Document:

Exhibit 10.3

 

EXECUTION VERSION

 

AMENDED AND RESTATED INTERIM SPONSORS AGREEMENT

 

AMENDED AND RESTATED INTERIM SPONSORS AGREEMENT (this “Agreement”), dated as of June 14, 2016, by and among Atlas Power, LLC, a Delaware limited liability company (the “Buyer”), Dynegy Inc., a Delaware corporation (“DYN”), and Energy Capital Partners III, LP, a Delaware limited partnership, Energy Capital Partners III-A, LP, a Delaware limited partnership, Energy Capital Partners III-B, LP, a Delaware limited partnership, Energy Capital Partners III-C, LP, a Delaware limited partnership, and Energy Capital Partners III-D, LP, a Delaware limited partnership (collectively, “ECP”), and, solely for purposes of Sections 1, 2.20 and 3, Terawatt Holdings, LP, a Delaware limited partnership (“Terawatt”). Each of ECP and DYN shall be referred to herein as a “Sponsor” and, collectively, as the “Sponsors”.

 

RECITALS

 

WHEREAS, pursuant to that certain Stock Purchase Agreement, dated as of February 24, 2016 (the “Effective Date”) (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”), by and among Atlas Power Finance, LLC, a wholly-owned Subsidiary of the Buyer (the “Buyer Subsidiary”), GDF SUEZ Energy North America, Inc., a Delaware corporation (the “Company”), and International Power, S.A., a “societe anonyme” under the laws of Belgium (the “Seller”), the Seller has committed, subject to the conditions set forth therein, to sell all of the Shares (as defined in the Purchase Agreement) to the Buyer Subsidiary;

 

WHEREAS, on the Effective Date, (a) ECP, certain Affiliated investment funds of ECP, the Buyer and the Buyer Subsidiary executed an equity commitment letter (the “ECP Equity Commitment Letter”), in which ECP (and such investment funds) committed, subject to the conditions set forth therein, to contribute (directly or through one or more Affiliated entities) to the Buyer an aggregate amount up to $814.75 million (it being understood and agreed that any funds contributed under the ECP Equity Commitment Letter in excess of $414.75 million shall be in the form of a loan substantially on the terms attached hereto as Exhibit C (other than any funds contributed pursuant to Section 2.15, as contemplated by the last sentence of Section 2.15.1, the “Bridge Portion)) solely for the purpose of funding, and to the extent necessary to fund, a portion of the Buyer Subsidiary’s obligations under Sections 3.2(c) and 4.2(b)(i) of the Purchase Agreement, and related costs and expenses, and (b) ECP executed a limited guarantee in favor of the Company, in which ECP committed to guarantee certain of the obligations of the Buyer Subsidiary pursuant to the Purchase Agreement (the “ECP Guarantee”);

 

WHEREAS, DYN, on the Effective Date, executed (a) an equity commitment letter (the “DYN Equity Commitment Letter” and, together with the ECP Equity Commitment Letter, the “Equity Commitment Letters”), in which DYN committed, subject to the conditions set forth therein, to contribute (directly or through one or more Affiliated entities) to the Buyer an aggregate amount up to $770.25 million solely for the purpose of funding, and to the extent necessary to fund, a portion of the Buyer Subsidiary’s obligations under Sections 3.2(c) and 4.2(b)(i) of the Purchase Agreement, and related costs and expenses, and (b) a limited guarantee in favor of the Company, in which DYN committed to guarantee certain of the obligations of the

 

 

Buyer Subsidiary pursuant to the Purchase Agreement (the “DYN Guarantee” and, together with the ECP Guaranty, the “Guarantees”);

 

WHEREAS, it is contemplated that DYN will consummate (i) a debt financing, on terms and conditions reasonably satisfactory to DYN (the “Alternative Debt Financing”), and (ii) a registered offering of tangible equity units of DYN, on terms and conditions reasonably satisfactory to DYN (the “Alternative Equity Financing” and, together with the Alternative Debt Financing, the “Alternative Financings”);

 

WHEREAS, each of DYN and Terawatt, on the Effective Date, executed a Stock Purchase Agreement related to the purchase of certain shares of common stock of DYN by Terawatt (the “Stock Purchase Agreement”), with the proceeds from such purchase to be contributed by DYN to the Buyer in accordance with this Agreement;

 

WHEREAS, the Buyer, DYN and ECP entered into that certain Interim Sponsors Agreement, dated as of the Effective Date (the “Interim Sponsors Agreement”), that governs the actions and the relationship among the Sponsors and the Buyer with respect to the Purchase Agreement, the Equity Commitment Letters, the Guarantees, and the Debt Commitment Letter (as defined in the Purchase Agreement) (each, a “Transaction Agreement” and collectively, the “Transaction Agreements”), and the transactions contemplated hereby and thereby or to be undertaken in connection therewith; and

 

WHEREAS, the Buyer, DYN, ECP and Terawatt desire to enter into this Agreement to amend and restate the Interim Sponsors Agreement in its entirety as set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

 

1.             EFFECTIVENESS; DEFINITIONS.

 

1.1          Effectiveness. This Agreement shall be deemed effective as of the Effective Date and, except as specifically provided herein, shall terminate upon the earlier of, except with respect to Sections 2.4, 2.6, 2.7, 2.8, 2.9, 2.13, 2.15, 2.16 (with respect to Section 2.16, solely if the Closing occurs), 2.17 (with respect to Section 2.17, solely if the Closing occurs), 2.19, 2.20, 2.21 and 3, the Closing and the termination of the Purchase Agreement; provided that any liability for breach of, or failure to comply with, any of the provisions of this Agreement prior to such termination shall survive such termination.

 

1.2          Definitions.

 

1.2.1       “Advisor” means any advisor, consultant or other Person engaged on behalf of the Sponsors or the Buyer for the purpose of conducting due diligence with respect to the Company or negotiating the terms and conditions of the Purchase Agreement, the Equity Commitment Letters, the Guarantees and the Debt Commitment Letter, with the Seller or the Company, including but not limited to Skadden, Arps, Slate,

 

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Meagher & Flom LLP, Latham & Watkins LLP and White & Case LLP. For the avoidance of doubt, any fees owed to advisors, consultants or other Persons for time or services expended negotiating the arrangements between the Sponsors shall not be fees or expenses of an Advisor for any purpose of this Agreement.

 

1.2.2       “Affiliate” means, with respect to a specified Person, any other Person, whether now in existence or hereafter created, directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, “controlling,” “controlled by” and “under common control with”) means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. For the avoidance of doubt, for purposes of this Agreement, the Company and its Subsidiaries shall not be deemed Affiliates of any party hereto and ECP and DYN shall not be deemed Affiliates of each other.

 

1.2.3       “Alternative Financing Closings” means (a) DYN having entered into a Third Amendment to Credit Agreement (the “Incremental Amendment”) among DYN, Morgan Stanley Senior Funding, Inc., BNP Paribas, Credit Agricole Corporate and Investment Bank, SunTrust Bank, Credit Suisse AG, Cayman Islands Branch, as the administrative agent, and the other parties thereto with respect to the Alternative Debt Financing, (b) DYN having received the proceeds of the Alternative Equity Financing and (c) the aggregate amount of the committed financing under the Incremental Amendment and the proceeds from the Alternative Equity Financing being equal to or greater than $2,375,000,000; provided that the amount of the committed financing under the Incremental Amendment is equal to or greater than $1,850,000,000.

 

1.2.4       “Bank of Tokyo Mitsubishi” means The Bank of Tokyo-Mitsubishi UFJ, Ltd.

 

1.2.5       “Commitment” means, with respect to each Sponsor, the amount of the Equity Commitment (as defined and set forth in such Sponsor’s Equity Commitment Letter, as may be increased or decreased in accordance with Section 2.15.

 

1.2.6       “Commitment Percentage” means, with respect to ECP, 35%, and with respect to DYN, 65%, in each case as may be increased or decreased in accordance with Section 2.15.

 

1.2.7       “CS” means Credit Suisse Securities (USA) LLC, an Advisor to DYN.

 

1.2.8       “DB” means Deutsche Bank Securities Inc., an Advisor to DYN.

 

1.2.9       “DB Side Letter” means that certain Side Letter, dated as of the Effective Date, by and between DYN and DB.

 

1.2.10     “DYN Debt Exclusions” means (a) the Credit Agreement, dated as of April 23, 2013, as amended (the “Credit Agreement”), among DYN, as borrower, and Credit Suisse AG, Cayman Islands Branch, as administrative agent, and the lenders and

 

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other parties thereto and the Guarantee and Collateral Agreement and Intercreditor and Trust Agreement, in each case, entered into in connection therewith and dated as of April 23, 2013, as amended, among DYN, Credit Suisse AG, Cayman Islands Branch, as collateral trustee, the subsidiary guarantors party thereto from time to time and the lenders and other parties thereto, (b) the Letter of Credit Reimbursement Agreement, dated as of September 18, 2014, as amended, among DYN, Macquarie Bank Limited and Macquarie Energy LLC, (c) the letter of credit facility to be entered into by DYN with Goldman Sachs Bank or one or more of its affiliates in connection with the transactions contemplated by the Purchase Agreement, (d) any indebtedness existing as of the date hereof pursuant to any indentures of DYN and/or its Subsidiaries, and any notes issued pursuant thereto, by DYN or any of its Subsidiaries, (e) any indebtedness issued pursuant to any indentures of DYN and/or its Subsidiaries in connection with the transactions contemplated by the Purchase Agreement, (f) any indebtedness issued pursuant to a revolving credit facility or letter of credit facility entered into after the date of this Agreement not to exceed $45,000,000 in the aggregate, (g) an increase in DYN’s revolving credit facility not to exceed $75,000,000 in the aggregate, and (h) other ordinary course working capital or liquidity facilities of DYN and its Subsidiaries not to exceed $100,000,000 in the aggregate.

 

1.2.11     “ENGIE Consent” means the applicable parties to the Letter Agreement having executed and delivered the annexes to the Letter Agreement in accordance with the terms of the Letter Agreement.

 

1.2.12     “Financing Date” means July 1, 2016.

 

1.2.13     “First Buyout Condition” means the (a) occurrence of DYN’s commencement of the Alternative Financings on or prior to June 16, 2016, (b) occurrence of the Alternative Financing Closings on or prior to the Financing Date and (c) receipt of the ENGIE Consent within two (2) Business Days after the occurrence of the Alternative Financing Closings.

 

1.2.14     “GS” means Goldman, Sachs & Co., an Advisor to DYN.

 

1.2.15     “GS Side Letter” means that certain Side Letter, entered into on or about the Effective Date, by and between DYN and GS, or any other agreement, whether written or oral, to pay GS a side fee.

 

1.2.16     “Lazard” means Lazard Freres & Co. LLC, an Advisor to DYN.

 

1.2.17     “Letter Agreement” means that certain letter agreement, dated as of the date hereof, by and among DYN, the Buyer, ECP, Seller and the Company.

 

1.2.18     “LLC Agreement Form” means the form of Amended and Restated Limited Liability Company Agreement attached as Exhibit A hereto.

 

1.2.19     “Morgan Stanley” means Morgan Stanley Senior Funding, Inc.

 

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1.2.20     “MS Side Letter” that certain Side Letter, dated as of the Effective Date, by and between the Buyer Subsidiary and MS.

 

1.2.21     “PIPE Closing” has the meaning given to the term “Closing” in the Stock Purchase Agreement.

 

1.2.22     “RBC” means the Royal Bank of Canada, an Advisor to DYN.

 

1.2.23     “Second Buyout Condition” means the occurrence of the Closing or the termination of the Purchase Agreement in accordance with Section 4.3(d) or Section 4.3(f) thereof.

 

1.2.24     “Side Letters” means, collectively, the DB Side Letter and the GS Side Letter.

 

1.2.25     “Transfer” means any sale, transfer, conveyance, assignment, pledge, encumbrance, hypothecation or other disposition (other than any sale or transfer to an Affiliate of the transferring party, including, with respect to ECP, an entity controlled by ECP and formed for the purpose of effecting an investment in the Buyer by certain limited partners of ECP and Affiliated investment funds of ECP).

 

Capitalized terms used but not defined herein shall have the meanings assigned to them in the Purchase Agreement.

 

2.             AGREEMENTS AMONG THE PARTIES.

 

2.1          Equity Commitments.

 

2.1.1       Each Sponsor hereby agrees to fund or cause to be funded the Commitment under its Equity Commitment Letter, on the terms and subject to the conditions and limitations thereof. Each Sponsor hereby affirms and agrees that the Buyer is entitled to and shall enforce the provisions of the Equity Commitment Letters in accordance with this Agreement and the terms of each such Equity Commitment Letter upon the direction of the Company if the Company is permitted to cause the Buyer to enforce the provisions of such Equity Commitment Letter under the specific circumstances set forth therein and Section 11.11 of the Purchase Agreement and does in fact so cause the Buyer to enforce such provisions. Neither the Buyer nor the Sponsors shall attempt to enforce the funding of any Commitment under any Equity Commitment Letter until the applicable conditions set forth in the foregoing sentence have been satisfied and, if such conditions are satisfied, DYN shall be entitled to cause the Buyer to enforce the provisions of the ECP Equity Commitment Letter in the event ECP has not funded thereunder and ECP shall be entitled to cause the Buyer to enforce the provisions of the DYN Equity Commitment Letter in the event DYN has not funded thereunder. This Section 2.1.1 shall terminate upon the occurrence of the First Buyout Condition.

 

2.1.2       In the event that the PIPE Closing occurs concurrently with the Closing, DYN hereby agrees to use the aggregate Purchase Price (as defined in the Stock Purchase Agreement), less related costs and expenses, to fund a portion of the Commitment under

 

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the DYN Equity Commitment Letter. In the event that the PIPE Closing occurs following the Closing, each Sponsor and the Buyer shall take the actions contemplated by Section 2.15.2. In the event that the parties under the Stock Purchase Agreement are required to consummate the PIPE Closing in accordance with the Stock Purchase Agreement, ECP shall cause Terawatt to pay the Purchase Price (as defined in the Stock Purchase Agreement) pursuant to the Stock Purchase Agreement and, to the extent Terawatt does not have the requisite funds to pay all of the Purchase Price (as defined in the Stock Purchase Agreement), ECP shall provide such requisite funds to Terawatt.

 

2.1.3       If the First Buyout Condition fails to occur, notwithstanding anything to the contrary in this Agreement and the Commitment Letters, the Sponsors hereby agree that in the event that the Buyer does not require the full amount of the Sponsors’ aggregate Commitment to fulfill its obligations under the Purchase Agreement (such unused amount, the “Excess Amount”), all or a portion of any such Excess Amount shall nevertheless be contributed to the Buyer in an amount necessary to satisfy the minimum cash balance of the Buyer required under the Debt Commitment Letter, and thereafter, the Commitment of each Sponsor shall be reduced as follows: first, ECP’s Commitment shall be reduced by up to the Bridge Portion and then, if the Excess Amount exceeds the Bridge Portion, each Sponsor’s Commitment shall be reduced by its pro rata portion (in accordance with its respective Commitment Percentage).

 

2.1.4       If the First Buyout Condition fails to occur, in exchange for each Sponsor’s Equity Commitment, at the Closing, upon execution of an Amended and Restated Limited Liability Company Agreement of the Buyer substantially in the form of the LLC Agreement Form, the Buyer shall issue, directly or indirectly, to each Sponsor an additional number of limited liability company interests in the Buyer so that each such Sponsor shall hold, directly or indirectly, a number of limited liability company interests in the Buyer equal to such Sponsor’s Commitment Percentage of the outstanding limited liability company interests in the Buyer (after giving effect to such issuances).

 

2.2          Decisions; Actions.

 

2.2.1       Except as otherwise set forth in this Section 2.2, the parties hereto hereby agree that the Buyer (on behalf of itself and the Buyer Subsidiary) shall be entitled to take or cause to be taken any and all actions required or permitted to be taken by the Buyer (on behalf of itself and the Buyer Subsidiary), in each case, in its sole discretion, regarding the Purchase Agreement, the Related Documents and the transactions contemplated thereby, including in order to comply with its obligations under the Purchase Agreement and the Related Documents, satisfying the conditions to the Closing set forth in Article IX of the Purchase Agreement and exercising the Buyer’s (and the Buyer Subsidiary’s) rights under the Purchase Agreement or the Related Documents.

 

2.2.2       The parties hereto hereby agree that the Buyer shall be controlled by DYN as managing member pursuant to the Limited Liability Company Agreement of the Buyer, dated as of the Effective Date; provided that the Buyer shall not, and shall cause the Buyer Subsidiary not to, take or cause to be taken any material actions without the

 

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prior written consent of ECP; provided, further, that, for the avoidance of doubt, the following shall be considered material actions:

 

(1)                                 amending, modifying or terminating the Purchase Agreement or any Related Document;

 

(2)                                 waiving the Seller’s or the Company’s compliance with any of their respective obligations under the Purchase Agreement or the Related Documents or granting any consent requested by the Seller or the Company pursuant to the Purchase Agreement or the Related Documents;

 

(3)                                 other than as contemplated by Section 2.11, paying any consideration to obtain, or granting any other benefit or concession to obtain, or in each case to facilitate the obtaining of, any consent or approval of any Governmental Body or other Person with respect to the transactions contemplated by the Purchase Agreement;

 

(4)                                 (i) determining that the conditions to the Closing set forth in Sections 9.1(a)–(g) of the Purchase Agreement have been satisfied or (ii) determining to waive any such condition or making any claim (in writing) that a Material Adverse Effect has occurred;

 

(5)                                 making any claim (in writing) that Seller or the Company is in breach of, or default under, the Purchase Agreement or any Related Document, or instituting any proceeding or action, or threatening (in writing) to institute any proceeding or action with respect to any such breach or default;

 

(6)                                 making any determination with respect to the Debt Financing contemplated in Section 2.10; and

 

(7)                                 making any filing with a Governmental Body required under Section 8.4 of the Purchase Agreement;

 

provided, further, that the obligations of the Buyer and the Buyer Subsidiary pursuant to clauses 2.2.2(2), 2.2.2(3), 2.2.2(4)(ii), 2.2.2(6) and 2.2.2(7) above shall terminate upon the occurrence of the First Buyout Condition; provided, further, that, from and after the occurrence of the First Buyout Condition, Buyer and Buyer Subsidiary shall have no obligation to obtain ECP’s prior written consent with respect to any other material action unless such material action would adversely affect ECP’s rights under this Agreement.

 

2.2.3       Notwithstanding the foregoing, if the Buyer requests in writing that ECP approve any decision or action set forth in Section 2.2.1 or Section 2.10 and ECP does not notify the Buyer in writing of its disapproval of such decision or action by 5:00 p.m. Houston, Texas time on the third (3rd) Business Day following the date of such request,

 

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ECP shall be deemed to have irrevocably consented to and approved of such decision or action for all purposes of this Agreement.

 

2.3          Pre-Closing Matters. Each Sponsor shall use its Commercially Reasonable Efforts to, and the parties hereto shall reasonably cooperate with one another to, (a) take all actions necessary or appropriate to consummate the transactions contemplated by the Purchase Agreement, (b) cause the fulfillment at the earliest practicable date of all of the conditions to their or the Buyer Subsidiary’s respective obligations to consummate the transactions contemplated by the Purchase Agreement and (c) execute and cause to be delivered to each other party hereto or thereto such instruments and other documents, and shall take such other actions, as such other party may reasonably request (prior to, at or after the Closing) for the purposes of carrying out or evidencing any of the transactions contemplated by the Purchase Agreement. This Section 2.3 shall terminate upon the occurrence of the First Buyout Condition; provided, however, that Buyer Subsidiary shall, and DYN shall cause it to, continue to comply with its obligations under Sections 8.4 and 8.5 of the Purchase Agreement.

 

2.4          Defaulting Sponsor.

 

2.4.1       In the event that (a) the Buyer has determined that the Closing Conditions have been satisfied or waived and (i) ECP (A) fails to fund (or provides written notice to DYN of its intent not to fund) its portion of the Closing Date Purchase Price in accordance with the terms of the ECP Equity Commitment Letter, or (B) fails to effect the PIPE Closing (assuming all conditions to ECP’s obligations to effect the PIPE Closing been satisfied or waived) or (ii) DYN (A) fails to fund (or provides written notice to ECP of its intent not to fund) its portion of the Closing Date Purchase Price in accordance with the terms of the DYN Equity Commitment Letter or (B) fails to effect the PIPE Closing (assuming all conditions to DYN’s obligations to effect the PIPE Closing have been satisfied or waived), or (b) any Sponsor takes, or causes the Buyer to take, or fails to take, any material action, or makes, or fails to make, any material decision, in each case that causes the Buyer, the Buyer Subsidiary or any Sponsor to be in material breach of, or material default under, any Transaction Agreement or the Stock Purchase Agreement, after written notice and reasonable opportunity to cure to the extent that such breach or default is curable and the applicable Transaction Agreement allows for such opportunity for cure (the applicable Sponsor, in the case of clause (a) or clause (b) above, the “Defaulting Sponsor”), then in each case in clauses (a) and (b) above, the other Sponsor (the “Non-Defaulting Sponsor”) shall have the right to terminate with immediate effect the Defaulting Sponsor’s participation in the transactions contemplated by the Purchase Agreement and the Stock Purchase Agreement and fund (or cause a third party to fund) any unpaid amount of the Defaulting Sponsor’s portion of the Closing Date Purchase Price and the Defaulting Sponsor shall immediately and irrevocably transfer to the Non-Defaulting Sponsor (or such third party, as the case may be) its equity interests in the Buyer in consideration therefor (at a cost equal to the par value per share of such equity interests).

 

2.4.2       Any Defaulting Sponsor hereby makes, constitutes and appoints the Non-Defaulting Sponsor as its true and lawful attorney-in-fact for it and in its name, place and stead to sign, execute, certify, acknowledge, file and record any instrument that is now or

 

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may hereafter be deemed necessary by a Non-Defaulting Sponsor in its reasonable discretion to carry out fully any transfer contemplated by Section 2.4 (such power of attorney granted is a special power of attorney, coupled with an interest, and is irrevocable, and will survive the bankruptcy, insolvency, dissolution or cessation of existence of the Defaulting Sponsor). The termination of any Defaulting Sponsor’s participation in the transactions contemplated by the Purchase Agreement and the funding of the Defaulting Sponsor’s portion of the Closing Date Purchase Price in the manner set forth above shall not affect, alter or impair the Buyer’s, the Buyer Subsidiary’s, the Non-Defaulting Sponsor’s, the Company’s or the Seller’s rights or remedies against the Defaulting Sponsor under this Agreement (including, without limitation, Sections 2.1.1 and 2.8) or the Transaction Agreements, with respect to the Defaulting Sponsor’s failure to fund or any other action or inaction. Nothing in Section 2.4 shall obligate or require the Non-Defaulting Sponsor to exercise its right to terminate the Defaulting Sponsor’s participation in the transactions contemplated by the Purchase Agreement or fund the Defaulting Sponsor’s portion of the Closing Date Purchase Price.

 

2.4.3       Notwithstanding anything to the contrary contained in this Agreement, Sections 2.4.1 and 2.4.2 shall terminate upon the occurrence of the First Buyout Condition.

 

2.5          LLC Agreement and Service Agreement.

 

2.5.1       If the First Buyout Condition fails to occur, each Sponsor agrees, on the Closing Date, to enter into an Amended and Restated Limited Liability Company Agreement of the Buyer substantially in the form of the LLC Agreement Form.

 

2.5.2       Each Sponsor agrees to negotiate in good faith the terms of a service agreement relating to the provision of certain services by DYN to the Buyer and its Subsidiaries following the Closing in accordance with the terms set forth on Exhibit B in order to execute such service agreement on the Closing Date. This Section 2.5.2 shall terminate upon the occurrence of the First Buyout Condition.

 

2.6          Company Payments. Until such time as the Closing occurs, each Sponsor agrees that any damages, costs, fees, expenses or other amounts to be paid by the Seller or the Company to the Sponsors or the Buyer under or with respect to any Transaction Agreement to which the Buyer (or the Buyer Subsidiary) is a party or the transactions contemplated thereby (collectively, the “Company Payments”) shall (a) first be used to pay the fees and expenses of the Advisors in their capacity as such (other than Lazard, RBC, DB, GS and CS) and (b) thereafter be paid to the Sponsors in proportion to their respective Commitment Percentages at the time of the event that triggered payment of any of the Company Payments (provided, that upon the occurrence of the First Buyout Condition, ECP shall have no right to any payment pursuant to this clause (b)); provided, however, that, until the occurrence of the First Buyout Condition, in the event a Sponsor becomes a Defaulting Sponsor, (x) such Defaulting Sponsor hereby waives all rights and shall have no right or claim to all or any portion of the Company Payments and (y) in the event any Company Payment is or has been paid to the Defaulting Sponsor by the Company, the Defaulting Sponsor shall immediately remit all such amounts to the Non-Defaulting Sponsors.

 

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2.7          Expenses.

 

2.7.1       In the event the Purchase Agreement is not terminated and the Closing occurs, the Company and/or the Buyer shall bear and pay any amounts due to each Advisor and all fees and expenses payable to the providers of the Debt Financing (including the fees and expenses of RBC, DB, GS, Morgan Stanley (including pursuant to the MS Side Letter) and Bank of Tokyo Mitsubishi related to the Debt Financing other than fees and expenses of (i) DB or GS pursuant to the Side Letters or (ii) Lazard, CS and RBC (to the extent not related to the Debt Financing)).

 

2.7.2       In the event the Purchase Agreement is terminated, after the application pursuant to Section 2.6 of any Company Payments, each Sponsor shall bear and pay its proportionate share (based on its respective Commitment Percentage) of any amounts due to each Advisor (including the fees and expenses of RBC, DB, GS, Morgan Stanley (including pursuant to the MS Side Letter) and Bank of Tokyo Mitsubishi related to the Debt Financing other than fees and expenses of (i) DB or GS pursuant to the Side Letters or (ii) Lazard, CS and RBC (to the extent not related to the Debt Financing)), solely in its capacity as an Advisor.

 

2.7.3       All fees and expenses of Lazard, RBC and CS related to the Purchase Agreement or the transactions contemplated thereby (but not including any such fees and expenses to the extent related to the Debt Financing) and all fees and expenses of DB or GS pursuant to the Side Letters, notwithstanding each of Lazard’s, RBC’s, DB’s, GS’s and CS’s status as an Advisor, shall be borne entirely by DYN and not by the Buyer, the Buyer Subsidiary, the Company or ECP.

 

2.7.4       Notwithstanding Sections 2.7.1 and 2.7.2, upon the occurrence of the First Buyout Condition and within 30 days of receipt of a written invoice from DYN, ECP shall pay to DYN 35% of any amounts covered by Section 2.7.1 (but only with respect to such amounts incurred prior to the occurrence of the First Buyout Condition), excluding, for the avoidance of doubt, any such amounts related to the Alternative Financings, and ECP shall have no further obligations under this Section 2.7.

 

2.8          The Buyer and Defaulting Sponsor Indemnification. Notwithstanding anything to the contrary in this Agreement, in the event a Sponsor becomes a Defaulting Sponsor (or otherwise breaches any of its obligations under any Transaction Agreement to which it is a party) and the Non-Defaulting Sponsor is obligated to make any payment in respect of any resulting claim or liability under any Transaction Agreement, such Defaulting Sponsor will (i) be solely responsible for such payment and (ii) defend, indemnify and hold harmless the Non-Defaulting Sponsor, the Buyer and the Buyer Subsidiary from and against, and reimburse the Non-Defaulting Sponsor and the Buyer and the Buyer Subsidiary for, all claims, actions, proceedings, liabilities, obligations, damages, losses, harms, charges, costs and expenses of whatever nature and however arising from such breach or any action or inaction of the Defaulting Sponsor that the Non-Defaulting Sponsor or the Buyer or the Buyer Subsidiary may suffer or incur, or become subject to, under or arising from the Purchase Agreement or any of the other Transaction Agreements or in respect thereof.

 

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2.9          Information Supplied; Indemnification. From and after the Effective Date, each Sponsor (the “Indemnifying Sponsor”) will defend, indemnify and hold harmless the other Sponsor and the Buyer (each, an “Indemnified Party” and collectively, the “Indemnified Parties”) from and against, and reimburse the Indemnified Parties for, all claims, actions, proceedings, liabilities, obligations, damages, losses, charges, costs or expenses of whatever nature and however arising that any Indemnified Party may suffer or incur, or become subject to, as a result of any information that (a) contains an untrue statement of a material fact or omits to state any material fact required to be stated therein in order to make such statement, in light of the circumstances in which it was made, not misleading and (b) is supplied by such Sponsor for inclusion in the filings or notifications with Governmental Bodies required to be made under the Purchase Agreement.

 

2.10        Debt Financing. The Sponsors shall cause the Buyer (and the Buyer shall cause the Buyer Subsidiary) to comply with the Buyer Subsidiary’s obligations under the Purchase Agreement to enter into and borrow under definitive agreements relating to the Debt Financing; provided that, without ECP’s prior written consent, the Buyer and the Buyer Subsidiary shall not make any determination to take any action, or determination to not act, with respect to the Debt Commitment Letter or with respect to any agreement on additional or modified terms related to the Debt Financing (subject to the terms of the Purchase Agreement). In addition, DYN shall permit, and shall cause the Buyer and the Buyer Subsidiary to permit, ECP to participate in (a) all “road shows”, lender meetings and similar meetings with respect to obtaining the Debt Financing and (b) the preparation and negotiation of all material documents necessary to consummate the Debt Financing. This Section 2.10 shall terminate upon the occurrence of the First Buyout Condition.

 

2.11        Regulatory Matters. Each Sponsor shall, and shall cause its Affiliates to, (a) make or assist the Buyer and the Buyer Subsidiary in making, as applicable, all filings and notifications with Governmental Bodies and (b) use its reasonable best efforts to obtain or assist the Buyer and the Buyer Subsidiary in obtaining, as applicable, all necessary consents, authorizations and approvals of any Governmental Body that, in each case of clause (a) or (b) above, are necessary to consummate the transactions to be effected pursuant to the Stock Purchase Agreement or Purchase Agreement. Without limiting the generality of the foregoing, each Sponsor shall, and shall cause its Affiliates to, (i) supply and provide all information (which information shall be accurate in all material respects) to the other Sponsors or the Buyer, as applicable, that is reasonably required in connection with any such filings or notifications or in connection with obtaining any such consents, authorizations or approvals and (ii) cooperate with the other Sponsor and the Buyer in responding to any action taken by any Governmental Body in connection with or in response to any such filings or notifications or any such consents, authorizations and approvals. In connection with and without limiting the foregoing, each Sponsor shall, and shall cause its Affiliates to, take promptly any and all steps necessary to avoid or eliminate each and every impediment under any Regulatory Laws that may be asserted by any federal, state and local and non-United States antitrust or competition authority, so as to enable the parties to the Purchase Agreement to effect the Closing and the PIPE Closing as expeditiously as possible; provided that ECP shall not be required to effect or commit to effect, by consent decree, hold separate orders, trust or otherwise (A) the sale or disposition of any of the assets or businesses of ECP or its Affiliates or (B) any other restriction, limitation or encumbrance on businesses or assets of ECP or its Affiliates (and in no event shall ECP be

 

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deemed to be a Defaulting Sponsor by failing to effect, or failing to commit to effect, any such action contemplated by clause (A) or clause (B) above). To the extent that any consent decree, hold separate orders, holding in trust of any of assets or business or any other restriction, limitation or encumbrance on any businesses or assets other than any sale or disposition of any businesses or assets of any Person (collectively, but expressly excluding any sale or disposition of any businesses or assets of any Person, the “Mitigation Actions”) is necessary to avoid or eliminate each and every impediment under any Regulatory Laws and is necessary to consummate the Closing under the Purchase Agreement or the PIPE Closing, DYN shall (1) first propose to the applicable authority that such Mitigation Actions be taken by the Company Group or by DYN and its Subsidiaries or both, (2) determine (which determination will be made by DYN in an economically rational manner and assuming that it indirectly owns all of the equity interests of the Company Group) which businesses or assets of the Company Group or DYN or its Subsidiaries, as applicable, will be subject to such Mitigation Actions and which Mitigation Actions will be taken (provided such Mitigation Actions avoid, mitigate or eliminate such impediments) and (3) cause the Company or it or any such DYN Subsidiary, as applicable, to take such Mitigation Action following the Closing under the Purchase Agreement. To the extent that sales or dispositions of assets or businesses of the Company Group are necessary to avoid or eliminate each and every impediment under any Regulatory Laws and are necessary to consummate the Closing under the Purchase Agreement or the PIPE Closing following the taking of the actions contemplated by the two preceding sentences, DYN shall (x) propose to the applicable authority that sale or dispositions of businesses or assets of the Company Group be undertaken by the Company Group, (y) determine (which determination will be made by DYN in an economically rational manner and assuming that it indirectly owns all of the equity interests of the Company Group) which businesses or assets of the Company Group will be sold or disposed (provided such sales or dispositions avoid, mitigate or eliminate such impediments) and (z) cause the Company to undertake such sales or dispositions following the Closing under the Purchase Agreement.

 

2.12        Exclusivity. Each Sponsor agrees that, for so long as this Agreement shall remain in effect, except for the Alternative Financings, it shall not become Affiliated with, enter into discussions with, or make an equity investment with, any other Person in relation to any transaction involving the Seller or the Company that could reasonably be expected to be competitive to, or interfere with, the negotiation or consummation of the transactions contemplated by the Purchase Agreement. This Section 2.12 shall terminate upon the occurrence of the First Buyout Condition.

 

2.13        Cooperation. Each Sponsor shall comply with, and be bound by, the Buyer Subsidiary’s obligations under Section 8.8 of the Purchase Agreement as if such Sponsor was the Buyer Subsidiary under Purchase Agreement. Each Sponsor agrees to cooperate with each other Sponsor reasonably and in good faith with respect to the publication of any press release or public announcement or other communication with any news media in respect of the Transaction Agreements or the transactions contemplated thereby. Unless otherwise required by Law or the rules of any stock exchange or regulatory authority (including a self-regulatory organization), no party hereto may issue any press release or otherwise make any public announcement or comment relating to the transactions contemplated by the Purchase Agreement without the prior coordination with the other Sponsors, including, without limitation, allowing, to the extent reasonably practicable, the other Sponsors a reasonable opportunity to comment on such press

 

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release, public announcement or other communication in advance of such issuance or publication (including any public announcement required by Law or the rules of any stock exchange). This Section 2.13 shall terminate upon the occurrence of the First Buyout Condition.

 

2.14        Restrictions on Transfer. Except as contemplated by Section 2.19.1, for so long as this Agreement shall be in force or remain in effect, no Sponsor shall permit any Transfer of any equity or other interest of the Buyer. Except for the Alternative Financings, each Sponsor shall not, and shall cause its Affiliates not to, permit any direct or indirect Transfer (including by issuance of equity interests) of any equity interest of such Sponsor or the beneficial ownership of any equity interest of such Sponsor if such Transfer would be reasonably be expected to adversely affect or materially delay obtaining or making the consents, authorizations and approvals of any Governmental Body that are necessary to consummate the transactions contemplated by the Purchase Agreement or the Related Documents. Notwithstanding the foregoing, Energy Capital Partners III-A, LP shall be permitted to Transfer all or a portion of the limited liability company interests that it holds in the Buyer to any of Energy Capital Partners III, LP, Energy Capital Partners III-B, LP, Energy Capital Partners III-C, LP, and Energy Capital Partners III-D, LP. This Section 2.14 shall terminate upon the occurrence of the First Buyout Condition.

 

2.15        Additional Financing.

 

2.15.1             In the event that the PIPE Closing does not occur prior to or concurrently with the Closing as a result of the failure of any of the conditions to the PIPE Closing under the Stock Purchase Agreement to have been satisfied or waived or because the Stock Purchase Agreement has been terminated, ECP shall be required to provide $150 million to DYN or the Buyer, as applicable, through one of the following options (provided that if (x) the First Buyout Condition fails to occur (other than in the circumstances described in clause (z) below), ECP can elect either option in its sole discretion, (y) the First Buyout Condition occurs, only the provisions of clause (i) below shall apply and (z) in the event that the First Buyout Condition fails to occur and the PIPE Closing has not occurred or does not occur as a result of the failure of the condition set forth in Section 2.04(g) of the Stock Purchase Agreement, only the provisions of clause (ii) below shall apply): (i) ECP and DYN shall enter into a loan agreement, the specific terms of which shall include the ability of DYN to repay all or a portion of the loan at any time without penalty and shall otherwise be agreed by ECP and DYN, acting reasonably and in good faith, prior to the Closing, pursuant to which ECP shall loan DYN $150 million (the “ECP Loan”), which DYN shall use to fund the Buyer Subsidiary’s obligations under the Purchase Agreement or (ii) (a) ECP’s Commitment shall be increased by $150 million and DYN’s Commitment shall be decreased by $150 million, (b) each Sponsor’s Commitment Percentage shall be increased or decreased, as the case may be, in accordance with the $150 million increase or decrease contemplated by the foregoing clause (a), and (c) ECP shall be required to contribute such additional $150 million to the Buyer at the Closing, subject to the satisfaction or waiver of the conditions set forth in the ECP Equity Commitment Letter; provided that, in each case in the foregoing clauses (i) and (ii), each of DYN and Terawatt shall continue to comply with its obligations set forth in the Stock Purchase Agreement (including effecting the PIPE Closing, subject to the satisfaction or waiver of the conditions set forth in the Stock

 

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Purchase Agreement), and provided  further that if any of the conditions to the PIPE Closing under the Stock Purchase Agreement are not satisfied or the Stock Purchase Agreement is terminated, in either case due to a material breach of, or material default under, the Stock Purchase Agreement by DYN, ECP shall not be required to provide the ECP Loan, ECP’s Commitment shall not be increased pursuant to clause (ii)(a) above and ECP shall not be required to contribute the additional $150 million to the Buyer at the Closing pursuant to clause (ii)(c) above, unless ECP elects, in its sole discretion, to either provide the ECP Loan or contribute such additional $150 million to the Buyer. For the avoidance of doubt, in the event that ECP contributes an additional $150 million to the Buyer pursuant to this Section 2.15.1, such contribution shall not constitute a Bridge Portion and shall instead be deemed an equity contribution by ECP to the Buyer under the ECP Equity Commitment Letter.

 

2.15.2             In the event that the PIPE Closing occurs after the actions contemplated in clauses (i) or (ii) of Section 2.15.1 have occurred, the Sponsors hereby agree that (a) ECP shall be deemed to have paid $150 million of DYN’s Commitment on DYN’s behalf, (b) such payment by ECP on DYN’s behalf shall be offset against, and shall be treated as satisfying, Terawatt’s obligation to pay the Purchase Price (as defined in the Stock Purchase Agreement) at the PIPE Closing, (c) in the case of clause (i) of Section 2.15.1, $150 million of the outstanding principal of the ECP Loan shall have been deemed repaid but any accrued and unpaid interest thereon shall be paid to ECP in full by DYN, and (d) in the case of clause (ii) of Section 2.15.1, for purposes of determining the ownership of Units (as defined in the LLC Agreement Form) and the Capital Contributions (as defined in the LLC Agreement Form) of each Sponsor, the actions set forth in clauses (ii)(a) and (ii)(b) of Section 2.15.1 shall be deemed to have not occurred and DYN shall be deemed to have funded DYN’s Commitment as contemplated as of the date hereof (for the avoidance of doubt, at the price per Unit paid by the Sponsors at the Closing).

 

2.16        Bridge Portion. Subject to Section 2.1.3, at the Closing and concurrently with the funding of ECP’s Commitment in accordance with the ECP Equity Commitment Letter, ECP shall provide the Bridge Portion to the Buyer substantially on the terms attached hereto as Exhibit C. Notwithstanding the foregoing or anything to the contrary in Section 2.2, through the Closing Date, DYN may, without ECP’s prior written consent, cause the Buyer to negotiate and obtain replacement financing from a third party that is not an Affiliate of DYN with respect to the Bridge Portion on terms materially more favorable to the Buyer in the aggregate than the terms of the Bridge Portion (which replacement financing shall (i) not be convertible into any equity of the Buyer or any of its Subsidiaries, (ii) not have any make-whole, cash interest, amortization, mandatory prepayment or redemption, financial covenants and call protection features and (iii) have a lower interest rate for the duration of such replacement financing and a maturity of at least four (4) years from the date of incurrence). This Section 2.16 shall terminate upon the occurrence of the First Buyout Condition.

 

2.17        Liquidity Facility. At the Closing, DYN and the Buyer shall enter into a liquidity facility, substantially on the terms attached hereto as Exhibit D. This Section 2.17 shall terminate upon the occurrence of the First Buyout Condition.

 

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2.18        Alternative Financings. From and after the date hereof, DYN shall use its commercially reasonable efforts to cause the Alternative Financing Closings to occur as promptly as reasonably practicable and, in any event, by the Financing Date. This Section 2.18 shall terminate upon the occurrence of the First Buyout Condition.

 

2.19        ECP Buyout.

 

2.19.1             Upon the occurrence of the First Buyout Condition, (a) ECP shall promptly, and in any event within two (2) Business Days, (i) enter into an assignment agreement, in substantially the form attached hereto as Exhibit E, with Dynegy Atlas Holdings, LLC, a Delaware limited liability company, and (ii) deliver to Dynegy Atlas Holdings, LLC a certificate of non-foreign status from each seller of limited liability company interests in the Buyer prepared pursuant to section 1445(b)(2) of the Internal Revenue Code of 1986, as amended, and Treasury regulations section 1.1445-2(b)(2), and (b) DYN or the Buyer, whichever is applicable, shall promptly, and in any event within two (2) Business Days, (i) deliver to ECP a certification that interests in the Buyer are not U.S. real property interests prepared pursuant to Treasury regulation Section 1.897-2(h) and Treasury regulation 1.1445-2(c), and (ii) to the extent not already entered into and delivered to ECP, deliver to ECP a termination agreement in respect of the ECP Equity Commitment Letter and the ECP Guarantee in the form attached hereto as Exhibit F, duly executed by the Buyer, the Buyer Subsidiary and the Company.

 

2.19.2             Upon the occurrence of the First Buyout Condition and, thereafter, the Second Buyout Condition, DYN shall pay to ECP and its affiliated funds, by wire transfer of immediately available funds to an account (or accounts) designated in writing by ECP, an aggregate amount in cash (the “Purchase Price”) as set forth below:

 

(1)         $375,000,000, if DYN pays the Purchase Price in full on or prior to the later of (i) December 31, 2016 and (ii) the date that is three (3) months after the occurrence of the Second Buyout Condition (such later date, the “First Payment Date”), provided, that in no event shall DYN pay the Purchase Price prior to the occurrence of the Second Buyout Condition;

 

(2)         $400,000,000, if DYN pays the Purchase Price in full after the First Payment Date but on or prior to the date that is three (3) months after the First Payment Date (such date, the “Second Payment Date”);

 

(3)         $425,000,000, if DYN pays the Purchase Price in full after the Second Payment Date but on or prior to the date that is six (6) months after the First Payment Date (such date, the “Third Payment Date”);

 

(4)         $450,000,000 if DYN pays the Purchase Price in full after the Third Payment date but on or prior to the date that is nine (9) months after the First Payment Date (the “Fourth Payment Date”); or

 

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(5)         if DYN does not pay the Purchase Price in full on or prior to the Fourth Payment Date, DYN shall pay ECP an amount equal to $468,500,000 on or prior to the date that is twelve (12) months from the First Payment Date (such date, together with the First Payment Date, the Second Payment Date, the Third Payment Date and the Fourth Payment Date, the “Payment Dates”).

 

DYN may make one or more partial payments of the Purchase Price at any time, whether on or prior to a Payment Date. If DYN makes any such partial payment, DYN shall owe, and be obligated to pay, only a proportionate amount of the Purchase Price increases reflected in Sections 2.19.2(2)—(5) based on the amount of the Purchase Price paid prior to any applicable Payment Date relative to the amount of the Purchase Price owed as of such applicable Payment Date.

 

2.19.3             In the event that the First Buyout Condition and the Second Buyout Condition have occurred and DYN has not paid the Purchase Price in full on or prior to March 15, 2017, DYN shall pay ECP an aggregate amount equal to $10,000,000 by wire transfer of immediately available funds; provided that, upon such payment, the Purchase Price shall be reduced by $10,000,000.

 

2.19.4             Until the earlier of (a) the failure of the First Buyout Condition to have occurred, (b) the payment of the Purchase Price in full and (c) the termination of the Purchase Agreement in accordance with its terms (other than a termination pursuant to Section 4.3(d) or Section 4.3(f) thereof), DYN shall not and shall cause its Subsidiaries not to:

 

(1)         subject to any applicable fiduciary duties of DYN’s board of directors, consummate any merger, consolidation or similar business combination transaction with any Person that is not an Affiliate of DYN involving consideration in excess of $300,000,000;

 

(2)         consummate any investments in, or loans or advances to, any Person that is not an Affiliate of DYN in excess of $100,000,000 individually or $300,000,000 in the aggregate;

 

(3)         other than with respect to the Alternative Debt Financings or the DYN Debt Exclusions, incur or guarantee debt for borrowed money in excess of $150,000,000 in the aggregate unless the proceeds are used to pay the Purchase Price;

 

(4)         enter into any agreement (other than pursuant to agreements or arrangements in effect as of June 14, 2016) to voluntarily prepay indebtedness in excess of $100,000,000 in the aggregate;

 

(5)         materially change lines of business;

 

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(6)         sell any physical assets (regardless of whether sold directly or indirectly in an asset or equity sale) in excess of $50,000,000 in the aggregate unless the proceeds thereof are used to pay the Purchase Price;

 

(7)         other than the Alternative Financings, issue any equity securities of DYN to any third party in exchange for cash, unless, in each case, the proceeds are used to pay the Purchase Price; or

 

(8)         utilize the existing restricted payment basket in the Credit Agreement in excess of $50,000,000 in the aggregate, except to pay fees, expenses and pre-funded interest expense for the Alternative Financings.

 

Notwithstanding the foregoing, nothing in this Section 2.19.4 shall restrict DYN’s ability to restructure or refinance in whole or in part the existing indebtedness of Illinois Power Generating Company, including restricting (i) the ability of DYN or any of its Subsidiaries to issue indebtedness to the lenders to Illinois Power Generating Company or (ii) DYN’s or IPH, LLC’s ability to make payments to the lenders to Illinois Power Generating Company.

 

2.20        ICC Sale. From and after the occurrence of the First Buyout Condition until the earlier of (a) the payment of the Purchase Price in full or (b) the termination of the Purchase Agreement in accordance with its terms (other than a termination pursuant to Section 4.3(d) or Section 4.3(f) thereof), DYN shall use its commercially reasonable efforts to sell Independence CC located in Oswego, New York (“ICC”) or to pursue a project financing of ICC. DYN shall use the proceeds from such sale or project financing, less related fees and expenses, to satisfy its obligations under Section 2.19.2. Notwithstanding the foregoing, if DYN does not enter into a definitive agreement relating to the sale of ICC on or prior to the Third Payment Date, DYN shall use its commercially reasonable efforts to pursue a project financing of ICC and shall use the proceeds of such project financing, less related fees and expenses, to fund the Purchase Price.

 

2.21        ROFR Waiver. Terawatt hereby waives all rights it has with respect to the Alternative Equity Financing under Section 5.06 of the Stock Purchase Agreement.

 

2.22        Representations and Warranties. Each Sponsor represents and warrants to the other Sponsor that:

 

2.22.1             such Sponsor is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization and has full power and legal right to execute and deliver this Agreement and to perform its obligations hereunder;

 

2.22.2             the execution, delivery and performance of this Agreement by such Sponsor has been and remains duly authorized by all necessary partnership action, and does not contravene any provision of its organizational documents or any Law or contravene or violate any provision of, or result in the termination or acceleration of, or entitle any party to accelerate any obligation or indebtedness under, any mortgage, lease, franchise, license, permit, Contract or instrument, to which such Sponsor is a party or by which any of such Sponsor’s assets or properties are bound;

 

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2.22.3             no other entity or governing body proceedings or approvals on the part of such Sponsor or any direct or indirect equity holders, managers or partners are necessary to authorize the execution, delivery and performance of this Agreement;

 

2.22.4             other than as disclosed in the Purchase Agreement (including the schedules thereto) or any notice to or filing with the FERC in connection with this Agreement, no notice to, filing with or consent or approval of any Governmental Body having jurisdiction is required for the execution, delivery and performance of this Agreement and no other proceedings or actions on the part of such Sponsor or any other Person (other than any proceedings that have previously occurred or actions that have been previously taken) are necessary in connection with the execution, delivery and performance of this Agreement;

 

2.22.5             other than as disclosed in the Purchase Agreement (including the schedules thereto), no notice to, filing with or consent or approval of any Governmental Body having jurisdiction is required for the execution, delivery and performance of the Stock Purchase Agreement or the Transaction Agreements by such Sponsor or the Buyer as a result of such Sponsor’s participation in the transactions contemplated by the Transaction Agreements (excluding, for the avoidance of doubt, the transactions contemplated by the Stock Purchase Agreement); and

 

2.22.6             to the knowledge of such Sponsor (including the knowledge that would have been obtained after due inquiry), the representations and warranties of the Buyer Subsidiary contained in the Purchase Agreement are true and accurate in all respects.

 

3.             MISCELLANEOUS.

 

3.1          Amendment. This Agreement may be amended or modified, and the provisions hereof waived, only by an agreement in writing signed by the parties hereto.

 

3.2          Severability. In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision shall be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law. The provisions hereof are severable, and in the event any provision hereof should be held invalid or unenforceable in any respect, it shall not invalidate, render unenforceable or otherwise affect any other provision hereof.

 

3.3          Notice. All notices and other communications hereunder shall be in writing and shall be deemed duly delivered (i) four Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid, (ii) one Business Day after being sent for next Business Day delivery, fees prepaid, via a reputable nationwide overnight courier service, or (iii) on the date of confirmation of receipt (or, the first Business Day following such receipt if the date of such receipt is not a Business Day) of transmission by electronic mail or facsimile, in each case to the intended recipient as set forth below:

 

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if to ECP:

 

Energy Capital Partners
 11943 El Camino Real, Suite 220
 San Diego, California 92130
 Facsimile: (858) 703-4401

Email: asinger@ecpartners.com; cleininger@ecpartners.com
 Attention: Andrew Singer; Chris Leininger

 

with a copy to (which alone shall not constitute notice):

 

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

Facsimile: (212) 751-4864

Email: david.kurzweil@lw.com; paul.kukish@lw.com

Attn: David Kurzweil; Paul Kukish

 

if to DYN:

 

Dynegy Inc.
 601 Travis Street
 Houston, TX 77002
 Facsimile: (713) 507-6808
 E-mail: catherine.james@dynegy.com 
 Attention: Catherine James, Esq., Executive Vice President and General Counsel

 

with a copy (which shall not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
 1440 New York Avenue, N.W.
 Washington, DC 20005
 Facsimile: (202) 661-8200 
 E-mail: michael.rogan@skadden.com 
 Attention: Michael P. Rogan

 

3.4          Governing Law; Jurisdiction; Venue; Waiver of Jury Trial.

 

3.4.1       This Agreement, and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon, arise out of or relate to this letter agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement), shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, applicable to contracts executed in and to be performed entirely within that State.

 

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3.4.2       This Agreement, and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement), shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without reference to the choice of law provisions thereof. All claims, causes of action, suits, actions or proceedings shall be raised to and exclusively determined by the Court of Chancery for the State of Delaware or, if such court disclaims jurisdiction, the U.S. District Court for the District of Delaware or, if such court disclaims jurisdiction, the courts of the State of Delaware, and in each case, any appellate court from any decision thereof, to whose exclusive jurisdiction and venue the Parties unconditionally consent and submit. Service of process in connection with any such claim, cause of action suit, action or proceeding may be served on each Party anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the Parties irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

3.4.3       THE PARTIES HERETO EACH HEREBY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF 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.

 

3.5          Specific Performance. The parties hereto acknowledge and agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that any of the provisions of this Agreement were not performed in accordance with its specific terms or were otherwise breached and that any remedy at law for any breach of the provisions of this Agreement would be inadequate. Accordingly, the parties hereto acknowledge and agree that each party hereto shall be entitled to an injunction, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, including the right of a party hereto to cause the other party hereto consummate the transactions contemplated by the Transaction Agreements, in the courts provided for in Section 3.4.2, this being in addition to any other remedy to which they are entitled at law or in equity. Each Party agrees that it will not oppose

 

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the granting of specific performance and other equitable relief on the basis that any other party hereto has an adequate remedy at law or that an award of specific performance is not an appropriate remedy for any reason at law or equity. The parties hereto acknowledge and agree that any party hereto seeking an injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 3.5 shall not be required to provide any bond or other security in connection with any such injunction.

 

3.6          No Recourse. Notwithstanding anything to the contrary that may be expressed or implied in this Agreement or any document or instrument delivered contemporaneously herewith, and notwithstanding the fact that any Sponsor or any of its successors or permitted assignees may be a partnership or a limited liability company, each of ECP, DYN and the Buyer, by its acceptance of the benefits hereof, covenants, agrees and acknowledges that no Person other than ECP, DYN and the Buyer and their respective successors and permitted assignees shall have any obligation hereunder, and that it has no rights of recovery against, and no recourse hereunder or under any documents or instruments delivered in connection herewith shall be had against, any former, current or future director, officer, agent, advisor, attorney, representative, Affiliate, manager or employee of any of ECP, DYN or the Buyer (or any of their successors or assignees), against any former, current or future general or limited partner, manager, member or stockholder of ECP, DYN or the Buyer, or any Affiliate thereof or against any former, current or future director, officer, agent, advisor, attorney, representative, employee, Affiliate, assignee, general or limited partner, stockholder, manager or member of any of the foregoing, whether by or through attempted piercing of the corporate veil, by the enforcement of any judgment or assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable Law, or otherwise.

 

3.7          Exercise of Rights and Remedies. No delay of or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor shall any such delay, omission nor waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.

 

3.8          Other Agreements. This Agreement, together with the Transaction Agreements and all agreements referenced herein and therein, constitutes the entire agreement and supersedes all prior agreements, understandings and statements, both written and oral, among the parties hereto with respect to the subject matter contained herein.

 

3.9          Assignment. No party hereto may assign any of its rights or obligations under this Agreement without the prior written consent of the other party; provided that ECP may assign this Agreement (in whole or in part) to one or more of its Affiliates as long as ECP remains liable hereunder.

 

3.10        Third Parties. No Person who is not a party to this Agreement shall have any rights to enforce this Agreement; provided that the parties hereto expressly intend that the Buyer shall be regarded as, and shall be entitled to rely upon its status as, an intended third party beneficiary of Section 2.8 hereof.

 

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3.11        Counterparts. This Agreement may be executed in counterparts, all of which, when taken together, shall constitute one and the same agreement.

 

3.12        Amendment and Restatement. Effective from and after the date hereof, this Agreement amends and restates the Interim Sponsors Agreement in its entirety.

 

[Signature pages follow]

 

22

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

 

 

	
 
    	
ENERGY   CAPITAL PARTNERS III, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Tyler Reeder
    
	
 
    	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-A, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Tyler Reeder
    
	
 
    	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-B, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Tyler Reeder
    
	
 
    	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
 
    	
Title:   Managing Member
    

 

[Signature Page to Amended and Restated Interim Sponsors Agreement]

 

 

	
 
    	
ENERGY   CAPITAL PARTNERS III-C, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Tyler Reeder
    
	
 
    	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-D, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Tyler Reeder
    
	
 
    	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    
	
 
    	
TERAWATT HOLDINGS, LP
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tyler Reeder
    
	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
Title:   President
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Andrew D. Singer
    
	
 
    	
 
    	
Name:   Andrew D. Singer
    
	
 
    	
 
    	
Title:   Secretary and General Counsel
    
	
 
    	
 
    
	
 
    	
DYNEGY INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert C. Flexon
    
	
 
    	
 
    	
Name:   Robert C. Flexon
    
	
 
    	
 
    	
Title:   President & Chief Executive Officer
    

 

[Signature Page to Amended and Restated Interim Sponsors Agreement]

 

 

	
 
    	
ATLAS POWER, LLC
    
	
 
    	
 
    
	
 
    	
By:   Dynegy Atlas Holdings, LLC, its managing member
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Robert C. Flexon
    
	
 
    	
Name:
    	
Robert   C. Flexon
    
	
 
    	
Title:
    	
President &   Chief Executive Officer
    

 

[Signature Page to Amended and Restated Interim Sponsors Agreement]

 

 

EXHIBIT A

 

FORM OF LLC AGREEMENT

 

 

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

 

ATLAS POWER, LLC

 

a Delaware limited liability company

 

effective as of [·]

 

UNITS IN ATLAS POWER, LLC, A DELAWARE LIMITED LIABILITY COMPANY, HAVE NOT BEEN REGISTERED WITH OR QUALIFIED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE.  THE UNITS ARE BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS.  THE UNITS CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFERABILITY CONTAINED IN THIS LIMITED LIABILITY COMPANY AGREEMENT OF ATLAS POWER, LLC AND APPLICABLE FEDERAL AND STATE SECURITIES LAWS.

 

 

CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I.   ORGANIZATION
    	
2
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Continuation of the   Company
    	
2
    
	
Section 1.02
    	
Name
    	
2
    
	
Section 1.03
    	
Registered Office;   Registered Agent
    	
2
    
	
Section 1.04
    	
Principal Place of   Business
    	
2
    
	
Section 1.05
    	
Purpose; Powers
    	
2
    
	
Section 1.06
    	
Fiscal Year
    	
3
    
	
Section 1.07
    	
Foreign Qualification   Governmental Filings
    	
3
    
	
Section 1.08
    	
Duration
    	
3
    
	
Section 1.09
    	
Units
    	
3
    
	
Section 1.10
    	
New Unitholders
    	
3
    
	
Section 1.11
    	
Tax Classification
    	
3
    
	
 
    	
 
    	
 
    
	
ARTICLE II.   CORPORATE GOVERNANCE
    	
4
    
	
 
    	
 
    
	
Section 2.01
    	
Board of Managers
    	
4
    
	
Section 2.02
    	
Removal
    	
5
    
	
Section 2.03
    	
Vacancies
    	
5
    
	
Section 2.04
    	
Voting Agreements
    	
6
    
	
Section 2.05
    	
Governance Expense
    	
6
    
	
Section 2.06
    	
Board Actions
    	
6
    
	
Section 2.07
    	
Officers
    	
9
    
	
Section 2.08
    	
Certain Powers of   Nominated Directors
    	
9
    
	
Section 2.09
    	
Annual Plan
    	
9
    
	
Section 2.10
    	
ECP Representative
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE III.   CAPITAL CONTRIBUTIONS AND DISTRIBUTIONS
    	
10
    
	
 
    	
 
    
	
Section 3.01
    	
Capital Contributions
    	
10
    
	
Section 3.02
    	
Distributions
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE IV.   ISSUANCE OF NEW SECURITIES; RESTRICTIONS ON TRANSFERS
    	
11
    
	
 
    	
 
    
	
Section 4.01
    	
Resale of Units
    	
11
    
	
Section 4.02
    	
Issuance of New   Securities; Pre-Emptive Rights
    	
12
    
	
Section 4.03
    	
ECP Put Right
    	
13
    
	
Section 4.04
    	
Dynegy Call Right
    	
16
    
	
Section 4.05
    	
Right of First Offer
    	
17
    
	
Section 4.06
    	
Drag Along Rights
    	
19
    
	
Section 4.07
    	
Tag Along Rights
    	
20
    
	
Section 4.08
    	
Void Assignment
    	
20
    

 

 

	
Section 4.09
    	
Cooperation
    	
21
    
	
Section 4.10
    	
Expenses
    	
21
    
	
Section 4.11
    	
Bridge Loan
    	
21
    
	
 
    	
 
    
	
ARTICLE V.   TERMINATION; LIQUIDATION
    	
22
    
	
 
    	
 
    
	
Section 5.01
    	
Initial Public Offering
    	
22
    
	
Section 5.02
    	
Liquidation; Voluntary   Termination
    	
22
    
	
Section 5.03
    	
Dissolution
    	
22
    
	
 
    	
 
    
	
ARTICLE VI.   [RESERVED]
    	
22
    
	
 
    	
 
    
	
ARTICLE VII.   COVENANTS
    	
22
    
	
 
    	
 
    
	
Section 7.01
    	
Confidentiality
    	
22
    
	
Section 7.02
    	
Information Rights
    	
24
    
	
Section 7.03
    	
Management Rights   Letter
    	
25
    
	
Section 7.04
    	
Limitation of Duties;   Separate Interests
    	
25
    
	
Section 7.05
    	
FIRPTA Compliance
    	
26
    
	
Section 7.06
    	
Notification of Certain   Transactions
    	
26
    
	
Section 7.07
    	
Dispute Resolution
    	
26
    
	
Section 7.08
    	
Registration Rights
    	
27
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII.   INDEMNIFICATION; LIMITATION OF LIABILITY
    	
27
    
	
 
    	
 
    
	
Section 8.01
    	
Indemnification;   Limitation of Liability
    	
27
    
	
Section 8.02
    	
D&O Insurance
    	
29
    
	
 
    	
 
    
	
ARTICLE IX.   GENERAL PROVISIONS
    	
29
    
	
 
    	
 
    
	
Section 9.01
    	
Successors and Assigns
    	
29
    
	
Section 9.02
    	
Specific Performance
    	
29
    
	
Section 9.03
    	
Governing Law
    	
29
    
	
Section 9.04
    	
Submission to   Jurisdiction; Consent to Service of Process
    	
29
    
	
Section 9.05
    	
Waiver of Jury Trial
    	
29
    
	
Section 9.06
    	
Interpretation
    	
30
    
	
Section 9.07
    	
Notices
    	
30
    
	
Section 9.08
    	
Counterparts
    	
32
    
	
Section 9.09
    	
Severability
    	
32
    
	
Section 9.10
    	
Amendment and Waiver
    	
32
    
	
Section 9.11
    	
Tax Withholding
    	
33
    
	
Section 9.12
    	
Entire Agreement
    	
33
    
	
Section 9.13
    	
Legends
    	
33
    
	
 
    	
 
    	
 
    
	
ARTICLE X.   DEFINITIONS
    	
34
    

 

iii

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

ATLAS POWER, LLC

 

This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of ATLAS POWER, LLC, a Delaware limited liability company (the “Company”), dated and effective as of [·] (the “Effective Date”), is made and entered into by and among:

 

(i)                                     the Company;

 

(ii)                                  Energy Capital Partners III, LP, a Delaware limited partnership (“ECP III”), Energy Capital Partners III-A, LP, a Delaware limited partnership (“ECP III-A”), Energy Capital Partners III-B, LP, a Delaware limited partnership (“ECP III-B”), Energy Capital Partners III-C, LP, a Delaware limited partnership (“ECP III-C”), Energy Capital Partners III-D, LP, a Delaware limited partnership (“ECP III-D” and, together with ECP III, ECP III-A, ECP III-B and ECP III-C, collectively, the “ECP Funds”); and

 

(iii)                               Dynegy Atlas Holdings, LLC, a Delaware limited liability company (“Dynegy” and, together with the ECP Funds, the “Principal Unitholders”).

 

Each of the parties hereto are sometimes referred to individually as a “Party” and collectively as the “Parties” in this Agreement.

 

RECITALS

 

WHEREAS, the Company was formed under the name “Atlas Power, LLC” as a limited liability company under the Delaware Limited Liability Company Act pursuant to the Certificate of Formation of the Company (the “Delaware Certificate”) filed with the Delaware Secretary of State on February 23, 2016;

 

WHEREAS, the Principal Unitholders and the Company previously entered into that certain Limited Liability Company Agreement of the Company, dated as of February [·], 2016 (the “Original Agreement”);

 

WHEREAS, (i) the ECP Funds have purchased from the Company an aggregate of [·] Units (as defined below) in exchange for $[·], representing [·]% of the issued and outstanding number of Units, and (ii) Dynegy has purchased from the Company an aggregate of [·] Units in exchange for $[·], representing [·]% of the issued and outstanding number of Units(1);

 

(1)  Note to Draft:  For the avoidance of doubt, these amounts and amounts set forth on Exhibit A to take into account all equity amounts funded by the ECP Funds and Dynegy, respectively, as of the Effective Date, including any amounts funded by the ECP Funds to the Company because the PIPE transaction has not yet been consummated.

 

1

 

WHEREAS, the Parties desire to promote their mutual interests by agreeing to certain matters relating to the operations of the Company and the disposition and voting of the Units;

 

WHEREAS, the Principal Unitholders wish to amend and restate the Original Agreement in its entirety and do hereby adopt this Agreement as the Limited Liability Company Agreement of the Company, effective as of the Effective Date.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties intending to be legally bound agree as follows:

 

ARTICLE I.
  ORGANIZATION

 

Section 1.01                             Continuation of the Company.  The Company was organized as a Delaware limited liability company on February 23, 2016 by the filing of the Delaware Certificate in the office of the Delaware Secretary of State pursuant to the Delaware Act.  The Unitholders desire to continue the Company for the purposes and upon the terms and conditions set forth herein.  As of the Effective Date, the ECP Funds and Dynegy constitute all of the Unitholders of the Company.  Except as provided herein, the rights, duties and liabilities of each Unitholder will be as provided in the Delaware Act.

 

Section 1.02                             Name.  The name of the Company is “Atlas Power, LLC”.  Company business will be conducted in such name or such other names that comply with applicable Law as the Board may select from time to time.

 

Section 1.03                             Registered Office; Registered Agent. The registered office of the Company in the State of Delaware will be the initial registered office designated in the Delaware Certificate or such other office (which need not be a place of business of the Company) as the Board may designate from time to time in the manner provided by law.  The registered agent of the Company in the State of Delaware will be the initial registered agent designated in the Delaware Certificate, or such other person or persons as the Board may designate from time to time in the manner provided by law.

 

Section 1.04                             Principal Place of Business.  The principal place of business of the Company will be at 601 Travis Street, Suite 1400, Houston, TX 77002, or such other location as the Board may designate from time to time, which need not be in the State of Delaware.  The Company may have such other offices as the Board may determine appropriate.

 

Section 1.05                             Purpose; Powers.  The Company shall have the power to engage in any and all lawful businesses or activities and exercise any powers in which a limited liability company may be engaged under applicable Law, including the Delaware Act.  The Company

 

2

 

will have all powers permitted to be exercised by a limited liability company organized in the State of Delaware.

 

Section 1.06                             Fiscal Year.  The fiscal year of the Company (the “Fiscal Year”) for financial statement and federal income tax purposes will end on December 31st unless otherwise determined by the Board or required under the Code.

 

Section 1.07                             Foreign Qualification Governmental Filings.  The Board is authorized to cause the Company to comply, to the extent procedures are available, with all requirements necessary to qualify the Company as a foreign limited liability company in any jurisdiction where the Company may conduct business.  Each Officer is authorized, on behalf of the Company, to execute, acknowledge, swear to and deliver all certificates and other instruments as may be necessary or appropriate in connection with such qualifications.  Further, each Unitholder will execute, acknowledge, swear to and deliver all certificates and other instruments that are necessary or appropriate to qualify, or, as appropriate, to continue or terminate such qualification of, the Company as a foreign limited liability company in all such jurisdictions in which the Company may conduct business.

 

Section 1.08                             Duration.  The Company commenced on the date the Certificate of Formation was filed with the Delaware Secretary of State, and the Company will be perpetual in duration unless terminated pursuant to this Agreement.

 

Section 1.09                             Units.  As of the date hereof, the Equity Interests of the Company shall be comprised of units (the “Units”).  Upon the execution hereof by the Parties, [·] Units were issued and outstanding as more fully set forth on Exhibit A hereto (the “Schedule of Unitholders”). The Company may (but need not) issue certificates representing the Units at the election of the Board.

 

Section 1.10                             New Unitholders.  Subject to the provisions of this Agreement, including Section 2.06(c)(i), Section 4.02 and Section 4.11, upon the approval of the Board, additional persons may be admitted to the Company as Unitholders and Equity Interests may be created and issued to such persons as determined by the Board on such terms and conditions as the Board may determine at the time of admission.  The terms of admission may provide for the creation of different classes or series of Equity Interests having different rights, powers and duties.  As a condition to the admission of any person as a Unitholder of the Company, such person must agree to be bound by the terms of this Agreement by executing and delivering a joinder to this Agreement in the form attached hereto as Exhibit B.  The Board is hereby authorized to update the Schedule of Unitholders as it may determine to be necessary from time to time, including to reflect the creation and issuance of additional Equity Interests pursuant to this Section 1.10, and such updates shall not be deemed to be amendments to this Agreement.

 

Section 1.11                             Tax Classification.  It is intended that the Company will be classified as an association taxable as a corporation for U.S. federal and applicable state and local income tax purposes, and the Company shall make (and not revoke) an election under Treasury Regulation Section 301.7701-3 to be treated as such, effective as of its date of formation.  The Company, the

 

3

 

Managers and the Officers are hereby authorized to sign and make such election (and any analogous election under state, local or other applicable income tax law).

 

ARTICLE II.
  CORPORATE GOVERNANCE

 

Section 2.01                             Board of Managers.

 

(a)                                 Except as otherwise provided in this Agreement or by applicable Law, the power and authority to manage, direct and control the Company will be vested in the Board.  The Board will have full, complete and exclusive authority to manage, direct and control the business, affairs and properties of the Company, and to perform any and all other acts or activities customary or incident to the management of the Company’s activities.  Unless expressly authorized to do so by the provisions hereof or by action of the Board, no Unitholder may claim or exercise any authority to act, or to enter into any contract or agreement, on behalf of the Company.

 

(b)                                 The board of managers of the Company (the “Board,” and each member thereof, a “Manager”) shall initially consist of the following five (5) Managers: (i) one (1) Manager nominated by ECP-III, who shall initially be Andy Singer (the “ECP III Manager”), (ii) one (1) Manager nominated by ECP III-A, who shall initially be Tyler Reeder (the “ECP III-A Manager” and, together with ECP III Manager, the “ECP Managers”), and (iii) three (3) Managers nominated by Dynegy, who shall initially be Robert Flexon, Hank Jones and Clint Freeland.

 

(c)                                  Each Unitholder shall vote all of its Units and any other voting securities of the Company over which such Unitholder has voting control and shall take all other necessary or desirable actions within its control (whether in its capacity as a unitholder, director, member of a board committee, or officer or otherwise, and including attendance at meetings in person or by proxy for purposes of obtaining a Quorum and execution of written consents in lieu of meetings), and the Company shall take all necessary or desirable actions within its control (including calling special board and unitholders meeting) to ensure, and each of the Parties agrees, that:

 

(i)                                     The authorized number of Managers shall be five (5) Managers (or such other number as unanimously agreed upon by the Principal Unitholders);

 

(ii)                                  Until such time as the ECP Funds and their Affiliate Transferees (the “ECP Parties”) shall collectively own less than twenty percent (20%) of the outstanding Units due to the circumstances described below, the ECP Parties shall collectively be entitled to nominate two (2) Managers, with each of ECP III and ECP III-A (or their Affiliate Transferees) entitled to nominate one (1) Manager and, following such time as the ECP Parties own less than twenty percent (20%) of the outstanding Units due to (individually or in the aggregate) (A) the occurrence of a Partial Put or a Partial Call and/or (B) being a Non-Subscribing Unitholder with respect to any New Securities approved pursuant to Section 2.06(c)(i), the ECP Parties shall collectively be entitled to nominate one (1) Manager (in which case Dynegy shall be entitled to nominate one (1) of the Managers previously nominated by the ECP Parties to the extent that Dynegy is then

 

4

 

entitled to nominate at least three (3) Managers pursuant to clause (iii) below and which Manager seat shall remain vacant if Dynegy is not then so entitled); and

 

(iii)                               Until such time as Dynegy and its Affiliate Transferees (the “Dynegy Parties”) shall collectively own less than fifty percent (50%) of the outstanding Units due to the circumstances described below, the Dynegy Parties shall collectively be entitled to nominate three (3) Managers, and following such time as the Dynegy Parties own less than (A) fifty percent (50%) of the outstanding Units due to (individually or in the aggregate) (1) a failure to exercise the Dynegy Repayment Option in an amount necessary to maintain ownership of at least fifty percent (50%) of the outstanding Units and/or (2) being a Non-Subscribing Unitholder with respect to any New Issuance approved pursuant to Section 2.06(c)(i), the Dynegy Parties shall be entitled (subject to the succeeding clause (B)) to nominate two (2) Managers (in which case the ECP Funds shall be entitled to nominate one of the Managers previously nominated by the Dynegy Parties to the extent that the ECP Parties are then entitled to nominate at least two (2) Managers pursuant to clause (ii) above and this clause (iii) and which Manager seat shall remain vacant if the ECP Parties are not then so entitled) and (B) twenty percent (20%) of the outstanding Units due to (individually or in the aggregate) (1) a failure to exercise the Dynegy Repayment Option in an amount necessary to maintain ownership of at least twenty percent (20%) of the outstanding Units and/or (2) being a Non-Subscribing Unitholder with respect to any New Securities approved pursuant to Section 2.06(c)(i), the Dynegy Parties shall be entitled to nominate one (1) Manager (in which case ECP shall be entitled to nominate all but one of the Managers previously nominated by the Dynegy Parties to the extent that the ECP Parties are then entitled to nominate at least two (2) Managers pursuant to clause (ii) above and this clause (iii) and which Manager seat shall remain vacant if the ECP Parties are not then so entitled).

 

(d)                                 The Principal Unitholders shall have the right to nominate a corresponding percentage of members to any committee of the Board as such Principal Unitholder may nominate to the Board itself pursuant to Section 2.01(c).

 

Section 2.02                             Removal.  The ECP Parties or the Dynegy Parties who have the right to nominate any Manager pursuant to Section 2.01(c) shall also have the right to send a notice to the Parties electing to remove such Manager.  Upon receipt of such notice, the Parties shall immediately remove such Manager from the Board and any committee thereof, and the Parties shall take all necessary action to fill the vacancy created by such removal in accordance with Section 2.01(c).

 

Section 2.03                             Vacancies. In the event that any Manager ceases to serve as a member of the Board or any committee thereof for any reason, in each case, during such member’s term of office, the resulting vacancy on the Board or committee, as applicable, shall be filled by the Parties in the manner provided in Section 2.01.  In the event that any person for any reason ceases to serve as a member of any committee of the Board during such member’s term of office, the resulting vacancy shall be filled by the Company (acting at the direction of the Board) in the manner provided in Section 2.01(d).

 

5

 

Section 2.04                             Voting Agreements.  Each Unitholder agrees to vote all its Units owned or held of record by it (a) to elect (or to execute a written consent consenting to the election of) the nominees nominated pursuant to Section 2.01 and Section 2.03, (b) not to remove (and not to execute a written consent consenting to the removal of) any Manager other than pursuant to Section 2.02, (c) to remove (or to execute a written consent consenting to the removal of) any Manager pursuant to Section 2.02 and (d) to effect any decisions made in accordance with the provisions of Section 2.08.  The voting agreements contained herein are coupled with an interest and may not be revoked or amended except as set forth in this Agreement.

 

Section 2.05                             Governance Expense.  The Company shall reimburse all Managers for reasonable travel, lodging and related expenses incurred in connection with meetings of the Board or otherwise in service as a Manager.

 

Section 2.06                             Board Actions.  Each of the Parties shall take all reasonable actions to cause the following procedures to be followed by the Board:

 

(a)                                 Quorum.  A quorum of the Board as to any action of the Board shall consist of (i) at least a majority of the Managers (excluding any vacancies), (ii) at least one (1) Manager nominated by the ECP Parties unless the ECP Parties are entitled to nominate three (3) Managers pursuant to Section 2.01(c), in which case at least two (2) Managers nominated by the ECP Parties shall be required for such quorum, and (iii) at least two (2) Managers nominated by the Dynegy Parties unless the Dynegy Parties are entitled to nominate one (1) Manager pursuant to Section 2.01(c), in which case at least one (1) Manager nominated by the Dynegy Parties shall be required for such quorum (a “Quorum”); provided, however, that with respect to the actions addressed by Section 2.08, a Quorum shall be deemed to exist with the presence of solely the Directors specified therein; provided, further, that if there is a failure of quorum at any such meeting as a result of the absence of a ECP Manager if the Dynegy Parties are entitled to nominate a majority of the Managers, or the absence of a Dynegy Manager if the ECP Parties are entitled to nominate a majority of the Managers, as the case may be, the Managers in attendance may adjourn such meeting and recall it not less than seventy-two (72) hours thereafter by written notice to each Manager, and at such recalled meeting, the presence of an ECP Manager or a Dynegy Manager, as the case may be, shall not be required for the presence of a quorum.  A Quorum must be present at all Board meetings (whether in person or by proxy, by telephone, videoconference or otherwise) to conduct business.  A Quorum must exist at all times during any Board meeting, including the reconvening of a meeting adjourned, in order for any action taken at such meeting to be valid.

 

(b)                                 Voting.  On all matters requiring the vote or action of the Board, each Manager shall be entitled to one vote and all actions, approvals and consents undertaken by the Board must be authorized (i) at any Board meeting at which a Quorum is present, by the affirmative vote of a majority of the number of votes represented by the Managers (excluding any vacancies), or such higher threshold required by Section 2.06(c), or (ii) in the manner specified in Section 2.06(d) with respect to actions by written consent; provided, however, that the matters addressed in Section 2.08 shall require only the determinations of the Directors specified therein.  Managers may participate in any meeting in person or by proxy (which proxy may be granted by e-mail), or through telephonic or similar communications equipment, and, such participation

 

6

 

shall constitute attendance at such meeting. For the avoidance of doubt, unless specified otherwise in this Section 2.06 or this Agreement, any action, approval or consent of the Board required pursuant to this Agreement shall require the affirmative vote of a majority of the number of votes represented by the Managers (excluding any vacancies).

 

(c)                                  Actions Requiring Supermajority Approval.  Notwithstanding anything to the contrary in this Agreement but subject to Section 4.11, neither the Company nor any Subsidiary thereof nor any officer or agent of the Company or its respective Subsidiaries shall take any of the actions described in this Section 2.06(c) without the affirmative vote of at least seventy five percent (75%) of the number of votes represented by the Managers (excluding any vacancies); provided, however that the actions described in clauses (v), (vi) and (xv) below shall not be taken by the Company or any Subsidiary thereof (nor any officer or agent of the Company or its respective Subsidiaries) without the unanimous vote of the Managers:

 

(i)                                     request or accept any Capital Contributions or other equity capital from any Unitholder or any other person or issue, or authorize the issuance of, any Units or other Equity Interests of the Company or any of its Subsidiaries;

 

(ii)                                  agree to any merger, consolidation or combination of the Company or its Subsidiaries with a third person (other than the Company or its Subsidiaries), or to a sale of all or substantially all of the assets of the Company or any of its Subsidiaries, other than in connection with the exercise of any Drag Along Rights pursuant to Section 4.06 or an ECP Forced Sale;

 

(iii)                               enter into or agree to any recapitalization, restructuring or reorganization of the Company or any of its Subsidiaries;

 

(iv)                              commence any voluntarily liquidation, winding up, or dissolution of the Company or any of its Subsidiaries;

 

(v)                                 commence or acquiesce in any bankruptcy, insolvency, reorganization, debt arrangement, composition or other case under any bankruptcy, insolvency law, or making an assignment for the benefit of creditors;

 

(vi)                              change any material tax elections or tax policies;

 

(vii)                           other than to the Company or a Subsidiary thereof, sell, license, transfer or otherwise dispose of (including through merger or consolidation) any assets or properties of the Company or any of its Subsidiaries having a fair market value in excess of $[·], or any equity interests owned by the Company or a Subsidiary thereof, in each case in any single transaction or series of related transactions;

 

(viii)                        purchase or otherwise acquire all or any part of the assets or business of, or Equity Interests or other evidences of beneficial ownership of, invest in or participate in any joint venture, partnership or similar arrangement (other than in the ordinary course of business) with, any person or entity (other than the Company or any of its

 

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Subsidiaries), in each case involving a commitment in excess of $[·], in each case in any single transaction or series of related transactions;

 

(ix)                              cause the Company, or any Subsidiary thereof, to consummate an Initial Public Offering or any other public securities offering;

 

(x)                                 (A) other than with respect to [·](2) or, until the first (1st) anniversary of this Agreement, Indebtedness from a third party that is not an Affiliate of any Unitholder on terms materially more favorable to the Company in the aggregate than the Bridge Loan (which Indebtedness shall (i) not be convertible into Equity Interests, (ii) not have any make-whole, cash interest, amortization, mandatory prepayment or redemption, financial covenants and call protection features and (iii) have a lower interest rate for the duration of such Indebtedness and a maturity of at least four (4) years from the date of incurrence), the proceeds of which are used solely to repay all or a portion of the Bridge Loan, incur, assume, guarantee or otherwise become responsible for Indebtedness in excess of $[·] in any single transaction or series of related transactions, (B) make any material amendment to, waiver of, or consent in respect of, any Indebtedness, (C) extend any credit or make any loan to any person or entity in excess of $[·] or (iv) other than the Bridge Loan, optionally repay any outstanding debt in excess of $[·]; provided; however, that, notwithstanding the foregoing, with the approval of a majority of the Board (and not 75%), the Company may enter into a liquidity facility that has terms not materially less favorable to the Company than to Dynegy Parent’s liquidity facility under the Dynegy Parent Credit Agreement as in existence on February 24, 2016;

 

(xi)                              other than with respect to the Service Agreement, enter into or agree to enter into any transaction or series of related transactions between the Company or any of its Subsidiaries, on the one hand, and any Principal Unitholder or any of its Affiliates (other than the Company or any of its Subsidiaries), on the other hand;

 

(xii)                           make any Distribution to the Unitholders;

 

(xiii)                        commence or settle any claim or litigation of the Company or any of its Subsidiaries (including any tax disputes) in excess of $[·] or agree to any injunctive or declaratory relief in respect of any such material claim or litigation;

 

(xiv)                       approve, amend or modify any Annual Plan;

 

(xv)                          amend or modify the Service Agreement in a manner that is disproportionately adverse to the ECP Parties; or(3)

 

(2)  Note to Draft: To reference acquisition financing credit facilities, the Bridge Loan and the liquidity facility.

 

(3)  Note to Draft: At the Board’s first meeting, it will approve a delegation of authority policy to the appropriate officers that generally permits expenditures under $[·] million.

 

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(xvi)                       agree or commit to do any of the foregoing, or delegate any of the foregoing to the Company or any of its Subsidiaries or any officer or agent of the Company or Subsidiary thereof.

 

(d)                                 Action by Written Consent or Telephone.  Any action permitted or required by applicable Law or this Agreement to be taken at a meeting of the Board may be taken without a meeting if a consent in writing, setting forth the action to be taken, is signed by all of the Managers then in office.  Such consent shall have the same force and effect as a unanimous vote at a meeting and may be stated as such in any document or instrument filed with the Secretary of State of Delaware, and the execution of such consent shall constitute attendance or presence in person at a meeting of the Board.  Subject to the requirements of applicable Law or this Agreement for notice of meetings, the Managers may participate in and hold a meeting of the Board by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in such meeting shall constitute attendance and presence in person at such meeting, except where a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened or is not called or convened in accordance with this Agreement.

 

Section 2.07                             Officers.  The Board may, from time to time, designate one or more persons to be Officers of the Company, with such titles as the Board may assign to such persons.  No Officer need be a Unitholder or a resident of the State of Delaware.  Officers so designated will have such authority and perform such duties as the Board may, from time to time, delegate to them and, unless otherwise specified by the Board, will have the authority and responsibilities generally held by officers of a Delaware corporation holding the same titles.  Any number of offices may be held by the same person.  The salaries or other compensation, if any, of the Officers and agents of the Company will be fixed from time to time by the Board.  Any Officer may resign as such at any time.  Such resignation will be made in writing and will take effect at the time specified therein, or if no time be specified, at the time of its receipt by the Board.  Any Officer may be removed as such, either with or without cause, by the Board, in its sole discretion.  Any vacancy occurring in any office of the Company may be filled by the Board.

 

Section 2.08                             Certain Powers of Nominated Directors.  Notwithstanding anything to the contrary in this Agreement, the ECP Managers or the Dynegy Managers, as applicable, shall have the sole power and authority to cause the Company to take (or refrain from taking) any action with respect to the enforcement of the Company’s and its Subsidiaries’ rights against the Principal Unitholder (or its Affiliates) that did not appoint such Managers in respect of any contract between the Company or any of its Subsidiaries and such Principal Unitholder (or its Affiliates).

 

Section 2.09                             Annual Plan.  At least sixty (60) days prior to the start of each fiscal year of the Company, or in the case of the fiscal year during which the date of this Agreement occurs, [within ten (10) days of the date of this Agreement], the Officers of the Company (or Dynegy pursuant to the Service Agreement), shall submit to the Board a proposed operating plan for such fiscal year (the “Annual Plan”). Such Annual Plan shall include: (a) a financial projection setting forth estimates of revenues, costs, fees, expenses and capital expenditures to be realized or borne

 

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by the Company or any of its Subsidiaries on a month-to-month basis for the next fiscal year, (b) a proposed operating budget for the Company and its Subsidiaries setting forth the authorized limit of the fees, costs, expenses and capital expenditures which may be incurred by the Company without additional prior approval by the Board, (c) risk management plans for the Company and its Subsidiaries, and (d) hedging strategies for the Company and its Subsidiaries.  The Board shall consider the Annual Plan for approval prior to the start of the fiscal year to which it pertains and the members of the Board shall use all reasonable efforts to resolve any disagreements as to any item contained in the Annual Plan prior to beginning of such fiscal year.  If any Annual Plan submitted to the Board in accordance with this Section 2.09 is not approved by the Board, then the Annual Plan most recently approved by the Board pursuant to this Section 2.09, as amended or modified pursuant to Section 2.06(c)(xiv), shall remain in effect as the Annual Plan for the next fiscal year, with the following adjustments: (x) all prior period non-recurring items shall be excluded, and (y) all prior period fees, costs, expenses, maintenance and on-going project-based capital expenditures and other similar items shall be increased by 5%.

 

Section 2.10                             ECP Representative.  Each of the ECP Funds has designated the ECP Representative to act as its representative with respect to the making of, and the delivery and receipt of, all notices, elections, approvals, requests or other instructions or determinations (including as to whether any condition has been met to the satisfaction of such ECP Fund) (each, a “Notice”) and to otherwise act on behalf of any or all of the ECP Funds with respect to any Notices delivered in connection with this Agreement.  The ECP Funds shall cause the ECP Representative to act at the direction of the ECP Funds holding a majority of Units held by all of the ECP Funds with respect to all such Notices.  Each of Dynegy and the Company shall direct any Notice to be made to any ECP Fund to the ECP Representative and agree that any Notice delivered under this Agreement by the ECP Representative shall be deemed to be a Notice delivered by the ECP Funds.  Any Notice made to the ECP Representative (referencing the ECP Funds) shall be deemed to have been made to the ECP Funds in the form and at the time made to the ECP Representative.

 

ARTICLE III.
  CAPITAL CONTRIBUTIONS AND DISTRIBUTIONS

 

Section 3.01                             Capital Contributions.

 

(a)                                 (i) The ECP Funds have made an initial Capital Contribution to the Company in the amount of $[·], and (ii) Dynegy has made an initial Capital Contribution to the Company in the amount of $[·].

 

(b)                                 None of the Unitholders shall be obligated to make or commit to make any additional Capital Contributions to the Company and none of the Unitholders shall be obligated to make or commit to make any loans or similar advances of capital to the Company.

 

Section 3.02                             Distributions.

 

(a)                                 Subject to the provisions of Section 18-607 of the Delaware Act and Section 2.06(c)(xii), the Board may in its sole discretion make Distributions at any time or from

 

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time to time, provided that the Board shall not authorize any Distribution without the affirmative vote of at least seventy five percent (75%) of the number of votes represented by the Managers (excluding any vacancies) if at such time any available amount of the [·](4) is drawn by the Company.(5)

 

(b)                                 Except as otherwise expressly provided in this Agreement, all Distributions shall be distributed to the Unitholders pro rata in accordance with the number of Units owned by each Unitholder as of the date of such Distribution. Any Distributions pursuant to this Section 3.02 made in error or in violation of Section 18-607(a) of the Delaware Act, will, upon demand by the Board, be returned to the Company.

 

ARTICLE IV.
  ISSUANCE OF NEW SECURITIES; RESTRICTIONS ON TRANSFERS

 

Section 4.01                             Resale of Units.

 

(a)                                 None of the Unitholders shall transfer all or any portion of its Units other than in reliance upon, and in accordance with, this Article IV.

 

(b)                                 Notwithstanding any provision in this Article IV to the contrary, a Unitholder may transfer (other than pledge) its Units to a Controlled Affiliate (an “Affiliate Transferee”) and such transfer shall not be subject to any restrictions set forth in this Article IV (other than the restrictions set forth in Section 4.01(c)).  Furthermore, a Unitholder may transfer (other than pledge) its Units to a Third Party Purchaser pursuant to Section 4.03(d) or if (i) the Principal Unitholders consent in writing to such transfer (such consent not to be unreasonably withheld, delayed or conditioned) and the Transferring Unitholder complies with the provisions of Section 4.05, and (ii) following compliance with the immediately preceding clause (i), the Unitholder complies with Section 4.06 and Section 4.07, as applicable; provided, however that a Dragging Group may exercise a Drag Along Right pursuant to Section 4.06 without first obtaining the consent of the other Principal Unitholders contemplated by the immediately preceding clause (i) so long as such Dragging Group complies with the provisions of Section 4.05.  In each case in clauses (i) and (ii), the Third Party Purchaser shall execute a joinder to this Agreement in the form attached as Exhibit B and such documents and instruments as the Board may request as necessary or appropriate to confirm such transferee as a Permitted Transferee and as a Unitholder in the Company. Any Permitted Transferee (other than an Affiliate Transferee) purchasing Units in accordance with this Article IV shall assume the rights and obligations of a “Unitholder” hereunder and no other rights or obligations; provided, however, that in the event that the ECP Funds, on the one hand, or Dynegy, on the other, sells all of their or its Units, as applicable, in a single transaction or series of related transactions in each case in compliance with this Article IV, then the ECP Funds or Dynegy, as applicable, shall be entitled to transfer to the Third Party Purchaser in such transfer or transfers all of the Manager

 

(4)  Note to Draft: To reference the liquidity facility.

 

(5)  Note to Draft: Additional Distribution terms may be required to address the parties’ agreement on treatment of Dynegy Parent’s incremental costs under the Service Agreement.

 

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nomination rights of such Party set forth in Article II and such Third Party Purchaser shall be deemed to be the “ECP Parties” or the “Dynegy Parties”, as applicable, for all purposes of this Agreement.

 

(c)                                  Notwithstanding any provision herein to the contrary, none of the Unitholders may (i) transfer any Units to an Affiliate Transferee pursuant to this Article IV unless such Affiliate Transferee executes a joinder to this Agreement in the form of Exhibit B agreeing to be bound by the relevant provisions which bind the Transferring Unitholder, or (ii) pledge any Units without the prior written consent of all of the Unitholders.

 

Section 4.02                             Issuance of New Securities; Pre-Emptive Rights.

 

(a)                                 In the event that the Company intends to issue any Units or other Equity Interests (including securities that are convertible into or exchangeable for Units or other Equity Interests) after approval of the Board pursuant to Section 2.06(c)(i) and after the date hereof, other than any Excluded Issuance (the “New Securities”), the Company shall give written notice (a “Preemption Notice”) to the Unitholders.  The Preemption Notice shall specify (i) the number of Units or other Equity Interests to be issued, the price per Unit or other Equity Interest and such Unitholder’s Pro Rata Share (such amount being such Unitholder’s “Subscription Securities”), (ii) the general purpose for which the Units or Equity Interests are being issued and (iii) the closing date of the issuance of the Units or Equity Interests (the “Issuance Date”).

 

(b)                                 The Company shall send to each Unitholder the Preemption Notice at least twenty-five (25) days prior to the Issuance Date, and no later than twelve (12) Business Days prior to the Issuance Date, each Unitholder shall either (A) commit, by written notice to the Company, to subscribe for and purchase all or part of its Subscription Securities or (B) decline to subscribe for and purchase any portion of its Subscription Securities. Any Unitholder that does not respond within twelve (12) Business Days prior to the Issuance Date shall be deemed to have declined to subscribe for and purchase all of its Subscription Securities and thereafter shall not be permitted to subscribe for and purchase any such Subscription Securities without prior approval of the Board (which approval shall be subject to the supermajority Board approval pursuant to Section 2.06(c)(i)).

 

(c)                                  If any Unitholder (each such Unitholder, a “Non-Subscribing Unitholder”) (A) declines to subscribe for all or any portion of its Subscription Securities in accordance with Section 4.02(b) (“Non-Penalized Unsubscribed Securities”), or (B) commits to subscribe for all or any portion of its Subscription Securities pursuant to the immediately preceding clause (b) but then fails to actually purchase such amount (“Penalized Unsubscribed Securities”), and any other Unitholder has subscribed for all of its Subscription Securities (each such Unitholder, a “Fully Subscribing Unitholder”), then:

 

(i)                                     each Fully Subscribing Unitholder (if any) may, but shall not be required to, subscribe for its Pro Rata Share (calculated for this purpose by not taking into account the Pro Rata Share of any Non-Subscribing Unitholder) of any Non-Penalized Unsubscribed Securities and Penalized Unsubscribed Securities (or, if another Fully Subscribing Unitholder chooses not to subscribe to such Pro Rata Share, such first Fully

 

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Subscribing Unitholder (having purchased both its Subscription Securities and its Pro Rata Share (calculated for this purpose by not taking into account the Pro Rata Share of any Non-Subscribing Unitholder) of any Non-Penalized Unsubscribed Securities and Penalized Unsubscribed Securities) may also fund the other Fully Subscribing Unitholder’s Pro Rata Share (calculated for this purpose by not taking into account the Pro Rata Share of any Non-Subscribing Unitholder) of any remaining deficiency such that after giving effect to the foregoing, the entire amount of any Non-Penalized Unsubscribed Securities and Penalized Unsubscribed Securities may be purchased by one or more Fully Subscribing Unitholders); provided, however, that any Fully Subscribing Unitholder shall be required to fund its Pro Rata Share (calculated for this purpose by not taking into account the Pro Rata Share of any Non-Subscribing Unitholder) of any Non-Penalized Unsubscribed Securities to the extent it has elected to purchase its Pro Rata Share (calculated for this purpose by not taking into account the Pro Rata Share of any Non-Subscribing Unitholder) of any Penalized Unsubscribed Securities; and

 

(ii)                                  in connection with each issuance of New Securities pursuant to this Section 4.02(c), the Company shall issue to each Fully Subscribing Unitholder the number of Units equal to the New Subscription Units.

 

(d)                                 Notwithstanding anything to the contrary in this Agreement, any ECP Fund may, in its sole discretion, cause one or more Affiliated Funds to purchase any New Securities that such ECP Fund commits to subscribe for (and any ECP Fund may, in lieu of any other ECP Fund, make any commitment hereunder that any other ECP Fund would otherwise be entitled to make) and to cause such Affiliated Fund(s) be admitted as an ECP Fund in accordance with Section 1.10, or, once such Affiliated Fund has been admitted as an ECP Fund, to cause such Affiliated Fund to increase the number of its Units by subscribing for and purchasing any future New Securities.

 

(e)                                  Notwithstanding any provision herein to the contrary, any issuance of Equity Interests (other than an Excluded Issuance) by any Subsidiary of the Company other than to the Company or a wholly owned Subsidiary of the Company shall be deemed an issuance by the Company of its Equity Interests to which the preemptive rights under this Section 4.02 shall apply.

 

Section 4.03                             ECP Put Right.

 

(a)                                 Subject to Section 4.03(b), at any time following the earliest of (i) the fourth (4th) anniversary of this Agreement and (ii) the eighteen (18) month anniversary of delivery of a Call Exercise Notice for a Partial Call, the ECP Funds shall have the right, but not the obligation, exercisable in the sole discretion of the ECP Funds, upon the terms and subject to the conditions set forth in this Section 4.03, to require Dynegy to purchase the Units owned by the ECP Funds in the manner described below (the “Put Units”) for aggregate cash consideration (or other consideration, to the extent permitted below) equal to (i) the outstanding principal amount of the Bridge Loan and any accrued and unpaid interest thereon (or, in the case of a Partial Put or Second Put Right, fifty percent (50%) of such amount) plus (ii) the ECP Consideration Amount (the “Put Right”).

 

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(b)                                 Within thirty (30) calendar days following delivery of a Put Exercise Notice, Dynegy shall have the right to (i) acquire all of the Units specified in such Put Exercise Notice; or (ii) subject to Section 4.03(c), elect to acquire only fifty percent (50%) of the Put Units (the “Partial Put”), in which case the ECP Representative shall determine the number of Units each ECP Fund will sell pursuant to such Partial Put and such Units collectively shall be deemed “Put Units” for purposes of Section 4.03(f); or (iii) subject to Section 4.03(d), decline to acquire any of the Put Units; provided, however, Dynegy shall not be permitted to elect a Partial Put if a Partial Call has previously been elected by Dynegy in connection with the exercise of its Call Right.

 

(c)                                  In the event of a Partial Put pursuant to Section 4.03(b)(ii), at any time following the first (1st) anniversary of delivery of the first Put Exercise Notice, the ECP Funds shall have the right, but not the obligation, exercisable in the sole discretion of the ECP Funds, upon the terms and subject to the conditions in this Section 4.03, to require Dynegy to purchase all, but not less than all, of the Units owned by the ECP Funds at the time (the “Remaining Put Units”) for aggregate cash consideration (or other consideration, to the extent permitted below) equal to the ECP Consideration Amount (the “Second Put Right”) by delivering a Put Exercise Notice to Dynegy pursuant to Section 4.03(e).

 

(d)                                 ECP Forced Sale.

 

(i)                                     In the event that Dynegy declines to acquire any of the Put Units pursuant to Section 4.03(b)(iii) or fails to acquire any of the Put Units pursuant to Section 4.03(g) or Section 4.03(h), without limiting any other rights or remedies of the ECP Funds in such event, the ECP Representative shall have the right, but not the obligation, to cause a sale of the Company and its Subsidiaries (the “ECP Forced Sale”) by providing written notice to the Company and Dynegy (the “ECP Forced Sale Notice”).

 

(ii)                                  In the event that the ECP Representative provides an ECP Forced Sale Notice, the Company (including the Board) shall promptly pursue a sale of the Company and its Subsidiaries (including by appointing investment banking and legal advisors which are reasonably acceptable to the ECP Representative).  The ECP Forced Sale may take the form of an equity sale, asset sale, merger or any other form whatsoever, to be determined by the ECP Representative; provided, that (i) in the case of an equity sale, the ECP Forced Sale shall be structured in a way to sell all of the Units, and (ii) in all cases, the ECP Forced Sale shall be on arms-length terms (as reasonably determined by the ECP Representative) with a third party that is not an Affiliate of any Unitholder. Each Unitholder hereby agrees to cooperate to effectuate an ECP Forced Sale and to take all actions that the ECP Representative reasonably deems necessary or desirable in connection with the foregoing, including executing any necessary or appropriate documents or forms, consenting to amendments to the Agreement to implement the foregoing and converting or exchanging its Units into shares of stock, other classes of Units or other property; provided, however that the ECP Representative shall consult with the other Principal Unitholders regarding their tax and structuring considerations relating to any such transactions and shall use reasonable efforts acting in good faith to address such tax and structuring considerations in effecting any such transaction.

 

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Notwithstanding the foregoing, (i) the Company shall not (and Dynegy shall not be obligated to) execute any definitive agreement with respect to an ECP Forced Sale unless the proceeds from such ECP Forced Sale that Dynegy is reasonably expected to receive exceeds Dynegy’s aggregate Capital Contribution as of such date (after taking into account any Distributions previously received by Dynegy), and (ii) none of the Unitholders (other than the ECP Parties) shall be required to provide indemnities as to any other person in excess of such Unitholder’s Percentage Interest of the purchase price under the ECP Forced Sale.

 

(e)                                  The ECP Representative may exercise the Put Right or the Second Put Right, as applicable, on behalf of the ECP Funds by delivery to Dynegy of a written notice given in the manner specified in Section 9.07 (the “Put Exercise Notice”) stating that the ECP Representative is exercising the Put Right or the Second Put Right, as applicable, on behalf of the ECP Funds and setting forth in such notice wire instructions for each of the ECP Funds.

 

(f)                                   The closing of the exercise of the Put Right or the Second Put Right, as applicable, (each, a “Put Right Closing”) shall take place on the sixtieth (60th) calendar day following the delivery of a Put Exercise Notice (or such earlier date as the Parties shall agree or such later date that is immediately following the obtaining of any consent or approval of any Governmental Entity or the stockholders of Dynegy Parent, in each case required to consummate such transaction) and shall occur at the offices of Latham & Watkins LLP, 885 Third Avenue, New York, New York at 10:00 a.m., New York City time (or such other place as the Parties shall agree) (each such date, a “Put Closing Date”).

 

(g)                                  At the applicable Put Right Closing, the ECP Representative shall deliver to Dynegy all of the Put Units or the Remaining Put Units, as applicable, in each case free and clear of all Liens, and shall make, or cause the applicable ECP Funds to make, individual representations (and no other representations or agreements) relating to such Put Units or Remaining Put Units (which such individual representations shall be limited to capacity, ownership of such Units to be sold by it (including its ability to convey title free and clear of all liens, encumbrances, adverse claims or similar restrictions), no conflicts with agreements to which it is a party, no conflicts with law, authority and enforceability on its part, and Dynegy shall make payment by wire transfer in immediately available funds to the accounts specified in the applicable Put Exercise Notice an aggregate amount equal to (i) the outstanding principal amount of the Bridge Loan and any accrued and unpaid interest thereon (or, in the case of a Partial Put or Second Put Right, fifty percent (50%) of such amount) plus (ii) the ECP Consideration Amount; provided that Dynegy shall be permitted to pay a portion of the consideration due to each ECP Fund in shares of common stock of Dynegy Parent solely if Dynegy Parent has not undergone a Change of Control prior to the applicable Put Right Closing and solely in the event that shares of common stock of Dynegy Parent are then listed on NYSE or another national share exchange, the value of each such share being equal to the Dynegy Parent Share Value, and provided further (i) that the aggregate number of shares of common stock of Dynegy Parent that Dynegy may use as consideration in connection with the Put Right and the Second Put Right shall not exceed a number of shares of Dynegy Parent common stock that is greater than five percent (5%) of the total number of shares of Dynegy Parent common stock outstanding prior to such issuance, and (ii) in the event that the obtaining of any consent or

 

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approval necessary for the consummation of such transaction (whether a consent or approval of a Governmental Entity, the stockholders of Dynegy Parent or otherwise), due to any portion of the consideration being in shares of common stock of Dynegy Parent, is either not obtained or is conditioned on any action (or failure to act) of the ECP Funds which would, or would reasonably be expected to, have an adverse impact on the ECP Funds or their Affiliates, as reasonably determined by the ECP Representative, then Dynegy shall not be entitled to pay a portion of the consideration due to each ECP Fund in shares of common stock of Dynegy Parent and Dynegy shall pay such amount in cash, and (iii) if fifty percent (50%) or more (by value) of the relevant ECP Consideration Amount is to be paid in the form of shares of common stock of Dynegy Parent, then Dynegy and the ECP Representative shall use reasonable efforts acting in good faith to structure the acquisition of such Put Units or such Remaining Put Units, as applicable, as a tax-free reorganization for U.S. federal income tax purposes.

 

(h)                                 Notwithstanding anything to the contrary in this Section 4.03, (i) the ECP Funds shall have the right, but not the obligation, to exercise their Put Right or Second Put Right, as applicable, within fifteen (15) days of the delivery of a Dynegy Parent Change of Control Notice, after which time, notwithstanding any right to exercise the Put Right or Second Put Right pursuant to Section 4.03(a), no such Put Right or Second Put Right may be exercised until after the Change of Control has been consummated or the agreement with respect to the Change of Control has been terminated and (ii) if the ECP Funds exercise their Put Right or Second Put Right pursuant to this Section 4.03(h), the Put Right Closing shall occur at the closing of the Change of Control of Dynegy Parent; provided that Dynegy shall take all necessary action, notwithstanding the time periods in this Section 4.03(h), to ensure that the Dynegy Parent Change of Control Notice is delivered in a timely fashion such that the ECP Funds may exercise their Put Right or Second Put Right pursuant to clause (i) and the Put Right Closing can occur at the closing of the Change of Control of Dynegy Parent.  Subject to the proviso in the immediately preceding sentence, each of the other terms and procedures of this Section 4.03 shall apply to any such exercise of the Put Right or Second Put Right, as applicable,

 

Section 4.04                             Dynegy Call Right.

 

(a)                                 At any time after the date hereof, Dynegy shall have the right, but not the obligation, exercisable in the sole discretion of Dynegy, upon the terms and subject to the conditions set forth in this Section 4.04, to purchase from the ECP Parties (i) if a Partial Put has not previously been elected by Dynegy in connection with the exercise of the Put Right, all of their Units or 50% of their Units (a “Partial Call”), and (ii) if a Partial Put has previously been elected by Dynegy in connection with the exercise of the Put Right, all of their Units (in each case, as applicable, the “Call Units”), for aggregate cash consideration equal to (i) the outstanding principal amount of the Bridge Loan and any accrued and unpaid interest thereon (or in the case of a Partial Call or Second Call Right, fifty percent (50%) of such amount) plus (ii) the greater of the ECP Consideration Amount and the 2.25x Value (such greater amount plus the aggregate amount in clause (i), the “Final Call Purchase Price”), and, upon exercise of such right, each ECP Party shall be required to sell such ECP Party’s Units to Dynegy (the “Call Right”).  If Dynegy elects a Partial Call in connection with its exercise of the Call Right, the ECP Representative shall determine the number of Units each ECP Party will sell pursuant to such Partial Call.

 

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(b)                                 Dynegy may exercise a Call Right by delivery to the ECP Representative of a written notice given in the manner specified in Section 9.07 (the “Call Exercise Notice”) stating that Dynegy is exercising the Call Right.  The ECP Representative shall provide Dynegy with the wire instructions for each ECP Party within three (3) Business Days of Dynegy giving the ECP Representative the Call Exercise Notice (“Call Option Wire Notice”).

 

(c)                                  In the event of a Partial Call pursuant to Section 4.04(a), at any time after the consummation of such Partial Call, Dynegy shall have the right, but not the obligation, exercisable in the sole discretion of Dynegy, upon the terms and subject to the conditions set forth in this Section 4.04, to purchase from the ECP Parties all, but not less than all, of the Units owned by the ECP Parties at the time (the “Remaining Call Units”) for aggregate consideration equal to the ECP Consideration Amount (the “Second Call Right”) by delivering a Call Exercise Notice to Dynegy pursuant to Section 4.04(b).

 

(d)                                 The closing of the exercise of the Call Right or the Second Call Right (each, a “Call Right Closing”) shall take place on the fourteenth (14th) Business Day following delivery of the Call Exercise Notice (or such earlier date as the parties shall agree or such later date that is immediately following the obtaining of any consent or approval of any Governmental Entity, in each case required to consummate such transaction) and shall occur at the offices of Latham & Watkins LLP, 885 Third Avenue, New York, New York at 10:00 a.m., New York City time (or such other place as the Parties shall agree) (such date, the “Call Closing Date”).

 

(e)                                  At the applicable Call Right Closing, the ECP Parties shall deliver to Dynegy the Call Units or the Remaining Call Units, as applicable, free and clear of all Liens, and shall make, or cause the applicable ECP Parties to make, individual representations (and no other representations or agreements) relating to such Call Units or Remaining Call Units (which such individual representations shall be limited to capacity, ownership of such Units to be sold by it (including its ability to convey title free and clear of all liens, encumbrances, adverse claims or similar restrictions), no conflicts with agreements to which it is a party, no conflicts with law, authority and enforceability on its part, and Dynegy shall make payment (entirely in cash) by wire transfer in immediately available funds to the accounts specified in the Call Option Wire Notice an aggregate in amount equal to the Final Call Purchase Price.

 

(f)                                   After the delivery of a Call Exercise Notice, the ECP Funds may not exercise a Put Right until the sale of the Call Units has been consummated.

 

Section 4.05                             Right of First Offer.

 

(a)                                 In the event that any Unitholder (a “Transferring Unitholder”) desires to transfer any or all of its Units (the “ROFO Units”) to any person other than to an Affiliate Transferee (the “Third Party Purchaser”) and other than pursuant to Section 4.03 or Section 4.04, then the Transferring Unitholder shall first give written notice (the “ROFO Notice”) of such desire to the other Unitholders (the “ROFO Unitholders”).

 

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(b)                                 Within thirty (30) days (the “ROFO Offer Period”) of receipt of the ROFO Notice by a ROFO Unitholder, such ROFO Unitholder shall have a right to make an offer (a “ROFO Offer”) to purchase all, but not less than all, of the ROFO Units (the “ROFO Sale”).

 

(c)                                  Each ROFO Offer (i) shall set forth the proposed amount and form of consideration and terms and conditions of payment offered by the ROFO Unitholder and a summary of any other material terms pertaining to the transfer and (ii) must remain open for at least thirty (30) days following the date on which the Transferring Unitholder receives the ROFO Offer.

 

(d)                                 If the Transferring Unitholder does not receive any ROFO Offer from a ROFO Unitholder within the ROFO Offer Period, or if all ROFO Unitholders inform the Transferring Unitholder in writing that they will not be exercising their right of first offer rights hereunder, then the Transferring Unitholder may, subject to the requirements of Section 4.05(h), transfer all of the ROFO Units to a Third Party Purchaser at a price and on terms and conditions acceptable to such Transferring Unitholder.

 

(e)                                  If the Transferring Unitholder receives a ROFO Offer within the ROFO Offer Period, the Transferring Unitholder may accept or reject such ROFO Offer in its sole discretion.

 

(f)                                   If a Transferring Unitholder accepts a ROFO Offer, then the Transferring Unitholder and the ROFO Unitholder shall negotiate in good faith to consummate the ROFO Offer as promptly as reasonably practicable and in any event within forty-five (45) days from the date of the ROFO Offer, and shall not transfer any ROFO Units described in such ROFO Offer to any Third Party Purchaser.

 

(g)                                  If the Transferring Unitholder rejects a ROFO Offer from a ROFO Unitholder, then the Transferring Unitholder may, subject to the requirements of Section 4.05(h), sell any ROFO Units which are not subject to any accepted ROFO Offer to a Third Party Purchaser at a price higher than that offered in all of the rejected ROFO Offers, and on such terms and conditions which, when taken as a whole, are at least as favorable in the aggregate to the Transferring Unitholder as those set forth in the most favorable rejected ROFO Offer (as determined by the Board acting in good faith).

 

(h)                                 The Transferring Unitholder may only sell ROFO Units to a Third Party Purchaser as permitted under Section 4.05(d) and Section 4.05(g), and the Transferring Unitholder shall consummate such sale within one hundred and eighty (180) days of the conclusion of the ROFO Offer Period; provided that to the extent the Transferring Unitholder has used commercially reasonable efforts to obtain all required approvals and consents prior to the expiration of such 180-day period, the Transferring Unitholder may extend such 180-day period by up to 120 days if necessary to obtain any required regulatory approvals or third party consents.

 

(i)                                     If the Transferring Unitholder does not meet the deadlines described in Section 4.05(h), then any proposed transfer by such Transferring Unitholder shall once again be subject to the terms and conditions of this Section 4.05.

 

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(j)                                    In the event of a potential sale by a Transferring Unitholder to a Third Party Purchaser pursuant to the terms of Section 4.05(h), the Managers and Officers shall (i) permit such potential Third Party Purchaser, after executing a confidentiality agreement in a form satisfactory to the Board, to conduct a due diligence review of the Company and its business, operations, prospects, assets, liabilities, financial condition, and results of operations, and (ii) make available the officers and technical personnel of the Company, during normal business hours, upon reasonable advance notice and at such Transferring Unitholder’s sole cost and expense, for the purpose of making presentations to, and answering questions from, such potential Third Party Purchaser.

 

Section 4.06                             Drag Along Rights.

 

(a)                                 In the event that (x) one or more Unitholders that in the aggregate hold more than fifty percent (50%) of the issued and outstanding Units (such Unitholder or Unitholders, the “Dragging Group”) desires to transfer in one transaction, or a series of related bona fide transactions (other than pursuant to Section 4.03 or Section 4.04), 100% of the relevant Dragging Group’s Units to a Third Party Purchaser, after complying with Section 4.05, and (y) in the event that Dynegy and its Affiliate Transferees hold any of the Units held by the Dragging Group, the aggregate proceeds to the ECP Funds from such transfer would equal or exceed an amount equal to the Final Call Purchase Price (a “Drag Along Sale”), then the Dragging Group shall have the right (a “Drag Along Right”), but not the obligation, to require all (and not less than all) other Unitholders in the Company (such other Parties, the “Non-Dragging Unitholders”), to tender for purchase by the Third Party Purchaser, on the same terms and conditions as apply to the Dragging Group, all of the Units held by the Non-Dragging Unitholder.

 

(b)                                 If the Dragging Group elects to exercise its Drag Along Right under this Section 4.06, the Dragging Group shall notify each other Party in writing (collectively, the “Drag Along Notices”).  Each Drag Along Notice shall set forth (i) the proposed amount and form of consideration and terms and conditions of payment offered by the Third Party Purchaser(s) and a summary of any other material terms pertaining to the transfer (“Drag Along Terms”), (ii) in the event Dynegy and its Affiliate Transferees hold any of the Units held by the Dragging Group, the Dragging Group’s calculation of the Final Call Purchase Price, and (iii) in the event that Dynegy and its Affiliate Transferees hold any of the Units held by the Dragging Group, a statement of the Dragging Group’s good-faith belief that proceeds from the Drag Along Sale would equal or exceed the Final Call Purchase Price.  The Drag Along Notices shall be given at least thirty (30) days before the closing of the proposed Drag Along Sale.

 

(c)                                  Upon receipt of a Drag Along Notice, each Non-Dragging Unitholder shall be obligated to sell all of its Units on the Drag Along Terms.  Each Non-Dragging Unitholder shall (i) receive the benefits of the same terms and conditions as the Dragging Group in connection with such transfer, including receiving the same valuation of consideration and form of consideration, and (ii) only make representations, warranties and covenants and assume any post-closing obligations that are in each case the same as the Dragging Group (adjusted as appropriate for each Party’s Percentage Interest); provided, however, that notwithstanding anything to the contrary in this Agreement, none of the Non-Dragging Unitholders shall be required to provide indemnities as to any other person in excess of such Unitholder’s Percentage Interest of the

 

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purchase price under the Drag Along Sale; provided, that for the avoidance of doubt, in no event shall a Non-Dragging Unitholder be required to sell less than all of its Units in a Drag Along Sale.

 

Section 4.07                             Tag Along Rights.

 

(a)                                 If any Unitholder proposes to transfer to a Third Party Purchaser the Units held by it and its Affiliates (collectively referred to in this Section 4.07 as the Transferring Unitholder) that in the aggregate exceed fifteen percent (15%) of the issued and outstanding Units, after complying with Section 4.05, in a single transfer or a series of related transfers (other than pursuant to Section 4.03 or Section 4.04), then each other Unitholder shall have the right (a “Tag Along Right”) to require that the Third Party Purchaser purchase (a “Tag Along Sale”) from such other Unitholder up to a number of Units equal to (i) the total number of Units that the proposed Third Party Purchaser has agreed or committed to purchase multiplied by (ii) the Pro Rata Share of such other Unitholder, on the same terms and conditions as apply to the Transferring Unitholders (the “Tag Along Terms”).

 

(b)                                 The Transferring Unitholders pursuant to Section 4.07(a) shall notify each other Unitholder in writing of any Tag Along Right at least thirty (30) days prior to the date on which the Transferring Unitholders expect to consummate the Tag Along Sale (the “Tag Along Notice”).  The Tag Along Notice shall specify the number of Units which the Third Party Purchaser intends to purchase in the Tag Along Sale as well as the price to be paid by the Third Party Purchaser (on a per Unit basis) and a reasonably detailed description of all of the material terms and conditions of such Tag Along Sale.  The Tag Along Right may be exercised by each other Principal Unitholder by delivery of a written notice to the Transferring Unitholder (the “Tag Along Exercise Notice”) within ten (10) days following receipt of the Tag Along Notice.

 

(c)                                  Each other Unitholder shall (i) be offered the benefits of the same terms and conditions as the Transferring Unitholder in connection with such transfer, including receiving the same valuation of consideration and form of consideration and (ii) only make representations, warranties and covenants and assume any post-closing obligations that are in each case the same as the Transferring Unitholder; provided, however, that notwithstanding anything to the contrary in this Agreement, none of the other Unitholders shall be required to provide indemnities as to any other person in excess of such Unitholder’s Percentage Interest of the purchase price under the Tag Along Sale. Any decision by the Third Party Purchaser to reduce the number of Units included in the Tag Along Notice shall result in a corresponding pro rata reduction of the number of Units to be sold by each Transferring Unitholder and each other Unitholder, as applicable.

 

Section 4.08                             Void Assignment.  Any purported transfer of any Equity Interests of the Company in contravention of this Agreement shall be void and ineffectual and shall not bind or be recognized by the Company or any other Party, and the Company shall not record such transfer on its books or treat any purported transferee of such Equity Interests as the owner of such Equity Interests for any purpose.  In the event of any transfer in contravention of this Agreement, the purported transferee shall have no right to any profits, losses or distributions of the Company or any other rights of a Unitholder.

 

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Section 4.09                             Cooperation.  In the event of (i) the exercise of a Drag Along Right pursuant to Section 4.06, or (ii) the exercise of a Tag Along Right pursuant to Section 4.07 or (iii) the ECP Forced Sale, subject to the last sentence of Section 4.03(d)(ii), each Party shall consent to and raise no objections against the proposed transfer or transactions contemplated thereby.  Without limiting the generality of the foregoing, each Party agrees to:  (A) consent to and raise no objections against the transaction, (B) execute any unit purchase agreement, merger agreement or other agreement entered into with the Third Party Purchaser with respect to the transaction setting forth the Drag Along Terms or Tag Along Terms, as applicable, or the sale terms in the event of an ECP Forced Sale, and in each case any ancillary agreement with respect thereto, (C) vote the Units held by any Party in favor of the transaction, and (D) refrain from the exercise of, and waive, dissenters’ appraisal rights with respect to the transaction.

 

Section 4.10                             Expenses.  Subject to the following sentence, each Unitholder shall bear its own expenses incurred in connection with this Article IV, and any Unitholder effecting a transfer pursuant to this Article IV (other than pursuant to an ECP Forced Sale) shall reimburse the Company for any expenses incurred by the Company in connection therewith.  All reasonable and documented fees and expenses of experts and advisors of the Company and the Unitholders incurred in connection with an ECP Forced Sale shall be borne by the Company.

 

Section 4.11                             Bridge Loan.

 

(a)                                 If the Bridge Loan (together with accrued and unpaid interest thereon) has not been repaid in full on or prior to the one (1) year anniversary of the date of this Agreement (the “Repayment Option Date”), then, on the Repayment Option Date (or the first Business Day thereafter to the extent the Repayment Option Date does not fall on a Business Day), and not thereafter, Dynegy may, or may cause any of its Controlled Affiliates to, contribute to the Company an amount up to the Option Bridge Loan Amount, in exchange for Units at the price per Unit as of the date of this Agreement (such transaction, the “Dynegy Repayment Option”), and the Company shall use the proceeds from such contribution to partially repay the Bridge Loan.

 

(b)                                 If the Bridge Loan (together with accrued and unpaid interest thereon) has not been repaid in full and Dynegy does not exercise the Dynegy Repayment Option in full on the Repayment Option Date (or the first Business Day thereafter to the extent the Repayment Option Date does not fall on a Business Day), at any time after the Repayment Option Date, ECP may, or may cause the lender under the Bridge Loan to, convert all or any portion of the then Outstanding Bridge Loan Amount (all or such portion thereof, the “Conversion Amount”) into the number of Units equal to the quotient of (i) the product of (A) the Conversion Amount, multiplied by (B) the Conversion Multiple, divided by (ii) the price per Unit as of the date of this Agreement, and such Conversion Amount shall be deemed repaid in accordance with the terms of the Bridge Loan Agreement.

 

(c)                                  If Dynegy exercises the Dynegy Repayment Option in full, on the Repayment Option Date, ECP shall, or shall cause the lender under the Bridge Loan to, convert the remaining Outstanding Bridge Loan Amount into Units at the price per Unit as of the date of this

 

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Agreement, and such converted amount shall be deemed repaid in accordance with the terms of the Bridge Loan Agreement.

 

(d)                                 None of the terms or procedures set forth in Section 4.02 shall apply to this Section 4.11.  The Board shall take all necessary action to effectuate the provisions of this Section 4.11, including authorizing and issuing the Units in respect of any Conversion Amount or in respect of a conversion pursuant to Section 4.11(a) or Section 4.11(c). Notwithstanding anything to the contrary in Section 2.06(c), no vote of the Board shall be required to effectuate the issuance of any Units pursuant to this Section 4.11.

 

ARTICLE V.
  TERMINATION; LIQUIDATION

 

Section 5.01                             Initial Public Offering.  Article II, Article III and Article IV shall automatically terminate upon the consummation of an Initial Public Offering.

 

Section 5.02                             Liquidation; Voluntary Termination. This Agreement shall terminate automatically upon the complete liquidation of the Company or an agreement for the sale, lease or other disposition by the Company of all or substantially all of the Company’s assets, or otherwise with the written consent of each Principal Unitholder; provided that such transaction is duly approved pursuant to, and complies with, the other provisions of this Agreement.

 

Section 5.03                             Dissolution.  The Company will dissolve and its affairs will be wound up upon the first to occur of any of the following:

 

(a)                                 the approval of the Board in accordance with Section 2.06(c)(iv); or

 

(b)                                 the occurrence of any other event causing dissolution of the Company under the Delaware Act;

 

provided that, upon dissolution pursuant to clause (b) of this Section 5.03, any or all of the remaining Unitholders may elect to continue the business of the Company within 90 days after the occurrence of the event causing such dissolution.  The death, resignation, withdrawal, bankruptcy, insolvency or expulsion of any Unitholder will not dissolve the Company.

 

For the avoidance of doubt, any and all distributions in the event of a liquidation, after the payment of all debts and liabilities of the Company and payment of the expenses of dissolution and liquidation, will be made accordance with Section 3.02.

 

ARTICLE VI.
  [RESERVED]

 

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ARTICLE VII.
  COVENANTS

 

Section 7.01                             Confidentiality.

 

(a)                                 Each Party agrees and acknowledges that the Managers nominated by the Principal Unitholders may share confidential, non-public information about the Company and any of its Subsidiaries with any of the Principal Unitholders.

 

(b)                                 No Party shall disclose any information relating to the Company or any Subsidiary thereof (the “Confidential Information”) without the prior written consent of the Board; provided that (i) Confidential Information may be disclosed if required by applicable Law, legal process or any stock exchange or other self-regulatory organization (subject to the provisions of Section 7.01(c)) and (ii) each Party may disclose Confidential Information to its Representatives that are actively engaged in the monitoring or oversight of such Party’s investment in the Company and its Subsidiaries, so long as (x) such Representatives agree to keep such information confidential or the Party directs such Representative to keep such information confidential, and in either case such Party shall be liable for any failure on the part of its Representatives to so keep such information confidential, and to limit their use of such information to the use and monitoring of such Party’s investment in the Company and its Subsidiaries, and (y) the sharing of such Confidential Information with such Representatives does not violate any applicable Law; provided, further, that the ECP Funds, their Affiliates and their respective Representatives shall be permitted to disclose such information regarding the direct or indirect investment in the Company by such ECP Funds or Affiliates, as applicable, the financial performance and operations of the Company and its Subsidiaries, and such other information relevant to such investment in the Company to the limited partners, investors or other direct or indirect equity owners of, or prospective investors of, the ECP Funds or their Affiliates who are under customary duties or obligations of confidentiality and provided, further that any Confidential Information may be shared with bona fide potential acquirors of Units to the extent the applicable Transfer would be in accordance with Article IV of this Agreement and so long as the recipient of such Confidential Information agrees to keep it confidential pursuant to a customary confidentiality agreement enforceable by the Company as a party thereto or as a third party beneficiary thereunder.  The term “Confidential Information” does not include information that (A) is or has become generally available to the public other than as a result of a direct or indirect disclosure by a Party or any of its Representatives in breach of the provisions hereof or (B) was within the possession of a Party or any of its Representatives from a source other than the Company prior to its being furnished to such Party by or on behalf of the Company; provided, that in the case of (B) above, the source of such information was not known by such Party to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, the Company with respect to such information.

 

(c)                                  In the event that any Party is required by applicable Law, legal process or any stock exchange or other self-regulatory organization, to disclose any of the Confidential Information, such Party shall promptly notify the Company in writing so that the Company may seek a protective order or other appropriate remedy.  Nothing herein shall be deemed to prevent any Party from honoring a subpoena (or governmental order) that seeks discovery of the Confidential Information if (A) a motion for a protective order, motion to quash and/or other motion filed to prevent the production or disclosure of the Confidential Information has been denied or is not made; provided, however, that such Party shall disclose only that portion of the Confidential Information which such Party’s legal counsel advises is required and that it exercise commercially reasonable efforts to preserve the confidentiality of the remainder of the

 

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Confidential Information; or (B) the Company consents in writing to having the Confidential Information produced or disclosed pursuant to the subpoena (or governmental order).  In no event will any Party or any of its Representatives oppose any action by the Company to obtain a protective order or other relief to prevent the disclosure of the Confidential Information or to obtain reliable assurance that confidential treatment will be afforded the Confidential Information.  The Company shall promptly reimburse the Party for any reasonable costs and expenses (including fees and disbursements of counsel) incurred in connection with any action that the Party may be required to take, or is requested by the Company to take, under this Section 7.01.

 

Section 7.02                             Information Rights.

 

(a)                                 The Company will furnish each of the ECP Funds and Dynegy, so long as each such Principal Unitholder holds any Units, as soon as available and in any event:

 

(i)                                     within the later of (i) ninety (90) days after the end of each fiscal year of the Company, and (ii) the period of time provided in the Dynegy Parent Credit Agreement with respect to Dynegy Parent’s similar obligation therein (so long as the Dynegy Parent Credit Agreement is in effect), the consolidated balance sheet of the Company and its Subsidiaries as at the end of each such fiscal year and the consolidated statements of income, cash flows and changes in unitholders’ equity for such year of the Company and its Subsidiaries, setting forth in each case in comparative form the figures for the next preceding fiscal year, accompanied by the report of independent certified public accountants of recognized national standing, to the effect that, except as set forth therein, such consolidated financial statements have been prepared in accordance with GAAP applied on a basis consistent with prior years and fairly present in all material respects the financial condition of the Company and its Subsidiaries at the dates thereof and the results of their operations and changes in their cash flows and unitholders’ equity for the periods covered thereby;

 

(ii)                                  within the later of (i) forty-five (45) days after the end of each quarterly accounting period in each fiscal year (other than the last fiscal quarter of the fiscal year), and (ii) the period of time provided in the Dynegy Parent Credit Agreement with respect to Dynegy Parent’s similar obligation therein (so long as the Dynegy Parent Credit Agreement is in effect), unaudited consolidated balance sheets of the Company and its Subsidiaries as at the end of each such fiscal quarter and for the current fiscal year to date and unaudited consolidated statements of income, cash flows and changes in unitholders’ equity for such fiscal quarter and for the current fiscal year to date, in each case setting forth in comparative form the figures for the corresponding periods of the previous fiscal quarter, all in reasonable detail and all prepared in accordance with GAAP applied on a basis consistent with prior years and fairly present in all material respects the financial condition of the Company and its Subsidiaries at the dates thereof and the results of their operations and changes in their cash flows and unitholders’ equity for the periods covered thereby and an update of material developments affecting the business and operations of the Company and its Subsidiaries; and

 

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(iii)                               within forty five (45) days after the end of each monthly accounting period in each fiscal quarter (other than the last month of the fiscal quarter) the Monthly Management Plan for the applicable month (beginning with the first full calendar month during which this Agreement is executed).

 

(b)                                 To the extent permitted by, and not inconsistent with, applicable Law, and without limiting the provisions of Section 7.03, regularly reported financial information and such other information as each of the ECP Funds and Dynegy, so long as such Principal Unitholder holds at least five percent (5%) of the issued and outstanding Units, may reasonably request or any other information that is delivered by the Company or the Board to any of the Principal Unitholders shall be made available to such Principal Unitholder.

 

(c)                                  Without limiting the provisions of Section 7.03, upon the request of any of the ECP Funds or Dynegy, so long as such Principal Unitholder holds at least five percent (5%) of the issued and outstanding Units, such Principal Unitholder and any Representatives of such Principal Unitholder shall have (i) reasonable access (at reasonable times and upon reasonable notice) to all executive officers and accountants of the Company and its Subsidiaries and (ii) reasonable access (at reasonable times and upon reasonable notice) to all premises, properties, books, records (including tax records), contracts, financial and operating data and information and documents pertaining to the Company and its Subsidiaries and shall be entitled to make copies, at such Unitholder’s sole expense, of such books, records, contracts, data, information and documents as such Principal Unitholder or its Representatives may reasonably request.

 

Section 7.03                             Management Rights Letter. So long as any of the ECP Funds owns any Units, each such ECP Fund will have the right to inspect the books and records of the Company and to consult with and advise the management of the Company and any of its Subsidiaries (including the right to meet with management personnel at least quarterly at the request of such ECP Fund) on matters relating to the business and financial affairs of the Company and any of its Subsidiaries.  The rights granted to the ECP Funds under this Section 7.03 are intended to constitute “management rights” within the meaning of U.S. Department of Labor Regulation § 2510.3-101(d)(3)(ii), and the Company and its Subsidiaries will be operated consistent with the status of the Company as a “venture capital investment” of each of the ECP Funds.

 

Section 7.04                             Limitation of Duties; Separate Interests.  No Unitholder or Manager (in its or his capacity as such) shall have any duties (including fiduciary duties) or liabilities relating thereto to the Company or the other Unitholders or Managers, except for the implied covenant of good faith and fair dealing and except as may be specifically provided herein or required by any provisions of the Delaware Act or other applicable Law that cannot be waived.  Accordingly, subject to the preceding sentence, each Manager shall be entitled to act solely on behalf, and in the interests, of the Unitholder that has designated such Manager.  In the event that any Unitholder or its Affiliates acquires knowledge of a potential transaction or matter that may be a corporate opportunity for the Company, its Subsidiaries or any of their Affiliates, no such Unitholder or Affiliate will have any duty (contractual or otherwise) to communicate or present such corporate opportunity to the Company, its Subsidiaries or any of their Affiliates and, notwithstanding any provision of this Agreement to the contrary, will not be liable to the Company, its Subsidiaries, any of the Unitholders or any of their respective Affiliates for breach

 

25

 

of any duty (contractual or otherwise) by reason of the fact that such Unitholder or Affiliate directly or indirectly pursues or acquires such opportunity for itself, directs such opportunity to another person, or does not present such opportunity to the Company, its Subsidiaries, any of the Unitholders or any of their respective Affiliates.  Furthermore, the Company, on behalf of itself and its Subsidiaries, and each Principal Unitholder acknowledges and affirms that each ECP Fund and its respective Permitted Transferees and Affiliates and each person who is a Board representative or nominee of such ECP Fund or its Permitted Transferees (the “Affiliated Parties”) (i) have participated (directly or indirectly) and will continue to participate (directly or indirectly) in private equity, venture capital and other direct investments in corporations, joint ventures, limited liability companies and other entities (“Other Investments”), including Other Investments engaged in various aspects of the power generating business (and related services businesses) that may, are or will be competitive with the Company’s business or that could be suitable for the Company, (ii) have interests in, participate with, aid and maintain seats on the board of directors or similar governing bodies of, Other Investments, (iii) may develop or become aware of business opportunities for Other Investments; and (iv) may or will, as a result of or arising from the matters referenced in this Section 7.04, the nature of the Affiliated Parties’ businesses and other factors, have conflicts of interest or potential conflicts of interest.

 

Section 7.05                             FIRPTA Compliance.  If requested by any Principal Unitholder in writing, the Company shall promptly provide such Principal Unitholder with a duly executed statement pursuant to Treasury Regulation Section 1.897-2(h) informing such Principal Unitholder whether or not the Units constitute a “United States real property interest” (and shall comply with the related notice requirements in Treasury Regulation Section 1.897-2(h)(2)).

 

Section 7.06                             Notification of Certain Transactions.

 

(a)                                 Without limiting the obligations set forth in Section 7.06(b), each Unitholder shall provide notice to the Company and the Principal Unitholders of any acquisition or other transaction through which it acquires directly, or becomes an “affiliate” as defined in 18 C.F.R. § 35.36 of an entity that owns, (i) electric generation, transmission or distribution assets, (ii) intrastate natural gas transportation, storage or distribution facilities, or (iii) physical coal supply sources or coal transportation, in each case no later than five days following the closing of such transaction.  Such notice shall include information sufficient for the Company or any entity in which the Company owns an equity interest to make any necessary change-in-status filing with the Federal Energy Regulatory Commission and otherwise to take any actions required to maintain its entitlement to market-based rate authority under Section 205 of the Federal Power Act.

 

(b)                                 As soon as reasonably practicable after Dynegy reasonably determines that the provision of a Dynegy Parent Change of Control Notice is necessary to provide the ECP Funds the opportunity to exercise their Put Right or Second Put Right based on the occurrence of any of the events described in the definition thereof, Dynegy shall provide a Dynegy Parent Change of Control Notice to the ECP Representative.

 

Section 7.07                             Dispute Resolution.  Each of the ECP Representative and Dynegy shall jointly determine all components of the calculation of the Put/Call Purchase Price, the 2.25x

 

26

 

Value and the Dynegy Parent Share Value.  If after a reasonable negotiation period, the ECP Representative and Dynegy are unable to reach an agreement on any such component, either such Party may engage an independent nationally-recognized investment banking or valuation firm selected by such Party, acting reasonably, to determine such component; provided, that in determining such component, the valuation firm must (x) use the methodologies set forth in this Agreement with respect to calculating each such component, if applicable, and (y) not assign a value greater than the greatest value claimed by the ECP Representative or Dynegy for such component, or less than the smallest value claimed by the ECP Representative or Dynegy for such component, which determined amount shall constitute the value of such component for all purposes of this Agreement. The fees of the valuation firm shall be split equally by the ECP Representative and Dynegy.

 

Section 7.08                             Registration Rights.  The Unitholders agree that in the event of an IPO, the Company will enter into a registration rights agreement with each Principal Unitholder containing customary provisions for a transaction of this type, including the right of each Principal Unitholder to make customary demand registration requests, piggyback registration requests, and when the Company is eligible for shelf registration, continuous shelf registration requests, subject to customary carve-back provisions and other exceptions.

 

ARTICLE VIII.
  INDEMNIFICATION; LIMITATION OF LIABILITY

 

Section 8.01                             Indemnification; Limitation of Liability.

 

(a)                                 Indemnification.  Except as limited by applicable Law and subject to the provisions of this Section 8.01, the Managers of the Company, and the directors or managers of each Subsidiary thereof (each an “Indemnitee”), shall not be liable for, and shall be indemnified and held harmless by the Company against, any losses, liabilities and reasonable expenses (including attorneys’ fee) (each, a “Loss”), arising from proceedings in which such Indemnitee may be involved, as a party or otherwise, by reason of he or she being a Manager of the Company, or director or manager of any Subsidiary thereof, or by reason of his or her involvement in the management of the affairs of the Company or its Subsidiaries, whether or not he or she continues to be such at the time any such Loss is paid or incurred.  Notwithstanding the foregoing, an Indemnitee shall not be held harmless or indemnified under this Section 8.01 for any Losses arising out of the fraud, intentional misconduct, or knowing or reckless breach of Indemnitee’s obligations under this Agreement, or bad faith of such Indemnitee.  The rights of indemnification provided in this Section 8.01 are in addition to any rights to which an Indemnitee may otherwise be entitled by contract or as a matter of Law.  Without limiting the foregoing, an Indemnitee shall be entitled to indemnification by the Company against reasonable expenses (as incurred), including attorneys’ fees, incurred by the Indemnitee in connection with the defense of any action to which the Indemnitee may be made a party (without regard to the success of such defense), to the fullest extent permitted under the provisions of the DGCL or any other applicable statute.

 

(b)                                 Payments Prior to Final Disposition.  Except as limited by applicable Law, expenses incurred by an Indemnitee in defending any proceeding (except a proceeding by or in

 

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the right of the Company or any Principal Unitholder against such Indemnitee) will be paid by the Company in advance of the final disposition of the proceeding, upon receipt of a written undertaking by or on behalf of such Indemnitee to repay such amount if such Indemnitee is determined pursuant to this Section 8.01 or adjudicated to be ineligible for indemnification.  This undertaking shall be an unlimited general obligation of the Indemnitee but does not need to be secured unless so determined by the Board.

 

(c)                                  Heirs and Representatives.  The indemnification provided by this Section 8.01 shall inure to the benefit of the heirs and personal representatives of each Indemnitee.

 

(d)                                 Officers and Agents.  The Company may, at the direction of the Board, indemnify and advance expenses to any Officer, employee or agent of the Company or its Subsidiaries to the same extent and subject to the same conditions under which it may indemnify and advance expenses under Section 8.01(a) and Section 8.01(b).

 

(e)                                  Not Exclusive.  The right to indemnification and the advancement and payment of expenses conferred in this Section 8.01 shall not be exclusive of any other right that a Manager or other person indemnified pursuant to this Section 8.01 may have or hereafter acquire under any Law or provision of this Agreement.

 

(f)                                   No Unitholder Personal Liability for Indemnification.  Any indemnification pursuant to this Section 8.01 shall be made only out of the assets of the Company and shall not cause any Principal Unitholder to incur any personal liability or result in any liability of any Principal Unitholder to any third party.

 

(g)                                  Priority.  The Company hereby acknowledges that each Indemnitee that is a nominee of Dynegy or any of the ECP Funds, or heir or representative of any such nominee (each, a “JV Indemnitee”), may have certain rights to indemnification, advancement of expenses and/or insurance provided by or on behalf of Dynegy or its Affiliates or the ECP Funds or their Affiliates, as applicable (collectively, the “Sponsor Indemnitors”).  Notwithstanding anything to the contrary in this Agreement:  (i) the Company is the indemnitor of first resort and the Sponsor Indemnitors are the indemnitors of last resort in connection with any claims for indemnification from the JV Indemnitees, (ii) the Company will be required to advance the full amount of expenses incurred by each JV Indemnitee and will be liable for the full amount of all Losses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by this Section 8.01, without regard to any rights each JV Indemnitee may have against the Sponsor Indemnitors, and (iii) the Parties irrevocably waive, relinquish and release the Sponsor Indemnitors from any and all claims against the Sponsor Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof.  Notwithstanding anything to the contrary in this Agreement, no advancement or payment by the Sponsor Indemnitors on behalf of an JV Indemnitee with respect to any claim for which such JV Indemnitee has sought indemnification or advancement of expenses from the Company will affect the foregoing and the Sponsor Indemnitors will have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such JV Indemnitee against the Company.  The Sponsor Indemnitors are express third party beneficiaries of the terms of this Section 8.01(g).

 

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Section 8.02                             D&O Insurance.  The Company shall purchase and maintain director and officer liability insurance (“D&O Insurance Policy”) in the amount approved by the Board on behalf of any person who is or was a Manager or Officer of the Company, or any director, officer or manager of any Subsidiary thereof, against any liability asserted against such person or incurred by such person in any capacity identified in Section 8.01 or arising out of such person’s status as an Indemnitee, whether or not the Company would have the power to indemnify such person against that liability under Section 8.01.

 

ARTICLE IX.
  GENERAL PROVISIONS

 

Section 9.01                             Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective legal representatives, heirs, legatees, successors and assigns.

 

Section 9.02                             Specific Performance.  Each Party, in addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, shall be entitled to specific performance of the Party’s rights under this Agreement.  Each Party agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by the Party of the provisions of this Agreement and each Party hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.

 

Section 9.03                             Governing Law.  This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under applicable principles of conflicts of Laws thereof.

 

Section 9.04                             Submission to Jurisdiction; Consent to Service of Process..

 

(a)                                 Each of the Parties hereto hereby (i) irrevocably submits to the exclusive jurisdiction of the court of chancery of the state of Delaware (or, if the chancery court of the state of Delaware declines to accept jurisdiction over a particular matter, any state or federal court within the state of Delaware) over all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this agreement, (ii) irrevocably waives, to the fullest extent permitted by applicable Law, any objection which it may now or hereafter have to the laying of venue of any such dispute, claim or cause of action brought in such court or any defense of inconvenient forum for the maintenance of such dispute and (iii) agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.

 

(b)                                 Each of the Parties hereto hereby consents to process being served by any party to this Agreement in any Legal Proceeding by the delivery of a copy thereof in accordance with the provisions of Section 9.07.

 

Section 9.05                             Waiver of Jury Trial.  EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND

 

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THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING BROUGHT BY OR AGAINST IT, DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

Section 9.06                             Interpretation.  The headings of the Sections contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties and shall not affect the meaning or interpretation of this Agreement. Unless the context otherwise requires: (a) an accounting term not otherwise defined has the meaning assigned to it in accordance with then-applicable GAAP; (b) “or” is not exclusive; (c) words in the singular include the plural, and words in the plural include the singular; (d) provisions apply to successive events and transactions; (e) the words “herein,” “hereof” and other words of similar import refer to this Agreement as a whole and not to any particular Article, or other subdivision; (f) all references herein to Articles, Sections, Recitals, Exhibits, Appendixes, Annexes, paragraphs, subparagraphs and clauses shall be deemed to be references to Articles, Sections, Recitals, paragraphs, subparagraphs and clauses of, and Exhibits, Appendixes and Annexes to, this Agreement unless the context shall otherwise require; (g) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; (h) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”; (i) references to “$” or “dollars” shall mean United States dollars; (j) any Losses, liabilities, payments, adjustments, or other payment obligations or financial amounts referenced herein or relating hereto shall be measured in, settled in, paid in and deemed to refer to United States dollars; and (h) unless otherwise expressly provided herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.

 

Section 9.07                             Notices.  All notices, requests, demands, waivers and other communications required or permitted to be given or made under this Agreement shall be in writing and shall be deemed to have been duly given or made if (a) delivered personally, (b) mailed by certified or registered mail with postage prepaid, (c) sent by next-Business Day or overnight mail or delivery, or (d) sent by facsimile or email, provided that delivery of such facsimile or email is promptly confirmed, as follows (or at such other address for a Party as shall be specified by like notice):

 

(i)                                     if to any of the ECP Funds, to

 

Energy Capital Partners
 11943 El Camino Real, Suite 220
 San Diego, California 92130
 Fax:  (858) 703-4401
 Attention:  Andrew Singer
 Email:  asinger@ecpartners.com

 

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with a copy (which shall not constitute notice) to:

 

Latham & Watkins LLP
 885 Third Avenue

New York, New York 10022-4834

Fax:  (212) 751-4864
 Attention:  David A. Kurzweil and Paul F. Kukish
  Email: David.Kurzweil@LW.com and Paul.Kukish@LW.com

 

(ii)                                  if to Dynegy, to

 

Dynegy Inc.

601 Travis Street

Houston, TX 77002

Facsimile: (713) 507-6808

Attention: Catherine James, Esq., Executive Vice President and General Counsel

E-mail: catherine.james@dynegy.com

 

with a copy (which shall not constitute notice) to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

1440 New York Avenue, N.W.

Washington, DC 20005

Facsimile: (202) 661-8200

Attention: Michael P. Rogan

E-mail: michael.rogan@skadden.com

 

(iii)                               if to the Company, to

 

Energy Capital Partners
 11943 El Camino Real, Suite 220
 San Diego, California 92130
 Fax:  (858) 703-4401
 Attention:  Andrew Singer
 Email:  asinger@ecpartners.com

 

and:

 

Dynegy Inc.

601 Travis Street

Houston, TX 77002

Facsimile: (713) 507-6808

Attention: Catherine James, Esq., Executive Vice President and General Counsel

E-mail: catherine.james@dynegy.com

 

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with copies (which shall not constitute notice) to:

 

Latham & Watkins LLP
 885 Third Avenue

New York, New York 10022-4834

Fax:  (212) 751-4864
 Attention:  David A. Kurzweil and Paul Kukish
  Email:  David.Kurzweil@LW.com and Paul.Kukish@LW.com

 

and

 

Skadden, Arps, Slate, Meagher & Flom LLP

1440 New York Avenue, N.W.

Washington, DC 20005

Facsimile: (202) 661-8200

Attention: Michael P. Rogan

E-mail: michael.rogan@skadden.com

 

All such notices, requests, demands, waivers and other communications will be deemed to have been received (w) if by personal delivery, on the day of such delivery, (x) if by certified or registered mail, on the fifth Business Day after the mailing thereof, (y) if by next-Business Day or overnight mail or delivery, on the day delivered or (z) if by email prior to 5:00 p.m. at the place of receipt, on the day on which such email was sent, provided that a copy is also sent by certified or registered mail.

 

Section 9.08                             Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to constitute one and the same agreement. This Agreement may be executed by facsimile or electronic transmission in portable document format (.pdf), each of which shall be deemed an original.

 

Section 9.09                             Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal, or unenforceable in any respect for any reason, the validity, legality, and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby.

 

Section 9.10                             Amendment and Waiver.  This Agreement may be amended, and the observance of any term of this Agreement may be waived, with (and only with) the written consent of the Company and all of the Principal Unitholders and Permitted Transferees who hold any Units at the time of the amendment or waiver.  No waiver of any breach shall be deemed to be a further or continuing waiver of such breach or a waiver of any other or subsequent breach.  Except as otherwise expressly provided herein, no failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor shall any single or partial

 

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exercise of such right, power or remedy by such Party preclude any other or further exercise thereof, or the exercise of any other right, power or remedy.

 

Section 9.11                             Tax Withholding.  The Company shall be entitled to deduct and withhold from amounts payable to any Unitholder any sums required by federal, state, or local tax law to be withheld by the Company with respect to the issuance, vesting, exercise, repurchase, or cancellation of, or otherwise with respect to, any Units or any option to purchase any Units.

 

Section 9.12                             Entire Agreement.  This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof.

 

Section 9.13                             Legends.  To the extent the Units are certificated at any time, each certificate representing Units from time to time owned by the Principal Unitholders shall bear a legend substantially as follows:

 

“THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR STATE SECURITIES LAWS AND CANNOT BE OFFERED, SOLD, OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS AND REGULATIONS PROMULGATED THEREUNDER.  THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED BY THE REGISTERED OWNER HEREOF FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF IN VIOLATION OF THE SECURITIES ACT.  THE UNITS MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN A TRANSACTION OTHERWISE IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS.

 

THE UNITS REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN UNITHOLDERS THEREOF INITIALLY DATED AS OF [·].  A COPY OF SUCH AGREEMENT SHALL

 

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BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”

 

ARTICLE X.
 DEFINITIONS

 

For purposes of this Agreement, the following terms shall have the respective meanings set forth below:

 

“2.25x Value” means, as of any date of determination, the product of (i) the product of (A) $[•],(6) plus any Capital Contributions made by the ECP Parties to the Company after the date hereof, plus any Conversion Amount and any amounts of the Bridge Loan converted pursuant to Section 4.11(c), minus any Capital Contributions returned through Distributions to the ECP Parties prior to the date of determination minus any ECP Consideration paid to the ECP Parties in connection with a Partial Put or Partial Call, and (B) 2.25, multiplied by (ii) the amount expressed as a percentage that equals the quotient of (A) the Units being sold by the ECP Parties in respect of the applicable Call Right divided by (B) the aggregate number of Units held by the ECP Parties.(7)

 

“Affiliate Transferee” has the meaning set forth in Section 4.01(b).

 

“Affiliate” means, with respect to any specified person, any other person that, at the time of determination, directly or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified person.

 

“Affiliated Fund” means, with respect to any ECP Fund, (i) ECP III, (ii) any investment fund controlled, directly or indirectly, by the members of the investment committee of Energy Capital Partners III, LLC, a Delaware limited liability company, or the investment committee of ECP III and (iii) any investment vehicle or other arrangement investing on a parallel basis with ECP III.

 

“Affiliated Parties” has the meaning set forth in Section 7.04.

 

“Agreement” has the meaning set forth in the introductory paragraph hereof.

 

“Applicable EBITDA” means, with respect to the Company and its Subsidiaries, the Consolidated Adjusted EBITDA for the twelve-month period ending on the last full calendar month immediately prior to the date the Call Exercise Notice is received by the ECP Representative or a Put Exercise Notice is received by Dynegy, as applicable, for which internal financial statements are available.

 

(6)  Note to Draft: ECP’s initial cash contribution to the company, to match dollar amount applicable to the ECP Funds from the third WHEREAS clause.

 

(7)  Note to Draft: Additional terms of this definition may be required to address the parties’ agreement on treatment of Dynegy Parent’s incremental costs under the Service Agreement.

 

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“Average Dynegy Parent EBITDA Multiple” means, (i) so long as a Dynegy Parent Change of Control has not been consummated prior to the delivery of the Put Exercise Notice or the Call Exercise Notice, as applicable, the arithmetic mean of the Dynegy Parent EBITDA Multiple for the six (6) month period prior to the delivery of the Put Exercise Notice or the Call Exercise Notice, as applicable; provided, however, that if the ECP Parties exercise their Put Right or Second Put Right pursuant to Section 4.03(h), the Dynegy Parent EBITDA Multiple shall be such multiple determined by deriving the Dynegy Parent Market Value from the valuation of Dynegy in the Change of Control transaction described in the Dynegy Parent Change of Control Notice, and (ii) if a Dynegy Parent Change of Control has been consummated prior to the delivery of the Put Exercise Notice or the Call Exercise Notice, as applicable, eight (8).

 

“Beneficially Own” means, with respect to any securities, having “beneficial ownership” of such securities for purposes of Rule 13d-3 or 13d-5 under the Exchange Act as in effect on the date hereof.

 

“Board” has the meaning set forth in Section 2.01(b).

 

“Bridge Loan” means the loan provided under the Bridge Loan Agreement.

 

“Bridge Loan Agreement” means [·].

 

“Business Day” means any day other than a Saturday, Sunday or other day on which banking institutions in New York, New York are required or authorized by Law or executive order to be closed.

 

“Call Closing Date” has the meaning set forth in Section 4.03(d)(ii).

 

“Call Closing Date” has the meaning set forth in Section 4.04(d).

 

“Call Exercise Notice” has the meaning set forth in Section 4.04(b).

 

“Call Option Wire Notice” has the meaning set forth in Section 4.04(b).

 

“Call Right Closing” has the meaning set forth in Section 4.04(d).

 

“Call Right” has the meaning set forth in Section 4.04(a).

 

“Capital Contribution” means any cash or contributed property that a Principal Unitholder contributes to the Company pursuant to Article III or in exchange for New Securities pursuant to Section 4.02.

 

“Change of Control” means (a) any transaction or series of related transactions that results in the directors comprising the Board of Directors of Dynegy Parent (or any parent or successor thereto) immediately prior to such transaction ceasing to represent the majority of the directors comprising the Board of Directors of Dynegy Parent or the board of directors of the person surviving or resulting from such transaction (or the

 

35

 

ultimate parent entity thereof); provided, however, that any directors comprising such Board or board that were nominated, elected, appointed or recommended by the Board immediately prior to such transaction or series of related transactions shall be deemed for purposes of this clause (a) to have been members of the Board of Directors of Dynegy Parent immediately prior to such transaction or series of related transactions; (b) the acquisition of Dynegy Parent (or any parent or successor thereto) by another person by means of any transaction or series of related transactions, whether or not Dynegy Parent is a party thereto (including any stock acquisition, reorganization, merger or consolidation), that results in the holders of the common stock of Dynegy Parent (or any parent or successor thereto) immediately prior to such transaction or series of related transactions failing to represent, immediately after such transaction or series of transactions, a majority of the total outstanding voting securities of the surviving person (or the ultimate parent entity thereof); (c) any transaction or series of related transactions, whether or not Dynegy Parent (or any parent or successor thereto) is a party thereto, after giving effect to which, in excess of a majority of the voting securities is Beneficially Owned directly, or indirectly through one or more persons, by any person and its Affiliates; or (d) a sale or disposition of all or substantially all of the assets of Dynegy Parent and its Subsidiaries on a consolidated basis.

 

“Code” means the Internal Revenue Code of 1986 and any successor statute, as amended from time to time.

 

“Company” has the meaning set forth in the introductory paragraph hereof.

 

“Confidential Information” has the meaning set forth in Section 7.01(b).

 

“Consolidated Adjusted EBITDA” means, with respect to the Company and its Subsidiaries or Dynegy and its Subsidiaries, as applicable, for any period, consolidated net income (or loss) (determined in accordance with GAAP) of such person for such period, plus the sum of, to the extent included in the calculation of net income (or loss) of such person, but without duplication, (i) consolidated interest expense for such period, (ii) consolidated income tax expense for such period, (iii) consolidated amounts attributable to depreciation expense for such period, and (iv) consolidated amortization expense for such period, in each case as reported in the financial statements included with Dynegy Parent’s most recent quarterly report on Form 10-Q filed with the SEC on [•] and most recent annual report on Form 10-K filed with the SEC on [•], and adjusted consisted with such financial statements, including for gains and losses on the sale of certain assets, the impacts of mark to market changes on derivatives related to Dynegy Parent’s generation portfolio, interest rate swaps, warrants, the impact of impairment charges and certain costs associated with acquisitions and other material items.

 

“Control” or “Controlled” means, as for any person, the possession, directly or indirectly of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities, by contract or otherwise.

 

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“Controlled Affiliate” means, with respect to the ECP Parties, (a) ECP III and (b) any Subsidiary of ECP III, and with respect to Dynegy, (x) Dynegy Parent and (b) any Subsidiary of Dynegy Parent.

 

“Conversion Amount” has the meaning set forth in Section 4.11(b).

 

“Conversion Multiple” means [·].(8)

 

“D&O Insurance Policy” has the meaning set forth in Section 8.02.

 

“Delaware Act” means the Delaware Limited Liability Company Act, 6 Del.L. § 18-101, et seq., as it may be amended from time to time, and any successor to the Delaware Act.

 

“Delaware Certificate” has the meaning set forth in the recitals.

 

“Distribution” means each distribution in respect of any Equity Interests of the Company made by the Company to a Unitholder, whether in cash, property or securities of the Company and whether by liquidating distribution, redemption, repurchase or otherwise.

 

“Drag Along Notices” has the meaning set forth in Section 4.06(b).

 

“Drag Along Right” has the meaning set forth in Section 4.06(a).

 

“Drag Along Sale” has the meaning set forth in Section 4.06(a).

 

“Drag Along Terms” has the meaning set forth in Section 4.06(b).

 

“Dragging Group” has the meaning set forth in Section 4.06(a).

 

“Dynegy” has the meaning set forth in the introductory paragraph hereof.

 

“Dynegy Parent” means Dynegy Inc., a Delaware corporation.

 

“Dynegy Parent Change of Control Notice” means a written notice provided by Dynegy to the ECP Representative notifying the ECP Representative of (a) a definitive and binding agreement with respect to a Change of Control of Dynegy Parent, which shall set forth all material terms and conditions of such agreement or (b) the taking of any other action by any Person other than Dynegy Parent or its Affiliates or Representatives that is publicly disclosed and that has resulted in, or would reasonably be expected to result in, a Change of Control.

 

(8)  Note to Draft:  Parties to agree on specific wording to reflect the dilution mechanics set forth in the spreadsheet attached hereto.

 

37

 

“Dynegy Parent Credit Agreement” means the Credit Agreement, dated as of April 23, 2013, among Dynegy Parent, as borrower and the guarantors, lenders and other parties thereto (as may be amended from time to time).

 

“Dynegy Parent EBITDA Multiple” means the quotient resulting from a fraction, the numerator of which shall be the Dynegy Parent Market Value and the denominator of which shall be the Consolidated Adjusted EBITDA of Dynegy Parent and its Subsidiaries for the twelve-month period ending on the last full calendar month immediately prior to the date of determination for which internal financial statements are available.

 

“Dynegy Parent Market Value” means, as of any date of determination, the principal net amount of indebtedness for borrowed money of Dynegy Parent (or any successor thereto) and its Subsidiaries (for the avoidance of doubt, (a) Illinois Power Holdings shall be deemed to be a Subsidiary of Dynegy Parent, (b) such amount of indebtedness for borrowed money shall be reduced by restricted and unrestricted cash of Dynegy Parent and its Subsidiaries and (c) and such amount of net indebtedness for borrowed money shall include Dynegy’s Pro Rata Share of any net indebtedness for borrowed money of the Company), plus the product of (i) the total number of issued and outstanding shares of common stock of Dynegy Parent (or any successor thereto) and (ii) the Dynegy Parent Share Value.

 

“Dynegy Parent Share Value” means, so long as Dynegy Parent is listed on NYSE (or another other national share exchange on which shares of Dynegy Parent common stock are listed if not listed on NYSE), the weighted average price of a share of common stock of Dynegy Parent listed on NYSE (or such other national share exchange on which shares of Dynegy Parent common stock are listed if not listed on NYSE) for the 90 trading day period ending on the Business Day immediately preceding the date of delivery of the applicable Put Exercise Notice or the Call Exercise Notice, as applicable, and, if Dynegy Parent is not listed on NYSE (or another other national share exchange) the Fair Market Value of a share of Dynegy Parent (or any successor thereto) common stock.

 

“Dynegy Parties” has the meaning set forth in Section 2.01(c)(iii).

 

“Dynegy Repayment Option” has the meaning set forth in Section 4.11(a).

 

“ECP Consideration Amount” means, with respect to the Put Right, the Second Put Right, the Call Right or the Second Call Right, as applicable and when calculated, an amount equal to the product of (i) the applicable Per Unit Put/Call Purchase Price and (ii) the number of Units being sold by the ECP Funds on the applicable Put Closing Date or Call Closing Date.

 

“ECP Forced Sale” has the meaning set forth in Section 4.03(c).

 

“ECP Forced Sale Notice” has the meaning set forth in Section 4.03(d)(i).

 

“ECP Funds” has the meaning set forth in the introductory paragraph hereof.

 

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“ECP III” has the meaning set forth in the introductory paragraph hereof.

 

“ECP III Manager” has the meaning set forth in Section 2.01(b).

 

“ECP III-A” has the meaning set forth in the introductory paragraph hereof.

 

“ECP III-A Manager” has the meaning set forth in Section 2.01(b).

 

“ECP III-B” has the meaning set forth in the introductory paragraph hereof.

 

“ECP III-C” has the meaning set forth in the introductory paragraph hereof.

 

“ECP III-D” has the meaning set forth in the introductory paragraph hereof.

 

“ECP Managers” has the meaning set forth in Section 2.01(b).

 

“ECP Parties” has the meaning set forth in Section 2.01(c)(ii).

 

“ECP Representative” means Energy Capital Partners GP III, LP, a Delaware limited partnership, or, upon written notice to each other Principal Unitholder from any of the ECP Funds, any other person appointed in lieu of Energy Capital Partners GP III, LP (or any subsequent ECP Representative) to be the “ECP Representative” by the ECP Funds.

 

“Effective Date” has the meaning set forth in the introductory paragraph hereof.

 

“Equity Interests” means (i) in relation to the Company, (A) Units or other equity interests in the Company (including other classes, groups or series thereof having such relative rights, powers, and/or obligations as may from time to time be established by the Board, as the case may be, including rights, powers, and/or duties different from, senior to or more favorable than existing classes, groups and series of units and other equity interests in the Company), (B) obligations, evidences of indebtedness or other securities or interests convertible or exchangeable into Units or other equity interests in the Company, and (C) warrants, options or other rights to purchase or otherwise acquire units or other equity interests in the Company and (ii) in relation to any person, any capital stock of or other type of equity interest in a person or other securities to purchase capital stock or other types of equity interests.

 

“Estimated EBITDA” means, with respect to the Company and its Subsidiaries, the projected Consolidated Adjusted EBITDA for the twelve-month period beginning on the first day of the first full calendar month occurring after the date the Call Exercise Notice is received by the ECP Representative or a Put Exercise Notice is received by Dynegy, as applicable, determined in a manner consistent with the then-applicable Annual Plan.

 

“Excluded Issuance” means (i) any Equity Interests issued as equity distributions, or pursuant to unit splits, recapitalization or other similar events that do not adversely

 

39

 

affect the proportionate amount of the Units held by the Principal Unitholders, (ii) securities issued pursuant to an Initial Public Offering, and (iii) Equity Interests, or warrants or options to purchase Equity Interests, issued to the third party seller or strategic partner in acquisitions, mergers or strategic partner transactions, the terms of which are approved by the Board (including pursuant to Section 2.06(c)).

 

“Fair Market Value” means the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, and both having reasonable knowledge of the relevant facts.

 

“Final Call Purchase Price” has the meaning set forth in Section 4.04(a).

 

“Fiscal Year” has the meaning set forth in Section 1.06.

 

“Fully Subscribing Unitholder” has the meaning set forth in Section 4.02(d).

 

“GAAP” means United States generally accepted accounting principles.

 

“Governmental Entity” means any federal, state, county, township, municipal, local or foreign government, or any legislature, administrative or regulatory authority, agency, commission, board, bureau, branch, department, division, court, tribunal, magistrate, justice, multi-national organization, quasi-governmental body, or other similar recognized organization, body or instrumentality of any federal, state, county, township, municipal, local or foreign government or any other similar recognized organization, body or instrumentality exercising similar powers or authority.

 

“Indebtedness” means, with respect to any person as of any particular time, without duplication, the sum of all amounts owing by such person to repay full amounts due and terminate all obligations (including any accrued interest and any cost or penalty associated with prepaying any such indebtedness or similar amounts) with respect to (i) all obligations for borrowed money of such person, (ii) all obligations of such person evidenced by bonds, debentures, notes, or other similar instruments or debt securities, (iii) all obligations, contingent or otherwise, of such person in respect of any letters of credit or bankers’ acceptances (to the extent drawn), (iv) any interest rate swap, forward contract or other hedging arrangement of such person, (v) all obligations for the deferred purchase price of assets, property or services, including any unpaid purchase price obligations relating to acquisitions, (vi) all obligations under capital or direct financing leases and purchase money and/or vendor financing, (vii) to the extent not otherwise included, any obligation by such person to be liable for, or to pay, as obligor, guarantor or otherwise, on the obligations of a third person of the type referred to in clauses (i) through (vi) above, other than by endorsement of negotiable instruments for collection in the ordinary course of business and (viii) any unpaid principal, premium, accrued and unpaid interest, prepayment penalties, commitment and fees, reimbursements, indemnities and all other amounts payable in connection with any of the foregoing.

 

“Indemnitee” has the meaning set forth in Section 8.01(a).

 

40

 

“Initial Public Offering” means an underwritten public offering of Company’s equity securities with an aggregate offering price equal to or greater than $[·] pursuant to a registration statement on Form S-1 filed with the SEC where such equity securities Stock will be listed on the New York Stock Exchange, the NASDAQ Global Market or any other internationally recognized stock exchange.

 

“Issuance Date” has the meaning set forth in Section 4.02(a).

 

“JV Indemnitee” has the meaning set forth in Section 8.01(g).

 

“Law” means any law (statutory, common or otherwise), constitution, treaty, convention, statute, ordinance, code, rule, regulation, standard, judgment, order, writ, injunction, ruling, decree, decision, arbitration award, agency requirement or other similar authority enacted, adopted, promulgated, entered or applied by any Governmental Entity.

 

“Liens” means any lien, statutory or otherwise, security interest, mortgage, deed of trust, priority, pledge, charge, right of first refusal or other encumbrance or similar right of others.

 

“Loss” has the meaning set forth in Section 8.01(a).

 

“Manager” has the meaning set forth in Section 2.01(b).

 

“Monthly Management Plan” means a monthly report with respect to the Company and its Subsidiaries setting forth in reasonable detail the results of operations and financial results for such month in a manner consistent with Dynegy Parent’s internal monthly reporting practices.

 

“New Securities” has the meaning set forth in Section 4.02(a).

 

“New Subscription Units” means, in relation to any Fully Subscribing Unitholder under Section 4.02(d), a number of Units equal to (i) such Unitholder’s Subscription Securities plus any Non-Penalized Unsubscribed Securities purchased by such Fully Subscribing Unitholder plus (ii) the product of (A) any Penalized Unsubscribed Securities purchased by such Fully Subscribing Unitholder and (B) 1.[·].

 

“Non-Dragging Unitholders” has the meaning set forth in Section 4.06(a).

 

“Non-Subscribing Unitholder” has the meaning set forth in Section 4.02(d).

 

“Non-Penalized Unsubscribed Securities” has the meaning set forth in Section 4.02(d).

 

“Notice” has the meaning set forth in Section 2.10.

 

“NYSE” means the New York Stock Exchange.

 

41

 

“Officer” means any person designated as an officer of the Company pursuant to Section 2.07.

 

“Option Bridge Loan Amount” means sixty-five percent (65%) of the outstanding principal amount of the Bridge Loan (together with accrued and unpaid interest thereon) as of the Option Repayment Date.

 

“Original Agreement” has the meaning set forth in the recitals.

 

“Other Investments” has the meaning set forth in Section 7.04.

 

“Outstanding Bridge Loan Amount” means, as of any date, the outstanding principal amount of the Bridge Loan (together with accrued and unpaid interest thereon) as of such date.

 

“Partial Put” has the meaning set forth in Section 4.03(b).

 

“Party” or “Parties” has the meaning set forth in the introductory paragraph hereof.

 

“Penalized Unsubscribed Securities” has the meaning set forth in Section 4.02(d).

 

“Per Unit Put/Call Purchase Price” means, as of any date of determination, an amount equal to the quotient obtained by dividing (i) the Put/Call Purchase Price by (ii) the number of issued and outstanding Units on the applicable Put Closing Date.

 

“Percentage Interest” means, with respect to any Unitholder, the percentage derived by dividing (i) the aggregate number of Units owned by such Unitholder, by (ii) the aggregate number of Units owned by all Unitholders.

 

“Permitted Transferee” means any Affiliate Transferee or any transferee that has received Units from any Principal Unitholder in accordance with Section 4.05 (Right of First Offer), Section 4.06 (Drag Along Rights) and Section 4.07 (Tag Along Rights), and a “Permitted Transfer” means any transfer from a Principal Unitholder to such Affiliate Transferee or transferee in accordance with the foregoing.

 

“person” means an individual, corporation, partnership, joint venture, limited liability company, association, trust, unincorporated organization or other entity.

 

“Preemption Notice” has the meaning set forth in Section 4.02(a).

 

“Principal Unitholders” has the meaning set forth in the introductory paragraph hereof.

 

“Pro Rata Share” means the percentage which corresponds to the ratio which each Unitholder’s Percentage Interest bears to the total Percentage Interests of all Unitholders.

 

42

 

“Put Closing Date” has the meaning set forth in Section 4.03(d)(ii).

 

“Put Exercise Notice” has the meaning set forth in Section 4.03(d)(ii).

 

“Put Right Closing” has the meaning set forth in Section 4.03(d)(ii).

 

“Put Right” has the meaning set forth in Section 4.03(a).

 

“Put Units” has the meaning set forth in Section 4.03(a).

 

“Put/Call Purchase Price” means, as of any date of determination, the difference resulting from (a) the product of (i) the arithmetic mean of the Applicable EBITDA and Estimated EBITDA and (ii) the Average Dynegy Parent EBITDA Multiple minus (b) the principal net amount of indebtedness for borrowed money of the Company and its Subsidiaries (for the avoidance of doubt, such amount of indebtedness for borrowed money shall be reduced by restricted and unrestricted cash of the Company and its Subsidiaries).

 

“Quorum” has the meaning set forth in Section 2.06(a).

 

“Remaining Call Units” has the meaning set forth in Section 4.04(c).

 

“Remaining Put Units” has the meaning set forth in Section 4.03(c).

 

“Repayment Option Date” has the meaning set forth in Section 4.11(a).

 

“Repayment Option Percentage” means the difference of (i) 100%, minus (ii) the percentage of the Option Bridge Loan Amount contributed by Dynegy (or its Controlled Affiliates) pursuant to Section 4.11(a).

 

“Representatives” as to any person, means such person’s directors, officers, employees, Affiliates, financial advisors, attorneys and accountants or agents.

 

“ROFO Notice has the meaning set forth in Section 4.05(a).

 

“ROFO Offer” has the meaning set forth in Section 4.05(b).

 

“ROFO Offer Period” has the meaning set forth in Section 4.05(b).

 

“ROFO Sale” has the meaning set forth in Section 4.05(b).

 

“ROFO Units” has the meaning set forth in Section 4.05(a).

 

“ROFO Unitholders” has the meaning set forth in Section 4.05(a).

 

“SEC” means the Securities and Exchange Commission of the United States.

 

“Second Call Right” has the meaning set forth in Section 4.04(c).

 

43

 

“Second Put Right” has the meaning set forth in Section 4.03(c).

 

“Service Agreement” means the Service Agreement, dated as of the date hereof, by and between Dynegy Parent and the Company.

 

“Schedule of Unitholders” has the meaning set forth in Section 1.09.

 

“Sponsor Indemnitors” has the meaning set forth in Section 8.01(g).

 

“Subscription Securities” has the meaning set forth in Section 4.02(a).

 

“Subsidiary” means, as to any Person, any corporation or other entity of which: (a) such Person, or a Subsidiary of such Person, is a general partner or manager; (b) at least a majority of the outstanding equity interest having by the terms thereof ordinary voting power to elect a majority of the board of directors or similar governing body of such corporation or other entity (irrespective of whether or not at the time any equity interest of any other class or classes of such corporation or other entity shall have or might have ordinary voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of its Subsidiaries; or (c) any corporation or other entity as to which such Person consolidates for accounting purposes.  Notwithstanding the foregoing or any reduction in Dynegy’s Percentage Interest in the Company, for purposes of the definitions of “Consolidated Adjusted EBITDA” and “Dynegy Parent EBITDA Multiple”, the Company shall be deemed a Subsidiary of Dynegy Parent.

 

“Tag Along Exercise Notice” has the meaning set forth in Section 4.07(b).

 

“Tag Along Notice” has the meaning set forth in Section 4.07(b).

 

“Tag Along Right” has the meaning set forth in Section 4.07(a).

 

“Tag Along Sale” has the meaning set forth in Section 4.07(a).

 

“Tag Along Terms” has the meaning set forth in Section 4.07(a).

 

“Third Party Purchaser” has the meaning set forth in Section 4.05(a).

 

“transfer” means any direct or indirect sale, bequest, exchange, assignment, gift, transfer, pledge, creation of any security interest or other encumbrance, and any other disposition of any kind (whether with or without consideration and whether voluntary or involuntary or by operation of Law) affecting title to or possession of any Units; provided, that, for the avoidance of doubt, with respect to any of the ECP Funds, any direct or indirect transfer, sale, assignment, exchange, gift, pledge, grant of a security interest, conveyance or other disposition of Equity Interests in such Principal Unitholder, to any person that does not have the right to vote with respect to, or otherwise control, the day-to-day management activities of such Principal Unitholder shall not be deemed to be a “transfer” for purposes this Agreement.

 

44

 

“Transferring Unitholder” has the meaning set forth in Section 4.05(a).

 

“Unit” has the meaning set forth in Section 1.09.

 

“Unitholder” means any owner of one or more Units as reflected on the Company’s books and records. For purposes of the Delaware Act, the Unitholders shall constitute the “members” (as defined in the Delaware Act) of the Company.

 

(Signature Pages Follow)

 

45

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed as of the date first written above.

 

 

	
 
    	
ATLAS   POWER, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III, LP
    
	
 
    	
 
    
	
 
    	
By:   
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:   
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
Energy   Capital Partners III, LLC
    
	
 
    	
 
    	
Its:   
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
[ · ]
    
	
 
    	
 
    	
 
    	
Managing   Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-A, LP
    
	
 
    	
 
    
	
 
    	
By:   
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:   
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
Energy   Capital Partners III, LLC
    
	
 
    	
 
    	
Its:   
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
[ · ]
    
	
 
    	
 
    	
 
    	
Managing   Member
    
					

 

Signature Page to LLC Agreement

 

 

	
 
    	
ENERGY   CAPITAL PARTNERS III-B, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
[ · ]
    
	
 
    	
 
    	
 
    	
Managing   Member
    
	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-C, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
[ · ]
    
	
 
    	
 
    	
 
    	
Managing   Member
    
	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-D, LP
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
[ · ]
    
	
 
    	
 
    	
 
    	
Managing   Member
    
	
 
    	
 
    
	
 
    	
DYNEGY   ATLAS HOLDINGS, LLC
    
	
 
    	
 
    
	
 
    	
By:   
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title
    
					

 

Each Permitted Transferee has agreed to be bound by the terms of this Agreement by execution and delivery of the signature page set forth as Exhibit B hereto.

 

Signature Page to LLC Agreement

 

 

EXHIBIT A

 

SCHEDULE OF UNITHOLDERS

 

	
Unitholder
    	
 
    	
Capital
   Contribution
    	
 
    	
Units
    	
 
    	
Percentage of Units
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

A-1

 

EXHIBIT B

 

FORM OF SIGNATURE PAGE TO

ATLAS POWER, LLC LIMITED LIABILITY COMPANY AGREEMENT

 

By execution of this signature page, the undersigned agrees to (i) become a party to the Limited Liability Company Agreement of Atlas Power, LLC, dated as of [·], by and among Atlas Power, LLC, a Delaware limited lability company, [ECP] and Dynegy Atlas Holdings, LLC, a Delaware limited liability company, as amended from time to time thereafter and (ii) be bound by the obligations of, and receive the benefits of, a [Unitholder] pursuant thereto.

 

 

	
 
    	
 
    
	
 
    	
[Name   of Permitted Transferee]
    
	
 
    	
 
    
	
 
    	
Notice   Information:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Acknowledged and accepted by:
    
	
 
    	
 
    
	
 
    	
Atlas   Power, LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

A-1

 

EXHIBIT B

 

 

Project Delta

Summary of Indicative Terms

Services Agreement (the “Agreement”)

 

This Term Sheet has been provided as a general outline of certain of the key terms to be contained in the Services Agreement referred to in the Interim Sponsors Agreement to which this Term Sheet is attached.

 

	
Services Provider:
    	
 
    	
Dynegy Inc. (the “Provider”).
    
	
 
    	
 
    	
 
    
	
Services Recipient:
    	
 
    	
Atlas Power, LLC and its subsidiaries (collectively,   the “Recipient”).
    
	
 
    	
 
    	
 
    
	
Term:
    	
 
    	
Six years shall be the initial term, with annual   evergreen thereafter.
    
	
 
    	
 
    	
 
    
	
Services:
    	
 
    	
The Provider will perform for the benefit of the   Recipient the Services described and defined in the draft Service Agreement,   dated February 22, 2016 (the “Draft Agreement”),   as well as certain other services which are related to the operation,   administration, maintenance, use, energy management, and ownership of the   Recipient’s business (the “Business”) to   be agreed (the “Services”).   The Services shall include all necessary services to fully commercialize the   Business.
    
	
 
    	
 
    	
 
    
	
Standard of Performance:
    	
 
    	
The Provider will perform the Services in accordance   with (a) applicable laws, regulations, orders, licenses and permits,   (b) agreements related to the Business which the Provider is aware,   (c) prudent utility practice, (d) reasonable prudence and sound   business judgment, (e) in conformance with the standards of diligence and   skill customarily provided by providers of comparable services in the power   generation industry and (f) other standards to be agreed.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In addition, the Provider will (i) act in a   non-discriminatory manner (including with respect to energy management, terms   of gas supply, commodity hedging and, generally, pricing received and paid in   connection with purchase of fuel and sale of power) vis-à-vis its other power   generation assets as set forth in the protocol described in the immediately   succeeding sentence, (ii) use its commercially reasonable efforts to   provide the Business with the benefits associated with Dynegy fleet-wide   master services agreements , and (iii) not disadvantage the Business to   the advantage of the Provider with respect to long-term turbine service,   maintenance and parts. ECP and
    

 

 

	
 
    	
 
    	
Dynegy will seek to negotiate in good faith a   protocol to (1) ensure that the Business is not disadvantaged vis-à-vis   other Dynegy power generation assets and (2) ensure that the Business   benefits from the synergies which arise from the Provider’s majority   ownership of the Business which have been discussed between ECP and Dynegy   prior to the date of this Term Sheet.
    
	
 
    	
 
    	
 
    
	
Limitations on Authority:
    	
 
    	
The Provider will be subject to the limitations set   forth in Sections 2.3, 3.3 and 3.4 of the Draft Agreement. In addition, the   Provider shall not otherwise act in a manner which is inconsistent with the   LLC Agreement referred to in the Interim Sponsors Agreement and any other   governance document entered into between ECP and Dynegy. ECP will be afforded   the right to cure the Recipient’s defaults and enforce the rights of the   Recipient under the Agreement.
    
	
 
    	
 
    	
 
    
	
Fees:
    	
 
    	
The fee to be promptly agreed following the   execution of the Interim Sponsors Agreement. The Provider will provide the   Services to the Recipient for such fee.
    
	
 
    	
 
    	
 
    
	
Credit Support:
    	
 
    	
The Recipient will not have to provide the Provider   with any credit support under the Agreement.
    
	
 
    	
 
    	
 
    
	
Accounts Receivable:
    	
 
    	
The Recipient shall maintain title to and directly   receive all accounts receivable, revenues and cash related to the Business’   revenues.
    
	
 
    	
 
    	
 
    
	
Limitation on Liability:
    	
 
    	
The Provider will not be liable to the Recipient for   indirect, special or consequential damages. If the Provider defaults and the Agreement   is terminated as a result of such default, the Recipient will be able to   receive damages which are intended to cover the lost synergy benefits   contemplated by the Agreement. The aggregate liability for the Provider under   the Agreement will be in an amount to be promptly agreed following the   execution of the Interim Sponsors Agreement.
    
	
 
    	
 
    	
 
    
	
Defaults / Termination:
    	
 
    	
The Provider will not have the right to optionally   terminate the Agreement. Generally, given that the Recipient’s performance   under the Agreement will largely be controlled by the Provider, provisions   will be included in the Agreement to prevent a termination which results from   the Provider failing to cause the Recipient to perform or for events (other   than payment defaults) which do not materially and adversely impact the   Provider’s ability to provide the Services.
    

 

 

	
Documentation:
    	
 
    	
The Agreement will not be less favorable to the   Recipient than the Draft Agreement, as modified by this Term Sheet.
    
	
 
    	
 
    	
 
    
	
Applicable Law:
    	
 
    	
State of New York.
    

 

 

EXHIBIT C

 

TERMS OF BRIDGE LOAN

 

	
Borrower:
    	
 
    	
Atlas Power, LLC (the “Borrower”)   (a joint venture indirectly formed by Dynegy Inc. (“Dynegy”)   and Energy Capital Partners III, LLC (“ECP”)).
    
	
 
    	
 
    	
 
    
	
Lenders:
    	
 
    	
ECP and/or one of its designated investment vehicles   or managed funds (collectively, the “Lenders”).
    
	
 
    	
 
    	
 
    
	
Facility:
    	
 
    	
An unsecured loan facility in an aggregate principal   amount of up to $400 million (the “Facility”),   which shall be available in a single draw (the “Loan”)   on the Closing Date (as defined below).
    
	
 
    	
 
    	
 
    
	
Closing Date:
    	
 
    	
The date the acquisition of GDF SUEZ Energy North   America, Inc., a Delaware corporation (the “Target”   and such acquisition, the “Acquisition”)   is consummated (the “Closing Date”).
    
	
 
    	
 
    	
 
    
	
Use of Proceeds:
    	
 
    	
The Facility will be used to fund, in part, the   purchase price for the Acquisition.
    
	
 
    	
 
    	
 
    
	
Maturity / Term:
    	
 
    	
4 years from the Closing Date (“Maturity”).
    
	
 
    	
 
    	
 
    
	
OID:
    	
 
    	
The Loan will be made at par.
    
	
 
    	
 
    	
 
    
	
Stated Coupon:
    	
 
    	
From the Closing Date until the first anniversary   thereof, interest shall accrue at a rate of 11.0% and thereafter at a rate of   18.0% (“Coupon”) per annum, payable quarterly   in arrears, subject to the Pay-In-Kind Provisions described below. The first   quarterly payment shall be made on the last day of the calendar quarter   immediately following the Closing Date and thereafter on the last day of each   calendar quarter (“Quarterly Dates”).

 

Interest shall be calculated on a 360-day year   consisting of 12 30-day months.
    
	
 
    	
 
    	
 
    
	
Pay-In-Kind:
    	
 
    	
The Borrower, at its option, can elect to defer   interest at each Quarterly Date during the first 12 months after the Closing   Date, provided that no event of default has   occurred and is continuing. Any amount deferred will be added to the   principal balance of the Loan.
    
	
 
    	
 
    	
 
    
	
Amortization:
    	
 
    	
None. The entire unpaid principal amount of the   Loan, together with accrued and unpaid interest thereon, shall be due and   payable 
    

 

 

	
 
    	
 
    	
at Maturity.
    
	
 
    	
 
    	
 
    
	
Default Interest:
    	
 
    	
2% per annum in excess of the Coupon otherwise   chargeable on the Facility.
    
	
 
    	
 
    	
 
    
	
Voluntary Prepayment:
    	
 
    	
The Facility may be repaid fully or partially at any   time, at the option of the Borrower, without premium or penalty.
    
	
 
    	
 
    	
 
    
	
Collateral:
    	
 
    	
None.
    
	
 
    	
 
    	
 
    
	
Affirmative Covenants:
    	
 
    	
Usual and customary for transactions of this type   and, in any event, to apply solely to the Borrower.
    
	
 
    	
 
    	
 
    
	
Negative Covenants:
    	
 
    	
Usual and customary negative covenants for   transactions of this type (and, in any event, to apply solely to the   Borrower), including, without limitation:

 

(i)            No additional   indebtedness;

(ii)           Restrictions on the   direct or indirect use of Dynegy Inc.’s revolving and letter of credit   facilities to support the Borrower or any of its subsidiaries;

(iii)          No change of control   or merger;

(iv)          Restrictions on asset   sales;

(v)           Restrictions on   investments and liens;

(vi)          No voluntary   prepayment of subsidiary debt for borrowed money; and

(vii)         No dividends or other   restricted payments (subject to permitted restricted payments to comply with   prepayment obligations under the Dynegy credit agreement, but only to the   extent corresponding restricted payments are permitted pursuant to the terms   of the credit facility to be entered into by the Target in connection with the   Acquisition).
    
	
 
    	
 
    	
 
    
	
Financial Covenant:
    	
 
    	
None.
    
	
 
    	
 
    	
 
    
	
Representations and Warranties:
    	
 
    	
Usual and customary for transactions of this type   and, in any event, to apply solely to the Borrower.

 
    
	
 
    	
 
    	
 
    
	
Conditions Precedent to Closing:
    	
 
    	
Usual and customary for transactions of this type,   including, without limitation:

 

(i)            execution of   mutually acceptable definitive documents;

(ii)           concurrent closing of   the Acquisition and funding of senior secured acquisition debt on the terms   contemplated by the debt
    

 

 

	
 
    	
 
    	
commitment papers; and

(iii)          absence of default.
    
	
 
    	
 
    	
 
    
	
Events of Default:
    	
 
    	
Usual and customary for transactions of this type   (and, in any event, to apply solely to the Borrower), including, without   limitation, failure to pay principal and interest at Maturity. In the event   the Loan is accelerated, the Lenders shall have the option to convert the   Loan to equity in the Borrower at the penalty rate as set forth in   Section 4.11(b) of the LLC Agreement Form.
    
	
 
    	
 
    	
 
    
	
Conversion to Equity:
    	
 
    	
If the Loan (together with accrued and unpaid   interest thereon) has not been repaid in full on or before the one year   anniversary of the Closing Date and Dynegy does not exercise the Dynegy   Repayment Option (as defined in the LLC Agreement Form) in full, as   contemplated in Section 4.11(a) of the LLC Agreement Form, then the   Loan, at the option of the Lenders, will be subject to conversion into equity   of the Borrower as provided for in Section 4.11(b) of the LLC   Agreement Form.

 

Any unconverted portion of the Loan which remains   outstanding after the one year anniversary of the Closing Date shall bear   interest at the 18% per annum rate described above under “Stated Coupon”.

 

No portion of the Loan shall convert to equity in   the Borrower to the extent repaid prior to the one year anniversary of the   Closing Date.

 

Attached to this term sheet as Schedule I are   sample calculations of the conversion mechanics described herein.
    

 

 

EXHIBIT D

 

TERMS OF LIQUIDITY FACILITY

 

	
Borrower:
    	
 
    	
Atlas Power Finance, LLC (the “Borrower”).
    
	
 
    	
 
    	
 
    
	
Lender:
    	
 
    	
Dynegy Inc. (“Dynegy” or   the “Lender”).
    
	
 
    	
 
    	
 
    
	
Facility Amount:
    	
 
    	
$100.0 million (the “Facility   Amount”).
    
	
 
    	
 
    	
 
    
	
Availability:
    	
 
    	
The Facility shall be available as loans (“Loans”) and/or by way of letters of credit (“Letters of Credit”) issued for the account of Dynegy under   the Credit Agreement or such other letter of credit facility as Dynegy may   determine in its sole discretion to support obligations of the Borrower; provided   that the aggregate principal amount of Loans and aggregate face amount of   Letters of Credit may not, in the aggregate, exceed the Facility Amount.
    
	
 
    	
 
    	
 
    
	
Letters of Credit:
    	
 
    	
The Borrower shall be obligated to reimburse Dynegy   for all costs and fees incurred by it in connection with the issuance of any   Letter of Credit (including, without limitation, Letter of Credit Fees and   Facing Fees) and shall reimburse Dynegy in full in cash in immediately   available funds immediately upon any drawing under any Letter of Credit.
    
	
 
    	
 
    	
 
    
	
Interest Rate/Borrowings:
    	
 
    	
The Borrower may elect that the Loans comprising   each borrowing bear interest and be subject to Interest Periods consistent   with those applicable to either Base Rate Loans or LIBOR Loans under the   Credit Agreement.
    
	
 
    	
 
    	
 
    
	
Maturity:
    	
 
    	
Consistent with the initial maturity date with   respect to term loans under that certain term loan facility to be entered   into by the direct subsidiary of the Borrower in connection with the “Delta”   acquisition in an aggregate principal amount of up to $1,850.0 million or, if   later, the maturity date with respect to the latest maturing revolving   facility tranche under the Credit Agreement.
    
	
 
    	
 
    	
 
    
	
Security:
    	
 
    	
None.
    
	
 
    	
 
    	
 
    
	
Call Protection:
    	
 
    	
None.
    
	
 
    	
 
    	
 
    
	
Guaranties:
    	
 
    	
None.
    
	
 
    	
 
    	
 
    
	
Applicable Law:
    	
 
    	
State of New York.
    

 

 

EXHIBIT E

 

FORM OF ASSIGNMENT AGREEMENT

 

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment”) is effective as of                      , 2016, by and among Energy Capital Partners III, LP, a Delaware limited partnership, Energy Capital Partners III-A, LP, a Delaware limited partnership, Energy Capital Partners III-B, LP, a Delaware limited partnership, Energy Capital Partners III-C, LP, a Delaware limited partnership, and Energy Capital Partners III-D, LP, a Delaware limited partnership (collectively, the “Assignors”), and Dynegy Atlas Holdings, LLC, a Delaware limited liability company (“Assignee”).

 

R E C I T A L S

 

WHEREAS, the Assignors collectively own 35% of the limited liability company interests in Atlas Power, LLC, a Delaware limited liability company (the “Transferred Interests”); and

 

WHEREAS, the Assignors desire to sell, assign, convey, transfer and deliver to Assignee, and Assignee desires to acquire from the Assignors, all of the Transferred Interests on the terms and conditions of this Assignment.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, including as set forth in the Amended and Restated Interim Sponsors Agreement, dated as of June 14, 2016, by and among Dynegy Inc., Atlas Power, LLC, the Assignors and Terawatt Holdings, LP, the receipt and adequacy of which are acknowledged, the parties hereto do hereby agree as follows:

 

1.  Purchase and Sale.  Each Assignor hereby sells, assigns, conveys, transfers and delivers to Assignee, free and clear of all claims, liens, pledges, options, charges, licenses, easements, security interests, restrictions, encumbrances or other interests or rights of any person, and Assignee hereby acquires from such Assignor, all of such Assignor’s right, title and interest in and to the Transferred Interests.

 

2.  Further Assurances.  The parties hereto will execute and deliver such further instruments and do such further acts and things as may be required to carry out the intent and purpose of this Assignment and the sale and assignment of the Transferred Interests  contemplated hereby.

 

3.  Governing Law.  This Assignment, including the interpretation, construction, validity and enforceability hereof, and the transactions contemplated herein, and all disputes between the parties under or related to this Assignment or the facts and circumstances leading to its execution or performance, whether in contract, tort or otherwise will be governed by the laws of the State of Delaware without regard to the conflict of laws rules thereof.

 

4.  Successors and Assigns.  This Assignment shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and permitted assigns.

 

 

5.  Counterparts.  This Assignment may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.  A facsimile transmission of this Assignment bearing a signature on behalf of a party will be legal and binding on such party.

 

[SIGNATURE PAGES FOLLOW]

 

2

 

IN WITNESS WHEREOF, the parties hereto have executed, or caused their duly authorized representatives to execute, this Assignment as of the date first above written.

 

	
 
    	
ENERGY   CAPITAL PARTNERS III, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-A, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-B, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
Title:   Managing Member
    
					

 

[SIGNATURE PAGE TO ASSIGNMENT AND ASSUMPTION AGREEMENT]

 

 

	
 
    	
ENERGY   CAPITAL PARTNERS III-C, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-D, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
Title:   Managing Member
    
					

 

[SIGNATURE PAGE TO ASSIGNMENT AND ASSUMPTION AGREEMENT]

 

 

	
 
    	
DYNEGY ATLAS HOLDINGS, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Robert   C. Flexon
    
	
 
    	
 
    	
Title:
    	
President &   Chief Executive Officer
    

 

[SIGNATURE PAGE TO ASSIGNMENT AND ASSUMPTION AGREEMENT]

 

 

EXHIBIT F

 

FORM OF TERMINATION AGREEMENT

 

 

EQUITY COMMITMENT AND GUARANTEE TERMINATION AGREEMENT

 

This EQUITY COMMITMENT AND GUARANTEE TERMINATION AGREEMENT (this “Agreement”) dated as of [·], 2016 (the “Execution Date”), by and among Atlas Power, LLC, a Delaware limited liability company (the “Atlas Power”), Atlas Power Finance, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Atlas Power (“Atlas Power Finance”), Energy Capital Partners III, LP, a Delaware limited partnership (“ECP III”), Energy Capital Partners III-A, LP, a Delaware limited partnership (“ECP III-A”), Energy Capital Partners III-B, LP, a Delaware limited partnership (“ECP III-B”), Energy Capital Partners III-C, LP, a Delaware limited partnership (“ECP III-C”), and Energy Capital Partners III-D, LP, a Delaware limited partnership (“ECP III-D” and together with ECP III, ECP III-A, ECP III-B and ECP III-C, “ECP”), International Power, S.A., a “societe anonyme” under the laws of Belgium (“International Power”), and GDF SUEZ Energy North America, Inc., a Delaware corporation and a wholly-owned subsidiary of International Power (“GDF”).

 

RECITALS

 

WHEREAS, GDF, International Power and Atlas Power Finance entered into that certain purchase agreement, dated as of February 24, 2016 (the “SPA”);

 

WHEREAS, in connection with the SPA, ECP III-A entered into that certain limited guarantee, dated as of February 24, 2016, for the benefit of GDF (the “Guarantee”); and

 

WHEREAS, in connection with the SPA, ECP, Atlas Power and Atlas Power Finance entered into that certain equity commitment letter, dated as of February 24, 2016 (the “ECL”), to which GDF is a third-party beneficiary.

 

NOW, THEREFORE, in consideration of the foregoing premises, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

AGREEMENT

 

1.             Termination.  Effective as of the Execution Date, (i) each of GDF and International Power acknowledges and agrees for all purposes that the Guarantee is fully and finally terminated in its entirety for all Guaranteed Obligations (as such term is defined in the Guarantee) or other obligations covered by the Guarantee and is of no further force or effect whatsoever, and that no claim may be made against ECP III-A under the Guarantee, and (ii) each of GDF, International Power, Atlas Power and Atlas Power Finance agrees and acknowledges for all purposes that the ECL is fully and finally terminated in its entirety for the Equity Commitment (as such term is defined in the ECL) or other obligations covered by the ECL and is of no further force or effect whatsoever, and that no claim may be made against any of ECP III, ECP III-A, ECP III-B, ECP III-C or ECP III-D under the ECL.

 

2.             Release and Discharge.  Effective as of the Execution Date, (i) each of GDF and International Power, on behalf of itself and its successors and assigns, hereby fully, finally,

 

1

 

unconditionally, irrevocably and absolutely releases and forever discharges each of ECP III, ECP III-A, ECP III-B, ECP III-C and ECP III-D and each of their representatives, and their respective successors and assigns (collectively, the “ECP Releasees”) from any and all demands, Proceedings (as defined below), causes of action, orders, obligations, contracts, agreements, debts and liabilities whatsoever, whether known or unknown, suspected or unsuspected, both at law and in equity (collectively, “Claims”), which each of GDF and International Power now has, has ever had or may hereafter have against the respective ECP Releasees arising under or pursuant to the Guarantee (including with respect to any of the Guaranteed Obligations) or the ECL (including with respect to the Equity Commitment), and (ii) each of Atlas Power and Atlas Power Finance, on their behalf and on the behalf of their successors and assigns, hereby fully, finally, unconditionally, irrevocably and absolutely releases and forever discharges each of the ECP Releasees from any and all demands, Proceeding and Claims, which each of Atlas Power and Atlas Power Finance now has, has ever had or may hereafter have against the respective ECP Releasees arising under or pursuant to the ECL (including with respect to the Equity Commitment).

 

3.             No Proceeding.  Each of GDF, International Atlas Power and Atlas Power Finance hereby irrevocably covenants to refrain from, directly or indirectly, asserting any Claim, or commencing, instituting or causing to be commenced any action, suit, investigation, claim, hearing, arbitration or proceeding at law or in equity (“Proceeding”), of any kind against any ECP Releasee, based upon any matter released pursuant to the terms of this Agreement.

 

4.             Binding Effect.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto.

 

5.             Governing Law. This Agreement and all claims or causes of action (whether in contract, tort or otherwise) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement), shall be governed by the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rules (whether of the State of Delaware or otherwise) that would cause the application of laws of any other jurisdiction.

 

6.             Submission to Jurisdiction; Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY (I) IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURT OF CHANCERY OF THE STATE OF DELAWARE (OR, IF THE CHANCERY COURT OF THE STATE OF DELAWARE DECLINES TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY STATE OR FEDERAL COURT WITHIN THE STATE OF DELAWARE) OVER ALL CLAIMS OR CAUSES OF ACTION (WHETHER IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF OR RELATE TO THIS AGREEMENT, (II) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE, CLAIM OR CAUSE OF ACTION BROUGHT IN SUCH COURT OR ANY DEFENSE OF INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE AND (III) AGREES THAT A JUDGMENT IN ANY SUCH DISPUTE MAY BE ENFORCED IN OTHER

 

 

JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING BROUGHT BY OR AGAINST IT, DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

7.             Counterparts.  This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all the counterparts together shall constitute one and the same instrument.

 

8.             Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision so long as the economic or legal substance of the transactions contemplated herein are not affected in any manner materially adverse to any party to this Agreement.  Upon such determination that any term or other provision is invalid, illegal, or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated herein are fulfilled as originally contemplated to the fullest extent possible.

 

[signature page follows]

 

 

IN WITNESS WHEREOF, the patties hereto have caused this Agreement to be duly executed by its duly authorized representative as of the Execution Date.

 

	
 
    	
ENERGY   CAPITAL PARTNERS III, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-A, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-B, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
Title:   Managing Member
    
					

 

Signature Page to Termination Agreement

 

 

	
 
    	
ENERGY   CAPITAL PARTNERS III-C, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
ENERGY   CAPITAL PARTNERS III-D, LP
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners GP III, LP
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    
	
 
    	
By:
    	
Energy   Capital Partners III, LLC
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Tyler Reeder
    
	
 
    	
 
    	
Title:   Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
ATLAS   POWER, LLC
    
	
 
    	
 
    
	
 
    	
By:  Dynegy Atlas Holdings, LLC, its managing   member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Robert   C. Flexon
    
	
 
    	
Title:
    	
President &   Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ATLAS   POWER FINANCE, LLC
    
	
 
    	
 
    
	
 
    	
By:  Atlas Power, LLC, its sole member
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Robert   C. Flexon
    
	
 
    	
Title:
    	
President &   Chief Executive Officer
    
					

 

 

	
 
    	
GDF   SUEZ ENERGY NORTH AMERICA, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
INTERNATIONAL   POWER, S.A.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Signature Page to Termination AgreementExhibit

EXECUTION COPY

    
SIXTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Dated as of June 23, 2016
Among
CAC WAREHOUSE FUNDING CORPORATION II
as the Borrower

CREDIT ACCEPTANCE CORPORATION
as the Servicer and Custodian

WELLS FARGO BANK, NATIONAL ASSOCIATION
as a Lender, and the other Lenders from time to time party hereto

WELLS FARGO BANK, NATIONAL ASSOCIATION
as the Deal Agent

and

WELLS FARGO BANK, NATIONAL ASSOCIATION
as the Backup Servicer and the Collateral Agent

    

22317857.8 

TABLE OF CONTENTS

Page

	
				
	ARTICLE I
	DEFINITIONS
	1

	 
	Section 1.1.
	Certain Defined Terms
	1

	 
	Section 1.2.
	Other Terms
	29

	 
	Section 1.3.
	Computation of Time Periods
	29

	 
	Section 1.4.
	Interpretation
	29

	ARTICLE II
	THE LOAN FACILITY
	30

	 
	Section 2.1.
	Funding of the Advance
	30

	 
	Section 2.2.
	Grant of Security Interest; Acceptance by Collateral Agent
	31

	 
	Section 2.3.
	Procedures for Funding of Advances
	33

	 
	Section 2.4.
	Determination of Yield
	34

	 
	Section 2.5.
	Reduction of the Facility Limit and Commitment
	34

	 
	Section 2.6.
	Actions with Respect to Advance
	34

	 
	Section 2.7.
	Settlement Procedures
	34

	 
	Section 2.8.
	[Reserved.]
	36

	 
	Section 2.9.
	Collections and Allocations
	36

	 
	Section 2.10.
	Payments, Computations, Etc
	37

	 
	Section 2.11.
	[Reserved.]
	38

	 
	Section 2.12.
	Fees
	38

	 
	Section 2.13.
	Increased Costs; Capital Adequacy; Illegality
	38

	 
	Section 2.14.
	Taxes
	40

	 
	Section 2.15.
	Assignment of the Contribution Agreement
	41

	 
	Section 2.16.
	Take-Out
	41

	ARTICLE III
	CONDITIONS TO THE CLOSING, EACH FUNDING AND AMENDMENT AND RESTATEMENT
	44

	 
	Section 3.1.
	Conditions to the Closing and the Initial Funding
	44

	 
	Section 3.2.
	Conditions Precedent To All Fundings
	44

	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES
	46

	 
	Section 4.1.
	Representations and Warranties of the Borrower
	46

	 
	Section 4.2.
	Representations and Warranties of the Borrower Relating to the Loans and the Related Contracts
	51

	 
	Section 4.3.
	Representations and Warranties of the Servicer
	53

	 
	Section 4.4.
	Representations and Warranties of the Backup Servicer
	54

	 
	Section 4.5.
	Breach of Representations and Warranties
	55

	ARTICLE V
	GENERAL COVENANTS
	56

	 
	Section 5.1.
	Affirmative Covenants of the Borrower
	56

	 
	Section 5.2.
	Negative Covenants of the Borrower
	61

	 
	Section 5.3.
	Covenant of the Borrower Relating to the Hedging Agreement
	66

	 
	Section 5.4.
	Affirmative Covenants of the Servicer
	67

	 
	Section 5.5.
	Negative Covenants of the Servicer
	69

	 
	Section 5.6.
	Negative Covenants of the Backup Servicer
	70

	
				
	22,317,857.8
	

	i
	 

TABLE OF CONTENTS
(continued)
Page

	
				
	ARTICLE VI
	ADMINISTRATION AND SERVICING OF CONTRACTS
	71

	 
	Section 6.1.
	Servicing
	71

	 
	Section 6.2.
	Duties of the Servicer and Custodian
	72

	 
	Section 6.3.
	Rights After Designation of Successor Servicer
	75

	 
	Section 6.4.
	Responsibilities of the Borrower
	75

	 
	Section 6.5.
	Reports
	76

	 
	Section 6.6.
	Additional Representations and Warranties of Credit Acceptance as Servicer
	77

	 
	Section 6.7.
	Establishment of the Accounts
	77

	 
	Section 6.8.
	Payment of Certain Expenses by Servicer
	78

	 
	Section 6.9.
	Annual Independent Public Accountant’s Servicing Reports
	78

	 
	Section 6.10.
	The Servicer Not to Resign
	79

	 
	Section 6.11.
	Servicer Termination Events
	79

	 
	Section 6.12.
	Appointment of Successor Servicer
	81

	 
	Section 6.13.
	Responsibilities of the Borrower
	82

	 
	Section 6.14.
	Segregated Payment Account
	82

	 
	Section 6.15.
	Dealer Collections Purchase; Replacement of Dealer Loan with Related Purchased Loans 
	82

	ARTICLE VII
	BACKUP SERVICER
	83

	 
	Section 7.1.
	Designation of the Backup Servicer
	72

	 
	Section 7.2.
	Duties of the Backup Servicer
	83

	 
	Section 7.3.
	Backup Servicing Compensation
	83

	ARTICLE VIII
	[Reserved]
	83

	ARTICLE IX
	SECURITY INTEREST
	84

	 
	Section 9.1.
	Security Agreement
	84

	 
	Section 9.2.
	Release of Lien
	84

	 
	Section 9.3.
	Further Assurances
	84

	 
	Section 9.4.
	Remedies
	84

	 
	Section 9.5.
	Waiver of Certain Laws
	84

	 
	Section 9.6.
	Power of Attorney
	85

	ARTICLE X
	TERMINATION EVENTS
	85

	 
	Section 10.1.
	Termination Events
	85

	 
	Section 10.2.
	Remedies
	87

	ARTICLE XI
	INDEMNIFICATION
	88

	 
	Section 11.1.
	Indemnities by the Borrower
	88

	 
	Section 11.2.
	Indemnities by the Servicer
	90

	 
	Section 11.3.
	After-Tax Basis
	91

	ARTICLE XII
	THE DEAL AGENT AND THE COLLATERAL AGENT
	91

	 
	Section 12.1.
	Authorization and Action
	91

	 
	Section 12.2.
	Delegation of Duties
	92

	
			
	 
	ii
	 

TABLE OF CONTENTS
(continued)
Page

	
				
	 
	Section 12.3.
	Exculpatory Provisions
	92

	 
	Section 12.4.
	Reliance
	93

	 
	Section 12.5.
	Non-Reliance on Deal Agent, Collateral Agent and Other Lenders
	94

	 
	Section 12.6.
	Reimbursement and Indemnification
	94

	 
	Section 12.7.
	Deal Agent and Collateral Agent in their Individual Capacities
	94

	 
	Section 12.8.
	Successor Deal Agent or Collateral Agent
	95

	ARTICLE XIII
	ASSIGNMENTS; PARTICIPATIONS
	95

	 
	Section 13.1.
	Assignments and Participations
	95

	ARTICLE XIV
	MISCELLANEOUS
	98

	 
	Section 14.1.
	Amendments and Waivers
	98

	 
	Section 14.2.
	Notices, Etc
	99

	 
	Section 14.3.
	Ratable Payments
	99

	 
	Section 14.4.
	No Waiver; Remedies
	99

	 
	Section 14.5.
	Binding Effect; Benefit of Agreement
	100

	 
	Section 14.6.
	Term of this Agreement
	100

	 
	Section 14.7.
	Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue
	100

	 
	Section 14.8.
	Waiver of Jury Trial
	100

	 
	Section 14.9.
	Costs, Expenses and Taxes
	100

	 
	Section 14.10.
	No Proceedings
	102

	 
	Section 14.11.
	Recourse Against Certain Parties
	102

	 
	Section 14.12.
	Protection of Right, Title and Interest in Assets; Further Action Evidencing the Funding
	102

	 
	Section 14.13.
	Confidentiality; Tax Treatment Disclosure
	104

	 
	Section 14.14.
	Execution in Counterparts; Severability; Integration
	105

	 
	Section 14.15.
	Patriot Act Compliance
	106

	 
	 
	 
	 

	EXHIBITS
	 
	 

	 
	EXHIBIT A
	Form of Funding Notice
	 

	 
	EXHIBIT B
	Form of Assignment and Acceptance
	 

	 
	EXHIBIT C
	Form of Monthly Report
	 

	 
	EXHIBIT D
	Form of Officer’s Certificate as to Solvency
	 

	 
	EXHIBIT E
	Form of Take-Out Release
	 

	 
	EXHIBIT F
	Form of Contribution Agreement
	 

	 
	EXHIBIT G
	Form of Variable Funding Note
	 

	 
	EXHIBIT H
	Form of Dealer Agreement
	 

	 
	EXHIBIT I
	Forms of Contracts
	 

	 
	EXHIBIT J
	Form of Backup Servicing Agreement
	 

	 
	EXHIBIT K
	Form of Purchase Agreement
	 

	 
	 
	 
	 

	
			
	 
	iii
	 

TABLE OF CONTENTS
(continued)
Page

	
				
	SCHEDULES
	 
	 

	 
	SCHEDULE I
	Credit Guidelines
	 

	 
	SCHEDULE II
	Tradenames, Fictitious Names and “Doing Business As” Names
	 

	 
	SCHEDULE III
	Location of Records and Contract Files
	 

	 
	SCHEDULE IV
	List of Loans, Contracts, Dealer Agreements and Pools 
	 

	 
	SCHEDULE V
	Forecasted Collections
	 

	 
	SCHEDULE VI
	Commitment Amount of Each Lender
	 

	 
	SCHEDULE VII
	Condition Precedent Documents Relating to Amendment and Restatement
	 

	
			
	 
	iv
	 

THIS SIXTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the “Agreement”) is made as of June 23, 2016 among:
(1)    CAC WAREHOUSE FUNDING CORPORATION II, a Nevada corporation (the “Borrower”);
(2)    CREDIT ACCEPTANCE CORPORATION, a Michigan corporation (“Credit Acceptance”, the “Originator”, the “Servicer” or the “Custodian”);
(3)    WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender (a “Lender” and together with the other Lenders from time to time party hereto, the “Lenders”);
(4)    WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association (“Wells Fargo”), as deal agent (the “Deal Agent”);
(5)    WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as backup servicer (the “Backup Servicer”); and
(6)    WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as collateral agent (the “Collateral Agent”).
WHEREAS, the Borrower, Credit Acceptance, Wells Fargo (as successor to Wachovia Bank, National Association), in its capacity as investor and in its capacity as liquidity agent, Variable Funding Capital Company LLC, Wells Fargo Securities, LLC, in its capacity as Deal Agent, and Wells Fargo, in its capacity as Collateral Agent and in its capacity as Backup Servicer, have entered into a Fifth Amended and Restated Loan and Security Agreement, dated as of December 27, 2012 (as amended through the date hereof, the “Existing Loan and Security Agreement”); and
WHEREAS, the parties hereto desire to amend and restate the Existing Loan and Security Agreement in its entirety as provided herein.
IT IS AGREED as follows:
ARTICLE I
DEFINITIONS
Section1.1.    Certain Defined Terms.
(a)    Certain capitalized terms used throughout this Agreement are defined above or in this Section 1.1.
(b)    As used in this Agreement and its schedules, exhibits and other attachments, unless the context requires a different meaning, the following terms shall have the following meanings:

22317857.8 

Accrual Period:  For any Payment Date, the calendar month immediately preceding such Payment Date.
Addition Date:  (a) With respect to any Dealer Loan, the date on which such Dealer Loan is contributed or otherwise transferred by Credit Acceptance to the Borrower pursuant to the Contribution Agreement; and (b)  With respect to any Purchased Loan, the date on which such Purchased Loan is contributed or otherwise transferred by Credit Acceptance to the Borrower pursuant to the Contribution Agreement.
Additional Amount:  Defined in Section 2.14(a).
Additional Cut-Off Date:  Each date on and after which Collections on an Additional Loan are to be transferred to the Collateral.
Additional Loans:  All Loans that become part of the Collateral after the Initial Funding.
Additional Principal Payment Amount:  With respect to any Payment Date during the Amortization Period, the lesser of:  (i) Capital as of the immediately preceding Payment Date (after giving effect to all payments in reduction of principal on such Payment Date); and (ii) Collections remaining after distribution of amounts described in Section 2.7 (a)(i) through (vi).
Adjusted Eurodollar Rate:  For any Accrual Period, an interest rate per annum equal to a fraction, expressed as a percentage and rounded upwards (if necessary), to the nearest 1/100 of 1%, (i) the numerator of which is equal to the LIBOR Rate for such Accrual Period and (ii) the denominator of which is equal to 100% minus the Eurodollar Reserve Percentage for such Accrual Period.
Advance:  As defined in Section 2.1(a).
Affected Party:  Each of the Lenders, any assignee or participant of any Lender, Wells Fargo, as Deal Agent, any successor to Wells Fargo as Deal Agent and any sub-agent of the Deal Agent.
Affiliate:  With respect to a Person, means any other Person that, directly or indirectly, controls, is controlled by or under common control with such Person, or is a director or officer of such Person.  For purposes of this definition, “control” (including the terms “controlling,” “controlled by” and “under common control with”) when used with respect to any specified Person means the possession, direct or indirect, of the power to vote 5% or more of the voting securities of such Person or to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
Agent’s Account:  An account at Wells Fargo Bank, National Association in the name of the Deal Agent or at such other account as may be designated by the Deal Agent from time to time.
Aggregate Outstanding Eligible Loan Balance:  On any date of determination, the sum of the Outstanding Balances of all Eligible Loans on such day.

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Aggregate Outstanding Eligible Loan Net Balance:  On any date of determination, the Aggregate Outstanding Eligible Loan Balance less the related Loan Loss Reserves at the end of the most recent Collection Period.
Aggregate Unpaids:  At any time, an amount, equal to the sum of all accrued and unpaid Capital, Yield, Breakage Costs, Hedge Breakage Costs and all other amounts owed by the Borrower hereunder, under any Hedging Agreement (including, without limitation, payments in respect of the termination of any such Hedging Agreement) or under any other Transaction Document or by the Borrower or any other Person under any fee letter (including, without limitation, the Fee Letter) delivered in connection with the transactions contemplated by this Agreement (whether due or accrued) and any unpaid fees due to the Backup Servicer, both before and after the Assumption Date.
Alternative Rate:  An interest rate per annum equal to the Adjusted Eurodollar Rate; provided, however, that the Alternative Rate shall be the Base Rate if a Eurodollar Disruption Event occurs.
Amortization Event:  The occurrence of any of the following events: (i) on any Determination Date, the average Payment Rate for the preceding three (3) Collection Periods with respect to which the Payment Rate was calculated is less than 3.0%; (ii) a Reserve Advance is made, except if on the date of such Reserve Advance, the Capital is zero; (iii) Collections are less than 80.0% of Forecasted Collections for any two (2) consecutive Collection Periods; (iv) the Commitment Termination Date; or (v) a Mandatory Take-Out has not occurred within 540 days following the Effective Date.
Amortization Period:  With respect to each Lender, the period beginning on the earlier of: (i) the occurrence of an Amortization Event and (ii) the occurrence or declaration of the Termination Date, and ending on the Collection Date.
Applicable Law:  For any Person, all existing and future applicable laws, rules, regulations (including proposed, temporary and final income tax regulations), statutes, treaties, codes, ordinances, permits, certificates, orders and licenses of and interpretations by any Governmental Authority (including, without limitation, usury laws, the Federal Truth in Lending Act, and Regulation Z and Regulation B of the Board of Governors of the Federal Reserve System), and applicable judgments, decrees, injunctions, writs, orders, or action of any Court, arbitrator or other administrative, judicial, or quasi-judicial tribunal or agency of competent jurisdiction.
Assignment and Acceptance:  An assignment and acceptance entered into by a Lender and an assignee, and accepted by the Deal Agent in substantially the form of Exhibit B hereto.
Assumption Date:  Defined in the Backup Servicing Agreement.
Authoritative Electronic Copy:  With respect to any Contract stored in an electronic medium, the single electronic “authoritative copy” (within the meaning of Section 9-105 of the UCC) of such Contract (i) that constitutes the single authoritative copy of the record or records comprising the related chattel paper which is unique, identifiable and, except as otherwise provided in clauses (iv), (v) and (vi) below, unalterable, (ii) that identifies Credit Acceptance as the sole assignee thereof, 

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(iii) that is communicated to and maintained by Credit Acceptance, (iv) copies or revisions to which that add or change an identified assignee thereof can only be made with the participation of Credit Acceptance, (v) for which any copy thereof is readily identifiable as a copy that is not the authoritative copy and (vi) for which any revision of the authoritative copy is readily identifiable as an authorized or unauthorized revision.
Available Funds:  With respect to any Payment Date: (i) all amounts deposited in the Collection Account during the Collection Period (other than Dealer Collections and Repossession Expenses) that ended on the last day of the calendar month immediately preceding the calendar month in which such Payment Date occurs and investment earnings thereon; (ii) all Reserve Advances (which shall be applied in accordance with Section 2.7(c) hereof); (iii) all amounts paid by the Borrower pursuant to Section 4.5 hereof with respect to the prior Collection Period in respect of Ineligible Loans; (iv) amounts paid by the Borrower pursuant to Section 2.16 hereof; (v) all amounts paid under any Dealer Agreement; and (vi) any other funds on deposit in the Collection Account on such date (other than Dealer Collections and Repossession Expenses).
Backup Servicer:  Wells Fargo or any Person designated as a successor backup servicer following Wells Fargo’s removal as Backup Servicer pursuant to the terms of the Backup Servicing Agreement.
Backup Servicing Agreement:  The Backup Servicing Agreement, dated as of August 24, 2009, among Wells Fargo, the Servicer, the Deal Agent, the Collateral Agent and the Borrower, as the same may be amended, restated, supplemented or otherwise modified from time to time.
Backup Servicing Fee:  The fee payable by the Borrower to the Backup Servicer pursuant to the Backup Servicing Agreement and Section 7.3 hereof.
Bankruptcy Code:  The United States Bankruptcy Reform Act of 1978 (11 U.S.C. § 101, et seq.), as amended from time to time.
Base Rate:  On any date, a fluctuating interest rate per annum equal to the higher of (a) the Prime Rate or (b) the Federal Funds Rate plus 2.0% or (c) the LIBOR Rate.
Benefit Plan:  Any employee benefit plan as defined in Section 3(3) of ERISA in respect of which the Borrower or any ERISA Affiliate of the Borrower is, or at any time during the immediately preceding six years was, an “employer” as defined in Section 3(5) of ERISA.
Borrower:  CAC Warehouse Funding Corporation II, a Nevada corporation.
Borrowing Base:  On any date of determination, (a) the product of (i) the Aggregate Outstanding Eligible Loan Net Balance and (ii) the Net Advance Rate, minus (b) the Excess Defaulted Contract Amount, minus (c) the Overconcentration Loan Amount.
Breakage Costs:  Any amount or amounts as shall compensate any Lender for any loss, cost or expense incurred by such Lender (as determined by such Lender in its sole discretion) as a result of a prepayment by the Borrower of Capital or Yield.

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Business Day:  Any day other than a Saturday or a Sunday on which (a) banks are not required or authorized to be closed in New York City, New York, Charlotte, North Carolina, San Francisco, California, Detroit, Michigan, Minneapolis, Minnesota or Nevada, and (b) if the term “Business Day” is used in connection with the determination of the LIBOR Rate, dealings in United States dollar deposits are carried on in the London interbank market.
Capital:  The amounts advanced to the Borrower by the Lenders pursuant to Section 2.1(a) and Section 2.3, reduced from time to time by Collections distributed on account of such Capital pursuant to Section 2.7; provided, however, if such Capital shall have been reduced by any distribution and thereafter all or a portion of such distribution is rescinded or must otherwise be returned for any reason, such Capital shall be increased by the amount of such rescinded or returned distribution, as though it had not been made; provided, further, that the aggregate amount of Capital may not, at any time, exceed the lesser of:  (i) the Facility Limit and (ii) the Borrowing Base.
Capped Servicing Fee:  With respect to any Collection Period when the Backup Servicer has become the Servicer, the greater of (x) an amount equal to the product of (i) 10.00% and (ii) Collections received during such Collection Period (exclusive of amounts received under any Hedging Agreement) and (y) $5,000.
Carrying Costs:  With respect to any Payment Date, the sum of amounts payable under Section 2.7(a)(iv)(A)-(C).
Certificate of Title: With regard to each Financed Vehicle (i) the original certificate of title relating thereto, or copies of correspondence and application made in accordance with applicable law to the appropriate state title registration agency, and all enclosures thereto, for issuance of its original certificate of title or (ii) if the appropriate state title registration agency issues a letter or other form  of evidence of Lien (whether in paper or electronic) in lieu of a certificate of title, the original lien entry letter or form or copies of correspondence and application made in accordance with applicable law to such state title registration agency, and all enclosures thereto, for issuance of the original lien entry letter or form.
Change-in-Control:  Any of the following:
(a)    the creation or imposition of any Lien on any shares of capital stock of the Borrower; or
(b)    the failure by the Originator to own all of the issued and outstanding capital stock of the Borrower.
Closed Pool:  With respect to any Dealer Loan, a Pool as to which, pursuant to the terms of the related Dealer Agreement, no additional Dealer Loan Contracts may be allocated.
Closing Date:  September 30, 2003.
Code:  The United States Internal Revenue Code of 1986, as amended from time to time.
Collateral:  Defined in Section 2.2(a).

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Collateral Agent:  Wells Fargo, and its successors and assigns.
Collection Account:  Defined in Section 6.7(a).
Collection Date:  The date following the Termination Date on which the Aggregate Unpaids have been reduced to zero and indefeasibly paid in full.
Collection Guidelines:  With respect to Credit Acceptance, the policies of the Servicer, relating to the collection of amounts due on contracts for the sale of automobiles and/or light-duty trucks, as in effect on the Cut-Off Date and as amended from time to time in accordance herewith and with the other Transaction Documents or in accordance with Applicable Law, and with respect to the Backup Servicer, as Successor Servicer, the servicing policies set forth in the Backup Servicing Agreement.
Collection Period:  Each calendar month, except in the case of the first Collection Period, the period beginning on the Cut-Off Date to and including the last day of the calendar month in which the Funding Date occurs.
Collections:  All payments (including recoveries on defaulted Contracts, credit-related insurance proceeds and proceeds of Related Security and so long as Credit Acceptance is the Servicer, excluding certain recovery and repossession expenses, in accordance with the terms of the Dealer Agreements) received by the Servicer, Credit Acceptance or the Borrower on or after the Cut-Off Date in respect of the Loans in the form of cash, checks, wire transfers or other form of payment in accordance with the Loans and the Dealer Agreements and all net amounts received under any Hedging Agreement.
Commitment:  For each Lender, the commitment of such Lender to make Advances to the Borrower in an amount not to exceed the amount set forth opposite such Lender’s name on Schedule VI to this Agreement.
Commitment Termination Date:  With respect to each Lender, June 23, 2019, or such later date to which the Commitment Termination Date may be extended if agreed in writing among the Borrower, the Deal Agent and each Lender.
Contract:  Any Dealer Loan Contract or Purchased Loan Contract.
Contract Files:  With respect to each Contract, the fully executed original counterpart of the Contract or, in the case of any Contract constituting electronic chattel paper, the Authoritative Electronic Copy of the Contract (in each case, for UCC purposes), the Certificate of Title with respect to the related financed vehicle or other evidence of lien, all original or electronic instruments modifying the terms and conditions of such Contract and the original or electronic endorsements or assignments of such Contract.
Contribution Agreement:  The Fourth Amended and Restated Sale and Contribution Agreement, dated as of the date hereof, substantially in the form of Exhibit F hereto, between Credit 

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Acceptance and the Borrower, as the same may be amended, restated, supplemented or otherwise modified from time to time.
Contractual Obligation:  With respect to any Person, means any provision of any securities issued by such Person or any indenture, mortgage, deed of trust, contract, undertaking, agreement, instrument or other document to which such Person is a party or by which it or any of its property is bound or is subject.
Corporate Trust Office: The principal office of the Collateral Agent and Backup Servicer at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this Agreement is located at Sixth Street and Marquette Avenue, MAC N9311-161, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services Asset-Backed Trust Administration, or at such other address as the Collateral Agent or Backup Servicer may designate from time to time by notice to the parties hereto, or the principal corporate trust office of any successor Collateral Agent or Backup Servicer at the address designated by such successor by notice to the parties hereto.
Credit Acceptance:  Credit Acceptance Corporation, a Michigan corporation, and its successors and permitted assigns.
Credit Acceptance Payment Account:  The clearinghouse account number xxxxxx5068 maintained by Credit Acceptance at Comerica Bank, where payments received in respect of all loans and contracts are deposited or paid.
Credit Agreement:  That certain Sixth Amended and Restated Credit Acceptance Corporation Credit Agreement, dated as of June 23, 2014, with Comerica Bank, as administrative agent and collateral agent, Credit Acceptance as borrower, and the banks signatory thereto, as amended from time to time; provided, however, to the extent the Credit Agreement is amended or terminated after June 23, 2016, references to the Credit Agreement shall refer to the Credit Agreement effective on June 23, 2016 unless otherwise consented to by the Deal Agent, which consent shall not be unreasonably withheld, delayed or conditioned. 
Credit Guidelines:  The policies of Credit Acceptance, attached hereto as Schedule I, relating to the extension of credit to automobile and light-duty truck dealers and consumers in respect of retail installment contracts for the sale of automobiles and/or light-duty trucks, including, without limitation, the policies for determining the creditworthiness of such dealers and consumers and, relating to this extension of credit to such dealers and consumers, the maintenance of installment sale contracts, as in effect on the Cut-Off Date and as amended from time to time in accordance herewith and with the other Transaction Documents, or in accordance with Applicable Law.
Custodian:  Credit Acceptance, or any person appointed as Custodian pursuant to Section 6.2(d).
Cut-Off Date:  With respect to the Initial Funding, August 31, 2003, and with respect to each Incremental Funding, the related Additional Cut-Off Date.

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Date of Processing:  With respect to any transaction relating to a Loan or a Contract, the date on which such transaction is first recorded on the Servicer’s master servicing file (without regard to the effective date of such recordation).
Deal Agent:  Defined in the preamble of this Agreement.
Dealer:  Any new or used automobile and/or light-duty truck dealer who has entered into a Dealer Agreement or a Purchase Agreement with Credit Acceptance.
Dealer Agreement:  Each agreement between Credit Acceptance and any Dealer, in substantially the form attached hereto as Exhibit H.
Dealer Collections:  Defined in Section 2.9(d).
Dealer Collections Purchase:  Defined in Section 6.15(a)
Dealer Collections Purchase Agreement: Defined in Section 6.15(a). 
Dealer Collections Purchase Price:  Defined in Section 6.15(b)
Dealer Concentration Limit:  With respect to any Dealer and any date of determination, an amount equal to, in the case of Dealer Loans made to such Dealer, 4.0% of the aggregate Net Loan Balance of all Dealer Loans (measured as of the end of the immediately preceding Collection Period) that are included in the Collateral as of such date of determination.
Dealer Loan:  All amounts advanced by Credit Acceptance under a Dealer Agreement and payable from Collections; provided, however, that the term “Dealer Loan” shall, for the purposes of this Agreement, include only those Dealer Loans identified from time to time on Schedule IV hereto, as amended from time to time in accordance herewith.
Dealer Loan Contract:  Each retail installment sales contract, in substantially one of the forms attached hereto as Exhibit I, relating to the sale of an automobile or light-duty truck originated by a Dealer and in which Credit Acceptance shall have been granted a security interest and shall have acquired certain other rights under a related Dealer Agreement to secure the related dealer’s obligation to repay one or more related Dealer Loans.
Determination Date:  The fourth (4th) Business Day prior to the related Payment Date.
Dissenting Lender:  Defined in Section 2.1(b)(ii).
Effective Date:  The date this Sixth Amended and Restated Loan and Security Agreement becomes effective, which shall be June 23, 2016.
Eligible Contract:  Each Eligible Dealer Loan Contract and each Eligible Purchased Loan Contract.
Eligible Dealer Agreement:  Each Dealer Agreement:

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(a)    which was originated by the Originator in material compliance with all applicable requirements of law and which complies in all material respects with all applicable requirements of law;
(b)    with respect to which all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given by the Borrower, Credit Acceptance or the Servicer in connection with the origination of such Dealer Agreement or the execution, delivery and performance by the Borrower, Credit Acceptance or the Servicer of such Dealer Agreement have been duly obtained, effected or given and are in full force and effect;
(c)    as to which at the time of the transfer of rights thereunder to the Collateral Agent and the Secured Parties, the Borrower will have good and marketable title thereto, free and clear of all Liens;
(d)    the Borrower’s rights under which have been the subject of a valid grant by the Borrower of a first priority perfected security interest in such rights and in the proceeds thereof in favor of the Collateral Agent;
(e)    which will at all times be the legal, valid and binding obligation of the Dealer party thereto (it being understood that recourse for such payment obligation shall be limited to the extent set forth in the Dealer Agreement), enforceable against such Dealer in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity);
(f)    which constitutes either a “general intangible” or “tangible chattel paper” under and as defined in Article 9 of the UCC;
(g)    which, at the time of the pledge of the rights to payment thereunder to the Collateral Agent and the Secured Parties, no right to payment thereunder has been waived or modified;
(h)    which is not subject to any right of rescission, setoff, counterclaim or other defense (including the defense of usury), other than defenses arising out of applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights in general;
(i)    as to which Credit Acceptance, the Servicer and the Borrower have satisfied in all material respects all obligations to be fulfilled at the time the rights to payment thereunder are pledged to the Collateral Agent and the Secured Parties;
(j)    as to which the related Dealer has not asserted that such agreement is void or unenforceable in any legal proceedings not being contested in good faith;
(k)    as to which the related Dealer is not known to be bankrupt or insolvent;

9

(l)    as to which the related Dealer is not an Affiliate of or an executive of Credit Acceptance or an Affiliate of Credit Acceptance;
(m)    as to which the related Dealer is located in the United States; and
(n)    as to which none of Credit Acceptance, the Servicer or the Borrower has done anything, at the time of its pledge to the Collateral Agent and Secured Parties, to materially impair the rights of the Collateral Agent and Secured Parties therein.
Eligible Dealer Loan Contract:  Each Dealer Loan Contract which at the time of its pledge by the applicable Dealer to the Originator, satisfied the requirements for “Qualifying Receivable” set forth in the related Dealer Agreement; provided, however, that an Eligible Dealer Loan Contract that has become subject to the payment of a Release Price pursuant to Section 4.5(a) hereof (regardless of whether such payment is actually paid) shall not constitute an “Eligible Contract.”
Eligible Dealer Loans:  Each Dealer Loan, at the time of its transfer to the Borrower under the Contribution Agreement:
(a)    which has arisen under a Dealer Agreement that, on the day the Dealer Loan was created, qualified as an Eligible Dealer Agreement;
(b)    which was created in material compliance with all applicable requirements of law and pursuant to an Eligible Dealer Agreement which complies in all material respects with all applicable requirements of law;
(c)    with respect to which all material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given by the Borrower, in connection with the creation of such Dealer Loan or the execution, delivery and performance by the Borrower, of the related Eligible Dealer Agreement have been duly obtained, effected or given and are in full force and effect;
(d)    as to which at the time of the pledge of such Dealer Loan to the Collateral Agent and the Secured Parties, the Borrower will have good and marketable title thereto, free and clear of all Liens;
(e)    as to which a valid first priority perfected security interest in such Dealer Loan, related security and in the Proceeds thereof has been granted by the Originator in favor of the Borrower and by the Borrower in favor of the Collateral Agent;
(f)    which will at all times be the legal, valid and binding payment obligation of the Obligor thereof (it being understood that recourse for such payment obligation shall be limited to the extent set forth in the Dealer Agreement), enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity);

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(g)     which constitutes a “general intangible” under and as defined in Article 9 of the UCC as in effect in the relevant State;
(h)    [reserved]
(i)    which is denominated and payable in United States dollars;
(j)    which, at the time of its pledge to the Collateral Agent and the Secured Parties, has not been waived or modified;
(k)    which is not subject to any right of rescission (subject to the rights of the related Dealer to repay the outstanding balance of the Dealer Loan and terminate the related Dealer Agreement), setoff, counterclaim or other defense (including the defense of usury), other than defenses arising out of applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights in general;
(l)    as to which Credit Acceptance, the Servicer and the Borrower have satisfied all material obligations to be fulfilled at the time it is pledged to the Collateral Agent and the Secured Parties;
(m)    as to which the related Dealer has not asserted that the related Dealer Agreement is void or unenforceable in any legal proceeding not being contested in good faith;
(n)    as to which the related Dealer is not known to be bankrupt or insolvent;
(o)    as to which none of Credit Acceptance, the Servicer nor the Borrower has done anything, at the time of its pledge to the Collateral Agent and the Secured Parties, to impair the rights of the Collateral Agent and the Secured Parties; 
 (p)    the proceeds of which were used to finance the purchases of new or used automobiles and/or light-duty trucks and related products;
(q)     if any Dealer Loan Contract securing such Dealer Loan is an electronic contract, such electronic contract constitutes “electronic chattel paper” and there is only a single “authoritative copy” (as such terms are used in Section 9-105 of the UCC) of such electronic contract and such “authoritative copy” constitutes an Authoritative Electronic Copy; and
(r)    if any Dealer Loan Contract securing such Dealer Loan constitutes electronic chattel paper, Credit Acceptance shall have “control” of such electronic chattel paper within the meaning of Section 9-105 of the UCC.
Eligible Loans:  The Eligible Dealer Loans and Eligible Purchased Loans.
Eligible Purchased Loan Contract:  Each Purchased Loan Contract which at the time of its purchase from the applicable Dealer by the Originator, evidenced an Eligible Purchased Loan; provided, however, that an Eligible Purchased Loan Contract that has become subject to the payment 

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of a Release Price pursuant to Section 4.5(a) hereof (regardless of whether such payment is actually paid) shall not constitute an “Eligible Contract.”
Eligible Purchased Loans:  Each Purchased Loan, at the time of its transfer to the Borrower under the Contribution Agreement:
(a)    which has been originated in the United States by a Dealer for the retail sale of a Financed Vehicle in the ordinary course of such Dealer’s business and is evidenced by a fully and properly executed Purchased Loan Contract of which there is only one original executed copy (or, if such Purchased Loan Contract is an electronic contract, there is only a single “authoritative copy” (as such term is used in Section 9-105 of the UCC) of such electronic contract and such “authoritative copy” constitutes an Authoritative Electronic Copy);
(b)    which creates a valid, subsisting, and enforceable first priority security interest for the benefit of the Originator in the Financed Vehicle, which security interest has been, in turn, assigned by the Originator to the Borrower, and by the Borrower to the Collateral Agent;
(c)    which contains customary and enforceable provisions such that the rights and remedies of the holder thereof shall be adequate for realization against the collateral of the benefits of the security;
(d)    which provides for, in the event that such Purchased Loan is prepaid in full, a prepayment that fully pays the Outstanding Balance of such Purchased Loan (net of all rebates for the unused portion of any ancillary products and net of all unearned finance charges);
(e)    which was created in material compliance with all applicable requirements of law;
(f)    which will at all times be the legal, valid and binding payment obligation of the Obligor thereof, enforceable against such Obligor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws, now or hereafter in effect, affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a suit at law or in equity);
(g)    which is not subject to any right of rescission, setoff, counterclaim or other defense (including the defense of usury), other than defenses arising out of applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights in general;
(h)    with respect to which the Obligor thereon is not the United States, any State or any agency, department, or instrumentality of the United States or any State;
(i)    with respect to which the Obligor thereon is a natural person;
(j)    with respect to which, to the best of the Originator’s knowledge, no liens or claims have been filed for work, labor, materials, taxes or liens that arise out of operation of law relating 

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to the applicable Financed Vehicle that are prior to, or equal with, the security interest in the Financed Vehicle granted by the related Purchased Loan Contract;
(k)    with respect to which, to the best of the Originator’s knowledge, there was no material misrepresentation by the Obligor thereon on such Obligor’s credit application;
(l)    which has not been originated in, and is not subject to the laws of, any jurisdiction under which the sale, transfer and assignment of such Purchased Loan under this Agreement or pursuant to the transfer of the related Purchased Loan Contract shall be unlawful, void or voidable;
(m)    which (i) constitutes either “tangible chattel paper,” “electronic chattel paper” or a “payment intangible” each as defined in the UCC in the relevant State, (ii) if “tangible chattel paper,” shall be maintained in its original “tangible” form, unless the Deal Agent has consented in writing to such chattel paper being maintained in another form or medium, and (iii) if “electronic chattel paper,” there is only a single “authoritative copy” (as such term is used in Section 9-105 of the UCC) and such “authoritative copy” constitutes an Authoritative Electronic Copy;
(n)    [reserved]
(o)    which is payable in United States dollars and the Obligor thereon is an individual who is a United States resident;
(p)    which satisfies in all material respects the requirements under the Credit Guidelines;
(q)    with respect to which the collection practices used with respect thereto have complied in all material respects with the Collection Guidelines;
(r)    with respect to which there are no proceedings pending, or to the best of the Originator’s knowledge, threatened, wherein the Obligor thereon or any governmental agency has alleged that such Purchased Loan is illegal or unenforceable;
(s)    with respect to which the Originator has duly fulfilled all material obligations to be fulfilled on the lender’s part under or in connection with the origination, acquisition and assignment of such Purchased Loan, including, without limitation, giving any notices or consents necessary to effect the acquisition of such Purchased Loan by the Borrower, and has done nothing to materially impair the rights of the Borrower or the Secured Parties in payments with respect thereto;
(t)    which was purchased by the Originator from a Dealer pursuant to a Purchase Agreement or, in the case of any Purchased Loan Contract that previously secured a Dealer Loan, another agreement with the applicable Dealer;
(u)    with respect to which the Dealer from whom the Originator purchased such Purchased Loan has not engaged in any conduct constituting fraud or misrepresentation with respect to such Purchased Loan to the best of the Originator’s knowledge;

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(v)    with respect to which, at the time such Purchased Loan was originated the proceeds thereof were fully disbursed and there is no requirement for future advances thereunder, and all fees and expenses in connection with the origination of such Purchased Loan have been paid;
(w)    with respect to which, if applicable State law requires or permits the Servicer to hold the certificate of title in respect of a Financed Vehicle financed by a Purchased Loan Contract, the Servicer holds the certificate of title (or if an electronic certificate of title is issued in lieu of a paper certificate of title by the relevant governmental department or agency, Credit Acceptance is listed as lienholder on such electronic certificate of title) or the application for a certificate of title for the related Financed Vehicle as of the date on which the related Purchased Loan Contract is sold to the Borrower and will obtain within 180 days of such date a certificate of title (or ensure that an electronic certificate of title is issued in lieu of a paper certificate of title by the relevant governmental department or agency on which Credit Acceptance is listed as lienholder) with respect to such Financed Vehicle as to which the Servicer holds only such application; 
 (x)    with respect to which the related Purchased Loan Contract has not been extended or rewritten and is not subject to any forbearance, or any other modified payment plan other than in accordance with the Credit Guidelines or the Collection Guidelines or otherwise in accordance with Applicable Law; and
(y)    if the related Purchased Loan Contract constitutes electronic chattel paper, with respect to which Credit Acceptance shall have “control” of such electronic chattel paper within the meaning of Section 9-105 of the UCC.
ERISA:  The United States Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder.
ERISA Affiliate:  (a) Any corporation that is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Borrower, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with the Borrower, or (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Borrower, any corporation described in clause (a) above or any trade or business described in clause (b) above.
Eurocurrency Liabilities: Defined in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.
Eurodollar Disruption Event:  The occurrence of any of the following: (a) a determination by a Lender that it would be contrary to law or to the directive of any central bank or other governmental authority (whether or not having the force of law) to obtain United States dollars in the London interbank market to make, fund or maintain the Funding, (b) the failure of one or more of the Reference Banks to furnish timely information for purposes of determining the Adjusted Eurodollar Rate, (c) a determination by a Lender that the rate at which deposits of United States dollars are being offered to such Lender in the London interbank market does not accurately reflect the cost to such Lender of making, funding or maintaining the Funding or (d) the inability of a 

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Lender to obtain United States dollars in the London interbank market to make, fund or maintain the Advance.
Eurodollar Reserve Percentage:  Means, with respect to any Reference Bank for any period, the percentage applicable during such period (or, if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Reference Bank with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term of one month.
Excess Reserve Amount:  With respect to any Payment Date, the excess, if any, of the amount on deposit in the Reserve Account over the Required Reserve Account Amount.
Excluded Dealer Agreement Rights:  With respect to any Dealer Agreement, the rights of Credit Acceptance thereunder related to loans made to the related Dealer which are not Dealer Loans pledged by the Borrower to the Collateral Agent hereunder, including rights of set-off and rights of indemnification, related to such Dealer Loans.
Existing Loan and Security Agreement:  Defined in the recitals hereto.
Existing Loan and Security Agreement Effective Date:  December 27, 2012.
Facility Limit:  $400,000,000; or as such amount may vary from time to time upon the written agreement of the Borrower, Credit Acceptance and the Deal Agent; provided, however, that on any date on or after the end of the Revolving Period with respect to all Lenders, the Facility Limit shall mean the aggregate outstanding Capital on such date.
FATCA: Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code.
Federal Funds Rate:  For any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the federal funds rates as quoted by Wells Fargo and confirmed in Federal Reserve Board Statistical Release H.15(519) or any successor or substitute publication selected by Wells Fargo (or, if such day is not a Business Day, for the next preceding Business Day), or, if, for any reason, such rate is not available on any day, the rate determined, in the sole opinion of Wells Fargo, to be the rate at which federal funds are being offered for sale in the national federal funds market at 9:00 a.m. Charlotte, North Carolina time.
Fee Letter:  With respect to each Lender, the Fee Letter, dated as of the date hereof, in the case of Wells Fargo, or in the case of any other Lender, the date of the Assignment and Acceptance related to such Lender, among the Borrower, Wells Fargo Bank, National Association and the Deal Agent, in the case of Wells Fargo and among the Borrower, the Servicer, the Deal Agent and the 

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related Lender, in the case of any other Lender, as any such letter may be amended, modified, supplemented, restated or replaced from time to time.
Financed Vehicle:  With respect to a Contract, any new or used automobile, light-duty truck, minivan or sport utility vehicle, together with all accessories thereto, securing the related Obligor’s indebtedness thereunder.
Forecasted Collections:  The expected amount of Collections to be received with respect to the Aggregate Outstanding Eligible Loan Balance each month as determined by Credit Acceptance in accordance with its forecasting model, which shall be submitted to the Deal Agent with each Funding Notice related to a proposed Advance when new Pools are pledged to the Collateral Agent.
Fourth Amended and Restated  Loan and Security Agreement Effective Date:  June 16, 2010.
Funding:  An Advance by a Lender pursuant to Section 2.1 and Section 2.3 hereof.
Funding Date:  In the case of the Initial Funding, and as to any Incremental Funding, the second Business Day immediately following receipt by the Deal Agent of a Funding Notice, delivered in accordance with Section 2.3, provided that such Funding Notice is received by 5:00 pm, Charlotte time.
Funding Notice:  The notice, in the form of Exhibit A hereto, delivered in accordance with Section 2.3 hereof.
GAAP:  Generally accepted accounting principles as in effect from time to time in the United States.
Governmental Authority:  Any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any body or entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, and any accounting board or authority (whether or not a part of government) which is responsible for the establishment or interpretation of national or international accounting principles, in each case whether foreign or domestic.
Hedge Breakage Costs:  For any Hedging Agreement, any amount payable by the Borrower for the early termination of such Hedging Agreement or any portion thereof.
Hedge Costs:  For any Hedging Agreement, any amount payable by the Borrower with respect thereto, including any swap payments, any breakage payments, any termination payments, any notional reduction payments and any other amounts due to the Hedge Counterparty.
Hedge Counterparty:  (I) Any entity that (a) on the date of entering into any Hedge Transaction (i) is an interest rate swap dealer and (ii) unless otherwise agreed to by the Deal Agent, has a long-term unsecured debt rating of not less than “A” by S&P and not less than “A2” by Moody’s (“Long-term Rating Requirement”) and a short-term unsecured debt rating of not less than “A-1” by S&P and not less than “P-1” by Moody’s (“Short-term Rating Requirement”), and (b) in 

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a Hedging Agreement (i) consents to the assignment of the Borrower’s rights under the Hedging Agreement to the Collateral Agent pursuant to Section 2.2(a) (except in the case of an interest rate cap where such consent is not required) and (ii) agrees that in the event that Moody’s or S&P reduces its long-term unsecured debt rating below the Long-term Rating Requirement, or reduces its short-term unsecured debt rating below the Short-term Rating Requirement, it shall transfer its rights and obligations under each Hedging Agreement to another entity that meets the requirements of clauses (I)(a) and (I)(b) hereof and has entered into a Hedging Agreement with the Borrower on or prior to the date of such transfer (except in the case of an interest rate cap where such transfer is not required), or (II) in respect of a Hedge Transaction entered into during the period commencing on June 23, 2016 and concluding on the Commitment Termination Date, any entity that (a) on the date of entering into any Hedge Transaction (i) is a bank signatory to the Credit Agreement (other than Israel Discount Bank of New York or an Affiliate) and (ii) unless otherwise agreed to by the Deal Agent, has not experienced a withdrawal or downgrade of its short- or long-term unsecured debt rating since July 23, 2016, and (b) in a Hedging Agreement (i) consents to the assignment of the Borrower’s rights under the Hedging Agreement to the Collateral Agent pursuant to Section 2.2(a) (except in the case of an interest rate cap where such consent is not required) and (ii) agrees that in the event that it experiences a withdrawal or reduction of its long-term unsecured debt rating such that it no longer has a minimum rating of “BBB-,” it shall transfer its rights and obligations under each Hedging Agreement to another entity that meets the requirements of clauses (I)(a) and (I)(b) or clauses (II)(a) and (II)(b) hereof and has entered into a Hedging Agreement with the Borrower on or prior to the date of such transfer (except in the case of an interest rate cap where such transfer is not required).
Hedge Transaction:  Each interest rate swap or other interest rate protection transaction between the Borrower and a Hedge Counterparty that is entered into pursuant to Section 5.3 hereof and is governed by a Hedging Agreement.
Hedging Agreement:  Each agreement between the Borrower and a Hedge Counterparty that governs one or more Hedge Transactions entered into pursuant to Section 5.3 hereof, , which agreement shall be in form and substance reasonably satisfactory to the Deal Agent, and each “Confirmation” thereunder confirming the specific terms of each such Hedge Transaction; provided, however, that for the avoidance of doubt no ISDA Master Agreement shall be required for any interest rate cap transaction. 
Increased Costs:  Any amounts required to be paid by the Borrower to an Affected Party pursuant to Section 2.13.
Incremental Funding:  Any Advance made after the Initial Funding that increases the aggregate outstanding Capital hereunder.
Independent Director:  Defined in Section 5.2(o)(xxvii).
Ineligible Contract: Each Contract other than an Eligible Contract. 
Ineligible Loan:  Each Loan other than an Eligible Loan.
Indemnified Amounts:  Defined in Section 11.1(a).

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Indemnified Parties:  Defined in Section 11.1(a).
Initial Funding:  Defined in Section 2.3(a).
Insolvency Event:  With respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable Insolvency Law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable Insolvency Law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.
Insolvency Laws:  The Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally.
Insolvency Proceeding:  Any case, action or proceeding before any court or other Governmental Authority relating to any Insolvency Event.
Instrument:  Any “instrument” (as defined in Article 9 of the UCC), other than an instrument that constitutes part of chattel paper.
Investment:  With respect to any Person, any direct or indirect loan, advance or investment by such Person in any other Person, whether by means of share purchase, capital contribution, loan or otherwise, excluding the acquisition of assets pursuant to the Contribution Agreement and excluding commission, travel and similar advances to officers, employees and directors made in the ordinary course of business.
Investment Company Act: The United States Investment Company Act of 1940, as amended.
Late Fees:  If the Backup Servicer has become the Successor Servicer, any late fees collected with respect to any Contract in accordance with the Collection Guidelines.
Lenders:  Collectively, Wells Fargo and any other Person that agrees, pursuant to the pertinent Assignment and Acceptance, to make or maintain Fundings pursuant to this Agreement.
LIBOR Rate:  For any portion of Capital and any day during any Accrual Period, an interest rate per annum equal to:

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(i)    the London interbank offered rate as administered by ICE Benchmark Administration Limited (“ICE”) (or its successor) for United States dollar deposits in the London interbank market for the posted rate for thirty (30) day deposits in United States dollars appearing on the display page designated as “BBAM” on the information service operated by Bloomberg L.P. (or a successor source) as of 11:00 a.m. (London time) on the Business Day which is the second Business Day immediately preceding the first day of the applicable Accrual Period; or
(ii)    if no such rate appears on the display page designated as “BBAM” at such time and day, then the LIBOR Rate shall be determined by Wells Fargo Bank, National Association at its office in Charlotte, North Carolina as its rate (each such determination, absent manifest error, to be conclusive and binding on all parties hereto and their assignees) at which thirty (30) day deposits in United States dollars are being, have been, or would be offered or quoted by Wells Fargo Bank, National Association to major banks in the applicable interbank market for Eurodollar deposits at or about 11:00 a.m. (Charlotte, North Carolina time) on such day; provided, that if as so determined the LIBOR Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.
Lien:  With respect to any Loan, Dealer Agreement or Contract, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind (other than any Permitted Lien, mechanics’ liens, liens of collection attorneys or agents collecting the property subject to such Permitted Lien or mechanics’ lien and any liens which attach thereto by operation of law).
Loan:  Any Dealer Loan or Purchased Loan.
Loan Loss Reserve:  The loan loss reserve, calculated in accordance with Credit Acceptance’s accounting policies.
Mandatory Take-Out:  The release of certain Loans and the related contracts from the Lien of this Agreement and the reduction of the Capital by at least the lesser of (a) 85% of currently outstanding Capital or (b) $100,000,000.
Material Adverse Effect:  With respect to any event or circumstance, means a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance, properties or prospects of the Originator, the Servicer or the Borrower, (b) the validity, enforceability or collectibility of this Agreement or any other Transaction Document or the validity, enforceability or collectibility of the Loans, (c) the rights and remedies of the Deal Agent, the Collateral Agent or the Secured Parties, (d) the ability of the Borrower, the Originator or the Servicer to perform its obligations under this Agreement or any other Transaction Document, or (e) the status, existence, perfection, priority or enforceability of the Collateral Agent’s or any Secured Party’s interest in the Collateral.
Material Debt:  Defined in Section 6.11(i).
Monthly Principal Payment Amount:  With respect to any Payment Date, the amount, if any, necessary to reduce the Capital to the Borrowing Base.

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Monthly Report:  Defined in Section 6.5(a).
Moody’s:  Moody’s Investors Service, Inc., and any successor thereto.
Multiemployer Plan:  A “multiemployer plan” as defined in Section 4001(a)(3) of ERISA that is or was at any time during the current year or the immediately preceding five years contributed to by the Borrower or any ERISA Affiliate on behalf of its employees.
Net Advance Rate:  80%.
Net Loan Balance:  With respect to any Loan, the excess of the related Outstanding Balance over the related Loan Loss Reserve.
Nonconforming Contract:  Defined in Section 6.2(c)(ii).
Notes:  The Variable Funding Notes of the Borrower, issued to the Lenders pursuant to Section 2.1(c) hereof substantially in the form of Exhibit G hereto.
Obligor:  With respect to any Loan, Dealer Agreement or Contract, the Person or Persons obligated to make payments with respect to such Dealer Agreement, Loan or Contract, respectively, including any guarantor thereof.
OFAC: The United States Department of the Treasury’s Office of Foreign Assets Control.
Officer’s Certificate:  A certificate signed by any officer of the Borrower or the Servicer, as the case may be, and delivered to the Collateral Agent.
Open Pool:  With respect to any Dealer Loan, a Pool as to which, pursuant to the terms of the related Dealer Agreement, additional Dealer Loan Contracts may be allocated.
Opinion of Counsel:  A written opinion of counsel, which opinion and counsel are reasonably acceptable to the Deal Agent.
Optional Take-Out:  The release of certain Loans and the related contracts from the Lien of this Agreement and the reduction of the Capital (other than pursuant to a Mandatory Take-Out) by at least $10,000,000 in connection with a refinancing (which may take the form of a sale) of such Loans by the Borrower using an affiliated special purpose entity.
Originator:  Defined in the preamble of this Agreement.

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Other Taxes: Any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under this Agreement or from the execution, delivery, performance, enforcement of, or otherwise with respect to, this Agreement. 
Outstanding Balance:
(i)    With respect to any Contract on any date of determination, all amounts owing under such Contract (whether considered principal or as finance charges) on such date of determination.  The Outstanding Balance with respect to a Contract shall be deemed to have been created at the end of the day on the Date of Processing of such Contract; which shall be greater than or equal to zero (except in the case of a Contract as to which the final payment on such Contract is in excess of the amount owed on such Contract on the date of such final payment); 
(ii)    with respect to any Dealer Loan on any date of determination, the aggregate amount advanced under such Dealer Loan plus revenue accrued with respect to such Dealer Loan in accordance with Credit Acceptance’s accounting policies, recoveries on such Dealer Loan if it has been written off and the payment of monies to a Dealer under the related Dealer Agreement, less collections on the related Dealer Loan Contracts applied through such date of determination in accordance with the related Dealer Agreement to the reduction of the balance of such Loan and write offs of such Dealer Loan; 
(iii)    with respect to any Purchased Loan (other than any Purchased Loan arising from a Dealer Collections Purchase Agreement) on any date of determination, the aggregate amount advanced under such Purchased Loan plus revenue accrued with respect to such Purchased Loan in accordance with Credit Acceptance’s accounting policies and recoveries on such Purchased Loan if it has been written off, less Collections on the related Purchased Loan Contract applied through the date of determination to the reduction of the balance of such Purchased Loan and write offs of such Purchased Loan; and
(iv) with respect to any Purchased Loan arising from a Dealer Collections Purchase Agreement on any date of determination, (A) such Purchased Loan’s pro rata share of the sum of (x) the Outstanding Balance of the related Dealer Loan as of the date of the related Dealer Collections Purchase and (y) the Dealer Collections Purchase Price with respect to such Dealer Loan (such pro rata share determined based on such Purchased Loan’s pro rata share of the forecasted collections on the pool of Purchased Loans which previously constituted Dealer Loan Contracts securing such Dealer Loan), plus following the acquisition of such Purchased Loan (B) revenue accrued with respect to such Purchased Loan in accordance with Credit Acceptance’s accounting policies and recoveries on such Purchased Loan if it has been written off, less (C) Collections on the related Purchased Loan Contract applied through the date of determination to the reduction of the balance of such Purchased Loan and write offs of such Purchased Loan.
Overconcentration Loan Amount:  With respect to any Dealer and any date of determination, the amount by which the aggregate Net Loan Balance of Dealer Loans (measured as of the end of the immediately preceding Collection Period) made to such Dealer as of such date of determination exceeds the Dealer Concentration Limit.

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Participant Register: Defined in Section 13.1(e) of this Agreement.
Patriot Act:  Defined in Section 4.1(z) of this Agreement.
Payment Date:  The fifteenth (15th) day of each calendar month or, if such day is not a Business Day, the next succeeding Business Day.
Payment Rate:  For any Collection Period in which a Take-Out does not occur, the ratio, expressed as a percentage, the numerator of which is equal to Collections received during such Collection Period and the denominator of which is equal to the Aggregate Outstanding Eligible Loan Net Balance as of the first day of such Collection Period.  For the avoidance of doubt, the Payment Rate will not be required to be calculated for any Collection Period in which a Take-Out occurs.
Permitted Investments:  Any one or more of the following types of investments:
(a)    marketable obligations of the United States, the full and timely payment of which are backed by the full faith and credit of the United States of America and that have a maturity of not more than 270 days from the date of acquisition;
(b)    marketable obligations, the full and timely payment of which are directly and fully guaranteed by the full faith and credit of the United States and that have a maturity of not more than 270 days from the date of acquisition;
(c)    bankers’ acceptances and certificates of deposit and other interest-bearing obligations (in each case having a maturity of not more than 270 days from the date of acquisition) denominated in dollars and issued by any bank with capital, surplus and undivided profits aggregating at least $100,000,000, the short-term obligations of which are rated at least A-1 by S&P and P-1 by Moody’s;
(d)    repurchase obligations with a term of not more than ten days for underlying securities of the types described in clauses (a), (b) and (c) above entered into with any bank of the type described in clause (c) above;
(e)    commercial paper rated at least A-1 by S&P and P-1 by Moody’s;
(f)    demand deposits, time deposits or certificates of deposit (having original maturities of no more than 365 days) of depository institutions or trust companies incorporated under the laws of the United States of America or any state thereof (or domestic branches of any foreign bank) and subject to supervision and examination by federal or state banking or depository institution authorities; provided, however that at the time such investment, or the commitment to make such investment, is entered into, the short-term debt rating of such depository institution or trust company shall be at least A-1 by S&P and P-1 by Moody’s; and
(g)    money market mutual funds (including funds for which the Collateral Agent may act as a sponsor or advisor or for which the Collateral Agent may receive fee income) having a 

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rating, at the time of such investment, from S&P or Moody’s in the highest investment category granted thereby.
Each of the Permitted Investments may be purchased by the Collateral Agent or through an Affiliate of the Collateral Agent.
Permitted Liens:  Liens for state, municipal or other local taxes if such taxes shall not at the time be due and payable and Liens granted pursuant to the Transaction Documents and with respect to the Dealer Loan Contracts, the second priority lien of the related Dealer therein as set forth in the related Dealer Agreement.
Person:  An individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, sole proprietorship, joint venture, government (or any agency or political subdivision thereof) or other entity.
Pool:  An identifiable group of Dealer Loan Contracts related to a particular Dealer Agreement identified on Schedule IV hereto, which, for the avoidance of doubt, may take the form of an Open Pool or Closed Pool at the time it is pledged hereunder.
Prepayment Fee:   With respect to each Lender, as defined in the applicable Fee Letter relating to such Lender.
Prime Rate:  The rate announced by Wells Fargo from time to time as its prime rate in the United States, such rate to change as and when such designated rate changes.  The Prime Rate is not intended to be the lowest rate of interest charged by Wells Fargo in connection with extensions of credit to debtors.
Proceeds:  With respect to any portion of the Collateral, all “proceeds” as such term is defined in Article 9 of the UCC, including, whatever is receivable or received when such portion of Collateral is sold, liquidated, foreclosed, exchanged, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes all rights to payment with respect to any insurance relating thereto.
Program Fee:  With respect to each Lender, as defined in the applicable Fee Letter related to such Lender.
Purchase Agreement:  Each agreement between Credit Acceptance and any Dealer in substantially the form attached hereto as Exhibit K, together with any Dealer Collections Purchase Agreement.
Purchased Loan: A motor vehicle retail installment loan relating to the sale of an automobile or light-duty truck originated by a Dealer, purchased by the Originator from such Dealer and evidenced by a Purchased Loan Contract; provided, however, that the term “Purchased Loan” shall, for purposes of this Agreement, include only those Purchased Loans identified from time to time on Schedule IV hereto.

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Purchased Loan Contract: Each motor vehicle retail installment sales contract, in substantially one of the forms attached hereto as Exhibit I, relating to a Purchased Loan.
Qualified Institution:  Defined in Section 6.7(a).
Records:  The Dealer Agreements, Contracts, Contract Files and all other documents, books, records and other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related contracts, records and other media for storage of information) in each case whether tangible or electronic that are maintained with respect to the Loans and the Contracts and the related Obligors.
Reference Bank:  Any bank that furnishes information for purposes of determining the Adjusted Eurodollar Rate.
Register:  Defined in Section 13.1(c).
Related Security:  With respect to any Loan all of Credit Acceptance’s and the Borrower’s interest in:
(i)    the Dealer Agreements (other than Excluded Dealer Agreement Rights, but including Credit Acceptance’s rights to service the Loans and the related Contracts and receive the related collection fee and receive reimbursement of certain repossession and recovery expenses, in accordance with the terms of the Dealer Agreements) and Contracts securing payment of such Loan;
(ii)    all security interests or liens purporting to secure payment of such Loan, whether pursuant to such Loan, the related Dealer Agreement or otherwise, together with all financing statements signed by the related Obligor describing any collateral securing such Loan and all other property obtained upon foreclosure of any security interest securing payment of such Loan or any related Contract;
(iii)    all guarantees, insurance or other agreements or arrangements of any kind from time to time supporting or securing payment of each Contract whether pursuant to such Contract or otherwise, including any of the foregoing relating to any Contract securing payment of such Loan;
(iv)    all of the Borrower’s interest in all Records, documents and writing evidencing or related to such Loan;
(v)    all rights of recovery of the Borrower against the Originator;
(vi)    all Collections (other than Dealer Collections), the Collection Account, the Reserve Account, and all amounts on deposit therein and investments thereof;
(vii)    all of the Borrower’s right, title and interest in and to (but not its obligations under) any Hedging Agreement and any payment from time to time due thereunder;

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(viii)    all of the Borrower’s right, title and interest in and to the Contribution Agreement and the assignment to the Collateral Agent of all UCC financing statements filed by the Borrower against the Originator under or in connection with the Contribution Agreement; and
(ix)    the Proceeds of each of the foregoing.
For the avoidance of doubt, the term “Related Security” with respect to any Dealer Loan includes all rights arising under such Dealer Loan which rights are attributable to advances made under such Dealer Loan as the result of such Dealer Loan being secured by an Open Pool on the date such Dealer Loan was sold and Dealer Loan Contracts being added to such Open Pool.
Release Date:  As defined in Section 4.5(b).
Release Price:  As defined in Section 4.5(a).
Reliening Expenses:  Defined in Section 6.2(d)(ii).
Repossession Expenses:  For any Collection Period, any expenses payable pursuant to the terms of this Agreement, incurred by the Backup Servicer, if it has become the Successor Servicer, in connection with the liquidation or repossession of any Financed Vehicle, in an aggregate amount not to exceed the cash proceeds received by the Backup Servicer, if it has become the Successor Servicer, from the disposition of the Financed Vehicles.
Required Lenders:  At a particular time, Lenders with Commitments in excess of 50% of the Facility Limit.
Required Reserve Account Amount:  With respect to any date of determination, an amount equal to the product of (i) 1.0% and (ii) the Capital on such date (after the application of funds pursuant to Section 2.7 on the related Payment Date plus all amounts required to be maintained by the Borrower pursuant to Section 6.2(c)(ii) hereof); provided, however, the Required Reserve Account Amount shall at no time be less than $300,000 (unless the Capital is zero, in which case the Required Reserve Account Amount shall be $0.00).
Reserve Account:  The segregated trust account established at the Collateral Agent for the benefit of the Secured Parties, established pursuant to Section 6.7(a).
Reserve Advance:  Defined in Section 2.7(c)(i).
Responsible Officer:  As to any Person any officer of such Person (who, in the case of the Collateral Agent or Backup Servicer, is an officer within the Corporate Trust Office) with direct responsibility for the administration of this Agreement and the other Transaction Documents to which such Person is a party, and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

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Retransfer Amount:  Defined in Section 4.5(b).
Revolving Period:  The period commencing on the Closing Date and ending on the day immediately preceding the first day of the Amortization Period.
S&P:  S&P Global Ratings, and any successor thereto.

Sanctioned Country:  Any country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise published from time to time.
Sanctioned Person: (i) a Person named on the list of “Specially Designated Nationals” or “Blocked Persons” maintained by OFAC available at http://www.treas.gov/offices/
 
enforcement/ofac/sdn, or as otherwise published from time to time, or (ii) (a) an agency of the government of a Sanctioned Country, (b) an organization controlled by a Sanctioned Country or (c) a Person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

Secured Party:  (i) The Collateral Agent, the Deal Agent and each Lender and (ii) each Hedge Counterparty that is either a Lender or an Affiliate of a Lender if that Affiliate that is a Hedge Counterparty executes a counterpart of this Agreement agreeing to be bound by the terms of this Agreement applicable to a Secured Party.

Securities Act: The United States Securities Act of 1933, as amended.

Servicer:  Credit Acceptance, the Backup Servicer, if it has become the Successor Servicer or any other Successor Servicer, appointed in accordance with the terms hereof as the Servicer of the Loans and Contracts.

Servicer Termination Event:  Defined in Section 6.11.

Servicer Termination Notice:  Defined in Section 6.11.

Servicer Expenses:  Any expenses incurred by the Backup Servicer, if it has become the Successor Servicer hereunder (including to the extent the Backup Servicer is Wells Fargo Bank, National Association any Reliening Expenses), other than Repossession Expenses or Transition Expenses.

Servicing Fee:  For each Payment Date, a fee payable to the Servicer for services rendered during the related Collection Period, equal to:  (i) so long as Credit Acceptance is the Servicer, the product of (A) 6.00% and (B) the total Collections for the related Collection Period (exclusive of amounts received under any Hedging Agreement) and (ii) if the Backup Servicer is the Servicer, the sum of (1) the greatest of:  (a) the product of 10.0% and the total Collections for the related Collection Period (exclusive of amounts received under any Hedging Agreement), (b) the actual 

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costs incurred by the Backup Servicer as Successor Servicer, and (c) the product of (x) $30.00 and (y) the aggregate number of Contracts serviced by it during the related Collection Period, plus (2) without duplication, Late Fees and Servicer Expenses; provided, however, with respect to each Payment Date on which the Backup Servicer is the Servicer, the Servicing Fee shall be at least equal to $5,000.

Solvent:  As to any Person at any time, having a state of affairs such that all of the following conditions are met: (a) the fair value of the property of such Person is greater than the amount of such Person’s liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code; (b) the present fair salable value of the property of such Person in an orderly liquidation of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s property would constitute unreasonably small capital.
Structuring Fees:  The structuring fee set forth in the Fee Letter related to Wells Fargo.
Subsidiary:  A corporation of which the Originator and/or its Subsidiaries own, directly or indirectly, such number of outstanding shares as have more than 50% of the ordinary voting power for the election of directors.
Successor Servicer:  Defined in Section 6.12(a).
Take-Out:  Any Mandatory Take-Out or Optional Take-Out.
Take-Out Release:  The release to be executed pursuant to Section 2.16 hereto, substantially in the form of Exhibit E hereto.
Taxes:  Any present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), charges, assessments or fees of any nature (including interest, penalties, and additions thereto) that are imposed by any Governmental Authority.
Termination Date:  With respect to each Lender, the earliest of:  (a) the date of the occurrence or declaration of the Termination Date pursuant to Section 10.2, and (b) the date of termination in whole of the Facility Limit pursuant to Section 2.5.
Termination Events:  Defined in Section 10.1.
Third Amended and Restated  Loan and Security Agreement Effective Date:  August 24, 2009.

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Total Commitment:  On any date of determination, the aggregate Commitments of all the Lenders.
Transaction Documents:  This Agreement, the Contribution Agreement, each Hedging Agreement, the Fee Letters, the Backup Servicing Agreement and any additional document the execution of which is necessary or incidental to carrying out the terms of the foregoing documents.
Transition Expenses:  If the Backup Servicer has become the Successor Servicer, the sum of:  (i) reasonable costs and expenses incurred by the Backup Servicer in connection with its assumption of the servicing obligations hereunder, related to travel, Obligor welcome letters, freight and file shipping plus (ii) a boarding fee equal to the product of $7.50 and the number of Contracts to be serviced.
UCC:  The Uniform Commercial Code as from time to time in effect in the applicable jurisdiction or jurisdictions.
United States:  The United States of America.
Unmatured Termination Event:  Any event that, with the giving of notice or the lapse of time, or both, would become a Termination Event.
Unsatisfactory Audit:  The occurrence of any audit exceptions resulting from any audit, inspection or review pursuant to Section 6.1(c), Section 6.2(e) or Section 6.9, which, in the reasonable judgment of the Deal Agent, would have a material adverse effect on the ability of the Servicer to identify and allocate Collections.
Unused Fee:  With respect to each Lender, as defined in the Fee Letter related to such Lender.
Wells Fargo:  Wells Fargo Bank, National Association, and it successors and assigns.
Yield:  With respect to each Lender and its portion of the Capital, with respect to any Accrual Period, the sum of the products (for each day during such Accrual Period) of:
YR x C x  1   
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where:
C    =    the outstanding principal amount of the Advance of such Lender; and
YR    =    the Yield Rate for such Lender applicable on such day;
provided, however, that (i) no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by Applicable Law and (ii) Yield shall not be considered paid by any distribution if at any time such distribution is rescinded or must otherwise be returned for any reason.

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Yield Rate:  For any Accrual Period and for the aggregate principal amount of the Advance allocated to such Accrual Period:
 (a)    prior to the occurrence of an Amortization Event or a Termination Event, a rate equal to the Alternative Rate; or
(b)    on and after the occurrence of an Amortization Event or a Termination Event, with respect to any Lender, the rate provided in the applicable Fee Letter;
provided, however, the Yield Rate shall be the Base Rate for any Accrual Period for any portion of the Advance as to which any Lender has funded the acquisition thereof on any day other than the first day of such Accrual Period and without such Lender(s) having received at least two Business Days’ prior notice of such funding pursuant to the provisions of Section 2.1(a).
Section 1.2.    Other Terms.  All accounting terms used but not specifically defined herein shall be construed in accordance with GAAP.  All terms used in Article 9 of the UCC in the State of New York, and used but not specifically defined herein, are used herein as defined in such Article 9.
Section 1.3.    Computation of Time Periods.  Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.”
Section 1.4.    Interpretation.  In each Transaction Document, unless a contrary intention appears:
(i)    the singular number includes the plural number and vice versa;
(ii)    reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by the Transaction Documents;
(iii)    reference to any gender includes each other gender;
(iv)    reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, supplemented or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other Transaction Documents, and reference to any promissory note includes any promissory note that is an extension or renewal thereof or a substitute or replacement therefor; and
(v)    reference to any Applicable Law means such Applicable Law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any section or other provision of any Applicable Law means that provision of such Applicable Law 

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from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision.
ARTICLE II
     
THE LOAN FACILITY
Section 2.1.    Funding of the Advance.
(a)    (i)    On the terms and conditions hereinafter set forth (including, without limitation, the conditions set forth in Sections 3.1 and 3.2), the Borrower may, at its option, on the Closing Date and on any Funding Date request an advance (an “Advance” or a “Funding”) pursuant to Section 2.3.  Following receipt of any such request, each Lender agrees that it shall advance its pro rata portion of such requested Advance, subject to fulfillment of the conditions contained herein, during the period from the date hereof to but not including the Termination Date.  Under no circumstances shall any Lender make an Advance if, after giving effect to such Advance, (A) the aggregate Capital outstanding hereunder would exceed the lesser of (i) the Facility Limit and (ii) the Borrowing Base or (B) with respect to each Lender, the aggregate Capital funded or maintained by such Lender would exceed its pro rata portion of the aggregate Capital outstanding.  Upon the occurrence of an Amortization Event or the occurrence or declaration of the Termination Date, the Borrower may not request and no Lender shall be required to effect any Funding.
(b)    (i)    The Borrower may, within 60 days, but no later than 45 days, prior to the then existing Commitment Termination Date, by written notice to the Deal Agent and each Lender, make written request for the Lenders to extend the Commitment Termination Date for an additional period as specified by the Borrower. Each Lender shall make a determination, in its sole discretion, not less than 15 days prior to the then applicable Commitment Termination Date as to whether or not it will agree to extend the Commitment Termination Date; provided, however, that the failure of any Lender to make a timely response to the Borrower’s request for extension of the Commitment Termination Date shall be deemed to constitute a refusal by such Lender to extend the Commitment Termination Date.  
(ii)    Any Lender which notifies the Deal Agent of its refusal to consent to the extension or which does not expressly notify such Deal Agent that it is willing to consent to an extension of the Commitment Termination Date during the time period set forth in clause (i) above shall be deemed to be a “Dissenting Lender” from the date of its refusal notice or the end of the applicable time period set forth in clause (i) above and, after the Commitment Termination Date then in effect, such Dissenting Lender’s Commitment shall be zero.  If a Lender has agreed to extend its Commitment Termination Date in accordance with the Borrower’s request made pursuant to clause (i) above, and, at the end of the applicable time period set forth in clause (i) above, no Termination Event shall have occurred, the Commitment Termination Date for such Lender then in effect shall be extended to the date that is the last day of the additional time period specified by Borrower pursuant to clause (i) above or, if such day is not a Business Day, the next preceding Business Day.

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(iii)    Within two Business Days following the end of the time period set forth in clause (i) above, each Dissenting Lender shall notify each other Lender, the Borrower and the Servicer of its election to become a Dissenting Lender and the amount of its Commitment, if any. Each Dissenting Lender hereby agrees to assign all or a portion of its Commitment and the amounts payable to it hereunder to a replacement lender identified by the Borrower and approved by the Deal Agent, subject to ratable payment of such Dissenting Lender’s portion of the Capital, together with all accrued and unpaid interest thereon, and a ratable portion of all fees and other amounts due to it hereunder.  
(iv)    If the Commitment of a Dissenting Lender is not assigned in accordance with clause (iii) above, the Facility Limit shall be reduced by the Commitment of the Dissenting Lender existing on the Commitment Termination Date.  The Capital outstanding on the Commitment Termination Date in effect on the date such Lender becomes a Dissenting Lender shall be paid in accordance with Section 2.7(a)(vii).
(c)    The Notes.
(i)    The Borrower’s obligation to pay the principal of and interest on all amounts advanced by the Lenders pursuant to the Fundings shall be evidenced by a variable funding note of the Borrower for each Lender (each, a “Note”) which shall:  (1) be dated the Effective Date; (2) be in the stated principal amount equal to the Commitment amount for such Lender (as reflected from time to time on the grid attached thereto); (3) bear interest as provided therein; (4) be payable to the order of Wells Fargo Bank, National Association, as Deal Agent, for the account of the applicable Lender; and (5) be substantially in the form of Exhibit G hereto, with blanks appropriately completed in conformity herewith.
(ii)    Although the Notes shall be dated the Effective Date, interest in respect thereof shall be payable only for the periods during which amounts are outstanding thereunder.  In addition, although the stated principal amount of each Note shall be equal to the Commitment amount of the related Lender, such Note shall be enforceable with respect to the Borrower’s obligation to pay the principal thereof only to the extent of the unpaid principal amount of the Capital outstanding thereunder at the time such enforcement shall be sought.
Section 2.2.    Grant of Security Interest; Acceptance by Collateral Agent.
(a)    (i) As security for the prompt and complete payment of the Notes and the performance of all of the Borrower’s obligations under the Notes, this Agreement and the other Transaction Documents, the Borrower hereby grants to the Collateral Agent, for the benefit of the Secured Parties, without recourse except as provided herein, a security interest in and continuing Lien on all assets and personal property of the Borrower, including but not limited to, all of the Borrower’s accounts, chattel paper, goods, deposit accounts, documents, general intangibles, instruments, investment property, letter of credit rights, money and supporting obligations and all proceeds of the foregoing (as each such term is defined in the UCC, collectively, the “Collateral”) now owned or hereafter acquired.  The foregoing pledge does not constitute an assumption by the Collateral Agent of any obligations of the Borrower to Obligors 

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or any other Person in connection with the Collateral or under any agreement or instrument relating to the Collateral, including, without limitation, any obligation to make future advances to or on behalf of such Obligors.
(ii)    In connection with such grant, the Borrower agrees to record and file, at its own expense, financing statements with respect to the Collateral now existing and hereafter created meeting the requirements of applicable state law in such manner and in such jurisdictions as are necessary to perfect the first priority security interest of the Collateral Agent for the benefit of the Secured Parties in the Collateral, and to deliver a file-stamped copy of such financing statements or other evidence of such filing to the Collateral Agent and the Deal Agent promptly following receipt thereof.  In addition, the Borrower and the Servicer agree to clearly and unambiguously mark their respective general ledgers and all accounting records and documents and all computer tapes and records to show that the Collateral, including that portion of the Collateral consisting of the Dealer Agreements listed on Schedule IV hereto (and each addendum thereto), the Loans and the related Contracts and the rights to payment under the related Dealer Agreements, has been pledged to the Collateral Agent for the benefit of the Secured Parties hereunder.
(iii)    In connection with such pledge, the Borrower agrees to deliver to the Collateral Agent on the Closing Date and any Funding Date on which new Pools or Purchased Loans are pledged to the Collateral Agent, as the case may be, one or more computer files containing true and complete lists of all applicable Dealer Agreements, Pools and Loans securing the payment of the Notes and amounts due under the Transaction Documents and all of the Borrower’s obligations under the Notes and the Transaction Documents as of such date, and all Contracts securing all such Loans, identified by, as applicable, account number, dealer number and pool number as of the end of the Collection Period immediately preceding the Funding Date.  Such file shall be marked as Schedule IV hereto or as an addendum thereto, shall be delivered to the Collateral Agent as confidential and proprietary, and such Schedule IV and each addendum thereto are hereby incorporated into and made a part of this Agreement.  Such Schedule IV shall be supplemented and updated on the date of each Incremental Funding in the Revolving Period to include all Loans and Contracts pledged on the date of each such date so that, on each such date, the Collateral Agent will have a Schedule IV that describes all Loans pledged by the Borrower to the Collateral Agent hereunder on or prior to said date of Incremental Funding, any related Dealer Agreements, Purchase Agreements and all Contracts securing or evidencing such Loans (other than those that have been released from the Collateral and those Dealer Loans that have been deemed to be extinguished pursuant to Section 6.15(b) hereto).  Such updated Schedule IV shall be deemed to replace any existing Schedule IV as of the date such updated Schedule IV is provided in accordance with this Section 2.2(a)(iii).  Furthermore, Schedule IV hereto shall be deemed to be supplemented on each date of Dealer Collections Purchase by the list set forth under Section 6.15(c). 
(iv)    In connection with such pledge, each of the Borrower, Credit Acceptance and the Servicer also agrees, within 180 days of the Closing Date or relevant Funding Date, as the case may be, to clearly mark at least 98% of the Contracts or Contract folders securing a Loan with the following legend: “THIS AGREEMENT HAS BEEN 

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PLEDGED TO WELLS FARGO BANK, NATIONAL ASSOCIATION AS COLLATERAL AGENT FOR THE BENEFIT OF CERTAIN SECURED PARTIES.”
(b)    The Collateral Agent hereby acknowledges its acceptance, on behalf of the Secured Parties, of the pledge by the Borrower of the Loans and all other Collateral.  The Collateral Agent further acknowledges that, prior to or simultaneously with the execution and delivery of this Agreement, the Borrower delivered to the Collateral Agent the computer file represented by the Borrower to be the computer file described in Section 2.2(a)(iii).
(c)    The Collateral Agent hereby agrees not to disclose to any Person (including any Secured Party) any of the account numbers or other information contained in the computer files delivered to the Collateral Agent by the Borrower pursuant to Section 2.2(a)(iii), except as is required in connection with the performance of its duties hereunder or in enforcing the rights of the Secured Parties or to a Successor Servicer; provided, however, that notwithstanding anything to the contrary in this Agreement, the Collateral Agent may reply to a request from any Person for a list of Loans, Dealer Agreements, Contracts or other information referred to in any financing statement.  The Collateral Agent agrees to take such measures as shall be necessary or reasonably requested by the Borrower to protect and maintain the security and confidentiality of such information.  The Collateral Agent shall provide the Borrower with written notice five Business Days prior to any disclosure pursuant to this subsection 2.2(c).
Section 2.3.    Procedures for Funding of Advances.  (%3) Each Advance hereunder shall be requested by the Borrower delivering to the Deal Agent and the Lenders (with a copy to the Collateral Agent) a duly completed Funding Notice no later than 5:00 p.m. (Charlotte, North Carolina time) at least two (2) Business Days prior to the proposed Funding Date.  Each Funding Notice shall:  (i) specify the desired amount of such Funding which amount must (a) in the case of the initial funding on or about the Closing Date (the “Initial Funding”) be in a minimum amount of $1,000,000, and (b) in the case of any Incremental Funding, be in an amount equal to $1,000,000 or an integral multiple of $10,000 in excess thereof, (ii) specify the date of such Funding, and (iii) include a representation that all conditions precedent for a Funding described in Article III hereof have been met.  Each Funding shall be allocated pro rata among each Lender based upon the Commitment related to such Lender as a percentage of the Total Commitment.  Each Funding Notice shall be irrevocable.  
(b)    On the Funding Date, the Lenders shall, upon satisfaction of the applicable conditions set forth in Article III, make available to the Borrower in same day funds, at such bank or other location reasonably designated by the Borrower in its Funding Notice given pursuant to this Section 2.3, an amount equal to the lesser of (A) the amount requested by the Borrower from such Lender for such Advance or (B) the excess of the Commitment related to such Lender over such Lender’s portion of Capital then outstanding.
(c)    In no event shall a Lender be required on any date to make any Funding which would result in its portion of the Capital, determined after giving effect to such Funding, exceeding its Commitment.

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Section 2.4.    Determination of Yield.  Each Lender shall initially determine (i) the applicable Yield Rate and the Yield (including unpaid Yield, if any, due and payable on a prior Payment Date) to be paid by the Borrower with respect to the Advance on each Payment Date for the related Accrual Period and (ii) the Program Fee, the Unused Fee and any Breakage Costs, Increased Costs and Additional Amounts due in respect of such Payment Date (including any such amounts unpaid from any prior Payment Date), and shall advise the Servicer and the Backup Servicer thereof on or before the fifth Business Day prior to such Payment Date.  Prior to the next succeeding Payment Date, each Lender shall determine the amount of Yield, if any, payable in connection with Section 2.16(a)(iv) and not previously paid.  The amount owed in respect of the Yield for the next succeeding Accrual Period, as initially determined by each Lender shall be increased, if necessary and as appropriate, to reflect any Yield payable in connection with Section 2.16(a)(iv) and not previously paid.
Section 2.5.    Reduction of the Facility Limit and Commitment. The Borrower may, upon at least two (2) Business Days’ notice to the Deal Agent and each Lender, terminate in whole or reduce in part the portion of the Facility Limit that exceeds the aggregate Capital.  With respect to any such reduction, each Lender’s Commitment shall be reduced pro rata based upon such Lender’s Commitment as a percentage of the Facility Limit; provided, however, that each partial reduction of the Facility Limit shall be in an aggregate amount equal to $1,000,000 or an integral multiple thereof.  Each notice of reduction or termination pursuant to this Section 2.5 shall be irrevocable.  With respect to any termination or reduction pursuant to this Section 2.5 that occurs prior to the Commitment Termination Date, the Borrower shall pay to the Deal Agent for the benefit of the Lenders the Prepayment Fee relating to each Lender.
Section 2.6.    Actions with Respect to Advance.  Each Lender may take any of the following actions at any time with respect to an Advance it has funded: (i) divide the Advance funded by such Lender into two or more portions having aggregate Capital equal to the Capital of such divided Advance; (ii) combine one portion of the Advance funded by such Lender with another portion of the Advance funded by such Lender with an Accrual Period ending on the same day, creating a new Advance having Capital equal to the Capital of the two portions of Advances combined; or (iii) combine an Advance funded by such Lender with the Advance to be funded on such day by such Lender, creating a new Advance having Capital equal to the Capital of the two Advances combined.
Section 2.7.    Settlement Procedures.  (a) On each Payment Date, the Collateral Agent shall withdraw Available Funds and any Excess Reserve Amount (to be applied in accordance with Section 2.7(c)) and investment earnings on amounts on deposit in the Collection Account from the Collection Account and allocate and distribute such amounts to the applicable Person in the following order of priority:
(i)    FIRST, to the Hedge Counterparty, an amount equal to any Hedge Costs (exclusive of termination payments) and any such Hedge Costs (exclusive of termination payments) unpaid from any prior Payment Date.
(ii)    SECOND, to the Backup Servicer so long as it has not become the Servicer hereunder, an amount equal to any accrued and unpaid Backup Servicing 

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Fee due in respect of such Payment Date, any unpaid Backup Servicing Fee from any prior Payment Date, any reasonable out-of-pocket expenses incurred by the Backup Servicer, and any accrued and unpaid Indemnified Amounts owed by the Borrower to the Backup Servicer up to $17,000, monthly;
(iii)    THIRD, (A) to the Servicer, an amount equal to any accrued and unpaid Servicing Fees due in respect of such Payment Date and any Servicing Fees unpaid from any prior Payment Date; provided, however, if the Servicer has been replaced pursuant to Section 6.12 such amount shall not exceed the Capped Servicing Fee; and (B) to the Backup Servicer, if it has become the Successor Servicer, any Transition Expenses;
(iv)    FOURTH, to the Deal Agent for the account of the Lenders, an amount equal to the sum of any accrued and unpaid (A) Yield and Breakage Costs, (B) the Program Fee, and (C) the Unused Fee, Increased Costs and any Additional Amounts due in respect of such Payment Date and any such amounts unpaid from any prior Payment Date;
(v)    FIFTH, during the Revolving Period, to the Deal Agent for the account of the Lenders, an amount equal to the Monthly Principal Payment Amount for such Payment Date; 
(vi)    SIXTH, to any Successor Servicer, to the extent not already paid pursuant to clause THIRD above, an amount equal to Reliening Expenses;
(vii)    SEVENTH, (A) during the Revolving Period with respect to each Dissenting Lender after the time its Commitment has been reduced to zero pursuant to Section 2.1(b)(iv), pro rata, an amount equal to its outstanding Capital until such Dissenting Lender’s Capital has been reduced to zero and (B) during the Amortization Period, to the Deal Agent for the account of the Lenders, pro rata, the Additional Principal Payment Amount, until Capital has been reduced to zero;
(viii)    EIGHTH, to the Deal Agent for the account of the Lenders and the Backup Servicer, an amount equal to, without double counting, Increased Costs, any Additional Amounts and Indemnified Amounts (provided that, with respect to the Backup Servicer, such Indemnified Amounts shall include only those Indemnified Amounts not paid pursuant to clause THIRD above) due in respect of such Payment Date and unpaid from any prior Payment Date;
(ix)    NINTH, to the Reserve Account, (A) an amount equal to any outstanding Reserve Advances and (B) the amount necessary to cause the amount on deposit in the Reserve Account to equal the Required Reserve Account Amount (after giving effect to any deposits made in subclause (A));
(x)    TENTH, to the Backup Servicer, any Servicing Fee due in respect of such Payment Date, to the extent not paid pursuant to clause THIRD above and any such Servicing Fee unpaid from any prior Payment Date;

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(xi)    ELEVENTH, to the Deal Agent for the account of any other applicable Person, all remaining amounts up to all Aggregate Unpaids (during the Revolving Period, other than Capital) until paid in full; and
(xii)    TWELFTH, to the Borrower any remaining amounts.
(b)    One Business Day per calendar month, the date of which is to be chosen by the Borrower, the Collateral Agent shall, upon two Business Days' prior written request of the Borrower, withdraw from the Collection Account an amount not to exceed the amount on deposit therein on the date of such request. The Collateral Agent shall distribute such amount to the Deal Agent for the account of the Lenders, to be distributed by the Deal Agent to the Lenders, pro rata, as a payment in reduction of Capital. Notwithstanding anything in this Section 2.7(b) to the contrary, the Collateral Agent shall not be required to effect any such withdrawal or the Deal Agent make any such distribution until an officer of the Servicer or a representative of the Servicer designated by an officer of the Servicer has certified to the Collateral Agent and the Deal Agent in writing (which shall include electronic transmission) that it reasonably believes that at the end of the related Collection Period the sum of Available Funds and Excess Reserve Amount, after giving effect to such payment, will be greater than the amount needed to make the payments required pursuant to Section 2.7(a)(i) through (xi).
(c)    (i) If on any Payment Date the amount paid pursuant to Section 2.7(a)(iv) and (vii) is insufficient to cover all amounts due thereunder on such Payment Date the Collateral Agent shall withdraw from the Reserve Account an amount equal to the lesser of such shortfall and the amount of funds on deposit in the Reserve Account (such withdrawal, a “Reserve Advance”) and deposit such amount to the Collection Account.  The Collateral Agent shall pay such amount to the Deal Agent for payment to the Lenders.
(ii)    If on any Payment Date during the Amortization Period, the amount paid pursuant to Section 2.7(a)(vii)(B) is insufficient to reduce Capital to zero, the Deal Agent, in its sole discretion, may direct the Collateral Agent to withdraw any or all of the amount on deposit in the Reserve Account, and pay such amount to the Deal Agent, for payment to the Lenders.
Section 2.8.    [Reserved.]
Section 2.9.    Collections and Allocations.
(a)    Collections.  The Servicer shall transfer, or cause to be transferred, all Collections on deposit in the form of available funds in the Credit Acceptance Payment Account to the Collection Account by the close of business on the second Business Day after such Collections are received therein.  The Servicer shall promptly (but in no event later than the second Business Day after the receipt thereof) deposit all Collections received directly by it in the Collection Account.  The Servicer shall make such deposits or payments on the date indicated therein by wire transfer in immediately available funds or by automated clearing house (ACH).

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(b)    Initial Deposits.  On the Funding Date, the Servicer will deposit (in immediately available funds) into the Collection Account all Collections received on and after the applicable Cut-Off Date and through and including the day that is two days immediately preceding the Funding Date, in respect of the Loans.
(c)    Investment of Funds.  (i) Until the occurrence of a Termination Event or Unmatured Termination Event, to the extent there are uninvested amounts on deposit in the Collection Account and the Reserve Account, all amounts shall be invested as set forth in Section 6.7(c).
(ii)    On the date on which Capital is reduced to zero and all Aggregate Unpaids have been indefeasibly paid in full, all Collateral is released from the Lien of this Agreement, and this Agreement is terminated, any amounts on deposit in the Reserve Account shall be released to the Borrower.
(d)    Allocation of Collections.  The Servicer will allocate Collections monthly in accordance with the actual amount of Collections received.  The Servicer shall determine each month the amount of Collections received during such month which constitutes amounts which, pursuant to the terms of any Dealer Agreement, are required to be remitted to the applicable Dealer (such collections, “Dealer Collections”) and shall so notify the Collateral Agent.  Notwithstanding any other provision hereof, the Collateral Agent, at the direction of the Servicer, shall distribute on each Payment Date: (i) to the Borrower, an amount equal to the aggregate amount of Dealer Collections received during or with respect to the prior Collection Period and (ii) to the Backup Servicer, if it has become the Successor Servicer, an amount equal to any Repossession Expenses related to the prior Collection Period prior to the distribution of Available Funds pursuant to Section 2.7.
Section 2.10.    Payments, Computations, Etc.
(a)    Unless otherwise expressly provided herein, all amounts to be paid or deposited by the Borrower or the Servicer hereunder shall be paid or deposited in accordance with the terms hereof no later than 11:00 a.m. (Charlotte, North Carolina time) on the day when due in lawful money of the United States in immediately available funds to the Agent’s Account and the Deal Agent shall distribute such amounts actually received by it to the Persons entitled thereto no later than 2:00 p.m. (Charlotte, North Carolina time).  Any amounts received in the Agent’s Account after 11:00 a.m. (Charlotte, North Carolina time) shall be deemed to be received on the next subsequent Business Day and the Deal Agent shall distribute such amounts to the Persons entitled thereto no later than 2:00 p.m. (Charlotte, North Carolina time) on such next subsequent Business Day.  The Borrower shall, to the extent permitted by law, pay to the Secured Parties interest on all amounts not paid or deposited when due hereunder 3.0% per annum above the Base Rate, payable on demand; provided, however, that such interest rate shall not at any time exceed the maximum rate permitted by Applicable Law.  All computations of interest and all computations of Yield and other fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed.

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(b)    Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of Yield, interest or any fee payable hereunder, as the case may be.
(c)    If the Advance requested by the Borrower for any Funding Date and approved by a Lender and the Deal Agent pursuant to Section 2.1 and Section 2.3, is not made or effectuated for any reason other than the failure of the Lender or the Deal Agent to honor its obligations hereunder, as the case may be, on the requested Funding Date, the Borrower shall indemnify such Lender against any reasonable loss, cost or expense incurred by such Lender, including, without limitation, any loss (including loss of anticipated profits, net of anticipated profits in the reemployment of such funds in the manner determined by such Lender), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain the Funding.
Section 2.11.    [Reserved.]
Section 2.12.    Fees.
(a)    The Borrower shall pay to the Deal Agent, for the account of each Lender from the Collection Account on each Payment Date, monthly in arrears, the Program Fee and Unused Fee for each Lender agreed to in each Fee Letter.
(b)    The Servicer shall be entitled to receive the Servicing Fee, monthly in arrears in accordance with Section 2.7(a).
(c)    The Backup Servicer shall be entitled to receive the Backup Servicing Fee in accordance with Section 2.7(a).
(d)    The Borrower shall pay to the Deal Agent, on the Effective Date, the Structuring Fee and reasonable out-of-pocket expenses (including, without limitation, rating agency fees, filing fees and expenses incurred by the Deal Agent, as agent for the Lenders, in connection with the preparation and execution of this Agreement and other Transaction Documents and the carrying out of the transactions contemplated hereby and thereby) in immediately available funds.
(e)    The Borrower shall pay to the Deal Agent, for the account of each Lender, the Prepayment Fee, if any, in accordance with Section 2.5.
(f)    The Borrower shall pay to Dechert LLP, as counsel to the Deal Agent, its reasonable fees and out-of-pocket expenses in accordance with the Fee Letter.
Section 2.13.    Increased Costs; Capital Adequacy; Illegality.
(a)    If either (i) the introduction of or any change (including, without limitation, any change by way of imposition or increase of reserve requirements) in or in the interpretation of any law or regulation or (ii) the compliance by an Affected Party with any 

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guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), shall (A) subject an Affected Party to any Tax (except for Taxes on the overall net income of such Affected Party), duty or other charge with respect to the Advance made by it hereunder, or any right to make the Funding hereunder, or on any payment made hereunder, (B) impose, modify or deem applicable any reserve requirement (including, without limitation, any reserve requirement imposed by the Board of Governors of the Federal Reserve System, but excluding any reserve requirement, if any, included in the determination of Yield), special deposit or similar requirement against assets of, deposits with or for the amount of, or credit extended by, any Affected Party or (C) impose any other condition affecting the Advance made by it hereunder or a Lender’s rights hereunder, the result of which is to increase the cost to any Affected Party or to reduce the amount of any sum received or receivable by an Affected Party under this Agreement, then within ten days after demand by such Affected Party (which demand shall be accompanied by a statement setting forth the basis for such demand), the Borrower shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such additional or increased cost incurred or such reduction suffered.
(b)    If either (i) the introduction of or any change in or in the interpretation of any law, guideline, rule, regulation, directive or request or (ii) compliance by any Affected Party with any law, guideline, rule, regulation, directive or request from any central bank or other governmental authority or agency (whether or not having the force of law), including, without limitation, compliance by an Affected Party with any request or directive regarding capital adequacy, has or would have the effect of reducing the rate of return on the capital of any Affected Party as a consequence of its obligations hereunder or arising in connection herewith to a level below that which any such Affected Party could have achieved but for such introduction, change or compliance (taking into consideration the policies of such Affected Party with respect to capital adequacy) by an amount deemed by such Affected Party to be material, then from time to time, within ten days after demand by such Affected Party (which demand shall be accompanied by a statement setting forth the basis for such demand), the Borrower shall pay directly to such Affected Party such additional amount or amounts as will compensate such Affected Party for such reduction.  For avoidance of doubt, any interpretation of Accounting Research Bulletin No. 51 by the Financial Accounting Standards Board shall constitute an adoption, change, request or directive subject to this subsection 2.13(b).
(c)    If as a result of any event or circumstance similar to those described in clauses (a) or (b) of this section, any Affected Party is required to compensate a bank or other financial institution providing liquidity support, credit enhancement or other similar support to such Affected Party in connection with this Agreement or the funding or maintenance of the Advance hereunder, then within ten days after demand by such Affected Party, the Borrower shall pay to such Affected Party such additional amount or amounts as may be necessary to reimburse such Affected Party for any amounts payable or paid by it.
(d)    In determining any amount provided for in this section, the Affected Party may use any reasonable averaging and attribution methods.  Any Affected Party making a claim under this section shall submit to the Servicer a written description as to such 

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additional or increased cost or reduction and the calculation thereof, which written description shall be conclusive absent demonstrable error.
(e)    If a Lender shall notify the Deal Agent that a Eurodollar Disruption Event as described in clause (a) of the definition of “Eurodollar Disruption Event” has occurred, the Deal Agent shall in turn so notify the Borrower, whereupon all Capital in respect of which Yield accrues at the Adjusted Eurodollar Rate shall immediately be converted into Capital in respect of which Yield accrues at the Base Rate.
Section 2.14.    Taxes.
(a)    All payments made by an Obligor in respect of each Loan and each Contract and all payments made by the Borrower or the Servicer under this Agreement will be made free and clear of and without deduction or withholding for or on account of any Taxes.  If any Taxes are required to be deducted or withheld from any amounts payable to the Deal Agent or any other Secured Party, then the amount payable to such Person will be increased (such increase, the “Additional Amount”) such that every net payment made under this Agreement after deduction or withholding for or on account of any Taxes (including, without limitation, any Taxes on such increase) is not less than the amount that would have been paid had no such deduction or withholding been deducted or withheld.  The foregoing obligation to pay Additional Amounts, however, will not apply with respect to net income or franchise taxes imposed on a Lender or the Deal Agent, respectively, with respect to payments required to be made by the Borrower or Servicer under this Agreement, by a taxing jurisdiction in which such Lender or Deal Agent is organized, conducts business or is paying taxes as of the Effective Date (as the case may be) (such taxes “Excluded Taxes”).
(b)    The Borrower will indemnify each Affected Party for the full amount of Taxes payable or paid by such Person in respect of Additional Amounts and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  All payments in respect of this indemnification shall be made within ten days from the date a written invoice, which shall be conclusive absent manifest error, therefor is delivered to the Borrower.
(c)    The Borrower shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Deal Agent timely reimburse it for the payment of, Other Taxes. 
(d)    As soon as practicable after any payment of Taxes by the Borrower to a Governmental Authority pursuant to this Section 2.14, the Borrower shall deliver to the Deal Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Deal Agent,  not including those Taxes paid by Credit Acceptance on a consolidated basis

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(e)    If a Lender is created or organized under the laws of the United States or a political subdivision thereof, such Lender shall deliver to the Borrower, with a copy to the Deal Agent on or prior to the date on which such Lender becomes a Lender hereunder, two (or such other number as may from time to time be prescribed by Applicable Law) duly completed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.
(f)    If a Lender is not created or organized under the laws of the United States or a political subdivision thereof, such Lender shall deliver to the Borrower, with a copy to the Deal Agent, (i) on or prior to the date on which such Lender becomes a Lender hereunder, two (or such other number as may from time to time be prescribed by Applicable Law) duly completed copies of IRS Form W-8BEN, Form W-8BEN-E or Form W-8ECI (or any successor forms or other certificates or statements that may be required from time to time by the relevant United States taxing authorities or Applicable Laws), as appropriate, to permit the Borrower to make payments hereunder for the account of such Lender, as the case may be, without deduction or withholding of United States federal income or similar Taxes and (ii) upon the obsolescence of or after the occurrence of any event requiring a change in, any form or certificate previously delivered pursuant to this Section 2.14(f), copies (in such numbers as may from time to time be prescribed by Applicable Law or regulations) of such additional, amended or successor forms, certificates or statements as may be required under Applicable Laws or regulations to permit the Borrower to make payments hereunder for the account of such Lender, without deduction or withholding of United States federal income or similar Taxes.
(g)    If a payment made to a Lender under this Agreement would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Deal Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower and the Deal Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Deal Agent as may be necessary for the Borrower and the Deal Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (g), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(h)    If, in connection with an agreement or other document providing liquidity support, credit enhancement or other similar support to the Lenders in connection with this Agreement or the funding or maintenance of the Funding hereunder, the Lenders are required to compensate a bank or other financial institution in respect of Taxes under circumstances similar to those described in this section then within 10 days after demand by the Lenders, the Borrower shall pay to the Lenders such additional amount or amounts as may be necessary to reimburse the Lenders for any amounts paid by them.

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(i)    Each Lender shall severally indemnify the Deal Agent, within 10 days after demand therefor, for (i) any Taxes, other than Excluded Taxes and Other Taxes,  attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Deal Agent for such Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 13.1(e) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Deal Agent in connection with any Transaction Documents, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Deal Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Deal Agent to set off and apply any and all amounts at any time owing to such Lender under any Transaction Documents or otherwise payable by the Deal Agent to the Lender from any other source against any amount due to the Deal Agent under this Section 2.14(i).
(j)    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 this Agreement.
Section 2.15.    Assignment of the Contribution Agreement.  The Borrower hereby assigns to the Collateral Agent, for the ratable benefit of the Secured Parties hereunder, all of the Borrower’s right, title and interest in and to, but none of its obligations under, the Contribution Agreement and the Hedging Agreement.  The Borrower confirms that the Collateral Agent on behalf of the Secured Parties shall have the sole right to, at the written direction of the Deal Agent, enforce the Borrower’s rights and remedies under the Contribution Agreement and the Hedging Agreement for the benefit of the Secured Parties.
Section 2.16.    Take-Out.
(a)    On any Business Day (the “Take-Out Date”), but subject to the limitation contained in clause (d) below, the Borrower shall have the right to effect a Take-Out and require the Collateral Agent to release its security interest in and Lien on the related Contracts and Loans, subject to the following terms and conditions:
(i)    The Borrower shall have given the Deal Agent, the Collateral Agent, the Backup Servicer and the Servicer at least three (3) Business Days’ prior written notice of its intent to effect the Take-Out, which notice shall be irrevocable; provided however, failure to effect such Take-Out on the Take-Out Date shall not result in a Termination Event), but the Borrower shall be obligated to pay any Breakage Costs and any other losses incurred by the Lenders in connection therewith.
(ii)    Unless the Take-Out is to be effected on a Payment Date (in which case the relevant calculations with respect to such Take-Out shall be reflected on the applicable Monthly Report), the Servicer shall deliver to the Deal Agent an Officer’s Certificate, together with evidence to the reasonable satisfaction of the Deal Agent (which evidence may consist solely of the Officer’s Certificate signed by an officer of the Servicer) that the Borrower 

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shall have sufficient funds on the related Take-Out Date to effect the contemplated Take-Out in accordance with this Agreement.  In effecting the Take-Out, the Borrower may use the proceeds of sales of the Loans (which sales must be made in arm’s-length transactions).
(iii)    After giving effect to the Take-Out and the release to the Borrower of the Loans and related Contracts on the Take-Out Date, (x) the representations and warranties contained in Section 4.1 and 4.2 hereof shall continue to be correct in all material respects, except to the extent relating to an earlier date and (y) neither an Unmatured Termination Event nor a Termination Event shall have resulted.
(iv)    On the Take-Out Date, the Collateral Agent shall have received, for the benefit of the Secured Parties and the Hedge Counterparties, as applicable, in immediately available funds, an amount equal to the sum of: (A) the aggregate outstanding Capital being paid plus (B) an amount equal to the related unpaid Yield to the end of the Accrual Period plus (C) an aggregate amount equal to the sum of all other amounts due and owing to the Deal Agent, the Lenders, the Backup Servicer, the Successor Servicer, the Hedge Counterparties and the other Secured Parties, as applicable, under this Agreement and the other Transaction Documents, to the extent accrued to such date and to accrue thereafter (including, without limitation, Breakage Costs and Hedge Costs) plus (D) all other Aggregate Unpaids.  No such reduction shall be given effect unless the Borrower has complied with the terms of any Hedging Agreement requiring that any derivative transaction related thereto be terminated in whole or in part as a result of any such reduction in the Capital and Borrower has paid all Hedge Costs due to the relevant Hedge Counterparty for any such termination.
(v)    Upon receipt of the amount set forth in Section 2.16(a)(iv), the Collateral Agent shall apply such amounts first to the pro-rata reduction of the Capital, second to the payment of accrued Yield on the amount of Capital to be repaid and to the payment of any Breakage Costs, by paying such amounts to the Lenders, and third to pay any Hedge Costs related to such reduction of the Capital due to the relevant Hedge Counterparty, and fourth to pay all other Aggregate Unpaids related to such reduction of the Capital due to the relevant party.
(vi)    The Borrower shall certify in writing to the Collateral Agent and the Deal Agent that no adverse selection was employed in the selection of the Loans and Contracts to be released.

(b)    The Borrower hereby agrees to pay the reasonable legal fees and expenses of the Deal Agent and the Lenders in connection with any Take-Out (including, but not limited to, expenses incurred in connection with the release of the Lien of the Collateral Agent, the Lenders and any other party having such an interest in the Loans in connection with such Take-Out).
(c)    In connection with any Take-Out, on the related Take-Out Date, the Collateral Agent, on behalf of the Lenders, shall, at the expense of the Borrower: (i) execute such instruments of release with respect to the portion of the Loans to be released to the Borrower, in favor of the Borrower as the Borrower may reasonably request; (ii) deliver any portion of the 

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Loans to be released to the Borrower in its possession to the Borrower; and (iii) otherwise take such actions as are necessary and appropriate to release the Lien of the Collateral Agent on the Loans to be released to the Borrower and deliver to the Borrower such Loans
(d)    Notwithstanding anything to the contrary contained herein, the Borrower may not effect an Optional Take-Out more frequently than one time during any three-month period.
ARTICLE III
     
CONDITIONS TO THE CLOSING, EACH FUNDING AND AMENDMENT AND RESTATEMENT
Section 3.1.    Conditions to Effectiveness of this Sixth Amended and Restated Loan and Security Agreement.  This Sixth Amended and Restated Loan and Security Agreement shall not become effective until:
(a)     Each document specified on Schedule VII has been duly executed by, and delivered to, the parties hereto and thereto and the Deal Agent has received all such executed documents.  

(b)    The Borrower shall have paid all fees or other amounts required to be paid by it on the Effective Date under the Fee Letter.

(c)    The Deal Agent has received such other approvals, opinions or documents as the Deal Agent or its counsel may reasonably require.  

Section 3.2.    Conditions Precedent To All Fundings.  Each request for a Funding hereunder (each, a “Transaction”) shall be subject to the further conditions precedent:
(a)    With respect to any Advance (including the Initial Funding), the Borrower shall have delivered to the Deal Agent, on or prior to the date of the Advance in form and substance satisfactory to the Deal Agent, (i) the Funding Notice and (ii) Exhibit A to the Contribution Agreement, including the Schedule of Loans and Contracts attached thereto, dated within two (2) Business Days prior to the date of the Advance and containing such additional information as may be reasonably requested by the Deal Agent.
(b)    On the date of such Transaction the following statements shall be true and the Borrower shall be deemed to have certified that, after giving effect to the proposed Advance and pledge of Additional Loans:
(i)    The representations and warranties contained in Sections 4.1, 4.2 and 4.3 are true and correct on and as of such day as though made on and as of such day and shall be deemed to have been made on such day;

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(ii)    On and as of such day, after giving effect to the proposed Advance, (A) the outstanding Capital does not exceed the lesser of (1) the Borrowing Base and (2) the Facility Limit and (B) with respect to each Lender the aggregate Capital funded or maintained by such Lender does not exceed such Lender’s Commitment;
(iii)    On and as of such day, the Borrower, the Originator and the Servicer each has performed all of the agreements contained in this Agreement and the other Transaction Documents to which it is a party to be performed by such person at or prior to such day; and
(iv)    No law or regulation shall prohibit, and no order, judgment or decree of any federal, state or local court or governmental body, agency or instrumentality shall prohibit or enjoin, the making of the Funding by the Lender in accordance with the provisions hereof.
(c)    The Borrower shall have delivered to the Collateral Agent the information described in Section 2.2(a)(iii).
(d)    All financing statements necessary to perfect the Collateral Agent’s first priority security interest in the Collateral shall have been filed in the appropriate filing offices.
(e)    Forecasted Collections for the Aggregate Outstanding Eligible Loan Net Balance (after giving effect to the proposed Advance) shall be greater than or equal to Capital, after giving effect to the proposed Advance.
(f)    (i) All conditions required to be satisfied in the Contribution Agreement shall have been satisfied.
(g)    No Amortization Event, Termination Event or Unmatured Termination Event shall have occurred.
(h)    No Servicer Termination Event or any event, that with the giving of notice or the lapse of time, or both, would become a Servicer Termination Event shall have occurred.
(i)    No material adverse selection procedures were used by the Borrower with respect to the Loans, Contracts or Dealer Agreements; provided, for the avoidance of doubt, that during the Revolving Period, the Borrower in its sole discretion may elect to pledge Dealer Loans secured by either Open Pools or Closed Pools.
(j)    The Borrower shall have deposited to the Reserve Account an amount equal to 1.0% of the Capital after giving effect to the proposed Advance.  In addition, the amount on deposit in the Reserve Account shall not be less than the Required Reserve Account Amount.
(k)    The Hedging Agreement shall be in effect.

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(l)    The Deal Agent shall have received such other approvals, opinions or documents as the Deal Agent or its counsel may reasonably require.

ARTICLE IV
     
REPRESENTATIONS AND WARRANTIES
Section 4.1.    Representations and Warranties of the Borrower.  The Borrower represents and warrants to the Collateral Agent, the Deal Agent, the Backup Servicer and the Secured Parties on the Effective Date and each Funding Date as follows:
(a)    Organization and Good Standing.  The Borrower has been duly organized, and is validly existing as a corporation in good standing under the laws of the State of Nevada, with all requisite power and authority to own or lease its properties and conduct its business as such business is presently conducted, and the Borrower had at all relevant times, and now has all necessary power, authority and legal right to acquire, own and pledge the Collateral and perform its obligations under this Agreement.
(b)    Due Qualification.  The Borrower is duly qualified to do business and is in good standing as a corporation and has obtained all material necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business requires such qualification, licenses or approvals.
(c)    Power and Authority; Due Authorization.  The Borrower:  (i) has all necessary power, authority and legal right to:  (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party, (B) carry out the terms of the Transaction Documents to which it is a party, and (C) transfer and assign each Loan, Related Security and all other Collateral on the terms and conditions herein provided and (ii) has duly authorized by all necessary action the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party and the transfer and assignment of the Loans, Related Security and all other Collateral on the terms and conditions herein provided.  This Agreement and each other Transaction Document to which it is a party have been duly executed and delivered by it.
(d)    Binding Obligation.  This Agreement and each other Transaction Document to which the Borrower is a party constitutes a legal, valid and binding obligation of the Borrower, each enforceable against the Borrower in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditor’s rights generally and to general principles of equity.
(e)    No Violation.  The consummation of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party and the fulfillment of the terms hereof and thereof will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the Borrower’s certificate of incorporation, bylaws or any Contractual Obligation of the 

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Borrower, (ii) result in the creation or imposition of any Lien upon any of the Borrower’s properties pursuant to the terms of any such Contractual Obligation, other than this Agreement, or (iii) violate any Applicable Law.
(f)    No Proceedings.  There is no litigation, proceeding or investigation pending or, to the best knowledge of the Borrower, threatened against the Borrower, before any Governmental Authority (i) asserting the invalidity of this Agreement or any other Transaction Document to which the Borrower is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which the Borrower is a party or (iii) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect.
(g)    All Consents Required.  All approvals, authorizations, consents, orders or other actions of any Person or of any Governmental Authority (if any) required for the due execution, delivery and performance by the Borrower of this Agreement and any other Transaction Document to which the Borrower is a party have been obtained except where the failure to so obtain is not reasonably expected to result in a Material Adverse Effect.
(h)    Bulk Sales.  The execution, delivery and performance of this Agreement do not require compliance with any “bulk sales” act or similar law by Borrower.
(i)    Solvency.  The transactions under this Agreement and any other Transaction Document to which the Borrower is a party do not and will not render the Borrower not Solvent and the Borrower shall deliver to the Deal Agent on the Closing Date a certification in the form of Exhibit D.  The Originator has confirmed in writing to the Borrower that, so long as the Borrower is Solvent, the Originator will not cause the Borrower to file a voluntary petition under the Bankruptcy Code or any other Insolvency Laws.
(j)    Selection Procedures.  No procedures believed by the Borrower to be materially adverse to the interests of the Collateral Agent or the Lenders were utilized by the Borrower in identifying and/or selecting Loans or Dealer Agreements; provided, for the avoidance of doubt, that during the Revolving Period, the Borrower in its sole discretion may elect to pledge Dealer Loans secured by either Open Pools or Closed Pools.  In addition, each Loan shall have been underwritten in accordance with and satisfy, in each case in all material respects, the standards of any Credit Guidelines that have been established by the Borrower or the Originator and are then in effect.
(k)    Taxes.  The Borrower has filed or caused to be filed all tax returns that are required to be filed by it.  The Borrower has paid or made adequate provisions for the payment of all Taxes and all assessments made against it or any of its property (other than any amount of Tax the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of the Borrower), and no tax lien has been filed and, to the Borrower’s knowledge, no claim is being asserted, with respect to any such Tax, fee or other charge.

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(l)    Exchange Act Compliance; Regulations T, U and X.  None of the transactions contemplated herein (including, without limitation, the use of the proceeds from the pledge of the Collateral) will violate or result in a violation of Section 7 of the United States Securities Exchange Act of 1934, as amended, or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.  The Borrower does not own or intend to carry or purchase, and no proceeds from the pledge of the Collateral will be used to carry or purchase, any “margin stock” within the meaning of Regulation U or to extend “purchase credit” within the meaning of Regulation U.
(m)    Quality of Title.  Each Loan, together with the Related Security related thereto, shall, at all times, be owned by the Borrower free and clear of any Lien except as provided in Section 4.2(a)(iii), and upon each Funding, the Collateral Agent as agent for the Secured Parties shall acquire a valid and perfected first priority security interest in such Loans, the Related Security related thereto and all Collections then existing or thereafter arising, free and clear of any Lien, except as provided in Section 4.2(a)(iii).  No effective financing statement or other instrument similar in effect covering any Loan or Dealer Agreement shall at any time be on file in any recording office except such as may be filed (i) in favor of the Borrower in accordance with the Contribution Agreement or (ii) in favor of the Collateral Agent in accordance with this Agreement.
(n)    Security Interest.  The Borrower has granted a security interest (as defined in the UCC) to the Collateral Agent, as agent for the Secured Parties, in the Collateral, which is enforceable in accordance with applicable law upon execution and delivery of this Agreement.  Upon the filing of UCC-1 financing statements naming the Collateral Agent as secured party and the Borrower as debtor, or upon the Collateral Agent obtaining control, in the case of that portion of the Collateral which constitutes electronic chattel paper, or possession, in the case of that portion of the Collateral which constitutes tangible chattel paper, the Collateral Agent, as agent for the Secured Parties, shall have a first priority perfected security interest in the Collateral.  All filings (including, without limitation, such UCC filings) as are necessary in any jurisdiction to perfect the interest of the Collateral Agent, as agent for the Secured Parties, in the Collateral have been made.
(o)    Accuracy of Information.  All information heretofore furnished by the Borrower (including without limitation, the Monthly Report and Credit Acceptance’s financial statements) to the Deal Agent, the Collateral Agent or any Lender for purposes of or in connection with this Agreement or any other Transaction Document, or any transaction contemplated hereby or thereby, will be true, correct, complete and accurate in every material respect, on the date such information is stated or certified.
(p)    Location of Offices.  The principal place of business and chief executive office of the Borrower and the office where the Borrower keeps all the Records (other than the Certificates of Title) are located at the address of the Borrower referred to in Section 14.2 hereof and the office where the Borrower keeps all the Certificates of Title is located at 200 Galleria Officentre, Suite 125, Southfield, Michigan 48034 (or, in each case, at such other 

48

locations as to which the notice and other requirements specified in Section 5.2(g) shall have been satisfied); provided, that, Credit Acceptance may temporarily (or permanently, solely in the case of a Contract that is repurchased, liquidated or paid in full) move or transfer individual Contract Files or Records, or any portion thereof without notice in accordance with Section 6.2(c)(iii).
(q)    OFAC.  None of the Borrower, any Subsidiary or any Affiliate of the Borrower (i) is a Sanctioned Person, (ii) has more than 10% of its assets in Sanctioned Countries or (iii) derives more than 10% of its operating income from investments in, or transactions with Sanctioned Persons or Sanctioned Countries.  The proceeds of any Funding will not be used and have not been used to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country.
(r)    Tradenames; Place of Business; Correct Legal Name.  (i) Except as described in Schedule II, the Borrower has no trade names, fictitious names, assumed names or “doing business as” names or other names under which it has done or is doing business; (ii) the principal place of business and chief executive office of the Borrower are located at the address of the Borrower set forth on the signature pages hereto; and (iii) “CAC Warehouse Funding Corporation II” is the correct legal name of the Borrower indicated on the public records of the Borrower’s jurisdiction of organization.
(s)    Contribution Agreement.  The Contribution Agreement is the only agreement pursuant to which the Borrower purchases Loans from the Originator.
(t)    Value Given.  The Borrower shall have given reasonably equivalent value to the Originator in consideration for the transfer to the Borrower of the Loans and Related Security under the Contribution Agreement, no such transfer shall have been made for or on account of an antecedent debt owed by the Originator to the Borrower, and no such transfer is or may be voidable or subject to avoidance under any section of the Bankruptcy Code.
(u)    Accounting.  The Borrower accounts for the transfers to it from the Originator of Loans and Related Security under the Contribution Agreement as sales or contributions to capital of such Loans and Related Security in its books, records and financial statements, in each case prepared as presented within the audited consolidated financial statements of Credit Acceptance and its subsidiaries and within the requirements set forth herein.
(v)    Special Purpose Entity.  The Borrower is in compliance with Section 5.2(o) hereof.
(w)    Confirmation from the Originator.  The Borrower has received in writing from the Originator confirmation that, so long as the Borrower is not “insolvent” within the meaning of the Bankruptcy Code, the Originator will not cause the Borrower to file a voluntary petition under the Bankruptcy Code or any other bankruptcy or insolvency laws.  Each of the Borrower and the Originator is aware that in light of the circumstances described in the preceding sentence and other relevant facts, the filing of a voluntary petition under the Bankruptcy Code for the purpose of making any Loan or any other assets of the Borrower 

49

available to satisfy claims of the creditors of the Originator would not result in making such assets available to satisfy such creditors under the Bankruptcy Code.
(x)    Investment Company Act.  The Borrower is not, and will not, as a result of the execution and delivery of this Agreement and the consummation of the transactions contemplated herein, be required to be registered as an “investment company” as defined in the Investment Company Act.  In determining that the Borrower is not an “investment company,” the Borrower is entitled to rely on the exclusion from the definition of “investment company” set forth in Section 3(c)(5) of the Investment Company Act, although there may be additional exclusions or exemptions available to the Borrower. The Borrower is not a “covered fund” for purposes of the regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as the “Volcker Rule.”
(y)    ERISA.  The present value of all benefits vested under all “employee pension benefit plans,” as such term is defined in Section 3 of ERISA, maintained by the Borrower, or in which employees of the Borrower are entitled to participate, as from time to time in effect (herein called the “Pension Plans”), does not exceed the value of the assets of the Pension Plan allocable to such vested benefits (based on the value of such assets as of the last annual violation date).  No prohibited transactions, failures to satisfy minimum funding standards, accumulated funding deficiencies, withdrawals or “reportable events” as defined in Section 4043 of ERISA have occurred with respect to any Pension Plans that, in the aggregate, could subject the Borrower to any  material tax, penalty or other liability.  No notice of intent to terminate a Pension Plan has been filed, nor has any Pension Plan been terminated under Section 4041(c) of ERISA, nor has the Pension Benefit Guaranty Corporation instituted proceedings to terminate, or appoint a trustee to administer a Pension Plan and no event has occurred or condition exists that might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan.
(z)    Patriot Act.   To the extent applicable, each of the Borrower, the Originator and their Affiliates is in compliance, in all material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto, and (b) Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”).  No part of the proceeds of any funding made hereunder will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
(aa)    Representations and Warranties in Contribution Agreement.  The representations and warranties made by the Originator to the Borrower in the Contribution Agreement are hereby remade by the Borrower on each date to which they speak in the Contribution Agreement as if such representations and warranties were set forth herein.  For purposes of this Section 4.1(aa), such representations and warranties are incorporated herein by 

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reference as if made by the Borrower to the Deal Agent, the Collateral Agent and each of the Secured Parties under the terms hereof mutatis mutandis.
(bb)    Amount of Loans and Contracts; Computer File.  When new Pools or Purchased Loans are pledged to the Collateral Agent, the Borrower shall provide, or cause to be provided to, the Collateral Agent with information regarding (A) the aggregate Outstanding Balance of the Contracts to be pledged to the Collateral Agent on the related Addition Date; (B) the Aggregate Outstanding Eligible Loan Balance; and (C) the Aggregate Outstanding Eligible Loan Net Balance, each as of the applicable Cut-Off Date and as reported in Credit Acceptance’s loan servicing system or as a product of the Loan Loss Reserve analysis.  The computer file delivered pursuant to Section 2.2(a)(iii) hereof is complete and accurately reflects the information regarding the Loans, applicable Dealer Agreements and Contracts in all material respects.
(cc)    Use of Proceeds.  The proceeds of each Funding will be used by the Borrower to purchase the Loans and related Collateral from the Originator pursuant to the Contribution Agreement or, subject to Section 5.2(f), to make distributions to Credit Acceptance in respect of its equity interest in the Borrower.
(dd)    Subsidiaries.  The Borrower does not have any Subsidiaries.
(ee)    Capital Stock.  The Borrower has neither sold nor pledged any of its common stock to any entity other than Credit Acceptance.
The representations and warranties set forth in this Section 4.1 shall survive the Borrower’s pledge of the Collateral to the Collateral Agent and the termination of the rights and obligations of the Servicer.  Upon discovery by the Borrower, the Servicer or Credit Acceptance, or upon written notice or actual knowledge by a Responsible Officer of the Collateral Agent, of a breach of any of the representations and warranties set forth herein, the party discovering, receiving notice of or having actual knowledge, as applicable, of such breach shall give prompt written notice to the other parties of such breach.
Section 4.2.    Representations and Warranties of the Borrower Relating to the Loans and the Related Contracts.
(a)    Eligibility of Loans.  The Borrower hereby represents and warrants to the Deal Agent, the Collateral Agent, the Backup Servicer and the Secured Parties as of the Effective Date and each Funding Date with respect to the Dealer Agreements, Loans, Contracts and Related Security pledged to the Collateral Agent on such date that:
(i)    each Loan classified as an “Eligible Dealer Loan” (or included in any aggregation of balances of “Eligible Dealer Loans”) or as an “Eligible Purchased Loan” (or included in any aggregation of balances of “Eligible Purchased Loans”) by the Borrower or the Servicer in any document or report delivered hereunder satisfied the requirements contained in the definition of Eligible Dealer Loan or Eligible Purchased Loan, as applicable, on the date so delivered; each Contract classified as an “Eligible Dealer Loan 

51

Contract” or “Eligible Purchased Loan Contract” (or included in any aggregation of balances of “Eligible Dealer Loan Contracts” or “Eligible Purchased Loan Contracts”) by the Borrower or the Servicer in any document or report delivered hereunder satisfied the requirements contained in the definition of Eligible Dealer Loan Contract or Eligible Purchased Loan Contract on the date so delivered;
(ii)    all information with respect to the Dealer Agreements, Purchase Agreements and the Loans and the Contracts and the other Collateral provided to the Collateral Agent or the Deal Agent by the Borrower or the Servicer was true and correct in all material respects as of the date such information was provided to the Collateral Agent or the Deal Agent (or such earlier time as specifically set forth in such information), as applicable;
(iii)    each Loan and all other Collateral has been pledged to the Collateral Agent free and clear of any Lien of any Person (other than, with respect to the Dealer Loan Contracts, the second priority Lien of the related Dealer therein as set forth in the related Dealer Agreement) and in compliance, in all material respects, with all Applicable Laws;
(iv)    with respect to each Dealer Agreement, Purchase Agreement, Loan, Contract and all other Collateral, all material consents, licenses, approvals or authorizations of or registrations or declarations with any Governmental Authority required to be obtained, effected or given by the Borrower, in connection with the pledge of such Dealer Agreement, Purchase Agreement, Loan, Contract or other Collateral to the Collateral Agent have been duly obtained, effected or given and are in full force and effect;
(v)    Schedule IV to this Agreement, which may be supplemented and updated from time to time, is and will be accurate and complete listings of all Loans, Contracts and Dealer Agreements in all material respects on the date each such Loan, Contract or Dealer Agreement was pledged to the Collateral Agent hereunder, and the information contained therein is and will be true and correct in all material respects as of such date; 
(vi)    each Contract and Purchased Loan constitutes tangible or electronic chattel paper; and
(vii)    no selection procedure believed by the Borrower to be materially adverse to the interests of the Secured Parties has been or will be used in selecting the Dealer Agreements, Loans or Contracts; provided that for the avoidance of doubt, during the Revolving Period, Credit Acceptance in its sole discretion may elect to sell to the Borrower Dealer Loans secured by either Open Pools or Closed Pools. 
(b)    Notice of Breach.  The representations and warranties set forth in this Section 4.2 shall survive the pledge of the Collateral to the Collateral Agent and the termination of the rights and obligations of the Servicer. Upon discovery by the Borrower, the Servicer or Credit Acceptance, or upon written notice or actual knowledge by a Responsible Officer of the Collateral Agent or the Backup Servicer, of a breach of any of the representations and warranties set forth herein, the party discovering, receiving notice of or having actual 

52

knowledge, as applicable, of such breach shall give prompt written notice to the other parties of such breach.
Section 4.3.    Representations and Warranties of the Servicer.  The Servicer represents and warrants as follows on the Effective Date and each Funding Date:
(a)    Organization and Good Standing.  The Servicer has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Michigan, with all requisite corporate power and authority to own or lease its properties and to conduct its business as such business is presently conducted and to enter into and perform its obligations pursuant to this Agreement and the other Transaction Documents to which it is a party.
(b)    Due Qualification.  The Servicer is duly qualified to do business as a corporation and is in good standing as a corporation, and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its property and or the conduct of its business requires such qualification, licenses or approvals.
(c)    Power and Authority; Due Authorization.  The Servicer (i) has all necessary power, authority and legal right to (A) execute and deliver this Agreement and the other Transaction Documents to which it is a party and (B) carry out the terms of this Agreement and the other Transaction Documents to which it is a party, and (ii) has duly authorized by all necessary corporate action the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party.  This Agreement and each other Transaction Document to which it is a party have been duly executed and delivered by the Servicer.
(d)    Binding Obligation.  This Agreement and each other Transaction Document to which the Servicer is a party constitutes a legal, valid and binding obligation of the Servicer, each enforceable against the Servicer in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity.
(e)    No Violation.  The consummation of the transactions contemplated by this Agreement and the other Transaction Documents to which it is a party and the fulfillment of the terms hereof and thereof will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the Servicer’s articles of incorporation, bylaws or any Contractual Obligation of the Servicer, (ii) result in the creation or imposition of any Lien upon any of the Servicer’s properties pursuant to the terms of any such Contractual Obligation, or (iii) violate any Applicable Law.
(f)    No Proceedings.  There is no litigation, proceeding or investigation pending or, to the best knowledge of the Servicer, threatened against the Servicer, before any Governmental Authority (i) asserting the invalidity of this Agreement or any other Transaction Document to which the Servicer is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any other Transaction Document to which 

53

the Servicer is a party or (iii) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect.
(g)    All Consents Required.  All approvals, authorizations, consents, orders or other actions of any Person or of any Governmental Authority (if any) required for the due execution, delivery and performance by the Servicer of this Agreement and any other Transaction Document to which the Servicer is a party have been obtained except where the failure to so obtain is not reasonably expected to result in a Material Adverse Effect.
(h)    Reports Accurate.  All Monthly Reports and other written and electronic information, exhibits, financial statements, documents, books, records or reports furnished by the Servicer to the Deal Agent, the Backup Servicer, the Collateral Agent or any Lender in connection with this Agreement are accurate, true, complete and correct in all material respects as of the date delivered.
(i)    Servicer’s Performance.  The Servicer has the knowledge, the experience and the systems, financial and operational capacity available to timely perform each of its obligations hereunder and under each other Transaction Document to which it is a party.
(j)    Compliance With Credit Guidelines and Collection Guidelines.  The Servicer has, with respect to the Loans and Contracts, complied in all material respects with the Credit Guidelines and the Collection Guidelines or otherwise as required by Applicable Law.
Section 4.4.    Representations and Warranties of the Backup Servicer.  The Backup Servicer represents and warrants as follows:
(a)    Organization and Good Standing.  The Backup Servicer has been duly organized, and is validly existing as a national banking association and in good standing under the laws of the United States of America, with all requisite power and authority to own or lease its properties and to conduct its business as such business is presently conducted and to enter into and perform its obligations pursuant to this Agreement and each other Transaction Document to which it is a party.
(b)    Binding Obligation.  This Agreement and each other Transaction Document to which it is a party constitutes a legal, valid and binding obligation of the Backup Servicer, each enforceable against the Backup Servicer in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by equitable limitations on the availability of specific remedies, regardless of whether such enforceability is considered in a proceeding in equity or at law.
(c)    Backup Servicing Agreement. The Backup Servicer hereby remakes the representations and warranties made by it under the Backup Servicing Agreement.

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Section 4.5.    Breach of Representations and Warranties.
(a)    Payment in respect of an Ineligible Loan or an Ineligible Contract.  If a Loan or a Contract is an Ineligible Loan or Ineligible Contract, no later than the earlier of (i) knowledge by the Borrower of such Loan or Contract being an Ineligible Loan or Ineligible Contract and (ii) receipt by the Borrower from the Deal Agent, the Collateral Agent or the Servicer of written notice thereof the Borrower shall, by the last day of the first full Collection Period following the discovery or notice thereof, make a payment to the Collection Account in respect of each such Loan or Contract in an amount equal to the related Release Price.  Any such Loan or Contract shall for all purposes of this Agreement be deemed to be an Ineligible Loan or Ineligible Contract.  The Borrower shall make a deposit to the Collection Account (for allocation pursuant to Section 2.7) in immediately available funds of an amount (the “Release Price”) equal to: (A) in the case of an Ineligible Loan, the product of (x) the Net Loan Balance related to such Loan as of the last day of the related Collection Period and (y) the Net Advance Rate in effect on the date of such payment; and (B) in the case of an Ineligible Contract, the product of (x) the Outstanding Balance related to such Contract as of the last day of the related Collection Period and (y) a ratio the numerator of which is the outstanding Capital as of the date of such payment and the denominator of which is the Outstanding Balance of all Contracts as of the last day of the related Collection Period.  Notwithstanding the foregoing, with respect to any Ineligible Contracts, the Borrower may repurchase the Loans related thereto in lieu of such Ineligible Contracts and deposit into the Collection Account the Release Price of such Loans (as if such Loans were Ineligible Loans).  Each Loan or Contract which is subject to a payment in accordance with this Section 4.5(a) shall, upon payment in full of the related Release Price, be released from the lien created pursuant to this Agreement and shall no longer constitute Collateral.  The Collateral Agent as agent for the Secured Parties shall, at the sole expense of the Servicer, execute and deliver such instruments of transfer, in each case without recourse, representation or warranty, as shall be prepared and reasonably requested by the Servicer on behalf of the Borrower to vest in the Borrower, or its designee or assignee, all right, title and interest of the Collateral Agent as agent for the Secured Parties in, to and under the Loans or Contract subject to a payment in accordance with this Section 4.5(a).
(b)    Retransfer of All of the Loans.  In the event of a breach of any representation or warranty set forth in Section 4.2 hereof which breach could reasonably be expected to have a Material Adverse Effect, by notice then given in writing to the Borrower, the Deal Agent may direct the Borrower to accept the release by the Collateral Agent of all of the Loans (as directed in writing by the Deal Agent), in which case the Borrower shall be obligated to accept the release of such Loans on a Payment Date specified by the Deal Agent (such date, the “Release Date”); provided, however, that no such release shall be given effect unless the Borrower has complied with the terms of any Hedging Agreement requiring that any derivative transaction related thereto be terminated in whole or in part and the Borrower has paid all Hedge Costs due with respect to such termination.  The Borrower shall deposit in the Collection Account on the Release Date an amount equal to: (A) the Aggregate Unpaids minus (B) the amount, if any, available in the Collection Account and the Reserve Account on such Payment Date (the “Retransfer Amount”) for allocation and distribution in accordance with Section 2.7.  On the Release Date, provided that the full Retransfer Amount has been deposited into the 

55

Collection Account, the Loans and Related Security related thereto shall be transferred to the Borrower; and the Collateral Agent as agent for the Secured Parties shall, at the sole expense of the Servicer, execute and deliver such instruments of transfer, in each case without recourse, representation or warranty, as shall be prepared and reasonably requested by the Servicer on behalf of the Borrower to vest in the Borrower, or its designee or assignee, all right, title and interest of the Collateral Agent as agent for the Secured Parties in, to and under the Loans.
(c)    [Reserved.]
(d)    Remedy for Breach.  Notwithstanding anything to the contrary contained in Sections 10.1(e) and 10.2, the parties hereto agree that the sole remedy for the breach by the Borrower of the representations and warranties set forth in Section 4.2 hereof with respect to the eligibility of a Loan or Contract shall be set forth in this Section 4.5 and Section 6.2(c)(ii).  
(e)    Application.  Amounts paid in accordance with Section 4.5(a) and (b) shall be distributed on the next succeeding Payment Date in accordance with Section 2.7.
(f)    Notwithstanding anything herein to the contrary, during the Revolving Period, payments required under Section 4.5(a) and (b) shall not be required if the Capital is equal to or less than the Borrowing Base.
ARTICLE V
     
GENERAL COVENANTS
Section 5.1.    Affirmative Covenants of the Borrower.  From the date hereof until the Collection Date:
(a)    Compliance with Laws.  The Borrower will comply in all material respects with all Applicable Laws, including those with respect to the Loans and Dealer Agreements.
(b)    Preservation of Corporate Existence; Conduct of Business.  The Borrower will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification has had, or could reasonably be expected to have, a Material Adverse Effect.  The Borrower will carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and do all things necessary to remain duly incorporated, validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted.
(c)    Performance and Compliance with Loans, Dealer Agreements and Contracts.  The Borrower will, at its expense, timely and fully perform and comply (or cause the Originator to perform and comply pursuant to the Contribution Agreement) with all provisions, 

56

covenants and other promises required to be observed by it under the Loans, Dealer Agreements and Contracts and all other agreements related thereto in all material respects.
(d)    Keeping of Records and Books of Account.  The Borrower will maintain or cause to be maintained and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Loans in the event of the destruction of the originals thereof), and keep and maintain or cause to be kept and maintained all documents, books, records and other information reasonably necessary or advisable for the collection of all Loans.
(e)    Originator Assets.  With respect to each Loan acquired by the Borrower, the Borrower will:  (i) acquire such Loan pursuant to and in accordance with the terms of the Contribution Agreement; (ii) take all action necessary to perfect, protect and more fully evidence the Borrower’s ownership of such Loan, including, without limitation, (A) filing and maintaining, effective financing statements (Form UCC-1) against the Originator in all necessary or appropriate filing offices, and filing continuation statements, amendments or assignments with respect thereto in such filing offices, and (B) executing or causing to be executed such other instruments or notices as may be necessary or appropriate; and (iii) take all additional action that the Deal Agent or the Collateral Agent may reasonably request to perfect, protect and more fully evidence the respective interests of the parties to this Agreement in the Collateral.
(f)    Delivery of Collections.  Subject to Section 2.9(d) hereof, the Borrower will deposit or cause to be deposited to the Collection Account promptly (but in no event later than two (2) Business Days after receipt) all Collections received by the Borrower in respect of the Loans or the Contracts.
(g)    Separate Corporate Existence.  The Borrower shall be in compliance with the requirements set forth in Section 5.2(o).
(h)    Credit Guidelines and Collection Guidelines.  The Borrower will comply in all material respects with the Credit Guidelines and the Collection Guidelines with respect to each Loan and Contract unless otherwise required by Applicable Law.
(i)    Taxes.  The Borrower will file and pay any and all Taxes imposed upon it or any of its property, income or assets (other than any amount of Tax the validity of which is being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of the Borrower).
(j)    Use of Proceeds.  The Borrower will use the proceeds of the Funding only to acquire Loans pursuant to the Contribution Agreement or to make distributions to Credit Acceptance.
(k)    Reporting.  The Borrower will maintain for itself a system of accounting established and administered as presented within the audited consolidated financial statements of Credit Acceptance and its subsidiaries and furnish or cause to be furnished to the Deal Agent the following information:

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(i)    [Reserved];
(ii)    Annual Reporting.  Within 120 days after the close of the Borrower’s and Credit Acceptance’s fiscal years, (A) audited financial statements for Credit Acceptance and all of its Subsidiaries, accompanied by an unqualified audit report certified by independent certified public accountants, prepared in accordance with GAAP on a consolidated basis and any management letter prepared by said accountants, and acceptable to the Deal Agent, and (B) unaudited financial statements for the Borrower, including balance sheets as of the end of such period and related statements of operations;
(iii)    Quarterly Reporting.  Within sixty (60) days after the close of the first three quarterly periods of each of the Borrower’s and Credit Acceptance’s fiscal years, (x) for Credit Acceptance and its Subsidiaries, consolidated unaudited balance sheets as at the close of each such period and consolidated related statements of operations, shareholder’s equity and cash flows for the period from the beginning of such fiscal year to the end of such quarter, and (y) for the Borrower, consolidated unaudited balance sheets as at the close of each such period and consolidated related statements of operations for the period from the beginning of such fiscal year to the end of such quarter, in each case, all certified by its chief financial officer or treasurer as true, accurate and complete in all material respects;
(iv)    Compliance Certificate.  Together with the financial statements required hereunder, a compliance certificate signed by Credit Acceptance’s chief financial officer or treasurer stating that (x) the attached financial statements have been prepared in accordance with GAAP and accurately reflect the financial condition of Credit Acceptance and (y) to the best of such Person’s knowledge, no Termination Event or Unmatured Termination Event exists, or if any Termination Event or Unmatured Termination Event exists, stating the nature and status thereof;
(v)    Shareholders Statements and Reports.  Promptly upon the furnishing thereof to the shareholders of the Borrower or Credit Acceptance, copies of all financial statements, reports and proxy statements so furnished, to the extent such information has not been provided pursuant to another clause of this Section 5.1(k);
(vi)    S.E.C. Filings.  Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which Credit Acceptance or any subsidiary files with the Securities and Exchange Commission;
(vii)    Notice of Termination Events or Unmatured Termination Events.  As soon as possible and in any event within two (2) days after the occurrence of each Termination Event or each Unmatured Termination Event, a statement of the chief financial officer or treasurer of the Borrower setting forth details of such Termination Event or Unmatured Termination Event and the action which the Borrower proposes to take with respect thereto;
(viii)    Change in Collection Guidelines.  Prior to the date of the effectiveness of any material change in or amendment to the Collection Guidelines (which shall 

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be in accordance with the terms of this Agreement), a notice describing such change or amendment, other than if required by Applicable Law;
(ix)    Collection Guidelines.  On the Closing Date, a complete copy of the Collection Guidelines then in effect;
(x)    ERISA.  Promptly after the filing or receiving thereof, copies of all reports and notices with respect to any “reportable event” (as defined in Section 4043 of ERISA) which the Borrower, Credit Acceptance or any ERISA Affiliate of the Borrower or Credit Acceptance files under ERISA with the United States Internal Revenue Service, the Pension Benefit Guaranty Corporation or the United States Department of Labor or which the Borrower, Credit Acceptance or any ERISA Affiliates of the Borrower or Credit Acceptance receives from the Internal Revenue Service, the Pension Benefit Guaranty Corporation or the United States Department of Labor;
(xi)    Proceedings.  As soon as possible and in any event within two (2) Business Days after any executive officer of the Borrower receives notice or obtains knowledge thereof, any settlement of, material judgment (including a material judgment with respect to the liability phase of a bifurcated trial) in or commencement of any labor controversy litigation, action, suit or proceeding (in each case, of a material nature), before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting the Borrower or any of its Affiliates;
(xii)    Notice of Material Events.  Promptly upon becoming aware thereof, notice of any other event or circumstances that, in the reasonable judgment of the Borrower, is likely to have a Material Adverse Effect; and
(xiii)    Other Information.  Such other information, documents, records or reports (including non-financial information) as the Deal Agent, each Lender or the Collateral Agent may from time to time reasonably request with respect to Credit Acceptance, the Borrower, the Servicer or any Subsidiary of any of the foregoing.
(l)    Compliance with Applicable Law.  The Borrower shall duly satisfy in all material respects its obligations under or in connection with each Loan and Contract, will maintain in effect all material qualifications required under all Applicable Law, and will comply in all material respects with all other Applicable Law in connection with each Loan and Contract the failure to comply with which would have a material adverse effect on the interests of the Secured Parties in the Collateral.
(m)    Furnishing of Information and Inspection of Records.  The Borrower will furnish to the Deal Agent, each Lender, the Backup Servicer and the Collateral Agent, from time to time, such information with respect to the Loans and Contracts as may be reasonably requested, including, without limitation, a computer file or other list identifying each Loan and Contract by pool number, account number and dealer number and by the Outstanding Balance and identifying the Obligor on such Loan or Contract.  The Borrower will, at any time and from time to time during regular business hours, upon reasonable notice, permit the Deal 

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Agent, each Lender, the Backup Servicer and the Collateral Agent, or its agents or representatives, to examine and make copies of and abstracts from all Records, to visit the offices and properties of the Borrower for the purpose of examining such Records, and to discuss matters relating to the Loans or Contracts or the Borrower’s performance hereunder and under the other Transaction Documents with any of the officers, directors, employees or independent public accountants of the Borrower having knowledge of such matters; provided, however, that the Deal Agent, each Lender and the Collateral Agent each acknowledges that in exercising the rights and privileges conferred in this Section 5.1(m) it or its agents and representatives may, from time to time, obtain knowledge of information, practices, books, correspondence and records of a confidential nature and in which the Borrower has a proprietary interest.  The Deal Agent, each Lender and the Collateral Agent each agrees that all such information, practices, books, correspondence and records are to be regarded as confidential information and agrees that it shall retain in strict confidence and shall use its reasonable efforts to ensure that its agents and representatives retain in strict confidence, and will not disclose without the prior written consent of the Borrower, any such information, practices, books, correspondence and records furnished to them except that it may disclose such information:  (i) to its officers, directors, employees, agents, counsel, accountants, auditors, affiliates, advisors or representatives (provided that such Persons are informed of the confidential nature of such information); (ii) to the extent such information has become available to the public other than as a result of a disclosure by or through the Deal Agent, any Lender, the Collateral Agent or its officers, directors, employees, agents, counsel, accountants, auditors, affiliates, advisors or representatives; (iii) to the extent such information was available to the Deal Agent, any Lender or the Collateral Agent on a non-confidential basis prior to its disclosure hereunder; (iv) to the extent the Deal Agent, any Lender or the Collateral Agent should be (A) required under the Transaction Documents or in connection with any legal or regulatory proceeding or (B) requested by any bank regulatory authority to disclose such information; or (v) to any Lender or prospective assignee or Lender; provided, that the relevant Lender shall notify such prospective assignee or Lender of the confidentiality provisions of this Section 5.1(m).
(n)    Keeping of Records and Books of Account.  The Borrower will maintain and implement or cause to be maintained and implemented administrative and operating procedures (including, without limitation, an ability to recreate records evidencing the Loans and Contracts in the event of the destruction of the originals thereof), and keep and maintain, or obtain, as and when required, all documents, books, records and other information reasonably necessary or advisable for the collection of all amounts due under the Loans and Contracts (including, without limitation, records adequate to permit adjustments to amounts due under each existing Loan and Contract).  The Borrower will give the Deal Agent and each Lender notice of any material change in the administrative and operating procedures of the Borrower referred to in the previous sentence.
(o)    Notice of Liens.  The Borrower will advise the Deal Agent and the Collateral Agent promptly, in reasonable detail of:  (i) any Lien asserted by a Person against any of the Loans or Contracts or other Collateral; (ii) any breach by the Borrower, the Originator or the Servicer of any of its representations, warranties and covenants contained herein or in any 

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other Transaction Document; and (iii) the occurrence of any other event which would have a Material Adverse Effect.
(p)    Protection of Interest in Collateral.  The Borrower shall file or cause to be filed such continuation statements and any other documents reasonably requested by the Collateral Agent, the Deal Agent or any Lender or which may be required by law to fully preserve and protect the interest of the Collateral Agent and the Secured Parties in and to the Loans, the Contracts and the other Collateral.
(q)    Contribution Agreement.  The Borrower will at all times enforce the covenants and agreements of Credit Acceptance in the Contribution Agreement (including, without limitation, the rights and remedies against the Dealers).
(r)    Notice of Delegation of Servicer’s Duties.  The Borrower promptly shall notify the Collateral Agent of any delegation by the Servicer of any of the Servicer’s duties under this Agreement which is not in the ordinary course of business of the Servicer.
(s)    Organizational Documents.  The Borrower shall only amend, alter, change or repeal its articles of incorporation with the prior written consent of the Deal Agent.
Section 5.2.    Negative Covenants of the Borrower.  From the date hereof until the Collection Date:
(a)    Other Business.  Borrower will not:  (i) engage in any business other than the transactions contemplated by the Transaction Documents; (ii) incur any indebtedness, obligation, liability or contingent obligation of any kind other than pursuant to the Transaction Documents; or (iii) form any Subsidiary or make any Investments in any other Person without the prior written consent of the Deal Agent.
(b)    Loans Not to be Evidenced by Instruments.  The Borrower will take no action to cause any Loan that is not, as of the Closing Date, evidenced by an Instrument, to be so evidenced except in connection with the enforcement or collection of such Loan.
(c)    Security Interests.  The Borrower will not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien (other than the Lien described in Section 4.2(a)(iii)) on any Loan, Contract, Related Security or any other Collateral, whether now existing or hereafter transferred hereunder, or any interest therein, and the Borrower will not sell, pledge, assign or suffer to exist any Lien on its interest, if any, hereunder.  The Borrower will promptly notify the Collateral Agent of the existence of any Lien on any Loan, Contract, Related Security or any other Collateral and the Borrower shall defend the right, title and interest of the Deal Agent as agent for the Secured Parties in, to and under the Loans, Contracts, Related Security and other Collateral, against all claims of third parties.
(d)    Mergers, Acquisitions, Sales, etc.  The Borrower will not be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or any stock of any class of, or any partnership or joint venture interest in, any other 

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Person, or, sell, transfer, convey or lease all or any substantial part of its assets, or sell or assign with or without recourse any Loan, Contracts, Related Security or other Collateral or any interest therein (other than pursuant to and in accordance with the Transaction Documents).
(e)    [Reserved.]
(f)    Distributions.  The Borrower shall not declare or pay, directly or indirectly, any dividend or make any other distribution (whether in cash or other property) with respect to the profits, assets or capital of the Borrower or any Person’s interest therein, or purchase, redeem or otherwise acquire for value any of its capital stock now or hereafter outstanding, except that so long as no Termination Event or Unmatured Termination Event has occurred and is continuing or would result therefrom, the Borrower may declare and pay cash or stock dividends on its capital stock.
(g)    Change of Name or Location of Records Files.  The Borrower shall not (x) change its name or state of organization, move the location of its principal place of business and chief executive office, and the offices where it keeps the Records from the locations referred to in Sections 4.1(p) and 14.2 or (y) move, or consent to the Custodian or Servicer moving, the Records/Contract Files from the location thereof on the Closing Date, unless the Borrower has given at least thirty (30) days’ written notice to the Deal Agent and the Collateral Agent and has taken all actions required under the UCC of each relevant jurisdiction in order to continue the first priority perfected security interest of the Collateral Agent, as agent for the Secured Parties, in the Collateral;  provided, that, Credit Acceptance may temporarily (or permanently, solely in the case of a Contract that is repurchased, liquidated or paid in full) move or transfer individual Contract Files or Records, or any portion thereof without notice in accordance with Section 6.2(c)(iii).
(h)    Accounting of the Contribution Agreement.  The Borrower will not account for or treat (whether in financial statements or otherwise) the transaction contemplated by the Contribution Agreement in any manner other than as a contribution, or absolute assignment, of the Loans and related assets by the Originator to the Borrower.
(i)    ERISA Matters.  The Borrower will not:  (i) engage or permit any ERISA Affiliate to engage in any prohibited transaction for which an exemption is not available or has not previously been obtained from the United States Department of Labor; (ii) permit to exist any failure to satisfy minimum funding standards, as defined in Section 302(a) of ERISA and Section 412(a) of the Code, or funding deficiency with respect to any Benefit Plan other than a Multiemployer Plan; (iii) fail to make any payments to a Multiemployer Plan that the Borrower or any ERISA Affiliate may be required to make under the agreement relating to such Multiemployer Plan or any law pertaining thereto; (iv) terminate any Benefit Plan so as to result in any liability; or (v) permit to exist any occurrence of any “reportable event” as defined in Section 4043 of ERISA.
(j)    Articles of Incorporation; Contribution Agreement.  The Borrower will not amend, modify, waive or terminate any provision of its articles of incorporation or the Contribution Agreement unless the Deal Agent shall have consented to such change in writing 

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and has received duly executed copies of all documentation related thereto.  The Borrower will not take any action under the Contribution Agreement which would have a Material Adverse Effect.
(k)    Changes in Payment Instructions to Obligors.  The Borrower will not make any change, or permit the Servicer to make any change, in its instructions to Obligors regarding where payments in respect of Contracts are to be made to the Borrower or the Servicer, unless the Deal Agent shall have consented to such change in writing and has received duly executed copies of all documentation related thereto.
(l)    Extension or Amendment.  The Borrower will not, except as otherwise permitted hereunder or by law, extend, amend or otherwise modify, or permit the Servicer to extend, amend or otherwise modify, the terms of any Dealer Agreement, Loan or Contract; provided, however, the Dealer Agreements may be amended (i) in connection with the closing of or opening of a Pool and (ii) in a manner that does not materially impair the collectability of any Loan or Contract.
(m)    Collection Guidelines.  The Borrower will not permit the amendment, modification, restatement or replacement, in whole or in part, of the Collection Guidelines of the initial Servicer, which change would materially impair the collectibility of any Loan or Contract or otherwise adversely affect the interests or the remedies of the Deal Agent, the Collateral Agent or the Secured Parties under this Agreement or any other Transaction Document, without the prior written consent of the Required Lenders other than if required by Applicable Law.
(n)    No Assignments.  The Borrower will not assign or delegate, or grant any interest in, or permit any Lien to exist upon, any of its rights, obligations or duties under this Agreement without the prior written consent of the Deal Agent.
(o)    Special Purpose Entity.  The Borrower has not and shall not:
(i)    engage in any business or activity other than the purchase and receipt of Loans and related assets from the Originator under the Contribution Agreement, the pledge of Loans and related assets under the Transaction Documents and such other activities as are incidental thereto;
(ii)    acquire or own any material assets other than (A) the Loans and related assets from the Originator under the Contribution Agreement and (B) incidental property as may be necessary for the operation of the Borrower;
(iii)    merge into or consolidate with any Person or dissolve, terminate or liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure, without in each case first obtaining the Deal Agent’s consent;

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(iv)    fail to preserve its existence as an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization or formation, or without the prior written consent of the Deal Agent, amend, modify, terminate, fail to comply with the provisions of its articles of incorporation, or fail to observe corporate formalities;
(v)    own any subsidiary or make any investment in any Person without the consent of the Deal Agent;
(vi)    commingle its assets or funds with the assets or funds of any of its Affiliates, or of any other Person, except for (A) Dealer Collections, (B) erroneous deposits or (C) prior to the identification and separation of such funds or assets by the Servicer in accordance with the Servicer’s normal and customary business practices;
(vii)    incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) indebtedness to the Lenders hereunder or in conjunction with a repayment of Aggregate Unpaids owed to the Lenders, (B) indebtedness to the Originator under the Contribution Agreement in respect of the purchase of Loans (which indebtedness, if any, shall be subordinate to the indebtedness arising hereunder), and (C) trade payables in the ordinary course of its business, provided that such debt is not evidenced by a note and paid when due;
(viii)    become insolvent or fail to pay its debts and liabilities from its assets as the same shall become due;
(ix)    fail to maintain its records, books of account and bank accounts separate and apart from those of its principal and Affiliates, and any other Person;
(x)    enter into any contract or agreement with any of its principals or Affiliates or any other Person, except upon terms and conditions that are commercially reasonable and intrinsically fair and substantially similar to those that would be available on an arms-length basis with third parties other than any principal or Affiliates;
(xi)    seek its dissolution or winding up in whole or in part;
(xii)    fail to correct any known misunderstandings regarding the separate identity of the Borrower or an Affiliate thereof or any other Person;
(xiii)    guarantee, become obligated for, or hold itself out to be responsible for the debt of another Person;
(xiv)    make any loan or advances to any third party, including any Affiliate, or hold evidence of indebtedness issued by any other Person (other than cash and investment-grade securities);
(xv)    fail either to hold itself out to the public as a legal entity separate and distinct from any other Person or to conduct its business solely in its own name in 

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order not (A) to mislead others as to the identity with which such other party is transacting business, or (B) to suggest that it is responsible for the debts of any third party (including any of its Affiliates);
(xvi)    fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations;
(xvii)    file or consent to the filing or any petition, either voluntary or involuntary, to take advantage of any applicable insolvency, bankruptcy, liquidation or reorganization statute, or make an assignment for the benefit of creditors;
(xviii)    share any common logo with or hold itself out as or be considered as a department or division of (A) any of its Affiliates or (B) any other Person;
(xix)    permit any transfer (whether in any one or more transactions) of any direct or indirect ownership interest in the Borrower;
(xx)    fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person, or have its assets listed on the financial statement of any other Person (except its parent in accordance with GAAP);
(xxi)    fail to pay its own liabilities and expenses only out of its own funds;
(xxii)    fail to pay the salaries of its own employees in light of its contemplated business operations;
(xxiii)    acquire the obligations or securities of its Affiliates or stockholders;
(xxiv)    fail to allocate fairly and reasonably any overhead expenses that are shared with an Affiliate, including paying for office space and services performed by any employee of an Affiliate;
(xxv)    to the extent it has invoices or checks, fail to use separate invoices or checks bearing its own name;
(xxvi)    pledge its assets for the benefit of any other Person, other than with respect to payment of the indebtedness to the Lenders hereunder;
(xxvii)    fail at any time to have at least two (2) independent directors (each, an  “Independent Director”) on its board of directors that (A) is not and has not been for at least five (5) years a director, officer, employee, trade creditor or shareholder (or spouse, parent, sibling or child of the foregoing) of (I) the Servicer, (II) the Borrower, or (III) any Affiliate of the Servicer or the Borrower; provided, however, such Independent Director may be an independent director or manager of another special purpose entity affiliated with the Servicer, 

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and (B) has, (I) prior experience as an Independent Director for a corporation or limited liability company whose charter documents required the unanimous consent of all Independent Directors thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (II) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to borrowers or issuers of securitization or structured finance instruments, agreements or securities;
(xxviii)     fail to provide that the unanimous consent of all directors (including the consent of the Independent Directors) is required for the Borrower to (A) dissolve or liquidate, in whole or part, or institute proceedings to be adjudicated bankrupt or insolvent, (B) institute or consent to the institution of bankruptcy or insolvency proceedings against it, (C) file a petition seeking or consent to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, (D) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for the Borrower, (E) make any assignment for the benefit of the Borrower’s creditors, (F) admit in writing its inability to pay its debts generally as they become due, or (G) take any action in furtherance of any of the foregoing; and
(xxix)    take or refrain from taking, as applicable, each of the activities specified in the non-consolidation opinion of Skadden, Arps, Slate, Meagher & Flom LLP, delivered on the Effective Date, upon which the conclusions expressed therein are based.
Section 5.3.    Covenant of the Borrower Relating to the Hedging Agreement.  At all times during, on and after the Initial Funding until the Collection Date, a Hedging Agreement shall be in place.  With respect to any Hedge Counterparty that satisfied clause (I) of the definition of “Hedge Counterparty” on the date it entered into a Hedging Agreement relating hereto, in the event that Moody’s or S&P reduces such Hedge Counterparty’s long-term unsecured debt rating below the Long-term Rating Requirement, or reduces such Hedge Counterparty’s short-term unsecured debt rating below the Short-term Rating Requirement, Borrower shall effect the replacement of such Hedge Counterparty with a counterparty meeting the definition of “Hedge Counterparty” not later than 30 calendar days following such rating reduction.  With respect to any Hedge Counterparty that satisfied clause (II) of the definition of “Hedge Counterparty” on the date it entered into a Hedging Agreement relating hereto, in the event that such Hedge Counterparty experiences a withdrawal or reduction of its long-term unsecured debt rating such that it no longer has a minimum rating of “BBB-,” Borrower shall effect the replacement of such Hedge Counterparty with a counterparty meeting the definition of “Hedge Counterparty” not later than 30 calendar days following such rating reduction.  The parties hereto acknowledge and agree that the Collateral Agent shall not be required to act as a "commodity pool operator" or be required to undertake regulatory filings related to this Agreement in connection therewith.

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Section 5.4.    Affirmative Covenants of the Servicer.  From the date hereof until the Collection Date:
(a)    Compliance with Law.  The Servicer will comply in all material respects with all Applicable Laws, including those with respect to the Contracts, the Loans and the Dealer Agreements or any part thereof.
(b)    Preservation of Existence.  The initial Servicer will preserve and maintain its existence, rights, franchises and privileges in the jurisdiction of its formation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification has had, or could reasonably be expected to have, a Material Adverse Effect.
(c)    Obligations and Compliance with Loans and Contracts.  The Servicer will duly fulfill and comply with all material obligations on the part of the Borrower to be fulfilled or complied with under or in connection with each Loan and each Contract and will do nothing to impair the rights of the Collateral Agent as agent for the Secured Parties or of the Secured Parties in, to and under the Collateral.
(d)    Keeping of Records and Books of Account.  The Servicer will maintain and implement administrative and operating procedures (including without limitation, an ability to recreate records evidencing the Loans and Contracts in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Loans.
(e)    Preservation of Security Interest.  The Servicer will file such financing and continuation statements and any other documents that may be required by any law or regulation of any Governmental Authority to preserve and protect fully the security interest of the Collateral Agent as agent for the Secured Parties in, to and under the Collateral.  In its capacity as Custodian, it will maintain possession of, or control over, the Contract Files and Records, as Custodian for the Secured Parties, as set forth in Section 6.2(c).
(f)    Collection Guidelines.  (i) The Servicer will comply in all material respects with the Collection Guidelines or with Applicable Law in regard to each Loan and Contract.
(ii)    The Servicer will not agree to or otherwise permit to occur any material change in the Collection Guidelines, which change would impair the collectibility of any Loan or Contract or otherwise adversely affect the interests or remedies of the Deal Agent, the Collateral Agent or the other Secured Parties under this Agreement or any other Transaction Document, without the prior written consent of the Deal Agent, other than if required by Applicable Law.
(g)    Amortization Events and Termination Events.  The Servicer will furnish to the Deal Agent and each Lender, as soon as possible and in any event within two (2) Business Days after the occurrence of each Amortization Event, each Termination Event and 

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each Unmatured Termination Event, a written statement of the chief financial officer or treasurer of the Servicer setting forth the details of such event and the action that the Servicer purposes to take with respect thereto.
(h)    Other.  The Servicer will furnish to the Deal Agent or the Collateral Agent, as applicable, promptly, from time to time, such other information, documents, records or reports respecting the Collateral or the condition or operations, financial or otherwise, of the Borrower or the Servicer as the Deal Agent or the Collateral Agent may from time to time reasonably request in order to protect the interests of the Collateral Agent or the Secured Parties under or as contemplated by this Agreement.
(i)    Losses, Etc.  In any suit, proceeding or action brought by the Deal Agent, the Collateral Agent or any Secured Party for any sum owing thereto, the initial Servicer shall save, indemnify and keep the Deal Agent, the Collateral Agent and the Secured Parties harmless from and against all expense, loss or damage suffered by reason of any defense, setoff, counterclaim, recoupment or reduction of liability whatsoever of the Obligor under a Loan or Contract, arising out of a breach by the initial Servicer of any obligation under the related Loan or Contract or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such Obligor or its successor from the initial Servicer, and all such obligations of the initial Servicer shall be and remain enforceable against and only against the Servicer and shall not be enforceable against the Deal Agent, the Collateral Agent or any Secured Party.
(j)    Notice of Liens  The Servicer shall advise the Collateral Agent and the Deal Agent promptly, in reasonable detail of:  (i) any Lien asserted or claim made against any portion of the Collateral; (ii) the occurrence of any breach by the Servicer of any of its representations, warranties and covenants contained herein or in any other Transaction Document; and (iii) the occurrence of any other event which would have a Material Adverse Effect.
(k)    Realization on Loans or Contracts.  In the event that the Servicer realizes upon any Loan or Contract, the methods utilized by the Servicer to realize upon such Loan or Contract or otherwise enforce any provisions of such Loan or Contract will not subject the Servicer, the Borrower, any Secured Party, the Deal Agent or the Collateral Agent to liability under any federal, state or local law, and such enforcement by the Servicer will be conducted in all material respects in accordance with the provisions of the Credit Guidelines (unless the Backup Servicer is then the Successor Servicer), the Collection Guidelines, Applicable Law and, in the case of Credit Acceptance, this Agreement, and in the case of the Backup Servicer if it has become the Servicer, the Backup Servicing Agreement.
(l)    Backup Servicing Agreement.  The Servicer shall provide the Backup Servicer with all information, data and reports as required by the terms of the Backup Servicing Agreement.
(m)    Change in Accounting Policies or Debt Rating.  The initial Servicer shall notify the Collateral Agent of any material change in or amendment to the Servicer’s accounting policies relating to the revenue recognition or the valuation of the Loans 

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within ten (10) days after the date such change or amendment has been made.  Within five (5) days after the date of any change in the Borrower’s or Credit Acceptance’s public or private debt ratings, if any, a written certification of the Borrower’s or Credit Acceptance’s public and private debt ratings after giving effect to any such change.
(n)    Monthly Reports.  Not later than the Determination Date preceding each Payment Date, the Servicer will furnish to the Deal Agent, each Lender, the Collateral Agent and the Backup Servicer a Monthly Report relating to the immediately preceding Collection Period.
Section 5.5.    Negative Covenants of the Servicer.  From the date hereof until the Collection Date:
(a)    Mergers, Acquisition, Sales, etc.  The Servicer (unless the Backup Servicer is then the Successor Servicer) will not consolidate with or merge into any other Person or convey or transfer its properties and assets substantially as an entirety to any Person, unless the Servicer is the surviving entity and unless:
(i)    the Servicer has delivered to the Deal Agent and the Backup Servicer an Officer’s Certificate and an Opinion of Counsel each stating that any consolidation, merger, conveyance or transfer and any related supplemental agreement comply with this Section 5.5 and that all conditions precedent herein provided for relating to such transaction have been complied with and, in the case of the Opinion of Counsel, that such supplemental agreement is legal, valid and binding with respect to the Servicer and such other matters as the Deal Agent may reasonably request;
(ii)    the Servicer shall have delivered notice of such consolidation, merger, conveyance or transfer to the Deal Agent;
(iii)    after giving effect thereto, no Termination Event, Unmatured Termination Event or Servicer Termination Event or event that with notice or lapse of time, or both, would constitute a Servicer Termination Event shall have occurred.
(b)    Change of Name or Location of Records.  The initial Servicer shall not (x) change its name or its state of organization, move the location of its principal place of business and chief executive office, and the offices where it keeps records concerning the Loans from the locations referred to in Sections 4.1(p) and 14.2 or (y) move, or consent to the Custodian moving, the Records from the location thereof on the Closing Date, unless the Servicer has given at least thirty (30) days’ written notice to the Deal Agent and has taken all actions required under the UCC of each relevant jurisdiction in order to continue the first priority perfected security interest of the Collateral Agent as agent for the Secured Parties in the Collateral; provided, that, Credit Acceptance may temporarily (or permanently, solely in the case of a Contract that is repurchased, liquidated or paid in full) move or transfer individual Contract Files or Records, or any portion thereof without notice in accordance with Section 6.2(c)(iii).

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(c)    Change in Payment Instructions to Obligors.  The Servicer will not make any change in its instructions to Obligors regarding where payments in respect of Contracts are to be made, unless the Deal Agent has consented to such change and has received duly executed documentation related thereto.
(d)    [Reserved].
(e)    No Instruments.  The Servicer shall take no action to cause any Loan to be evidenced by any instrument (as defined in the UCC as in effect in the relevant State) except for instruments obtained with respect to defaulted Loans.
(f)    No Liens.  The Servicer shall not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien (other than the Lien described in Section 4.2(a)(iii)) on the Collateral or any interest therein; the Servicer will notify the Collateral Agent and the Deal Agent of the existence of any Lien on any portion of the Collateral immediately upon discovery thereof, and the Servicer shall defend the right, title and interest of the Collateral Agent on behalf of the Secured Parties in, to and under the Collateral against all claims of third parties claiming through or under the Servicer.
(g)    Information.  The Servicer shall, within two (2) Business Days of its receipt thereof, respond to reasonable written directions or written requests for information that the Backup Servicer, the Borrower, the Deal Agent or the Collateral Agent might have with respect to the administration of the Loans.
(h)    Consent.  The Servicer will promptly advise the Borrower, the Backup Servicer, the Deal Agent and the Collateral Agent of any inquiry received from an Obligor which requires the consent of the Borrower, the Deal Agent or the Collateral Agent.
(i)    Credit Guidelines and Collection Guidelines.  The initial Servicer will not amend, modify, restate or replace in any material way the Credit Guidelines or the Collection Guidelines, which change would impair the collectibility of any Loan or Contract or otherwise adversely affect the interests or the remedies of the Deal Agent, Collateral Agent or the Secured Parties under this Agreement or any other Transaction Document, without the prior written consent of each Lender in the case of the Credit Guidelines or without the prior written consent of the Deal Agent and the Required Lenders with respect to the Collection Guidelines, in each case unless required by Applicable Law.
Section 5.6.    Negative Covenants of the Backup Servicer.  From the date hereof until the Collection Date:
(a)    No Changes in Backup Servicing Fee.  The Backup Servicer will not make any changes to the Backup Servicing Fee without the prior written approval of the Deal Agent.

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ARTICLE VI
     
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 6.1.    Servicing.  (a)  The Borrower, the Deal Agent and the Collateral Agent hereby appoint Credit Acceptance as servicer hereunder and Credit Acceptance hereby accepts such appointment and agrees to manage, collect and administer each of the Loans and Contracts as Servicer.  In the event of a Servicer Termination Event, the Deal Agent shall have the right to terminate Credit Acceptance as servicer hereunder.  Upon termination of Credit Acceptance as servicer of the Loans pursuant to Section 6.11 hereof, the Deal Agent shall have the right to appoint a Successor Servicer and enter into a servicing agreement with such Successor Servicer at such time and exercise all of its rights under Section 6.3 hereof.  Such servicing agreement shall specify the duties and obligations of such Successor Servicer, and all references herein to the Servicer shall be deemed to refer to such Successor Servicer.  
(b)      The Borrower shall cause the Servicer to deposit all Collections to the Collection Account no later than two (2) Business Days after receipt.  The Servicer agrees to deposit all Collections to the Collection Account no later than two (2) Business Days after receipt.
(c)    On or before 120 days after the end of each fiscal year of the Servicer, beginning with the fiscal year ending December 31, 2003, the Servicer shall cause a firm of independent public accountants (who may also render other services to the Servicer or the Borrower) to furnish a report to the Collateral Agent, the Deal Agent and the Secured Parties to the effect that they have (i) compared the information contained in the Monthly Reports delivered during such fiscal year, based on a sample size provided by the Collateral Agent, with the information contained in the Loans, the Contracts and the Servicer’s records and computer systems for such period, and that, on the basis of such agreed-upon procedures, such firm is of the opinion that the information contained in the Monthly Reports reconciles with the information contained in the Loans and the Contracts and the Servicer’s records and computer system and that the servicing of the Loans and the Contracts has been conducted in compliance with this Agreement, and (ii) verified the Aggregate Outstanding Eligible Loan Balance as of the end of each Collection Period during such fiscal year, except, in each case, for (a) such exceptions as such firm shall believe to be immaterial (which exceptions need not be enumerated) and (b) such other exceptions as shall be set forth in such statement. In the event such independent public accountants require the Collateral Agent to agree to the procedures to be performed by such firm in any of the reports required to be prepared pursuant to this Section 6.1(c), the Servicer shall direct the Collateral Agent in writing to so agree; it being understood and agreed that the Collateral Agent will deliver such letter of agreement in conclusive reliance upon the direction of the Servicer, and the Collateral Agent has not made any independent inquiry or investigation as to, and shall have no obligation or liability in respect of, the sufficiency, validity or correctness of such procedures. The Collateral Agent shall not be liable for any claims, liabilities or expenses relating to such accountants’ engagement or any report issued in connection with such engagement, and the dissemination of any such report is subject to the written consent of the accountants.

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Section 6.2.        Duties of the Servicer and Custodian.
(a)    The Servicer shall take or cause to be taken all such action as may be necessary or advisable to collect all amounts due under the Loans and Contracts from time to time, all in material accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in material accordance with the Collection Guidelines, and with respect to the Initial Servicer, the Credit Guidelines, it being understood that there shall be no recourse to the Servicer with regard to the Loans and Contracts except as otherwise provided herein and in the other Transaction Documents.  In performing its duties as Servicer, the Servicer shall use the same degree of care and attention it employs with respect to similar contracts and loans which it services for itself or others.  Each of the Borrower, the Deal Agent, the Collateral Agent and the Secured Parties hereby appoints as its agent the Servicer, from time to time designated pursuant to Section 6.1 hereof, to enforce its respective rights and interests in and under the Collateral.  If the Servicer shall commence a legal proceeding to enforce a Loan or a Contract (for purposes of collection or otherwise), or if in any enforcement or other legal proceeding it shall be held that the Servicer may not enforce a Loan or a Contract, on the grounds that it shall not be a real party in interest or a holder entitled to enforce the Loan or Contract or on similar grounds, the Collateral Agent shall thereupon be deemed to have automatically assigned to the Servicer, solely for the purpose of enforcement, such Loan or Contract.  Without limiting the foregoing, the Collateral Agent (and each Lender, if applicable) shall furnish the Servicer with any reasonably necessary and appropriate affidavit prepared by the Servicer that the Servicer may use in any such legal proceedings confirming the Servicer’s power and authority to sue and otherwise enforce the Loans and Contracts in its own name, consistent with this Section 6.2, and any powers of attorney, declarations or other documents prepared by the Servicer reasonably necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder.  The Servicer shall hold in trust for the Secured Parties all Records and any amounts it receives in respect of the Collateral.  In the event that a Successor Servicer is appointed, the outgoing Servicer shall deliver to the Successor Servicer and the Successor Servicer shall hold in trust for the Borrower and the Secured Parties all records which evidence or relate to all or any part of the Collateral.
(b)    The Servicer, if other than Credit Acceptance, shall as soon as practicable upon demand, deliver to the Borrower all records in its possession which evidence or relate to indebtedness of an Obligor which is not a Loan or a Contract.
(c)    (i)    The Borrower, the Deal Agent and the Collateral Agent hereby revocably appoint Credit Acceptance as custodian (or if there has been a Successor Servicer appointed hereunder then such Successor Servicer shall be appointed as Custodian in accordance with Section 6.2(d)), and Credit Acceptance hereby accepts such appointment, to hold and maintain physical possession of the Contract Files and all Records (or with respect to any Contract constituting electronic chattel paper, to maintain "control" (within the meaning of Section 9-105 of the UCC) of the Authoritative Electronic Copy thereof) (in such capacity together with its successors in such capacity, the “Custodian”). The Contract Files and Records are to be delivered to the Custodian or its designated bailee by or on behalf of the Borrower, the Deal Agent and Collateral Agent within two (2) Business Days preceding the Funding Date or 

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within two (2) Business Days after each Addition Date, as the case may be, with respect to each Loan acquired on the Funding Date or Addition Date.
(ii)    The Custodian shall within 180 days after the Closing Date or Funding Date, as applicable, review 100% of the Contract Files to verify the presence of the original retail installment contract and security agreement and/or installment loans with respect to each Contract, provided, however, that the Certificate of Title or other evidence of lien with respect to a Contract need not be verified.  If the number of Contracts for which any of the foregoing documents have not been delivered to the Custodian within 180 days of the Closing Date or relevant Funding Date, as the case may be, or corrected (each such Contract, a “Nonconforming Contract”), exceeds 2% of the aggregate number of Contract Files required to be reviewed pursuant to this Section 6.2(c)(ii), the Borrower shall make a deposit to the Reserve Account only with respect to the excess number of Nonconforming Contracts, in an amount equal to the related Release Price.  Once per month, the amount on deposit in the Reserve Account in respect of Nonconforming Contracts shall be adjusted to account for increases or decreases in the excess number of Nonconforming Contracts and for changes in the Outstanding Balance of such Nonconforming Contracts.  The Borrower shall, in the case of an increase, promptly deposit to the Reserve Account the amount of any such increase.  In the case of a decrease, the amount of any such decrease shall be deemed to be part of the Excess Reserve Amount.  During the Revolving Period, payments required under this Section 6.2(c)(ii) shall not be required if the Capital is equal to or less than the Borrowing Base by the amount of the payment that would otherwise be required to be made by this clause.
(iii)    The Custodian agrees to maintain the Contract Files and Records which are delivered to it at the offices of the Custodian as shall from time to time be identified to the Deal Agent by written notice.  Subject to the foregoing, Credit Acceptance may temporarily (or permanently, in the case of a Contract that is repurchased, liquidated or paid in full) move or transfer to an agent of the Servicer individual Contract Files or Records, or any portion thereof without notice as necessary to allow the Servicer to conduct collection and other servicing activities in accordance with its customary practices and procedures.
(iv)    The Custodian shall have the following powers and perform the following duties:
(A)    hold the Contract Files and Records for the benefit of the Secured Parties and maintain a current inventory thereof; and
(B)    carry out such policies and procedures in accordance with its customary actions with respect to the handling and custody of the Contract Files and Records so that the integrity and physical possession of the Contract Files and Records (or with respect to any Contract constituting electronic chattel paper, the integrity and "control" (within the meaning of Section 9-105 of the UCC) of the Authoritative Electronic Copy thereof) will be maintained.

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In performing its duties as custodian, the Custodian agrees to act with reasonable care, using that degree of skill and care that it exercises with respect to similar contracts or loans owned or held by it for its own account or for any other Person.
(v)    Credit Acceptance shall have the obligation to (i) physically segregate the Contract Files (to the extent held in physical form) from the other custodial files it is holding for its own account or on behalf of any other Person, (ii) physically mark the Contract folders (to the extent held in physical form) to demonstrate the transfer of Contract Files and the Collateral Agent’s security interest hereunder, (iii) mark its computer records indicating the transfer of any Contract Files relating to Contracts constituting electronic chattel paper and the Collateral Agent’s security interest hereunder, and (iv) with respect to each Contract constituting electronic chattel paper, cause the single “authoritative copy” (within the meaning of Section 9-105 of the UCC) to be communicated to and maintained at all times by Credit Acceptance such that the “authoritative copy” constitutes an Authoritative Electronic Copy at all times.
(d)    (i) If (A) an Unsatisfactory Audit occurs or (B) a Servicer Termination Event or potential Servicer Termination Event occurs, the Deal Agent shall have the right to terminate Credit Acceptance as the Custodian hereunder and the Deal Agent shall have the right to appoint a successor Custodian hereunder who shall assume all the rights and obligations of the “Custodian” hereunder.  On the effective date of the termination of Credit Acceptance as Servicer, Credit Acceptance shall be released of all of its obligations as Custodian arising on or after such date.  The Contract Files and Records shall be delivered by Credit Acceptance to the successor Custodian, on or before the date which is two (2) Business Days prior to such date.
(ii)    Upon the occurrence of a Servicer Termination Event or potential Servicer Termination Event, the Servicer and the Borrower shall, at the request of the Deal Agent, in its sole discretion, take all steps necessary to cause the Certificate of Title or other evidence of ownership of each Financed Vehicle to be revised to name the Collateral Agent on behalf of the Secured Parties as lienholder.  Any costs associated with such revision of the Certificate of Title (“Reliening Expenses”) shall be paid by Credit Acceptance, and to the extent such costs are not paid by Credit Acceptance such unpaid costs shall be recovered as Servicer Expenses as described in Section 2.7 hereof.  In no event shall the Collateral Agent be required to expend funds in connection with this Section 6.2(d).  
(iii)    The Custodian shall provide to the Deal Agent access to the Contract Files and Records and all other documentation regarding the Contracts, Dealer Agreement and the Loans and the related Financed Vehicles in such cases where the Collateral Agent is required in connection with the enforcement of the rights or interests of the Secured Parties, or by applicable statutes or regulations to review such documentation, such access being afforded without charge.
(e)    Two times per calendar year, at the expense of the initial Servicer, and if the Backup Servicer is the Successor Servicer, the Deal Agent, the Deal Agent and any Lender may review the Servicer’s collection and administration of the Loans, Dealer Agreements and Contracts in order to assess compliance by the Servicer with the Servicer’s written policies 

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and procedures, as well as with this Agreement and may conduct an audit of the Loans, Dealer Agreements and Contracts and Contract Files in conjunction with such a review.  On and after the occurrence of a Termination Event or Servicer Termination Event, the Deal Agent or any Lender may conduct such reviews and audits without limitation, at the Servicer’s expense.
Section 6.3.    Rights After Designation of Successor Servicer.  At any time following the designation of a Successor Servicer pursuant to Section 6.12(a):
(i)    The Successor Servicer or Collateral Agent may intercept payments made by or on behalf of Obligors and direct that payment of all amounts payable under any Loan or Contract be made directly to the Successor Servicer or Collateral Agent or its designee; provided, that the Collateral Agent shall pay to any Dealer, to the extent to which such Dealer is entitled, all related Dealer Collections pursuant to the written direction of the Successor Servicer set forth in the Monthly Report.
(ii)    The Successor Servicer shall, at the Borrower’s expense, give notice of the Collateral Agent’s interest in the Loans and Contracts to each Obligor and direct that payments be made directly to the Successor Servicer or the Collateral Agent or its designee.
(iii)    The Borrower shall, at the Collateral Agent’s or the Successor Servicer’s request, (A) assemble all of the records relating to the Collateral, including all Records with respect to the Loans and Contracts, and shall make the same available to the Successor Servicer or the Collateral Agent at a place selected by the Successor Servicer or the Collateral Agent or its designee, and (B) segregate all cash, checks and other instruments received by it from time to time constituting collections of Collateral in a manner acceptable to the Successor Servicer or the Collateral Agent and shall, promptly upon receipt but in any event within two (2) Business Days, remit all such cash, checks and instruments, duly endorsed or with duly executed instruments of transfer, to the Successor Servicer or the Collateral Agent or its designee.
(iv)    The Borrower hereby authorizes the Collateral Agent and the Successor Servicer to take any and all steps in the Borrower’s name and on behalf of the Borrower necessary or desirable, in the determination of the Collateral Agent or the Successor Servicer, to collect all amounts due under any and all of the Collateral with respect thereto, including, without limitation, endorsing the Borrower’s name on checks and other instruments representing Collections and enforcing the Loans and Contracts.
Section 6.4.    Responsibilities of the Borrower.  Anything herein to the contrary notwithstanding, the Borrower shall (i) perform all of its obligations under the Loans and Contracts to the same extent as if a security interest in such Loans and Contracts had not been granted hereunder and the exercise by the Collateral Agent of its rights hereunder shall not relieve the Borrower from such obligations and (ii) pay when due any taxes, including without limitation, any sales taxes payable in connection with the Loans or Contracts and their creation and satisfaction.  Neither the Collateral Agent, the Deal Agent nor any Secured Party shall have any obligation or liability with respect to any Loan, nor shall any of them be obligated to perform any of the obligations of the Borrower thereunder.

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Section 6.5.    Reports.
(a)    Monthly Report.  On each Determination Date, the Servicer shall deliver to the Deal Agent and the Collateral Agent a report in substantially the form of Exhibit C attached hereto (the “Monthly Report”) for the related Collection Period.  The Deal Agent shall provide to the Borrower, the Servicer and the Backup Servicer by the third Business Day prior to each Payment Date, information relating to the amount of each obligation which comprises Carrying Costs, Increased Costs, Indemnified Amounts and Additional Amounts  for such Collection Period.  The Monthly Report shall specify whether an Amortization Event, Termination Event or Unmatured Termination Event has occurred with respect to the Collection Period preceding such Determination Date.  Upon receipt of the Monthly Report, the Deal Agent and the Collateral Agent shall rely (and shall be fully protected in so relying) on the information contained therein for the purposes of making distributions and allocations as provided for herein.  Each Monthly Report shall be certified by a Responsible Officer of the Servicer.
(b)    Credit Agreement.  The Servicer shall deliver to the Deal Agent all reports or certificates required to be delivered under Section 7.3 of the Credit Agreement at the times set forth therein.
(c)    Financial Statements.  In the event the Servicer is no longer subject to the periodic and current reporting requirements of Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended, the Servicer will submit to the Deal Agent, the Collateral Agent and the Backup Servicer, within 60 days of the end of each of its fiscal quarters, commencing September 30, 2003 unaudited financial statements as of the end of each such fiscal quarter.  The Servicer will submit to the Deal Agent and the Collateral Agent, within 120 days of the end of each of its fiscal years, commencing with the fiscal year ending December 31, 2003 audited financial statements as of the end of each such fiscal year.  The Servicer will submit to the Deal Agent, the Collateral Agent and the Backup Servicer an analysis of the static pool performance of Credit Acceptance for each fiscal quarter within 60 days of the end of such fiscal quarter.
(d)    Annual Statement as to Compliance.  The Servicer will provide to the Deal Agent and the Collateral Agent, within 120 days following the end of each fiscal year of the Servicer, commencing with the fiscal year ending on December 31, 2003, an annual report signed by a Responsible Officer of the Servicer certifying that (a) a review of the activities of the Servicer, and the Servicer’s performance pursuant to this Agreement, for the period ending on the last day of such fiscal year has been made under such Person’s supervision and (b) the Servicer has performed or has caused to be performed in all material respects all of its obligations under this Agreement throughout such year (or in the case of a Successor Servicer which has been Servicer for less than one year, for so long as such Successor Servicer has been Servicer) and no Servicer Termination Event or potential Servicer Termination Event has occurred and is continuing (or if a Servicer Termination Event has so occurred and is continuing, specifying each such event, the nature and status thereof and the steps necessary to remedy such event, and, if a Servicer Termination Event or potential Servicer Termination Event occurred during such year and no notice thereof has been given to the Deal Agent and the Collateral Agent, specifying such Servicer Termination Event or potential Servicer Termination Event and the steps taken to remedy such event).

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Section 6.6.    Additional Representations and Warranties of Credit Acceptance as Servicer.  Credit Acceptance, in its capacity as Servicer, represents and warrants to the Collateral Agent and the Deal Agent as of the Effective Date and the Funding Date, that the only material servicing computer systems and related software utilized by the Servicer to service the Loans and Contracts are:  (i) provided by Ontario Systems Corporation under an existing licensing agreement and related resource agreement, each of which may be amended from time to time, and (ii) the “loan servicing system” software developed by Credit Acceptance, which is owned by Credit Acceptance.  Should the Servicer or any of its Affiliates develop or implement computer software for servicing that is owned by or exclusively licensed to the Servicer or an Affiliate and utilize such software in the servicing of the Loans and Contracts, the Servicer shall give prompt written notice thereof to the Backup Servicer and the Collateral Agent, and the Collateral Agent shall be entitled to compel a license or sublicense for the benefit of the Collateral Agent or its designee of any such rights to the extent the Collateral Agent deems reasonably necessary and appropriate to assure that it or a duly appointed Successor Servicer would be able to continue to service the Loans and Contracts should that be required in accordance with the terms hereof.
Section 6.7.    Establishment of the Accounts.
(a)    Establishment of the Collection Account and Reserve Account.  The Servicer shall cause to be established, on or before the Closing Date, and maintained in the name of the Collateral Agent as agent for the Secured Parties, with an office or branch of a depository institution or trust company (i) a segregated corporate trust account entitled “Collection Account for WCM, as agent for the Secured Parties” (the “Collection Account”) and (ii) a segregated corporate trust account entitled “Reserve Account for WCM” as agent for the Secured Parties (the “Reserve Account”), in each case, over which the Collateral Agent as agent for the Secured Parties shall have sole dominion and control and from which neither the Originator, the Servicer nor the Borrower shall have any right of withdrawal; provided, however, that at all times such depository institution or trust company shall be a depository institution organized under the laws of the United States of America or any one of the States thereof or the District of Columbia (or any domestic branch of a foreign bank), (i) (A) that has either (1) a long-term unsecured debt rating of AA- or better by S&P and Aa3 or better by Moody’s or (2) a short-term unsecured debt rating or certificate of deposit rating of A-1 or better by S&P or P-1 or better by Moody’s, (B) the parent corporation which has either (1) a long-term unsecured debt rating of AA- or better by S&P and Aa3 or better by Moody’s or (2) a short-term unsecured debt rating or certificate of deposit rating of A-1 or better by S&P and P-1 or better by Moody’s or (C) that is otherwise acceptable to the Deal Agent and (ii) whose deposits are insured by the Federal Deposit Insurance Corporation (any such depository institution or trust company, a “Qualified Institution”).
(b)    Adjustments.  If (i) the Servicer makes a deposit into the Collection Account in respect of a Collection of a Loan and such Collection was received by the Servicer in the form of a check or other form of payment that is not honored for any reason or (ii) the Servicer makes a mistake with respect to the amount of any Collection and deposits an amount that is less than or more than the actual amount of such Collection, the Servicer shall appropriately adjust the amount subsequently deposited into the Collection Account to reflect such dishonored check or 

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mistake.  Any payment in respect of which a dishonored check or other form of payment is received shall be deemed not to have been paid.
(c)    Permitted Investments.  Funds on deposit in the Collection Account and the Reserve Account shall be invested in Permitted Investments by or at the written direction of the Borrower, provided that if a Termination Event or Unmatured Termination Event shall have occurred, such amounts shall be invested in Permitted Investments described in clause (g) of the definition thereof.  Any such written directions from the Borrower shall specify the particular investment to be made and shall certify that such investment is a Permitted Investment and is permitted to be made under this Agreement. If the Borrower fails to provide such written direction to the Collateral Agent, such funds shall remain uninvested. Funds on deposit in the Collection Account and the Reserve Account shall be invested in Permitted Investments that will mature so that such funds will be available no later than the Business Day prior to the next Payment Date, except that in the case of funds representing Collections with respect to a succeeding Collection Period, such Permitted Investments may mature so that such funds will be available no later than the Business Day prior to the Payment Date for such Collection Period.  No Permitted Investment may be liquidated or disposed of prior to its maturity.  All proceeds of any Permitted Investment shall be deposited in the Collection Account or the Reserve Account, as applicable.  Investments may be made in either account on any date (provided such investments mature in accordance herewith), only after giving effect to deposits to and withdrawals from such account on such date.  Realized losses, if any, on amounts invested in Permitted Investments shall be charged against investment earnings on amounts on deposit in the Collection Account or the Reserve Account, as applicable.
Section 6.8.    Payment of Certain Expenses by Servicer.  The initial Servicer will be required to pay all expenses incurred by it in connection with its activities under this Agreement, including fees and disbursements of independent accountants, Taxes imposed on the Servicer, expenses incurred in connection with payments and reports pursuant to this Agreement, and all other fees and expenses not expressly stated under this Agreement for the account of the Borrower.  The initial Servicer will be required to pay all reasonable fees and expenses owing to any bank or trust company in connection with the maintenance of the Collection Account, the Reserve Account and the Credit Acceptance Payment Account.  The Servicer shall be required to pay such expenses for its own account and shall not be entitled to any payment therefor other than the Servicing Fee.
Section 6.9.    Annual Independent Public Accountant’s Servicing Reports.  The Servicer will cause a firm of nationally recognized independent public accountants (who may also render other services to the Servicer) to furnish to the Deal Agent, within 120 days following the end of each fiscal year of the Servicer, commencing with the fiscal year ending on December 31, 2003:  (i) a report relating to such fiscal year to the effect that (A) such firm has reviewed certain documents and records relating to the servicing of the Loans and Contracts included in the Collateral, and (B) based on such examination, such firm is of the opinion that the Monthly Reports for such year were prepared in compliance with this Agreement, except for such exceptions as it believes to be immaterial and such other exceptions as will be set forth in such firm’s report and (ii) a report covering such fiscal year to the effect that such accountants have applied certain agreed-upon procedures, as set forth in Section 6.1(c) (which procedures shall have been approved by the Deal 

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Agent) to certain documents and records relating to the Loans under any Transaction Document, compared the information contained in the Monthly Reports delivered during the period covered by such report with such documents and records and that no matters came to the attention of such accountants that caused them to believe that such servicing was not conducted in compliance with Article VI of this Agreement, except for such exceptions as such accountants shall believe to be immaterial and such other exception as shall be set forth in such statement. In the event such independent public accountants require the Collateral Agent to agree to the procedures to be performed by such firm in any of the reports required to be prepared pursuant to this Section 6.9, the Servicer shall direct the Collateral Agent in writing to so agree; it being understood and agreed that the Collateral Agent will deliver such letter of agreement in conclusive reliance upon the direction of the Servicer, and the Collateral Agent has not made any independent inquiry or investigation as to, and shall have no obligation or liability in respect of, the sufficiency, validity or correctness of such procedures. The Collateral Agent shall not be liable for any claims, liabilities or expenses relating to such accountants’ engagement or any report issued in connection with such engagement, and the dissemination of any such report is subject to the written consent of the accountants.
Section 6.10.    The Servicer Not to Resign.  The Servicer shall not resign from the obligations and duties hereby imposed on it hereunder except upon the Servicer’s determination that (i) the performance of its duties hereunder is or becomes impermissible under Applicable Law and (ii) there is no reasonable action that the Servicer could take to make the performance of its duties hereunder permissible under Applicable Law.  Any such determination permitting the resignation of the Servicer shall be evidenced as to clause (i) above by an Opinion of Counsel to such effect delivered to the Deal Agent, the Collateral Agent and the Backup Servicer.  No such resignation shall become effective until a Successor Servicer shall have assumed the responsibilities and obligations of the Servicer in accordance with Section 6.12.
Section 6.11.    Servicer Termination Events.  If any one of the following events (a “Servicer Termination Event”) shall occur and be continuing:
(a)    any failure by the Servicer to make any payment, transfer or deposit as required by this Agreement or any other Transaction Document, other than any such failure resulting from an administrative or technical error of the Servicer in the amount so paid, transferred or deposited; provided that within one (1) Business Day after the Servicer becomes aware that, as a result of an administrative or technical error of the Servicer, any amount previously paid, transferred or deposited by the Servicer was less than the amount required to be paid, transferred or deposited by the Servicer, the Servicer pays, transfers or deposits the amount of such shortfall;
(b)    any failure by the Servicer to give instructions or notice to the Deal Agent as required by this Agreement or any other Transaction Document, or to deliver any required Monthly Report or other required reports hereunder on or before the date occurring two (2) Business Days after the date such instruction, notice or report is required to be made or given, as the case may be, under the terms of this Agreement or the relevant Transaction Document;
(c)    any failure on the part of the Servicer duly to observe or perform in any material respect any other covenants or agreements of the Servicer set forth in this Agreement 

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or the other Transaction Documents (other than as set forth in clause (a) or (b) above) to which the Servicer is a party, which continues unremedied for a period of 10 days;
(d)    any material representation, warranty or certification made by the Servicer in any Transaction Document or in any certificate delivered pursuant to any Transaction Document shall prove to have been incorrect when made, which continues unremedied for more than thirty (30) days (or a longer period, not in excess of sixty (60) days, as may be reasonably necessary to remedy such default, if the default is capable of remedy within sixty (60) days or less and the Servicer delivers an Officer’s Certificate to the Deal Agent to the effect that it has commenced, or will promptly commence and diligently pursue, all reasonable efforts to remedy the default);
(e)    an Insolvency Event shall occur with respect to the Servicer;
(f)    any delegation of the Servicer’s duties that is not permitted by Section 7.1;
(g)    any financial information related to the Collateral reasonably requested by the Deal Agent, the Collateral Agent or any Lender as provided herein is not reasonably provided as requested;
(h)    the rendering against the Servicer of one or more final judgments, decrees or orders for the payment of money in excess of United States $15,000,000 in the aggregate, and the continuance of such judgment, decree or order unsatisfied and in effect for any period of more than 60 consecutive days without a stay of execution;
(i)    the Servicer shall fail to pay any principal of or premium or interest on any indebtedness in an aggregate outstanding principal amount of $15,000,000 or more (“Material Debt”), when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Material Debt; or any other default under any agreement or instrument relating to any Material Debt or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Material Debt; or any such Material Debt shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof; 
(j)    any change in the control of the Servicer that takes the form of either a merger or consolidation in which the Servicer is not the surviving entity;
(k)    a Material Adverse Effect shall have occurred; or
(l)    a Termination Event shall have occurred and such Termination Event has not been waived by the Deal Agent; or

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(m)    the occurrence of the thirtieth (30th) day after the end of the fiscal quarter in which a breach of any covenant set forth in Sections 7.5, 7.6 and 7.7 of the Credit Agreement shall occur unless prior to such date, such breach is cured or waived by the Deal Agent in the Deal Agent’s sole discretion;
then notwithstanding anything herein to the contrary, so long as any such Servicer Termination Event shall not have been remedied, within any applicable cure period prior to the date of the Servicer Termination Notice (defined below), the Deal Agent may, or at the direction of the Required Lenders, by written notice to the Servicer (with a copy to the Backup Servicer) (a “Servicer Termination Notice”), shall terminate all of the rights and obligations of the Servicer as Servicer under this Agreement.
Section 6.12.    Appointment of Successor Servicer.
(a)    On and after the receipt by the Servicer of a Servicer Termination Notice pursuant to Section 6.11 or Section 10.2, the Servicer shall continue to perform all servicing functions under this Agreement until the date specified in the Servicer Termination Notice or otherwise specified by the Deal Agent in writing or, if no such date is specified in such Servicer Termination Notice or otherwise specified by the Deal Agent, until a date mutually agreed upon by the Servicer and the Deal Agent.  The Deal Agent may at the time described in the immediately preceding sentence at the direction of the Required Lenders appoint the Backup Servicer by written notice as the Servicer hereunder, and the Backup Servicer shall on such date (which date shall be no less than 30 days after receipt of such written notice) assume all obligations of the Servicer hereunder (except as specifically set forth herein or in the Backup Servicing Agreement), and all authority and power of the Servicer under this Agreement shall pass to and be vested in the Backup Servicer.  In the event that the Deal Agent does not so appoint the Backup Servicer, there is no Backup Servicer or the Backup Servicer is unable to assume such obligations on such date, the Deal Agent shall as promptly as possible appoint a successor servicer (the “Successor Servicer”) who shall be acceptable to the Required Lenders, and such Successor Servicer shall accept its appointment by a written assumption in a form acceptable to the Deal Agent.  In the event that a Successor Servicer has not accepted its appointment at the time when the Servicer ceases to act as Servicer, the Deal Agent shall petition a court of competent jurisdiction to appoint any established financial institution having a net worth of not less than United States $50,000,000 and whose regular business includes the servicing of Loans as the Successor Servicer hereunder.
(b)    Upon its assumption as Successor Servicer, the Backup Servicer (except as specifically set forth herein or in the Backup Servicing Agreement and subject to Section 6.12(a)) or any other Successor Servicer, as applicable, shall be the successor in all respects to the Servicer with respect to servicing functions as set forth in this Agreement and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof, and all references in this Agreement and the other Transaction Documents to the Servicer shall be deemed to refer to the Backup Servicer or the Successor Servicer, as applicable.  In no event shall the Backup Servicer be liable for any actions or omissions of any predecessor Servicer.

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(c)    All authority and power granted to the Servicer under this Agreement shall automatically cease and terminate upon termination of this Agreement and shall pass to and be vested in the Borrower and, without limitation, the Borrower is hereby authorized and empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other instruments, and to do and accomplish all other acts or things necessary or appropriate to effect the purposes of such transfer of servicing rights.  The Servicer agrees to cooperate with the Borrower in effecting the termination of the responsibilities and rights of the Servicer to conduct servicing on the Loans and the Contracts.
(d)    Within 30 days of receiving notice that the Backup Servicer is required to serve as the Servicer hereunder pursuant to the foregoing provisions of this Section 6.12 the Backup Servicer will begin the transition to its role as Servicer.
Section 6.13.    Responsibilities of the Borrower.  Anything herein to the contrary notwithstanding, the Borrower shall (i) perform all of its obligations under the Loans to the same extent as if a security interest in such Loans had not been granted hereunder and (ii) pay when due, from funds available to the Borrower under Section 2.7 hereto, any taxes.  Neither the Deal Agent, Collateral Agent nor any Secured Party shall have any obligation or liability with respect to any Loan, nor shall any of them be obligated to perform any of the obligations of the Borrower thereunder.
Section 6.14.    Segregated Payment Account.  Upon the occurrence of a Servicer Termination Event, a potential Servicer Termination Event or an Unsatisfactory Audit, the Deal Agent shall have the right to require the Borrower and the Servicer (i) to establish a segregated payment trust account in the name of the Collateral Agent for Collections related to the Collateral and (ii) to direct all Obligors to make payments into such account.
Section 6.15.  Dealer Collections Purchase; Replacement of Dealer Loan with Related Purchased Loans.  The parties hereto acknowledge the following:
(a)   During its ordinary course of business in managing its serviced portfolio of Dealer Loans (and not based on poor credit quality of the Dealer Loan Contracts), Credit Acceptance may from time to time agree to enter into an agreement (a “Dealer Collections Purchase Agreement”) with a Dealer, pursuant to which the Dealer agrees to sell and assign to Credit Acceptance all of its rights, interests and entitlement in and to one or more Pools of Dealer Loan Contracts securing the related Dealer Loans, including such Dealer’s ownership interest in such Dealer Loan Contracts and rights to receive the related Dealer Collections (a “Dealer Collections Purchase”). 
(b)   Credit Acceptance has assigned all of its rights under any Dealer Collections Purchase Agreements to the Borrower pursuant to the Contribution Agreement.  Upon the payment by Credit Acceptance to the applicable Dealer under a Dealer Collections Purchase Agreement of the purchase price thereunder (the “Dealer Collections Purchase Price”), the related Dealer Loans (including the rights to the related Dealer Loan Collections thereunder) shall be deemed to be extinguished and pursuant to the Contribution Agreement the Dealer Loan Contracts securing such Dealer Loans shall be assigned by Credit Acceptance to the Borrower as Purchased Loan Contracts and the loans thereunder shall be deemed Purchased Loans.  For the avoidance of doubt, all Collections on such Purchased Loan Contracts shall be included in Available Funds.  

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(c)   On the date of each Dealer Collections Purchase, Credit Acceptance shall deliver to the Collateral Agent a list identifying (A) all Dealer Loans extinguished as a result of such Dealer Collections Purchase, (B) each Dealer Loan Contract previously securing such Dealer Loans and (C) the Purchased Loans and Purchased Loan Contracts evidencing such Purchased Loans resulting from such Dealer Collections Purchase, in each case, identified by account number, dealer number and pool number, as applicable.  Such list shall be deemed to supplement Exhibit A to the Contribution Agreement and Schedule IV hereto as of the date of such Dealer Collections Purchase.  

ARTICLE VII
         
BACKUP SERVICER
Section 7.1.    Designation of the Backup Servicer.  The backup servicing role with respect to the Collateral shall be conducted by the Person designated as Backup Servicer under the Backup Servicing Agreement, which shall initially be Wells Fargo.
Section 7.2.    Duties of the Backup Servicer.  (a) On or before the Closing Date, and until its removal pursuant to the Backup Servicing Agreement, the Backup Servicer shall perform, on behalf of the Servicer, the Borrower, the Deal Agent, the Collateral Agent and the Secured Parties, the duties and obligations set forth in the Backup Servicing Agreement.
(b)     Except as otherwise expressly set forth herein, and without duplication, the Backup Servicer shall be entitled to the protections, privileges and indemnities afforded to the Collateral Agent in Sections 12.3(b) and 12.3(c) (except that the Backup Servicer shall be responsible for any costs and expenses related to performance of the Backup Servicer’s duties under the Backup Servicing Agreement), as if restated herein.

Section 7.3.    Backup Servicing Compensation.  As compensation for its backup servicing activities hereunder and under the Backup Servicing Agreement, the Backup Servicer shall be entitled to receive the Backup Servicing Fee pursuant to the provisions of Section 2.7(a).  The Backup Servicer’s entitlement to receive the Backup Servicing Fee shall cease on the earliest to occur of:  (i) it becoming the Successor Servicer; (ii) its removal as Backup Servicer pursuant to the terms of the Backup Servicing Agreement; or (iii) the termination of this Agreement or the Backup Servicing Agreement.
ARTICLE VIII
     
[Reserved]

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ARTICLE IX
     
SECURITY INTEREST
Section 9.1.    Security Agreement.  (a) The parties hereto intend that this Agreement constitute a security agreement and the transactions effected hereby constitute secured loans by the Lender to the Borrower under Applicable Law.
(b)    The Borrower hereby authorizes the Collateral Agent to file one or more financing or continuation statements, and amendments thereto, relating to all or any part of the Collateral and Proceeds thereof without the signature of the Borrower where permitted by law.  A photographic or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.
Section 9.2.    Release of Lien.  At the same time as any Loan by its terms and all amounts in respect thereof has been paid by the related Obligor and deposited in the Collection Account, the Collateral Agent as agent for the Secured Parties will, to the extent requested by the Servicer, release its interest in such Loan and Related Security.  The Collateral Agent as agent for the Secured Parties will after the deposit by the Servicer of such payment into the Collection Account, at the sole expense of the Servicer, execute and deliver to the Servicer any assignments, termination statements and any other releases and instruments as the Servicer may reasonably request in order to effect such release and transfer; provided, that the Collateral Agent as agent for the Secured Parties will make no representation or warranty, express or implied, with respect to any such Loan and Related Security in connection with such sale or transfer and assignment.  
Section 9.3.    Further Assurances.  The provisions of Section 14.12 shall apply to the security interest granted under Section 2.2(a) as well as to each Funding hereunder.
Section 9.4.    Remedies.  Upon the occurrence of a Termination Event, the Deal Agent, the Collateral Agent and the other Secured Parties shall have, with respect to the Collateral granted pursuant to Section 2.2(a), and in addition to all other rights and remedies available to the Deal Agent, the Collateral Agent and the other Secured Parties under this Agreement or other Applicable Law, all rights and remedies of a secured party upon default under the UCC.
Section 9.5.    Waiver of Certain Laws.  Each of the Borrower and the Servicer agrees, to the full extent that it may lawfully so agree, that neither it nor anyone claiming through or under it will set up, claim or seek to take advantage of any appraisement, valuation, stay, extension or redemption law now or hereafter in force in any locality where all or any portion of the Collateral may be situated in order to prevent, hinder or delay the enforcement or foreclosure of this Agreement, or the absolute sale of all or any portion of the Collateral, or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereof, and each of the Borrower and the Servicer, for itself and all who may at any time claim through or under it, hereby waives, to the full extent that it may be lawful so to do, the benefit of all such laws, and any and all right to have any of the properties or assets constituting the Collateral marshaled upon any such sale, and agrees that the Deal Agent, the Collateral Agent or any court having jurisdiction to foreclosure the 

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security interests granted in this Agreement may sell the Collateral as an entirety or in such parcels as the Deal Agent, the Collateral Agent or such court may determine.
Section 9.6.    Power of Attorney.  The Borrower hereby irrevocably appoints the Deal Agent and the Servicer and any Successor Servicer as its true and lawful attorney (with full power of substitution) in its name, place and stead and at its expense, in connection with the enforcement of the rights and remedies provided for in this Agreement, including without limitation the following powers:  (a) to give any necessary receipts or acquittance for amounts collected or received hereunder, (b) to make all necessary transfers of the Collateral in connection with any such sale or other disposition made pursuant hereto, (c) to execute and deliver for value all necessary or appropriate bills of sale, assignments and other instruments in connection with any such sale or other disposition, the Borrower hereby ratifying and confirming all that such attorney (or any substitute) shall lawfully do hereunder and pursuant hereto, and (d) to sign any agreements, orders or other documents in connection with or pursuant to any Transaction Document.  Nevertheless, if so requested by the Deal Agent, the Servicer or any Successor Servicer, the Collateral Agent or a purchaser of the Collateral, the Borrower shall ratify and confirm any such sale or other disposition by executing and delivering to the Deal Agent, the Collateral Agent or such purchaser all proper bills of sale, assignments, releases and other instruments as may be designated in any such request.
ARTICLE X
     
TERMINATION EVENTS
Section 10.1.    Termination Events.  The following events shall be termination events (“Termination Events”) hereunder:
(a)    On any Determination Date, the average Payment Rate for the preceding  three (3) Collection Periods with respect to which Payment Rate was calculated is less than 2.0%; or
(b)    the aggregate amount of Capital exceeds, for a period of two (2) Business Days or more, the sum of (A) the Borrowing Base and (B) all Collections on deposit in the Collection Account relating to the immediately preceding Collection Period; or
(c)    a Servicer Termination Event occurs and is continuing; or
(d)    (i)    failure on the part of the Borrower or the Originator to make any payment or deposit required by the terms of any Transaction Document on the day such payment or deposit is required to be made; or
(ii)    failure on the part of the Borrower or the Originator to materially observe or perform any of its covenants or agreements set forth in this Agreement or any other Transaction Document and such failure continues unremedied for more than five (5) Business Days after written notice to the Borrower or the Originator;

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(e)    any representation or warranty made or deemed to be made by the Borrower or the Originator under or in connection with this Agreement, any of the other Transaction Documents or any information required to be given by the Borrower or the Originator to the Deal Agent or the Collateral Agent to identify Loans or Contracts pursuant to any Transaction Document, shall prove to have been false or incorrect in any material respect when made, deemed made or delivered and such failure continues unremedied for more than thirty (30) days after the earlier of (x) the date on which the Borrower or the Originator discovers such breach and (y) the date on which the Borrower or the Originator receives written notice of such breach; or
(f)    the occurrence of an Insolvency Event relating to the Originator, the Borrower or the Servicer; or
(g)    the Borrower shall become an “investment company” within the meaning of the Investment Company Act or the arrangements contemplated by the Transaction Documents shall require registration as an “investment company” within the meaning of the Investment Company Act; or
(h)    a regulatory, tax or accounting body has ordered that the activities of the Borrower or any Affiliate of the Borrower contemplated hereby be terminated or, as a result of any other event or circumstance, the activities of the Borrower contemplated hereby may reasonably be expected to cause the Borrower or any of its respective Affiliates to suffer materially adverse regulatory, accounting or tax consequences; or
(i)    there shall exist any event or occurrence that has a reasonable possibility of causing a Material Adverse Effect; or
(j)    the Borrower, the Servicer or Credit Acceptance shall enter into any merger, consolidation or conveyance transaction, unless in the case of Credit Acceptance or the Servicer, the Servicer or Credit Acceptance, as applicable, is the surviving entity; or
(k)    the United States Internal Revenue Service shall file notice of a lien pursuant to Section 6323 of the Code with regard to any assets of the Borrower or the Originator and such lien shall not have been released within five (5) Business Days, or the Pension Benefit Guaranty Corporation shall file notice of a lien pursuant to Section 4068 of ERISA with regard to any of the assets of the Borrower or the Originator and such lien shall not have been released within five (5) Business Days; or
(l)    the Collateral Agent ceases to have a valid and perfected first priority security interest in a material portion of the Collateral and such failure has not been remedied within ten (10) Business Days; provided that, the portion of the Collateral in which the Collateral Agent does not have a valid and perfected first priority security interest will be material if the outstanding balance of the related Contracts exceeds 3% of the Aggregate Outstanding Eligible Loan Balance of all Eligible Contracts; or
(m)    any Change-in-Control shall occur; or

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(n)    (i) any Transaction Document, or any lien or security interest granted thereunder, shall (except in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be the legally valid, binding and enforceable obligation of the Borrower, the Originator, or the Servicer, (ii) the Borrower, the Originator or the Servicer shall, directly or indirectly, contest in any manner such effectiveness, validity, binding nature or enforceability or (iii) any security interest securing any obligation under any Transaction Document shall, in whole or in part, cease to be a perfected first priority security interest; or
(o)    Credit Acceptance shall fail to pay any principal of or premium or interest on any Material Debt, when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Material Debt; or any other default under any agreement or instrument relating to any Material Debt or any other event, shall occur and shall continue after the applicable grace period, if any, specified in such agreement or instrument if the effect of such default or event is to accelerate, or to permit the acceleration of, the maturity of such Material Debt; or any such Material Debt shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof; or
(p)    Collections are less than 70.0% of Forecasted Collections for any three consecutive Collection Periods. 
Section 10.2.    Remedies.
(a)    Upon the occurrence of a Termination Event (other than a Termination Event described in Section 10.1(f), the Deal Agent may, or at the direction of the Required Lenders shall, by notice to the Borrower declare the Termination Date to have occurred.
(b)    Upon the occurrence of a Termination Event described in Section 10.1(f), the Termination Date shall automatically occur.
(c)    Upon any Termination Date that occurs following a Termination Event pursuant to this Section 10.2: (i) the applicable Yield Rate on the Capital outstanding with respect to each Lender shall be equal to the rate set forth in the Fee Letter related to such Lender; (ii) the Deal Agent may, and shall at the direction of the Required Lenders by delivery of a Servicer Termination Notice, terminate the Servicer; and (iii) the Deal Agent may, and at the direction of the Required Lenders shall, declare the entire outstanding principal amount of the Notes be immediately due and payable.  The Deal Agent, the Collateral Agent and the Secured Parties shall have, in addition to all other rights and remedies under this Agreement or otherwise, all other rights and remedies provided of a secured party under the UCC of each applicable jurisdiction and other applicable laws, which rights shall be cumulative.
(d)    If the Notes have been declared due and payable pursuant to Section 10.2(c), the Collateral Agent may institute proceedings to collect amounts due, exercise remedies as a secured party (including foreclosure or sale of the Collateral) or elect to maintain the Collateral 

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and continue to apply the proceeds from the Collateral as if there had been no declaration of acceleration.
(e)    Upon the occurrence of an Amortization Event or the occurrence or declaration of the Termination Date, the Borrower may not request and no Lender shall be required to effect any Funding.
    
ARTICLE XI
     
INDEMNIFICATION
Section 11.1.    Indemnities by the Borrower.
(a)    Without limiting any other rights that any such Person may have hereunder or under Applicable Law, the Borrower hereby agrees to indemnify the Deal Agent, the Backup Servicer, the Collateral Agent, the Successor Servicer, the Secured Parties, and each of their respective Affiliates and officers, directors, employees and agents thereof (collectively, the “Indemnified Parties”), forthwith on demand, from and against any and all damages, losses, claims, liabilities and related costs and expenses, including reasonable and documented attorneys’ fees and disbursements (all of the foregoing being collectively referred to as the “Indemnified Amounts”) awarded against or incurred by such Indemnified Party or other non-monetary damages of any such Indemnified Party any of them arising out of or as a result of this Agreement or the financing or maintenance of the Capital or in respect of any Loan or any Contract (including any reasonable and documented legal fees and expenses incurred in connection with any action or suit brought by an Indemnified Party to enforce any indemnification or other obligation of the Borrower by such Indemnified Party for any indemnification or other obligation of the Borrower), excluding, however, (a) Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of such Indemnified Party or (b) Indemnified Amounts that have the effect of recourse for non-payment of the Loans due to credit problems of the Obligors (except as otherwise specifically provided in this Agreement).  If the Borrower has made any indemnity payment pursuant to this Section 11.1 and such payment fully indemnified the recipient thereof and the recipient thereafter collects any payments from others in respect of such Indemnified Amounts, then the recipient shall repay to the Borrower an amount equal to the amount it has collected from others in respect of such indemnified amounts.  Without limiting the foregoing, the Borrower shall indemnify each Indemnified Party for Indemnified Amounts relating to or resulting from:
(i)    any Contract or Loan treated as or represented by Credit Acceptance to be an Eligible Dealer Loan Contract or Eligible Loan that is not at the applicable time an Eligible Dealer Loan Contract or Eligible Loan;
(ii)    reliance on any representation or warranty made or deemed made by the Borrower or any of its officers under or in connection with this Agreement, which shall have been false or incorrect in any material respect when made or deemed made or delivered;

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(iii)    the failure by the Borrower to comply with any term, provision or covenant contained in this Agreement or any agreement executed in connection with this Agreement, or with any Applicable Law, with respect to any Loan, Dealer Agreement, Purchase Agreement, or Contract, or the nonconformity of any Loan, Dealer Agreement, Purchase Agreement or Contract with any such Applicable Law;
(iv)    the failure to vest and maintain vested in the Collateral Agent for the Secured Parties a first priority perfected security interest in the Collateral, together with all Collections, free and clear of any Lien whether existing at the time of any Funding or at any time thereafter;
(v)    the failure to file, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other Applicable Laws with respect to the Collateral, whether at the time of the Funding or at any subsequent time;
(vi)    any dispute, claim, offset or defense (other than the discharge in bankruptcy of the Obligor) of the Obligor to the payment of any Loan or Contract (including, without limitation, a defense based on such Loan or Contract not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms);
(vii)    any failure of the Borrower to perform its duties or obligations in accordance with the provisions of this Agreement or any failure by the Borrower to perform its respective duties under the Loans;
(viii)    the failure by Borrower to pay when due any Taxes for which the Borrower is liable, including without limitation, sales, excise or personal property taxes payable in connection with the Collateral;
(ix)    any repayment by the Deal Agent or a Secured Party of any amount previously distributed in reduction of Capital or payment of Yield or any other amount due hereunder or under any Hedging Agreement, in each case which amount the Deal Agent or a Secured Party believes in good faith is required to be repaid;
(x)    the commingling of Collections of the Collateral at any time with other funds;
(xi)    any investigation, litigation or proceeding related to this Agreement or the use of proceeds of the Funding or the funding of or maintenance of Capital or in respect of any Loan or Contract;
(xii)    any failure by the Borrower to give reasonably equivalent value to the Originator in consideration for the transfer by the Originator to the Borrower of the Loans, Related Security or any portion thereof or any attempt by any Person to void or otherwise avoid any such transfer under any statutory provision or common law or equitable action, including, without limitation, any provision of the Bankruptcy Code;

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(xiii)    the use of the Proceeds of the Funding in a manner other than as provided in this Agreement and the Contribution Agreement; or
(xiv)    the failure of the Borrower or any of its agents or representatives to remit to the Servicer, the Deal Agent, the Collateral Agent or any other Secured Party, any Collections of the Collateral remitted to the Borrower or any such agent or representative.
(b)    Any amounts subject to the indemnification provisions of this Section 11.1 shall be paid by the Borrower to the relevant Indemnified Party on the next Payment Date pursuant to Section 2.7.
(c)    The obligations of the Borrower under this Section 11.1 shall survive the resignation or removal of the Deal Agent, the Collateral Agent, the Successor Servicer, any Lender or the Backup Servicer or the assignment or termination of this Agreement.
Section 11.2.    Indemnities by the Servicer.
(a)    Without limiting any other rights that any such Person may have hereunder or under Applicable Law, the initial Servicer hereby agrees to indemnify each Indemnified Party, forthwith on demand, from and against any and all Indemnified Amounts (including any reasonable and documented legal fees and expenses incurred in connection with any action or suit brought by an Indemnified Party to enforce any indemnification or other obligation of the Borrower by such Indemnified Party for any indemnification or other obligation of the Borrower) awarded against or incurred by any such Indemnified Party by reason of any acts, omissions or alleged acts or omissions of the initial Servicer, including, but not limited to:  (i) any representation or warranty made by the initial Servicer under or in connection with any Transaction Document, any Monthly Report or any other information or report delivered by or on behalf of the Servicer pursuant hereto, which shall have been false, incorrect or misleading in any material respect when made or deemed made; (ii) the failure by the initial Servicer to comply with any Applicable Law; (iii) the failure of the Servicer to comply with its duties or obligations in accordance with this Agreement or any other Transaction Document to which it is a party; (iv) any litigation, proceedings or investigation against the initial Servicer; (v) the commingling by the Servicer of Collections at any time with other funds; or (vi) the failure of the initial Servicer or any of its agents or representatives to remit to the Collection Account, Deal Agent or Collateral Agent any Collections or Proceeds of the Collateral.  The provisions of this indemnity shall run directly to and be enforceable by an Indemnified Party subject to the limitations hereof.
(b)    Any amounts subject to the indemnification provisions of this Section 11.2 shall be paid by the initial Servicer to the relevant Indemnified Party within five (5) Business Days following such Person’s demand therefor.
(c)    The initial Servicer shall have no liability for making indemnification hereunder to the extent any such indemnification constitutes recourse for uncollectible Contracts.

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(d)    The obligations of the initial Servicer under this Section 11.2 shall survive the resignation or removal of the Deal Agent, the Collateral Agent, the Successor Servicer, any Lender or the Backup Servicer and the assignment or termination of this Agreement.
(e)    Any indemnification pursuant to this Section 11.2 shall not be payable from the Collateral.
Section 11.3.    After-Tax Basis.  Indemnification under Sections 11.1 and 11.2 shall be in an amount necessary to make the Indemnified Party whole after taking into account any tax consequences to the Indemnified Party of the receipt of the indemnity provided hereunder, including the effect of such tax or refund on the amount of tax measured by net income or profits that is or was payable by the Indemnified Party.
ARTICLE XII
     
THE DEAL AGENT AND THE COLLATERAL AGENT
Section 12.1.    Authorization and Action.
(a)    Each Secured Party hereby designates and appoints Wells Fargo as Deal Agent hereunder, and authorizes the Deal Agent to take such actions as agent on its behalf and to exercise such powers as are delegated to the Deal Agent by the terms of this Agreement together with such powers as are reasonably incidental thereto.  The Deal Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Secured Party, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Deal Agent shall be read into this Agreement or otherwise exist for the Deal Agent.  In performing its functions and duties hereunder, the Deal Agent shall act solely as agent for the Secured Parties and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for the Borrower or any of its successors or assigns.  The Deal Agent shall not be required to take any action that exposes the Deal Agent to personal liability or that is contrary to this Agreement or Applicable Law.  The appointment and authority of the Deal Agent hereunder shall terminate upon the indefeasible payment in full of the Aggregate Unpaids.
(b)    [Reserved.]
(c)        Each Secured Party hereby designates and appoints Wells Fargo as Collateral Agent hereunder, and authorizes the Collateral Agent to take such actions as agent on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms of this Agreement together with such powers as are reasonably incidental thereto.  The Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Secured Party, and no implied covenants, functions, responsibilities, duties, obligations or liabilities on the part of the Collateral Agent shall be read into this Agreement or otherwise exist for the Collateral Agent.  In performing its functions and duties hereunder, the Collateral Agent shall act solely as agent for the Secured Parties and does not assume nor shall be deemed to have assumed any obligation or relationship of trust or agency with or for the Borrower or any of its successors or assigns.  The Collateral Agent shall not be required to take any action 

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that exposes the Collateral Agent to personal liability or that is contrary to this Agreement or Applicable Law.  The appointment and authority of the Collateral Agent hereunder shall terminate upon the indefeasible payment in full of the Aggregate Unpaids.

Section 12.2.    Delegation of Duties.
(a)    The Deal Agent may execute any of its duties under this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  The Deal Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.
(b)    The Collateral Agent may execute any of its duties under this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties.  The Collateral Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.
Section 12.3.    Exculpatory Provisions.
(a)    Neither the Deal Agent nor any of its directors, officers, agents or employees shall be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement (except for its, their or such Person’s own gross negligence or willful misconduct or, in the case of the Deal Agent, the breach of its obligations expressly set forth in this Agreement), or (ii) responsible in any manner to any of the Secured Parties for any recitals, statements, representations or warranties made by the Borrower contained in this Agreement or in any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, this Agreement for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other document furnished in connection herewith, or for any failure of the Borrower to perform its obligations hereunder, or for the satisfaction of any condition specified in Article III.  The Deal Agent shall not be under any obligation to any Secured Party to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, this Agreement, or to inspect the properties, books or records of the Borrower.  The Deal Agent shall not be deemed to have knowledge of any Amortization Event, Unmatured Termination Event, Termination Event or Servicer Termination Event unless the Deal Agent has received notice from the Borrower or a Secured Party.
(b)    Neither the Collateral Agent nor any of its directors, officers, agents or employees shall be (i) liable for any action lawfully taken or omitted to be taken by it or them under or in connection with this Agreement (except for its, their or such Person’s own gross negligence or willful misconduct or, in the case of the Collateral Agent, the breach of its obligations expressly set forth in this Agreement resulting from the gross negligence or willful misconduct of the Collateral Agent), or (ii) responsible in any manner to any of the Secured Parties for any recitals, statements, representations or warranties made by the Borrower, the Servicer, the Originator, the Custodian, the Deal Agent, any Lender or any other Person contained in this Agreement or in any certificate, report, statement or other document referred to or provided for in, or received under or in connection with, this Agreement for the value, validity, effectiveness, genuineness, enforceability 

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or sufficiency of this Agreement or any other document furnished in connection herewith, or for the acts or omissions of any other party hereto or for any failure of the Borrower, the Servicer, the Originator, the Custodian, the Deal Agent, any Lender or any other Person to perform its obligations hereunder, or for the satisfaction of any condition specified in Article III.  The Collateral Agent shall not be under any obligation to any Secured Party to ascertain or to inquire as to the observance or performance of any of the agreements or covenants contained in, or conditions of, this Agreement, or to inspect the properties, books or records of the Servicer, the Originator, the Custodian, the Deal Agent, any Lender or any other Person, and may assume performance absent written notice or actual knowledge of a Responsible Officer to the contrary.  The Collateral Agent shall not be deemed to have knowledge of any event, including any Amortization Event, Unmatured Termination Event, Termination Event or Servicer Termination Event, or information (including breaches of representations and warranties), unless a Responsible Officer of the Collateral Agent has received written notice or has actual knowledge thereof from the Borrower or a Secured Party, and shall have no duty to take any action to determine whether such event or information has occurred. For purposes of determining the Collateral Agent’s responsibility and liability hereunder (including the sending of any notice), whenever reference is made in this Agreement or any other Transaction Document to any event (including, but not limited to, any Amortization Event, Unmatured Termination Event, Termination Event or Servicer Termination Event) or information, such reference shall be construed to refer only to such event or information of which the Collateral Agent has received written notice or has actual knowledge as described in this Section. Information contained in monthly distribution reports (other than those reports that the Collateral Agent is contractually obligated to review) and other publicly-available information shall not constitute written notice or actual knowledge.
(c)        The Collateral Agent shall not be imputed with any knowledge of, or information possessed or obtained by, the Backup Servicer, any custodian, or any affiliate, line of business or other division of Wells Fargo and vice versa (in each case other than instances where such roles are performed by the same group or division within Wells Fargo or otherwise include common Responsible Officers).
Section 12.4.    Reliance.
(a)    The Deal Agent shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower), independent accountants and other experts selected by the Deal Agent.  The Deal Agent shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other document furnished in connection herewith unless it shall first receive such advice or concurrence of Wells Fargo, as a Lender, or the Required Lenders or all of the Secured Parties, as applicable, as it deems appropriate or it shall first be indemnified to its satisfaction by the Secured Parties, provided that unless and until the Deal Agent shall have received such advice, the Deal Agent may take or refrain from taking any action, as the Deal Agent shall deem advisable and in the best interests of the Secured Parties.  The Deal Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request of Wells Fargo, as a Lender, or the Required Lenders or all of the Secured 

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Parties, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Secured Parties.
(b)    The Collateral Agent shall in all cases be entitled to rely, and shall be fully protected in relying, upon any document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower), independent accountants and other experts selected by the Collateral Agent.  The Collateral Agent shall in all cases be fully justified in failing or refusing to take any action under this Agreement or any other document furnished in connection herewith unless it shall first receive such advice or concurrence of the Required Lenders or all of the Secured Parties, as applicable, as it deems appropriate or it shall first be indemnified to its satisfaction by the Secured Parties, provided that unless and until the Collateral Agent shall have received such advice, the Collateral Agent may take or refrain from taking any action, as the Collateral Agent shall deem advisable and in the best interests of the Secured Parties.  The Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, in accordance with a request of the Required Lenders or all of the Secured Parties, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Secured Parties.
Section 12.5.    Non-Reliance on Deal Agent, Collateral Agent and Other Lenders.  Each Secured Party expressly acknowledges that neither the Deal Agent, the Collateral Agent nor any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates has made any representations or warranties to it and that no act by the Deal Agent or the Collateral Agent hereafter taken, including, without limitation, any review of the affairs of the Borrower, shall be deemed to constitute any representation or warranty by the Deal Agent, any Lender or the Collateral Agent.  Each Secured Party represents and warrants to the Deal Agent and the Collateral Agent that it has and will, independently and without reliance upon the Deal Agent, the Collateral Agent or any other Secured Party and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, prospects, financial and other conditions and creditworthiness of the Borrower and made its own decision to enter into this Agreement or Hedging Agreement, as the case may be.
Section 12.6.    Reimbursement and Indemnification.  The Lenders agree to reimburse and indemnify the Deal Agent, the Collateral Agent and each of their respective officers, directors, employees, representatives and agents ratably according to their pro rata shares, to the extent not paid or reimbursed by the Borrower (i) for any amounts for which the Deal Agent, acting in its capacity as Deal Agent, or the Collateral Agent, acting in its capacity as Collateral Agent is entitled to reimbursement by the Borrower hereunder and (ii) for any other expenses incurred by the Deal Agent, in its capacity as Deal Agent or the Collateral Agent, acting in its capacity as Collateral Agent and acting on behalf of the Secured Parties, in connection with the administration and enforcement of this Agreement.
Section 12.7.    Deal Agent and Collateral Agent in their Individual Capacities.  The Deal Agent, the Collateral Agent and each of their respective Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower or any Affiliate of the Borrower 

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as though the Deal Agent or the Collateral Agent, as the case may be, were not the Deal Agent or the Collateral Agent, as the case may be, hereunder.  With respect to each Funding pursuant to this Agreement, the Deal Agent, the Collateral Agent and each of their respective Affiliates shall have the same rights and powers under this Agreement as any Lender and may exercise the same as though it were not the Deal Agent or the Collateral Agent, as the case may be, and the terms “Lender,” and “Lenders” shall include the Deal Agent or the Collateral Agent, as the case may be, each in its individual capacity.
Section 12.8.    Successor Deal Agent or Collateral Agent.
(a)    The Deal Agent may, upon 5 days’ notice to the Borrower and the Secured Parties, and the Deal Agent will, upon the direction of the Required Lenders resign as Deal Agent.  If the Deal Agent shall resign, then the Required Lenders during such 5-day period shall appoint a successor agent.  If for any reason no successor Deal Agent is appointed by the Required Lenders during such 5-day period, then effective upon the expiration of such 5-day period, the Secured Parties shall perform all of the duties of the Deal Agent hereunder and the Borrower shall make all payments in respect of the Aggregate Unpaids or under any fee letter delivered in connection herewith directly to the applicable Secured Party and for all purposes shall deal directly with each Secured Party.  After any retiring Deal Agent’s resignation hereunder as Deal Agent, the provisions of Article XI and Article XII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Deal Agent under this Agreement.
(b)    The Collateral Agent may, upon 5 days’ notice to the Borrower and the Secured Parties, and the Collateral Agent will, upon the direction of all of the Secured Parties resign as Collateral Agent.  If the Collateral Agent shall resign, then the Secured Parties, during such 5-day period shall appoint a successor agent.  If for any reason no successor Collateral Agent is appointed by the Secured Parties during such 5-day period, then effective upon the expiration of such 5-day period, the Secured Parties shall perform all of the duties of the Collateral Agent hereunder and the Borrower shall make all payments in respect of the Aggregate Unpaids or under any fee letter delivered in connection herewith directly to the applicable Secured Party and for all purposes shall deal directly with each Secured Party.  After any retiring Collateral Agent’s resignation hereunder as Collateral Agent, the provisions of Article XI and Article XII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent under this Agreement.
ARTICLE XIII
     
ASSIGNMENTS; PARTICIPATIONS
Section 13.1.    Assignments and Participations.
(a)    Each Lender may upon at least 30 days’ notice to the Deal Agent, assign to one or more banks or other entities all or a portion of its rights and obligations under this Agreement; provided, however, that (i) each such assignment shall be of a constant, and not a varying percentage of all of the assigning Lender’s rights and obligations under this Agreement; (ii) the amount of the Commitment of the assigning Lender being assigned pursuant to each such assignment (determined as of the date of the Assignment and Acceptance with respect to such assignment) shall 

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in no event be less than the lesser of (A) $15,000,000 or an integral multiple of $1,000,000 in excess of that amount and (B) the full amount of the assigning Lender’s Commitment; (iii) the parties to each such assignment shall execute and deliver to the Deal Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with a processing and recordation fee of $3,500 or such lesser amount as shall be approved by the Deal Agent; (iv) the parties to each such assignment shall have agreed to reimburse the Deal Agent for all fees, costs and expenses (including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for each of the Deal Agent and any other Lenders) incurred by the Deal Agent or any other Lenders, respectively, in connection with such assignment; and (v) there shall be no increased costs, expenses or taxes incurred by the Deal Agent or any other Lenders upon such assignment or participation.  Upon such execution, delivery and acceptance by the Deal Agent and any other Lenders and the recording by the Deal Agent, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be the date of acceptance thereof by the Deal Agent and any other Lenders, unless a later date is specified therein, (A) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the rights and obligations of a Lender hereunder and (B) the Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto).
(b)    By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows:  (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; (ii) such assignee confirms that it has received a copy of this Agreement, together with copies of such financial statements and other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance; (iii) such assignee will, independently and without reliance upon the Deal Agent, the Collateral Agent, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (iv) such assignee appoints and authorizes each of the Deal Agent, the Collateral Agent and any other Lender to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to such agent by the terms hereof, together with such powers as are reasonably incidental thereto; and (v) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.
(c)    The Deal Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at its address referred to herein a copy of each Assignment and Acceptance delivered to and accepted by it and a register for the recordation of the names and addresses of the 

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Lenders and the Commitment of, and the Capital of the Funding (the “Register”).  The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrower and the Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by any Lender at any reasonable time and from time to time upon reasonable prior notice.
(d)    Subject to the provisions of Section 13.1(a), upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee, the Deal Agent, the Collateral Agent and the Lenders shall each, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit B hereto, accept such Assignment and Acceptance, and the Deal Agent shall then (i) record the information contained therein in the Register and (ii) give prompt notice thereof to each Lender.
(e)    Each Lender may sell participations to one or more banks or other entities in or to all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and its portion of the Funding and related Collateral); provided, however, that (i) such Lender’s obligations under this Agreement (including, without limitation, its Commitment hereunder) shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) the Deal Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Notwithstanding anything herein to the contrary, each participant shall have the rights of a Lender (including any right to receive payment) under Sections 2.13 and 2.14; provided, however, that no participant shall be entitled to receive payment under either such Section in excess of the amount that would have been payable under such Section by the Borrower to the Lender granting its participation had such participation not been granted, and no Lender granting a participation shall be entitled to receive payment under either such Section in an amount that exceeds the sum of (i) the amount to which such Lender is entitled under such Section with respect to any portion of the Capital that is not subject to any participation plus (ii) the aggregate amount to which its participants are entitled under such Sections with respect to the amounts of their respective participations.  With respect to any participation described in this Section 13.1, the participant’s rights as set forth in the agreement between such participant and the applicable Lender to agree to or to restrict such Lender’s ability to agree to any modification, waiver or release of any of the terms of this Agreement or to exercise or refrain from exercising any powers or rights that such Lender may have under or in respect of this Agreement shall be limited to the right to consent to any of the matters set forth in Section 14.1 of this Agreement. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each participant and the amount of Capital (and stated interest) of each participant’s interest in the rights and obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant's interest in the rights and obligations under this Agreement) to any Person except to the extent that such disclosure is necessary to establish that such obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner 

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of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Deal Agent (in its capacity as Deal Agent) shall have no responsibility for maintaining a Participant Register.
(f)    Each Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 13.1, disclose to the assignee or participant or proposed assignee or participant any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower.
(g)    Nothing herein shall prohibit any Lender from pledging or assigning as collateral any of its rights under this Agreement to any Federal Reserve Bank in accordance with Applicable Law and any such pledge or collateral assignment may be made without compliance with Section 13.1(a) or Section 13.1(b).
(h)    Each Lender may at any time assign, or grant a security interest in or sell a participation interest in the Capital and the Collateral (or portion thereof) to any Person.  The parties to any such assignment, grant or sale of participation interest, shall execute and deliver to the related Lender, for its acceptance and recording in its books and records, such agreement or document as may be satisfactory to such parties and the related Lender.
ARTICLE XIV
     
MISCELLANEOUS
Section 14.1.    Amendments and Waivers.
(a)    Except as provided in this Section 14.1, no amendment, waiver or other modification of any provision of this Agreement shall be effective without the written agreement of the Borrower, the Deal Agent, the Collateral Agent and the Required Lenders; provided, however, that no such amendment, waiver or modification shall affect the rights or obligations of any Hedge Counterparty or the Backup Servicer without the written agreement of such Person.  Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
(b)    No amendment, waiver or other modification of this Agreement shall:
(i)    without the consent of each affected Lender, (A) extend the Commitment Termination Date or the date of any payment or deposit of Collections by the Borrower or the Servicer, (B) reduce the rate or extend the time of payment of Yield (or any component thereof), (C) reduce any fee payable to the Deal Agent for the benefit of the Lenders, (D) except pursuant to Article XIII hereof, change the amount of the Capital of any Lender, a Lender’s pro rata share or a Lender’s Commitment, (E) amend, modify or waive any provision of the definition of Required Lenders or this Section 14.1(b), (F) consent to or permit the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement or (G) amend or modify any defined term (or any defined term used directly or indirectly in such defined term) used in clauses 

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(A) through (F) above in a manner that would circumvent the intention of the restrictions set forth in such clauses;
(ii)    without the written consent of the Deal Agent or the Collateral Agent, as applicable, amend, modify or waive any provision of this Agreement if the effect thereof is to affect the rights or duties of the Deal Agent or the Collateral Agent, as applicable; or
(iii)    without the consent of the Deal Agent, amend or modify (A) Section 10.1, (B) the definitions of “Amortization Event,” “Eligible Dealer Agreement,” “Hedging Agreement,” “Net Advance Rate,” “Termination Date” and “Required Reserve Account Amount” as set forth in Section 1.1, (C) Section 2.7(a) or (D) Section 5.3.
                
(c)    Notwithstanding the foregoing provisions of this Section 14.1, without the consent of the Lenders, the Deal Agent may, with the consent of the Borrower amend this Agreement solely to add additional Persons as Lenders hereunder.  Any modification or waiver shall apply to each of the Lenders equally and shall be binding upon the Borrower, the Lenders, the Collateral Agent and the Deal Agent.
Section 14.2.    Notices, Etc.  All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including telex communication and communication by facsimile copy) and mailed, telexed, transmitted or delivered, as to each party hereto, at its address set forth under its name on the signature pages hereof, or specified in such party’s Assignment and Acceptance or at such other address as shall be designated by such party in a written notice to the other parties hereto.  All such notices and communications shall be effective, upon receipt, or in the case of (a) notice by mail, five days after being deposited in the United States mail, first class postage prepaid, (b) notice by telex, when telexed against receipt of answer back, or (c) notice by facsimile copy, when verbal communication of receipt is obtained, except that notices and communications pursuant to this Article XIV shall not be effective until received with respect to any notice sent by mail or telex.
Section 14.3.    Ratable Payments.  If any Secured Party, whether by setoff or otherwise, has payment made to it with respect to any portion of the Aggregate Unpaids owing to such Secured Party (other than payments received pursuant to Section 11.1 in a greater proportion than that received by any other Secured Party), such Secured Party agrees, promptly upon demand, to purchase for cash without recourse or warranty a portion of the Aggregate Unpaids held by the other Secured Parties so that after such purchase each Secured Party will hold its ratable proportion of the Aggregate Unpaids; provided, however, that if all or any portion of such excess amount is thereafter recovered from such Secured Party, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.
Section 14.4.    No Waiver; Remedies.  No failure on the part of the Deal Agent, the Collateral Agent, the Backup Servicer or a Secured Party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right.  The rights and remedies herein provided are cumulative and not exclusive of any rights and remedies provided by law.

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Section 14.5.    Binding Effect; Benefit of Agreement.  This Agreement shall be binding upon and inure to the benefit of the Borrower, the Deal Agent, the Backup Servicer, the Collateral Agent, the Secured Parties and their respective successors and permitted assigns and, in addition, the provisions of Section 2.7(a)(i) and Section 2.7(a)(xi) shall inure to the benefit of each Hedge Counterparty, whether or not that Hedge Counterparty is a Secured Party.
Section 14.6.    Term of this Agreement.  This Agreement, including, without limitation, the Borrower’s representations, warranties and covenants set forth in Articles IV and V, and the Servicer’s representations, warranties and covenants set forth in Articles V and VI hereof, create and constitute the continuing obligation of the parties hereto in accordance with its terms, and shall remain in full force and effect until the Collection Date; provided, however, that the rights and remedies with respect to any breach of any representation and warranty made or deemed made by the Borrower or Servicer pursuant to Articles III and IV and the indemnification and payment provisions of Article XI and Article XII and the provisions of Section 14.10 and Section 14.11 shall be continuing and shall survive any termination of this Agreement.
Section 14.7.    Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  EACH OF THE PARTIES HERETO AND EACH HEDGE COUNTERPARTY HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK.  EACH OF THE PARTIES HERETO AND EACH SECURED PARTY HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
Section 14.8.    Waiver of Jury Trial.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO AND EACH HEDGE COUNTERPARTY HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 14.9.    Costs, Expenses and Taxes.
(a)    In addition to the rights of indemnification granted to the Deal Agent, the Backup Servicer, the Collateral Agent, the Secured Parties and its or their Affiliates and officers, directors, employees and agents thereof under Article XI hereof, the Borrower agrees to pay on demand all costs and expenses of the Deal Agent, the Backup Servicer, the Collateral Agent and the Secured Parties incurred in connection with the preparation, execution, delivery, administration (including periodic auditing), amendment or modification of, or any waiver or consent issued in connection with, this Agreement, the other Transaction Documents and the other documents to be delivered hereunder or thereunder, or in connection herewith or therewith (excluding any Hedging 

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Agreement), including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Deal Agent, the Backup Servicer, the Collateral Agent and the Secured Parties with respect thereto and with respect to advising the Deal Agent, the Backup Servicer, the Collateral Agent and the Secured Parties as to their respective rights and remedies under this Agreement, the other Transaction Documents and the other documents to be delivered hereunder or thereunder, or in connection herewith or therewith (excluding any Hedging Agreement), and all costs and expenses, if any (including reasonable counsel fees and expenses), incurred by the Deal Agent, the Backup Servicer, the Collateral Agent or the Secured Parties in connection with the enforcement of this Agreement, the other Transaction Documents and the other documents to be delivered hereunder or thereunder, or in connection herewith or therewith (including any Hedging Agreement).
(b)    The Borrower shall pay on demand any and all stamp, sales, excise and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and recording of this Agreement, the other Transaction Documents, the other documents to be delivered hereunder or any agreement or other document providing liquidity support, credit enhancement or other similar support to the Lender in connection with this Agreement or the funding or maintenance of any Funding hereunder.

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Section 14.10.    No Proceedings. Each of the parties hereto (other than the Deal Agent) hereby agrees that it will not institute against, or join any other Person in instituting against the Borrower any Insolvency Proceeding so long as there shall not have elapsed one year and one day since the Collection Date.
Section 14.11.    Recourse Against Certain Parties. No recourse under or with respect to any obligation, covenant or agreement (including, without limitation, the payment of any fees or any other obligations) of any Secured Party as contained in this Agreement or any other agreement, instrument or document entered into by it pursuant hereto or in connection herewith shall be had against any administrator of such Secured Party or any incorporator, affiliate, stockholder, officer, employee or director of such Secured Party or of any such administrator, as such, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood that the agreements of such Secured Party contained in this Agreement and all of the other agreements, instruments and documents entered into by it pursuant hereto or in connection herewith are, in each case, solely the corporate obligations of such Secured Party, and that no personal liability whatsoever shall attach to or be incurred by any administrator of such Secured Party or any incorporator, stockholder, affiliate, officer, employee or director of such Secured Party or of any such administrator, as such, or any other of them, under or by reason of any of the obligations, covenants or agreements of such Secured Party contained in this Agreement or in any other such instruments, documents or agreements, or that are implied therefrom, and that any and all personal liability of every such administrator of such Secured Party and each incorporator, stockholder, affiliate, officer, employee or director of such Secured Party or of any such administrator, or any of them, for breaches by such Secured Party of any such obligations, covenants or agreements, which liability may arise either at common law or at equity, by statute or constitution, or otherwise, is hereby expressly waived as a condition of and in consideration for the execution of this Agreement.  The provisions of this Section 14.11 shall survive the termination of this Agreement.
Section 14.12.    Protection of Right, Title and Interest in Assets; Further Action Evidencing the Funding.
(a)    Each of the Borrower and the Servicer shall cause this Agreement, all amendments hereto and/or all financing statements and continuation statements and any other necessary documents covering the right, title and interest of the Deal Agent as agent for the Secured Parties and of the Secured Parties to the assets to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect the right, title and interest of the Deal Agent as agent for the Secured Parties hereunder to all property comprising the assets.  Each of the Borrower and the Servicer shall deliver to the Deal Agent file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing.  The Borrower shall cooperate fully with the Servicer in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this Section 14.12(a).

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(b)    Each of the Borrower and the Servicer agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that the Deal Agent may reasonably request in order to perfect, protect or more fully evidence the Funding hereunder, or to enable the Deal Agent or the Secured Parties to exercise and enforce their rights and remedies hereunder or under any other Transaction Document.
(c)    If the Borrower or the Servicer fails to perform any of its obligations hereunder, the Deal Agent or any Secured Party may (but shall not be required to) perform, or cause performance of, such obligation; and the Deal Agent’s or such Secured Party’s costs and expenses incurred in connection therewith shall be payable by the Borrower (if the Servicer that fails to so perform is the Borrower or an Affiliate thereof) as provided in Article XI, as applicable.  The Borrower irrevocably authorizes the Deal Agent and appoints the Deal Agent as its attorney-in-fact to act on behalf of the Borrower (i) to execute on behalf of the Borrower as debtor and to file financing statements necessary or desirable in the Deal Agent’s sole discretion to perfect and to maintain the perfection and priority of the interest of the Secured Parties in the assets and (ii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the assets as a financing statement in such offices as the Deal Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the interests of the Secured Parties in the assets.  This appointment is coupled with an interest and is irrevocable.
(d)    Without limiting the generality of the foregoing, Borrower will, not earlier than six (6) months and not later than three (3) months prior to the fifth anniversary of the date of filing of any financing statement filed pursuant to this Agreement or in connection with the Funding hereunder, unless the Collection Date shall have occurred:
(i)    execute and deliver and file or cause to be filed an appropriate continuation statement with respect to such financing statement; and
(ii)    deliver or cause to be delivered to the Deal Agent an opinion of the counsel for Borrower, in form and substance reasonably satisfactory to the Deal Agent, confirming and updating the opinion delivered pursuant to Section 3.1 with respect to perfection and priority and otherwise to the effect that the grant of the security interest in the Collateral hereunder continues to be an enforceable and perfected first priority security interest, subject to no other Liens of record except as provided herein or otherwise permitted hereunder, which opinion may contain usual and customary assumptions, limitations and exceptions.
(e)    In addition to the foregoing, the Borrower shall deliver or cause to be delivered to the Collateral Agent and the Deal Agent for the benefit of the Secured Parties: 
(i) within thirty (30) days after the end of each calendar quarter, beginning with the quarter ended September 30, 2016, an Opinion of Counsel, dated as of a date during such 30-day period, with respect to the creation of the Borrower’s security interest under the Contribution Agreement, in the Subsequent Conveyed Property (as defined in the Contribution Agreement) sold by Credit Acceptance to the Borrower during such calendar quarter (or in the case of the first such Opinion of Counsel, during the period from the Effective Date to September 30, 2016); and

103

(ii) within ninety (90) days after the beginning of each calendar year beginning with 2017, an opinion of the counsel for Borrower, dated as of a date during such 90-day period, stating that, in the opinion of such counsel, the existing financing statement naming the Borrower as debtor and the Collateral Agent as secured party and any related continuation statement or amendment (the “Financing Statement”) will remain effective and no additional financing statements, continuation statements or amendments with respect to the Financing Statement (other than a continuation statement to be filed within the period that is six months prior to the expiration of the Financing Statement, as applicable) will be required to be filed from the date of such opinion through the date that is the one year anniversary of the date of such opinion to maintain the perfection of the security interest of the Collateral Agent as such lien otherwise exists on the date of such opinion.  Such opinion of counsel shall (i) describe the filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to preserve and protect the interest of the Collateral Agent in the Collateral, until the 90th day in the following calendar year and (ii) specify any action necessary (as of the date of such opinion) to be taken in the following calendar year to preserve perfection of such interest.
Section 14.13.    Confidentiality; Tax Treatment Disclosure.
(a)    Each of the Deal Agent, the Secured Parties, the Servicer, the Collateral Agent, the Backup Servicer and the Borrower shall maintain and shall cause each of its employees and officers to maintain the confidentiality of this Agreement and all information with respect to the other parties, including all information regarding the business of the Borrower and the Servicer hereto and their respective businesses obtained by it or them in connection with the structuring, negotiating and execution of the transactions contemplated herein, except that each such party and its officers and employees may (i) disclose such information to its external accountants, attorneys, investors, potential investors and the agents of such Persons (“Excepted Persons”), provided, however, that each Excepted Person shall, as a condition to any such disclosure, agree for the benefit of the Deal Agent, the Secured Parties, the Servicer, the Collateral Agent, the Backup Servicer and the Borrower that such information shall be used solely in connection with such Excepted Person’s evaluation of, or relationship with, the Borrower and its affiliates, (ii) disclose the existence of this Agreement, but not the financial terms hereof, (iii) disclose such information as is required by the Transaction Documents or Applicable Law and (iv) disclose this Agreement and such information in any suit, action, proceeding or investigation (whether in law or in equity or pursuant to arbitration) involving any of the Transaction Documents or any Hedging Agreement for the purpose of defending itself, reducing its liability, or protecting or exercising any of its claims, rights, remedies, or interests under or in connection with any of the Transaction Documents or any Hedging Agreement.  It is understood that the financial terms that may not be disclosed except in compliance with this Section 14.13(a) include, without limitation, all fees and other pricing terms, and all Termination Events, Servicer Termination Events, and priority of payment provisions.
(b)    Anything herein to the contrary notwithstanding, each of the Borrower and the Servicer hereby consents to the disclosure of any nonpublic information with respect to it (i) to the Deal Agent, the Collateral Agent, the Backup Servicer or the Secured Parties by each other, (ii) by the Deal Agent or the Lender to any prospective or actual assignee or participant 

104

of any of them or (iii) by the Deal Agent, the Collateral Agent or a Lender to any nationally recognized statistical rating organization, commercial paper dealer or provider of a surety, guaranty or credit or liquidity enhancement to a Lender and to any officers, directors, employees, outside accountants and attorneys of any of the foregoing, provided each such Person is informed of the confidential nature of such information.  In addition, the Secured Parties, the Backup Servicer and the Deal Agent may disclose any such nonpublic information as required pursuant to any law, rule, regulation, direction, request or order of any judicial, administrative or regulatory authority or proceedings (whether or not having the force or effect of law).
(c)    Notwithstanding anything herein to the contrary, the foregoing shall not be construed to prohibit (i) disclosure of any and all information that is or becomes publicly known, (ii) disclosure of any and all information (A) if required to do so by any applicable statute, law, rule or regulation, (B) to any government agency or regulatory body having or claiming authority to regulate or oversee any aspects of the Collateral Agent’s or Backup Servicer’s business or that of their affiliates, (C) pursuant to any subpoena, civil investigative demand or similar demand or request of any court, regulatory authority, arbitrator or arbitration to which the Collateral Agent or Backup Servicer or an affiliate or an officer, director, employer or shareholder thereof is a party, (D) in any preliminary or final offering circular, registration statement or contract or other document pertaining to the transactions contemplated herein approved in advance by the Borrower or Servicer or (E) to any affiliate, independent or internal auditor, agent, employee or attorney of the Collateral Agent or Backup Servicer having a need to know the same, provided that the Collateral Agent or Backup Servicer advises such recipient of the confidential nature of the information being disclosed, or (iii) any other disclosure authorized by the Transaction Documents or the Borrower or Servicer.
(d)    Notwithstanding anything herein to the contrary, any party to this Agreement (and any employee, representative or other agent of any party to this Agreement) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure; provided, however, that such disclosure may not be made to the extent required to be kept confidential to comply with any applicable federal or state securities laws; and provided further that (to the extent not inconsistent with the foregoing) such disclosure shall be made without disclosing the names or other identifying information of any party.
Section 14.14.    Execution in Counterparts; Severability; Integration.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.  In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.  This Agreement and any agreements or letters (including fee letters) executed in connection herewith contains the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the 

105

subject matter hereof, superseding all prior oral or written understandings other than any fee letter delivered by the Originator to the Deal Agent and the Lenders.
Section 14.15.  Patriot Act Compliance.  The Deal Agent, Collateral Agent and Backup Servicer hereby notify the Borrower that pursuant to the requirements of the Patriot Act, it, and each other Lender, may be required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower, organizational documentation, director and shareholder information, and other information that will allow the Deal Agent, the Collateral Agent, the Backup Servicer and each Lender to identify the Borrower in accordance with the Patriot Act.  This notice is given in accordance with the requirements of the Patriot Act and is effective for the Deal Agent, the Collateral Agent, the Backup Servicer and each Lender.
[Remainder of Page Intentionally Left Blank.]

106

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
THE BORROWER:    CAC WAREHOUSE FUNDING CORPORATION II
By: /s/ Douglas W. Busk
Name:  Douglas W. Busk
Title:  Treasurer
CAC Warehouse Funding Corporation II
Silver Triangle Building
25505 West Twelve Mile Road
Southfield, Michigan 48034-8339
Attention: Douglas W. Busk
Facsimile No. (866) 743-2704
Confirmation No.: (248) 353-2700 (ext. 4432)
THE SERVICER:    CREDIT ACCEPTANCE CORPORATION
By: /s/ Douglas W. Busk
Name:  Douglas W. Busk
Title:  Senior Vice President and Treasurer
Credit Acceptance Corporation
Silver Triangle Building
25505 West Twelve Mile Road
Southfield, Michigan 48034-8339
Attention: Douglas W. Busk
Facsimile No. (866) 743-2704
Confirmation No.: (248) 353-2700 (ext. 4432)
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

22317857.8 

THE LENDER:    WELLS FARGO BANK, NATIONAL ASSOCIATION

By: /s/ James B. Brinkley III
Name: James B. Brinkley III
Title: Director
Wells Fargo Bank, National Association
550 South Tryon Street
Charlotte, North Carolina 28202
Attention:    James B. Brinkley, III
Facsimile No.:    (704) 410-0223
Confirmation No:    (704) 410-2415
 [SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

		
	THE DEAL AGENT:
	WELLS FARGO BANK, NATIONAL ASSOCIATION

By: /s/ Erin Walsh
Name: Erin Walsh
Title: Vice President
Wells Fargo Bank, National Association
550 South Tryon Street
Charlotte, North Carolina 28202
Attention:    James B. Brinkley, III
Facsimile No.:    (704) 410-0223
Confirmation No:    (704) 410-2415

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

THE BACKUP SERVICER and     WELLS FARGO BANK, NATIONAL COLLATERAL AGENT:    ASSOCIATION
    
By: /s/ Julie Tanner Fischer
Title: Vice President
Wells Fargo Bank, National Association
MAC N9311-161
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479
Attention:  Corporate Trust Services – Asset-              Backed Administration
Facsimile:  (612) 667-3464
Telephone:  (612) 667-8058

22317857.8 

Exhibit A
FORM OF FUNDING NOTICE
Reference is made to the Sixth Amended and Restated Loan and Security Agreement, dated as of June 23, 2016 (as amended, supplemented or otherwise modified and in effect from time to time, the “Agreement”), by and among CAC Warehouse Funding Corporation II, as borrower (in such capacity, the “Borrower”), Credit Acceptance Corporation, as servicer (in such capacity, the “Servicer”), the Lenders named therein, Wells Fargo Bank, National Association, as Deal Agent, Wells Fargo Bank, National Association, as the Backup Servicer and Collateral Agent and each other Lender party thereto.  Terms defined in the Agreement, or incorporated therein by reference, are used herein as therein defined.
(A)    Funding Request.  The Borrower hereby requests the Funding pursuant to Section 2.1 and Section 2.3 of the Agreement.
(B)    Funding Information.  The Funding shall (a) take place on [__________] and (b) be in an amount equal to $[_______].  Each Lender’s pro rata share of the Funding shall be:  [(i) ______________; and (ii) ______________.]
(C)    Representations.  The Borrower hereby represents and warrants that (i) all conditions precedent to the Funding described in Article III of the Agreement have been satisfied and (ii) no Termination Event or Unmatured Termination Event shall have occurred.  This Funding Notice has been made in accordance with the provisions of Section 2.1(a) of the Agreement.
(D)    Irrevocable.  This Funding Notice shall be irrevocable.
(E)    Governing Law.  This Funding Notice shall be governed by, and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this Funding Notice to be duly executed and delivered by its duly authorized officer as of the date first above written.
CAC Warehouse Funding Corporation II
By    
Name:
Title:

22317857.8    A-1    

Exhibit B
FORM OF ASSIGNMENT AND ACCEPTANCE 
 
Dated __________, 20__
Reference is made to the Sixth Amended and Restated Loan and Security Agreement dated as of June 23, 2016 (as amended or modified from time to time, the “Agreement”) among CAC Warehouse Funding Corporation II, as borrower (the “Borrower”), Credit Acceptance Corporation, as servicer (the “Servicer”), the lenders named therein, Wells Fargo Bank, National Association, as deal agent (the “Deal Agent”), Wells Fargo Bank, National Association, as backup servicer and collateral agent (the “Backup Servicer” and the “Collateral Agent”), and each other Lender party thereto.  Terms defined in the Agreement are used herein with the same meaning.
__________________ (the “Assignor”) and ___________________ (the “Assignee”) agree as follows:
1.    The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to all of the Assignor’s rights and obligations under the Agreement as of the date hereof which represents the percentage interest specified in Section 1 of Schedule 1 of all outstanding rights and obligations of the Assignor under the Agreement, including, without limitation, such interest in the Lender’s Commitment of the Assignor and the Advance made by the Assignor.  After giving effect to such sale and assignment, the Lender’s Commitment and the amount of the Capital made by the Assignee will be as set forth in Section 2 of Schedule 1.
2.    The Assignor:  (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim and (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Agreement or any other instrument or document furnished pursuant thereto.
3.    The Assignee:  (i) confirms that it has received a copy of the Agreement, together with copies of such financial statements and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Deal Agent, the Collateral Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Agreement; (iii) appoints and authorizes the Deal Agent and the Collateral Agent each to take such action as agent on its behalf and to exercise such powers under the Agreement as are delegated to the Deal Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Agreement are required to be performed by it as a Lender; and (v) agrees and acknowledges that the Assignee, as Lender and Secured Party is bound by the confidentiality provisions of Section 14.13 of the Agreement.

22317857.8    B-1    

4.    Following the execution of this Assignment and Acceptance by the Assignor and the Assignee, it will be delivered to each of the Deal Agent and the Collateral Agent for acceptance and recording by the Deal Agent.  The effective date of this Assignment and Acceptance (the “Assignment Date”) shall be the date of acceptance thereof by the Deal Agent, unless a later date is specified in Section 3 of Schedule 1.
5.    Upon such acceptance by the Deal Agent and the Collateral and upon such recording by the Deal Agent, as of the Assignment Date, (i) the Assignee shall be a party to the Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Agreement.
6.    Upon such acceptance and recording by the Deal Agent, from and after the Assignment Date, the Deal Agent and the Collateral Agent shall make, or cause to be made, all payments under the Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and Unused Fee with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Agreement for periods prior to the Assignment Date directly between themselves.
7.    This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York.

B-2    

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed by their respective officers thereunto duly authorized, as of the date first above written, such execution being made on Schedule 1 hereto.
[ASSIGNOR]

By:    
Name:
Title:

Address for notices
[Address]

[ASSIGNEE]

By:    
Name:
Title:

Address for notices
[Address]
Acknowledged and accepted this ___ day of 
___________, ____
WELLS FARGO BANK, NATIONAL ASSOCIATION, 
as Deal Agent
By:    
Name:
Title:
WELLS FARGO BANK, NATIONAL ASSOCIATION, 
as Collateral Agent
By:    
Name:
Title:

B-3    

Schedule 1 
to 
Assignment and Acceptance 
Dated _________, 200_
Section 1.
Percentage Interest:    ________%
Section 2.
Assignee’s Commitment:     $_____________
Aggregate Outstanding Advance owing to the 
Assignee:    $_____________
Section 3.
Assignment Date:  _____________, 200_

B-4    

Exhibit C
Form of Monthly Report
[Intentionally Omitted]

C-1
22317857.8 

Exhibit D
Form of Officer’s Certificate 
as to Solvency

[Intentionally Omitted]

D-1
22317857.8 

Exhibit E
FORM OF TAKE-OUT RELEASE
Reference is hereby made to the Sixth Amended and Restated Loan and Security Agreement, dated as of June 23, 2016, among CAC Warehouse Funding Corporation II, as the Borrower, Credit Acceptance Corporation, as the Servicer, the Lenders named therein, Wells Fargo Bank, National Association, as the Deal Agent, Wells Fargo Bank, National Association, as the Backup Servicer and Collateral Agent, and each other Lender party thereto as it may from time to time be amended, supplemented or otherwise modified in accordance with the terms thereof (the “Agreement”).
Capitalized terms not defined herein shall have the meaning given such terms in the Agreement.
Pursuant to Section 2.16(a) of the Agreement, the Borrower requests the Collateral Agent to release all of its right, title and interest, including any security interest and Lien, in and to the Loans and Related Security identified on Schedule 1 hereto (the “Released Loans and the Related Security”). The Take-Out Date is as of [_____________________].
Pursuant to Section 2.16(a)(ii) of the Agreement, the Servicer and the Borrower hereby certify that the Borrower will have sufficient funds on the Take-Out Date to effect the Take-Out in accordance with the Agreement.
Pursuant to Section 2.16(a)(iii) of the Agreement, the Servicer and Borrower hereby certify that after giving effect to the Take-Out and the release to the Borrower of the Loans and Related Security on the Take-Out Date, (x) the representations and warranties contained in Article IV of the Agreement shall continue to be correct in all material respects, except to the extent relating to an earlier date, and (y) neither an Unmatured Termination Event nor a Termination Event has occurred.
Upon deposit in the Collection Account of $[___________] in immediately available funds, the Collateral Agent hereby releases all of its right, title and interest, including any security interest and Lien, in and to:
		
	(i)
	the Released Loans and the Related Security related thereto, all monies due or to become due with respect thereto, whether accounts, chattel paper, general intangibles or other property, all monies or remittances on deposit in the Credit Acceptance Payment Account which constitute proceeds of such Released Loans and the Related Security;

		
	(ii)
	the security interests in the Contracts granted by Obligors pursuant to the related Released Loan and the Related Security;

		
	(iii)
	all of the Borrower’s rights under (x) the Contribution Agreement and (y) each Dealer Agreement, in each case with respect to such Released Loans and the Related Security;

		
	(iv)
	the proceeds of any and all of the foregoing.

E-1
22317857.8 

Executed as of _____________.
Credit Acceptance Corporation, as the Servicer
By:     
Name:
Title:
CAC Warehouse Funding Corporation II, as the Borrower
By:     
Name:
Title:
Wells Fargo Bank, National Association, as the Deal Agent
By:     
Name:
Title:
Wells Fargo Bank, National Association, as the Collateral Agent
By:     
Name:
Title:

Signature Page
22317857.8 

Exhibit F
Form of Contribution Agreement

[Intentionally Omitted]

F-1
22317857.8 

Exhibit G
FORM OF VARIABLE FUNDING NOTE 
 
New York, New York 
[_______]
FOR VALUE RECEIVED, the undersigned, CAC WAREHOUSE FUNDING CORPORATION II, a Nevada corporation (the “Borrower”), promises to pay to the order of Wells Fargo Bank, National Association, as Deal Agent, on behalf of [the Lender], on the date specified in Section 2.1(c) of the Sixth Amended and Restated Loan and Security Agreement (as hereinafter defined), at 550 South Tryon, Charlotte, North Carolina 28202, in lawful money of the United States of America and in immediately available funds, the principal amount of [            ] ($[        ]), or, if less, the aggregate unpaid principal amount of the all Advances made by the Lenders to the Borrower pursuant to the Sixth Amended and Restated Loan and Security Agreement, and to pay interest at such office, in like money, from the date hereof on the unpaid principal amount of the Advance from time to time outstanding at the rates and on the dates specified in the Sixth Amended and Restated Loan and Security Agreement.
The Deal Agent is authorized to record, on the schedules annexed hereto and made a part hereof or on other appropriate records of the Deal Agent, the date and the amount of the Advance made by the Lenders, each continuation thereof, the funding period for such Advance and the date and amount of each payment or prepayment of principal thereof.  Any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded; provided that the failure of the Deal Agent to make any such recordation (or any error in such recordation) shall not affect the obligations of the Borrower hereunder, under the Sixth Amended and Restated Loan and Security Agreement in respect of the Advance.
This Variable Funding Note is one of the Notes referred to in the Sixth Amended and Restated Loan and Security Agreement, dated as of June 23, 2016 (as amended, supplemented, or otherwise modified and in effect from time to time, the “Loan and Security Agreement”), among CAC Warehouse Funding Corporation II (the “Borrower”); Credit Acceptance Corporation (the “Servicer”); the financial institutions listed on the signature pages thereto under the heading “The Lender(s)” (the “Lenders”); Wells Fargo Bank, National Association, as deal agent (the “Deal Agent”); Wells Fargo Bank, National Association, as the Backup Servicer (the “Backup Servicer”); Wells Fargo Bank, National Association, as the Collateral Agent (the “Collateral Agent”), and each other Lender party thereto, and is entitled to the benefits thereof.  Capitalized terms used herein and defined herein have the meanings given them in the Loan and Security Agreement.
This Variable Funding Note is being issued in substitution and replacement of that certain Variable Funding Note, dated as of [          ], made by the Borrower to the order of the Deal Agent, on behalf of the Lender, pursuant to the Existing Loan and Security Agreement (as defined in the Loan and Security Agreement) (the "Replaced Note").  This Variable Funding Note is not intended to be, nor shall it be deemed to be, a repayment of the Replaced Note.  Upon the issuance of this Variable Funding Note, the Replaced Note shall be deemed to cease to have any effect.

22317857.8    G-1    

This Variable Funding Note is subject to optional and mandatory prepayment as provided in the Loan and Security Agreement.
Upon the occurrence of a Termination Event, the Secured Parties shall have all of the remedies specified in the Loan and Security Agreement.  The Borrower hereby waives presentment, demand, protest, and all notices of any kind.
THIS VARIABLE FUNDING NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
CAC WAREHOUSE FUNDING CORPORATION II,  as Borrower

By: ___________________________________
Name: 
Title:

G-2    

Schedule 1 to 
VARIABLE FUNDING NOTE
Principal of the    Yield on the    Prepayment    Notation by
Advances    Advances    of the Advances    Date

G-3    

Exhibit H
Form of Dealer Agreement

[Intentionally Omitted]

22317857.8    H-1

Exhibit I
Forms of Contracts

[Intentionally Omitted]

I-1
22317857.8 

Exhibit J
Form of Backup Servicing Agreement

[Intentionally Omitted]

J-1
22317857.8 

Exhibit K

Form of Purchase Agreement

[Intentionally Omitted]

K-1
22317857.8 

Schedule I

Credit Guidelines

[On File with Servicer and Deal Agent]

Sch. I-1    
22317857.8 

Schedule II 
 
Tradenames, Fictitious Names and “Doing Business As” Name
None

Sch. II-1    
22317857.8 

Schedule III 
 
Location of Records and Contract Files

[Intentionally Omitted]

Sch. III-1    
22317857.8 

Schedule IV 
 
List of Loans, Contracts, Dealer Agreements and Pools 
[Disc on File with Deal Agent]

Sch. IV-1
22317857.8 

Schedule V 
 
Forecasted Collections
[Intentionally Omitted]

Sch. V-1    
22317857.8 

Schedule VI 
Commitment Amount of Each Lender
	
		
	Lender
	Commitment Amount

	Wells Fargo Bank, National Association
	$400,000,000

Sch. VI-1    
22317857.8 

Schedule VII

Condition Precedent Documents Relating to Amendment and Restatement

Sch. VII-1    
22317857.8 

	
		
	I.   TRANSACTION DOCUMENTS
	 

	   A.   Sixth Amended and Restated Loan and Security Agreement
	Dechert

	   Exhibits to Loan and Security Agreement
	 

	Exhibit A Form of Funding Notice
	WFB

	Exhibit B Form of Assignment and Acceptance
	Dechert

	Exhibit C Form of Monthly Report
	WFB

	Exhibit D Form of Officer’s Certificate as to Solvency
	Borrower

	Exhibit E Form of Take-Out Release
	Dechert

	Exhibit F Form of Contribution Agreement
	Skadden

	Exhibit G Form of Variable Funding Note
	Dechert

	Exhibit H Form of Dealer Agreement
	Credit Acceptance

	Exhibit I Form of Contracts
	Credit Acceptance

	Exhibit J Form of Backup Servicing Agreement
	Dechert

	Exhibit K Form of Purchase Agreement
	Credit Acceptance

	 
	 

	   Schedules to Loan and Security Agreement
	 

	Schedule I Credit Guidelines
	Credit Acceptance

	Schedule II Tradenames, Fictitious Names and “Doing Business As” Names
	Credit Acceptance

	Schedule III Location of Records and Contract Files
	Credit Acceptance

	Schedule IV List of Loans, Contracts, Dealer Agreements and Pools
	Credit Acceptance

	Schedule V Forecasted Collections
	Credit Acceptance

	Schedule VI Commitment Amount of Each Lender
	Dechert

	Schedule VII Condition Precedent Documents Relating to Amendment and Restatement

	Dechert

	II.        OPINIONS OF COUNSEL
	 

	A.   Opinion of Skadden as to certain corporate and enforceability matters
	Skadden

	B.  Opinion of Skadden as to creation of security interest in the Collateral
	Skadden

	C.   Opinion of Skadden as to true sale matters
	Skadden

	D.   Opinion of Skadden covering non-consolidation matters
	Skadden

	E.  Opinion of Dykema as to certain corporate, perfection and priority matters
	Dykema

	III.       ADDITIONAL DOCUMENTS
	 

	A.  Amended & Restated Fee Letter
	Dechert

Sch. VII-2    

Key:
	
		
	Wells Fargo Bank, National Association
	WFB, the Deal Agent or the Collateral Agent

	Credit Acceptance Corporation
	Credit Acceptance

	CAC Warehouse Funding Corporation II
	Borrower

	Dechert
	Dechert

	Skadden
	Skadden, Arps, Slate, Meagher & Flom LLP

	Dykema
	Dykema Gossett PLLC

	Wells Fargo Bank, National Association
	Backup Servicer or Collateral Agent

Sch. VII-3

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