REVOLVING CREDIT AGREEMENT

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

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

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

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

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

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

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

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

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

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

Section 1.1.         Certain Defined Terms.

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

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

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

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

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

“Administrative Agent”: Defined in the Preamble.

“Advance”: Defined in Section 2.1(a).

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

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

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

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

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

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

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

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

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

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

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

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

“Backup Servicer”: Defined in the Preamble.

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

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

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

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

“Bailee”: Defined in Section 8.2(b).

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

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

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

“Borrower”: Defined in the Preamble.

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

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

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

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

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

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

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

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

“Change of Control”: Any of the following:

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

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

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

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

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

“Closing Date”: December 19, 2008.

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

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

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

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

(iii)            all income and Proceeds of the foregoing.

“Collateral Custodian”: Defined in the Preamble.

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

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

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

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

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

“Collection Account Bank”: Defined in the Preamble.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“Errors”: Defined in Section 6.14(g).

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

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

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

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

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

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

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

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

“Facility Amount”: As of any date, an amount equal to (i) the Advances Outstanding, plus (ii) all due and unpaid Interest, Unused Fees, Make-Whole Fees, Early Termination Fees and Breakage Costs (including, without limitation, all Indemnified Amounts, other amounts payable under Article XI and amounts required to be paid under Section 2.7, Section 2.8, Section 2.12 and Section 2.13 to any Indemnified Party).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“Indemnified Amounts”: Defined in Section 11.1.

“Indemnified Parties”: Defined in Section 11.1.

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

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

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

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

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

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

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

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

IRxPx 1

 D

where:

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

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

D           =           360;

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

where:

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

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

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

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

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

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

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

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

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

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

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

“Lender”: Defined in the Preamble.

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

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

“LIBOR Rate”: For any day during any Accrual Period and any Advance, or portion thereof, a per annum interest rate equal to:

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

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

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

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

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

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

“Liquidity Agent”: Defined in the Preamble.

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

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

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

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

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

“Lockbox”: Defined in the Lockbox Agreement.

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

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

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

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

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

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

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

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

“Maximum Advance Rate”: 80%.

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

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

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

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

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

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

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

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

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

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

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

“Originator”: Defined in the Preamble.

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

(e)            notes that are payable on demand or bankers’ acceptances issued by any depository institution or trust company referred to in clause (b) above;

(h)            Eligible Repurchase Obligations with a rating from Moody’s of “P-1”, S&P of“A-1”, and Fitch of“F-1+”; or

(i)            each Permitted Investment that may be purchased by or through the Collateral Custodian or its Affiliates.

“Powersports Vehicles”: (i) Motorcycles having an engine size/displacement equal to or in excess of 5 50cc, (ii) all-terrain vehicles having a four-stroke engine, and (iii) select Scooters.

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

“Regulation U”: Regulation U of the Board of Governors of the Federal Reserve System, 12 C.F.R. §22 1, or any successor regulation.

(b)            the Required Loan Files and Servicing Files related to the Receivables and all Records;

(c)            all Insurance Policies with respect to any Receivable;

(d)            the Accounts, together with all cash and investments therein;

(e)            the Sale Agreement (including, without limitation, rights of recovery of the Borrower against the Originator);

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

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

“Reporting Date”: The date that is five (5) Business Days prior to each Payment Date, or, if such day is not a Business Day, the immediately preceding Business Day.

(a)            the Underlying Instruments evidencing such Receivable (including any amendments thereto);

(b)            a true and complete copy of each related guaranty or security agreement;

(f)            the credit file relating to such Receivable and the related Obligor (including the FICO score of the related Obligor); and

“Revolving Period”: The period commencing on the Closing Date and ending on the day preceding the Termination Date.

“S&P”: Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

“Sale Agreement”: The Purchase and Contribution Agreement, dated as of the date hereof, between the Originator and the Borrower.

“Secured Party”: (i) Each Lender, (ii) the Administrative Agent and (iii) each Liquidity Bank.

“Securities Act”: The U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Securities and Exchange Commission”: The U.S. Securities and Exchange Commission.

“Servicing File”: For each Receivable, copies of each of the documents included in the Required Loan File definition.

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

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

(c)            reference to any gender includes each other gender;

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

(e)            reference to any time means New York City time;

ARTICLE II

THE FACILITY

(a)            No later than 11:00 a.m. two (2) Business Days prior to the related Funding Date, the Borrower (or the Servicer on its behalf) shall deliver:

(ii)            to the Administrative Agent, a wire disbursement and authorization form, to the extent not previously delivered; and

(6)            to the Lenders, in an amount equal to (if any) the positive difference between the Advances Outstanding on such Payment Date over the Borrowing Base;

(1)            to any Hedge Counterparty, if applicable, amounts due under any outstanding Hedging Agreement (other than breakage costs);

(6)            to the Administrative Agent, for the account of each applicable Lender, in an amount necessary to reduce the Advances Outstanding to zero;

ARTICLE III

CONDITIONS TO CLOSING AND ADVANCES

(d)            The Borrower and the Servicer shall have delivered to the Administrative Agent duly executed Powers of Attorney in the form of Exhibits F-1 and F-2, as applicable;

(i)            The Servicer shall have delivered a sample Servicing File to the Administrative Agent which shall be reasonably satisfactory to the Administrative Agent;

(k)            The Borrower shall have delivered to the Administrative Agent executed copies of (i) the Lienholder Nominee Agreement prior to the initial Funding Date and (ii) an ISDA master agreement (and related schedule) with a Hedge Counterparty to be used to govern any confirmations to be entered into on the initial Funding Date.

(iii)            On and as of such day, after giving effect to such Transaction, the Availability shall be greater than or equal to $0;

(iv)            No Applicable Law shall prohibit or enjoin such Transaction; and

(v)             The Originator is in compliance with each of the financial covenants set forth in Sections 5.4(q), (u), (v), (w) and (x).

(f)            On the date of such Transaction, the Administrative Agent shall have received such other opinions or documents as the Administrative Agent may reasonably require;

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

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