PURCHASE AGREEMENT

Exhibit 10.2

PURCHASE AGREEMENT

BETWEEN

ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2009 LLC

as Buyer

AND

ALLIANCE LAUNDRY SYSTEMS LLC,

as Seller

DATED AS OF JUNE 26, 2009

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PURCHASE AGREEMENT, dated as of June 26, 2009, between ALLIANCE LAUNDRY EQUIPMENT RECEIVABLES 2009 LLC, a Delaware limited liability company (together with its permitted successors and assigns, the “ Buyer ”), and ALLIANCE LAUNDRY SYSTEMS LLC, a Delaware limited liability company individually, and as Servicer (in its individual capacity, “ ALS ,” or “ Seller ” and collectively with all Subsidiaries of ALS that become a Seller, the “ Sellers ”).

WHEREAS, Buyer desires to purchase from Seller, from time to time, Equipment Loans, Receivables and all Related Security;

WHEREAS, Seller is willing to sell to Buyer from time to time such Equipment Loans, Receivables and Related Security;

WHEREAS, Buyer will sell or otherwise transfer such Equipment Loans, Receivables and Related Security, to Alliance Laundry Equipment Receivables Trust 2009-A (together with its permitted successors and assigns, the “ Issuer ”);

WHEREAS, the Issuer will issue notes and certificates of beneficial interest (any such issued interests or securities collectively the “ Securities ”) to fund its acquisition of such Equipment Loans, Receivables and Related Security; and

WHEREAS, the Issuer will pledge its rights in such Receivables, Equipment Loans and Related Security, including its rights under this Agreement, to the Indenture Trustee under the Indenture for the benefit of the Securityholders.

NOW, THEREFORE, in consideration of the foregoing, the other good and valuable consideration and the mutual terms and covenants herein contained, the parties hereto agree as follows:

ARTICLE I.

DEFINITIONS

SECTION 1.1 Definitions . Capitalized terms used but not otherwise defined in this Agreement shall have the respective meanings assigned them in Part A of Appendix A hereto, as it may be amended, supplemented or modified from time to time, and such capitalized terms used herein but not otherwise defined in Part A of Appendix A hereto shall have the respective meanings assigned them in Part I of Appendix A to the Pooling and Servicing Agreement, as it may be amended, supplemented or modified from time to time. All references herein to “the Agreement” or “this Agreement” are to this Purchase Agreement as it may be amended, supplemented or modified from time to time, the exhibits hereto and the capitalized terms used herein which are defined in Appendix A hereto, and all references herein to Articles, Sections and subsections are to Articles, Sections or subsections of this Agreement unless otherwise specified. The rules of construction set forth in Part B of such Appendix A shall be applicable to this Agreement.

ARTICLE II.

PURCHASE AND SALE OF CONVEYED ASSETS

SECTION 2.1 Initial Transfer of Conveyed Assets . On the terms and subject to the conditions set forth in this Agreement (including the conditions precedent set forth in Article IV ), each Seller hereby transfers to the Buyer, effective as of the Closing Date, all of Seller’s right, title and interest in, to and under:

(a) all Receivables of the Seller, as listed on the Funding Date Data Pool Report delivered on the Closing Date, which report shall contain data as of the Initial Cutoff Date;

(b) each Equipment Loan that is listed as one of the Initial Transferred Assets on the Funding Date Data Pool Report delivered on the Closing Date, which report shall contain data as of the Initial Cutoff Date;

(c) all Related Security with respect to all Conveyed Assets described in Sections 2.1 (a)  and (b)  above;

(d) the Lockbox Accounts, the Bank Accounts, all documents, instruments and agreements relating to the Lockbox Accounts and the Bank Accounts, and all amounts from time to time on deposit in the Lockbox Accounts or the Bank Accounts;

(e) all Records relating to any of the foregoing; and

(f) all Proceeds of the foregoing, including Collections.

Such transfer shall be characterized as set forth in Section 2.4 . All of the items listed in clauses (a) , (b) , (c) , (d) , (e)  and (f)  of this Section 2.1 are collectively referred to as the “ Initial Transferred Assets .”

SECTION 2.2 Subsequent Transfers of Conveyed Assets . On the terms and subject to the conditions set forth in this Agreement (including the conditions precedent set forth in Article IV ), each Seller agrees to transfer to Buyer (which transfer shall be characterized as set forth in Section 2.4 ), and Buyer agrees to accept from such Seller, at the times set forth in Section 2.3 , all of such Seller’s right, title and interest in, to and under:

(a) all unpaid Receivables existing as of the Initial Cutoff Date and not transferred pursuant to Section 2.1 and thereafter arising and originated by each Seller from time to time prior to the earlier to occur of (x) the Receivables Conversion Date and (y) the closing of Seller’s business on the Purchase Termination Date, which Receivables shall be listed on a Funding Date Data Pool Report delivered on the related Receivables Settlement Date, which report shall contain data as of the Business Day immediately preceding such Receivables Settlement Date;

(b) each Equipment Loan that is listed on a Funding Date Data Pool Report delivered two (2) Business Days prior to the related Funding Date (provided, however, that once per calendar quarter, such Funding Date Data Pool Report may be delivered one (1) Business Day prior to the related Funding Date), which report shall contain data as of the Loan Cutoff Date;

 

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(c) all Related Security with respect to all Conveyed Assets described in Sections 2.2(a) and (b)  above;

(d) all Records relating to any of the foregoing; and

(e) all Proceeds of the foregoing, including Collections.

As used herein, (i) “ Purchased Receivables ” means the items listed above in Sections 2.1(a) and 2.2(a), (ii) “ Purchased Equipment Loans ” means the items listed above in Sections 2.1(b) and 2.2(b), (iii) “ Conveyed Assets ” means the Purchased Receivables and Purchased Equipment Loans collectively, (iv) “ Related Assets ” means the items listed above in Sections 2.1(c) , (d) , (e)  and (f)  and 2.2(c) , (d)  and (e)  collectively, and (v)  “ Specified Assets ” means the Conveyed Assets and the Related Assets collectively.

SECTION 2.3 Timing of Conveyances . Subject to the satisfaction of the terms and conditions of Section 4.1 :

(a) Initial Closing Date Conveyances . The Specified Assets described in Section 2.1 shall be conveyed by the Seller to the Buyer on the Closing Date pursuant to a written assignment substantially in the form of Exhibit A-1 (the “ Initial PA Assignment ”).

(b) Regular Purchases . (i) On the Closing Date, and thereafter from time to time until the earlier to occur of (x) the Loan Conversion Date and (y) the closing of Seller’s business on the Purchase Termination Date, any Purchased Equipment Loans and Related Assets with respect to such Purchased Equipment Loans shall be transferred by the Seller to the Buyer pursuant to a written assignment substantially in the form of Exhibit A-2 (each a, “ Subsequent PA Assignment ” and, together with the Initial PA Assignment the “ PA Assignments ”), on the Purchase Date set forth in a Funding Date Data Pool Report delivered by a Seller to the Buyer that lists such Purchased Equipment Loans; provided , however , that such purchases and sales of Equipment Loans shall occur not more frequently than once per each calendar week.

(ii) On the Closing Date, and on each Business Day thereafter until the earlier to occur of (x) the Receivables Conversion Date and (y) the closing of Seller’s business on the Purchase Termination Date, the Seller shall transfer to the Buyer all Purchased Receivables and Related Assets with respect to such Purchased Receivables originated by the Seller since the close of business on the prior Business Day (or in the case of a transfer on the Closing Date, since the close of business on the Initial Cutoff Date).

SECTION 2.4 Consideration for, and Characterization of, Purchases . (a) On the terms and subject to the conditions set forth in this Agreement, Buyer agrees to make Purchase Price payments to, and accept capital contributions from, the Sellers in accordance with the provisions of Section 2.12 .

 

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(b) The transfers contemplated in Section 2.1 and Section 2.2 of Eligible Receivables and Eligible Equipment Loans shall be treated as (x) sales to the extent of cash received by Seller from Buyer on the related Purchase Date or Receivables Settlement Date, as applicable, and (y) if such Seller is ALS, to the extent the Total Consideration is in excess of the amount set forth in clause (x) , a contribution to the capital of the Buyer in the amount of such excess. The transfers of Conveyed Assets contemplated in Sections 2.1 and 2.2 that are not Eligible Receivables or Eligible Equipment Loans shall be treated as a capital contribution to the Buyer.

SECTION 2.5 No Recourse . Except as specifically provided in this Agreement, the sale and purchase of Specified Assets under this Agreement shall be without recourse to the Sellers; it being understood that each Seller shall be liable to Buyer for all representations, warranties, covenants and indemnities made by such Seller pursuant to the terms of this Agreement, all of which obligations are limited so as not to constitute recourse to such Seller for the credit risk of the Obligors under any Conveyed Assets.

SECTION 2.6 No Assumption of Obligations Relating to Conveyed Assets, Related Assets or Contracts . None of the Buyer, the Servicer, the Issuer, the Indenture Trustee or any Third Party Financier shall have any obligation or liability to any Obligor or other customer or client of Seller, including any obligation to perform any of the obligations of any Seller under any Specified Asset. No such obligation or liability is intended to be assumed by the Buyer, the Servicer, the Issuer, the Indenture Trustee or any Third Party Financier, and any assumption is hereby expressly disclaimed.

SECTION 2.7 True Sales and True Contributions . The Sellers and Buyer intend the transfers of Specified Assets hereunder to be absolute conveyances by the Sellers to Buyer that are absolute and irrevocable and that provide Buyer with the full benefits of ownership of the Specified Assets, and (other than for tax purposes and the limited accounting purposes described in the following sentence) none of the Sellers nor Buyer intend the transactions contemplated hereunder to be, or for any purpose to be characterized as, loans from Buyer to any Seller. Without limiting or otherwise affecting the preceding sentence, and solely for accounting purposes, the Seller will treat the sale or contribution of Receivables owing by certain foreign obligors as loans until the Seller recognizes the revenue associated with those Receivables in accordance with GAAP consistently applied; and for tax purposes, the transactions contemplated by the Basic Documents will be treated as a financing by the Seller. However, in the event that, notwithstanding the intent of the parties, any Specified Assets are determined to be property of any Seller’s estate, then (i) this Agreement also shall be deemed to be a security agreement within the meaning of the UCC, and (ii) the conveyance by such Seller provided for in this Agreement shall be deemed to be a grant by such Seller to Buyer of all of such Seller’s right, title and interest in, to and under the Specified Assets, whether now or hereafter existing or created, to secure (1) the rights of Buyer hereunder, (2) a loan by Buyer to such Seller in the amount of the Total Consideration and (3) without limiting the foregoing, the payment and performance of such Seller’s obligations (whether monetary or otherwise) hereunder. Each Seller and Buyer shall, to the extent consistent with this Agreement, take such actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the Specified Assets, such security interest would be deemed to be a perfected security interest of first priority (subject to Permitted Adverse Claims) in favor of Buyer under applicable

 

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law and shall be maintained as such throughout the term of this Agreement. The parties agree that the foregoing sales of Specified Assets constitute sales of “accounts,” “promissory notes” and “tangible chattel paper” as described in the UCC, and that this Agreement shall create a security interest in favor of the Buyer as the purchaser of the Specified Assets. Notwithstanding such intent, if the arrangements with respect to the Specified Assets hereunder are deemed for any purpose to constitute a loan and not a purchase and sale or contribution of such Specified Assets, it is the intention of the parties hereto that this Agreement shall still constitute a security agreement under applicable law, and each Seller hereby grants to the Buyer a first priority perfected security interest in all of such Seller’s right, title and interest, whether now owned or hereafter acquired, in, to and under the Specified Assets, and all money, accounts, general intangibles, payment intangibles, chattel paper, instruments, documents, goods, supporting obligations, investment property, deposit accounts, securities accounts, certificates of deposit, letters of credit, letter-of-credit rights, and advices of credit consisting of, arising from or related to the Specified Assets, and all proceeds thereof, to secure its obligations hereunder, including its obligation to remit to the Seller, or its successors and assigns, all Collections of the Specified Assets and other proceeds of the Specified Assets.

SECTION 2.8 Addition of Sellers . Upon (i) the delivery to Issuer (as assignee of Buyer) of a performance guaranty by ALS, in form and substance acceptable to the Administrative Agent (acting at the direction of the Special Required Noteholders), guaranteeing the performance obligations of such Subsidiary of the Seller and (ii) with the prior written consent of the Special Required Noteholders in each instance, any Subsidiary of Seller may become a Seller hereunder and thereafter may sell to Buyer its Receivables, Equipment Loans, Related Security, Lockbox Accounts, Bank Accounts and Proceeds. Each Subsidiary of a Seller that is proposed to be added as a Seller shall give to each of the Buyer and all Third Party Financiers and Rating Agencies not less than ten (10) Business Days’ prior written notice of the effective date of the addition of the Subsidiary as a Seller. Once the notice has been given, any addition of a Subsidiary of Seller as a Seller pursuant to this section shall become effective on the first Business Day following the expiration of such ten (10) Business Day period (or such later date as may be specified in the notice) on which the Subsidiary and the parties hereto shall have executed and delivered the agreements, instruments and other documents and the amendments or other modifications to the Transaction Documents (including financing statements, lien searches and opinions), in form and substance reasonably satisfactory to each of the Buyer and each Third Party Financiers, that any of the foregoing reasonably determines are necessary or appropriate to effect the addition.

SECTION 2.9 [Reserved]

SECTION 2.10 Calculation of Purchase Price . With respect to (i) the Closing Date, (ii) each Purchase Date when Equipment Loans and Related Assets with respect thereto are transferred to Buyer from a Seller pursuant to Section 2.2 and (iii) each Receivables Settlement Period during which Receivables and Related Assets with respect thereto are transferred to Buyer from a Seller pursuant to Section 2.2 , the “ Purchase Price ” to be paid by the Buyer to such Seller on the Closing Date, such Purchase Date or the next following Receivables Settlement Date, as applicable, for the applicable Specified Assets that are Eligible Equipment Loans and/or Eligible Receivables, shall be determined in accordance with the following formula:

 

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SECTION 2.11 Definitions and Calculations Related to Purchase Price Percentage .

(a)(i) “ Purchase Price Percentage ” for any Receivables that are Eligible Receivables and are to be sold by a Seller on any day during a Settlement Period shall mean the percentage determined in accordance with the following formula:

 

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(ii) “ Purchase Price Percentage ” for any Equipment Loans that are Eligible Equipment Loans and are to be sold by a Seller on any day during a Settlement Period shall mean one-hundred percent (100%).

The Purchase Price Percentage, the Loss Discount and the Purchase Discount Reserve Ratio shall be recomputed by the Servicer on or prior to each Settlement Date as of the then most recent Cutoff Date, and shall become effective immediately after it becomes available and remain in effect until the next succeeding Settlement Date; provided , however , that if such data is not delivered on or prior to a Settlement Date, the Purchase Price Percentage, the Loss Discount and Purchase Discount Reserve Ratio which are then applicable shall remain effective until such revised information is delivered.

(b)(i) “ Loss Discount ” in effect during such Settlement Period means a percentage equal to the Default Ratio-Receivables (expressed as a percentage) for the Calculation Period ending immediately prior to the commencement of such Settlement Period.

(ii) “ Default Ratio-Receivables ” shall have the meaning set forth in Part I of Appendix A to the Pooling and Servicing Agreement.

(c) “ Purchase Discount Reserve Ratio ” for the Receivables to be sold on any day during a Settlement Period shall mean a percentage determined in accordance with the following formula:

 

 

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(d) “ Discount Rate ” for the Conveyed Assets to be sold or contributed on any day during a Settlement Period shall mean a percentage calculated to provide Buyer with a reasonable return on its investment in the Conveyed Assets after taking account of (i) the time value of money based upon the anticipated dates of collection of the Conveyed Assets and the cost to Buyer of financing its investment in the Conveyed Assets during such period and (ii) the costs of sub-servicing performed by the applicable Seller. A Seller and Buyer may agree from time to time to change the Discount Rate based on changes in the items affecting the calculation thereof, provided that any change to the Discount Rate shall take effect as of the commencement of a Settlement Period, shall apply only prospectively and shall not affect the Purchase Price payment in respect of Purchases which occurred during any Settlement Period ending prior to the Settlement Period during which such Seller and Buyer agree to make such change; and provided , further , that any adjusted Purchase Price calculation resulting from such adjustment shall be determined by the Seller and the Buyer to result in a Purchase Price that represents the then fair market value of such Conveyed Assets.

(e) The Discount Rate shall initially be 5%.

SECTION 2.12 Purchase Mechanics . (a) (i) To the extent Buyer has sufficient funds or Purchase Price Credits pursuant to clauses (A)  and (B)  below, then (x) on the first Funding Date, Buyer shall purchase from the Seller the Conveyed Assets that are Eligible Equipment Loans and Eligible Receivables transferred to Buyer on such date, (y) with respect to the Equipment Loans, the Buyer shall purchase from the Seller on each Purchase Date thereafter, the Conveyed Assets that are Eligible Equipment Loans and (z) with respect to Receivables, on each Receivables Settlement Date thereafter, Buyer shall make payment to the Seller for the transfers of the Conveyed Assets that are Eligible Receivables made on each Business Day in the immediately preceding Receivables Settlement Period, in each of cases (y) and (z), pursuant to Section 2.2 , and in each case on the terms and subject to the conditions of this Agreement, and Buyer shall pay to such Seller as the Purchase Price for the applicable Conveyed Assets as follows:

(A) make a cash payment to such Seller of such Purchase Price, to the extent that Buyer has cash available to make such payment pursuant to Section 2.14 ;

(B) if the Buyer does not have cash available to pay the full Purchase Price, automatically decrease the aggregate amount of then outstanding Purchase Price Credits with respect to such Seller, but not below zero;

(ii) To the extent the Buyer has insufficient funds or Purchase Price Credits pursuant to the foregoing clauses (A)  and (B)  above, then the Seller shall be deemed to have made a capital contribution to the Buyer in the amount of such deficiency (that is, in an amount equal to the difference between (x) an amount equal to the aggregate Purchase Price that would be payable for all Eligible Receivables or Eligible Equipment Loans, as applicable, transferred on the applicable Purchase Date, or during the applicable

 

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Receivables Settlement Period, had they all been sold for cash and Purchase Price Credits (such amount, the “ Total Consideration ”) less (y) the Purchase Price actually paid (whether in the form of cash or Purchase Price Credits) for all Eligible Receivables or Eligible Equipment Loans, as applicable, transferred on such Purchase Date or during the applicable Receivables Settlement Period, as applicable) on the first Funding Date or on any such Purchase Date or Receivables Settlement Date, as applicable, with respect to the remainder of the Conveyed Assets that are Eligible Receivables and Eligible Equipment Loans, pursuant to Section 2.2 on the terms and subject to the conditions of this Agreement.

(b) The Seller shall be deemed to have made a capital contribution to the Buyer on the first Funding Date and on each Purchase Date or Receivables Settlement Date, as applicable, of the Conveyed Assets that are not Eligible Receivables or Eligible Equipment Loans.

(c) If on any Business Day, either of the following conditions shall apply:

(A) the Unpaid Balance of a Purchased Receivable is (i) reduced as a result of any defective goods or services or a cash discount, (ii) reduced or canceled as a result of a setoff in respect of any claim by any Person (whether such claim arises out of the same or a related transaction or an unrelated transaction and whether such claim relates to a Seller or any Affiliate thereof), or (iii) otherwise reduced as a result of any Dilution; or

(B) any of the Buyer, the Administrative Agent, or the Required Noteholders reasonably determine that any Purchased Receivable that was identified on the related Funding Date Data Pool Report as an Eligible Receivable or the associated Related Asset failed to comply with the representations set forth in Section 3.1 on the Purchase Date on which such Purchased Receivable was transferred by the Seller to the Buyer (if a Purchased Receivable is remedied under this clause (B) , then the remedy under clause (A)  shall not apply),

then, in either such instance, the Buyer shall be entitled to a reduction in the then unpaid Purchase Price otherwise payable to the applicable Seller (such reduction in the unpaid Purchase Price, a “ Purchase Price Credit ”) in an amount equal to (i) in the case of clause (A)  above, the full amount of such reduction, setoff or cancellation in the Unpaid Balance of such Purchased Receivable, and (ii) in the case of clause (B)  above, the Unpaid Balance of such non-conforming Purchased Receivable on the date such Purchase Price Credit is determined (the applicable amount set forth in clause (i)  or (ii) , the “ Receivables Credit Amount ”). The applicable Seller may, at its option, at any time prior to the Receivables Conversion Date elect to remedy the events described in clause (A)  or (B)  above by remitting to the Issuer (as assignee of the Buyer) cash in an amount equal to the unpaid Receivables Credit Amount.

Notwithstanding the foregoing, the applicable Seller shall remit to the Issuer (as assignee of the Buyer): (x) on the Receivables Conversion Date, cash in an amount equal to the sum of all then unpaid Receivables Credit Amounts calculated as of the Receivables Conversion Date and (y) on each Business Day after the Receivables Conversion Date, cash in an amount

 

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equal to all unpaid Receivables Credit Amounts that result from events or conditions that occur or exist (or are discovered) subsequent to the Receivables Conversion Date and with respect to which payment has not already been made pursuant to this sentence.

(d) If on any Business Day, any of the Buyer, the Issuer, the Administrative Agent, or the Required Noteholders reasonably determines that any Purchased Equipment Loan that was identified as an Eligible Equipment Loan on the related Funding Date Data Pool Report or the associated Related Assets failed to comply with the representations set forth in Section 3.1 on the Purchase Date on which such Purchased Equipment Loan was transferred by such Seller to Buyer, then , the Seller shall, at its election, either repurchase the affected Purchased Equipment Loans for the Purchase Price equal to the Warranty Payment for such Loan or provide the Buyer (or the Issuer as its assignee) with a Substitute Loan, at the times and in accordance with the procedures set forth in Section 2.12 or 2.13 as applicable of the Pooling and Servicing Agreement.

SECTION 2.13 [ Reserved ]

SECTION 2.14 Application of Collections and Other Funds . If, on any day, Buyer receives payments from the Trust as permitted by the Indenture, Buyer shall apply the funds as follows:

(a) first , to pay its existing expenses and to set aside funds for the payment of expenses that are then accrued (in each case to the extent such expenses are permitted to exist under the applicable Third Party Documents);

(b) second , to pay the unpaid Purchase Price pursuant to Section 2.12 for the applicable Conveyed Assets and Related Assets which were purchased by Buyer from the Sellers on such day; and

(c) third , if Buyer shall elect, to declare and pay distributions to ALS, in its capacity as the sole member of Buyer, to the extent permitted by law.

SECTION 2.15 Servicing of Conveyed Assets and Related Assets . Consistent with Buyer’s ownership of the Specified Assets, as between the parties to this Agreement, Buyer shall have the sole right to service, administer and collect the Specified Assets and to assign and delegate such right to others.

SECTION 2.16 Payments and Computations, Etc . (a) All amounts to be paid by a Seller to Buyer hereunder shall be paid in accordance with the terms hereof no later than 11:30 a.m., New York City time, on the day when due in Dollars in immediately available funds to an account that Buyer shall from time to time specify in writing. Payments received by Buyer after such time shall be deemed to have been received on the next Business Day. In the event that any payment becomes due on a day that is not a Business Day, then the payment shall be made on the next Business Day. Each Seller shall, to the extent permitted by law, pay to Buyer, on demand, interest on all amounts not paid when due hereunder at 2% per annum above the Base Rate plus the Applicable Margin (as each such term is defined in the Pooling and Servicing Agreement) on the date the payment was due; provided , however , that the interest rate shall not at any time exceed the maximum rate permitted by applicable law. All computations of interest payable hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed.

 

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(b) All amounts to be paid by Buyer to a Seller hereunder shall be paid no later than 3:00 p.m., New York City time, on the day when due in Dollars in immediately available funds to an account that Seller shall from time to time specify in writing. Payments received by such Seller after such time shall be deemed to have been received on the next Business Day. In the event that any payment becomes due on a day that is not a Business Day, then such payment shall be made on the next Business Day.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

SECTION 3.1 Representations and Warranties of the Sellers . Each Seller severally makes the following representations and warranties for the benefit of the Buyer, the Issuer and the Third Party Financiers as to each Seller and as to the Specified Assets on which Buyer relies in accepting such Specified Assets. Unless otherwise provided below, such representations and warranties speak as of the Closing Date and each Purchase Date, Receivables Settlement Date and Funding Date for each Seller for the Specified Assets to be acquired or settled on such date, and shall survive the sale, transfer and assignment of such Specified Assets to Buyer and the subsequent assignment and transfer thereof to the Issuer:

(a) Organization and Good Standing . Seller has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted, and had at all relevant times, and now has, power, authority and legal right to acquire and own the Specified Assets;

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

(c) Power and Authority . Seller has the power and authority to execute and deliver this Agreement and to carry out its terms; Seller has full power and authority to sell and assign the Specified Assets to Buyer, has duly authorized such sale and assignment to Buyer by all necessary limited liability company action; and the execution, delivery and performance of this Agreement have been duly authorized by Seller by all necessary limited liability company action;

(d) Valid Sale; Binding Obligation . This Agreement, together with the delivery of a Funding Date Data Pool Report, when duly executed and delivered, shall constitute a valid sale, transfer and assignment of the Specified Assets specified therein, enforceable against creditors of Seller; and this Agreement, together with the applicable Funding Date Data Pool Report, when duly executed and delivered, shall constitute a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its respective terms, except as

 

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enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law;

(e) No Violation . The consummation of the transactions contemplated by this Agreement and any Funding Date Data Pool Report, and the fulfillment of the terms of this Agreement and any Funding Date Data Pool Report, shall not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time, or both) a default under, the limited liability company agreement of Seller, or any indenture, agreement, mortgage, deed of trust or other instrument to which Seller is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement, mortgage, deed of trust or other instrument (other than this Agreement or any other Transaction Document), or violate any law (including without limitation any bulk sales, tax or similar laws) or, to Seller’s knowledge, any order, rule or regulation applicable to Seller of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over Seller or any of its properties;

(f) No Proceedings . There are no proceedings or, to Seller’s knowledge, investigations pending or, to Seller’s knowledge, threatened, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over Seller or its properties (i) asserting the invalidity of this Agreement or any other Transaction Document, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document, or (iii) seeking any determination or ruling that might materially and adversely affect the performance by Seller of its obligations under, or the validity or enforceability of, this Agreement or any other Transaction Document;

(g) No Consent . No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is required in connection with the execution, delivery and performance by Seller of this Agreement or any other Transaction Document or the consummation by Seller of the transactions contemplated hereby or thereby except as expressly contemplated herein or therein;

(h) Due Execution and Delivery . This Agreement and each of the other Transaction Documents to which it is a party have been duly executed and delivered on behalf of Seller;

(i) Ability to Perform . No event has occurred which materially and adversely affects Seller’s operations or its ability to perform its obligations under this Agreement or any other Transaction Document to which it is a party;

(j) Insolvency . Seller (i) is not insolvent and will not be rendered insolvent by the transactions contemplated by this Agreement or any other Transaction Document and has an adequate amount of capital to conduct its business in the ordinary course and to carry out its obligations hereunder, (ii) shall not intend to incur or believe that it shall incur debts that would be beyond its ability to pay as such debts mature, (iii) shall not make such transfer with actual

 

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intent to hinder, delay or defraud any Person, and (iv) shall not have assets that constitute unreasonably small capital to carry out its business as then conducted. Seller does not contemplate the commencement of insolvency, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official with respect to it or any of its assets. Seller is not selling or transferring the Specified Assets with any intent to hinder, delay or defraud its creditors;

(k) UCC Information . As of the initial Funding Date, the information set forth on Schedule 3.1(k) is true, correct and complete in all material respects;

(l) [ Reserved ]

(m) Release of Lien . Each transfer of Conveyed Assets and Related Assets satisfies the requirements for release of all liens thereon set forth in the Credit Agreement, and all transfers shall satisfy the requirements for release set forth in any successor facility to the Credit Agreement;

(n) Eligible Equipment Loans and Eligible Receivables . On the Closing Date or subsequent Purchase Date of Conveyed Assets hereunder from such Seller, each such Conveyed Asset identified as an Eligible Equipment Loan or Eligible Receivable in the related Funding Date Data Pool Report, is an Eligible Equipment Loan or Eligible Receivable, as the case may be;

(o) Accuracy of Information . All written information furnished by, or on behalf of, such Seller to Buyer or any Third Party Financier pursuant to or in connection with any Transaction Document, or any transaction contemplated herein or therein, does not and shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made not misleading, in each case on the date the statement was made and in light of the circumstances under which the statements were made or the information was furnished;

(p) Lockbox Banks and Payment Instructions . The names and addresses of all the banks, together with the account numbers of the accounts at such banks (and all related lockboxes and post office boxes), into which Collections are paid as of the Closing Date are set forth in Schedule 3.1(p) ; such banks, accounts, lockboxes and post office boxes constitute all of the Lockbox Banks and Lockbox Accounts as of the Closing Date, and all of such Lockbox Accounts are subject to Lockbox Agreements;

(q) [ Reserved ]

(r) [ Reserved ]

(s) Taxes . Such Seller has filed all Federal income tax returns and all other material tax returns (including, without limitation, any bulk sales or similar tax returns) that are required to be filed by it whether in connection with this transaction or otherwise and has paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except for any such taxes or assessments, if any, that are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves in conformity with GAAP have been provided. No Tax Lien has been filed, and, to the knowledge of such Seller, no claim is being asserted, with respect to any such tax or assessment;

 

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(t) Margin Regulations . No use of any funds obtained by Seller under this Agreement will conflict with or contravene any of Regulations T, U and X promulgated by the Federal Reserve Board from time to time;

(u) Investment Company Act; Other Regulations . Such Seller is not an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended. Such Seller is not subject to regulation under any Federal or state statute or regulation which limits its ability to incur indebtedness;

(v) No Adverse Selection . No Purchased Equipment Loan is selected on any basis intended to adversely affect the value of any Third Party Financier’s right and interest under the applicable Third Party Documents;

(w) ERISA . As of the date hereof and as of each Purchase Date: (i) each of ALS and its ERISA Affiliates is in compliance in all material respects with the applicable provisions of ERISA and the Code and regulations and published interpretations thereunder, and (ii) no ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events, could reasonably be expected to result in a Material Adverse Effect;

(x) [ Reserved ]

(y) [ Reserved ]

(z) Conformity with Seller Policies . All Specified Assets (other than those not identified as Eligible Receivables or Eligible Equipment Loans) were originated in the ordinary course of business and in conformity with the Credit and Collection Policies of such Seller as in effect at such time; and

(aa) Security Interest Representations .

(i) In the event that the transfer of the Specified Assets pursuant to the terms of this Agreement is held not to constitute a “true sale” or “true contribution,” this Agreement creates a valid and continuing security interest (as defined in the UCC) in the Specified Assets in favor of the Buyer, which security interest is prior to all other Liens, and is enforceable as such as against creditors of and purchasers from the Seller;

(ii) The Purchased Receivables constitute “accounts” within the meaning of the applicable UCC. The Purchased Equipment Loans constitute “tangible chattel paper” within the meaning of the applicable UCC. The Equipment constitutes “equipment” and not “fixtures” under the UCC. The Equipment Notes constitute “instruments” within the meaning of the applicable UCC;

 

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(iii) Immediately prior to the conveyance of the Specified Assets set forth in this Agreement, the Seller was the sole owner of such Specified Assets and owned and had good and marketable title to the Specified Assets, free and clear of any Lien, claim or encumbrance of any Person (whether senior, junior or pari passu ) except for any Permitted Adverse Claim; provided , however , that the Seller makes no representation regarding the availability of a willing buyer for the Specified Assets.

(iv) The Seller has caused the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Specified Assets granted to the Buyer and assigned to the Issuer (and the Indenture Trustee as assignee of the Issuer). All financing statements filed against the Seller in favor of the Buyer in connection herewith describing the Specified Assets contain a statement to the following effect: “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Buyer, the Issuer and the Indenture Trustee (as assignee of the Issuer)”;

(v) The Seller has not pledged, assigned, sold, granted a security interest in or otherwise conveyed any of the Specified Assets except for Permitted Adverse Claims. The Seller has not authorized the filing of, and is not aware of, any financing statements or documents of similar import against the Seller that include a description of collateral covering the Specified Assets other than any financing statement or document of similar import (i) relating to the security interest granted to the Buyer and assigned to the Issuer (and the Indenture Trustee as assignee of the Issuer) or (ii) that has been terminated. The Seller is not aware of any judgment or tax lien filings against the Seller;

(vi) The Seller or the Indenture Trustee has received a written acknowledgement from the Custodian that the Custodian is holding the only originally executed counterpart of each Equipment Note and the related security agreement on behalf of, and for the benefit of, the Indenture Trustee and is subject to the Custodian’s customary security and safekeeping procedures;

(vii) None of the Equipment Notes or Equipment Loans have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Buyer’s and the Issuer’s assignee, the Indenture Trustee; and other than any holder of an Adverse Claim to be released simultaneously with the Purchase by the Buyer hereunder; and

(viii) The Seller has received all necessary consents and approvals required by the terms of the Specified Assets to pledge to the Buyer of its interest and rights in such Specified Assets hereunder, under the Pooling and Servicing Agreement or the Indenture.

(bb) Representations With Respect to the Equipment Loans . Each Equipment Loan contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for realization against the collateral of the benefits of the security;

 

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(cc) Compliance With Law . All requirements of applicable federal, state and local laws, and regulations thereunder, including the Equal Credit Opportunity Act, the Federal Reserve Board’s Regulation “B,” the Soldiers’ and Sailors’ Civil Relief Act of 1940, and any applicable bulk sales or bulk transfer law and other equal credit opportunity and disclosure laws, in respect of any of the Equipment Loans, have been complied with in all material respects, and each such Equipment Loan and the sale of each item of Equipment evidenced thereby complied at the time it was originated or made and now complies in all material respects with all legal requirements of the jurisdiction in which it was originated or made;

(dd) Binding Obligation . Each Equipment Loan is non-cancelable, in full force and effect and is the genuine, legal, valid and binding payment obligation in writing of the Obligor thereon, enforceable against the Obligor in accordance with its terms and the obligations of the related Obligor under such Equipment Loan are irrevocable and unconditionally payable, except as may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors’ rights in general and by equity, regardless of whether such enforceability is considered in a proceeding in equity or at law;

(ee) Equipment Loans In Force . The obligations of an Obligor under any Equipment Loan have not been satisfied, subordinated or rescinded, and the Equipment securing any Equipment Loan has not been released from the Lien of the related Loan in whole or in part;

(ff) No Liens . There are, to ALS’s knowledge, no Liens or claims that have been filed for work, labor or materials affecting any Equipment securing any Equipment Loan that are or may be prior to, or equal or pari passu with, the security interest in the Equipment granted by the Equipment Loan;

(gg) Default . There has been no default, breach, violation or event permitting acceleration under the terms of any Equipment Loan, and no event has occurred and is continuing that with notice or the lapse of time (or both) would constitute a default, breach, violation or event permitting acceleration under the terms of any Equipment Loan, and ALS has not waived any of the foregoing, in each case except for payments on any Equipment Loans which are not more than sixty (60) days past due (measured from the date of any Scheduled Payment) as of the applicable Purchase Date;

(hh) Lawful Assignment . No Equipment Loan was originated in, or is subject to the laws of, any jurisdiction the laws of which would make unlawful the sale, transfer and assignment of such Equipment Loan under this Agreement or the Pooling and Servicing Agreement; and

(ii) Fair Consideration . The consideration received by each Seller hereunder with respect to the assets sold hereunder to Buyer is fair consideration having value reasonably equivalent to the value of the Specified Assets sold by it and the performance of its obligations hereunder.

The representations and warranties set forth in this Section 3.1 shall survive until the Indenture is terminated in accordance with its terms; provided that to the extent such representations and warranties relate to the Purchased Receivables and the Related Assets with respect thereto, such representations and warranties shall survive only until the Receivables Payoff Date. Any breaches of the representations and warranties set forth in this Section 3.1 may be waived only

 

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upon prior written notice to the Rating Agencies and consent of the Required Noteholders unless such waiver would amount to a waiver of an Event of Default under Section 5.1(e) of the Indenture or a Servicer Default under Section 9.01(q) of the Pooling and Servicing Agreement, which, in either such case, any such waiver shall require consent of the Special Required Noteholders.

SECTION 3.2 Representations and Warranties of Buyer . Buyer hereby makes the following representations and warranties for the benefit of the Sellers, the Issuer and each Third Party Financier as of the Closing Date and each Purchase Date:

(a) Organization and Good Standing . Buyer has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted, and had at all relevant times, and now has, power, authority and legal right to acquire and own the Specified Assets;

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

(c) Power and Authority . Buyer has the power and authority to execute and deliver this Agreement and to carry out its terms and the execution, delivery and performance of this Agreement have been duly authorized by Buyer by all necessary limited liability company action;

(d) No Violation . The consummation by Buyer of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party, and the fulfillment of the terms of this Agreement and the other Transaction Documents to which it is a party, shall not conflict with, result in any breach of any of the terms and provisions of or constitute (with or without notice or lapse of time) a default under, the limited liability company agreement of Buyer, or any indenture, agreement, mortgage, deed of trust or other instrument to which Buyer is a party or by which it is bound, or result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than this Agreement, or any other Transaction Document to which it is a party), or violate any law or, to Buyer’s knowledge, any order, rule or regulation applicable to Buyer of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over Buyer or any of its properties;

(e) No Proceedings . There are no proceedings or, to Buyer’s knowledge, investigations pending or, to Buyer’s knowledge, threatened, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality having jurisdiction over Buyer or its properties (i) asserting the invalidity of this Agreement or any other Transaction Document to which it is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which it is a party or (iii) seeking any determination or ruling that might materially and adversely affect the performance by Buyer of its obligations under, or the validity or enforceability of, this Agreement or any other Transaction Document to which it is a party;

 

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(f) Binding Obligation . This Agreement shall constitute a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law;

(g) No Consent . No permit, consent, approval or authorization of, or declaration to or filing with, any governmental authority is required in connection with the execution, delivery and performance by Buyer of this Agreement, or the consummation by Buyer of the transactions contemplated hereby except as expressly contemplated herein; and

(h) Insolvency . Buyer (i) is not insolvent and will not be rendered insolvent by the transactions contemplated by this Agreement or any other Transaction Document and has an adequate amount of capital to conduct its business in the ordinary course and to carry out its obligations hereunder, (ii) shall not intend to incur or believe that it shall incur debts that would be beyond its ability to pay as such debts mature, (iii) shall not make such transfer with actual intent to hinder, delay or defraud any Person and (iv) shall not have assets that constitute unreasonably small capital to carry out its business as then conducted. Buyer does not contemplate the commencement of insolvency, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official with respect to it or any of its assets.

ARTICLE IV.

CONDITIONS

SECTION 4.1 Conditions to Obligation of Buyer . The obligation of Buyer to purchase or acquire Specified Assets hereunder on the Closing Date or any Purchase Date, as the case may be, is subject to the satisfaction of the following conditions:

(a) Representations and Warranties True . The representations and warranties of Seller in Section 3.1 shall be true and correct as of the Closing Date or Purchase Date, as the case may be, with the same effect as if then made, and Seller shall have performed all obligations to be performed by it hereunder on or prior to the Closing Date or such Purchase Date, as the case may be.

(b) No Events . No Rapid Amortization Event, Servicer Default, Default or Event of Default shall have occurred on or prior to such Purchase Date.

(c) Computer Files Marked . In accordance with the Pooling and Servicing Agreement, the Servicer shall, on or prior to the related Purchase Date (i) cause the Contract Management System to be marked with a specified code (the “ Contract Management Code ”) to show that the Conveyed Assets have been assigned and transferred in accordance with this Agreement and the related PA Assignment, and (ii) prepare and hold in its capacity as Servicer on behalf of the Issuer and the Indenture Trustee the Schedule of Loans and Schedule of Receivables.

 

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(d) Documents to be Delivered By Seller .

(i) PA Assignments . On or prior to the Closing Date, the Seller shall have executed and delivered to the Buyer, an Initial PA Assignment, and on or prior to each Purchase Date thereafter on which Purchased Equipment Loans and Related Assets with respect thereto are to be transferred to the Buyer, Seller shall have executed and delivered to Buyer a Subsequent PA Assignment with r