple plaintiff action shall be instituted

12

 

or threatened in writing with respect to any Receivables or (iii) any governmental official
shall institute, or threaten to institute any investigation or proceeding relating to any account.

     Section 3.05 Annual Statement as to Compliance and Audit. The Subservicer will
deliver to the Servicer on or before April 15 of each year, beginning with April 15, 2008, an
Officer’s Certificate stating that (i) a review of the activities of the Subservicer during the
preceding calendar year and of performance under this Subservicing Agreement has been made under
such officer’s supervision, (ii) to the best of such officer’s knowledge, based on such review, the
Subservicer has fulfilled all its obligations under this Subservicing Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation, specifying each
such default known to such officer and the nature and status thereof and (iii) to the best of such
officer’s knowledge, each vendor has fulfilled its obligations, or, if there has been a default in
the fulfillment of such obligations, specifying such default known to such officer and the nature
and status thereof.

     The Subservicer shall provide to the Servicer, within 120 days of the end of each fiscal year,
annual audited financial statements for the Subservicer prepared in accordance with generally
accepted accounting principles, consistently applied, by an independent certified public accounting
firm of national standing

     Section 3.06 Servicing Compensation. The Subservicer, as compensation for its
activities hereunder, shall be entitled to receive the Subservicing Fee, which shall be payable by
the Servicer no later than the seventh calendar day of each month or, if such day, is not a
Business Day, the next such Business Day; provided, however, (i) in all instances
with respect to Exempted Receivables and (ii) in all instances other than with respect to Exempted
Receivables, prior to the occurrence of a Subservicer Termination Event or Unmatured Subservicer
Termination Event (which has not been waived), the Subservicer may withhold the Subservicing Fee
payable thereto with respect to any Collections from the amount to be deposited thereby into the
Collection Account.

     The Subservicer shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder (including payment of the fees and expenses of any vendor) and shall
not be entitled to reimbursement therefor except as specifically provided in Section 3.02.

     Section 3.07 Receivable Reviews. To the extent permitted under applicable law any
time during regular business hours and upon at least five Business Days’ prior notice (so long as
no Subservicer Termination Event or Unmatured Subservicer Termination Event has occurred within
such calendar year), the Subservicer shall permit the Servicer and the Administrator, their agents,
representatives or designees (i) to examine and make copies of, and abstracts from, the Receivable
Files and of all books, records and documents (including, without limitation, computer tapes and
disks) in possession or under control of the Subservicer or any vendor (to the extent permissible
under the related vendor agreement) relating to the Receivables, (ii) to cause such books and
records to be audited by independent public accounts selected by the Servicer or its designee and
(iii) to visit the offices and properties of the Subservicer for the purposes of examining such
materials described above, and to discuss matters

13

 

related to the Receivables with any of the officers and employees of the Subservicer having
knowledge of such matters. Any activities undertaken by the Servicer or its designee in connection
with items (i) through (iii) above, shall be at the expense of the Servicer; provided,
however that the Servicer shall not be required to pay for more than two audits in any
calendar year unless a Subservicer Termination Event or Unmatured Subservicer Termination Event has
occurred and is continuing, in which event such audits may be as frequently as the Administrator
may determine in its sole discretion.

ARTICLE 4.

VENDORS

     Section 4.01 Agreements Between Subservicer and Vendors. The Subservicer, with the
prior written consent of the Servicer, may enter into vendor agreement with one or more third party
vendors for the servicing and administration of certain of the Receivables. References in this
Subservicing Agreement to actions taken or to be taken by the Subservicer in servicing the
Receivables include actions taken or to be taken by a vendor on behalf of the Subservicer. Each
vendor will service the Receivables in a manner materially consistent with this Subservicing
Agreement. The Subservicer hereby acknowledges that it is holding the Receivable Files and any
other items of the Collateral in its possession from time to time for the related Receivables as
bailee of Borrower and the Collateral Agent (for the benefit of the Secured Parties) in accordance
with Section 3.03.

     Section 4.02 Obligation of Subservicer. Notwithstanding any agreement with a vendor,
any of the provisions of this Subservicing Agreement relating to agreements or arrangements between
the Subservicer or a vendor or reference to actions taken through a vendor or otherwise, the
Subservicer shall remain obligated to the Servicer, the Borrower and the Collateral Agent for the
servicing and administering of the Receivables in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such arrangements or by
virtue of indemnification from a vendor and to the same extent and under the same terms and
conditions as if the Subservicer alone were servicing and administering the Receivables. The
Subservicer shall be entitled to enter into any agreement with a vendor for indemnification of the
Subservicer and nothing contained in this Subservicing Agreement shall be deemed to limit or modify
such indemnification.

     Section 4.03 No Contractual Relationship Between a Vendor and the Servicer. Any
vendor agreement that may be entered into and any other transactions or services relating to the
Receivables involving a vendor in its capacity as such shall be deemed to be between a vendor and
the Subservicer alone and the Servicer shall not be deemed a party thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to a vendor except as set forth in
Section 4.04.

     Section 4.04 Assumption or Termination of Vendor Agreement by Servicer. In the event
the Subservicer shall for any reason no longer be the subservicer of the Receivables (including by
reason of a Subservicer Termination Event) pursuant to this Subservicing

14

 

Agreement, the Servicer shall have the right, in its sole discretion, to terminate all of the
rights and obligations of any vendor under the related vendor agreement.

ARTICLE 5.

SUBSERVICER TERMINATION EVENT

     Section 5.01 Subservicer Termination Event. “Subservicer Termination Event,”
wherever used herein, means any one of the following events:

               (i) the Subservicer shall fail to deposit all amounts required to be deposited in the
Collection Account when required to be deposited under this Subservicing Agreement and such failure
shall continue unremedied for 1 Business Day after the Subservicer has knowledge or notice thereof,
other than with respect to administrative errors not to exceed $10,000 of Collections in any
Collection Period for which such grace period shall be 5 Business Days after the Subservicer has
knowledge or notice thereof; or

               (ii) the Subservicer shall fail to observe or perform in any material respect any other of
the covenants or agreements on the part of the Subservicer contained in this Subservicing Agreement
or any other Transaction Document to which it is a party and such failure shall continue unremedied
for a period of twenty (20) days after the Subservicer has knowledge or notice thereof;

               (iii) a decree or order of a court or agency or supervisory authority having jurisdiction in
the premises in an involuntary case under any present or future federal or state bankruptcy,
insolvency or similar law or appointing a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the Subservicer;

               (iv) the Subservicer shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar
proceedings of, or relating to, the Subservicer or of, or relating to, all or substantially all of
the property of the Subservicer;

               (v) the Subservicer shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of, or commence a voluntary case under, any
applicable insolvency or reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations;

               (vi) the Subservicer shall have breached any of the representations and warranties set forth
in Section 2.01 in any material respect and the Subservicer shall have failed to cure such
breach within ten (10) days of its receipt of a notice of such breach;

               (vii) a Servicer Termination Event shall have occurred under the Servicing Agreement; or

15

 

               (viii) a Termination Event shall have occurred under the Receivables Financing Agreement.

     If a Subservicer Termination Event shall occur (which has not been waived), then, and in each
and every such case, the Servicer may, by notice in writing to the Subservicer (with a copy to the
Adminstrator, the Borrower and the Collateral Agent), terminate all of the rights and obligations
of the Subservicer under this Subservicing Agreement and in and to the Subservicer’s interest in
and to the Receivables and the proceeds thereof (except with respect to the Subservicer’s right to
collect Exempted Receivables pursuant to the terms of this Agreement), subject to compensation,
rights of reimbursement, indemnity and limitation on liability to which the Subservicer is then
entitled. Upon the effective date of such termination, all authority and power of the Subservicer
under this Subservicing Agreement, whether with respect to the Receivables or otherwise, shall
terminate. The Subservicer agrees to cooperate with such responsibilities and rights hereunder,
including, without limitation, the transfer pursuant to such termination. If the Subservicer is
terminated pursuant to this Section 5.01, then the Subservicer shall bear all of the costs
and expenses of transferring the duties and obligations of the Subservicer; provided,
however, that if the Subservicer fails to bear all such costs and expenses any successor
shall be entitled to reimbursement from amounts realized on the related collateral, if any, by
retention of such amounts prior to the distribution of any Collections from the Collection Account
in accordance with the Receivables Financing Agreement.

     Section 5.02 Term of Subservicer. (a) Except with respect to Exempted Receivables,
upon notice, the Subservicer may be removed by the Servicer, such removal to become effective upon
such date as specified in such notice upon the consent of the Administrator, which consent shall
not be unreasonably withheld or delayed. The Servicer shall be entitled to sell, on behalf of
Borrower, any and all Receivables (subject to the requirements of the Receivables Financing
Agreement and related documents), including Exempted Receivables; provided, in the case of Exempted
Receivables, except in connection with a Subservicer Termination Event pursuant to clauses (iii),
(iv) and (v) of Section 5.01, or occurrences of fraud, theft, willful misconduct or bankruptcy that
the Subservicer shall be retained as subservicer of such Receivables on terms materially similar to
the ones in this Subservicing Agreement.

     (b) The initial term of this Subservicing Agreement, except with respect to Exempted
Receivables, shall be two years, beginning on the date of this Subservicing Agreement, and shall be
renewable for additional terms upon the mutual agreement of the Servicer and Subservicer.

ARTICLE 6.

MISCELLANEOUS PROVISIONS

     Section 6.01 Amendments, Etc. No amendment, modification or waiver of, or consent
with respect to, any provision of this Subservicing Agreement shall be effected unless the same
shall be in writing and signed and delivered by each of the parties hereto and consented to by the
Administrator (which consent shall not be unreasonably withheld), and then any such waiver or
consent shall be effected only in the specific instance and for the specific purpose for which
given.

16

 

     Section 6.02 Acknowledgment of Subservicer. The Subservicer hereby agrees that upon
request from the Collateral Agent after the occurrence of a Termination Event which does not have
the effect of terminating the Subservicer under this Subservicing Agreement, the Subservicer shall
provide all services described in this Subservicing Agreement for the benefit of the Collateral
Agent (for the benefit of the Secured Parties) in accordance with the terms of this Subservicing
Agreement.

     Section 6.03 Notices. Any notice required or permitted to be given under this
Subservicing Agreement shall be in writing and shall be mailed by express mail, postage prepaid, or
personally delivered to an officer of the receiving party. All such communications shall be
mailed, sent or delivered to the parties at their respective addresses as set forth opposite their
respective signatures to this Subservicing Agreement, or as to any party at such other address as
shall be designated by such party in a written notice to each other party complying as to delivery
with the terms of this Section. All such notices and other communications shall, if properly
addressed and sent by pre-paid courier service, be deemed given when received; any notice or other
communication, if transmitted by facsimile, shall be deemed given when transmitted and receipt
thereof has been confirmed by telephone or electronic means.

     Section 6.04 GOVERNING LAW. THIS SUBSERVICING AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK OTHER THAN THOSE SET FORTH
IN SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK.

     Section 6.05 Successors and Assigns. This Subservicing Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, the Borrower, the Collateral Agent, the
Secured Parties and their successors and assigns; provided, however, that the
Subservicer may not assign its rights, obligations or duties hereunder without the prior written
consent of the Servicer and the Administrator (which consent shall not be unreasonably withheld),
except as otherwise set forth in this Subservicing Agreement.

     Section 6.06 Attorney’s Liens. The Subservicer has and shall be deemed to have waived
any and all attorney’s liens against any Receivables subserviced hereunder. The Subservicer shall
require any attorney or other vendor engaged to service any Receivables to waive any and all
attorney’s liens and such attorneys and other vendors shall be deemed to have made such waiver.

     Section 6.07 Quantum Meruit. In the event of a dispute between the Servicer and the
Subservicer relating to the performance required hereunder, the Subservicer agrees to waive its
rights to pursue any legal action for payment pursuant to or based upon the equitable remedy of
quantum meruit.

     Section 6.08 Employment. The Subservicer hereby covenants and agrees that, for the
first two years of this Subservicing Agreement, the Subservicer shall remain in the collection

17

 

business and Ronald M. Abramson and Stuart J. Wolpoff will remain employed by the Subservicer
in a senior capacity.

     Section 6.09 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Subservicing Agreement shall be for any reason whatsoever
held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Subservicing Agreement and shall
in no way affect the validity or enforceability of the other provisions of this Subservicing
Agreement.

     Section 6.10 Consent to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS SUBSERVICING AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
SUBSERVICING AGREEMENT, EACH OF THE BORROWER AND THE SERVICER CONSENTS, FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER AND THE
SERVICER IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF
THIS SUBSERVICING AGREEMENT OR ANY DOCUMENT RELATED HERETO.

     Section 6.11 Survival. The rights and remedies with respect to the indemnification
provisions of Section 2.02 shall be continuing and shall survive any termination of this Agreement
and any termination of Subservicer’s rights to act as a “Subservicer” hereunder.

     Section 6.12 Counterparts. This Subservicing Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together shall constitute one
and the same instrument.

     Section 6.13 Third Party Beneficiaries. Each party hereto acknowledges and agrees
that the Lender, the Administrator and the Collateral Agent are third party beneficiaries under
this Agreement and shall have the full power to enforce its rights and benefits granted hereunder.

[Signature page follows]

18

 

     IN WITNESS WHEREOF, the Servicer and the Subservicer have caused their names to be signed
hereto by their respective officers thereunto duly authorized, all as of the day and year first
above written.

	 	 	 	 	 
	 	WOLPOFF & ABRAMSON, L.L.P.,

as subservicer

 	 
	 	By:  	/s/ Ronald Abramson
 	 
	 	 	Name:   Ronald Abramson 	 
	 	 	Title:  Managing Partner 	 
	 
	 	ADDRESS:

702 King Farm Blvd.

5th Floor

Rockville, MD 20850

 	 
	 	 	 
	 	 	 
	 	 	 
	 

Subservicing Agreement

S-1

 

	 	 	 	 	 
	 	PALISADES COLLECTION, L.L.C.,

as Servicer

 	 
	 	By:  	/s/ Mitchell Cohen
 	 
	 	 	Name:  	Mitchell Cohen 	 
	 	 	Title:  	Manager 	 
	 
	 	ADDRESS:

210 Sylvan Avenue

Englewood Cliffs, NJ 07632

 	 
	 	 	 
	 	 	 
	 	 	 
	 

Subservicing Agreement

S-2

 

SCHEDULE 1

SUBSERVICING FEE SCHEDULE

	 	 	 	 	 
	CLASS OF RECEIVABLE	 	PERCENTAGE	 
	All Receivables directly being serviced by the Subservicer;
provided, for the purposes of clarification, that any
Receivable subserviced by a vendor under this Subservicing
Agreement, will not be deemed to be directly serviced by the
Subservicer
	 	 	24%	
	All other Receivables
	 	 	30%	

For the purposes of this Schedule, “Exempted Receivables” shall not be a class hereunder. When
determining the applicable class for an “Exempted Receivable,” such class shall instead be related
to the Receivable underlying such Exempted Receivable.

Subservicing
Agreement

S1-1

 

SCHEDULE 2

LIST OF RECEIVABLES

Subservicing Agreement

S2-1

 

	 	 	 	 	 	 	 
	ARTICLE 1.
	 	DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 
	Section 1.01
	 	Definitions
	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE 2.
	 	REPRESENTATIONS, WARRANTIES AND COVENANTS	 	 	5	 
	 
	 	 	 	 	 	 
	Section 2.01
	 	Representations, Warranties and Covenants of Subservicer
	 	 	5	 
	Section 2.02
	 	Servicer Indemnity
	 	 	8	 
	Section 2.03
	 	Subservicer Indemnity
	 	 	8	 
	 
	 	 	 	 	 	 
	ARTICLE 3.
	 	ADMINISTRATION AND SERVICING OF RECEIVABLES	 	 	8	 
	 
	 	 	 	 	 	 
	Section 3.01
	 	Subservicer to Servicer
	 	 	8	 
	Section 3.02
	 	Collection of Receivable Payments; Collection Account
	 	 	10	 
	Section 3.03
	 	Custodial Arrangements
	 	 	11	 
	Section 3.04
	 	Reports to Servicer
	 	 	12	 
	Section 3.05
	 	Annual Statement as to Compliance and Audit
	 	 	13	 
	Section 3.06
	 	Servicing Compensation
	 	 	13	 
	Section 3.07
	 	Receivable Reviews
	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE 4.
	 	VENDORS	 	 	14	 
	 
	 	 	 	 	 	 
	Section 4.01
	 	Agreements Between Subservicer and Vendors
	 	 	14	 
	Section 4.02
	 	Obligation of Subservicer
	 	 	14	 
	Section 4.03
	 	No Contractual Relationship Between a Vendor and the Servicert
	 	 	14	 
	Section 4.04
	 	Assumption or Termination of Vendor Agreement by Servicer
	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE 5.
	 	SUBSERVICER TERMINATION EVENT	 	 	15	 
	 
	 	 	 	 	 	 
	Section 5.01
	 	Subservicer Termination Event
	 	 	15	 
	Section 5.02
	 	Term of Subservicer
	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE 6.
	 	MISCELLANEOUS PROVISIONS	 	 	17	 
	 
	 	 	 	 	 	 
	Section 6.01
	 	Amendments, Etc
	 	 	17	 
	Section 6.02
	 	Acknowledgment of Subservicer
	 	 	17	 
	Section 6.03
	 	Notices
	 	 	17	 
	Section 6.04
	 	GOVERNING LAW
	 	 	17	 
	Section 6.05
	 	Successors and Assigns
	 	 	17	 
	Section 6.06
	 	Attorney’s Liens
	 	 	17	 
	Section 6.07
	 	Quantum Meruit
	 	 	17	 
	Section 6.08
	 	Employment
	 	 	18	 
	Section 6.09
	 	Severability of Provision
	 	 	18	 
	Section 6.10
	 	Consent to Jurisdiction
	 	 	18	 
	Section 6.11
	 	Survival
	 	 	18	 
	Section 6.12
	 	Counterparts
	 	 	18	 
	Section 6.13
	 	Third Party Beneficiaries
	 	 	18	 

Subservicing
Agreement

S-5

 

	 	 	 
	Exhibits	 	 
	 
	 	 
	Exhibit A

	 	List of Receivables

Subservicing
Agreement

S-6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00155-of-00352.parquet"}]]