Exhibit 10.42


 


SECOND
AMENDED AND RESTATED


AGREEMENT
FOR WHOLESALE FINANCING


 


between


GE
COMMERCIAL DISTRIBUTION FINANCE CORPORATION


 


as Lender


 


 


and


 


 


TITAN
MACHINERY INC.


 


as Borrower


 


March 12,
2010


 

















 


TABLE OF
CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Effective Date

  	
   

  	
  1

  
	
  2.

  	
  Amendment and Restatement; Reaffirmation

  	
   

  	
  1

  
	
  3.

  	
  Assignment

  	
   

  	
  2

  
	
  4.

  	
  Definitions; Rules of Construction; Borrowing Agent; Patriot Act

  	
   

  	
  2

  
	
   

  	
  4.1.

  	
  Listed
  Definitions

  	
   

  	
  2

  
	
   

  	
  4.2.

  	
  Other
  Definitions

  	
   

  	
  2

  
	
   

  	
  4.3.

  	
  References to
  Borrower

  	
   

  	
  2

  
	
   

  	
  4.4.

  	
  References to
  Covered Person

  	
   

  	
  2

  
	
   

  	
  4.5.

  	
  Accounting Terms

  	
   

  	
  2

  
	
   

  	
  4.6.

  	
  Meaning of
  Satisfactory

  	
   

  	
  2

  
	
   

  	
  4.7.

  	
  Computation of
  Time Periods

  	
   

  	
  2

  
	
   

  	
  4.8.

  	
  General

  	
   

  	
  3

  
	
   

  	
  4.9.

  	
  Patriot Act
  Notification

  	
   

  	
  3

  
	
  5.

  	
  Lender’s Credit Facilities

  	
   

  	
  3

  
	
   

  	
  5.1.

  	
  Floorplan Loan
  Facility

  	
   

  	
  3

  
	
   

  	
   

  	
  5.1.1.

  	
  Floorplan Loan
  Facility Generally

  	
   

  	
  3

  
	
   

  	
   

  	
  5.1.2.

  	
  Operation of
  Floorplan Loan Facility

  	
   

  	
  4

  
	
   

  	
   

  	
  5.1.3.

  	
  Floorplan Loan
  Approvals

  	
   

  	
  4

  
	
   

  	
   

  	
  5.1.4.

  	
  Inventory not
  Available for Floorplan Loans

  	
   

  	
  4

  
	
   

  	
   

  	
  5.1.5.

  	
  New Inventory

  	
   

  	
  4

  
	
   

  	
   

  	
  5.1.6.

  	
  Used Inventory

  	
   

  	
  5

  
	
   

  	
   

  	
  5.1.7.

  	
  Requirements for
  Every Advance Request.

  	
   

  	
  5

  
	
   

  	
   

  	
  5.1.8.

  	
  Termination of
  Floorplan Loan Facility

  	
   

  	
  5

  
	
   

  	
   

  	
  5.1.9.

  	
  Repurchase
  Agreements

  	
   

  	
  6

  
	
   

  	
   

  	
  5.1.10.

  	
  Existing
  Transaction Statements and Approvals

  	
   

  	
  6

  
	
   

  	
   

  	
  5.1.11.

  	
  LKE Inventory

  	
   

  	
  6

  
	
   

  	
  5.2.

  	
  Increase in
  Floorplan Loan Facility

  	
   

  	
  6

  
	
   

  	
  5.3.

  	
  Termination

  	
   

  	
  7

  
	
  6.

  	
  Interest; Yield Protection

  	
   

  	
  7

  
	
   

  	
  6.1.

  	
  Interest on the
  Floorplan Loan

  	
   

  	
  7

  
	
   

  	
  6.2.

  	
  Interest on
  Floorplan Loans

  	
   

  	
  9

  
	
   

  	
  6.3.

  	
  Adjusted LIBOR
  Rate

  	
   

  	
  9

  
	
   

  	
  6.4.

  	
  Time of Accrual

  	
   

  	
  9

  
	
   

  	
  6.5.

  	
  Computation

  	
   

  	
  9

  
	
   

  	
  6.6.

  	
  Rate After
  Maturity and Rate After An Event of Default

  	
   

  	
  9

  
	
   

  	
  6.7.

  	
  Taxes

  	
   

  	
  9

  
	
   

  	
  6.8.

  	
  Compensation for
  Increased Costs and Reduced Returns; Capital Adequacy

  	
   

  	
  10

  
	
   

  	
  6.9.

  	
  Usury

  	
   

  	
  11

  
	
  7.

  	
  Payments

  	
   

  	
  11

  
	
   

  	
  7.1.

  	
  Scheduled
  Payments on Loans; Applications to Loans

  	
   

  	
  11

  
	
   

  	
   

  	
  7.1.1.

  	
  Interest

  	
   

  	
  11

  
	
   

  	
   

  	
  7.1.2.

  	
  Principal

  	
   

  	
  11

  
	
   

  	
   

  	
  7.1.3.

  	
  Maturity

  	
   

  	
  11

  
	
   

  	
  7.2.

  	
  Prepayments

  	
   

  	
  12

  
	
   

  	
   

  	
  7.2.1.

  	
  Voluntary
  Prepayments

  	
   

  	
  12

  



 


i

















 


	
   

  	
   

  	
  7.2.2

  	
  Mandatory
  Prepayments

  	
   

  	
  12

  
	
   

  	
   

  	
  7.2.3

  	
  Other Mandatory
  Prepayments

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
  7.2.3.1

  	
  Insurance
  Proceeds

  	
   

  	
  12

  
	
   

  	
  7.3.

  	
  Manner of
  Payments and Timing of Application of Payments

  	
   

  	
  12

  
	
   

  	
   

  	
  7.3.1

  	
  Payment
  Requirement

  	
   

  	
  12

  
	
   

  	
   

  	
  7.3.2

  	
  Application of
  Payments and Proceeds

  	
   

  	
  12

  
	
   

  	
   

  	
  7.3.3

  	
  Interest
  Calculation

  	
   

  	
  13

  
	
   

  	
  7.4.

  	
  Returned
  Instruments

  	
   

  	
  13

  
	
   

  	
  7.5.

  	
  Compelled Return
  of Payments or Proceeds

  	
   

  	
  13

  
	
   

  	
  7.6.

  	
  Due Dates Not on
  Business Days

  	
   

  	
  13

  
	
  8.

  	
  Procedure for Obtaining Advances

  	
   

  	
  13

  
	
   

  	
  8.1.

  	
  Initial Advances

  	
   

  	
  13

  
	
   

  	
  8.2.

  	
  Subsequent
  Floorplan Loan Advances

  	
   

  	
  13

  
	
   

  	
   

  	
  8.2.1

  	
  Lender’s Right
  to Make Other Certain Advances

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
  8.2.1.1

  	
  Payment of Loan
  Obligations

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
  8.2.1.2

  	
  Payments to
  Other Creditors

  	
   

  	
  14

  
	
   

  	
  8.3.

  	
  Disbursement

  	
   

  	
  14

  
	
   

  	
  8.4.

  	
  Restrictions on
  Advances

  	
   

  	
  14

  
	
   

  	
  8.5.

  	
  Each Advance
  Request a Certification

  	
   

  	
  14

  
	
   

  	
  8.6.

  	
  Requirements for
  Every Advance Request

  	
   

  	
  14

  
	
   

  	
  8.7.

  	
  Exoneration of
  Lender

  	
   

  	
  14

  
	
  9.

  	
  Security Interest in Personal Property Collateral; Security

  	
   

  	
  15

  
	
   

  	
  9.1.

  	
  Grant of
  Security Interest; Landlord Consents

  	
   

  	
  15

  
	
  10.

  	
  Power of Attorney

  	
   

  	
  15

  
	
  11.

  	
  Conditions of Lending

  	
   

  	
  16

  
	
   

  	
  11.1.

  	
  Conditions to
  Initial Advance

  	
   

  	
  16

  
	
   

  	
   

  	
  11.1.1

  	
  Listed Documents
  and Other Items

  	
   

  	
  16

  
	
   

  	
   

  	
  11.1.2

  	
  Financial
  Condition

  	
   

  	
  16

  
	
   

  	
   

  	
  11.1.3

  	
  Default

  	
   

  	
  16

  
	
   

  	
   

  	
  11.1.4

  	
  Perfection of
  Security Interests

  	
   

  	
  16

  
	
   

  	
   

  	
  11.1.5

  	
  Representations
  and Warranties

  	
   

  	
  16

  
	
   

  	
   

  	
  11.1.6

  	
  Material Adverse
  Change

  	
   

  	
  16

  
	
   

  	
   

  	
  11.1.7

  	
  Pending Material
  Proceedings

  	
   

  	
  16

  
	
   

  	
   

  	
  11.1.8

  	
  Payment of Fees

  	
   

  	
  17

  
	
   

  	
   

  	
  11.1.9

  	
  Other Items

  	
   

  	
  17

  
	
   

  	
  11.2.

  	
  Conditions to
  Subsequent Advances

  	
   

  	
  17

  
	
   

  	
   

  	
  11.2.1

  	
  General
  Conditions

  	
   

  	
  17

  
	
   

  	
   

  	
  11.2.2

  	
  Representations
  and Warranties

  	
   

  	
  17

  
	
   

  	
   

  	
  11.2.3

  	
  Approvals

  	
   

  	
  17

  
	
   

  	
   

  	
  11.2.4

  	
  Default

  	
   

  	
  17

  
	
   

  	
   

  	
  11.2.5

  	
  Releases or
  Intercreditor Agreements

  	
   

  	
  17

  
	
  12.

  	
  Representations and Warranties

  	
   

  	
  17

  
	
   

  	
  12.1.

  	
  Organization and
  Existence

  	
   

  	
  17

  
	
   

  	
  12.2.

  	
  Authorization

  	
   

  	
  18

  
	
   

  	
  12.3.

  	
  Due Execution

  	
   

  	
  18

  
	
   

  	
  12.4.

  	
  Enforceability
  of Obligations

  	
   

  	
  18

  
	
   

  	
  12.5.

  	
  Burdensome
  Obligations

  	
   

  	
  18

  
	
   

  	
  12.6.

  	
  Legal Restraints

  	
   

  	
  18

  
	
   

  	
  12.7.

  	
  Labor Contracts
  and Disputes

  	
   

  	
  18

  
	
   

  	
  12.8.

  	
  No Material
  Proceedings

  	
   

  	
  18

  
	
   

  	
  12.9.

  	
  Material
  Licenses

  	
   

  	
  18

  



 


ii

















 


	
   

  	
  12.10.

  	
  Compliance with
  Material Laws

  	
   

  	
  18

  
	
   

  	
   

  	
  12.10.1

  	
  General
  Compliance with Environmental Laws

  	
   

  	
  19

  
	
   

  	
   

  	
  12.10.2

  	
  Proceedings

  	
   

  	
  19

  
	
   

  	
   

  	
  12.10.3

  	
  Investigations
  Regarding Hazardous Materials

  	
   

  	
  19

  
	
   

  	
   

  	
  12.10.4

  	
  Notices and
  Reports Regarding Hazardous Materials

  	
   

  	
  19

  
	
   

  	
   

  	
  12.10.5

  	
  Hazardous
  Materials on Real Property

  	
   

  	
  19

  
	
   

  	
   

  	
  12.10.6

  	
  Environmental
  Property Transfer Acts

  	
   

  	
  19

  
	
   

  	
  12.11.

  	
  Other Names

  	
   

  	
  19

  
	
   

  	
  12.12.

  	
  Prior
  Transactions

  	
   

  	
  20

  
	
   

  	
  12.13.

  	
  Capitalization

  	
   

  	
  20

  
	
   

  	
  12.14.

  	
  Solvency

  	
   

  	
  20

  
	
   

  	
  12.15.

  	
  Projections

  	
   

  	
  20

  
	
   

  	
  12.16.

  	
  Financial
  Statements

  	
   

  	
  20

  
	
   

  	
  12.17.

  	
  No Change in
  Condition

  	
   

  	
  20

  
	
   

  	
  12.18.

  	
  No Defaults

  	
   

  	
  20

  
	
   

  	
  12.19.

  	
  Investments

  	
   

  	
  20

  
	
   

  	
  12.20.

  	
  Indebtedness

  	
   

  	
  20

  
	
   

  	
  12.21.

  	
  Indirect
  Obligations

  	
   

  	
  20

  
	
   

  	
  12.22.

  	
  [Intentionally
  omitted]

  	
   

  	
  20

  
	
   

  	
  12.23.

  	
  Capital Leases

  	
   

  	
  20

  
	
   

  	
  12.24.

  	
  Tax Liabilities;
  Governmental Charges

  	
   

  	
  21

  
	
   

  	
  12.25.

  	
  Pension Benefit
  Plans

  	
   

  	
  21

  
	
   

  	
  12.26.

  	
  Welfare Benefit
  Plans

  	
   

  	
  21

  
	
   

  	
  12.27.

  	
  Retiree Benefits

  	
   

  	
  21

  
	
   

  	
  12.28.

  	
  Real Property

  	
   

  	
  21

  
	
   

  	
  12.29.

  	
  State of
  Collateral and other Property

  	
   

  	
  21

  
	
   

  	
   

  	
  12.29.1

  	
  Inventory

  	
   

  	
  22

  
	
   

  	
   

  	
  12.29.2

  	
  Equipment

  	
   

  	
  22

  
	
   

  	
   

  	
  12.29.3

  	
  Documents,
  Instruments and Chattel Paper

  	
   

  	
  22

  
	
   

  	
  12.30.

  	
  Chief Place of
  Business; Locations of Collateral

  	
   

  	
  22

  
	
   

  	
  12.31.

  	
  Warranties and
  Representations-Inventory

  	
   

  	
  23

  
	
   

  	
  12.32.

  	
  No Negative
  Pledges

  	
   

  	
  23

  
	
   

  	
  12.33.

  	
  Security
  Documents

  	
   

  	
  23

  
	
   

  	
   

  	
  12.33.1

  	
  Security
  Agreements

  	
   

  	
  23

  
	
   

  	
  12.34.

  	
  [Intentionally
  omitted]

  	
   

  	
  23

  
	
   

  	
  12.35.

  	
  Subsidiaries

  	
   

  	
  23

  
	
   

  	
  12.36.

  	
  [Intentionally
  omitted]

  	
   

  	
  24

  
	
   

  	
  12.37.

  	
  Margin Stock

  	
   

  	
  24

  
	
   

  	
  12.38.

  	
  Securities
  Matters

  	
   

  	
  24

  
	
   

  	
  12.39.

  	
  Investment
  Company Act, Etc.

  	
   

  	
  24

  
	
   

  	
  12.40.

  	
  No Material
  Misstatements or Omissions

  	
   

  	
  24

  
	
   

  	
  12.41.

  	
  Filings

  	
   

  	
  24

  
	
   

  	
  12.42.

  	
  Broker’s Fees

  	
   

  	
  24

  
	
   

  	
  12.43.

  	
  Transportation
  Solutions Assets

  	
   

  	
  24

  
	
  13.

  	
  Modification and Survival of Representations

  	
   

  	
  24

  
	
  14.

  	
  Affirmative Covenants

  	
   

  	
  25

  
	
   

  	
  14.1.

  	
  Use of Proceeds

  	
   

  	
  25

  
	
   

  	
  14.2.

  	
  Corporate
  Existence

  	
   

  	
  25

  
	
   

  	
  14.3.

  	
  Maintenance of
  Property and Leases

  	
   

  	
  25

  
	
   

  	
  14.4.

  	
  Inventory

  	
   

  	
  25

  
	
   

  	
  14.5.

  	
  Insurance

  	
   

  	
  26

  



 


iii

















 


	
   

  	
  14.6.

  	
  Payment of Taxes
  and Other Obligations

  	
   

  	
  26

  
	
   

  	
  14.7.

  	
  Compliance With
  Laws

  	
   

  	
  26

  
	
   

  	
   

  	
  14.7.1.

  	
  Environmental
  Laws

  	
   

  	
  26

  
	
   

  	
   

  	
  14.7.2.

  	
  Pension Benefit
  Plans

  	
   

  	
  27

  
	
   

  	
  14.8.

  	
  Discovery and
  Clean-Up of Hazardous Material

  	
   

  	
  27

  
	
   

  	
   

  	
  14.8.1.

  	
  In General

  	
   

  	
  27

  
	
   

  	
  14.9.

  	
  Termination of
  Pension Benefit Plan

  	
   

  	
  27

  
	
   

  	
  14.10.

  	
  Notice to Lender
  of Material Events

  	
   

  	
  27

  
	
   

  	
  14.11.

  	
  Maintenance of
  Security Interests of Security Documents

  	
   

  	
  30

  
	
   

  	
   

  	
  14.11.1.

  	
  Preservation and
  Perfection of Security Interests

  	
   

  	
  30

  
	
   

  	
   

  	
  14.11.2.

  	
  Collateral Held
  by Warehouseman, Bailee, etc.

  	
   

  	
  30

  
	
   

  	
   

  	
  14.11.3.

  	
  Compliance With
  Terms of Security Documents

  	
   

  	
  30

  
	
   

  	
  14.12.

  	
  Accounting
  System

  	
   

  	
  31

  
	
   

  	
   

  	
  14.12.1.

  	
  Account Records

  	
   

  	
  31

  
	
   

  	
   

  	
  14.12.2.

  	
  Inventory
  Records

  	
   

  	
  31

  
	
   

  	
   

  	
  14.12.3.

  	
  Tracing of
  Proceeds

  	
   

  	
  31

  
	
   

  	
  14.13.

  	
  Financial
  Statements

  	
   

  	
  31

  
	
   

  	
   

  	
  14.13.1.

  	
  Annual Financial
  Statements

  	
   

  	
  31

  
	
   

  	
   

  	
  14.13.2.

  	
  Quarterly
  Financial Statements

  	
   

  	
  31

  
	
   

  	
  14.14.

  	
  Other Financial
  Information

  	
   

  	
  32

  
	
   

  	
   

  	
  14.14.1.

  	
  Reports or
  Information Concerning Inventory

  	
   

  	
  32

  
	
   

  	
   

  	
  14.14.2.

  	
  Stockholder and
  SEC Reports

  	
   

  	
  32

  
	
   

  	
  14.15.

  	
  Inventory

  	
   

  	
  32

  
	
   

  	
  14.16.

  	
  Annual
  Projections; Operating Plan

  	
   

  	
  32

  
	
   

  	
  14.17.

  	
  Rental
  Agreements and System Reports

  	
   

  	
  33

  
	
   

  	
  14.18.

  	
  Other
  Information

  	
   

  	
  33

  
	
   

  	
  14.19.

  	
  Examinations and
  Site Visits by Lender

  	
   

  	
  33

  
	
   

  	
  14.20.

  	
  Verification of
  Accounts and Notices to Account Debtors

  	
   

  	
  33

  
	
   

  	
  14.21.

  	
  Appraisals of
  Collateral

  	
   

  	
  33

  
	
   

  	
  14.22.

  	
  Access to
  Officers and Auditors

  	
   

  	
  33

  
	
   

  	
  14.23.

  	
  Movement of
  Inventory

  	
   

  	
  34

  
	
   

  	
  14.24.

  	
  Titled Assets

  	
   

  	
  34

  
	
   

  	
  14.25.

  	
  Claims Act

  	
   

  	
  34

  
	
   

  	
  14.26.

  	
  Further
  Assurances

  	
   

  	
  34

  
	
  15.

  	
  Negative Covenants

  	
   

  	
  34

  
	
   

  	
  15.1.

  	
  Investments

  	
   

  	
  34

  
	
   

  	
  15.2.

  	
  Indebtedness

  	
   

  	
  35

  
	
   

  	
  15.3.

  	
  Prepayments

  	
   

  	
  35

  
	
   

  	
  15.4.

  	
  Indirect
  Obligations

  	
   

  	
  35

  
	
   

  	
  15.5.

  	
  Security
  Interests

  	
   

  	
  35

  
	
   

  	
  15.6.

  	
  Acquisitions

  	
   

  	
  36

  
	
   

  	
  15.7.

  	
  Leases;
  Bailments; Consignments; Warehousing

  	
   

  	
  36

  
	
   

  	
  15.8.

  	
  Disposal of
  Property

  	
   

  	
  36

  
	
   

  	
  15.9.

  	
  Change of
  Control

  	
   

  	
  36

  
	
   

  	
  15.10.

  	
  Capital
  Structure; Capital Securities

  	
   

  	
  37

  
	
   

  	
  15.11.

  	
  Change of State
  of Formation; Change of Name

  	
   

  	
  37

  
	
   

  	
  15.12.

  	
  Change of
  Business

  	
   

  	
  37

  
	
   

  	
  15.13.

  	
  Transactions
  With Affiliates

  	
   

  	
  37

  
	
   

  	
  15.14.

  	
  Conflicting
  Agreements

  	
   

  	
  37

  
	
   

  	
  15.15.

  	
  Investment
  Banking and Finder’s Fees

  	
   

  	
  37

  
	
   

  	
  15.16.

  	
  Sale and
  Leaseback Transactions

  	
   

  	
  37

  



 


iv

















 


	
   

  	
  15.17.

  	
  New Subsidiaries

  	
   

  	
  37

  
	
   

  	
  15.18.

  	
  Fiscal Year

  	
   

  	
  38

  
	
   

  	
  15.19.

  	
  [Intentionally
  omitted]

  	
   

  	
  38

  
	
   

  	
  15.20.

  	
  Depreciation
  Methodology

  	
   

  	
  38

  
	
   

  	
  15.21.

  	
  Tax
  Consolidation

  	
   

  	
  38

  
	
   

  	
  15.22.

  	
  Transactions
  Having a Material Adverse Effect

  	
   

  	
  38

  
	
   

  	
  15.23.

  	
  Storage

  	
   

  	
  38

  
	
   

  	
  15.24.

  	
  Transportation
  Solutions Assets

  	
   

  	
  38

  
	
   

  	
  15.25.

  	
  Other
  Indebtedness

  	
   

  	
  38

  
	
   

  	
  15.26.

  	
  Rental Contracts

  	
   

  	
  38

  
	
  16.

  	
  Financial Covenants

  	
   

  	
  39

  
	
   

  	
  16.1.

  	
  Special
  Definitions

  	
   

  	
  39

  
	
   

  	
  16.2.

  	
  Debt Service
  Coverage

  	
   

  	
  40

  
	
   

  	
  16.3.

  	
  Maximum Total
  Funded Indebtedness to Tangible Net Worth

  	
   

  	
  40

  
	
   

  	
  16.4.

  	
  Minimum
  Inventory Turn

  	
   

  	
  41

  
	
   

  	
  16.5.

  	
  Maximum Total
  Whole Goods Inventory

  	
   

  	
  41

  
	
  17.

  	
  Default

  	
   

  	
  41

  
	
   

  	
  17.1.

  	
  Events of
  Default

  	
   

  	
  41

  
	
   

  	
   

  	
  17.1.1.

  	
  Failure to Pay
  Principal or Interest

  	
   

  	
  41

  
	
   

  	
   

  	
  17.1.2.

  	
  Failure to Pay
  Certain Other Amounts Owed to Lender

  	
   

  	
  41

  
	
   

  	
   

  	
  17.1.3.

  	
  Failure to Pay
  Examination and Appraisal Costs

  	
   

  	
  41

  
	
   

  	
   

  	
  17.1.4.

  	
  Failure to Pay
  Amounts Owed to Other Persons

  	
   

  	
  42

  
	
   

  	
   

  	
  17.1.5.

  	
  Representations
  or Warranties

  	
   

  	
  42

  
	
   

  	
   

  	
  17.1.6.

  	
  Certain
  Covenants with Cure Periods

  	
   

  	
  42

  
	
   

  	
   

  	
  17.1.7.

  	
  Certain
  Covenants Without Cure Periods

  	
   

  	
  42

  
	
   

  	
   

  	
  17.1.8.

  	
  Other Covenants

  	
   

  	
  42

  
	
   

  	
   

  	
  17.1.9.

  	
  Acceleration of
  Other Indebtedness

  	
   

  	
  42

  
	
   

  	
   

  	
  17.1.10.

  	
  Default Under
  Other Agreements

  	
   

  	
  42

  
	
   

  	
   

  	
  17.1.11.

  	
  Bankruptcy;
  Insolvency; Etc.

  	
   

  	
  43

  
	
   

  	
   

  	
  17.1.12.

  	
  Judgments;
  Attachment; Settlement; Etc.

  	
   

  	
  43

  
	
   

  	
   

  	
  17.1.13.

  	
  Pension Benefit
  Plan Termination, Etc.

  	
   

  	
  43

  
	
   

  	
   

  	
  17.1.14.

  	
  Liquidation or
  Dissolution

  	
   

  	
  43

  
	
   

  	
   

  	
  17.1.15.

  	
  Seizure of
  Assets

  	
   

  	
  44

  
	
   

  	
   

  	
  17.1.16.

  	
  Racketeering
  Proceeding

  	
   

  	
  44

  
	
   

  	
   

  	
  17.1.17.

  	
  Loan Documents;
  Security Interests

  	
   

  	
  44

  
	
   

  	
   

  	
  17.1.18.

  	
  Loss to
  Collateral

  	
   

  	
  44

  
	
   

  	
   

  	
  17.1.19.

  	
  Change of
  Control

  	
   

  	
  44

  
	
   

  	
   

  	
  17.1.20.

  	
  Material Adverse
  Change

  	
   

  	
  44

  
	
   

  	
  17.2.

  	
  Cross-Default

  	
   

  	
  44

  
	
   

  	
  17.3.

  	
  Rights and
  Remedies

  	
   

  	
  45

  
	
   

  	
   

  	
  17.3.1.

  	
  Termination of
  Floorplan Loan Facility

  	
   

  	
  45

  
	
   

  	
   

  	
  17.3.2.

  	
  Acceleration;
  Funding

  	
   

  	
  45

  
	
   

  	
   

  	
  17.3.3.

  	
  Right of Set-off

  	
   

  	
  45

  
	
   

  	
   

  	
  17.3.4.

  	
  Notice to
  Account Debtors

  	
   

  	
  45

  
	
   

  	
   

  	
  17.3.5.

  	
  Entry Upon
  Premises and Access to Information

  	
   

  	
  46

  
	
   

  	
   

  	
  17.3.6.

  	
  Completion of
  Uncompleted Inventory Items

  	
   

  	
  46

  
	
   

  	
   

  	
  17.3.7.

  	
  Borrower’s
  Obligations

  	
   

  	
  46

  
	
   

  	
   

  	
  17.3.8.

  	
  Secured Party
  Rights

  	
   

  	
  46

  
	
   

  	
   

  	
  17.3.9.

  	
  Joint and
  Several

  	
   

  	
  47

  
	
   

  	
   

  	
  17.3.10.

  	
  Miscellaneous

  	
   

  	
  48

  
	
   

  	
  17.4.

  	
  Application of
  Funds

  	
   

  	
  48

  



 


v

















 


	
   

  	
  17.5.

  	
  Limitation of
  Liability; Waiver

  	
   

  	
  48

  
	
   

  	
  17.6.

  	
  Notice

  	
   

  	
  49

  
	
   

  	
  17.7.

  	
  No Liability

  	
   

  	
  49

  
	
  18.

  	
  Intentionally Omitted

  	
   

  	
  49

  
	
  19.

  	
  General

  	
   

  	
  49

  
	
   

  	
  19.1.

  	
  Lender’s Right
  to Cure

  	
   

  	
  49

  
	
   

  	
  19.2.

  	
  Rights Not
  Exclusive

  	
   

  	
  49

  
	
   

  	
  19.3.

  	
  Survival of
  Agreements

  	
   

  	
  49

  
	
   

  	
  19.4.

  	
  Assignments;
  Participations

  	
   

  	
  49

  
	
   

  	
   

  	
  19.4.1.

  	
  Assignments

  	
   

  	
  49

  
	
   

  	
   

  	
  19.4.2.

  	
  Sale of
  Participations

  	
   

  	
  50

  
	
   

  	
   

  	
  19.4.3.

  	
  Information

  	
   

  	
  50

  
	
   

  	
  19.5.

  	
  Payment of
  Expenses

  	
   

  	
  50

  
	
   

  	
  19.6.

  	
  General
  Indemnity

  	
   

  	
  51

  
	
   

  	
  19.7.

  	
  Changes in
  Accounting Principles

  	
   

  	
  52

  
	
   

  	
  19.8.

  	
  Loan Records

  	
   

  	
  52

  
	
   

  	
  19.9.

  	
  Other Security
  and Guaranties

  	
   

  	
  53

  
	
   

  	
  19.10.

  	
  Loan Obligations
  Payable in Dollars

  	
   

  	
  53

  
	
   

  	
  19.11.

  	
  Disclosure

  	
   

  	
  53

  
	
   

  	
  19.12.

  	
  Tax Treatment
  Waiver

  	
   

  	
  54

  
	
  20.

  	
  Binding Arbitration

  	
   

  	
  54

  
	
   

  	
  20.1.

  	
  Arbitrable
  Claims

  	
   

  	
  54

  
	
   

  	
  20.2.

  	
  Administrative
  Body

  	
   

  	
  55

  
	
   

  	
  20.3.

  	
  Hearings

  	
   

  	
  55

  
	
   

  	
  20.4.

  	
  Discovery

  	
   

  	
  55

  
	
   

  	
  20.5.

  	
  Exemplary or
  Punitive Damages

  	
   

  	
  56

  
	
   

  	
  20.6.

  	
  Confidentiality
  of Awards

  	
   

  	
  56

  
	
   

  	
  20.7.

  	
  Prejudgment and
  Provisional Remedies

  	
   

  	
  56

  
	
   

  	
  20.8.

  	
  Attorneys’ Fees

  	
   

  	
  56

  
	
   

  	
  20.9.

  	
  Limitations

  	
   

  	
  56

  
	
   

  	
  20.10.

  	
  Survival After
  Termination

  	
   

  	
  57

  
	
   

  	
  20.11.

  	
  Invalidity/Unenforceability
  of Binding Arbitration; Jury Trial Waiver; Service of Process; Forum

  	
   

  	
  57

  
	
   

  	
   

  	
  20.11.1.

  	
  Jury Trial
  Waiver

  	
   

  	
  57

  
	
   

  	
   

  	
  20.11.2.

  	
  Choice of Forum

  	
   

  	
  57

  
	
   

  	
   

  	
  20.11.3.

  	
  Service of
  Process

  	
   

  	
  57

  
	
  21.

  	
  Miscellaneous

  	
   

  	
  58

  
	
   

  	
  21.1.

  	
  Notices

  	
   

  	
  58

  
	
   

  	
  21.2.

  	
  Amendments and
  Modifications; Waivers and Consents

  	
   

  	
  58

  
	
   

  	
  21.3.

  	
  Course of
  Dealing

  	
   

  	
  58

  
	
   

  	
  21.4.

  	
  Rights
  Cumulative

  	
   

  	
  58

  
	
   

  	
  21.5.

  	
  Successors and
  Assigns

  	
   

  	
  58

  
	
   

  	
  21.6.

  	
  Severability

  	
   

  	
  59

  
	
   

  	
  21.7.

  	
  Counterparts

  	
   

  	
  59

  
	
   

  	
  21.8.

  	
  Governing Law;
  No Third Party Rights

  	
   

  	
  59

  
	
   

  	
  21.9.

  	
  Counterpart
  Facsimile Execution

  	
   

  	
  59

  
	
   

  	
  21.10.

  	
  No Other
  Agreements

  	
   

  	
  59

  
	
   

  	
  21.11.

  	
  Negotiated
  Transaction

  	
   

  	
  59

  
	
   

  	
  21.12.

  	
  Waiver of
  Punitive and Exemplary Damages

  	
   

  	
  59

  
	
   

  	
  21.13.

  	
  Incorporation By
  Reference

  	
   

  	
  60

  
	
   

  	
  21.14.

  	
  Statutory
  Notice-Insurance

  	
   

  	
  60

  



 


vi

















 


	
   

  	
  21.15.

  	
  Statutory
  Notice—Oral Commitments

  	
   

  	
  60

  



 


vii






 










 


SECOND AMENDED AND RESTATED
AGREEMENT FOR WHOLESALE FINANCING


 


In consideration of the
mutual agreements herein and other sufficient consideration, the receipt of
which is hereby acknowledged, TITAN MACHINERY INC., a Delaware corporation
(referred to as “Borrower” or “the Borrower” or “Parent”), and GE COMMERCIAL
DISTRIBUTION FINANCE CORPORATION (“Lender”) (and its successors and assigns),
agree as follows:


 


1.                                      Effective Date.  This Agreement is effective March 12,
2010.


 


2.                                      Amendment and Restatement; Reaffirmation.  This Agreement is an amendment and
restatement of that certain Agreement for Wholesale Financing, dated June 29,
2004, by and between Borrower and GE Commercial Distribution Finance
Corporation (the “Initial AWF”) which was amended and restated in its entirety
by that certain Amended and Restated Amendment to Agreement for Wholesale
Financing dated December 16, 2009 by and among Borrower, and GE Commercial
Distribution Finance Corporation as administrative agent and as sole lender
(together with all subsequent amendments and modifications, the “Prior AWF”),
which Prior AWF is hereby amended and restated in its entirety and replaced
with this Agreement in its entirety. 
This Agreement is not a novation of the Prior AWF.


 


This Agreement does not extinguish
the obligations for the payment of money outstanding under the Initial AWF, the
Prior AWF, or the Existing Loan Documents, or discharge or release the Loan
Obligations under, and as defined in, the Prior AWF or the Security Interests
or priority of Lender’s Security Interests in the Collateral (as defined in the
Prior AWF), including any Existing Loan Document.  Nothing herein contained shall be construed
as a substitution or novation of the Loan Obligations outstanding under, and as
defined in, the Prior AWF or instruments securing the same, which shall remain
in full force and effect, except as modified hereby or by instruments executed
concurrently herewith.  Nothing expressed
or implied in this Agreement shall be construed as a release or other discharge
of any Covered Person under the Initial AWF, the Prior AWF, any Existing Loan
Document or any other Loan Document. 
Each Existing Loan Document, including to the extent amended hereby, to
which it is a party is, and shall continue to be, in full force and effect and
is hereby ratified and confirmed in all respects.


 


The Borrower hereby unconditionally reaffirms,
covenants, represents, warrants, acknowledges and confirms that (i) the
Borrower has no defenses to its obligations under the Initial AWF, the Prior
AWF, the Existing Loan Documents, this Agreement and the other Loan Documents
arising out of or relating to any facts or circumstances existing on or before
the date hereof, known or unknown, to the Borrower or any Covered Person, (ii) as
of the date hereof, the Borrower has no claim against Administrative Agent (as
defined in the Prior AWF), CDF (as defined in the Prior AWF), or Lender arising
from or in connection with the Prior AWF, the Existing Loan Documents, this
Agreement or the other Loan Documents and any AND
ALL SUCH CLAIMS ARE WAIVED, RELEASED AND
DISCHARGED FOREVER (the foregoing is not intended to waive any
manifest errors in the Administrative Agent’s or any Lender’s records with
respect to the Loan Obligations), (iii) each of Existing Loan Documents
and each of the Loan Documents is hereby reaffirmed without qualification and
is and remains in full force and effect except that on and after the Effective
Date all references in any such Loan Document to “the Loan Agreement,” “the
Credit Agreement”, “thereto,” “thereof,” “thereunder” or words of like import
referring to the Prior AWF shall mean the Prior AWF as amended and restated by
and into this Agreement and therefore this Agreement, and constitutes the
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms, except to the extent that the
enforceability thereof against the Borrower may be limited by bankruptcy,
insolvency or other laws affecting the enforceability of creditors rights
generally or by equity 


 

















 


principles of general application, and (iv) the
Security Interests granted by the Borrower in favor of the Administrative Agent
(as defined in the Prior AWF), CDF (as defined in the Prior AWF) or Lender
under the Initial AWF, the Prior AWF and the Existing Loan Documents secure all
the Loan Obligations hereunder, are perfected, continue in full force and
effect, and have the same priority as before this Agreement.


 


3.                                      Assignment.  Simultaneously with the effectiveness hereof,
Administrative Agent (as such term is defined in the Prior AWF) hereby assigns
and transfers to Lender, and Lender hereby accepts, all of Administrative Agent’s
rights in and to the Collateral (as defined in the Prior AWF), and under and
with respect to any landlord consents, control agreements, pledge agreements
and security agreements.


 


4.                                      Definitions; Rules of
Construction; Borrowing Agent; Patriot Act.


 


4.1.                            Listed Definitions.  Capitalized words defined in the Glossary and Index of
Defined Terms attached hereto as Exhibit 4.1 shall have such defined
meanings wherever used in this Agreement and the other Loan Documents.


 


4.2.                            Other Definitions.  If a capitalized word in this Agreement is not defined in the
Glossary and Index of Defined Terms, it shall have such meaning as defined
elsewhere herein, or if not defined elsewhere herein, the meaning defined in
the UCC.


 


4.3.                            References to Borrower.  In the event that there is more than one Person who is a
Borrower hereunder, then the words “a Borrower”, “any Borrower”, “each Borrower”
and “every Borrower” refer to such Borrower, both separately and collectively,
as though each such entity were actually listed, and its Obligations and
liabilities (including, without limitation, the Loan Obligations) under the
Loan Documents are joint and several in all respects.


 


4.4.                            References to Covered Person.  The words “Covered Person”, “a Covered Person”, “any Covered
Person”, “each Covered Person” and “every Covered Person” refer to Borrower and
each of their currently existing or later acquired, created or organized
Subsidiaries separately.  The words “Covered
Persons” refers to Borrower and their currently existing or later acquired,
created or organized Subsidiaries collectively.


 


4.5.                            Accounting Terms.  Unless the context otherwise requires, accounting terms
herein that are not defined herein shall be determined under GAAP.  All financial measurements contemplated
hereunder respecting Borrower shall be made and calculated for Borrower and all
of their now existing or later acquired, created or organized Subsidiaries, if
any, on a consolidated basis in accordance with GAAP unless expressly provided
otherwise herein.


 


4.6.                            Meaning of Satisfactory.  Whenever herein a document or matter is required to be
satisfactory to Lender, unless expressly stated otherwise such document must be
reasonably satisfactory to Lender in both form and substance, and unless
expressly stated otherwise Lender shall have the commercially reasonable
discretion to determine whether the document or matter is satisfactory.


 


4.7.                            Computation of Time Periods.  In computing or defining periods of time from a specified
date to a later specified date, and in computing the accrual of interest or
fees, the word “from” shall mean “from and including” and the words “to” and “until”
shall each mean “to but excluding”. 
Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed, and references in
this Agreement to months and years are to calendar months and calendar years
unless otherwise specified.


 


2

















 


4.8.                            General.  Unless the context of this Agreement clearly requires
otherwise: (i) references to the plural include the singular and vice versa;
(ii) references to any Person include such Person’s successors and assigns
but, if applicable, only if such successors and assigns are permitted by this
Agreement;  (iii) references to one
gender include all genders; (iv) “including” is not limiting;  (v) “or” has the inclusive meaning
represented by the phrase “and/or;” (vi) the words “hereof,” “herein,” “hereby,”
“hereunder” and similar terms in this Agreement refer to this Agreement as a
whole, including its Exhibits, and not to any particular provision of this
Agreement;  (vii) the word “Section”
or “section” and “Page” or “page” refer to a section or page, respectively, of,
and the word Exhibit refers to an Exhibit to, this Agreement unless
it expressly refers to something else; (viii) reference to any agreement,
document, or instrument (including this Agreement and any other Loan Document
or other agreement, document or instrument defined herein), means such
agreement, document, or instrument as amended, modified, restated and/or
replaced and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms hereof, and includes all attachments thereto and
documents incorporated therein, if any; (ix) general and specific
references to any Law means such Law as amended, modified, codified or
reenacted, in whole or in part, and in effect from time to time; and (x) unless
otherwise expressly modified, the word “anniversary” shall refer to the annual
observance of such an event on that date in following years.  Section captions and the Table of
Contents are for convenience only and shall not affect the interpretation or
construction of this Agreement or the other Loan Documents.


 


4.9.                            Patriot Act Notification.  Lender hereby notifies the Borrowers and each other Covered
Person that, pursuant to the requirements of the USA PATRIOT Act, Title III of
Pub. L. 107-56, signed into law October 26, 2001 (as amended from time to
time (including any successor statute) and together with all rules promulgated
thereunder, collectively, the “Act”), it is required to obtain, verify and
record information that identifies the Borrowers and each other Covered Person,
which information includes the name and address of the Borrowers and each other
Covered Person and other information that will allow Lender to identify the
Borrowers and each other Covered Person in accordance with the Act.


 


5.                                      Lender’s Credit
Facilities.  Subject to the terms and conditions hereof, and in reliance upon the
Representations and Warranties:


 


5.1.                            Floorplan Loan Facility.


 


5.1.1.                              Floorplan Loan Facility
Generally.  Lender
shall, subject to the terms and limitations in this Section 5.1, and
elsewhere herein, make available to Borrower a “Floorplan Loan Facility” that
is initially Fifty Million Dollars ($50,000,000) but which may increase from
time to time as provided herein.  No
Floorplan Loan Advance will be made which would result in the sum of the
Floorplan Loan and all unfunded Approvals, exceeding the Floorplan Loan
Facility. Subject to the terms of this Agreement, payments and prepayments that
are applied to reduce the Floorplan Loan may be reborrowed through subsequent
Floorplan Loan Advances, subject to the terms and conditions of this Agreement
and the Loan Documents.  The Floorplan Loan Facility is not a commitment to
lend or advance funds but is a discretionary facility.  From and after the date on which Lender has
actual knowledge of an Event of Default under Section 17.1.1 or under Section 17.1.11
(whether or not any time periods referenced therein have expired), in Lender’s
sole and absolute discretion, no further Approvals will be issued, and except,
in Lender’s sole and absolute discretion, with respect to existing unfunded
Approvals, no further Floorplan Loan Advances shall be made.  From and after the date on which Lender has
actual knowledge of any other Event of Default, no further Approvals will be 


 


3

















 


issued if Lender so chooses in its
sole and absolute discretion to no longer issue Approvals.


 


5.1.2.                              Operation of Floorplan Loan
Facility.  Subject to
the terms of this Agreement, the Floorplan Loan Facility will be used by
Borrower from time to time to purchase new and used Inventory from vendors
approved by Lender in its sole and absolute discretion (“Vendors”) or to
refinance such Vendors original purchase financing with Borrower, to finance or
refinance new Inventory owned by Borrower, or to finance or refinance used
Inventory, in each case as approved by Lender in its sole and absolute
discretion.


 


5.1.3.                              Floorplan Loan Approvals.  A request from a Vendor (with respect to a Borrower) to
Lender to fund Floorplan Inventory will be deemed to be a request from the
Borrower for a Floorplan Loan Advance.


 


5.1.4.                              Inventory not Available for Floorplan
Loans.  Only Vendors
approved by Lender will be eligible to receive proceeds of the Floorplan Loan
Facility.  Lender may, at any time and
without notice to Borrower, elect not to finance any Inventory sold by
particular Vendors, including any Vendors who are in default of their
obligations to Lender, or with respect to which Lender deems itself insecure,
or any Inventory or Proceeds thereof in which another Person has a Security
Interest other than a Permitted Security Interest.  Except with respect to Approvals issued by
Lender on or before the Floorplan Loan Maturity Date or before termination as
set forth in Section 5.1.8 which such Approvals may be funded in Lender’s
sole and absolute discretion, Lender shall not be obligated to fund any
Floorplan Loan Advances after the Floorplan Loan Maturity Date or after the
Floorplan Loan Facility has been terminated.


 


5.1.5.                              New Inventory.  If Borrower provides to Lender a written
request to finance (“Advance Request”) an item or items of new Inventory (which
is or was equipment acquired from the original equipment manufacturer or its
distributor, and which has not been sold before), then Lender may approve some
or all such new Inventory for financing under the Floorplan Loan Facility,
subject to the following conditions or requirements:  (i) Lender may, in its discretion,
advance up to 85% of Borrower’s purchase price for such equipment if the
Advance is made within twelve months of the original invoice date for such
equipment and such equipment has been used less than 100 hours; (ii) Lender
may, in its discretion, for new equipment not satisfying the conditions in (i) above,
advance up to the lesser of 85% of (A) the Borrower’s purchase price of
any such new equipment Inventory, or (B) the price for such equipment
listed in Green Guide Quick Sale, Farm Equipment Guide Quick Sale or other
similar guides as Lender may select in its sole discretion, as necessary, with
respect to such new equipment Inventory; and (iii) such other conditions
or requirements as Lender may impose in its sole discretion.  Lender shall notify Borrower if it approves
or disapproves of financing any new Inventory under the Floorplan Loan
Facility.  Any new Inventory financed
under the Floorplan Loan Facility shall be amortized by Borrower over 48 months
for light equipment Inventory (for example, attachments, compact equipment,
trailers and lift equipment Inventory) or over 54 months for heavy equipment
Inventory (for example, dozers, excavators, loaders, combines, and tractors);
provided, however that the 48/54 month principal amortization payments shall
commence, in each case, six months following the Advance with respect to such
equipment (unless such Inventory shall be leased by Borrower to another Person
in which case the amortization payments shall begin immediately) and shall be
level monthly principal payments.


 


4

















 


5.1.6.                              Used Inventory.  If Borrower provides to Lender an Advance
Request with respect to an item or items of used Inventory (which is equipment
not acquired from the original equipment manufacturer or its distributor, and
which has been sold before) together with a written report acceptable to Lender
and in such detail as requested by Lender describing the condition of each item
of such used Inventory, then Lender may approve some or all such used Inventory
for financing under the Floorplan Loan Facility, subject to the following
conditions or requirements:  (i) Lender
may, in its discretion, advance up to the lesser of 85% of (A) the
Borrower’s purchase price of any such used Inventory or (B) the price for
such used equipment listed in Green Guide Quick Sale, Farm Equipment Guide
Quick Sale or other similar guides as Lender may select in its sole discretion,
with respect to any such used Inventory, (ii) Lender or its designee shall
have had the opportunity to physically inspect each such item of used Inventory
and approved each such item of used Inventory for financing under the Floorplan
Loan Facility, and (iii) such other conditions or requirements as Lender
may impose in its sole discretion. 
Lender shall notify Borrower if it approves or disapproves of financing
any used Inventory under the Floorplan Loan Facility.  Any used Inventory financed under the
Floorplan Loan Facility shall be amortized by Borrower over 36 months for light
equipment Inventory (see Section 5.1.5 above) or over 48 months for heavy
equipment Inventory (see Section 5.1.5 above), provided, however, the age
of the used Inventory plus the amortization of such used Inventory cannot
exceed (i) eight years for light equipment Inventory; (ii) ten years
for heavy equipment Inventory; and (iii) three years for any equipment
Inventory considered forestry equipment Inventory.


 


5.1.7.                              Requirements for Every Advance
Request.  Subject
to the terms of Section 11 and the other provisions of this Agreement,
with regards to Floorplan Loans requested by Borrower under Section 5.1.5
and Section 5.1.6, only an Advance Request (which shall be in writing in
the form specified by Lender from time to time and mailed, sent via email from
a Borrowing Officer with such email containing a signed PDF copy of such duly
signed request, personally delivered or telecopied as provided herein) from a
Borrowing Officer to Lender that specifies the amount of the Advance to be
made, the Advance Date, the new or used Inventory to be financed, the Vendor,
and such other information as Lender shall request from time to time, shall be
treated as a request for an Advance.  No
Advance Date for any requested Advance may be other than a Business Day and a
request for an Advance must be given prior to 11:00 a.m., Local Time, two
Business Days prior to the Advance Date for such Advance.  Subject to the terms of Section 11 and
the other provisions of this Agreement, Floorplan Loan Advances will be funded
in accordance with Lender’s procedures.


 


5.1.8.                              Termination of Floorplan Loan
Facility.  The
Floorplan Loan Facility is a discretionary facility and may be terminated by
Lender with respect to any future Floorplan Loans which have not been funded
(whether or not an Approval has been issued) at any time by Lender upon written
notice to the Borrower in accordance with this Section 5.1.8.  In addition to any other rights and remedies
that Lender may have in this Agreement, including, without limitation, if there
is an Existing Default and all rights and remedies set forth in Section 17.3
and in this Section, Lender may, at any time, whether or not there is an
Existing Default, elect to terminate the Floorplan Loan Facility, and Borrower
agrees that if there is no Existing Default, sixty (60) days prior notice
of termination is reasonable and sufficient (although this provision shall not
be construed to mean that shorter periods may not, in particular circumstances,
also be reasonable and sufficient) and Lender will continue to fund Advances
for Approvals issued on or before the expiration of such sixty (60) day period
and repayment shall be in immediately 


 


5

















 


available funds in accordance with
the applicable Transaction Statement and billing statement.  Borrower will not be relieved from any
obligation to Lender arising out of Floorplan Loans made before the effective
termination date of the Floorplan Loan Facility or made after the effective
termination date of the Floorplan Loan Facility in connection with Approvals
issued on or before such effective termination date.  Notwithstanding a termination of the
Floorplan Loan Facility, Lender will retain all of its rights, interests and
remedies hereunder and in all Collateral until Borrower has made Payment in
Full.  The effective date of the
termination of the Floorplan Loan Facility in accordance with this Section 5.1.8
shall be deemed the “Floorplan Termination Date”.


 


5.1.9.                              Repurchase Agreements.  Lender may enter into agreements with the Vendors who will be
receiving proceeds of the Floorplan Loan Facility (each being a “Vendor
Agreement” and collectively, the “Vendor Agreements”).  Lender makes no representation or warranty
regarding the Vendor Agreements, including, without limitation regarding the
enforceability thereof, whether any particular item of Inventory purchased by
Borrower is subject to repurchase rights, or any repurchase rights that may be
set forth therein.  Borrower acknowledges
and agrees that Lender may take or refrain from taking any actions under or in
connection with the Vendor Agreements in Lender’s commercially reasonable
judgment.


 


5.1.10.                       Existing Transaction Statements and
Approvals.  Pursuant to
each of the Prior AWF’s, Transaction Statements and Approvals may have been
issued by CDF (as such term is defined thereunder) or Administrative Agent (as
such term is defined thereunder)  in
favor of Borrower which remain outstanding. 
Simultaneously with the execution and delivery by Borrower of this
Agreement, all outstanding Transaction Statements and Approvals under the Prior
AWF’s shall be deemed to have been ratified by and re-issued under this
Agreement.  To the extent a Transaction
Statement represents an outstanding advance under the Prior AWF’s, the same
shall be deemed the initial Floorplan Loan Advance under the Floorplan Loan
Facility, without further action on the part of Borrower, Lender or any Vendor.


 


5.1.11.                       LKE Inventory.  No Inventory financed by a Floorplan Loan shall be subject to
a like-kind exchange, unless such Inventory is paid for in full prior to being
subject to any like-kind exchange.


 


5.2.                            Increase in Floorplan Loan Facility.


 


5.2.1.                              The Borrower may, at its option at any time and from time to
time before the Floorplan Loan Maturity Date, on no more than two occasions (or
more occasions at Lender’s discretion) at anytime on or before the Termination
Date, seek to increase the Floorplan Loan Facility by up to an aggregate amount
not exceeding One Hundred Million Dollars ($100,000,000.00) upon written notice
to Lender (which notice shall specify the amount of any such incremental
increase), and any such notice shall be delivered at a time when no Event of
Default has occurred and is continuing. 
Lender may sell participations to such financial institutions as Lender
may choose in its sole discretion to fund any such incremental increase. There
is no commitment by Lender to provide any such incremental increase.


 


5.2.2.                              No increase in the Floorplan Loan Facility shall become
effective until: (1) Lender has, in its sole discretion agreed to such
increase stating the amount of the Floorplan Loan Facility increase and has
obtained credit approval for such increase, (2) the Borrower accepts in
writing such increased facility amount in writing, as the case 


 


6

















 


may be; (3) Borrower shall
have delivered to Lender such amendments, certificates and other agreement as
Lender may request in its sole discretion, (4) Borrower shall have
delivered to Lender an opinion of Borrower’s outside counsel in form and
substance satisfactory to Lender in its sole discretion, (5) if Lender
chooses to sell participations, Lender shall have entered into participations
agreements with third party financial institutions acceptable to it in its sole
discretion, and (6) Borrower has agreed in writing to pay any fee required
by Lender in connection with such increase. 
Any such amendments to the Loan Documents and any such fees payable by Borrower
shall be agreed to in writing by Borrower.


 


5.3.                            Termination.


 


5.3.1.                              At any time an Event of Default has occurred and is
continuing, Lender may, without notice or demand to Borrowers or any other
Covered Person, terminate the Floorplan Loan Facility, accelerate the Loan
Obligations or take such other actions as they may have hereunder (including Section 17.3),
the other Loan Documents or at law or at equity.


 


5.3.2.                              Borrower may at any time terminate Floorplan Loan Facility by
giving written notice to Lender if and only if Borrower repays in full and in
cash all of the Loan Obligations within 60 days of Lender’s receipt of such
notice, including Floorplan Loan Advances that may be made with respect to any
Approval issued during such 60 day period, and such termination shall be
effective on or before the end of such 60 day period.  Notwithstanding a termination, Lender will
retain all of its rights, interests and remedies hereunder and in all
Collateral until Payment in Full.


 


5.3.3.                              Subject to the terms hereof, within five business days of
Borrower’s request (which Borrower may request at any time), Lender shall
provide a written payoff letter in form and content acceptable to Lender
setting forth the amount required to be paid (or cash collateralized in the
case of Approvals) for Payment in Full (subject to per diem amounts, additional
Advances made or Approvals given or payments received after the date thereof,
together with all fees, costs and expenses owing to Lender hereunder and the
other Loan Documents), which letter shall provide that Lender agrees to release
the Security Interest granted hereunder upon Payment in Full in same day funds
of such amount.


 


6.                                      Interest; Yield Protection.


 


6.1.                            Interest on the Floorplan Loan.


 


6.1.1.                              The term “Three Month LIBOR” with respect to any Transaction
Statement, shall have the following meaning, regardless of any other definition
that may appear in a Transaction Statement from time to time: the term “Three
Month LIBOR” in such Transaction Statement shall mean, for any calendar month
the Three Month LIBOR Rate published in the “Money Rates” column of the Wall
Street Journal on the first Business Day of such month. After Maturity or
upon the occurrence and during the continuance of an Event of Default, and if
Lender so determines in its absolute discretion, Indebtedness under each
Transaction Statement shall bear interest at the default or post-maturity rate
described therein (but not greater than at the rate which would otherwise apply
under such Transaction Statement plus 2.0%). 
In the event no default or post-maturity rate is specified in any
Transaction Statement, then after Maturity or upon the occurrence and during
the continuance of an Event of Default, and if Lender so determines in its
absolute 


 


7

















 


discretion, the Indebtedness under
such Transaction Statement shall bear interest at the rate which would
otherwise apply under such Transaction Statement plus 2.0%.


 


6.1.2.                              Borrower and Lender agrees that certain financial terms of
any Floorplan Loan Advance made under this Agreement, whether regarding finance
charges, other fees, maturities, curtailments or other financial terms, are not
set forth herein because such terms depend, in part, upon the availability of
Vendor discounts, payment terms or other incentives, prevailing economic
conditions, Lender’s floorplanning volume with Borrower and with Borrower’s
Vendors, and other economic factors which may vary over time.  Borrower, and Lender further agree that it is
therefore in their mutual best interest to set forth in this Agreement only the
general terms of the Floorplan Loan Facility.  Upon agreeing to finance a
particular item of Inventory for Borrower, Lender will send Borrower a
transaction statement identifying such Inventory and the applicable financial
terms (each being a “Transaction Statement”). 
Lender may change any aspect or portion of any Transaction
Statement.  Unless Borrower notifies
Lender in writing of any objection within thirty (30) days after the earlier to
occur of the date a Transaction Statement is made available to Borrower or the
date a Transaction Statement is sent to Borrower:  (a) the amount shown on such Transaction
Statement will be an account stated; (b) Borrower will have agreed to all
rates, charges and other terms shown on such Transaction Statement; (c) Borrower
will have agreed that Lender is financing the items of Inventory referenced in
such Transaction Statement at Borrower’s request; and (d) such Transaction
Statement will be incorporated herein by reference, will be made a part hereof
as if originally set forth herein, and will constitute an addendum hereto.  If Borrower objects to the terms of any
Transaction Statement, Borrower agrees to pay Lender for such Inventory in
accordance with the most recent terms for similar Inventory to which Borrower
has not objected (or, if there are no prior terms, at the lesser of the then
agreed upon rate between Lender and Borrower as set forth in any Interest Rate
and Fee Letter and 16.00% per annum or at the maximum lawful contract rate of
interest permitted under applicable law).


 


6.1.3.                              Borrower will pay the interest, fees, and finance charges to
Lender on the outstanding principal amount of the Floorplan Loans,
respectively, at the rate(s) and in the amount(s) shown on the
applicable Transaction Statement, unless Borrower objects thereto as provided
in Section 6.1.2.  All such amounts
(whether interest, fees or late charges, but excluding principal) due and owing
as set forth in each Transaction Statements shall be retained by Lender.  The finance charges attributable to the rate
shown on each Transaction Statement will: 
(a) be computed based on a 360 day year; (b) be calculated by
multiplying the Daily Charge (as defined below) by the actual number of days in
the applicable billing period; and (c) accrue at the applicable interest
rate set forth in the applicable Transaction Statement (which such rate may be
zero percent for a period of time) from the invoice date of the Collateral identified
on such Transaction Statement until Lender receives full payment as provided in
this Agreement for each item of such Collateral.  The “Daily Charge” is the product of the
Daily Rate (as defined below) multiplied by the Average Daily Balance (as defined
below).  The “Daily Rate” is the quotient
of the annual rate shown on each Transaction Statement divided by 360, or the
monthly rate shown on each Transaction Statement divided by 30.  The “Average Daily Balance” is the quotient
of (i) the sum of the outstanding principal under the Floor Plan Facility
on each day of a billing period for each item of Collateral identified on a
Transaction Statement, divided by (ii) the actual number of days in such
billing period.  With respect to the
Floorplan Loans, the annual percentage rate of the finance charges relating to
any item of Collateral financed thereby will be calculated from the invoice 


 


8

















 


date of such Collateral (which rate
may be zero percent for a period of time), regardless of any period during
which any finance charge subsidy shall be paid or payable by any third party.


 


6.1.4.                              Lender will send Borrower a monthly billing statement
identifying all charges, including any late fees assessed, due to Lender.  The charges specified on each billing
statement will be (1) due and payable in full immediately on receipt, and (2) an
account stated, unless Lender receives Borrower’s written objection thereto
within fifteen (15) days after it is transmitted or otherwise sent to Borrower.
If Lender does not receive, by the 25th day of any given month, payment of all
charges accrued to Borrower’s account with Lender during the immediately
preceding month, Borrower will (to the extent allowed by law) pay Lender a late
fee equal to the greater of $5 or 5% of the amount of such charges (payment of
such fee does not waive the default caused by the late payment). Lender may
adjust the billing statement at any time to conform to applicable law and this
Agreement.


 


6.2.                            Interest on Floorplan Loans.  Borrower and Lender acknowledges and agrees that the rate of
return paid on any Floorplan Loan is dependent on numerous factors, including
discounts and subsidies offered by the Vendors.


 


6.3.                            Adjusted LIBOR Rate.  The “Adjusted LIBOR Rate” for any LIBOR Loan is the
Three-Month LIBOR Rate plus the LIBOR Increment.  The “LIBOR Increment” shall be the amount set
forth in the Interest Rate and Fee Letter and defined therein as the “LIBOR
Increment.”  The interest rate paid by
Borrower on the Floorplan Loan is the interest rate described in each
Transaction Statement, as provided in Section 6.1.


 


6.4.                            Time of Accrual.  Interest shall accrue on all principal amounts outstanding
from the date when first outstanding to the date when no longer
outstanding.  Amounts shall be deemed
outstanding until payments are applied thereto as provided herein.


 


6.5.                            Computation.  Interest shall be computed for the actual days elapsed over a
year deemed to consist of 360 days for all LIBOR Loans.  The Three-Month LIBOR Rate will be determined
by Lender before the initial Advance on the Effective Date and with respect to
LIBOR Loans, and on the first Business Day of each calendar month
thereafter.  Interest rates that are
based on the Three-Month LIBOR Rate shall be effective for the entire calendar
month for which such rate is determined.


 


6.6.                            Rate After Maturity and Rate After An Event
of Default.  The default
rate on the Floorplan Loans is described in Section 6.1.1.


 


6.7.                            Taxes.


 


6.7.1.                              Any and all payments by the Borrower to or for the account of
Lender hereunder or under any other Loan Document shall be made free and clear
of and without deduction for any and all present or future Taxes, excluding,
in the case of Lender, Taxes imposed on its income, and franchise Taxes imposed
on it, by the jurisdiction (or any political subdivision thereof) under the
laws of which Lender (or its Applicable Lending Office) is organized or any
political subdivision thereof.  If the Borrower
shall be required by Law to deduct any Taxes from or in respect of any sum
payable under this Agreement or any other Loan Document to Lender, (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) Lender receives an amount equal to the 


 


9

















 


sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable Law, and (iv) the
Borrower shall furnish to Lender , at its address referred to herein, the
original or a certified copy of a receipt evidencing payment thereof or other
evidence satisfactory to Lender .


 


6.7.2.                              In addition, the Borrower agrees to pay any and all present
or future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
Agreement or any other Loan Document or from the execution or delivery of, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as “Impositions”), except income Taxes and franchise
Taxes imposed by any jurisdiction referred to in Section 6.7.1.


 


6.7.3.                              The Borrower agrees to indemnify Lender for the full amount
of Taxes and Impositions (including, without limitation, any Taxes or
Impositions imposed or asserted by any jurisdiction on amounts payable under
this Section) that are required to be paid by the Borrower hereunder but are
paid by Lender and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto; provided, however, that Lender shall
not have any obligation to pay any such Taxes, Impositions or other liability.


 


6.7.4.                              Within thirty (30) days after the date of any payment of
Taxes described in this Section 6.7, the Borrower shall furnish to Lender
the original or a certified copy of a receipt evidencing such payment or other
evidence of payment satisfactory to v.


 


6.7.5.                              Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section shall survive the termination of the Floorplan
Loan Facility and the payment in full in cash of the Loan Obligations.


 


6.8.                            Compensation for Increased Costs and
Reduced Returns; Capital Adequacy.


 


6.8.1.                              If, after the date hereof, Lender shall have reasonably
determined that the adoption of any applicable Law regarding capital adequacy
or any change therein or in the interpretation or administration thereof by any
Governmental Authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank, or comparable agency, has or would have
the effect of reducing the rate of return on the capital of Lender or any
corporation controlling Lender as a consequence of Lender’s obligations
hereunder to a level below that which Lender or such corporation could have
achieved but for such adoption, change, request, or directive (taking into
consideration its policies with respect to capital adequacy), then from time to
time upon demand the Borrower shall pay to Lender such additional amount or
amounts as will reasonably compensate Lender for such reduction.


 


6.8.2.                              Lender shall promptly notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which will entitle
Lender to compensation pursuant to this Section and will designate a
different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of Lender, be otherwise disadvantageous to it. 
If Lender is claiming compensation under this Section it shall
furnish to the Borrower a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be conclusive in 


 


10

















 


the absence of manifest error.  In determining such amount, Lender may use
any reasonable averaging and attribution methods.  Lender agrees, with respect to the provisions
of this Section, to treat Borrower in a manner substantially similar to that of
its other similarly situated customers.


 


6.9.                            Usury.  Notwithstanding any provisions to the contrary in Section 6
or elsewhere in any of the Loan Documents, Borrower shall not be obligated to
pay interest at a rate which exceeds the maximum rate permitted by Law.  If, but for this Section 6.9, Borrower
would be deemed obligated to pay interest at a rate which exceeds the maximum
rate permitted by Law, or if any of the Loan Obligations is paid or becomes
payable before its originally scheduled Maturity and as a result Borrower has
paid or would be obligated to pay interest at such an excessive rate, then (i) Borrower
shall not be obligated to pay interest to the extent it exceeds the interest
that would be payable at the maximum rate permitted by Law; (ii) if the
outstanding Loan Obligations have not been accelerated as provided in Section 17.3.2,
any such excess interest that has been paid by Borrower shall be refunded; (iii) if
the outstanding Loan Obligations have been accelerated as provided in Section 17.3.2,
any such excess that has been paid by Borrower shall be applied to the Loan
Obligations as provided in Section 17.4; and (iv) the effective rate
of interest shall be deemed automatically reduced to the maximum rate permitted
by Law.


 


7.                                      Payments.


 


7.1.                            Scheduled Payments on Loans; Applications
to Loans.


 


7.1.1.                              Interest.  Borrower shall pay to Lender , all interest, fees and charges
accrued on the Floorplan Loan in accordance with the Transaction Statements.


 


7.1.2.                              Principal.  Borrower will immediately pay Lender the principal
indebtedness owed Lender on each item of Collateral financed by Lender (as
shown on the Transaction Statement identifying such Collateral) under the
Floorplan Loan Facility on the earliest occurrence of any of the following
events:  (a) when such Collateral is
(i) lost, (ii) stolen, or (iii) damaged and no longer
merchantable; (b)  in strict accordance with any curtailment schedule for such
Collateral (as shown on the Transaction Statement identifying such Collateral);
(c) for Collateral financed under Scheduled Payment Program (“SPP”) terms
(as shown on the Transaction Statement identifying such Collateral), or in
accordance with Sections 5.1.5 or 5.1.6, in strict accordance with the
installment payment schedule; and (d) when otherwise required under the
terms of any financing program agreed to in writing by the Borrower
Lender.  Any third party discount,
rebate, subsidy, bonus or credit granted to Borrower for any Collateral will
not reduce the Loan Obligations until Lender has received payment as provided
in this Agreement.  The Floorplan
Shortfall, if any, will remain in effect, until the next determination of the
Floorplan Shortfall by Lender.  Lender
may determine the Floorplan Shortfall as often as it chooses in its sole
discretion.  Borrower shall pay all
amounts owing to Lender under the Floorplan Loan Facility as set forth herein
and in the Transaction Statement.


 


7.1.3.                              Maturity.  Borrower shall repay the entire amount of the Floorplan Loan
on the Floorplan Termination Date or as specified elsewhere in this Agreement
(such date being, the “Floorplan Loan Maturity Date”), plus cash collateral
equal to 100% of any unfunded Approvals, in which case such Approvals shall be
otherwise paid in accordance with the applicable Transaction Statements.


 


11






 










 


7.2.         Prepayments.


 


7.2.1.          Voluntary
Prepayments.  Subject to
the limitations in the following sentences, except for mandatory prepayments
and funds received by Lender as contemplated by Section 7.1, Borrower may
wholly prepay any Floorplan Loan at any time and may make a partial prepayment
thereon from time to time, without penalty or premium if Borrower pays any
amount that is due as a consequence of the prepayment of any LIBOR Loan and as
otherwise provided for in this Agreement. 
All such prepayments, unless otherwise expressly stated in writing by
Borrower to Lender prior to the making of such prepayment, will be deemed made
on the Floorplan Loan until it is reduced to zero (with, in each case, the
payment of any and all penalties and premiums due hereunder in connection
therewith), and will be applied by Lender to reduce the Floorplan Loans.


 


7.2.2.          Mandatory
Prepayments.  On any date
that the sum of the Floorplan Loans plus unfunded Approvals exceeds the
Floorplan Loan Facility, then the Borrower shall, on such date, pay such excess
to Lender and failure to pay such excess on such date shall be an immediate
Event of Default.  In addition, on any
date that the sum of the Floorplan Loans, the unfunded Approvals, and the
Floorplan Shortfall exceeds the Floorplan Inventory Value, then the Borrower
shall immediately make a payment of the amount of such excess to Lender and
failure to pay such excess on such date shall be an immediate Event of Default.


 


7.2.3.          Other Mandatory Prepayments.


 


7.2.3.1.               Insurance Proceeds.  All Insurance Proceeds relative to the Personal Property
Collateral shall be deposited with Lender and shall be applied by Lender to the
Loan Obligations.  Lender is hereby
authorized to participate in any proceeding for the condemnation or other
taking of any of Borrower’s Personal Property Collateral and Borrower from time
to time will deliver to Lender all instruments reasonably requested by Lender
to permit such participation.


 


Every prepayment under this Section  shall be applied to
reduce the Floorplan Loans to zero.


 


7.3.         Manner of Payments and Timing of Application of
Payments.


 


7.3.1.          Payment
Requirement.  Unless
expressly provided to the contrary elsewhere herein, Borrower shall make each
payment on the Loan Obligations to Lender as required under the Loan Documents
at the Applicable Lending Office of Lender on the date when due, without
deduction, set-off or counterclaim (provided, however, the making of such
payment shall not constitute a waiver by Borrower of counterclaims arising from
the willful misconduct or gross negligence of Lender).  All such payments will be applied to the Loan
Obligations as provided herein.


 


7.3.2.          Application
of Payments and Proceeds.  All
immediately available funds collected at or before 12:00 noon (Local Time)
on a Business Day, will be applied to the Loan Obligations as provided
herein.  Such funds received on a day
that is not a Business Day, or if on a Business Day, after 12:00 noon
(Local Time), will be deemed received on the immediately following Business
Day, and applied to the Loan Obligations as provided herein.  The amount so received Lender will be applied
by Lender to the relevant Loan Obligation on the Business Day when received.  Borrower will also pay to


 


12

















 


Lender , such fees as Lender generally charges its customers
for each check returned unpaid for insufficient funds (an “NSF check”) (such
payment repays Lender’s estimated administrative costs; it does not waive any
Default or Event of Default caused by the NSF check).


 


7.3.3.          Interest
Calculation.  Interest
shall begin accruing, and be owing and payable on an Advance on the day such
Advance is made by Lender (provided, however, that interest on the Floorplan
Loan shall begin accruing on the date of the applicable invoice, as provided in
the applicable Transaction Statement at the applicable rate set forth therein
(which rate may be zero percent for a period of time)).  Section 7.3.2 notwithstanding, for
purposes of interest calculation only, (i) a payment by check, draft or
other instrument received on a Business Day shall be deemed to have been
applied to the relevant Loan Obligation on the third following Business Day, (ii) a
payment received by ACH (Automatic Clearing House) received on a Business Day
shall be deemed to have been applied to the relevant Loan Obligation on the
same Business Day, and (iii) a payment received by wire transfer received
on a Business Day shall be deemed to have been applied to the relevant Loan
Obligation on the Business Day when it is received.  Borrower acknowledges that payments in cash
on the Loan Obligations will not be accepted by Lender.


 


7.4.         Returned
Instruments.  If a
payment is made by check, draft or other instrument and the check, draft or
other instrument is returned unpaid, any application of the payment to the Loan
Obligations will be reversed and will be treated as never having been made.


 


7.5.         Compelled Return
of Payments or Proceeds.  If Lender
is for any reason compelled to surrender any payment or any proceeds of the
Collateral because such payment or the application of such proceeds is for any
reason invalidated, declared fraudulent, set aside, or determined to be void or
voidable as a preference, an impermissible set-off, or a diversion of trust
funds, then this Agreement and the Loan Obligations to which such payment or
proceeds was applied or intended to be applied shall be revived as if such
application was never made; and Borrower shall be liable to pay to Lender, and
shall indemnify Lender for and hold Lender harmless from any loss with respect
to, the amount of such payment or proceeds surrendered.  This Section shall be effective
notwithstanding any contrary action that Lender may take in reliance upon its
receipt of any such payment or proceeds. 
Any such contrary action so taken by Lender shall be without prejudice
to Lender’s rights under this Agreement and shall be deemed to have been
conditioned upon the application of such payment or proceeds having become
final and indefeasible.  The provisions
of this Section shall survive termination of the Floorplan Loan Facility
and the indefeasible payment and satisfaction of all of the Loan Obligations.


 


7.6.         Due Dates Not on
Business Days.  If any
payment required hereunder becomes due on a date that is not a Business Day,
then such due date shall be deemed automatically due on the preceding Business
Day.


 


8.             Procedure for Obtaining Advances.


 


8.1.         Initial
Advances.   The manner
of disbursement shall be subject to Lender’s approval.  Lender will fund the initial Floorplan Loan
in accordance with its policies and procedures.


 


8.2.         Subsequent
Floorplan Loan Advances.  Lender will
fund subsequent Floorplan Loan in accordance with its policies and procedures
and subject to the terms and conditions of this Agreement.  No requested Floorplan Loan Advance shall
violate any provision of this Agreement, including, without limitation, 7.2.2.


 


13

















 


8.2.1.          Lender’s Right to Make Other Certain Advances.


 


8.2.1.1.               Payment of Loan Obligations.  Lender shall have the right to make Advances at any time and
from time to time to cause timely payment of any of the Loan Obligations,
including without limitation, to pay any fees, interest or principal on the
Floorplan Loan, and to pay any other fees owing to Lender; provided, however,
with respect to third party fees, if there is no Existing Default, Lender shall
use its reasonable efforts to give prior notice to the Borrower of the payment
of any such fees from an Advance (but shall have no liability for its failure
to notify Borrower, and any such failure shall not give rise to a claim or
cause of action by Borrower against Lender). 
If there is no Existing Default, Lender shall use reasonable efforts to
notify Borrower (but shall have no liability for its failure to notify Borrower
and such failure shall not give rise to a claim or cause of action by Borrower
Lender) on the day it makes an Advance to pay any interest owing
hereunder.  Lender may select the Advance
Date for any such Advance, but such Advance Date may only be a Business
Day.  Lender will give notice to Borrower
after any such Advance is made.


 


8.2.1.2.               Payments to Other Creditors.  If Lender becomes obligated to reimburse or pay to any
creditor of Borrower any amount in order to (i) obtain a release of such
creditor’s Security Interest in any of the Collateral, other than Permitted
Security Interests, or (ii) otherwise satisfy an Obligation of Borrower to
such creditor to the extent not indefeasibly satisfied by the initial Advances,
then Lender shall have the right (but shall have no obligation) to make
Advances for that purpose.  Lender may
select the Advance Date for any such Advance, but such Advance Date may only be
a Business Day.  Lender will give notice
to Borrower after any such Advance is made.


 


8.3.         Disbursement.  Provided that all conditions precedent herein to a requested
Advance have been satisfied, Lender will make the amount of such requested
Advance available to the appropriate Vendor or to Borrower, on the applicable
Advance Date in immediately available funds in Dollars at the Applicable
Lending Office.


 


8.4.         Restrictions on
Advances.  Advances
will only be made for the purposes permitted in Section 14.1.


 


8.5.         Each Advance
Request a Certification.  Each
submittal of a request for an Advance by a Borrowing Officer shall constitute a
certification by Borrower that (i) there is no Existing Default, (ii) all
conditions precedent hereunder to the making of the requested Advance have been
satisfied, and (iii) the Representations and Warranties are then true,
with such exceptions as have been disclosed to Lender in writing by the Covered
Person making such Representations and Warranties from time to time and are
satisfactory to Lender, and will be true on the Advance Date, as applicable, as
if then made with such exceptions.


 


8.6.         Requirements for
Every Advance Request.  Subject to
the terms of Section 11 and the other provisions of this Agreement,
Floorplan Loan Advances will be funded in accordance with Lender’s procedures.


 


8.7.         Exoneration of
Lender.  Lender
shall not incur any liability to Borrower for treating a request that meets the
express requirements of Sections 8.6, as a request for an Advance Lender
believes in good faith that the Person making the request is a Borrowing
Officer of Borrowing


 


14

















 


Agent.  Lender shall
not incur any liability to Borrower for failing to treat any such request as a
request for an Advance Lender believes in good faith that the Person making the
request is not a Borrowing Officer of Borrowing Agent.


 


9.             Security Interest in Personal Property
Collateral; Security.


 


9.1.         Grant of Security Interest; Landlord Consents.


 


As security for the payment and performance of the Loan
Obligations, Borrower hereby grants to Lender, a first priority security
interest in all of the Personal Property Collateral.  Borrower shall on the Execution Date and from
time to time thereafter execute and deliver, or cause to be executed and delivered,
to Lender such additional security agreements and other security documents as
they relate to the Collateral as reasonably requested by Lender from time to
time, including, without limitation, the following documents, each in form and
substance satisfactory to Lender: with respect to any real property leased
(whether pursuant to a lease, bailment or otherwise) by Borrower or any other
Covered Person on which Collateral valued in excess of $50,000 is located,
whether on, prior to or after the Effective Date, Borrower shall cause to be
delivered to Lender such landlord consents and/or warehousemen’s letters as
Lender shall reasonably request.


 


10.          Power of Attorney.  Each Borrower hereby authorizes (and shall cause each other
Covered Person to do the same) Lender and irrevocably appoints Lender (acting
by any of its officers) as such Borrower’s agent and attorney-in-fact (which
appointment is coupled with an interest and is therefore irrevocable) to do any
of the following until Payment in Full:


 


10.1.       At any time while there is
an Existing Default, (i) demand payment of any Account that is Collateral;
(ii) enforce payment of any such Account by legal proceedings or
otherwise; (iii) exercise all of such Borrower’s rights and remedies in
proceedings brought to collect any such Account; (iv) sell or assign any
such Account upon such terms, for such amount and at such time or times as
Lender deems advisable; (v) settle, adjust, compromise, extend or renew
any such Account; (vi) discharge and release any such Account; (vii) prepare,
file and sign such Borrower’s name on any proof of claim in bankruptcy or other
similar documents against an Account Debtor with respect to such an Account; (viii) notify
the postal authorities of any change of the address for delivery of such
Borrower’s mail to any address designated by Lender and open and process all
mail addressed to such Borrower; (ix) endorse such Borrower’s name on any
verification of such Accounts and notices thereof to Account Debtors; (x) make
one or more Floorplan Loan Advances to pay the costs and expenses of any of the
foregoing; and (xi) do anything that Lender deems necessary in its
reasonable discretion to assure that the Loan Obligations are fully and
indefeasibly paid and satisfied in cash and that Borrower complies with each
covenant and agreement contained herein and in the other Loan Documents.


 


10.2.       At any time while there is
an Existing Default, (i) take control in any manner of any item of payment
or proceeds of any Account that is Collateral; (ii) have access to any
lockbox or postal box into which such Borrower’s mail is deposited; (iii) endorse
such Borrower’s name upon any items of payment with respect to such Accounts
and deposit the same in the Cash Collateral Account and apply the proceeds thereof
to the Loan Obligations as provided herein; (iv) endorse such Borrower’s
name upon any chattel paper, document, instrument, invoice, or similar document
or agreement relating to any Account that is Collateral or other item of the
Collateral; and (v) execute in such Borrower’s name and on such Borrower’s
behalf any financing statement or amendments thereto, or such mortgages, deeds
of trust or other security documents deemed necessary or appropriate by Lender
to assure the perfection or continued perfection of Lender’s Security Interests
in the Collateral.  If Lender by
exercising its rights in this Section


 


15

















 


receives mail not containing Collateral, Lender will use its
reasonable efforts to return such mail to the Parent within three (3) Business
Days of its receipt thereof, provided however, Lender shall have no liability
for the failure to so return such mail unless such failure was willful.


 


The foregoing power of attorney and authorization shall be deemed
irrevocable, but shall be automatically revoked only upon Payment in Full.


 


11.          Conditions of Lending.


 


11.1.       Conditions to
Initial Advance.  Lender will
have no obligation to fund the initial Floorplan Loan Advance or any subsequent
Floorplan Loan Advance unless the following conditions are satisfied or waived
by Lender:


 


11.1.1.        Listed
Documents and Other Items.  Lender
shall have received on or before the Effective Date all of the documents and
other items listed or described in Exhibit 11.1.1 hereto, with each being
satisfactory to Lender and (as applicable) duly executed and (also as
applicable) sealed, attested, acknowledged, certified, or authenticated.


 


11.1.2.        Financial
Condition.  Lender
shall have determined to its satisfaction that the Financial Statements of
Borrower for the period ended April 30, 2009 (the “Initial Financial
Statements”), and the projections of Borrower’s financial condition, results of
operations, and cash flow statements of Borrower for the period ending as of January 31,
2010 (the “Proforma Financial Statements”, as furnished to Lender and other
information furnished to Lender by Borrower (i) for the periods ended on
or before the Effective Date, fairly and accurately reflect the business and
financial condition of Borrower, its cash flows and the results of its
operations for such periods in accordance with GAAP, and (ii) for the
periods that will end after the Effective Date, fairly forecast on a reasonable
basis and in Borrower’s good faith the business and financial condition of
Borrower, its cash flows, and the results of its operations for such periods in
accordance with GAAP.


 


11.1.3.        Default.  There shall be no Existing Default and no Default or Event of
Default will occur as a result of such Advance being requested or made or the
application of the proceeds thereof.


 


11.1.4.        Perfection
of Security Interests.  Every
Security Interest required to be granted by Borrower to Lender under Section 9
shall have been perfected and shall be, except for Permitted Security Interests,
as otherwise satisfactory to Lender, a first priority Security Interest.


 


11.1.5.        Representations
and Warranties.  The
Representations and Warranties shall be true and correct, with such exceptions
as are set forth in the Disclosure Schedule.


 


11.1.6.        Material
Adverse Change.  Since the
date of the last audited Financial Statements delivered to Lender for the
period ending January 31, 2009, there shall not have been any change which
has had or is reasonably likely to have a Material Adverse Effect.


 


11.1.7.        Pending
Material Proceedings.  There shall
be no pending Material Proceedings.


 


16

















 


11.1.8.        Payment
of Fees.  Borrower
shall have paid and reimbursed to Lender all fees, costs and expenses that are
payable or reimbursable to Lender hereunder on or before the Effective Date.


 


11.1.9.        Other
Items.  Lender
shall have received such other consents, approvals, opinions, certificates,
documents or information as it reasonably deems necessary to issue an Approval
as necessary, including releases or intercreditor agreements acceptable to
Lender from any Person holding or purporting to hold a Security Interest in any
of the Collateral.


 


11.2.       Conditions to
Subsequent Advances.  Lender will
have no obligation to fund any Advance and after the initial Floorplan Loan
Advance, unless the following conditions are satisfied or waived by Lender:


 


11.2.1.        General
Conditions.  All of the
conditions to the initial Advances in Section 11.1 (except the condition
in Section 11.1.5) shall have been and shall remain satisfied.


 


11.2.2.        Representations
and Warranties.  The
Representations and Warranties are then true, with such exceptions as have been
disclosed to Lender in writing by Borrower or each Guarantor from time to time and
are satisfactory to Lender, and will be true as of the time of such Advance, as
if then made with such exceptions.


 


11.2.3.        Approvals.  With regards to a Floorplan Loan Advance, an Approval has
been issued by Lender.


 


11.2.4.        Default.  There shall be no Existing Default and no Default or Event of
Default will occur as a result of such Advance being requested or made or the
application of the proceeds thereof.


 


11.2.5.        Releases
or Intercreditor Agreements.  Releases
or intercreditor agreements acceptable to Lender from any Person holding or
purporting to hold a Security Interest in any of the Collateral.


 


12.          Representations and Warranties.  Except as otherwise described in the Disclosure Schedule
attached hereto as Exhibit 12 as updated from time to time pursuant to the
provisions hereof, Borrower represents and warrants to Lender, as follows:


 


12.1.       Organization and
Existence.  Each
Covered Person is duly organized and existing in good standing under the Laws
of the state of its organization and is duly qualified to do business and is in
good standing in every state where the nature or extent of its business or
properties require it to be qualified to do business, except where the failure
to so qualify will not have a Material Adverse Effect.  Each Covered Person has the power and
authority to own its properties and carry on its business as now being
conducted.  Section 12.1 of the
Disclosure Schedule, as updated from time to time as permitted herein, set
forth (a) the Borrower’s and each other Covered Person’s jurisdiction of
organization, (b) the location of the Borrower’s and each other Covered
Person’s chief executive office, (c) the Borrower’s and each other Covered
Person’s exact legal name as it appears on its organizational documents, (d) all
prior legal names and trade names of each Borrower and each other Covered
Person since January 1, 2001, (e) the Borrower’s and each other
Covered Person’s organizational identification number (to the extent the
Borrower’s and each other Loan Party’s is organized in a jurisdiction which
assigns such


 


17

















 


numbers), and (f) the Borrower’s and each other Covered
Person’s federal employer identification number.


 


12.2.       Authorization.  Each Covered Person is duly authorized to execute and perform
every Loan Document to which such Covered Person is a party, and Borrower is
duly authorized to borrow hereunder, and this Agreement and the other Loan
Documents have been duly authorized by all requisite corporate action (or in the
case of Covered Persons which are not corporations, other organizational
action) of each Covered Person.  No
consent, approval or authorization of, or declaration or filing with, any
Governmental Authority, and no consent of any other Person, is required in
connection with any Covered Person’s execution, delivery or performance of this
Agreement and the other Loan Documents to which it is a party, except for those
already duly obtained.


 


12.3.       Due
Execution.  Every Loan
Document to which a Covered Person is a party has been executed on behalf of
such Covered Person by a Person duly authorized to do so.


 


12.4.       Enforceability
of Obligations.  Each of the
Loan Documents to which a Covered Person is a party constitutes the legal,
valid and binding obligation of such Covered Person, enforceable against such
Covered Person in accordance with its terms, except to the extent that the
enforceability thereof against such Covered Person may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting
creditors’ rights generally or by equitable principles of general application.


 


12.5.       Burdensome
Obligations.  No Covered
Person is a party to or bound by any Contract or is subject to any provision in
the Charter Documents of such Covered Person which, if performed by such
Covered Person, could reasonably be likely to result in a Default or Event of
Default.


 


12.6.       Legal
Restraints.  The
execution and performance of any Loan Document by a Covered Person does not and
will not violate or constitute a default under the Charter Documents of such
Covered Person, any Material Agreement of such Covered Person, or any Material
Law applicable to such Covered Person, and does not and will not, except as
expressly contemplated or permitted in this Agreement, result in any Security
Interest being imposed on any of such Covered Person’s property.


 


12.7.       Labor Contracts
and Disputes.  There is no
collective bargaining agreement or other labor contract covering employees of a
Covered Person.  To Borrower’s Knowledge,
no union or other labor organization is seeking to organize, or to be
recognized as, a collective bargaining unit of employees of a Covered
Person.  There is no pending or, to
Borrower’s knowledge, threatened, strike, work stoppage or other material
labor dispute against or affecting any Covered Person or its employees, which
has had or could reasonably be likely to have a Material Adverse Effect.


 


12.8.       No Material
Proceedings.  There are
no Material Proceedings pending or, to the Borrower’s Knowledge, threatened.


 


12.9.       Material
Licenses.  All
Material Licenses have been obtained or exist for each Covered Person.


 


12.10.     Compliance
with Material Laws.  Each
Covered Person is in compliance with all Material Laws.  Without limiting the generality of the
foregoing:


 


18

















 


12.10.1.     General
Compliance with Environmental Laws.  The
operations of every Covered Person comply with all applicable Environmental
Laws except where the failure to be in compliance would not reasonably be
likely to have a Material Adverse Effect.


 


12.10.2.     Proceedings.  None of the operations of any Covered Person are the subject
of any written judicial or administrative complaint, order or proceeding
alleging the violation of any applicable Environmental Laws which could
reasonably be likely to have a Material Adverse Effect.


 


12.10.3.     Investigations
Regarding Hazardous Materials.  To
Borrower’s Knowledge, none of the operations of any Covered Person are the
subject of investigation by any Governmental Authority regarding the improper
transportation, storage, disposal, generation or release into the environment
of any Hazardous Material, the results of which have or could reasonably be
likely to have a Material Adverse Effect or reduce materially the value of the
Collateral.


 


12.10.4.     Notices
and Reports Regarding Hazardous Materials.  No written notice or report under any Environmental Law
indicating a past or present spill or release into the environment of any
Hazardous Material has been filed within the four years ending on the Execution
Date, or is required to be filed, by any Covered Person with any Governmental
Authority.


 


12.10.5.     Hazardous
Materials on Real Property.  No
Covered Person has at any time, and to Borrower’s Knowledge, no other Person
has at any time during any Covered Person’s occupancy of such real property,
transported, stored, disposed of, generated or released any Hazardous Material
on the surface, below the surface, or within the boundaries of any real
property owned or operated by such Covered Person or any improvements thereon
in violation of applicable Law except where such violation is not reasonably
likely to have a Material Adverse Effect. 
No property of any Covered Person is subject to a Security Interest in
favor of any Governmental Authority for any liability under any Environmental
Law or damages arising from or costs incurred by such Governmental Authority in
response to a spill or release of Hazardous Material into the environment.


 


12.10.6.     Environmental
Property Transfer Acts.  No
environmental property transfer acts are applicable to the transactions
contemplated by this Agreement and each Covered Person has provided all notices
and obtained all necessary environmental permit transfers and consents, if any,
required in order to consummate the transactions contemplated by this
Agreement, to perfect Lender’s Security Interests and to operate such Covered
Person’s business as presently or proposed to be operated, except in any case
where the failure to provide such notices, obtain such permits or consents
could not reasonably be likely to have a Material Adverse Effect.


 


12.11.     Other
Names.  Except as
disclosed in the Disclosure Schedules or in writing to Lender from time to time
with no less than thirty (30) days prior written notice to Lender (unless
Lender agrees in writing to a shorter period) (i) no Covered Person has
used any name other than the full name which identifies such Covered Person in
this Agreement, and (ii) the only trade name or style under which a
Covered Person sells Inventory or creates Accounts, or to which instruments in
payment of Accounts are made payable, is the name which identifies such Covered
Person in this Agreement.


 


19

















 


12.12.     Prior
Transactions.  Except as
described in section 12.12 of the Disclosure Schedule except for Permitted
Acquisitions (including, transactions contemplated by the last proviso in Section 15.17),
since the Effective Date, no Covered Person has been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any
Person, or acquired any of its property outside of the ordinary course of
business.


 


12.13.     Capitalization.  Other than with respect to Parent, each Covered Person’s authorized
capital stock, partnership interests and membership interests and issued and
outstanding capital stock, partnership interests and membership interests is as
described in section 12.13 of the Disclosure Schedule; provided, however,
Borrower shall update the Disclosure Schedule with respect to any newly-created
Subsidiary (in each case, with obtaining the prior written consent of Lender,
and Borrower shall comply with the terms of Section 15.17 hereof); and all
issued and outstanding shares, partnership interests and membership interests
of each Covered Person are validly issued and outstanding, fully paid and
non-assessable, and are owned beneficially and of record by the Persons listed.


 


12.14.     Solvency.  Each Borrower is Solvent prior to and after giving effect to,
the making of each Advance and after giving effect to the contribution
provisions of Section 17.3.9.


 


12.15.     Projections.  The projections of Borrower’s financial condition, results of
operations, and cash flow for the period through January 31, 2010, a copy
of which have been delivered to Lender, represent Borrower’s good faith
estimate of Borrower’s future financial performance for the periods set forth
therein.  Such projections have been
prepared on the basis of the assumptions set forth therein reasonably believed
by Borrower in good faith to be fair and reasonable.


 


12.16.     Financial
Statements.  The
Financial Statements are complete and correct in all material respects, have
been prepared in accordance with GAAP, and fairly reflect the financial
condition, results of operations and cash flows of the Persons covered thereby
as of the dates and for the periods stated therein.


 


12.17.     No Change
in Condition.  Since the
date of the initial Financial Statements and the Financial Statements delivered
to Lender as required herein, there has been no change which has had or could
reasonably be likely to have a Material Adverse Effect.


 


12.18.     No
Defaults.  No Covered
Person is in breach or violation under any Material Agreement or any Material
Obligation of such Covered Person.  No
Default has occurred which is continuing and no Event of Default has occurred
and is continuing.


 


12.19.     Investments.  No Covered Person has any Investments in other Persons except
Permitted Investments.


 


12.20.     Indebtedness.  No Covered Person has any Indebtedness except Permitted
Indebtedness.


 


12.21.     Indirect
Obligations.  No Covered
Person has any Indirect Obligations except existing Permitted Indirect
Obligations.


 


12.22.     [Intentionally omitted].


 


12.23.     Capital Leases.  No Covered Person has an interest as a lessee under any
Capital Leases other than Capital Leases that are Permitted Indebtedness.


 


20

















 


12.24.     Tax
Liabilities; Governmental Charges.  Each
Covered Person has filed or caused to be filed all tax reports and returns
required to be filed by it with any Governmental Authority, except where
extensions have been properly obtained. 
Each Covered Person has paid or made adequate provision for payment of
all Taxes of such Covered Person, except Taxes which are being diligently
contested in good faith by appropriate proceedings and as to which such Covered
Person has established adequate reserves in conformity with GAAP.  No Security Interest for any such Taxes has
been filed and no claims are being asserted in writing with respect to any such
Taxes which, if adversely determined, have or could reasonably be likely to
have a Material Adverse Effect.  There
are no material unresolved issues concerning any liability of a Covered Person
for any Taxes which, if adversely determined, has or could reasonably be likely
to have a Material Adverse Effect.


 


12.25.     Pension
Benefit Plans.  All Pension
Benefit Plans that Borrower or any ERISA Affiliate has maintained, sponsored, or
contributed to in the past 5 years comply with all Material Laws applicable
thereto and will continue to so comply.


 


12.26.     Welfare
Benefit Plans.  No Covered
Person or ERISA Affiliate of any Covered Person maintains a Welfare Benefit
Plan that has a liability which, if enforced or collected, has had or could
reasonably be likely to have a Material Adverse Effect.  Each Covered Person and each ERISA Affiliate
of any Covered Person has complied in all respects with the applicable
requirements of Section 4980B of the Code pertaining to continuation
coverage as mandated by COBRA, except any failure that does not have or could
be reasonably likely not to have a Material Adverse Effect.


 


12.27.     Retiree
Benefits.  No Covered
Person or ERISA Affiliate of such Covered Person has an obligation to provide
any Person with any medical, life insurance, or similar benefit following such
Person’s retirement or termination of employment (or to such Person’s
beneficiary subsequent to such Person’s death) which, if enforced or collected,
has had or could reasonably be likely to have a Material Adverse Effect, other
than (i) such benefits provided to Persons at such Person’s sole expense
and (ii) obligations under COBRA.


 


12.28.     Real
Property.  Section 12.28
of the Disclosure Schedule contains a correct and complete list of (i) the
street addresses of all real property owned by each Covered Person, and (ii) a
list of all leases, subleases, and licenses of real property by each Covered
Person, with such Covered Person identified for each as the lessee, sublessee,
licensee, lessor, sublessor, or licensor, as is the case, together with the
street addresses of the real property involved and the names and addresses of
the other parties to such leases, subleases, and licenses.  Each of such leases, subleases, and licenses
is valid and enforceable against the Covered Person party thereto and to
Borrower’s Knowledge, each other party thereto, in accordance with its terms
and is in full force and effect, and no default by such Covered Person, or to
Borrower’s Knowledge, any other party to any such lease, sublease, or license
exists which could reasonably be likely to have a Material Adverse Effect.


 


12.29.     State of
Collateral and other Property.  Each
Covered Person has good and marketable or merchantable title to all real and
personal property purported to be owned by it or reflected in the Financial
Statements, except for personal property sold or leased in the ordinary course
of business after the date of the Initial Financial Statements as permitted by
and in accordance with the terms of the Loan Documents and subject to Permitted
Security Interests.  There are no
Security Interests on any of the property purported to be owned by any Covered
Person, including the Collateral, except Permitted Security Interests.  All of the Inventory purported to be owned or
leased by a Covered Person is in good operating condition and repair taken as a
whole and is,


 


21














 


taken as a whole, suitable for the use to which it is
customarily put by its owner, ordinary wear and tear and damage by acts of God
excepted.  Without limiting the
generality of the foregoing:


 


12.29.1.     Inventory.  With respect to Inventory of each Borrower:  (i) such Inventory (except for Inventory
in transit or in the possession of such Covered Person’s customers) that is
Collateral is located at one or another of the premises listed in
section 12.29.1 of the Disclosure Schedule as being a location of such
Borrower’s Inventory; (ii) the applicable Covered Person has good and
merchantable title to such Inventory or a good and valid leasehold interest as
lessee to such Inventory, subject to no Security Interest whatsoever except for
the perfected Security Interest granted to Lender and except for Permitted
Security Interests; (iii) such is of good and merchantable quality, free
from any material defects; (iv) such Inventory that is Collateral is not
subject to any licensing, patent, royalty, trademark, trade name or copyright
agreements with any third parties; and (v) the completion of manufacture
and sale, lease, or other disposition of such Inventory that is Collateral by
Lender following an Event of Default shall not require the consent of any
Person and shall not constitute a breach or default under any contract or
agreement to which any Covered Person is a party or to which the Inventory is
subject.


 


12.29.2.     Equipment.  With respect to each Covered Person’s equipment: (i) such
Covered Person has good and marketable title thereto subject to Permitted
Security Interests; (ii) none of such equipment is subject to any Security
Interests except for the perfected Security Interest granted to Lender pursuant
hereto and except for Permitted Security Interests; (iii) such equipment
that is Collateral (except for equipment in transit) is located at one or
another of the premises listed in section 12.29.1 of the Disclosure
Schedule as a location of such Covered Person’s equipment; and (iv) such
equipment is of good and merchantable quality, free from any material defects,
ordinary wear and tear and damage by acts of God excepted.


 


12.29.3.     Documents,
Instruments and Chattel Paper.  All
documents, instruments and chattel paper describing, evidencing or constituting
Collateral, and all signatures and endorsements thereon by a Covered Person are
complete, valid, and genuine as to Borrower and, to Borrower’s Knowledge, as to
third parties, and all goods evidenced by such documents, instruments and
chattel paper are owned by a Covered Person free and clear of all Security
Interests other than Permitted Security Interests.


 


12.30.     Chief
Place of Business; Locations of Collateral.  As of the Execution Date,


 


12.30.1.     the chief
executive office and principal place of business of each Covered Person is
identified in section 12.30.1 of the Disclosure Schedule and the location
of the books and records of each Covered Person, and all of such Covered Person’s
chattel paper and all records of Accounts, are located only at the places listed
and so identified in section 12.30.1 of the Disclosure Schedule;


 


12.30.2.     the States
in which any Covered Person is qualified to conduct its business and other
foreign jurisdictions if any in which any Covered Person conducts its business
are listed and so identified in section 12.30.2 of the Disclosure
Schedule; and


 


12.30.3.     all of the
Collateral is located within one or more of the locations listed in
section 12.29.1 of the Disclosure Schedule or is in transit to, or located
at, one of the Borrower’s customers, provided, however, if any Collateral will
remain outside of any location listed on section 12.29.1 of the Disclosure
schedule for longer than


 


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30 consecutive days, Borrower shall, prior to the
expiration of such 30-day period, give written notice to Lender of such event
as required under Section 14.23.


 


12.31.     Warranties
and Representations-Inventory.  For
each item of Inventory, Borrower represents and warrants to Lender that at all
times:  (a) all such Inventory that
is Collateral, except as otherwise provided in Section 12.30.3, will be
kept only at the locations indicated on section 12.29.1 of the Disclosure
Schedule; (b) Borrower now keeps and will keep correct and accurate
records itemizing and describing the kind, type, quality and quantity of such
Inventory, Borrower’s cost therefor and the selling price thereof and/or the
rental/lease rate thereof, the daily withdrawals therefrom and the additions
thereto; (c) Inventory that is Collateral not on rent is not and will not
be stored with a bailee, repairman, warehouseman or similar party without
Lender’s prior written consent, and if Lender consents, Borrower will,
concurrently with delivery to such party, cause any such party to issue and
deliver to Lender, in form acceptable to Lender, warehouse receipts, in Lender’s
name evidencing the storage of such Inventory, and waivers of warehouseman’s
liens in favor of Lender, if required by this Agreement; (d) Borrower will
timely pay or cause to be timely paid all taxes, rents, business taxes, and
other charges relating to the premises where such Inventory is located which
Borrower is contractually or legally obligated to pay; and (e) a landlord
consent of the type described in Section 9.1, satisfactory to Lender, has
been obtained for each location in which Borrower keeps Inventory that is
Collateral with a value in excess of $50,000 or any of its material books and
records.


 


12.32.     No
Negative Pledges.  No Covered
Person is a party to or bound by any Contract which prohibits the creation or
existence of any Security Interest upon or assignment or conveyance of any of
the Collateral (regardless of type or nature) of any Covered Person, except as
expressly set forth on Section 12.32 of the Disclosure Schedule.


 


12.33.     Security Documents.


 


12.33.1.     Security
Agreements.  Section 9
of this Agreement is effective to grant to Lender for itself and for the
benefit of its participants (and each of their respective successors and
assigns) an enforceable Security Interest in the Personal Property Collateral
described therein.  Upon appropriate
filing (as to all Personal Property Collateral in which a  Security Interest may be perfected under the
applicable state’s UCC by filing a financing statement or statements) or Lender’s
taking possession (as to items of the Personal Property Collateral of which a
secured party must take possession in order to perfect a Security Interest
under the applicable state’s UCC), Lender for itself and for the benefit of its
participants (and each of their respective successors and assigns) a fully
perfected Security Interest in the Personal Property Collateral described,
subject only to Permitted Security Interests affecting such Personal Property
Collateral.


 


12.34.     [Intentionally omitted].


 


12.35.     Subsidiaries.  Borrower has no Subsidiaries except those Persons listed in
section 12.35 of the Disclosure Schedule; provided, however, Borrower shall
update the Disclosure Schedule with respect to a new Subsidiary created any newly-created
Subsidiary (in each case, with obtaining the prior written consent of Lender)
and Borrower shall comply with the terms of Section 15.17 hereof;
provided, however, if Borrower acquires a Subsidiary in connection with a
Permitted Acquisition, no prior consent of Lender shall be required and the
foregoing shall be inapplicable to any such acquired Subsidiary if such
acquired Subsidiary is merged into a Borrower within ten (10) days
following its acquisition.  As of the
Execution Date, except as set forth in section 12.35 of the Disclosure Schedule
and except for employee or director stock option programs, employee stock
purchase plans, benefit plans, and restricted stock programs, there are


 


23

















 


no pre-emptive or other outstanding rights, options,
warrants, conversion rights or other similar agreements or understandings for
the purchase or acquisition of any Capital Securities of any Borrower other
than Parent or other Covered Person other than Parent to which a Borrower or
other Covered Person is a party.


 


12.36.     [Intentionally omitted].


 


12.37.     Margin
Stock.  No Covered
Person is engaged or will engage, principally or as one of its important
activities, in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulation U), and no part of
the proceeds of any Advance will be used to purchase or carry any such margin
stock or to extend credit to others for the purpose of purchasing or carrying
any such margin stock or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation U.  None of the transactions contemplated by any
of the Loan Documents will violate Regulations T, U or X of the FRB.


 


12.38.     Securities
Matters.  No proceeds
of any Advance will be used to acquire any security in any transaction which is
subject to Sections 13 and 14 of the Securities Exchange Act of 1934.


 


12.39.     Investment
Company Act, Etc.  No Covered
Person is an investment company  registered
or required to be registered under the Investment Company Act of 1940, or a
company controlled (within the meaning of such Investment Company Act) by such
an investment company or an affiliated person of, or promoter or principal
underwriter for, an investment company, as such terms are defined in the
Investment Company Act of 1940.  No
Covered Person is subject to regulation under the Public Utility Holding
Company Act of 2005, the Federal Power Act, the Interstate Commerce Act or any
other Law limiting or regulating its ability to incur Indebtedness for money
borrowed.


 


12.40.     No
Material Misstatements or Omissions.  Neither
the Loan Documents, any of the Financial Statements nor any statement, list,
certificate or other information furnished or to be furnished by Borrower or
any other Covered Person to Lender in connection with the Loan Documents or any
of the transactions contemplated thereby contains any untrue statement of a
material fact, or omits to state a material fact necessary to make the statements
therein, in light of the circumstances in which it was made, not
misleading.  To Borrower’s knowledge,
Borrower has disclosed to Lender everything regarding the business, operations,
property, financial condition, or business prospects of itself and every
Covered Person that has or is reasonably likely to have a Material Adverse
Effect on any Covered Person.


 


12.41.     Filings.  Since December 11, 2007, all registration statements,
reports and proxy statements, if any, required to be filed by Borrower with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, and
the Securities Exchange Act of 1934, have been filed, and such filings are
complete and accurate in all material respects and contain no untrue statements
of material fact or omit to state any material facts required to be stated
therein or necessary in order to make the statements therein not misleading.


 


12.42.     Broker’s
Fees.  No broker
or finder is entitled to compensation for services rendered with respect to the
transactions contemplated by this Agreement.


 


12.43.     Transportation
Solutions Assets.   The sole
asset of Borrower’s Subsidiary, Transportation Solutions, LLC, is its interest
in aircraft.


 


13.          Modification and Survival of
Representations.  Borrower
may at any time after the initial Advances are made propose to Lender in
writing to modify the Representations and Warranties in


 


24

















 


Section 12, and any other representation or warranty
made in any certificate, report, opinion or other document delivered by
Borrower pursuant to the Loan Documents. 
If the proposed modifications are satisfactory to Lender as evidenced by
its written assent thereto, then such representations and warranties shall be
deemed and treated as so modified, but only as of the date of Borrower’s
written modification proposal.  If such
proposed modifications are not satisfactory to Lender, then such proposed
modifications shall not be deemed or treated as modifying such Representations
and Warranties.  All such representations
and warranties, as made or deemed made as of a particular time, shall survive
execution of each of the Loan Documents and the making of every Advance, and
may be relied upon by Lender as being true and correct as of the date when made
or deemed made until Payment in Full.


 


14.          Affirmative Covenants.  Each Borrower covenants and agrees that, while the Floorplan
Loan Facility remains in effect and until Payment in Full, each Borrower shall
do, and each Borrower shall cause each other Borrower and each other Covered
Person to do, the following:


 


14.1.       Use of
Proceeds.  The
proceeds of and the initial and subsequent Floorplan Loan Advances, shall be
used for purposes permitted by Section 5.1.2.


 


14.2.       Corporate
Existence.  Each Covered
Person shall maintain its existence in good standing and shall maintain in good
standing under its jurisdiction of incorporation/formation/organization and its
right to transact business in those states in which it is now or hereafter
doing business, except where the failure to so qualify will not have and will
not be reasonably likely to have a Material Adverse Effect on any Covered
Person (provided, however, notwithstanding anything contained herein to the
contrary, Borrower may, in its discretion, eliminate any Subsidiary by merging
such Subsidiary with and into Borrower with Borrower as the surviving
entity).  Each Covered Person shall
obtain and maintain all Material Licenses for such Covered Person.


 


14.3.       Maintenance of
Property and Leases.  Each
Covered Person shall maintain in good condition and working order (ordinary
wear and tear and damage by acts of God excepted and taken as a whole), and
repair and replace as required, all buildings, equipment, machinery, fixtures,
Inventory, and other real and personal property owned or leased by such Covered
Person whose useful economic life has not elapsed and which is necessary for
the ordinary conduct of the business of such Covered Person, except where
failure to do so does not have or reasonably will likely not have a Material
Adverse Effect.  Each Covered Person
shall maintain in good standing and free of defaults all of its leases of
buildings, equipment, machinery, fixtures, Inventory, and other real and personal
property, taken as a whole, whose useful economic life has not elapsed and
which is necessary for the ordinary conduct of the business of such Covered
Person, except where the failure to be in good standing or free of default
would not reasonably be likely to give rise to a Material Adverse Effect.  No Covered Person shall permit any of its
equipment, Inventory, or other property that is Collateral to become a fixture
to real property or an accession to other personal property unless Lender has a
valid, perfected and first priority Security Interest in such Collateral.  No Covered Person shall, without Lender’s
prior written consent, alter or remove any identifying symbol or number on its
equipment or any Inventory that is Collateral.


 


14.4.       Inventory.  Each Covered Person shall keep its Inventory and Equipment,
taken as a whole, in good and merchantable condition (subject to ordinary wear
and tear) at its own expense and shall hold such Inventory and Equipment for
lease, or to be furnished in connection with the rendition of services, in the
ordinary course of such Covered Person’s business, on terms which do not
include consignment or similar terms with respect to any Inventory and
Equipment that is Collateral.


 


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14.5.       Insurance.  Each Covered Person shall at all times keep insured or cause
to be kept insured, in insurance companies having a rating of at least “A-” by
Best’s Rating Service, all property owned by it of a character usually insured
by others carrying on businesses similar to that of such Covered Person in such
manner and to such extent and covering such risks as such properties are
usually insured.  At all times, all
Inventory that is Collateral shall be insured for full replacement value.  Each Covered Person shall timely pay all
premiums for such insurance.  Each
Covered Person shall at all times carry insurance, in insurance companies
having a rating of at least “A-” by Best’s Rating Service, against liability on
account of damage to persons or property (including product liability insurance
and insurance required under all Laws pertaining to workers’ compensation) and
covering all other liabilities common to such Covered Person’s business, in
such manner and to such extent as such coverage is usually carried by others
conducting businesses similar to that of such Covered Person.  At all times, Borrower shall maintain
replacement value insurance for all Collateral on any ocean, waterway,
interstate, highway, or other public way. 
All policies of liability insurance maintained hereunder shall name
Lender as named as an additional insured; all policies of property insurance
maintained hereunder with respect to the Collateral shall reflect Lender’s
interest therein as a loss payee on a form reasonably acceptable to
Lender.  Lender is authorized, but not
obligated, as the attorney-in-fact for Borrower, and every other Covered Person
and, (i) prior to the occurrence of an Event of Default, with Borrower’s
consent (which consent shall not be unreasonably withheld), and upon the
occurrence of an Event of Default, without Borrower’s or any other Covered
Person’s consent, to adjust and compromise proceeds payable under such policies
of insurance, (ii) to collect, receive and give receipts for such proceeds
in the name of Borrower or any other Covered Person and Lender, and (iii) to
endorse Borrower or any other Covered Person’s name upon any instrument in
payment thereof.  Such power granted to
Lender shall be deemed coupled with an interest and shall be irrevocable (until
Payment in Full) as set forth in Section 10.  All policies of insurance maintained
hereunder shall contain a clause providing that such policies under which
Lender is the loss payee or additional insured may not be canceled, reduced in
coverage or otherwise modified without 30 days’ prior written notice to
Lender.  Borrower shall or shall cause
any other Covered Person upon the reasonable request of Lender at any time to
furnish to Lender updated evidence of insurance (in the form required as a
condition to Lender’s lending hereunder) for such insurance.


 


14.6.       Payment of Taxes
and Other Obligations.  Each
Covered Person shall promptly pay and discharge or cause to be paid and
discharged, as and when due, any and all income taxes, federal or otherwise,
lawfully assessed and imposed upon it, and any and all lawful taxes, rates,
levies, and assessments whatsoever upon its properties and every part thereof,
or upon the income or profits therefrom and all claims of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons for labor,
materials, supplies, storage or other items or services which if unpaid might
be or become a Security Interest or charge upon any of its property; provided,
however, that a Covered Person may diligently contest in good faith by appropriate
proceedings the validity of any such taxes, rates, levies, or assessments and
claims, provided such Covered Person has established adequate reserves therefor
in conformity with GAAP on the books of such Covered Person, and no Security
Interest, other than a Permitted Security Interest, results from such
non-payment.


 


14.7.       Compliance With
Laws.  Each
Covered Person shall comply with all Material Laws.  Without limiting the generality of the
foregoing:


 


14.7.1.        Environmental
Laws.  Each
Covered Person shall comply and shall use commercially reasonable efforts to
ensure compliance by all of its tenants, subtenants and other occupants, if
any, with all Environmental Laws, any of which if not so complied


 


26

















 


with will or could be reasonably likely to have a Material
Adverse Effect on any Covered Person.


 


14.7.2.        Pension
Benefit Plans.  Each
Covered Person and each ERISA Affiliate of such Covered Person shall at all
times make prompt payments or contributions to meet the minimum funding
standards under ERISA and the Code with respect to any Pension Benefit Plan
maintained by such Covered Person or such ERISA Affiliate, and shall comply
with all reporting and disclosure requirements and all provisions of the Code
and ERISA applicable to any Pension Benefit Plan maintained by such Covered
Person or such ERISA Affiliate except to the extent that any such failure could
not reasonably be expected to have a Material Adverse Effect.


 


14.8.       Discovery and Clean-Up of Hazardous Material.


 


14.8.1.        In
General.  Upon any
Covered Person receiving written notice of any violation of Environmental Laws
or any similar notice described in Section 14.10.4, or upon any Covered
Person otherwise discovering Hazardous Material on any property owned or leased
by such Covered Person which is in violation of, or which would result in
liability under, any Environmental Law, the violation of which or which
liability will or is reasonably likely to have a Material Adverse Effect.  Borrower shall: (i) promptly take such
acts as Borrower determines may be necessary to prevent material danger or
material harm to the property or any Person therein as a result of such
Hazardous Material; (ii) at the request of Lender during the continuance
of an Event of Default, and at Borrower’s sole cost and expense, obtain and
deliver to Lender promptly, but in no event later than 90 days after such
request, a then currently dated environmental assessment of the property
certified to Lender and any future holder of the Loan Obligations, a proposed
plan for responding to any environmental problems described in such assessment,
and an estimate of the costs thereof; and (iii) take all necessary steps
that Borrower determines may be appropriate to comply with its obligations
under Environmental Laws in connection therewith, and keep Lender informed of
such actions and the results thereof as it may reasonably request.


 


14.9.       Termination of
Pension Benefit Plan.  No Covered
Person or ERISA Affiliate of such Covered Person shall terminate or amend any
Pension Benefit Plan maintained by such Covered Person or such ERISA Affiliate
if such termination or amendment would result in any liability to such Covered
Person or such ERISA Affiliate under ERISA or any increase in current liability
for the plan year for which such Covered Person or such ERISA Affiliate is
required to provide security to such Pension Benefit Plan under the Code except
to the extent any such termination or amendment could not reasonably be
expected to have a Material Adverse Effect.


 


14.10.     Notice to
Lender of Material Events.  Borrower
shall, promptly upon any Responsible Officer of Borrower obtaining Knowledge or
notice thereof, give notice to Lender of (i) any breach of any of the
covenants in Sections 14, 15, or 16; (ii) any Default or Event of
Default; (iii) the commencement of any Material Proceeding; and (iv) any
loss of or damage to any assets of a Covered Person or the commencement of any
proceeding for the condemnation or other taking of any of the assets of a
Covered Person, if such loss, damage or proceeding has or is reasonably likely
to have a Material Adverse Effect on such Covered Person, whether or not
Insurance Proceeds are likely to be payable as a consequence of such loss,
damage or proceeding.  In addition,


 


14.10.1.     Borrower
shall furnish to Lender from time to time all information which Lender
reasonably requests with respect to the status of any Material Proceeding,
which


 


27

















 


Borrower is not prohibited to provide to Lender under any
applicable Law or without loss of attorney-client privilege.


 


14.10.2.     Borrower
shall furnish to Lender from time to time all information which Lender
reasonably requests with respect to any Pension Benefit Plan established by a
Covered Person or an ERISA Affiliate of any Covered Person.


 


14.10.3.     Borrower
shall deliver to Lender a copy of any notice from any Governmental Authority
that any violation of applicable Material Law may have occurred with respect to
any Pension Benefit Plan by a Covered Person or an ERISA Affiliate of such
Covered Person.


 


14.10.4.     Borrower
shall promptly inform Lender of its receipt of, and deliver to Lender a copy
of, any (i) notice that any violation of any Environmental Law or Employment
Law may have been committed or is about to be committed by any Covered Person
that has had or which could reasonably be likely to have a Material Adverse
Effect, (ii) notice that any administrative or judicial complaint or order
has been filed or is about to be filed against any Covered Person alleging
violations of any Environmental Law or Employment Law or requiring such Covered
Person to take any action in connection with the release of any Hazardous
Material into the environment, which has had or could reasonably be likely to
have a Material Adverse Effect, (iii) notice from a Governmental Authority
or private party alleging that a Covered Person may be liable or responsible
for costs associated with a response to or cleanup of a release of Hazardous
Material into the environment or any damages caused thereby, which has had or
could reasonably be likely to have a Material Adverse Effect, (iv) notice
that a Covered Person is subject to federal, state or local investigation
regarding the improper transportation, storage, disposal, generation or release
into the environment of any Hazardous Material which has had or could
reasonably be expected to have a Material Adverse Effect, or (v) notice
that any properties or assets of a Covered Person are subject to a Security
Interest in favor of any Governmental Authority for any liability under any
Environmental Law or damages arising from or costs incurred by such
Governmental Authority in response to a release of Hazardous Material into the
environment.


 


14.10.5.     Borrower
shall deliver to Lender notice of each of the following events promptly after
they occur:  (i) the failure of any
Covered Person or ERISA Affiliate of such Covered Person to make any required
installment or any other required payment to any Pension Benefit Plan in
sufficient amount to comply with ERISA and the Code on or before the due date
for such installment or payment and any applicable grace period; (ii) the
occurrence of any Reportable Event, or a prohibited transaction or accumulated
funding deficiency (as those terms are defined in ERISA), with respect to any
Pension Benefit Plan maintained or contributed to by a Covered Person or an
ERISA Affiliate of such Covered Person; (iii) receipt by a Covered Person
or ERISA Affiliate of such Covered Person of any notice from a Multi-employer
Plan regarding the imposition of withdrawal liability; and (iv) receipt by
a Covered Person or ERISA Affiliate of such Covered Person of any notice of the
institution, or a Covered Person’s expectancy of the institution, of any
proceeding or receipt by such Covered Person or such ERISA Affiliate of any
notice of the taking, or such Covered Person’s or such ERISA Affiliate’s
expectancy of the taking, of any other action which may be reasonably expected
to result in the termination of any Pension Benefit Plan maintained or
contributed to by such Covered Person or such ERISA Affiliate, or the
withdrawal or partial withdrawal by a Covered Person or ERISA Affiliate of such
Covered Person from any Pension Benefit


 


28

















 


Plan, and the filing or receipt by a Covered Person or ERISA
Affiliate of such Covered Person of any such notice and filing or receipt of
all subsequent reports or notices under ERISA with or from the IRS, the PBGC,
or the DOL relating to the same; and, in addition to such notice, deliver to
Lender a certificate of a Responsible Officer of Borrower, setting forth
details as to such events and the action that the affected Covered Person or
ERISA Affiliate of such Covered Person proposes to take with respect
thereto.   For purposes of this Section,
each Covered Person and any ERISA Affiliate of such Covered Person shall be
deemed to know all facts known by the administrator of any Plan of which such
Covered Person or such ERISA Affiliate is the plan sponsor.


 


14.10.6.     Borrower
shall promptly deliver to Lender notice of any default or event of default, or
the occurrence of any event which would with the passage of time, giving of
notice or otherwise, constitute a default or event of default with respect to
any of the Permitted Indebtedness in excess of $250,000.


 


14.10.7.     To the
extent not filed by the Borrower with the SEC, Borrower shall promptly deliver
notice to Lender of the assertion by the holder of any Capital Securities in a
Covered Person or any other Indebtedness of a Covered Person in the outstanding
principal amount in the aggregate in excess of $250,000 that a default exists
with respect thereto or that such Covered Person is not in compliance with the
terms thereof, or of the threat or commencement by such holder of any
enforcement action because of such asserted default or noncompliance.


 


14.10.8.     Borrower
shall, promptly upon Borrower’s Knowledge thereof, deliver notice to Lender of
any pending or threatened strike, work stoppage, or other material labor
dispute affecting a Covered Person which could reasonably be likely to have a
Material Adverse Effect.


 


14.10.9.     Borrower
shall promptly deliver notice to Lender of any change in the name, state of
incorporation or organization or form of any Covered Person, or the trade names
or styles under which a Covered Person will sell Inventory or create Accounts,
or to which instruments in payment of Accounts may be made payable, at least 30
days prior to such change unless Lender agrees in writing to a shorter period.


 


14.10.10.   Borrower
shall, promptly after Borrower having Knowledge thereof, deliver notice to
Lender of any event that has or is reasonably likely to have a Material Adverse
Effect on any Covered Person.


 


14.10.11.   Borrower
shall, promptly after Borrower having Knowledge thereof, deliver notice to
Lender of an actual, alleged, or potential violation of any Material Law
applicable to a Covered Person or the property of a Covered Person.


 


14.10.12.   Borrower
shall notify Lender promptly in writing of any fact or condition of which
Borrower is aware which adversely affects the value of the Collateral taken as
a whole, including disclosing the amount of such loss or depreciation and
disclosing any adverse fact or condition or the occurrence of any event which
causes loss or depreciation in the value of the Collateral, of more than
$250,000 taken as a whole.  Borrower
shall provide such additional information to Lender regarding the amount of any
loss or depreciation in value of the Collateral as Lender may request from time
to time.


 


14.10.13.   Borrower
shall keep on file with Lender at all times an appropriate instrument naming
each Borrowing Officer.


 


29

















 


14.11.     Maintenance of Security Interests of Security
Documents.


 


14.11.1.     Preservation
and Perfection of Security Interests.  Borrower shall promptly, upon the reasonable request of
Lender and at Borrower’s expense, execute, acknowledge and deliver, or cause
the execution, acknowledgment and delivery of, and thereafter file or record in
the appropriate governmental office, any document or instrument supplementing
or confirming the Security Documents or otherwise reasonably deemed necessary
by Lender to create, preserve or perfect any Security Interest purported to be
created by the Security Documents in the Collateral or to fully consummate the
transactions contemplated by the Loan Documents.  The foregoing actions by Borrower shall
include, without limitation, (i) filing financing or continuation
statements, and amendments thereof, and executing such assignments or security
agreements, in form and substance satisfactory to Lender; (ii) delivering
to Lender the original certificates of title for motor vehicles, or
applications therefor duly executed, with Lender’s Security Interest properly
shown thereon; (iii) delivering to Lender the originals of all
instruments, documents and chattel paper, and all other Collateral of which
Lender determines it should have physical possession in order to perfect and
protect Lender s Security Interest, duly endorsed or assigned to Lender without
restriction; (iv) delivering to Lender warehouse receipts covering any
portion of the Collateral located in warehouses and for which warehouse
receipts are issued; (v) during an Event of Default, transferring
Inventory that is Collateral to warehouses designated by Lender; (vi) during
an Event of Default, delivering to Lender all letters of credit on which
Borrower is named beneficiary if it is Collateral or relates to Collateral; (vii) placing
a durable notice of the existence of Lender’s Security Interest, acceptable to
Lender, upon such items of the Collateral as are designated by Lender; and (viii) placing
a notice of the existence of Lender’s Security Interest, acceptable to Lender,
upon those writings evidencing the Collateral and the books and records of
Borrower pertaining to the Collateral, as designated by Lender.


 


14.11.2.     Collateral
Held by Warehouseman, Bailee, etc.  If
any Collateral with a value greater than $50,000 or if any of its material
books and records are at any time in the possession or control of a
warehouseman, bailee or any of Borrower’s agents or processors (not including
any lessee or other person to whom Inventory is leased or rented in the
ordinary course of such Covered Person’s business), or with respect to any
national or regional headquarters location, then Borrower shall notify Lender
thereof and shall notify such Person of Lender’s Security Interest in such
Collateral and, upon Lender’s request during an Event of Default, instruct such
Person to hold all such Collateral for Lender’s account subject to Lender’s
instructions.  If at any time any
Collateral with a value greater than $50,000 or any of its material books and
records are located on any premises that are not owned by Borrower (not
including any lessee or other person to whom Inventory is leased or rented in
the ordinary course of such Covered Person’s business, or other locations where
Borrower is not obligated to pay rent for up to 30 consecutive days or in
transit thereto), or with respect to any national or regional headquarters
location, then Borrower shall obtain or cause to be obtained written waivers or
consents, in form and substance satisfactory to Lender, of all present and
future Security Interests to which the owner or lessor or any mortgagee of such
premises may be entitled to assert against the Collateral.


 


14.11.3.     Compliance
With Terms of Security Documents.  Each
Covered Person shall comply with all of the terms, conditions and covenants in
the Security Documents to which such Covered Person is a party.


 


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14.12.     Accounting
System.  Each
Covered Person shall maintain a system of accounting established and
administered in accordance with GAAP. 
Without limiting the generality of the foregoing:


 


14.12.1.     Account
Records.  Each
Covered Person shall maintain a record of Accounts at its principal place of
business that itemizes each Account of such Covered Person and describe the
names and addresses of the Account Debtors on such Accounts, all relevant
invoice numbers, invoice dates, and shipping dates, and the due dates,
collection histories, and aging of such Accounts.


 


14.12.2.     Inventory
Records.  Each
Covered Person shall maintain an Inventory system satisfactory to Lender.


 


14.12.3.     Tracing
of Proceeds.  Each
Borrower shall maintain detailed and accurate accounting and records of
proceeds of the Loans and transfers of proceeds of the Loans (i) received
by it from Lender, (ii) transferred from it to any other Covered Person,
and (iii) received by it from another Borrower.  Each Borrower acknowledges that its ability
to obtain the Loans hereunder is made possible by the fact that the Borrowers
are co-borrowers under this Agreement and the other Loan Documents, and are
engaged in a common enterprise.  Each
Borrower agrees that (i) the business operations of each Borrower and each
other Covered Person are interrelated and complement one another, and such
entities have a common business purpose and common management, and (ii) the
proceeds of Advances hereunder will benefit each Borrower, severally and
jointly, regardless of which Borrower requests or receives part or all of any
Advance.  Not in any way in limitation of
any other provisions set forth herein, such books and records may be reviewed
and copied by Lender at Borrower’s expense at reasonable intervals and upon
reasonable notice given by Lender to Borrower.


 


14.13.     Financial
Statements.  Borrower
shall deliver to Lender:


 


14.13.1.     Annual
Financial Statements.  Within 120
days after the close of each fiscal year of Borrower, year-end audited
consolidated Financial Statements of each Borrower and its Subsidiaries,
containing a balance sheet, income statement, statement of cash flows and a
report by a regionally or nationally recognized independent certified public
accounting firm selected by Borrower certified by such public accounting firm
without qualification, including without adverse reference to going concern
value and without reference to material weakness (as defined by Regulation S-X)
in any respect of the Borrower’s or any other Covered Person’s internal
controls, together with all related income tax returns and filings (except for
income tax returns for which the required filing date has been extended, in
which case Borrower shall deliver such tax returns to Lender simultaneously
with the filing thereof in accordance with such extension) and accompanied by a
Compliance Certificate of Borrower.  The
independent certified public account firm of Borrower on the Effective Date is
acceptable.


 


14.13.2.     Quarterly
Financial Statements.  Within
45 days after the end of each fiscal quarter of Borrower
management-prepared unaudited Financial Statements of each Borrower and every
Subsidiary of a Borrower for the fiscal quarters not covered by the latest
year-end Financial Statements, in each case containing a balance sheet, income
statement, statement of cash flows, and unaudited consolidated Financial
Statements of Borrower and its Subsidiaries, in each case accompanied by (i) for
the third month of each fiscal quarter, a statement comparing such Financial
Statements with budgeted projections for such fiscal quarter and for the
elapsed portion of the fiscal year of


 


31














 


Borrower as
contained in the annual budget prepared for such fiscal year, and (ii) a
Compliance Certificate.


 


Each Compliance Certificate shall be in the form of Exhibit 14.13,
shall contain detailed calculations of the financial measurements referred to in
Section 16 for the relevant periods, and shall contain statements by the
signing authorized officer on behalf of Borrower (either the chief executive
officer, president, any vice president, the chief financial officer or other
mutually agreed to representative) to the effect that, except as explained in
reasonable detail in such Compliance Certificate, (i) the attached
Financial Statements are complete and correct in all material respects
(subject, in the case of Financial Statements other than annual, to normal
year-end audit adjustments and with respect to Financial Statements other than
annual, without footnote disclosures) and have been prepared in accordance with
GAAP applied consistently throughout the periods covered thereby and with prior
periods (except as disclosed therein), (ii) all of the Representations and
Warranties are true and correct as of the date such certification is given as
if made on such date (with such exceptions as have been disclosed to Lender in
writing by Borrower or any Guarantor and are satisfactory to Lender), and (iii) there
is no Existing Default.  If any
Compliance Certificate delivered to Lender discloses that a representation or
warranty is not true and correct, or that there is an Existing Default that has
not been waived in writing by Lender, such Compliance Certificate shall state
what action Borrower has taken or proposes to take with respect thereto.


 


14.14.              Other
Financial Information.  Borrower
shall also deliver the following to Lender each in a form satisfactory to
Lender:


 


14.14.1.                Reports or Information Concerning
Inventory.  Such other
reports and information, in form and detail reasonably satisfactory to Lender,
and documents as Lender may reasonably request from time to time concerning
Inventory that constitutes Collateral including, to the extent requested by
Lender, copies of all invoices, leases, rental agreements, bills of lading,
shipping receipts, purchase orders, and warehouse receipts.


 


14.14.2.                Stockholder and SEC Reports.  Contemporaneously with their filing by or on behalf of
Borrower or any other Covered Person, copies of the following to the extent
that they are not otherwise publicly available: 
(i) proxy statements, financial statements and reports which
Borrower makes available to its stockholders, and (ii) reports,
registration statements and prospectuses with any securities exchange or the
Securities and Exchange Commission or any Governmental Authority succeeding to
any of its functions.


 


14.15.              Inventory.  Borrower shall, at least once per fiscal year, conduct a
physical count of the Inventory that constitutes Collateral at each location
and promptly following the completion of such count provide Lender with a
report thereof in form and detail satisfactory to Lender, including the value
of such Inventory in accordance with GAAP, provided, however, during an
Existing Default, Lender may request a physical count at any time.


 


14.16.              Annual
Projections; Operating Plan.  No
more than 60 days after the first day of each fiscal year of all Borrowers,
projected balance sheets, statements of income and expense, and statements of
cash flows for such fiscal year and the fiscal year immediately thereafter, on
a consolidated basis, and with such other detail as Lender may require,
together with management’s operating plan, and, if the board of directors of
Parent approves such operating plan, projections and/or budget, promptly after
such approval, provide such approved operating plan, projections and budget, if
modified, to Lender.


 


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14.17.              Rental Agreements and System Reports.  At all times, Borrower shall cause its
Account Debtors on Accounts that are Collateral to sign separate rental
agreements relating to the Collateral from the rental agreements relating to
assets securing Indebtedness to other Persons. 
At all times, Borrower shall cause the reports delivered to Lender to
show separately the Collateral from its and each other Covered Person’s assets
securing the Indebtedness to other Persons.


 


14.18.              Other
Information.  Upon the
request of Lender, Borrower shall promptly deliver to Lender such other
information about the business, operations, revenues, financial condition,
property, or business prospects of Borrower and every other Covered Person as
Lender may, from time to time, reasonably request.


 


14.19.              Examinations
and Site Visits by Lender.  Lender
or Persons authorized by and acting on behalf of Lender may at any time (upon
reasonable prior notice, except if there is an Existing Default, no prior
notice shall be required) during normal business hours examine the books,
records, and assets of, and inspect any of the property, locations or
operations of, each Covered Person from time to time, and in the course thereof
may make copies or abstracts of such books and records and discuss the affairs,
finances and books and records of such Covered Person with its accountants,
officers and employees, and make such inspections as it deems necessary.  Lender may undertake examinations up to
twelve (12) times in each calendar year. 
Each Covered Person shall cooperate with Lender and such Persons in the
conduct of such exams, site visits and inspections and shall deliver to Lender
any instrument necessary for Lender to obtain records from any service bureau
maintaining records for such Covered Person. 
Lender may, while there is an Existing Default, perform as many as
examinations as it may choose.  Borrower
is required to reimburse Lender for all reasonable fees, costs and expenses
incurred in connection with any such examinations, provided however, if any
such examination is performed while there is no Existing Default, then the
Borrower shall not be obligated to reimburse Lender for an amount in excess of
$5,500 per such examination or $11,000 per year in total.


 


14.20.              Verification
of Accounts and Notices to Account Debtors.  Lender shall have the right at any time and from time to
time, to verify the validity and amount of any Account that is Collateral and
any other matter relating to an Account that is Collateral, by communicating in
writing or orally directly with the Account Debtor or any Person who represents
or Lender reasonably believes represents the Account Debtor.


 


14.21.              Appraisals
of Collateral.  Lender or
Persons authorized by and acting on behalf of Lender may, as often as Lender
deems desirable, perform or have performed on its behalf an appraisal of
Borrower’s Collateral by an appraiser reasonably acceptable to Lender and
prepared on a basis reasonably satisfactory to Lender.  Each Covered Person shall cooperate with
Lender and such Persons in the conduct of such appraisals and shall deliver to
Lender or such Persons any documents or instruments necessary for Lender or
such Person’s to perform such appraisals. 
If there is an Existing Default at the time of any such appraisal, then
Borrower shall reimburse Lender for all reasonable costs and expenses actually
incurred by it in conducting or having conducted such appraisal plus Lender’s
other actual out-of-pocket costs and expenses, and if there is no Existing
Default at the time of any such appraisal, Borrower shall not be obligated to
reimburse Lender for its costs and expenses actually incurred by it in
conducting or having conducted such appraisal including Lender’s other actual
out-of-pocket costs and expenses.


 


14.22.              Access to
Officers and Auditors.  Each
Covered Person shall permit Lender and Persons authorized by Lender to discuss
the business, operations, revenues, financial condition, property, or business
prospects of such Covered Person with its officers, employees, accountants and 


 


33

















 


independent
auditors as often as Lender may request in its reasonable discretion, and such
Covered Person shall direct such officers and employees, and shall request such
accountants and independent auditors to cooperate with Lender.


 


14.23.              Movement
of Inventory.  Borrower
shall notify Lender in writing if Borrower has Knowledge that any Inventory
that constitutes Collateral will be located for more than thirty
(30) consecutive days outside any of the locations listed in
section 12.29.1 of the Disclosure Schedule (except for Inventory in
transit or at Borrower’s customers).


 


14.24.              Titled
Assets.  While an
Event of Default has occurred and is continuing, upon Lender’s request,
Borrower shall promptly cause the respective titles of all Collateral which are
titled in the name of any Covered Person to reflect thereon that Lender, as the
first and only lienholder thereon, and shall deliver, at Lender’s request,
originals of all such titles to Lender.


 


14.25.              Claims
Act.  At any
time, Borrower shall, at Lender’s request, promptly make such filings and
obtain such acknowledgements in accordance with the Claims Act and take any
other steps necessary to perfect Lender’s Security Interest to Lender’s
satisfaction in any Account that is Collateral with respect to which the
Account Debtor is the United States of America, any state, or any department,
agency, public corporation or other instrumentality thereof.


 


14.26.              Further
Assurances.  Borrower
shall execute and deliver, or cause to be executed and delivered, to Lender
such documents and agreements, and shall take or cause to be taken such
actions, as Lender may from time to time reasonably request to carry out the terms
and conditions of this Agreement and the other Loan Documents.  Borrower further covenants to promptly
execute and deliver at its expense (including, without limitation, the
reasonable fees and expenses of counsel for Lender) an amendment to this Agreement
in form and substance satisfactory to Lender evidencing the amendment of this
Agreement to include Additional and Amended Financial Covenants as provided in Section 15.25,
provided, however, that the execution and delivery of such amendment shall not
be a precondition to the effectiveness of such amendment as provided for in Section 15.25,
but shall merely be for the convenience of the parties hereto, and provided
further, however, with respect to any Indebtedness in existence on the date
hereof, the provisions of this sentence shall apply only to amendments after
the date hereof.  Borrower shall provide
Lender prior written notice of any proposed Additional and Amended Financial
Covenants promptly upon Borrower becoming aware of any such proposed Additional
and Amended Financial Covenants.


 


15.                               Negative
Covenants.  Borrower
covenants and agrees that, while the Floorplan Loan Facility remains in effect
and until Payment in Full, Borrower shall not, directly or indirectly, do any
of the following, or permit any other Borrower or any other Covered Person to
do any of the following, without the prior written consent of Lender:


 


15.1.                     Investments.  Make any Investments in any other Person except the
following:


 


15.1.1.                       Investments arising in the ordinary course of business and
consistent with past practice, or otherwise incurred in the ordinary course of
business and substantially related to the Parent’s business as of the Effective
Date, including Permitted Acquisitions, cash and cash equivalents, marketable
securities and short-term Investments, Investments in Subsidiaries to the
extent permitted hereunder, travel and other expense advances to employees,
deposit accounts, and currency or interest rate hedging arrangements, or any
other Investment approved by Lender in writing prior to its incurrence.


 


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15.2.                     Indebtedness.  Create, incur, assume, or allow to exist any Indebtedness of
any kind or description, except the following:


 


15.2.1.                       Indebtedness (including, without limitation, Capital Lease
and purchase money Indebtedness) incurred in the ordinary course of business
which is not reasonably anticipated to cause a Default hereunder.


 


15.2.2.                       The Loan Obligations.


 


15.2.3.                       Any Indebtedness that would not result in a violation of the
financial covenant set forth in Section 16.


 


15.3.                     Prepayments.  During any Existing Default prepay, whether voluntarily or
otherwise, any Indebtedness, other than (a) the Loan Obligations in
accordance with the terms of the Loan Documents, (b) Obligations to other
lenders constituting Permitted Indebtedness, and (c) trade payables in the
ordinary course of business consistent with past practices.


 


15.4.                     Indirect
Obligations.  Create,
incur, assume or allow to exist any Indirect Obligations except (i) Indirect
Obligations existing on the Execution Date and disclosed on section 12.21 of
the Disclosure Schedule, and (ii) Indirect Obligations with respect to
Permitted Indebtedness, or in connection with the Obligations of another Covered
Person incurred in such Covered Person’s ordinary course of business consistent
with past practices.


 


15.5.                     Security
Interests.  Create,
incur, assume or allow to exist any Security Interest upon all or any part of
its property, real or personal (including, without limitation, intangible
property), now owned, leased or hereafter acquired or leased, except the
following:


 


15.5.1.                       Security Interests for taxes, assessments or governmental
charges not delinquent or being diligently contested in good faith and by
appropriate proceedings and for which adequate book reserves in accordance with
GAAP are maintained.


 


15.5.2.                       Security Interests arising out of deposits in connection with
workers’ compensation insurance, unemployment insurance, old age pensions, or other
social security or retirement benefits legislation.


 


15.5.3.                       Deposits to secure bids, tenders, contracts (other than
contracts for the payment of money), leases, statutory obligations, and appeal
bonds, and other obligations of like nature arising in the ordinary course of
business.


 


15.5.4.                       Security Interests imposed by any Law, such as mechanics’,
workmen’s, materialmen’s, landlords’, carriers’, or other like Security
Interests arising in the ordinary course of business which secure payment of
obligations which are not past due or which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP are maintained on such Covered Person’s books.


 


15.5.5.                       Subject to the limitations in Section 15.2, Security
Interests in favor of the holders of any asset leased under a Capital Lease to
Borrower.


 


15.5.6.                       Subject to the limitations in Section 15.2, Purchase
money Security Interests securing payment of the purchase price of equipment
acquired by Borrower after the Execution Date if such Security Interests attach
within 20 days of the Borrower’s receipt 


 


35

















 


of such
equipment and if the holder of such Security Interest holds or purports to hold
a Security Interest in any of the Collateral then such Security Interest must
be subject to an intercreditor agreement acceptable to Lender.


 


15.5.7.                       Security Interests securing the Loan Obligations in favor of
Lender.


 


15.5.8.                       Without duplication of any other Security Interests permitted
by this Section 15.5, Security Interests existing on the Execution Date
that are disclosed in section 12.29 of the Disclosure Schedule


 


15.5.9.                       Security Interests in assets that are not Collateral.


 


15.5.10.                Security Interests in Collateral that are subordinated to the
Security Interest granted hereunder pursuant to an intercreditor agreement
acceptable to Lender.


 


15.6.                     Acquisitions.  Acquire any Capital Securities in a Person, or acquire all or
substantially all of the assets of a Person (including without limitation
assets comprising all or substantially all of an unincorporated business unit
or division of any Person) for consideration in excess of ten percent (10%) of
the Parent’s Total Assets in any single Acquisition or series of related
Acquisitions and twenty percent (20%) of the Parent’s Total Assets for all
acquisitions in a fiscal year, except if approved by Lender (any such approved
acquisition or acquisitions, being a “Permitted Acquisition”).


 


15.7.                     Leases;
Bailments; Consignments; Warehousing.  Store any Inventory that is Collateral with a value in excess
of $50,000 for each location or any of its material books and records that is
at any time (i) in the possession or control of a warehouseman, bailee,
consignee including pursuant to an express or implied agreement establishing a
bailment or consignment, or similar arrangement, (ii) at any of Borrower’s
agents or processors (not including any Person to whom Inventory is leased or
rented in the ordinary course of such Covered Person’s business), or (iii) at
any location or premises that are not owned by Borrower, unless, at its
customer’s locations, in transit or in each case, Lender has received written
waivers or consents, in form and substance reasonably satisfactory to Lender,
which such written waivers or consents shall include, without limitation, a
waiver of all present and future Security Interests to which the owner, bailor,
or lessor of such premises may be entitled to assert against the Collateral.  Occupy any national or regional headquarters
location, unless, in each case, Lender has received written waivers or
consents, in form and substance satisfactory to Lender, which such written
waivers or consents shall include, without limitation, a waiver of all present
and future Security Interests to which the owner, bailor, or lessor of such
premises may be entitled to assert.


 


15.8.                     Disposal
of Property.  Sell,
transfer, exchange, or otherwise dispose of the Personal Property
Collateral.  Notwithstanding the foregoing
unless an Event of Default then exists (in which case any of the following
shall be prohibited if directed by Lender), Borrower may sell, transfer or
otherwise dispose of Personal Property Collateral in the ordinary course of
business consistent with past practice, provided that all proceeds of such
sales, transfers or other dispositions shall be paid to Lender for application
to the Loan Obligations.


 


15.9.                     Change of
Control.  Unless
consented to in writing by Lender, authorize or approve, or consent to, a
Change in Control.


 


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15.10.              Capital
Structure; Capital Securities.


 


15.10.1.                (i) Except as permitted by clause (iii) of this Section 15.10
hereof, make any change in the capital structure of any Covered Person which is
reasonably likely to cause a Default or Event of Default or which is reasonably
likely to have a Material Adverse Effect; or (ii) change any Charter
Documents of any Covered Person which is reasonably likely to have a Material
Adverse Effect or which will or is reasonably likely to cause a Default or
Event of Default.


 


15.10.2.                Be a party to any merger or consolidation, except as
permitted by Section 14.2 or Section 15.6.


 


15.11.              Change of
State of Formation; Change of Name.  Make
any change in the state of incorporation or formation of organization of any
Covered Person, change its type of legal entity, or change its legal name as it
appears on any certificates or articles of organization or formation.  Make any change in the trade names or styles
under which a Covered Person will sell Inventory or create Accounts, or to
which instruments in payment of Accounts may be made payable, except in
accordance with the terms of Section 14.10.9 with at least 30 days prior
written notice to Lender of such change (unless Lender agrees in writing to a
shorter period).


 


15.12.              Change of
Business.  Engage in
any business other than substantially as conducted by the Parent on the
Effective Date.


 


15.13.              Transactions
With Affiliates.  Enter into
or be a party to any transaction or arrangement, including the purchase, sale
or exchange of property of any kind or the rendering of any service, with any
Affiliate, or make any loans or advances to any Affiliate, except each Covered
Person may engage in such transactions with an Affiliate in the ordinary course
of business or, if not in the ordinary course of business  but not material, and in each case pursuant
to the reasonable requirements of its business and on fair and reasonable terms
substantially as favorable to it as those which it could obtain in a comparable
arm’s-length transaction with a non-Affiliate. 
Pay any management or similar fees to any Affiliate or other Person
other than another Borrower except each Covered Person may pay management fees
to an Affiliate or any other Person in the ordinary course of business or, if
not in the ordinary course of business but not material, and in each case
pursuant to the reasonable requirements of its business and on fair and
reasonable terms substantially as favorable to it as those which it could
obtain in a comparable arm’s-length transaction with a non-Affiliate.


 


15.14.              Conflicting
Agreements.  Enter into
any agreement that would, if fully complied with by it, result in a Default or
Event of Default.


 


15.15.              Investment
Banking and Finder’s Fees.  Pay
or agree to pay, or reimburse any other party with respect to, any investment
banking or similar or related fee, underwriter’s fee, finder’s fee, or broker’s
fee to any Person in connection with this Agreement.


 


15.16.              Sale and
Leaseback Transactions.  Enter into
any agreement or arrangement with any Person providing for any Covered Person
to lease or rent property that Borrower has or will sell or otherwise transfer
to such Person.


 


15.17.              New
Subsidiaries.  Organize,
create or acquire any Subsidiary unless Borrower has obtained the prior written
consent of Lender thereto (which consent shall not be unreasonably withheld)
and within five Business Days (unless Lender consents, in its sole discretion
to a longer period of time up to but not exceeding thirty days) following the
organization, creation or acquisition of such Subsidiary, the applicable
Covered Person and such Subsidiary executes and delivers to Lender the
following additional documents: all Charter Documents of such new 


 


37

















 


Subsidiary,
an unlimited Guaranty of the Loan Obligations by such Subsidiary or a joinder
agreement to this Agreement and the Loan Documents, and other Security
Documents requested by Lender so as to grant Lender, a perfected, first
priority security interest in the Collateral of such Subsidiary; provided,
however, if Borrower acquires a Subsidiary in connection with a Permitted
Acquisition, no prior consent of Lender shall be required and the foregoing
shall be inapplicable to any such acquired Subsidiary if such acquired
Subsidiary is merged into a Borrower within ten (10) days following its
acquisition.


 


15.18.              Fiscal
Year.  Change its
fiscal year from a fiscal year ending on January 31 of each calendar year.


 


15.19.              [Intentionally
omitted].


 


15.20.              Depreciation
Methodology.  Change the
depreciation schedule or depreciation methodology for any Inventory that is
Collateral except as required by GAAP or applicable tax laws or upon 30 days
prior written notice to Lender.


 


15.21.              Tax
Consolidation.  File or
consent to the filing of any consolidated income tax return with any Person
other than another Borrower or Subsidiary.


 


15.22.              Transactions
Having a Material Adverse Effect.  Enter
into any transaction which has or is reasonably likely to have a Material
Adverse Effect; or enter into any transaction, or take or contemplate taking
any other action, or omit or contemplate omitting to take any action, which any
Responsible Officer has Knowledge that it is reasonably likely to cause a
Default or Event of Default hereunder.


 


15.23.              Storage.  Store any Inventory that is Collateral at any location other
than as set forth on section 12.29.1 of the Disclosure Schedule; maintain
its chief executive office at any location other than as set forth on
section 12.30.1 of the Disclosure Schedule.


 


15.24.              Transportation
Solutions Assets.  Borrower’s
Subsidiary, Transportation Solutions, LLC, shall not own any material asset
other than interests in aircraft.


 


15.25.              Other
Indebtedness.  Enter into,
assume or otherwise be bound or obligated under any agreement creating or
evidencing Indebtedness containing one or more Additional and Amended Financial
Covenants, without providing prior written notice to Lender, provided, however,
in the event the Borrower or any other Covered Person shall enter into, assume
or otherwise become bound by or obligated under any such agreement, whether or
not prior written notice is given to Lender, the terms of this Agreement shall,
without any further action on the part of the Borrower and each other Covered
Person or Lender, be deemed to be amended automatically to include each
Additional and Amended Financial Covenant contained in such agreement, and
provided further, however, with respect to any Indebtedness in existence on the
date hereof, the provisions of this sentence shall apply only to amendments
after the date hereof.


 


15.26.              Rental
Contracts.  Borrower may rent the Inventory financed by Lender or against which Lender
has advanced funds and is Collateral pursuant to
the terms of Borrower’s rental contracts (“Rental Contracts”).  Financing for such Inventory will thereafter
be subject to the rates and terms of Lender’s financing program in effect for rented goods, as
reflected in the applicable Transaction Statement for such Inventory.  All of Borrower’s Rental Contracts,
agreements and rental transactions will be in a form satisfactory to Lender
and conform with all applicable laws.  Borrower will indemnify Lender against any loss or damage Lender suffer, whether direct or indirect, resulting in any
way from the Rental Contracts, agreements or rental 


 


38

















 


transactions that fail to so comply with such
laws.  All Rental Contracts will be
transferable to Lender.  Borrower will
indemnify Lender against any claims by
its customers regarding Borrower’s obligations under the Rental Contacts.  Borrower will immediately, upon Lender’s oral or written request, deliver to Lender all Rental Contracts and all related documents.  This assignment is a transfer for security
only and, until Lender has foreclosed its
interest in the Rental Contracts, will not be deemed to delegate any of
Borrower’s duties under the Rental Contracts to Lender; nor is it intended to alter or impair performance by
either party to the Rental Contracts.  Lender
may, from time to time, verify the accuracy of
the Rental Contracts.  Borrower will
immediately, upon Lender’s written
request, provide Lender with the following
information regarding Rental Contracts which are in effect on the date of such
request:  (a) the name, address and
telephone number of each customer who has executed a Rental Contract; (b) the
location of the Inventory; (c) the date of each Rental Contract; (d) the
date when the Inventory is to be returned under each Rental Contract; and, (e) any
other information which Lender may
reasonably request.  Other than to Lender
and other than Permitted Security Interests,
Borrower will not assign, sell, pledge, convey or by any other means transfer
any Rental Contracts or chattel paper covering inventory financed by Lender
that are for a term of thirty-two (32) days or
more, without Lender’s prior written
consent.  Borrower will not enter into
any Rental Contracts for Inventory financed by Lender or against which Lender has advanced funds pursuant to which:  (i) the original term of the Rental
Contract is greater than ninety (90) days; (ii) the original term of the
Rental Contract is equal to or greater than the remaining economic life of such
Inventory; (iii) the customer is bound to renew the Rental Contract for
the economic life of such Inventory or is bound to become the owner of such
Inventory; or, (iv) the customer has an option to renew the Rental Contract
for the remaining economic life of such Inventory, or to become the owner of
such Inventory, for nominal consideration, or for consideration which is less
than the unpaid balance owed to Lender
for such inventory.  If any such Rental
Contracts are issued, Borrower will take any action which Lender may reasonably require to perfect and/or protect Lender’s security interest in such Rental Contracts and/or
the inventory subject thereto.


 


16.                               Financial Covenants.


 


16.1.                     Special
Definitions.  As used in
this Section 16 and elsewhere herein, the following capitalized terms have
the following meanings:


 


“Capital Expenditure” means an expenditure for an asset that
must be depreciated or amortized under GAAP, or for any asset that under GAAP
must be treated as a capital asset.  An
expenditure for purposes of this definition includes any deferred or seller
financed portion of the purchase price of an asset and includes the Capital
Expenditure Equivalent of a Capital Lease. 
Capital Expenditures do not include any expenditure made with insurance
proceeds to the extent used to replace or repair damaged fixed assets and plant
equipment.


 


“EBITDA” means, for any period of calculation, an amount
equal to (A) the sum of (i) Net Income, (ii) Interest Expense, (iii) income
tax expense, (iv) depreciation expense, (v) amortization expense, and
(vi) non-cash charges relating to any share-based compensation awards, to
the extent such non-cash charges were expensed during such period in accordance
with SFAS 123R or are required to be shown as an expense in any Financial
Statements for periods prior to the effective date of SFAS 123R, plus (B), the
sum of (i) all nonrecurring losses under GAAP, and (ii) all
extraordinary losses not otherwise related to the continuing operations of the
Borrower in such period, minus (C) the sum of (i) all nonrecurring
gains under GAAP, and (ii) all extraordinary gains and income not
otherwise related to the continuing operations of the Borrower in such period.


 


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“Intangibles” means and includes, at any date, general
intangibles; software (purchased or developed in-house); accounts receivable
and advances due from officers, directors, employees, stockholders, members,
owners and Affiliates; leasehold improvements net of depreciation; licenses;
good will; prepaid expenses; escrow deposits; covenants not to compete; the
excess of cost over book value of acquired assets; franchise fees;
organizational costs; finance reserves held for recourse obligations; capitalized
research and development costs; the capitalized cost of patents, trademarks,
service marks and copyrights net of amortization; and such other similar items
as Lender may from time to time determine in Lender’s sole discretion.


 


“Interest Expense” means for any period of calculation, all
interest, whether paid in cash or accrued as a liability, but without
duplication, on Total Funded Indebtedness during such period.


 


“Net Income” means, for any period of calculation, “net
income” as determined in accordance with GAAP.


 


“Tangible Net Worth” means, at any date, (a) Total
Assets minus (b) the sum of (i) Intangibles plus (ii) Total
Liabilities.


 


“Total Assets” means the sum of all assets as presented in
the balance sheet in Borrower’s most recent consolidated Financial Statements
delivered to Lender as required hereunder.


 


“Total Funded Indebtedness” means the sum of the following,
without duplication (i) the aggregate outstanding principal balance of all
other Indebtedness for borrowed money, (ii) the principal outstanding
under the Floorplan Loan Facility and 
unfunded Approvals, and (iii) the maximum amount payable under any
guaranty executed by a Borrower.


 


“Total Liabilities” means the sum of all liabilities as
presented in the balance sheet in Borrower’s most recent consolidated Financial
Statements delivered to Lender as required hereunder (including as liabilities,
all reserves required under GAAP for contingencies and other potential
liabilities) plus all Indebtedness of Borrower not otherwise reported thereon.


 


“Total Whole Goods Inventory” means the aggregate acquisition
cost of all whole good items of Inventory owned by the Borrower and its
Subsidiaries, whether or not such Inventory is subject to a Security Interest
or subject to any Indebtedness (interest bearing or otherwise).


 


All other
capitalized terms used in this Section 16 shall have their meanings and
shall be determined under GAAP.  All
calculations shall be for the Borrowers and their respective Subsidiaries on a
consolidated basis.  For the purposes of
calculating the amount of Total Funded Indebtedness in this Section 16,
each scheduled payment of interest and principal on any of the Loans made on
the first of a month shall be deemed to have been made on the immediately
preceding day.


 


16.2.                     Debt
Service Coverage.  Borrower
covenants that it will maintain, as of the last day of each fiscal quarter
ending on or after January 31, 2010, a ratio of EBITDA to Interest
Expense, for the four preceding quarters then ended, of not less than 1.20 to
1.00.


 


16.3.                     Maximum
Total Funded Indebtedness to Tangible Net Worth.  Borrower covenants that it will maintain, as of the last day
of each fiscal quarter ending on or after January 31, 2010, a ratio of
Total Funded Indebtedness to Tangible Net Worth not in excess of 3.00 to 1.00, 


 


40

















 


calculated
as of the last day of each fiscal quarter ending for the preceding four (4) fiscal
quarters then ended.


 


16.4.                     Minimum
Inventory Turn.  Borrower
covenants that it will maintain as of the last day of each fiscal quarter
ending on or after January 31, 2010, a ratio of:


 


(I) Borrower’s
cost of goods sold with respect to new Inventory, to (b) average new
Inventory, for the four (4) fiscal quarters then ended, of not less than (y) for
the fiscal quarters ending January 31, 2010, April 30, 2010 and July 31,
2010, 1.80 to 1.00 and (z) for the fiscal quarter ending October 31,
2010 and each January 31, April 30, July 31 and October 31
thereafter, 2.00 to 1.00;


 


(II) (a) Borrower’s
cost of goods sold with respect to used inventory, to (b) average used
Inventory for the (4) fiscal quarters then ended, of not less than (y) for
the fiscal quarters ending January 31, 2010, April 30, 2010 and July 31,
2010, 1.80 to 1.00 and (z) for the fiscal quarter ending October 31,
2010 and each January 31, April 30, July 31 and October 31
thereafter, 2.00 to 1.00; and


 


(III) (a) Borrower’s
cost of goods sold with respect to parts inventory, to (b) average parts
inventory, for the four (4) fiscal quarters then ended, of not less than
1.50 to 1.00.


 


16.5.                     Maximum
Total Whole Goods Inventory.  Borrower
covenants that as of October 31, 2009, January 31, 2010, April 30,
2010 and July 31, 2010, Borrower’s Total Inventory shall not exceed
$380,000,000 plus an amount equal to fifty percent (50%) of the Dollar amount
of all assets purchased by Borrower in connection with any Permitted
Acquisition after the Effective Date. 
For clarity, this covenant shall not be applicable after July 31,
2010.


 


17.                               Default.


 


17.1.                     Events of
Default.  Any one or
more of the following shall constitute an event of default (an “Event of
Default”) under this Agreement:


 


17.1.1.                       Failure to Pay Principal or
Interest.  Failure of
Borrower to pay (i) any interest accrued on any of the Loans within three (3) Business
Days after the date when due, or (ii) any principal of the Loans when due;
provided, however, it shall not be an Event of Default with respect to the
payment of any principal or interest on any Floorplan Loan until the occurrence
of a Floorplan Payment Default.  “Floorplan
Payment Default” means any failure by Borrower to make any payment, under a
Transaction Statement by the last day of the “no interest” period set forth in
a Transaction Statement.  “Floorplan Payment
Default” shall not mean or include, and shall exclude, any deductions, offsets
or other disputes made or asserted by Borrower which are accepted by or under
good faith negotiation with Lender.


 


17.1.2.                       Failure to Pay Certain Other Amounts Owed to
Lender.  Failure of
Borrower to pay any of the Loan Obligations (other than principal of the Loans
or interest accrued thereon and other than Lender’s costs and expenses Borrower
is required to pay pursuant to the terms of Section 14.19 and Section 14.21)
within 10 days after the date when due.


 


17.1.3.                       Failure to Pay Examination and Appraisal
Costs.  Failure of
Borrower to pay any of Lender’s reasonable costs and expenses required to be
paid by Borrower pursuant to the terms of Section 14.19 and Section 14.21
within 10 days after the date when due.


 


41






 










 


17.1.4.                       Failure to Pay Amounts Owed to Other
Persons.  Failure of
any Covered Person to make any payment due on Indebtedness of such Covered
Person which such Indebtedness is over $250,000 in the aggregate to Persons
(other than Indebtedness owed to Lender under the Loan Documents and other than
Indebtedness owed to any Covered Person’s trade creditors in connection with
the purchase of such Covered Person’s Inventory from such trade creditors) and
which failure continues unwaived beyond any applicable grace period specified
in the documents evidencing such Indebtedness.


 


17.1.5.                       Representations or Warranties.  Any of the Representations and Warranties is discovered to
have been false in any material respect when made and is not cured within ten (10) days
of the date such Representation and Warranty was made (provided such breach can
be cured within such period and provided that Borrower works diligently and in
good faith to cure any such breach during such period), provided, however, with
respect to Representations and Warranties regarding Accounts, any such breach
or falsity could reasonably be likely to have a Material Adverse Effect.


 


17.1.6.                       Certain Covenants with Cure
Periods.  Failure of
any Covered Person to comply with any covenant in Section 14 (other than
the covenants set forth in Section 14.13, Section 14.14, Section 14.16,
Section 14.19, Section 14.20, Section 14.21, Section 14.22,
and Section 14.23) which is not cured within 20 days after the
initial occurrence of such failure, provided noncompliance with such covenant
can be cured within such 20 day period and provided that Borrower works
diligently and in good faith to cure any such noncompliance during such period.


 


17.1.7.                       Certain Covenants Without Cure
Periods.  Failure of
any Covered Person to comply with the covenants in Section 14 (unless
specified in Section 17.1.6 above ), Section 15, or Section 16.


 


17.1.8.                       Other Covenants.  Failure of any Covered Person to comply with of any of the
terms or provisions of any of the Loan Documents applicable to it (other than a
failure which constitutes an Event of Default under any of Sections 17.1.1
through 17.1.7).


 


17.1.9.                       Acceleration of Other
Indebtedness.  Any
Obligation (other than a Loan Obligation) of a Covered Person for the repayment
of $250,000 in the aggregate or more of borrowed money is accelerated, or
becomes or is declared to be due and payable or required to be prepaid (other
than by an originally scheduled or required (not by acceleration) prepayment)
prior to the original maturity thereof.


 


17.1.10.                Default Under Other Agreements.  The occurrence of any default or event of default under any
agreement to which a Covered Person is a party (other than the Loan Documents),
which default or event of default continues unwaived beyond any applicable
grace period provided therein and has had or could reasonably likely to have a
Material Adverse Effect.  Lender or any
Covered Person receives notice of a breach that is not cured within any
applicable grace period from any landlord under a landlord consent/waiver
concerning a leased regional or national headquarters or a leased location at
which $500,000 or more of Inventory that is Collateral is located or any of its
material books and records are located stating that Borrower is in default of its
obligations under such lease.  Borrower
loses any franchise, permission, license or right to sell or deal in any
Collateral which Lender or Lender finance which has had or could reasonably be
likely to have a Material Adverse Effect.


 


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17.1.11.                Bankruptcy; Insolvency; Etc.  A Covered Person (i) fails to pay, or admits in writing
its inability to pay, its debts generally as they become due, or otherwise
becomes insolvent (however evidenced); (ii) makes an assignment for the
benefit of creditors; (iii) files a petition in bankruptcy, is adjudicated
insolvent or bankrupt, petitions or applies to any tribunal for any receiver or
any trustee of such Covered Person or any substantial part of its property; (iv) commences
any proceeding relating to such Covered Person under any reorganization,
arrangement, readjustment of debt, dissolution or liquidation Law of any
jurisdiction, whether now or hereafter in effect; (v) has commenced
against it any such proceeding which remains undismissed for a period of
60 days, or by any act indicates its consent to, approval of, or
acquiescence in any such proceeding or the appointment of any receiver of or
any trustee for it or of any substantial part of its property, or allows any
such receivership or trusteeship to continue undischarged for a period of
60 days; or (vi) takes any action to authorize any of the foregoing.


 


17.1.12.                Judgments; Attachment; Settlement;
Etc.  Any one or
more judgments or orders is entered against a Covered Person or any attachment
or other levy is made against the property of a Covered Person with respect to
a claim or claims involving in the aggregate liabilities (not paid or fully
covered by insurance, less the amount of reasonable deductibles in effect on
the Execution Date) in an aggregate amount in excess of $250,000, and such
judgment becomes final and non-appealable or if timely appealed is not fully
bonded and collection thereof stayed pending the appeal; or any Covered Person
agrees to a settlement obligating any Covered Person to make a payment with
respect to a claim or claims involving in the aggregate liabilities (not paid
or fully covered by insurance, less the amount of reasonable deductibles in
effect on the Execution Date) in an aggregate amount in excess of $250,000.


 


17.1.13.                Pension Benefit Plan Termination,
Etc.  Any Pension
Benefit Plan termination by the PBGC or the appointment by the appropriate
United States District Court of a trustee to administer any Pension Benefit
Plan or to liquidate any Pension Benefit Plan, which has had or reasonably
could be likely to have a Material Adverse Effect; or any event which
constitutes grounds either for the voluntary termination of any Pension Benefit
Plan by the PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer or liquidate any Pension Benefit Plan
shall have occurred and be continuing for thirty (30) days after Borrower
has notice of any such event, which has had or reasonably could be likely to
have a Material Adverse Effect; or any voluntary termination of any Pension
Benefit Plan which is a defined benefit pension plan as defined in Section 3(35)
of ERISA while such defined benefit pension plan has an accumulated funding
deficiency in an amount exceeding $500,000 in the aggregate unless Lender has
been notified of such intent to voluntarily terminate such plan and Lender has
given its consent and agreed that such event shall not constitute an Event of
Default; or the plan administrator of any Pension Benefit Plan applies under Section 412(d) of
the Code for a waiver of the minimum funding standards of Section 412(1) of
the Code and Lender determines that the substantial business hardship upon
which the application for such waiver is based could subject any Covered Person
or ERISA Affiliate of any Covered Person to a liability in excess of $500,000
in the aggregate.


 


17.1.14.                Liquidation or Dissolution.  A Covered Person files a certificate of dissolution under
applicable state Law or is liquidated or dissolved or suspends or terminates
the operation of its business, or has commenced against it any action or 


 


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proceeding
for its liquidation or dissolution or the winding up of its business, or takes
any action in furtherance thereof, except in connection with the consolidation
of such a Covered Person and its assets with another Covered Person and its
assets except as permitted by this Agreement.


 


17.1.15.                Seizure of Assets.  All or any material part of the property of all Covered
Persons is nationalized, expropriated, seized or otherwise appropriated, or
custody or control of such property or of all Covered Persons is assumed by any
Governmental Authority or any court of competent jurisdiction at the instance
of any Governmental Authority, unless the same is being contested in good faith
by proper proceedings diligently pursued and a stay of enforcement is in
effect.


 


17.1.16.                Racketeering Proceeding.  There is filed against any Covered Person any civil or
criminal action, suit or proceeding under any federal or state racketeering
statute (including, without limitation, the Racketeer Influenced and Corrupt
Organization Act of 1970), which action, suit or proceeding is not dismissed
within 120 days and could result in the confiscation or forfeiture of any
of the Collateral.


 


17.1.17.                Loan Documents; Security
Interests.  For any
reason other than the failure of Lender to take any action available to it to
maintain perfection of the Security Interests created in favor of Lender
pursuant to the Loan Documents, any Loan Document ceases to be in full force
and effect or any Security Interest with respect to any portion of the
Collateral intended to be secured thereby ceases to be, or is not, valid, perfected
and prior to all other Security Interests (other than the Permitted Security
Interests, and other than sales of Collateral expressly permitted hereunder
made in the ordinary course of business, to a bona fide purchaser, for fair
market value, if all of the proceeds thereof are delivered to Lender as set
forth herein) or is terminated, revoked or declared void or invalid, or
Borrower or any Covered Person contests or denies that it has any liability or
obligation under any agreement, term, or condition contained in any Loan
Document to which Borrower or such Covered Person is a party.


 


17.1.18.                Loss to Collateral.  Any abandonment, loss, theft, damage or destruction of any
item or items of Collateral occurs which is not covered by insurance as required
herein and has or is reasonably likely to have a Material Adverse Effect.


 


17.1.19.                Change of Control.  Unless consented to in writing by Lender, a Change of Control
shall occur, or the Borrowers shall take any action in support of a Change in
Control, or any Person states, publicly, privately, or otherwise, its intention
to take any action, or fail to take any action, that may reasonably be likely,
as determined by Lender, to result in a Change of Control.


 


17.1.20.                Material Adverse Change.  There occurs any action or event or there is a nonoccurrence
of any action or event, which has or reasonably could be likely to have a
Material Adverse Effect.


 


17.2.                     Cross-Default.  An Event of Default under this Agreement will automatically
and immediately constitute a default under every other Loan Document without
regard to any requirement therein for the giving of notice or the passing of
time.


 


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17.3.                     Rights and Remedies.


 


17.3.1.                       Termination of Floorplan Loan Facility.  Upon an Event of Default described in Section 17.1.11
(regardless of whether any time periods specified therein have expired), the
Floorplan Loan Facility shall be deemed canceled without any action or notice
by Lender shall have no obligation to make any further or subsequent Advances
and no further advances or Approvals shall be made without the consent of
Lender.  Upon the occurrence and during
the continuance of any other Event of Default, Lender in its sole and absolute
discretion may cancel the Floorplan Loan Facility.  Such cancellation may be, in any case,
without presentment, demand or notice of any kind, which Borrower expressly
waives.  Borrower hereby waives any
requirement for notice of acceleration.


 


17.3.2.                       Acceleration; Funding.  Upon an Event of Default described in Section 17.1.11
(regardless of whether any time periods specified therein have expired), all of
the outstanding Loan Obligations shall automatically become immediately due and
payable.  From and after the date Lender
has knowledge of an Event of Default under Section 17.1.1, no further
Advances shall be made or issued Lender approves in writing any further
Advances or unless Lender waives in writing such Event of Default.  Upon the occurrence and during the
continuance of any other Event of Default, and at any time thereafter, (i) Lender
may cease making Advances, and (ii) Lender in its sole and absolute
discretion may declare all of the outstanding Loan Obligations immediately due
and payable.  Any such acceleration may
be, in either case, without presentment, demand or notice of any kind, which
Borrower expressly waives.


 


17.3.3.                       Right of Set-off.  During an Existing Default, Lender and each participant of
Lender in the Loan Obligations is hereby authorized, without notice to Borrower
(any such notice being expressly waived by Borrower), to the fullest extent
permitted by law, to set off and apply against the Loan Obligations any and all
deposits (general or special, time or demand, provisional or final) or any
other assets at any time held by or at Lender or such participant or under the
control of or otherwise pledged to Lender or such participant, or any other
Indebtedness at any time owing by Lender (or its Affiliate) or such participant
(or its Affiliate) to or for the credit or the account of Borrower,
irrespective of whether or not Lender shall have made any demand under this
Agreement or the notes or any guaranty and although such Loan Obligations may
be unmatured.  The rights of Lender or
such participant under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which Lender
or such participant may otherwise have. 
Any such amounts shall be applied by Lender to the Loan Obligations as
set forth in this Agreement.  During an
Existing Default, Lender or such participant is hereby authorized, without
notice to Borrower (any such notice being expressly waived by Borrower), to set
off and apply against the Loan Obligations any and all deposits (general or
special, time or demand, provisional or final) or other assets at any time held
by or at Lender or such participant, or under the control of or otherwise
pledged to Lender or such participant, or any other Indebtedness at any time
owing by Lender (or its Affiliates) or such participant (or its Affiliates) to
or for the credit or the account of Borrower, irrespective of whether or not
Lender (or its Affiliates) thereof or such participant (or its Affiliates)
shall have made any demand under this Agreement or the Loan Obligations and
although such Loan Obligations may be unmatured.


 


17.3.4.                       Notice to Account Debtors.  Upon the occurrence and during the continuance of an Event of
Default, Lender may, without prior notice to Borrower, notify any or all
Account Debtors that the Accounts have been assigned to Lender and that Lender
has a Security Interest therein, and Lender may direct, or Borrower, at Lender’s
request, shall 


 


45

















 


direct, any
or all Account Debtors to make all payments upon the Accounts directly to
Lender.


 


17.3.5.                       Entry Upon Premises and Access to
Information.  Upon the
occurrence and during the continuance of an Event of Default, Lender may (i) enter
upon the premises leased or owned by Borrower where Collateral is located (or
is believed to be located) without any obligation to pay rent to Borrower, or
any other place or places where Collateral is believed to be located, (ii) render
Collateral usable or saleable, (iii) remove Collateral therefrom to the premises
of Lender or any agent of Lender for such time as Lender may desire in order
effectively to collect or liquidate Collateral; (iv) take possession of,
and make copies and abstracts of, Borrower’s original books and records, obtain
access to Borrower’s data processing equipment, computer hardware and software
relating to any of the Collateral and use all of the foregoing and the
information contained therein in any manner deems appropriate in connection
with the exercise of Lender’s rights; and (v) notify postal authorities to
change the address for delivery of Borrower’s mail to an address designated by
Lender and to receive, open and process all mail addressed to Borrower.


 


17.3.6.                       Completion of Uncompleted Inventory
Items.  Upon the
occurrence and during the continuance of an Event of Default, Lender may
request that Borrower, and Borrower shall upon such request, use Borrower’s
best efforts to obtain the consent of its and any other Covered Person’s
customers to the completion (before or after foreclosure by Lender of its
security interest therein) of the manufacture of all uncompleted Inventory
items that Borrower or any other Covered Person was manufacturing for such
customers pursuant to contracts or accepted purchase orders, and the commitment
by such customers to purchase such items upon their completion as provided in
the relevant contracts or accepted purchase orders.  Borrower shall, as an uncompensated agent for
Lender, complete or cause to be completed the manufacture and shipment of all
such items as provided in the relevant contracts or accepted purchase orders if
Lender so directs.


 


17.3.7.                       Borrower’s Obligations.  Upon the occurrence and during the continuance of an Event of
Default, Borrower shall, if Lender so requests, assemble all the movable
tangible Collateral and make it available to Lender at a place or places to be
designated by Lender in its discretion.


 


17.3.8.                       Secured Party Rights.  Upon the occurrence and during the continuance of an Event of
Default:


 


17.3.8.1.                                     Lender may exercise any or all of its rights under the
Security Documents as a secured party under the UCC and any other applicable
Law; and


 


17.3.8.2.                                     Lender may sell or otherwise dispose of any or all of the
Collateral at public or private sale in a commercially reasonable manner, which
sale Lender may postpone from time to time by announcement at the time and
place of sale stated in the notice of sale or by announcement at any adjourned
sale without being required to give a new notice of sale, all as Lender deems
advisable, for cash or credit.  Lender
may become the purchaser at any such sale if permissible under applicable Law,
and Borrower agrees that Lender has no obligation to preserve rights to
Collateral against prior parties or to marshal any Collateral for the benefit
of any Person.  Borrower agrees that if
Lender 


 


46

















 


conducts a private sale of any
Collateral by requesting bids from 5 or more dealers, distributors, or lessors
in that type of Collateral, any sale by Lender of such Collateral, in bulk or
in parcels, to the bidder submitting the highest cash bid therefor, which
occurs within 120 days of the later to occur of (a) Lender taking
possession and control of such Collateral, or (b) Lender being otherwise
authorized or permitted to sell such Collateral, is a commercially reasonable
sale of such Collateral under the UCC. 
Borrower further agrees that 10 (ten) or more days prior written notice
will be commercially reasonable notice of any public or private sale.  Borrower agrees that the purchase of any
Collateral by a Vendor, as provided in any agreement between Lender and the
Vendor, is a commercially reasonable disposition and private sale of such
Collateral under the UCC, and no request for bids shall be required.  Borrower irrevocably waives any requirement
that Lender retain possession and not dispose of any Collateral until after an
arbitration hearing, arbitration award, confirmation, trial or final judgment.  If Lender disposes of any such Collateral other
than as herein contemplated, the commercial reasonableness of such disposition
will be determined in accordance with the laws of the state governing this
Agreement.


 


17.3.9.                       Joint and Several.  Each Obligation and liability of Borrower to Lender, including
the Loan Obligations, are the joint and several obligations of Borrower, and
Lender may proceed directly against any Borrower, or all Borrowers, or any
Guarantor, or any Collateral, or all of the foregoing, or any one of the
foregoing or any combination of the foregoing, without first proceeding against
Borrower or any Collateral, or without joining all Persons liable or
potentially liable for any portion of the Loan Obligations in one action.  Each Borrower shall be jointly and severally
liable as primary obligor and not merely as surety for repayment of all Loan
Obligations arising under the Loan Documents. 
Such joint and several liability shall apply to Borrower regardless of
whether any Advance was only requested by or on behalf of or made to any other
Borrower or the proceeds of any Advance were used only by or on behalf of any
other Borrower or any indemnification Obligation or any other Obligation arose
only as a result of the action of any other Borrower.  If any Borrower makes a payment in respect of
the Loan Obligations hereunder and under the other Loan Documents, it shall
have the rights of contribution described in this Section below against
the other Borrower or Borrowers; provided that such Borrower shall not exercise
its right of contribution until Payment in Full; provided, however, that Lender
is hereby granted, a Security Interest in such right of contribution and may
enforce such right during an Existing Default. 
It is the intent of Borrower and Lender, that Borrower’s maximum
obligation to repay the Loan Obligations hereunder and under the other Loan
Documents (the “Loan Obligation Limit”) shall not exceed the greater of (i) the
amount actually borrowed or received directly or indirectly by such Borrower
with respect thereto and (ii) the amount which is $1.00 less than the
amount which, if recorded by such Borrower as a liability, would render such
Borrower not Solvent.  To the extent that
any Borrower makes a payment on any of the Loan Obligations (a “Loan Obligation
Payment”), such Borrower (the “Entitled Borrower”) is entitled to contribution
and indemnification from, and reimbursement by, each other Borrower (a “Contributing
Borrower”) in the amount of the Contribution Obligation of such Contributing
Borrower hereunder.  The “Contribution
Obligation” of a Contributing Borrower with respect to the Loan Obligation
Payment of an Entitled Borrower is an amount equal to the greater of (1) the
lesser of (x) such Contributing Borrower’s Loan Obligation Limit at the
time the Loan Obligation Payment is made and (y) such Contributing
Borrower’s Allocable Share of the Loan Obligation 


 


47

















 


Payment,
and (2) the amount of all proceeds from the Loan Obligations actually
received by such Contributing Borrower or applied by the recipient thereof
directly or indirectly for the benefit of such Contributing Borrower, less the
sum of any repayments thereof and any Loan Obligation Payments made by such
Contributing Borrower prior to the time the applicable Loan Obligation Payment
is made.  The “Allocable Share” of a
Contributing Borrower is a fraction, the numerator of which is such
Contributing Borrower’s Loan Obligation Limit at the time the applicable Loan
Obligation Payment is made and the denominator of which is the sum of the Loan
Obligation Limits of all of the Contributing Borrowers (plus a similarly
computed amount for any Guarantor which has a similar obligation to make a
contribution) as of such time.


 


17.3.10.                Miscellaneous.  Upon the occurrence of an Event of Default and at any time
thereafter, Lender may exercise any other rights and remedies available to
Lender under the Loan Documents or otherwise available to Lender at law or in
equity.


 


17.4.                     Application
of Funds.  Any funds
received by Lender with respect to any Loan Obligation after its Maturity,
including proceeds of Collateral, shall be applied as follows:  (i) first, to reimburse Lender all
unreimbursed costs and expenses paid or incurred by Lender that are payable or
reimbursable by Borrower hereunder; (ii) second, to the payment of accrued
and unpaid fees due hereunder and all other amounts due hereunder; (iii) third,
to the payment of interest accrued on the Loans to Lender; and to the payment (pari passu with the foregoing) of any Interest/Currency
Hedge Obligations; (iv) fourth, to the payment of the Loans, in such order
as Lender determines in its absolute discretion; and (v) fifth, to the
payment of the other Loan Obligations. 
Any further remaining amounts shall be paid to Borrower or such other
Persons as shall be legally entitled thereto. 
Except as expressly provided otherwise herein, Lender may apply, and
reverse and reapply, payments and proceeds of the Collateral to the Loan
Obligations in such order and manner as Lender determines in its absolute
discretion.  Borrower hereby irrevocably
waives the right to direct the application of payments and proceeds of the
Collateral.  Notwithstanding the
foregoing, Lender may, with respect to the Floorplan Loan Facility apply: (i) at
any time, payments to reduce finance charges first and then principal,
regardless of Borrower’s instructions; and (ii) principal payments to the
oldest (earliest) invoice for Collateral financed by Lender under the Floorplan
Loan Facility, but, in any event, all principal payments will first be applied
to such Collateral financed by Lender under the Floorplan Loan Facility  which is sold, lost, stolen, damaged, rented,
leased, or otherwise disposed of or unaccounted for.


 


17.5.                     Limitation
of Liability; Waiver.  Lender
shall not be liable to Borrower as a result of any commercially reasonable
possession, repossession, collection or sale by Lender of Collateral; and
Borrower hereby waives all rights of redemption from any such sale and the
benefit of all valuation, appraisal and exemption Laws.  If Lender seeks to take possession of any of
the Collateral by replevin or other court process, Borrower hereby irrevocably
waives (i) the posting of any bonds, surety and security relating thereto
required by any statute, court rule or otherwise as an incident to such
possession, (ii) any demand for possession of the Collateral prior to the
commencement of any suit or action to recover possession thereof, (iii) any
requirement that Lender retain possession and not dispose of any Collateral
until after trial or final judgment, and (iv) to the extent permitted by
applicable Law, all rights to notice and hearing prior to the exercise by
Lender of Lender’s right to repossess the Collateral without judicial process
or to replevy, attach or levy upon the Collateral without notice or
hearing.  Lender shall have no obligation
to preserve rights to the Collateral or to marshal any Collateral for the
benefit of any Person.


 


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17.6.                     Notice.  Any notice of intended action required to be given by Lender
(including notice of a public or private sale of Collateral), if given as
provided in Section 21.1 at least 10 days prior to such proposed action,
shall be effective and constitute reasonable and fair notice to Borrower.


 


17.7.                     No
Liability.  Lender
shall not be responsible for any action taken or omitted to be taken by it
under or in connection with any Loan Document, except for its own gross
negligence or willful misconduct.  Lender
may execute any of its duties hereunder through its officers, directors,
employees, agents and attorneys-in-fact, and Lender may employ agents and
attorneys in fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys in fact selected by it with reasonable
care.  Lender shall be entitled to rely
upon any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telecopy) believed
by it to be genuine and correct and to have been signed, sent or made by or on
behalf of the proper Person or Persons, and upon advice and statements of legal
counsel (including counsel for any Covered Person), independent accountants,
and other experts selected by Lender. 
Lender shall be entitled to seek and rely upon the advice of counsel
concerning all matters hereunder and shall not be liable to Borrower for acting
or failing to act as advised by such counsel.


 


18.                               Intentionally Omitted.


 


19.                               General.


 


19.1.                     Lender’s
Right to Cure.  Lender may
(but shall not be obligated to), from time to time, in its absolute discretion,
for Borrower’s account and at Borrower’s expense, pay (or, make a Floorplan
Loan Advance to pay) any amount or do any act required of Borrower hereunder or
requested by Lender to preserve, protect, maintain or enforce the Loan
Obligations, the Collateral or Lender’s Security Interests therein, and which
Borrower fails to pay or do, including payment of any judgment against
Borrower, insurance premium, Taxes, warehouse charge, finishing or processing
charge, landlord’s claim, and any other Security Interest upon or with respect
to the Collateral.  All payments that
Lender make pursuant to this Section and all reasonable out-of-pocket
costs and expenses that Lender pay or incur in connection with any action taken
by it hereunder shall be a part of the Loan Obligations, the repayment of which
shall be secured by the Collateral.  Any
payment made or other action taken by Lender pursuant to this Section shall
be without prejudice to any right to assert an Event of Default hereunder and
to pursue Lender’s other rights and remedies with respect thereto.


 


19.2.                     Rights
Not Exclusive.  Every right
granted to Lender hereunder or under any other Loan Document or allowed to it
at law or in equity shall be deemed cumulative and may be exercised from time
to time.


 


19.3.                     Survival
of Agreements.  All
covenants and agreements made herein and in the other Loan Documents shall
survive the execution and delivery of this Agreement, and other Loan Documents
and the making of every Advance.  All
agreements, obligations and liabilities of Borrower under this Agreement
concerning the payment of money to Lender, including Borrower’s obligations
under Sections 19.5 and 19.6, but excluding the obligation to repay the
Loans and interest accrued thereon, shall survive the repayment in full of the
Loans and interest accrued thereon, whether or not indefeasible and the
termination of the Floorplan Loan Facility.


 


19.4.                     Assignments; Participations.


 


19.4.1.                       Assignments.  At any time after the Execution Date, Lender may assign all
of its rights and obligations under this Agreement without the consent or
approval of 


 


49

















 


Borrower.  Upon execution, delivery, and acceptance of
an assignment and acceptance in form and substance acceptable to Lender, the
assignee thereunder shall be a party hereto and, have the obligations, rights,
and benefits of Lender hereunder and the assigning Lender shall, to the extent
of such assignment, relinquish its rights and be released from its obligations
under this Agreement.  Upon the
consummation of any assignment pursuant to this Section, the assignor and the
Borrower shall make appropriate arrangements so that, if required, new notes
are issued to the assignee.   If the
assignee is not incorporated under the laws of the United States of America or
a State thereof, it shall deliver to the Borrower and the Lender certification
as to the exemption from deduction or withholding of Taxes in accordance with
applicable laws and as otherwise required by Lender.  Lender shall give prompt notice thereof to
Borrower and Borrower shall be obligated to assignee to the same extent
Borrower was obligated to such assignor. 
Notwithstanding any other provision set forth in this Agreement, Lender
may at any time assign and pledge all or any portion of its Loans to any
Federal Reserve Bank as collateral security pursuant.  No such assignment shall release Lender from
its obligations hereunder.


 


19.4.2.                       Sale of Participations.  Lender may sell one or more participations from time to time
in its Loans to any other Person without the consent or approval of Borrower.


 


19.4.3.                       Information.  Lender may furnish any information concerning the Borrower or
any of its Subsidiaries in the possession of Lender from time to time to
assignees, affiliates or participants (including prospective assignees and
participants)  Lender will use reasonable
efforts to provide notice to Borrower prior to disclosing any such information,
but shall have no liability for failure to provide such notice unless failure
was willful.


 


19.5.                     Payment
of Expenses.  Borrower
agrees to pay or reimburse to Lender all of Lender’s reasonable out-of-pocket
costs incurred in connection with Lender’s due diligence review before
execution of the Loan Documents; the negotiation and preparation of proposals,
a commitment letter and the Loan Documents; the assignment of the Loans; any
participation of the Loans; the administration of this Agreement, the Loan
Documents and the Loans; the perfection of Lender’s Security Interests in the
Collateral; the interpretation of any of the Loan Documents; the enforcement of
Lender’s rights and remedies under the Loan Documents after a Default or Event
of Default; any amendment of or supplementation to any of the Loan Documents;
and any waiver, consent or forbearance with respect to any Default or Event of
Default.  Lender’s reasonable
out-of-pocket costs may include but are not limited to the following, to the
extent they are actually paid or incurred by Lender: title insurance fees and
premiums; the cost of searches for Security Interests existing against Covered
Persons or Guarantors; recording and filing fees and taxes; appraisal fees;
travel expenses; environmental consultant fees; litigation costs; reasonable
attorneys’ and paralegals’ expenses and reasonable fees; and costs and expenses
(for both internal and external examiners) for any field examinations.  Attorneys’ and paralegals’ expenses may
include but are not limited to filing charges; telephone, data transmission,
facsimile and other communication costs; courier and other delivery charges;
and photocopying charges.  Litigation
costs may include but are not limited to filing fees, deposition costs, expert
witness fees, expenses of service of process, and other such costs paid or
incurred in any administrative, arbitration, or court proceedings involving
Lender and any Covered Person, including proceedings under the Bankruptcy Code.  All costs which Borrower is obligated to pay
or reimburse Lender are Loan Obligations payable to Lender and are payable on
demand by Lender.


 


50

















 


19.6.                     General Indemnity.


 


19.6.1.                       Borrower agrees to indemnify and hold harmless Lender, and
each of its affiliates and its respective officers, directors, employees,
attorneys, representatives, agents, and advisors (each, an “Indemnified
Party”) from and against any and all claims, damages, losses, liabilities,
costs, and expenses (including, without limitation, reasonable attorneys’ fees)
that may be incurred by or asserted or awarded against any Indemnified Party,
in each case arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation, or
proceeding or preparation of defense in connection therewith) the Loan
Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Loans (including, without limitation, any
payments made by Lender to any Person (other than Borrower) who is a party to
any blocked account and/or lockbox agreement, including, without limitation,
any indemnity payments by Lender thereunder), or the manufacture, storage,
transportation, release or disposal of any Hazardous Material on, from, over or
affecting any of the Collateral or any of the assets, properties, or operations
of any Covered Person or any predecessor in interest, directly or indirectly,
except to the extent such claim, damage, loss, liability, cost, or expense is
found in a final, non-appealable judgment by a court of competent jurisdiction
to have resulted from such Indemnified Party’s gross negligence or willful
misconduct.  In the case of an
investigation, litigation or other proceeding to which the indemnity in this Section applies,
such indemnity shall be effective whether or not such investigation, litigation
or proceeding is brought by the Borrower, its directors, shareholders or
creditors or an Indemnified Party or any other Person or any Indemnified Party
is otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated.  The Borrower
agrees not to assert and agrees that it will not direct any other Covered Person
to assert, any claim against any Indemnified Party, on any theory of liability,
for special, indirect, consequential, exemplary or punitive damages arising out
of or otherwise relating to the Loan Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Loans.  Borrower also agrees to pay,
indemnify and hold harmless the Indemnified Parties for, from and against, and
shall promptly reimburse the Indemnified Parties for, any and all claims,
damages, liabilities, losses, costs and expenses (including reasonable
attorneys’ fees and expenses and amounts paid in settlement) incurred, paid or
sustained by the Indemnified Parties, or enforcement by Lender of any of its
rights with respect thereto, except to the extent such claim, damage, loss,
liability, cost, or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party’s
gross negligence or willful misconduct. 
Each Borrower covenants and agrees to assume liability for and to
protect, indemnify and hold harmless Lender, from any and all liabilities,
obligations, damages, penalties, claims, causes of action, costs, charges and
expenses (including without limitation, attorneys’ fees), which may be incurred
by, imposed or asserted against Lender, howsoever arising or incurred because
of. out of or in connection with the disbursements of Floorplan Loans;
provided, however, the liability of the Borrowers pursuant to this indemnity
shall not extend to any liability, obligation, damage, penalty, claim, cause of
action, cost, charge or expense caused by or arising out of the gross
negligence or willful misconduct of Lender. 
Borrower:  (i) is obligated
to pay any Loan Obligation even if any Collateral is defective or fails to
conform to any warranties extended by any third party; (ii) shall not
assert against Lender, or any other Indemnified Party any claim or defense
Borrower has against any third party; and (iii) indemnify and hold Lender
and any other Indemnified Party harmless against all claims and defenses
asserted by any buyer of the Collateral relating to the condition of, or any
representations regarding, any of the Collateral.  Borrower irrevocably waives all rights of
offset and counterclaims Borrower


 


51






 










 


may have against Lender, except counterclaims arising in
cases of Lender’s gross negligence or willful misconduct.


 


19.6.2.        The obligations of Borrower under this Section 19.6
shall survive the termination of the Floorplan Loan Facility, the full payment in
cash and satisfaction of all of the Loan Obligations, and the release of the
Collateral.  All amounts, obligations and
liabilities referred to in Section 19.6.1 shall be deemed to be a part of
the Loan Obligations and shall be paid to Lender on demand.


 


19.6.3.        To the extent that any of the
indemnities required from Borrower under this Section are unenforceable
because they violate any Law or public policy, Borrower shall pay the maximum
amount which it is permitted to pay under applicable Law.


 


19.6.4.        The
foregoing indemnification shall not apply to the extent such liabilities and
costs are determined to have resulted or been caused, in whole or in part, by
the gross negligence or willful misconduct on the part of such Indemnified
Party.  THE FOREGOING INDEMNIFICATION
SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY
EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY
KIND EXCEPT AS PROVIDED BY THE IMMEDIATELY PRECEDING SENTENCE.


 


19.6.5.        In exchange for, among other things, Lender’s agreement to
make any payments to any Person (other than Borrower or a Covered Person) who
is a party to any blocked account, lockbox agreement, bailee letter, landlord
waiver or other similar agreement entered into in connection herewith
(including any indemnity payments by Lender thereunder, collectively, “Third
Person Reimbursement Agreements”), Borrower hereby indemnifies, releases,
discharges and acquits forever Lender and any of its respective officers,
directors, servants, agents, employees and attorneys, past, present and future,
from any and all claims, demands and causes of action, of whatever nature,
whether in contract or tort, accrued or to accrue, contingent or vested, known
or unknown, running in favor of Borrower or any Covered Person arising out of
or relating to such Third Person Reimbursement Agreements, except those arising
from Lender’s gross negligence or willful misconduct.


 


19.7.       Changes in Accounting Principles.  If
any Covered Person, at the end of its fiscal year and with the concurrence of
its independent certified public accountants, changes the method of valuing the
Inventory of such Covered Person, or if any other changes in accounting
principles from those used in the preparation of any of the Financial
Statements are required by or result from the promulgation of principles,
rules, regulations, guidelines, pronouncements or opinions by the Financial
Accounting Standards Board or the American Institute of Certified Public
Accountants (or successors thereto or bodies with similar functions), and any
of such changes result in a change in the method of calculation of, or affect
the results of such calculation of, any of the financial covenants, standards
or terms found herein, then the parties hereto agree to enter into and
diligently pursue negotiations in order to amend such financial covenants,
standards or terms so as to equitably reflect such changes, with the desired
result that the criteria for evaluating the financial condition and results of
operations of such Covered Person shall be the same after such changes as if
such changes had not been made; provided, however, that until such amendments
are made, all financial covenants herein and all the provisions hereof which
contemplate financial calculation hereunder shall remain in full force and
effect.


 


19.8.       Loan Records.  The date
and amount of all Advances to Borrower and payments of amounts due from
Borrower under the Loan Documents will be recorded in the records that 


 


52

















 


Lender normally maintains for such types of
transactions.  The failure to record, or
any error in recording, any of the foregoing shall not, however, affect the
obligation of Borrower to repay the Loans and other amounts payable under the
Loan Documents.  Borrower shall have the
burden of proving that such records are not correct.  Borrower agrees that Lender’s books and
records showing the Loan Obligations and the transactions pursuant to this
Agreement shall be admissible in any action or proceeding arising therefrom,
and shall constitute prima facie proof thereof, irrespective of whether any
Loan Obligation is also evidenced by a promissory note or other
instrument.  Any statement sent by Lender
to a Covered Person shall be deemed correct, accurate and binding on Borrower
and an account stated (except for reversals and reapplications of payments as
provided in Section 7.5 and corrections of errors discovered by Lender),
unless Borrower notifies Lender in writing to the contrary within 60 days
after such statement is rendered (regardless of whether a shorter period is
provided for in any Transaction Statement). 
In the event a timely written notice of objections is given by Borrower,
only the items to which exception is expressly made will be considered to be
disputed by Borrower.


 


19.9.       Other Security and Guaranties.  Lender
may, without notice or demand and without affecting Borrower’s obligations
hereunder, from time to time,: (a) take from any Person and hold
collateral (other than the Collateral) for the payment of all or any part of
the Loan Obligations and exchange, enforce and release such collateral or any
part thereof; and (b) accept and hold any endorsement or Guaranty of
payment of all or any part of the Loan Obligations and release or substitute
any such endorser or Guarantor, or any Person who has given any Security
Interest in any other collateral as security for the payment of all or any part
of the Loan Obligations, or any other Person in any way obligated to pay all or
any part of the Loan Obligations.


 


19.10.     Loan Obligations Payable
in Dollars.  All Loan Obligations shall be payable only in
Dollars.  If, however, to obtain a
judgment in any court it is necessary to convert a Loan Obligation payable in
Dollars into another currency, the rate of exchange used shall be that at which
Lender, using its customary procedures, could purchase Dollars with such other
currency in New York, New York on the Business Day immediately preceding the
day on which such judgment is rendered. 
If any sum in another currency is paid to Lender or received by Lender
and applied to a Loan Obligation payable in Dollars, such Loan Obligation shall
be deemed paid and discharged only to the extent of the amount of Dollars that
Lender, using its customary procedures, is able to purchase in New York, New
York with such sum on the Business Day immediately following receipt
thereof.  Borrower agrees to indemnify
Lender against any loss in Dollars that it may incur on such Loan Obligation as
a result of such payment or receipt and application to such Loan Obligation.


 


19.11.     Disclosure.


 


19.11.1.     Borrower irrevocably authorizes Lender to
investigate and make inquiries of former, current, or future creditors or other
persons and credit bureaus regarding or relating to Borrower (including, to the
extent permitted by law, any equity holders of Borrower).  Lender may provide to any Affiliate of Lender
or any third parties any financial, credit or other information regarding
Borrower that Lender may at any time possess, whether such information was
supplied by Borrower to Lender or otherwise obtained by Lender.  Further, Borrower irrevocably authorizes and
instructs any third parties (including without limitation, any Vendors or
customers of Borrower) to provide to Lender any credit, financial or other
information regarding Borrower that such third parties may at any time possess,
whether such information was supplied by Borrower to such third parties or
otherwise obtained by such third parties.


 


53

















 


19.11.2.     Lender may obtain from any vendor any
credit, financial or other information regarding Borrower that such vendor may
from time to time possess.


 


19.11.3.     Notwithstanding the terms of Section 19.11.1,
Lender may, disclose information regarding Borrower, or its operations or
finances, to their Affiliates, to each other, to each other’s Affiliates, to
any actual or prospective assignee, participant, trustee or purchaser
(including any purchaser of any interest in a trust or other special purpose
entity), and to all of the officers, attorneys, auditors, accountants, bank
examiners, agents and representatives of the foregoing, in connection with the
administration or the securitization, participation, or other disposition of
all or any portion of the Loans or Loan Documents, or the interpretation or
enforcement of the Loan Documents, or the lending and collection activity
contemplated therein, or to the extent required by Law or a Governmental
Authority, or to the extent required for the assignment, securitization,
participation, or other disposition of all or any portion of the Loans or Loan
Documents.  Lender shall use its
reasonable efforts to cause such Persons to which information is to be
disclosed as part of an assignment of, or participation in, the Loans to
execute non-disclosure agreements with respect to such information, but shall
have no liability for failure to do so, unless such failure is intentionally
willful.  Notwithstanding the terms of Section 19.11.1,
Lender may also disclose without restriction any such information in any
documents that it files in any legal proceeding to pursue, enforce or preserve
its rights under the Loan Documents. 
Notwithstanding the terms of Section 19.11.1, Lender may also
disclose customary credit, financial, or other information on Borrower in
Lender’s possession to Vendors and potential Vendors, credit rating agencies,
suppliers of Borrower, any Persons liable for the Loan Obligations, or any
Person involved in the Floorplan Loan Facility, and Lender shall use its
reasonable efforts to advise such Persons that such information is to be
treated as confidential, but shall have no liability for failure to do so,
unless such failure is intentionally willful. 
Lender’s non-disclosure obligation shall not apply to any information
that (i) is disclosed to Lender by a third Person not affiliated with or
employed by Borrower who does not, to Lender’s knowledge, have a commensurate
duty of non-disclosure, or (ii) is or becomes publicly known other than as
a result of disclosure by Lender.


 


19.12.     Tax Treatment
Waiver.  Notwithstanding any provision of this Agreement
to the contrary, any party hereto (and each employee, representative, or other
agent of each such party) may disclose to any and all Persons, without
limitation of any kind, the “tax treatment,” “tax structure,” and “tax
strategies” of the transactions contemplated hereby and the other Loan
Documents and all materials of any kind (including opinions or other tax analyses)
that are provided to such party relating to any such tax treatment, tax
structure, or tax strategy.  This
authorization is effective immediately upon the Effective Date.  The terms “tax treatment,” “tax structure,”
and “tax strategies” shall be ascribed the meaning set forth in Treas. Reg.
§1.6011-4, and this paragraph shall be construed so as to cause the subject
transaction not to have been offered or entered into under conditions of
confidentiality as described in Treas. Reg. §1.6011-4(b)(3).


 


20.          Binding Arbitration.


 


20.1.       Arbitrable Claims.  Except
as otherwise specified below, all actions, disputes, claims and controversies
under common law, statutory law or in equity of any type or nature whatsoever,
whether arising before or after the date of this Agreement and the Loan
Documents, and whether directly or indirectly relating to: (a) this
Agreement or any amendments, modifications, restatements, waivers, and addenda
hereto, or the breach, invalidity or termination hereof; (b) any 


 


54

















 


previous or subsequent agreement between or among Lender,
Borrower and any other Covered Person; (c) any act committed by Lender or
by any parent company, subsidiary or affiliated company of Lender (the “Lender
Companies”), or by any employee, agent, officer or director of a Lender Company
whether or not arising within the scope and course of employment or other
contractual representation of the Lender Companies provided that such act
arises under a relationship, transaction or dealing between Lender, Borrower
and any other Covered Person; or (d) any other relationship, transaction
or dealing between or among, Lender, Borrower and any Covered Person
(collectively, for clauses (a) through and including (d), the “Disputes”),
will be subject to and resolved by binding arbitration.  Notwithstanding the foregoing, the parties
agree that either party may pursue claims against the other that do not exceed
Fifteen Thousand Dollars ($15,000) in the aggregate in a court of competent
jurisdiction.  Service of arbitration
claims shall be acceptable if made by U.S. mail or overnight delivery to the
address for the party described herein.


 


20.2.       Administrative Body.  All
arbitration hereunder will be conducted in accordance with the Commercial
Arbitration Rules of either: (a) The American Arbitration Association
(“AAA”); or (b) United States Arbitration & Mediation (“USA&M”).  The party first filing an arbitration claim
shall designate which arbitration forum and rules are to be applied for
all Disputes between the parties.  The
arbitration rules are found at www.adr.org for AAA, and at
www.usam-midwest.com. for USA&M.  AAA
claims may be filed in any AAA office. 
Claims filed with USA&M shall be filed in their Midwest office
located at 720 Olive Street, Suite 2020, St. Louis, Missouri 63101.  All arbitrator(s) selected will be
attorneys with at least five (5) years secured transactions
experience.  A panel of three arbitrators
shall hear all claims exceeding One Million Dollars ($1,000,000), exclusive of
interest, costs and attorneys’ fees.  The
arbitrator(s) will decide if any inconsistency exists between the rules of
the applicable arbitral forum and the arbitration provisions contained
herein.  If such inconsistency exists,
the arbitration provisions contained herein will control and supersede such
rules.  The arbitrator shall follow the
terms of this Agreement and the applicable law, including the attorney-client
privilege and the attorney work product doctrine.


 


20.3.       Hearings.  Each party
hereby consents to a documentary hearing for all arbitration claims, by
submitting the Dispute to the arbitrator(s) by written briefs and
affidavits, along with relevant documents. 
However, arbitration claims will be submitted by way of an oral hearing
if any party requests an oral hearing within thirty (30) days after service of
the claim, and that party remits the appropriate amount for AAA’s or USA&M’s
(as applicable) fees and arbitrator compensation within ten (10) days of
the designated arbitration association’s statement for payment of all fees and
arbitrator compensation relating to the oral hearing.  Each party agrees that failure to timely pay
all fees and arbitrator compensation billed to the party requesting the oral
hearing will be deemed such party’s consent to submitting the Dispute to the
arbitrator on documents and such party’s waiver of its request for an oral
hearing.  The site of all oral
arbitration hearings will be in the Division of the Federal Judicial District
in which the designated arbitration association maintains a regional office
that is closest to Borrower.


 


20.4.       Discovery.  Discovery
permitted in any arbitration proceeding commenced hereunder is limited as
follows.  No later than forty (40) days
after the filing and service of a claim for arbitration, the parties in
contested cases will exchange detailed statements setting forth the facts
supporting the claim(s) and all defenses to be raised during the
arbitration, and a list of all exhibits and witnesses.  No later than twenty-one (21) days prior to
the oral arbitration hearing, the parties will exchange a final list of all
exhibits and all witnesses, including any designation of any expert witness(es)
together with a summary of their testimony; a copy of all documents and a
detailed description of any property to be introduced at the hearing.  Under no circumstances will 


 


55

















 


the use of interrogatories, requests for admission, requests
for the production of documents or the taking of depositions be permitted.  However, if of the designation of any expert
witness(es), the following will occur: (i) all information and documents
relied upon by the expert witness(es) will be delivered to the opposing party; (ii) the
opposing party will be permitted to depose the expert witness(es); (iii) the
opposing party will be permitted to designate rebuttal expert witness(es); and (iv) the
arbitration hearing will be continued to the earliest possible date that
enables the foregoing limited discovery to be accomplished.


 


20.5.       Exemplary or Punitive Damages.  The
Arbitrator(s) will not have the authority to award exemplary or punitive
damages.


 


20.6.       Confidentiality of Awards.  All
arbitration proceedings, including testimony or evidence at hearings, will be
kept confidential, although any award or order rendered by the arbitrator(s) pursuant
to the terms of this Agreement may be confirmed as a judgment or order in any
state or federal court of competent jurisdiction within the federal judicial district
which includes the residence of the party against whom such award or order was
entered.  This Agreement concerns
transactions involving commerce among the several states.  The Federal Arbitration Act, Title 9 U.S.C.
Sections 1 et seq., as amended (“FAA”) will govern all arbitration(s) and
confirmation proceedings hereunder.


 


20.7.       Prejudgment and Provisional
Remedies.  Nothing herein will be construed to prevent
Lender’s, Borrower’s or any Covered Person’s use of bankruptcy, receivership,
injunction, repossession, replevin, claim and delivery, sequestration, seizure,
attachment, foreclosure, or any other prejudgment or provisional action or
remedy relating to any Collateral for any current or future debt owed by either
party to the other.  Any such action or
remedy will not waive Lender’s, Borrower’s or any Covered Person’s right to
compel arbitration of any Dispute.


 


20.8.       Attorneys’ Fees.  If
Lender, Borrower or any Covered Person brings any other action for judicial
relief with respect to any Dispute (other than those set forth in Sections 20.1
or 20.7), the party bringing such action will be liable for and immediately pay
all of the other party’s costs and expenses (including attorneys’ fees)
incurred to stay or dismiss such action and remove or refer such Dispute to
arbitration.  If Lender, Borrower or any
Covered Person brings or appeals an action to vacate or modify an arbitration
award and such party does not prevail, such party will pay all costs and expenses,
including attorneys’ fees, incurred by the other party in defending such
action.  Additionally, if Borrower or any
Covered Person sues Lender or institutes any arbitration claim or counterclaim
against Lender in which Lender is the prevailing party, Borrower or any such
Covered Person will pay all costs and expenses (including attorneys’ fees)
incurred by Lender in the course of defending such action or proceeding.


 


20.9.       Limitations.  Any
arbitration proceeding must be instituted: 
(i) with respect to any Dispute for the collection of any debt owed
by either party to the other, before the second anniversary of the date the
last payment by or on behalf of the payor was received and applied in respect
of such debt by the payee; and (ii) with respect to any other Dispute,
before the second anniversary of the date the incident giving rise thereto
occurred, whether or not any damage was sustained or capable of ascertainment
or either party knew of such incident. 
Failure to institute an arbitration proceeding within such period will
constitute an absolute bar and waiver to the institution of any proceeding,
whether arbitration or a court proceeding, with respect to such Dispute.   Notwithstanding the foregoing, this
limitations provision will be suspended temporarily, as of the date any of the
following events occur, and will not resume until the date following the date
either party is no longer subject to, (a) bankruptcy; (b) receivership;
(c) any proceeding regarding an assignment for the benefit of creditors;
or (d) any legal proceeding, civil 


 


56

















 


or criminal, which prohibits either party from foreclosing
any interest it might have in the collateral of the other party.


 


20.10.     Survival After
Termination.  The agreement to arbitrate will survive the
termination of this Agreement.


 


20.11.     Invalidity/Unenforceability
of Binding Arbitration; Jury Trial Waiver; Service of Process;
Forum.  IF THIS
AGREEMENT IS FOUND TO BE NOT SUBJECT TO ARBITRATION, THEN:


 


20.11.1.     Jury Trial
Waiver.  ANY LEGAL
PROCEEDING WITH RESPECT TO ANY DISPUTE (1) ARISING UNDER THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, or (2) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM IN RESPECT OF
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
OR NOT SOUNDING IN CONTRACT OR TORT OR OTHERWISE, WILL BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE WITHOUT A JURY.  EACH BORROWER AND LENDER WAIVE ANY RIGHT TO A JURY TRIAL IN ANY SUCH
PROCEEDING.  Each Borrower and Lender
further agrees and consents that any such claim, demand, action or cause of
action shall be decided by court trial without a jury and that either may file
an original counterpart or a copy of this Agreement with any court as written
evidence of the consent of the parties hereto to the waiver of their right to
trial by jury.


 


20.11.2.     Choice of
Forum.  Subject only to the exception in the next
sentence, Borrower and Lender hereby agrees to the exclusive jurisdiction of
the federal court of the Northern District of Illinois and the state courts of
Illinois located in Cook County, Illinois and waives any objection based on
venue or forum  non  conveniens with respect to any action
instituted therein, and agrees that any dispute concerning the relationship
between Lender and Borrower or the conduct of any of them in connection with
this Agreement or otherwise shall be heard only in the courts described above.  Notwithstanding the foregoing: (1) 
Lender shall have the right to bring any action or proceeding against any
Borrower or its property in any courts of any other jurisdiction Lender deem
necessary or appropriate in order to realize on the Collateral, real estate or
other security for the Loan Obligations, and (2) each party hereto
acknowledges that any appeals from the courts described in the immediately
preceding sentence may have to be heard by a court located outside those
jurisdictions.


 


20.11.3.     Service of Process.  Each
Borrower hereby waives personal service of any and all process upon it and
consents that all such service of process may be made by registered mail
(return receipt requested) directed to Borrower at its address set forth on the
signature pages hereof, and service so made shall be deemed to be
completed five (5) days after the same shall have been so deposited in the
U.S. mails, registered mail, return receipt requested; or at Lender’s option,
by service upon CT Corporation which Borrower irrevocably appoints as such
Borrower’s agent for the purpose of accepting service of process.  Lender shall promptly forward by registered
mail any process so served upon said agent to Borrower at its address on the
signature pages hereof.  Nothing 


 


57

















 


in this Section shall affect the right of Lender to
serve legal process in any other manner permitted by Law.


 


21.          Miscellaneous.


 


21.1.       Notices.  All notices,
consents, requests and demands to or upon the respective parties hereto shall
be in writing, and shall be deemed to have been given or made when delivered in
person to those Persons listed on the signature pages hereof or four (4) days
after the date when deposited in the United States mail, postage prepaid, or,
in the case of the overnight courier services, when delivered to the overnight
courier service, or in the case of telecopy or e-mail (if expressly permitted
herein) notice, when sent, verification received, in each case addressed as set
forth on the signature pages hereof, or to such other address as either
party may designate by notice to the other in accordance with the terms of this
Section.  No notice given to or demand
made on Borrower by Lender in any instance shall entitle Borrower to notice or
demand in any other instance.


 


21.2.       Amendments and Modifications; Waivers and Consents.


 


21.2.1.        No amendment to or modification of any
provision of this Agreement, or of any of the other Loan Documents shall be
effective unless it is in writing and signed by authorized officers of Lender
and Borrower.  Unless otherwise provided
herein, no waiver of, or consent to any departure by Borrower from, the
requirements of any provision of this Agreement or any of the other Loan
Documents shall be effective unless it is in writing and signed by authorized
officers or representatives of Lender.


 


21.2.2.        Any such amendment, modification, waiver
or consent shall be effective only in the specific instance and for the purpose
for which given.  No notice to or demand
on Borrower in any instance shall entitle Borrower to any other or further
notice or demand in another similar or different instance.  No failure by Lender to exercise, and no
delay by Lender in exercising, any right, remedy, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise by
Lender of any right, remedy, power or privilege hereunder preclude any other
exercise thereof, or the exercise of any other right, remedy, power or
privilege existing under any Law or otherwise.


 


21.3.       Course of Dealing.  ACCEPTANCE
OF OR ACQUIESCENCE IN A COURSE OF PERFORMANCE OR COURSE OF DEALING RENDERED OR
TAKEN UNDER OR WITH RESPECT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS WILL
NOT BE RELEVANT IN ANY RESPECT TO DETERMINE THE MEANING OF THIS AGREEMENT OR
THE OTHER LOAN DOCUMENTS, OR THE OBLIGATIONS OR LIABILITIES OF THE PARTIES
HERETO UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, EVEN THOUGH THE
ACCEPTING OR ACQUIESCING PARTY HAD KNOWLEDGE OF THE NATURE OF THE PERFORMANCE AND
OPPORTUNITY FOR OBJECTION.


 


21.4.       Rights Cumulative.  Each
of the rights and remedies of Lender under this Agreement shall be in addition
to all of its other rights and remedies under applicable Law, and nothing in
this Agreement shall be construed as limiting any such rights or remedies.


 


21.5.       Successors and Assigns.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that Borrower may not
assign, delegate or transfer any of its rights or obligations under this
Agreement without the prior written consent of Lender.  With respect to Borrower’s successors and
assigns, such successors and assigns shall include any receiver, trustee or
debtor-in-possession of or for Borrower.


 


58

















 


21.6.       Severability.  Any
provision of this Agreement which is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition, unenforceability or lack of authorization
without invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction unless
the ineffectiveness of such provision would result in such a material change as
to cause completion of the transactions contemplated hereby to be unreasonable.


 


21.7.       Counterparts.  This
Agreement may be executed by the parties hereto on any number of separate
counterparts, and all such counterparts taken together shall constitute one and
the same instrument.  It shall not be
necessary in making proof of this Agreement to produce or account for more than
one counterpart signed by the party to be charged.


 


21.8.       Governing Law; No Third Party
Rights.  This Agreement, and the other Loan Documents and
the rights and obligations of the parties hereunder and thereunder shall be
governed by and construed and interpreted in accordance with the internal Laws
of the State of Illinois applicable to contracts made and to be performed
wholly within such state, without regard to choice or conflicts of law
principles; except that the provisions of the Loan Documents pertaining to the
creation or perfection of Security Interests or the enforcement of rights of
Lender in Collateral located in a State other that the State of Illinois shall
be governed by the Laws of such State to the extent such law is applicable
thereto.  This Agreement is solely for the benefit of the parties hereto
and their respective successors and assigns, and no other Person shall have any
right, benefit, priority or interest under, or because of the existence of,
this Agreement.


 


21.9.       Counterpart Facsimile Execution.  For
purposes of this Agreement, a document (or signature page thereto) signed
and transmitted by facsimile machine or telecopier or via e-mail as a PDF
attachment is to be treated as an original document.  The signature of any Person thereon, for
purposes hereof, is to be considered as an original signature, and the document
transmitted is to be considered to have the same binding effect as an original
signature on an original document.  At
the request of any party hereto, any facsimile, telecopy or PDF document is to
be re-executed in original form by the Persons who executed the facsimile,
telecopy or PDF document.  No party
hereto may raise the use of a facsimile machine, telecopier, e-mail or the fact
that any signature was transmitted through the use of a facsimile machine,
telecopier or e-mail as a defense to the enforcement of this Agreement or any
amendment or other document executed in compliance with this Section.


 


21.10.     No Other
Agreements.  There are no other agreements between Lender
and Borrower, oral or written, concerning the subject matter of the Loan
Documents, and all prior agreements concerning the same subject matter,
including any proposal or commitment letter, are merged into the Loan Documents
and thereby extinguished.


 


21.11.     Negotiated
Transaction.  Borrower and Lender represent each to the
others that in the negotiation and drafting of this Agreement and the other
Loan Documents they have been represented by and have relied upon the advice of
counsel of their choice.  Borrower and
Lender affirm that their counsel have both had substantial roles in the
drafting and negotiation of this Agreement; therefore, this Agreement will be
deemed drafted by Borrower and Lender, and the rule of construction to the
effect that any ambiguities are to be resolved against the drafter will not be
employed in the interpretation of this Agreement.


 


21.12.     Waiver of Punitive and
Exemplary Damages.  Each party to this Agreement hereby
waives any right to bring any action or claim against any other party to this
Agreement for exemplary or punitive damages arising out of or otherwise relating
to the this Agreement, Loan 


 


59

















 


Documents, any of the transactions contemplated herein, or
the actual or proposed use of the proceeds of the Loans.


 


21.13.     Incorporation By
Reference.  All of the terms of the other Loan Documents
are incorporated in and made a part of this Agreement by this reference.


 


21.14.     Statutory
Notice-Insurance.  The following notice is given pursuant
to Section 180/15 of the Collateral Protection Act set forth in Chapter
815 Section 180/1 of the Illinois Compiled Statutes; nothing contained in
such notice shall be deemed to limit or modify the terms of this Agreement:


 


UNLESS YOU PROVIDE EVIDENCE OF THE INSURANCE
COVERAGE REQUIRED BY YOUR AGREEMENT WITH US, WE MAY PURCHASE INSURANCE AT
YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR COLLATERAL.  THIS INSURANCE MAY, BUT NEED NOT, PROTECT
YOUR INTERESTS.  THE COVERAGE THAT WE
PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM THAT IS MADE
AGAINST YOU IN CONNECTION WITH THE COLLATERAL. 
YOU MAY LATER CANCEL ANY INSURANCE PURCHASED BY US, BUT ONLY AFTER
PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED BY OUR
AGREEMENT.  IF WE PURCHASE INSURANCE FOR
THE COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE,
INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES WE MAY IMPOSE
IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF
THE CANCELLATION OR EXPIRATION OF THE INSURANCE.  THE COSTS OF THE INSURANCE MAY BE ADDED
TO YOUR TOTAL OUTSTANDING BALANCE OR OBLIGATION.  THE COSTS OF THE INSURANCE MAY BE MORE
THAN THE COST OF INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR OWN.


 


21.15.     Statutory Notice—Oral
Commitments.  ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT
IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S)) AND
US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER
AGREE IN WRITING TO MODIFY IT.


 


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signature
pages follow}


 


60

















 


THIS CONTRACT CONTAINS A BINDING
ARBITRATION CLAUSE WHICH MAY BE ENFORCED BY THE PARTIES.


 


IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by appropriate duly authorized officers as of the Effective Date.


 


GE
COMMERCIAL DISTRIBUTION FINANCE CORPORATION,


as Lender


 


 


	
  By: 

  	
  /s/ Joseph
  Kinkenon

  	
   

  	
   

  
	
  Name: 

  	
  Joseph Kinkenon

  	
   

  	
   

  
	
  Title: 

  	
  Wholesale Risk
  Leader

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
  Joseph Kinkenon

  
	
   

  	
  GE Capital
  Americas - Equipment Finance

  
	
   

  	
  125 John
  Carpenter Freeway

  
	
   

  	
  Irving, TX 75062

  
	
   

  	
  FAX # (314)
  228-0163

  
	
   

  	
  TEL # (972) 830-6009

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Joe Cistulli, General Counsel,

  
	
   

  	
  GE Capital Americas - Equipment Finance

  
	
   

  	
  300 John
  Carpenter Freeway

  
	
   

  	
  Irving, TX 75062

  
	
   

  	
  FAX #) (469) 519-4148

  
	
   

  	
  TEL # ( 469) 586-2091

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  GE Commercial Distribution Finance Corporation

  
	
   

  	
  5595 Trillium Boulevard

  
	
   

  	
  Hoffman Estates, IL 60192-3405

  
	
   

  	
  Attn: Peter Muniz, General Counsel

  
	
   

  	
  FAX # (847) 747-7455

  
	
   

  	
  TEL # (847) 747-7552

  



 


1

















 


	
   

  	
  TITAN
  MACHINERY INC., as
  Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ted O.
  Christianson

  
	
   

  	
  Name:

  	
  Ted O.
  Christianson

  
	
   

  	
  Title:

  	
  Vice
  President-Finance

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address
  for the Borrower:

  
	
   

  	
  Titan Machinery
  Inc.

  
	
   

  	
  4876 Rocking
  Horse Circle

  
	
   

  	
  Fargo, ND
  58104-6049

  
	
   

  	
  Telephone:
  701-356-0130

  
	
   

  	
  Attn: Ted O.
  Christianson

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Simon C. Root, Esq.

  
	
   

  	
  Fredrikson & Byron, P.A.

  
	
   

  	
  200 South Sixth Street

  
	
   

  	
  Minneapolis, MN 55402-1425

  
	
   

  	
  Telephone: 612-492-7000

  



 


{remainder
of page intentionally left blank}


 


2














 


EXHIBIT 4.1


 


GLOSSARY
AND INDEX OF DEFINED TERMS


 


AAA — is defined in Section 20.2.


 


ACCOUNT — as to any Person, the right of such Person to
payment for goods sold or leased or for services rendered by such Person.


 


ACCOUNT DEBTOR — the obligor on any Account.


 


ACQUISITION means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of all or
substantially all of any business or division of a Person, (b) the
acquisition of 50% or more of the Capital Securities of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is already a Subsidiary).


 


ADJUSTED LIBOR RATE — is defined in Section 6.3.


 


ADDITIONAL AND AMENDED FINANCIAL COVENANT — shall mean any
new or amended covenant or similar restriction measuring the financial
performance of the Borrower or any other Covered Person (regardless of whether
such provision is labeled or otherwise characterized as a covenant) including,
without limitation, (i) is similar to that of the covenants in Section 16
of this Agreement, or related definitions of this Agreement, but contains one
or more percentages, amounts or formulas that is more restrictive than those
set forth in this Agreement or more beneficial to the holder or holders of the
Indebtedness created or evidenced by the document in which such covenant or
similar restriction is contained (and such covenant or similar restriction
shall be deemed an Additional and Amended Covenant only to the extent that it
is more restrictive or more beneficial) or (ii) is different from the
subject matter of the covenants in Section 16 of this Agreement, or
related definitions of this Agreement.


 


ADVANCE — an Floorplan Loan Advance.


 


ADVANCE DATE — the date on which an Advance is requested by
Borrower to be made, or is otherwise contemplated or intended to be made, as
provided herein.


 


AFFILIATE — with respect to any Person, (a) any other
Person who is a partner, director, officer or stockholder of such Person; and (b) any
other Person which, directly or indirectly, is in control of, is controlled by
or is under common control with such Person, and any partner, director, officer
or stockholder of such other Person described.  For purposes of this
Agreement, control of a Person by another Person shall be deemed to exist if
such other Person has the power, directly or indirectly, either to (i) vote
twenty percent (20%) or more of the securities having the power to vote in an
election of directors of such Person, or (ii) direct the management of
such Person, whether by contract or otherwise and whether alone or in
combination with others.  Notwithstanding
the foregoing, in no event will any stockholder of Borrower who is not also an
officer or director of Borrower be considered to be an “Affiliate” of Borrower.


 


AGREEMENT — this document (including every document that is
stated herein to be an appendix, exhibit or schedule hereto, whether or not
physically attached to this document), as amended from time to time.


 


1

















 


APPLICABLE LENDING OFFICE — means, for Lender and for each
Loan, the “Applicable Lending Office” of Lender (or of an affiliate of Lender)
designated for such Loan on the signature pages hereof or such other
office of Lender (or an affiliate of Lender) as Lender may from time to time
specify to the Borrower by written notice in accordance with the terms hereof
as the office by which its Loans are to be made and maintained.


 


APPROVAL — means Lender’s approval to finance particular
Inventory for Borrower which is evidenced by Lender issuing a financing
approval number to the Vendor of such Inventory.  “Approval” also means (i) any
open-to-buy authorization given by Lender to a Vendor, pursuant to which Lender
may authorize such vendor to assume Lender’s approval to finance Inventory
until Lender affirmatively withdraws such authorization, and (ii) any
Approval for which Lender has not made a Floorplan Loan Advance as a result of
Lender not receiving the invoice from the Vendor for the Inventory which is
subject to the Approval.


 


ASBESTOS MATERIAL — either asbestos or asbestos-containing
materials.


 


AVERAGE DAILY BALANCE — is defined in Section 6.1.3.


 


BORROWING OFFICER — each officer of the Borrower who is
authorized to submit a request for an Advance or take such other action on
behalf of the Borrower in a writing delivered to Lender.


 


BUSINESS DAY — any day on which the Federal Reserve Bank of
Chicago is open for the transaction of business.


 


CAPITAL EXPENDITURE — is defined in Section 16.1.


 


CAPITAL EXPENDITURE EQUIVALENT — means, with respect to a
Capital Lease, the amount that would have been the aggregate cost of the
property leased if it had been purchased rather than leased.


 


CAPITAL LEASE — any lease that has been or should be
capitalized under GAAP.


 


CAPITAL SECURITIES means, with respect to any Person, all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person’s capital, whether now outstanding
or issued or acquired after the Effective Date, including common shares,
preferred shares, membership interests in a limited liability company, limited
or general partnership interests in a partnership, interests in a trust,
interests in other unincorporated organizations or any other equivalent of such
ownership interest.


 


CASH COLLATERAL ACCOUNT — the account(s) with such
financial institution as selected or designated by Lender from time to time
that is designated by Lender as the Cash Collateral Account during an Existing
Default.


 


CHANGE OF CONTROL — means the occurrence of any of the
following events with respect to Parent: 
(a) any Person or group of Persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934) shall acquire beneficial
ownership (within the meaning of Rule 13d-3 promulgated under such Act) of
more than 35% of the outstanding Capital Securities (on a fully diluted basis
and taking into account any securities or contract rights exercisable,
exchangeable or convertible into equity securities) of Parent having voting
rights in the election of directors under normal circumstances; or (b) the
sale of all or substantially all of the assets of Parent.


 


2

















 


CHARTER DOCUMENTS — the articles or certificate of
incorporation and bylaws of a corporation; the certificate of limited
partnership and partnership agreement of a limited partnership; the partnership
agreement of a general partnership; the articles of organization and operating
agreement of a limited liability company; or the indenture of a trust.


 


CLAIMS Act — the Assignment of Claims Act of 1940.


 


COBRA — the Consolidated Omnibus Budget Reconciliation Act.


 


CODE — the Internal Revenue Code of 1986 and all regulations
thereunder of the IRS.


 


COLLATERAL — all of the Personal Property Collateral, and any
other property or asset in which Lender has a Security Interest, from time to
time, to secure payment or performance of the Loan Obligations, and all
proceeds (including, without limitation, Accounts, insurance and sale proceeds)
thereof.


 


CONTRACT — any contract, capital lease, operating lease, note,
bond, indenture, deed, mortgage, deed of trust, security agreement, pledge,
hypothecation agreement, assignment, or other agreement or undertaking.


 


COVERED PERSON — is defined in Section 4.4.


 


CREDIT AGREEMENT — This Agreement.


 


DAILY CHARGE — is defined in Section 6.1.3.


 


DAILY RATE — is defined in Section 6.1.3.


 


DEFAULT — any of the events listed in Section 17.1 of
this Agreement, without giving effect to any requirement for the giving of
notice, for the lapse of time, or both, or for the happening of any other
condition, event or act.


 


DEFAULT RATE — the rate of interest payable on each Loan
after its Maturity and in certain other circumstances as provided in Section 6.6.


 


DISCLOSURE SCHEDULE — the disclosure schedule of Borrower
attached hereto as Exhibit 12.


 


DISPUTES — is defined in Section 20.1.


 


DOL — the United States Department of Labor.


 


DOLLARS and the sign $ — lawful money of the United States.


 


EBITDA — is defined in Section 16.1.


 


EFFECTIVE DATE — the date when this Agreement is effective as
provided in Section 1.


 


EMPLOYMENT LAW — ERISA, the Occupational Safety and Health
Act, the Fair Labor Standards Act, or any other Law pertaining to the terms or
conditions of labor or safety in the workplace or discrimination or sexual
harassment in the workplace.


 


3

















 


ENVIRONMENTAL LAW — the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response, Compensation and Liability Act,
the Clean Water Act, the Clean Air Act, or any other Law pertaining to
environmental quality or remediation of Hazardous Material.


 


EPA — the United States Environmental Protection Agency.


 


ERISA — the Employee Retirement Income Security Act of 1974.


 


ERISA AFFILIATE — as to any Borrower, any trade or business
(irrespective of whether incorporated) which is a member of a group of which
such Person is a member and thereafter treated as a single employer under
§414(b), (c), (m) or (o) of the Code or applicable Treasury
Regulations.


 


EVENT OF DEFAULT — any of the events listed in Section 17.1
of this Agreement as to which any requirement for the giving of notice, for the
lapse of time, or both, or for the happening of any further condition, event or
act has been satisfied.


 


EXECUTION DATE — the date when this Agreement has been
executed.


 


EXISTING DEFAULT — an Event of Default which has occurred and
is continuing and which has not been waived in writing by Lender.


 


EXISTING LOAN DOCUMENTS — the “Loan Documents” as such term
is defined in the Prior AWF, and includes, without limitation, each document
and agreement specified therein and any other existing document or agreement
granting, or purporting to grant, in favor of Administrative Agent (as defined
therein), a Security Interest on any asset of the Borrower or any other Covered
Person.


 


FAA — is defined in Section 20.6.


 


FINANCIAL STATEMENTS — the most recent of the Initial
Financial Statements and the financial statements of Borrower required to be
furnished to Lender under this Agreement.


 


FLOORPLAN INVENTORY VALUE — means one hundred percent (100%)
of the total aggregate wholesale invoice price of all of Borrower’s Inventory
financed under the Floorplan Loan Facility in which Lender has a first
priority, perfected Security Interest (subject to no other Security Interest)
that is unsold and not leased by Borrower and is in Borrower’s possession and
control as of the date of determination, less the amount of any such Inventory
reported by the Borrower (if the Borrower is required by Lender to report) as
demonstration items or Inventory that is obsolete or otherwise unmerchantable
or if in the possession or control of Borrower for 180 days or more from the
date of the invoice for such Inventory. 
If any Inventory financed under the Floorplan Loan Facility with a value
in excess of $0.00 for each location is located on any premises that are not
owned by Borrower (not including any lessee or other person to whom Inventory
is leased or rented in the ordinary course of such Covered Person’s business,
or other locations where Borrower is not obligated to pay rent for up to 30
consecutive days) and Borrower has not obtained or caused to be obtained
written waivers or consents, in form and substance satisfactory to Lender, then
such Inventory shall be deemed to have a “Floorplan Inventory Value” of zero
Dollars ($0.00).


 


FLOORPLAN LOAN — any Floorplan Loan Advance.


 


FLOORPLAN LOAN ADVANCE — an Advance by Lender that is to be
funded under the Floorplan Loan Facility.


 


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FLOORPLAN LOAN FACILITY — the discretionary line of credit of
Lender as stated in Section  5.1.1 to fund Floorplan Loan Advances.


 


FLOORPLAN LOAN MATURITY DATE — is defined in Section 7.1.3.


 


FLOORPLAN PAYMENT DEFAULT — is defined in Section 17.1.1.


 


FLOORPLAN SHORTFALL — means the amount, if any, by which (a) the
sum of the Floorplan Loans (less the amount of the Floorplan Loans attributable
to Inventory purchased by Borrower during the In Transit Period (defined below)
as evidenced by the invoice date) outstanding on any date of determination,
exceeds (b) the Floorplan Inventory Value as determined by Lender as of
such date of determination.  “In Transit
Period” shall mean a period determined by Lender which reasonably estimates the
time period it takes Inventory ordered by Borrower and shipped by a Vendor to
arrive at Borrower’s location.  Until
notice is given by Lender to Borrower of a change in the In Transit Period, the
In-Transit Period shall be the two (2) day period immediately preceding
the date of the most recent Schedule of Inventory.


 


FLOORPLAN TERMINATION DATE — is defined in Section 5.1.8.


 


FRB — the Board of Governors of the Federal Reserve System
and any successor thereto or to the functions thereof.


 


GAAP — those generally accepted accounting principles set
forth in Statements of the Financial Accounting Standards Board and in Opinions
of the Accounting Principles Board of the American Institute of Certified
Public Accountants or which have other substantial authoritative support in the
United States and are applicable in the circumstances, as applied on a
consistent basis.


 


GOVERNMENTAL AUTHORITY — the federal government of the United
States; the government of any foreign country that is recognized by the United
States or is a member of the United Nations; any state of the United States;
any local government or municipality within the territory or under the
jurisdiction of any of the foregoing; any department, agency, division, or
instrumentality of any of the foregoing; and any court, arbitrator, or board of
arbitrators whose orders or judgments are enforceable by or within the
territory of any of the foregoing.


 


GUARANTOR — any Person who at any time guaranties the Loan
Obligations.  As of the Execution Date,
there is no Guarantor.


 


HAZARDOUS MATERIAL — any hazardous, radioactive, toxic, solid
or special waste, material, substance or constituent thereof, or any other such
substance (as defined under any applicable Law or regulation), including
Asbestos Material.


 


IMPOSITIONS — is defined in Section 6.7.2.


 


INDEBTEDNESS — as to any Person at any particular date, any
contractual obligation enforceable against such Person (i) to repay
borrowed money; (ii) to pay the deferred purchase price of property or
services; (iii) to make payments or reimbursements with respect to bank
acceptances or to a factor; (iv) to make payments or reimbursements with
respect to letters of credit whether or not there have been drawings
thereunder; (v) with respect to which there is any Security Interest in
any property of such Person; (vi) to make any payment or contribution to a
Multi-Employer Plan; (vii) that is evidenced by a note, bond, debenture or
similar instrument; (viii) under any conditional sale agreement or title
retention agreement; (ix) all Liabilities (as 


 


5

















 


defined by GAAP) under any Capital Lease or (x) to pay
interest or fees with respect to any of the foregoing.  INDEBTEDNESS also includes any other
Obligation that either (i) is non-contingent and liquidated in amount or (ii) should
under GAAP be included in liabilities and not just as a footnote on a balance
sheet.  In no event shall “Indebtedness”
include trade accounts payable.


 


INDIRECT OBLIGATION — as to any Person, (a) any guaranty
by such Person of any Obligation of another Person; (b) any Security
Interest in any property of such Person that secures any Obligation of another
Person; (c) any enforceable contractual requirement that such Person (i) purchase
an Obligation of another Person or any property that is security for such
Obligation, (ii) advance or contribute funds to another Person for the
payment of an Obligation of such other Person or to maintain the working
capital, net worth or solvency of such other Person as required in any
documents evidencing an Obligation of such other Person, (iii) purchase
property, securities or services from another Person for the purpose of
assuring the beneficiary of any Obligation of such other Person that such other
Person has the ability to timely pay or discharge such Obligation, (iv) grant
a Security Interest in any property of such Person to secure any Obligation of
another Person, (v) otherwise assure or hold harmless the beneficiary of
any Obligation of another Person against loss in respect thereof; (d) any
Obligation arising from the endorsement by such Person of an instrument (e) any
Obligation of such Person as a surety; and (f) any other contractual
requirement enforceable against such Person that has the same substantive
effect as any of the foregoing.  The term
INDIRECT OBLIGATION does not, however, include the endorsement by a Person of
instruments for deposit or collection in the ordinary course of business or the
liability of a general partner of a partnership for Obligations of such
partnership.  The amount of any Indirect
Obligation of a Person shall be deemed to be the stated or determinable amount
of the Obligation in respect of which such Indirect Obligation is made or, if
not stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.


 


INTEREST RATE AND FEE LETTER  — collectively, any and all interest rate
letters, fee letters and similar agreements between Borrower and Lender and
entered into from time to time by Borrower and Lender.


 


INITIAL AWF — Investments permitted under Section 2.


 


INITIAL FINANCIAL STATEMENTS — the financial statements (not
including the projections) of Borrower referred to in Section 11.1.2.


 


INSURANCE PROCEEDS — insurance and/or condemnation proceeds
payable as a consequence of damage to or destruction of any of the Collateral.


 


INTEREST EXPENSE — is defined in Section 16.1.


 


INTEREST/CURRENCY HEDGE OBLIGATION — any obligations of
Borrower to Lender or any of its respective Affiliates or Subsidiaries under an
agreement or agreements between Borrower and Lender  or
any of its respective Affiliates or Subsidiaries under which the exposure of
Borrower to fluctuations in interest rates or currencies is effectively
limited, including, without limitation, whether in the form of one or more
interest rate cap, collar, corridor agreements, interest rate swaps, currency
swaps, or the like, or options therefor.


 


INVENTORY — goods owned, leased or held by a Person for sale,
lease, sublease or resale or furnished or to be furnished under contracts for
services, and raw materials, goods/work in process, materials, component parts
and supplies used or consumed, or held for use or consumption in such Person’s
business.


 


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INVESTMENT — (a) a loan or advance of money or property
to a Person, (b) Capital Securities in a Person, (c) a debt
instrument issued by a Person, whether or not convertible to stock or other
equity interest in such Person, or (d) any other interest in or rights
with respect to a Person which include, in whole or in part, a right to share,
with or without conditions or restrictions, some or all of the revenues or net
income of such Person.


 


IRS — the Internal Revenue Service.


 


KNOWLEDGE — means, with respect to the Borrower or any
Covered Person, that a Responsible Officer of Borrower or such Covered Person,
as the case may be, has actual knowledge or conscious awareness of the fact or
matter in question or reasonably should, in light of such Responsible Officer’s
position, have knowledge of the fact or matter in question.


 


LAW — any statute, rule, regulation, order, judgment, award
or decree of any Governmental Authority.


 


LENDER — GE Commercial Distribution Finance Corporation, and
its successors and assigns.


 


LENDER COMPANIES — is defined in Section 20.1.


 


LIBOR ADVANCE — an Advance that will become a LIBOR Loan.


 


LIBOR INCREMENT — is defined in Section 6.3.


 


LIBOR LOAN — any portion of a Loan on which interest accrues
at the Adjusted LIBOR Rate.


 


LOAN — a Floorplan Loan.


 


LOAN DOCUMENTS — this Agreement, the guaranties, the Security
Documents, each Interest Rate and Fee Letter, Transaction Statements and all
other agreements, certificates, documents, instruments and other writings
executed in connection herewith or therewith from time to time.


 


LOAN OBLIGATIONS — all of Borrower’s Indebtedness owing to
Lender under this Agreement and the other Loan Documents, and all other
agreements, certificates, documents, instruments and other writings executed in
connection therewith, whether as principal, interest, fees, or otherwise,
including without limitation, the amount of all unfunded Approvals, any amounts
set forth in Section 6.8, all obligations of Lender under any Third Person
Reimbursement Agreements, and all other Obligations and liabilities of Borrower
to Lender under this Agreement and the other Loan Documents and all
Interest/Currency Hedge Obligations (in each case including all extensions,
renewals, modifications, rearrangements, restructures, replacements and
refinancings of the foregoing, whether or not the same involve modifications to
interest rates or other payment terms), whether now existing or hereafter
created, absolute or contingent, direct or indirect, joint or several, secured
or unsecured, due or not due, contractual or tortious, liquidated or
unliquidated, arising by operation of law or otherwise, including but not
limited to the obligation of Borrower to repay future advances by Lender
hereunder, whether or not made pursuant to commitment and whether or not
presently contemplated by Borrower, Lender in the Loan Documents.


 


LOCAL TIME — means the local time in Chicago, Illinois.


 


MATERIAL ADVERSE EFFECT — as to the Borrower, any Guarantor
or any other Covered Person, taken as a whole, and with respect to any event or
occurrence of whatever nature (including any 


 


7

















 


adverse determination in any litigation, arbitration,
investigation or proceeding), a material adverse effect on the business,
operations, revenues, financial condition, property, or business prospects of
Borrower and each other Covered Person taken as a whole, or the ability of
Borrower, any Guarantor or such Covered Person to timely pay or perform
Borrower’s, any Guarantor’s and each other Covered Person’s Obligations
generally taken as a whole, or in the case of Borrower, the ability of Borrower
to pay or perform any of Borrower’s Obligations to Lender, or in the case of a
Guarantor, the ability of such Guarantor to pay or perform any of its
Obligations guarantied under the terms of its Guaranty.


 


MATERIAL AGREEMENT — as to Borrower, any Guarantor or any
other Covered Person, any Contract to which Borrower, any Guarantor or any
Covered Person is a party or by which any such Borrower, any Guarantor or any
other Covered Person is bound which, if violated or breached, has or is
reasonably likely to have a Material Adverse Effect.


 


MATERIAL LAW — any separately enforceable provision of a Law
whose violation by a Borrower, any Guarantor, or any other Covered Person has
or is reasonably likely to have a Material Adverse Effect.


 


MATERIAL LICENSE — (i) as to any Covered Person, any
license, permit or consent from a Governmental Authority or other Person and
any registration and filing with a Governmental Authority or other Person which
if not obtained, held or made by such Covered Person has or is reasonably
likely to have a Material Adverse Effect, and (ii) as to any Person who is
a party to this Agreement or any of the other Loan Documents, any license,
permit or consent from a Governmental Authority or other Person and any
registration or filing with a Governmental Authority or other Person that is
necessary for the execution or performance by such party, or the validity or
enforceability against such party, of this Agreement or such other Loan
Document.


 


MATERIAL OBLIGATION — as to Borrower, any Guarantor or any
Covered Person, an Obligation of such Person which if not fully and timely paid
or performed has or is reasonably likely to have a Material Adverse Effect.


 


MATERIAL PROCEEDING — any litigation, investigation or other
proceeding by or before any Governmental Authority (i) which involves any
of the Loan Documents or any of the transactions contemplated thereby, or
involves a Covered Person or a Guarantor as a party or any property of Covered
Person or a Guarantor, and has or is reasonably likely to have a Material
Adverse Effect if adversely determined, (ii) in which there has been
issued an injunction, writ, temporary restraining order or any other order of
any nature which purports to restrain or enjoin the making of any Advance, the
consummation of any other transaction contemplated by the Loan Documents, or
the enforceability of any provision of any of the Loan Documents, (iii) which
involves the actual or alleged breach or violation by a Covered Person of, or
default by a Covered Person under, any Material Agreement, or (iv) which
involves the actual or alleged violation by a Covered Person or any Guarantor
of any Material Law.


 


MATURITY — as to any Indebtedness, the time when it becomes
payable in full, whether at a regularly scheduled time, because of acceleration
or otherwise.


 


MULTI-EMPLOYER PLAN — a Pension Benefit Plan which is a
multi-employer plan as defined in Section 4001(a)(3) of ERISA.


 


MORTGAGEE CONSENT AGREEMENT — means each agreement described
in Section 9.1 in form and substance satisfactory Lender.


 


8

















 


NET INCOME — is defined in Section 16.1.


 


OBLIGATION — as to any Person, any Indebtedness of such
Person, any guaranty by such Person of any Indebtedness of another Person, and
any contractual requirement enforceable against such Person that does not
constitute Indebtedness of such Person or a guaranty by such Person but which would
involve the expenditure of money by such Person if complied with or enforced.


 


OPERATING LEASE — any lease that is not a Capital Lease.


 


PAYMENT IN FULL — collectively, (i) the full payment in
cash or same day funds of all of the outstanding Loan Obligations, including,
without limitation, all fees, costs and expenses owing to Lender hereunder and
the other Loan Documents, (ii) Lender has no other commitment to extend
credit or make advances to or for the account of Borrower or any Covered Person
under this Agreement or the other Loan Documents, and (iii) all
outstanding Approvals have been 100% cash collateralized and such cash
collateral shall have been delivered to Lender in cash or same day funds;
subject to per diem amounts, additional Advances made or Approvals given or
payments received after the date of any request for a payoff.


 


PBGC — the Pension Benefit Guaranty Corporation.


 


PENSION BENEFIT PLAN — any pension plan within the meaning of
Section 3(2) of ERISA, including a Multiemployer Plan that is covered
by Title IV of ERISA or Section 412 of the Code.


 


PERMITTED ACQUISITION — is defined in Section 15.6.


 


PERMITTED INDEBTEDNESS — Indebtedness permitted under Section 15.2.


 


PERMITTED INDIRECT OBLIGATIONS — Indirect Obligations
permitted under Section 15.4.


 


PERMITTED INVESTMENTS — Investments permitted under Section 15.1.


 


PERMITTED SECURITY INTERESTS — Security Interests that
Borrower is permitted under Section 15.5 to create, incur, assume, or
allow to exist.


 


PERSON — any individual, partnership, corporation, trust,
unincorporated association, joint venture, limited liability company,
Governmental Authority, or other organization in any form that has the legal
capacity to sue or be sued.  If the
context so implies or requires, the term Person includes Borrower.


 


PERSONAL PROPERTY COLLATERAL — means all Inventory of
Borrower which is financed by Lender or against which Lender has advanced
monies under this Agreement or the other Loan Documents, whether such property
or debtor’s right, title or interest therein or thereto is now owned or
existing or hereafter acquired or arising, and wherever located, all Accounts,
Inventory, Equipment, Fixtures, other Goods, General Intangibles (including,
without limitation, Payment Intangibles), Chattel Paper (whether tangible or
electronic), Instruments (including, without limitation, Promissory Notes),
Investment Property and Documents arising from or associated with the sale,
lease, rental or other disposition of such property, all returns,
repossessions, exchanges, substitutions, replacements, attachments, parts,
accessories and accessions thereto, and all products and Proceeds of the
foregoing.  The Personal Property
Collateral also includes Borrower’s right to all price protection payments,
rebates, discounts, credits, factory holdbacks, incentive payments and any
other amounts due Borrower at any time from a Person from whom Borrower has
purchased any of the foregoing property. 
In addition, the Personal Property 


 


9

















 


Collateral includes, without limitation, all disks, tapes,
media and other devices, electronic or otherwise, which evidence or otherwise
relate to any of the foregoing property, and other devices in which such
records are stored.


 


PRIOR AWF — Investments permitted under Section 2.


 


PRO FORMA FINANCIAL STATEMENTS — the projections of Borrower
referred to in Section 11.1.2.


 


REGULATION T, REGULATION U, and REGULATION X  — respectively, Regulation T issued by
the FRB, Regulation U issued by the FRB, and Regulation X issued by
the FRB.


 


REPORTABLE EVENT — a reportable event as defined in
Title IV of ERISA or the regulations thereunder excluding events with
respect to which notice has been waived by the PBGC in writing.


 


REPRESENTATIONS AND WARRANTIES — The representations and
warranties made by Borrower with respect to itself and other Covered Persons in
Section 12, and the representations and warranties made in any
certificate, report, opinion or other document delivered by Borrower pursuant
to the Loan Documents, as such representations and warranties are modified from
time to time as provided in Section 13.


 


RENTAL CONTRACTS — is defined in Section 15.26.


 


RESPONSIBLE OFFICER — as to any Person that is not an
individual, partnership or trust, the Chairman of the Board of Directors, the
President, the chief executive officer, the chief operating officer, the chief
financial officer, the Treasurer, any Assistant to the Treasurer, or any Vice
President in charge of a principal business unit; as to any partnership, any
individual who is a general partner thereof or any individual who has general
management or administrative authority over all or any principal unit of the
partnership’s business; and as to any trust, any individual who is a trustee.


 


SCHEDULE OF INVENTORY — a listing of each item of existing
Inventory (new and used), new Inventory purchases and items of Inventory sold,
rented or assigned within the past thirty (30) days from the date of the
last such schedule, containing the following: location, manufacturer, age,
quantity, initial date of purchase or lease by Borrower, actual cost, total
accrued depreciation, and net book value of then-existing Inventory in such
reasonable detail as Lender may require.


 


SECURITY AGREEMENT — this Agreement and any security
agreement required or contemplated under Section 9 to be executed and
delivered to Lender or otherwise delivered to Lender from time to time.


 


SECURITY DOCUMENTS — all of the documents required or
contemplated to be executed and delivered to Lender under Section 9, all
other documents granting a Security Interest in any asset of Borrower or any
other Person to secure the payment or performance of any of the Loan
Obligations from time to time, including this Agreement and any such documents
listed on Exhibit 11.1.1, all collateral assignments, and any similar
documents at any time executed and delivered to Lender from time to time, by
Borrower or any other Person to secure payment or performance of any of the
Loan Obligations.


 


SECURITY INTEREST — as to any item of tangible or intangible
property, any interest therein or right with respect thereto or assignment
thereof that secures an Obligation or Indirect Obligation, 


 


10

















 


whether such interest or right is created under a Contract,
or by operation of law or statute (such as but not limited to a statutory lien
for work or materials), or as a result of a judgment, or which arises under any
form of preferential or title retention agreement or arrangement (including a
conditional sale agreement or a lease) that has substantially the same economic
effect as any of the foregoing.


 


SOLVENT — as to any Person, (i) such Person not being “insolvent”
within the meaning of Section 101(32) of the Bankruptcy Code, Section 2
of the Uniform Fraudulent Transfer Act (the “UFTA”) or Section 3 of the
Illinois Uniform Fraudulent Transfer Act set forth in Section 160/3 of the
Illinois Compiled Statutes (1996) (the “Illinois UFTA”), (ii) such Person
not having unreasonably small capital, within the meaning of Section 548
of the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the
Illinois UFTA, and (iii) such Person not being unable to pay such Person’s
debts as they become due within the meaning of Section 548 of the Bankruptcy
Code, Section 4 of the UFTA, or Section 5 of the Illinois UFTA, or
any other applicable Law.


 


STATE — any state of the United States.


 


SUBSIDIARY — as to any Person, another Person with respect to
which 50% or more of the outstanding Capital Securities of each class having
ordinary voting power (other than Capital Securities having such power only by
reason of the happening of a contingency) is at the time owned by such Person
or by one or more Subsidiaries of such Person.


 


TAX — as to any Person, any tax, duty, impost, deduction,
charges, withholdings, assessment, fee, or other charge levied by a
Governmental Authority (and all liabilities associated therewith) on the income
or property of such Person, including any interest or penalties thereon, and
which is payable by such Person.


 


THIRD PERSON REIMBURSEMENT AGREEMENTS-  is defined in Section 19.6.5.


 


TOTAL AVAILABLE ASSETS — is defined in Section 16.1.


 


TOTAL FUNDED INDEBTEDNESS — is defined in Section 16.1.


 


TRANSACTION STATEMENT — is defined in Section 6.1.2.


 


UCC — the Uniform Commercial Code as in effect from time to
time in the State of Illinois or such other similar statute as in effect from
time to time in Illinois or any other appropriate jurisdiction.


 


UNITED STATES — when used in a geographical sense, all the
states of the United States of America and the District of Columbia; and when
used in a legal jurisdictional sense, the government of the country that is the
United States of America.


 


VENDOR — is defined in Section 5.1.2.


 


VENDOR AGREEMENT — is defined in Section 5.1.9.


 


WELFARE BENEFIT PLAN — any plan described by Section 3(1) of
ERISA.


 


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