Document:

exhibit10

Exhibit 10.1 EXECUTION VERSION Receivables Financing Agreement Amendment No. 10 This Receivables Financing Agreement Amendment No. 10 (this “Amendment”), dated  as of June 30, 2022, among Davey Receivables LLC, an Ohio limited liability company, as  Borrower (together with its successors and assigns, the “Borrower”); The Davey Tree Expert  Company, an Ohio corporation, in its individual capacity (“Davey Tree”) and as Servicer (in  such capacity, together with its successors and assigns in such capacity, the “Servicer”); PNC  Bank, National Association, as LC Bank (in such capacity, together with its successors and  assigns in such capacity, the “LC Bank”); and PNC Bank, National Association (“PNC”), as  Administrative Agent (in such capacity together with its successors and assigns in such capacity,  the “Administrative Agent”). W I T N E S S E T H: Whereas, the Borrower, the Servicer, the LC Bank, and the Administrative Agent are  party to that certain Receivables Financing Agreement dated as of May 9, 2016 (as amended  prior to the date hereof, the “Financing Agreement”). Whereas, the Borrower, the Servicer, the LC Bank, and the Administrative Agent hereby  agree to extend the Scheduled Termination Date and to make certain amendments to the  Financing Agreement pursuant to the terms and conditions set forth herein. Now, Therefore, in consideration of the mutual agreements herein contained and other  good and valuable consideration, receipt and sufficiency of which are hereby acknowledged by  the parties, the Borrower, the Servicer, the LC Bank, and the Administrative Agent hereto agree  as follows:            Section 1.     Definitions.  Capitalized terms not otherwise defined herein shall have the  meanings given to them in the Financing Agreement.            Section 2.     Amendments. Subject to the satisfaction of the conditions precedent set forth in Section 4 below, the  Financing Agreement, including the Exhibits thereto, shall hereby be amended to delete the  stricken text (indicated textually in the same manner as the following example: stricken text) and  to add the underlined text (indicated textually in the same manner as the following example:  double underlined text) as set forth in the pages of the amended Financing Agreement attached as  Exhibit A hereto.             Section 3.     Representations of the Borrower and the Servicer.  Each of the Borrower and  the Servicer hereby represent and warrant to the parties hereto that as of the date hereof each of  the representations and warranties contained in Article VII of the Financing Agreement and any  other Transaction Documents to which it is a party are true and correct as of the date hereof and  Receivables Financing Agreement Amendment No. 10 

 

after giving effect to this Amendment (except to the extent that such representations and  warranties expressly refer to an earlier date, in which case they are true and correct as of such  earlier date).            Section 4.     Conditions Precedent.  This Amendment shall become effective and be  deemed effective as of the date first written above upon the satisfaction of the following  conditions precedent:               (a)      the Administrative Agent shall have received a fully executed counterpart  of this Amendment;              (b)      the Administrative Agent shall have received a fully executed counterpart  of that certain Third Amended and Restated Fee Letter dated as of the date hereof, and all fees  due thereunder;               (c)      each representation and warranty of the Borrower and the Servicer  contained herein or in any other Transaction Document (after giving effect to this Amendment)  shall be true and correct (except to the extent that such representations and warranties expressly  refer to an earlier date, in which case they are true and correct as of such earlier date); and              (d)      no Unmatured Event of Default or Event of Default shall have occurred  and be continuing.            Section 5.     Counterparts.  This Amendment may be executed by the parties in separate  counterparts, each of which when so executed and delivered shall be an original, but all such  counterparts shall together constitute but one and the same instrument.            Section 6.     Electronic Signatures.  Each party agrees that this Amendment and any  documents to be delivered in connection herewith may be electronically signed, and that any  electronic signatures appearing on this Amendment and such other documents are the same as  handwritten signatures for the purposes of validity, enforceability, and admissibility.            Section 7.     Severability.  Any provision of this Amendment which is prohibited or  unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such  prohibition or unenforceability without invalidating the remaining provisions, and any such  prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable  such provision in any other jurisdiction.            Section 8.     Governing Law and Jurisdiction.  The provisions of the Financing  Agreement with respect to governing law, jurisdiction, and agent for service of process are  incorporated in this Amendment by reference as if such provisions were set forth herein.            Section 9.     Miscellaneous.  For the avoidance of doubt, this Amendment shall constitute  a Transaction Document. [Signatures appear on following page.] Receivables Financing Agreement Amendment No. 10 

 

IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to be  duly executed by their respective duly authorized officers as of the day and year first above  written. DAVEY RECEIVABLES LLC By: /s/ Christopher J. Bast Name: Christopher J. Bast Title: Treasurer THE DAVEY TREE EXPERT COMPANY, as the Servicer By: /s/ Christopher J. Bast Name: Christopher J. Bast Title: Vice President and Treasurer Receivables Financing Agreement Amendment No. 10 

 

PNC BANK, NATIONAL ASSOCIATION, as LC Bank and as Administrative Agent By: /s/ Deric Bradford Name: Deric Bradford Title Senior Vice President PNC CAPITAL MARKETS LLC, as Structuring  Agent By: /s/ Deric Bradford Name: Deric Bradford Title: Managing Director Receivables Financing Agreement Amendment No. 10 

 

Exhibit A  

 

CONFORMED VERSION (AMENDMENT NO. 1 DATED AS OF MARCH 27, 2017, AMENDMENT NO. 2 DATED AS OF MAY 8, 2017,  AMENDMENT NO. 3 DATED AS OF MAY 7, 2018, AND AMENDMENT NO. 4 DATED AS OF AUGUST 23, 2018 AMENDMENT NO. 5 DATED AS OF JANUARY 24, 2019) AMENDMENT NO. 6 DATED AS OF APRIL 16, 2019 AMENDMENT NO. 7 DATED AS OF MAY 21, 2019 COMMITMENT INCREASE REQUEST DATED AS OF AUGUST 15, 2019 AMENDMENT NO. 8 DATED AS OF MAY 19, 2020 AMENDMENT NO. 9 DATED AS OF MAY 18, 2021 AMENDMENT NO. 10 DATED AS OF JUNE 30, 2022 RECEIVABLES FINANCING AGREEMENT Dated as of May 9, 2016 by and among DAVEY RECEIVABLES LLC, as Borrower, PNC BANK, NATIONAL ASSOCIATION, as LC Bank, PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent, THE DAVEY TREE EXPERT COMPANY, as initial Servicer and PNC CAPITAL MARKETS LLC, as Structuring Agent 

 

-i- TABLE OF CONTENTS SECTION HEADING PAGE ARTICLE I DEFINITIONS .................................................................................................1 Section 1.01. Certain Defined Terms...........................................................................1 Section 1.02. Other Interpretative Matters.................................................................27 Section 1.03. SOFR Notifications..............................................................................27 Section 1.04. Conforming Changes Relating to SOFR..............................................27 ARTICLE II [RESERVED] ................................................................................................28 ARTICLE III LETTER OF CREDIT FACILITY ......................................................................28 Section 3.01. Letters of Credit ...................................................................................28 Section 3.02. Issuance of Letters of Credit ................................................................28 Section 3.03. Requirements For Issuance of Letters of Credit ..................................29 Section 3.04. Disbursements, Reimbursement ..........................................................29 Section 3.05. Maturity Date, Interest and Fees; Reimbursement  Obligations...........................................................................................30 Section 3.06. Documentation.....................................................................................30 Section 3.07. Determination to Honor Drawing Request ..........................................30 Section 3.08. Nature of Reimbursement Obligations ................................................30 Section 3.09. Indemnity .............................................................................................32 Section 3.10. Liability for Acts and Omissions .........................................................32 Section 3.11. Changes in Facility Limit.....................................................................33 Section 3.12. LIBOR Notification .............................................................................34 ARTICLE IV SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS.........................3534 Section 4.01. Settlement Procedures......................................................................3534 Section 4.02. Payments and Computations, Etc. ...................................................3736 ARTICLE V INCREASED COSTS; FUNDING LOSSES; TAXES; ILLEGALITY AND  SECURITY INTEREST....................................................................................37 Section 5.01. Increased Costs ....................................................................................37 Section 5.02. Reserved...........................................................................................3938 Section 5.03. Taxes ................................................................................................3938 Section 5.04. Inability to Determine Adjusted LIBOR or LMIRTerm  SOFR Rate; Change in Legality ......................................................4443 Section 5.05. Security Interest ...............................................................................4548 Section 5.06. Successor LMIR...................................................................................46 ARTICLE VI CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS....................4849 Section 6.01. Conditions Precedent to Effectiveness.............................................4849 Section 6.02. Conditions Precedent to All Credit Extensions ...............................4849 

 

-ii- Section 6.03. Conditions Precedent to All Reinvestments ....................................4950 ARTICLE VII REPRESENTATIONS AND WARRANTIES....................................................5051 Section 7.01. Representations and Warranties of the Borrower ............................5051 Section 7.02. Representations and Warranties of the Servicer ..............................5556 ARTICLE VIII COVENANTS............................................................................................5960 Section 8.01. Covenants of the Borrower ..............................................................5960 Section 8.02. Covenants of the Servicer ....................................................................68 Section 8.03. Separate Existence of the Borrower.....................................................75 ARTICLE IX ADMINISTRATION AND COLLECTION OF RECEIVABLES ...............................79 Section 9.01. Appointment of the Servicer................................................................79 Section 9.02. Duties of the Servicer...........................................................................80 Section 9.03. Collection Account Arrangements.......................................................81 Section 9.04. Enforcement Rights .............................................................................81 Section 9.05. Responsibilities of the Borrower .........................................................83 Section 9.06. Servicing Fee .......................................................................................83 ARTICLE X EVENTS OF DEFAULT ..............................................................................8483 Section 10.01. Events of Default .............................................................................8483 ARTICLE XI THE ADMINISTRATIVE AGENT ................................................................8887 Section 11.01. Authorization and Action.................................................................8887 Section 11.02. Administrative Agent’s Reliance, Etc..................................................88 Section 11.03. Administrative Agent and Affiliates....................................................88 Section 11.04. Indemnification of Administrative Agent........................................8988 Section 11.05. Delegation of Duties ............................................................................89 Section 11.06. Action or Inaction by Administrative Agent .......................................89 Section 11.07. Notice of Events of Default; Action by Administrative  Agent....................................................................................................89 Section 11.08. Non-Reliance on Administrative Agent and Other Parties..................89 Section 11.09. Successor Administrative Agent..........................................................90 Section 11.10. Structuring Agent.................................................................................90 ARTICLE XII [RESERVED] ............................................................................................9190 ARTICLE XIII INDEMNIFICATION...................................................................................9190 Section 13.01. Indemnities by the Borrower ...........................................................9190 Section 13.02. Indemnification by the Servicer.......................................................9493 ARTICLE XIV MISCELLANEOUS ....................................................................................9594 Section 14.01. Amendments, Etc.............................................................................9594 

 

-iii- Section 14.02. Notices, Etc ..........................................................................................95 Section 14.03. Participations........................................................................................95 Section 14.04. Costs and Expenses..........................................................................9796 Section 14.05. No Proceedings ................................................................................9796 Section 14.06. Confidentiality .....................................................................................97 Section 14.07. GOVERNING LAW..............................................................................9998 Section 14.08. Execution in Counterparts................................................................9998 Section 14.09. Integration; Binding Effect; Survival of Termination .....................9998 Section 14.10. CONSENT TO JURISDICTION...................................................................99 Section 14.11. WAIVER OF JURY TRIAL..................................................................10099 Section 14.12. Ratable Payments...........................................................................10099 Section 14.13. Limitation of Liability....................................................................10099 Section 14.14. Intent of the Parties ......................................................................101100 Section 14.15. USA Patriot Act ...........................................................................101100 Section 14.16. Right of Setoff..............................................................................101100 Section 14.17. Severability ........................................................................................101 Section 14.18. Mutual Negotiations...........................................................................101 Section 14.19. Captions and Cross References....................................................102101 

 

-iv- EXHIBITS EXHIBIT A – Form of LC Request EXHIBIT B – Fiscal Months EXHIBIT C – Reserved EXHIBIT D – Form of Letter of Credit Application EXHIBIT E – Credit and Collection Policy EXHIBIT F – Form of Information Package EXHIBIT G – Form of Compliance Certificate EXHIBIT H – Closing Memorandum SCHEDULES SCHEDULE I – Commitments SCHEDULE II – Lock-Boxes, Collection Accounts and Collection Account Banks SCHEDULE III – Notice Addresses SCHEDULE IV – Excluded Receivables SCHEDULE V – Specified Obligors 

 

This RECEIVABLES FINANCING AGREEMENT (as amended, restated, supplemented or  otherwise modified from time to time, this “Agreement”) is entered into as of May 9, 2016 by and  among the following parties: (i) DAVEY RECEIVABLES LLC, an Ohio limited liability company, as Borrower  (together with its successors and assigns, the “Borrower”); (ii) PNC BANK, NATIONAL ASSOCIATION, as LC Bank (in such capacity,  together with its successors and assigns in such capacity, the “LC Bank”); (iii) PNC BANK, NATIONAL ASSOCIATION (“PNC”), as Administrative Agent; (iv) THE DAVEY TREE EXPERT COMPANY, an Ohio corporation, in its individual  capacity (“Davey Tree”) and as initial Servicer (in such capacity, together with its  successors and assigns in such capacity, the “Servicer”); and (v) PNC CAPITAL MARKETS LLC, a Pennsylvania limited liability company, as  Structuring Agent. PRELIMINARY STATEMENTS The Borrower has acquired, and will acquire from time to time, Receivables from the  Originator(s) pursuant to the Receivables Purchase Agreement.  The Borrower has requested the  LC Bank to issue Letters of Credit for the account of the Borrower from time to time, on the terms,  and subject to the conditions set forth herein, secured by, among other things, the Receivables. In consideration of the mutual agreements, provisions and covenants contained herein, the  sufficiency of which is hereby acknowledged, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01. Certain Defined Terms.  As used in this Agreement, the following terms shall  have the following meanings (such meanings to be equally applicable to both the singular and  plural forms of the terms defined): “Account Control Agreement” means each agreement, in form and substance satisfactory  to the Administrative Agent, among the Borrower, the Servicer, the Administrative Agent and a  Collection Account Bank, governing the terms of the related Collection Accounts that (i) provides  the Administrative Agent with control within the meaning of the UCC over the deposit accounts  subject to such agreement, and (ii) may not be terminated or canceled by the related Collection  Account Bank without the written consent of the Administrative Agent or upon no less than thirty  (30) days prior written notice to the Administrative Agent, as the same may be amended, restated,  supplemented or otherwise modified from time to time. “Adjusted LC Amount” means, at any time of determination, the greater of (i) the LC  Amount minus the amount of cash collateral held in the LC Collateral Account at such time and (ii)  

 

-2- zero (mm0). “Adjusted LIBOR” means for any day, the interest rate per annum determined by the  Administrative Agent by dividing (the resulting quotient rounded upwards, if necessary, to the  nearest 1/100th of 1% per annum) (i) the rate per annum equal to the average of the rates at which  deposits in Dollars are offered by the LC Bank at approximately 11:00 a.m. (London time) on such  day to prime banks in the London interbank market for a one (1) month period, or if such day is not  a Business Day, on the immediately preceding Business Day, by (ii) a number equal to 1.00 minus  the Euro-Rate Reserve Percentage.  The calculation of Adjusted LIBOR may also be expressed by  the following formula: LC Bank’s offered rate for one month  Dollar loans in the London interbank  marketAdjusted LIBOR = 1.00 - Euro-Rate Reserve Percentage. Adjusted LIBOR shall be adjusted on the effective date of any change in the Euro-Rate  Reserve Percentage as of such effective date.  The Administrative Agent shall give prompt notice  to the Borrower of Adjusted LIBOR as determined or adjusted in accordance herewith (which  determination shall be conclusive absent manifest error).  Notwithstanding the foregoing, if  Adjusted LIBOR as determined herein would be less than zero (0.00), such rate shall be deemed to  be zero percent (0.00%) for purposes of this Agreement. “Administrative Agent” means PNC, in its capacity as contractual representative for the  Credit Parties, and any successor thereto in such capacity appointed pursuant to Article XI or  Section 14.03(c). “Administrative Agent’s Account” means the account from time to time designated by the  Administrative Agent to the Borrower and the Servicer for purposes of receiving payments to or  for the account of the Credit Parties hereunder. “Adverse Claim” means any ownership interest or claim, mortgage, deed of trust, pledge,  lien, security interest, hypothecation, charge or other encumbrance or security arrangement of any  nature whatsoever, whether voluntarily or involuntarily given, including, but not limited to, any  conditional sale or title retention arrangement, and any assignment, deposit arrangement or lease  intended as, or having the effect of, security and any filed financing statement or other notice of  any of the foregoing (whether or not a lien or other encumbrance is created or exists at the time of  the filing); it being understood that any of the foregoing in favor of, or assigned to, the  Administrative Agent (for the benefit of the Secured Parties) shall not constitute an Adverse  Claim. “Advisors” has the meaning set forth in Section 14.06(c). “Affected Person” means each Credit Party. “Affiliate” means, as to any Person:  (a) any Person that, directly or indirectly, is in control  of, is controlled by or is under common control with such Person or (b) who is a director or officer:   (i) of such Person or (ii) of any Person described in clause (a).  For purposes of this definition,  

 

-3- control of a Person means the power, direct or indirect:  (x) to vote 25% or more of the securities  having ordinary voting power for the election of directors or managers of such Person or (y) to  direct or cause the direction of the management and policies of such Person, in either case whether  by ownership of securities, contract, proxy or otherwise. “Aggregate Interest” means, at any time of determination, the aggregate accrued and  unpaid Interest on the Outstanding Reimbursement Obligations at such time. “Agreement” has the meaning set forth in the preamble to this Agreement. “Anti-Terrorism Laws” means any Applicable Law relating to terrorism, trade sanctions  programs and embargoes, import/export licensing, money laundering or bribery, and any  regulation, order, or directive promulgated, issued or enforced pursuant to such Applicable Laws,  all as amended, supplemented or replaced from time to time. “Applicable Law” means, with respect to any Person, (x) all provisions of law, statute,  treaty, constitution, ordinance, rule, regulation, ordinance, requirement, restriction, permit,  executive order, certificate, decision, directive or order of any Governmental Authority applicable  to such Person or any of its property and (y) all judgments, injunctions, orders, writs, decrees and  awards of all courts and arbitrators in proceedings or actions in which such Person is a party to the  extent applicable to such Person or by which any of its property is bound.  For the avoidance of  doubt, FATCA shall constitute an “Applicable Law” for all purposes of this Agreement. “Attorney Costs” means and includes all reasonable fees, costs, expenses and  disbursements of any law firm or other external counsel and all reasonable disbursements of  internal counsel. “Bankruptcy Code” means the United States Bankruptcy Reform Act of 1978 (11 U.S.C. §  101, et seq.), as amended from time to time. “Base Rate” means, for any day, a fluctuating interest rate per annum as shall be in effect  from time to time, which rate shall be at all times equal to the highergreatest of:  (a) the rate of interest in effect for such day as publicly announced from time to time by  the LC Bank as its “reference rate” or “prime rate”, as applicable.  Such “reference rate” or “prime  rate” is set by the LC Bank based upon various factors, including such Person’s costs and desired  return, general economic conditions and other factors, and is used as a reference point for pricing  some loans, which may be priced at, above or below such announced rate, and is not necessarily  the lowest rate charged to any customer; and  (b) 0.50% per annum above the Overnight Bank Funding Rate in effect on such day;  and (c) 1.00% above per annum above Daily 1M SOFR in effect on such day plus the  SOFR Adjustment; provided, however, if the Base Rate as determined above would be less than zero, then  such rate shall be deemed to be zero. 

 

-4- “Bill Plan Receivables” means a Receivable that has been fully earned and that is related  to a Contract that allows for invoicing in installments over a specified period.  “Borrower” has the meaning specified in the preamble to this Agreement. “Borrower Indemnified Amounts” has the meaning set forth in Section 13.01(a). “Borrower Indemnified Party” has the meaning set forth in Section 13.01(a). “Borrower Obligations” means all present and future indebtedness, reimbursement  obligations, and other liabilities and obligations (howsoever created, arising or evidenced, whether  direct or indirect, absolute or contingent, or due or to become due) of the Borrower to any Credit  Party, Borrower Indemnified Party and/or any Affected Person, arising under or in connection  with this Agreement or any other Transaction Document or the transactions contemplated hereby  or thereby, and shall include, without limitation, all Reimbursement Obligations and Interest with  respect thereto, reimbursement for drawings under the Letters of Credit, all Fees and all other  amounts due or to become due under the Transaction Documents (whether in respect of fees, costs,  expenses, indemnifications or otherwise), including, without limitation, interest, fees and other  obligations that accrue after the commencement of any Insolvency Proceeding with respect to the  Borrower (in each case whether or not allowed as a claim in such proceeding). “Borrower’s Net Worth” means, at any time of determination, an amount equal to (i) the  aggregate Outstanding Balance of all Pool Receivables at such time, minus (ii) the sum of (A) the  Outstanding Reimbursement Obligations at such time, plus (B) the Adjusted LC Amount at such  time, plus (C) the Aggregate Interest at such time, plus (D) the aggregate accrued and unpaid Fees  at such time, plus (E) the aggregate outstanding principal balance of all Subordinated Notes at such  time, plus (F) the aggregate accrued and unpaid interest on all Subordinated Notes at such time,  plus (G) without duplication, the aggregate accrued and unpaid other Borrower Obligations at such  time. “Borrowing Base” means, at any time of determination, the amount equal to (a) the Net  Receivables Pool Balance at such time, minus (b) the Total Reserves at such time. “Borrowing Base Deficit” means, at any time of determination, the amount, if any, by  which (a) the Outstanding Reimbursement Obligations plus the Adjusted LC Amount at such time,  exceeds (b) the lesser of (i) Borrowing Base at such time and (ii) the Facility Limit at such time. “Business Day” means any day (other than a Saturday or Sunday) on which:  (a) banks are  not authorized or required to close in Pittsburgh, Pennsylvania, or New York City, New York and  (b) if this definition of “Business Day” is utilized; provided that, when used in connection with the  LMIR or Adjusted LIBOR, dealings are carried out in the London interbank marketan amount that  accrues Interest at a rate based on SOFR or any direct or indirect calculation or determination of  SOFR, the term “Business Day” means any such day that is also a U.S. Government Securities  Business Day. “Capital Stock” means, with respect to any Person, any and all common shares, preferred  shares, interests, participations, rights in or other equivalents (however designated) of such  Person’s capital stock, partnership interests, limited liability company interests, membership  

 

-5- interests or other equivalent interests and any rights (other than debt securities convertible into or  exchangeable for capital stock), warrants or options exchangeable for or convertible into such  capital stock or other equity interests. “Change in Control” means the occurrence of any of the following: (a) Davey Tree ceases to own, directly, 100% of the issued and outstanding  Capital Stock and all other equity interests of the Borrower, free and clear of all Adverse  Claims; (b) Davey Tree ceases to own 100% of the issued and outstanding Capital  Stock, membership interests or other equity interests of any Originator (other than Davey  Tree); or (c) (A) the acquisition, or, if earlier, the shareholder or director approval of the  acquisition, ownership or voting control, directly or indirectly, beneficially or of record, on  or after the Closing Date, by any Person or group (within the meaning of Rule 13d-3 of the  SEC under the Securities Exchange Act of 1934, as then in effect), of shares representing  more than thirty-three percent (33%) of the aggregate ordinary Voting Power represented  by the issued and outstanding capital stock of Davey Tree; (B) the occupation of a majority  of the seats (other than vacant seats) on the board of directors of Davey Tree by Persons  who were neither (i) nominated by the board of directors of Davey Tree nor (ii) appointed  by directors so nominated; or (C) the approval by the shareholders or directors of Davey  Tree of a plan of complete liquidation of Davey Tree or an agreement or agreements for the  sale or disposition by Davey Tree of all or substantially all of Davey Tree’s assets;  provided that purchases or other acquisitions of equity interests by, and sales or other  transfers of equity interests to or within the Davey ESOP in accordance with its terms shall  not be deemed or construed to cause, trigger or otherwise result in a Change in Control. “Change in Law” means the occurrence, after the Closing Date, of any of the following:   (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law,  rule, regulation or treaty or in the administration, interpretation, implementation or application  thereof by any Governmental Authority or (c) the making or issuance of any request, rule,  guideline or directive (whether or not having the force of law) by any Governmental Authority;  provided that notwithstanding anything herein to the contrary, (w) the final rule titled Risk-Based  Capital Guidelines; Capital Adequacy Guidelines; Capital Maintenance: Regulatory Capital;  Impact of Modifications to Generally Accepted Accounting Principles; Consolidation of  Asset-Backed Commercial Paper Programs; and Other Related Issues, adopted by the United  States bank regulatory agencies on December 15, 2009, (x) the Dodd-Frank Wall Street Reform  and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued  in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the  Bank for International Settlements, the Basel Committee on Banking Supervision (or any  successor or similar authority) or the United States or foreign regulatory authorities, in each case  pursuant to the agreements reached by the Basel Committee on Banking Supervision in “Basel III:  A Global Regulatory Framework for More Resilient Banks and Banking Systems” (as amended,  supplemented or otherwise modified or replaced from time to time), shall in each case be deemed  to be a “Change in Law”, regardless of the date enacted, adopted or issued. 

 

-6- “Closing Date” means May 9, 2016. “Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise  modified from time to time. “Collateral” has the meaning set forth in Section 5.05(a). “Collection Account” means each account listed on Schedule II to this Agreement (as such  schedule may be modified from time to time in connection with the closing or opening of any  Collection Account in accordance with the terms hereof) (in each case, in the name of the  Borrower) and maintained at a bank or other financial institution acting as a Collection Account  Bank pursuant to an Account Control Agreement for the purpose of receiving Collections. “Collection Account Bank” means any of the banks or other financial institutions holding  one or more Collection Accounts. “Collections” means, with respect to any Pool Receivable: (a) all funds that are received  by any Originator, the Borrower, the Servicer or any other Person on their behalf in payment of  any amounts owed in respect of such Pool Receivable (including purchase price, finance charges,  interest and all other charges), or applied to amounts owed in respect of such Pool Receivable  (including insurance payments and net proceeds of the sale or other disposition of repossessed  goods or other collateral or property of the related Obligor or any other Person directly or  indirectly liable for the payment of such Pool Receivable and available to be applied thereon), (b)  all Deemed Collections with respect to such Pool Receivable, (c) all proceeds of all Related  Security with respect to such Pool Receivable, and (d) all other proceeds of such Pool Receivable. “Commitment” means the maximum aggregate amount which the LC Bank is obligated to  pay hereunder on account of all drawings under all Letters of Credit, on a combined basis, as set  forth on Schedule I, as such amount may be modified in connection with a reduction or an increase  in the Facility Limit pursuant to Section 3.11.  If the context so requires, “Commitment” also refers  to the LC Bank’s obligation to issue Letters of Credit hereunder in accordance with this  Agreement. “Concentration Percentage” means (i) for any Group A Obligor, 20.00%, (ii) for any  Group B Obligor, 15.00%, (iii) for any Group C Obligor, 10.00% and (iv) for any Group D  Obligor, 5.00%. “Concentration Reserve Percentage” means, at any time of determination, the largest of:  (a) the sum of the five (5) largest Obligor Percentages of the Group D Obligors, (b) the sum of the  three (3) largest Obligor Percentages of the Group C Obligors, (c) the sum of the two (2) largest  Obligor Percentage of the Group B Obligors, and (d) the largest Obligor Percentage of the Group  A Obligors. “Conforming Changes” means, with respect to the Term SOFR Rate or any Benchmark  Replacement, any technical, administrative or operational changes (including changes to the  definition of “Base Rate”, the definition of “Business Day”, timing and frequency of determining  rates and making payments of Interest, prepayment, conversion or continuation notices, the  applicability and length of lookback periods, the applicability of breakage provisions, and other  

 

-7- technical, administrative or operational matters) that the Administrative Agent decides in its  reasonable discretion may be appropriate to reflect the adoption and implementation of the Term  SOFR Rate or such Benchmark Replacement and to permit the administration thereof by the  Administrative Agent in a manner substantially consistent with market practice (or, if the  Administrative Agent decides that adoption of any portion of such market practice is not  administratively feasible or if the Administrative Agent determines that no market practice for the  administration of the Term SOFR Rate or the Benchmark Replacement exists, in such other  manner of administration as the Administrative Agent decides is reasonably necessary in  connection with the administration of this Agreement and the other Transaction Documents). “Contract” means, with respect to any Receivable, any and all contracts, instruments,  agreements, leases, invoices, notes or other writings, pursuant to which such Receivable arises or  that evidence such Receivable or under which an Obligor becomes or is obligated to make  payment in respect of such Receivable. “Controlled Group” means all members of a controlled group of corporations or other  business entities and all trades or businesses (whether or not incorporated) under common control  which, together with Davey Tree or any of its Subsidiaries, are treated as a single employer under  Section 414 of the Code. “Covered Entity” shall mean (a) each of the Borrower, the Servicer, each Originator and  each of Davey Tree’s Subsidiaries and (b) each Person that, directly or indirectly, is in control of a  Person described in clause (a) above.  For purposes of this definition, control of a Person shall  mean the direct or indirect (x) ownership of, or power to vote, 25% or more of the issued and  outstanding equity interests having ordinary voting power for the election of directors of such  Person or other Persons performing similar functions for such Person, or (y) power to direct or  cause the direction of the management and policies of such Person whether by ownership of equity  interests, contract or otherwise. “Credit and Collection Policy” means, as the context may require, those receivables credit  and collection policies and practices of the Originators in effect on the Closing Date and described  in Exhibit E, as modified in compliance with this Agreement. “Credit Extension” means the issuance of any Letter of Credit or any modification,  extension or renewal of any Letter of Credit. “Credit Party” means the LC Bank and the Administrative Agent. “Credit Risk Retention Rules” means (i) Section 15G of the Securities Exchange Act of  1934, as amended, and (ii) Articles 404-410 of the EU Capital Requirements Regulation  (including Article 122a of the Banking Consolidation Directive), in each case, together with the  rules and regulations thereunder. “Daily 1M SOFR” means, for any day, the rate per annum determined by PNC by dividing  (the resulting quotient rounded upwards, at PNC’s discretion, to the nearest 1/100th of 1%) (a) the  Term SOFR Reference Rate for such day for a one (1) month period, as published by the Term  SOFR Administrator, by (b) a number equal to 1.00 minus the SOFR Reserve Percentage;  provided, that if Daily 1M SOFR, determined as provided above, would be less than the SOFR  

 

-8- Floor, then Daily 1M SOFR shall be deemed to be the SOFR Floor.  The rate of interest will be  adjusted automatically as of each Business Day based on changes in Daily 1M SOFR without  notice to the Borrower. “Davey ESOP” means The Davey 401KSOP and Employee Stock Ownership Plan (March  1, 2003 Restatement), as amended. “Davey Tree” has the meaning set forth in the preamble to this Agreement. “Davey Tree Group” has the meaning set forth in Section 8.03(c). “Days’ Sales Outstanding” means, for any Fiscal Month, an amount computed as of the  last day of such Fiscal Month equal to:  (a) the average of the aggregate Outstanding Balance of all  Pool Receivables (other than Unbilled Receivables) as of the last day of each of the three most  recent Fiscal Months ended on the last day of such Fiscal Month, divided by (b) an amount equal to  (i) the aggregate initial Outstanding Balance of all Pool Receivables (other than Unbilled  Receivables) originated by the Originators during the three most recent Fiscal Months ended on  the last day of such Fiscal Month, divided by (ii) 90. “Debt” means, as to any Person at any time of determination, any and all indebtedness,  obligations or liabilities (whether matured or unmatured, liquidated or unliquidated, direct or  indirect, absolute or contingent, or joint or several) of such Person for or in respect of:  (i)  borrowed money, (ii) amounts raised under or liabilities in respect of any bonds, debentures, notes,  note purchase, acceptance or credit facility, or other similar instruments or facilities, (iii)  reimbursement obligations (contingent or otherwise) under any letter of credit, (iv) any other  transaction (including production payments (excluding royalties), installment purchase  agreements, forward sale or purchase agreements, capitalized leases and conditional sales  agreements) having the commercial effect of a borrowing of money entered into by such Person to  finance its operations or capital requirements (but not including accounts payable incurred in the  ordinary course of such Person’s business payable on terms customary in the trade), (v) all net  obligations of such Person in respect of interest rate or currency hedges or (vi) any Guaranty of any  such Debt. “Deemed Collections” has the meaning set forth in Section 4.01(d). “Default Ratio” means the ratio (expressed as a percentage and rounded to the nearest  1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of each Fiscal  Month by dividing:  (a) the aggregate Outstanding Balance of all Pool Receivables other than  Specified Obligor Receivables that became Defaulted Receivables during such Fiscal Month, by  (b) the aggregate initial Outstanding Balance of all Pool Receivables (other than Unbilled  Receivables) originated by the Originators during the Fiscal Month that is eight (8) Fiscal Months  before such month. “Defaulted Receivable” means a Receivable: (a) as to which any payment, or part thereof, remains unpaid for 241 days or  more from the original invoice date for such payment; 

 

-9- (b) as to which any payment, or part thereof, remains unpaid for less than or  equal to 240 days from the original invoice date for such payment and consistent with the  Credit and Collection Policy, has been or should be written off the applicable Originator’s  or the Borrower’s books as uncollectible; or (c) without duplication, as to which an Insolvency Proceeding shall have  occurred with respect to the Obligor thereof or any other Person obligated thereon or  owning any Related Security with respect thereto unless such Receivable is an Eligible  Chapter 11 Receivable; provided, however, that in each case above such amount shall be calculated without giving effect  to any netting of credits that have not been matched to a particular Receivable for the purposes of  aged trial balance reporting. “Delinquency Ratio” means the ratio (expressed as a percentage and rounded to the nearest  1/100 of 1%, with 5/1000th of 1% rounded upward) computed as of the last day of each Fiscal  Month by dividing:  (a) the aggregate Outstanding Balance of all Pool Receivables that were  Delinquent Receivables on such day other than Specified Obligor Receivables, by (b) the  aggregate Outstanding Balance of all Pool Receivables on such day. “Delinquent Receivable” means a Receivable as to which any payment, or part thereof,  remains unpaid for 151 days or more from the original invoice date for such payment; provided,  however, that such amount shall be calculated without giving effect to any netting of credits that  have not been matched to a particular Receivable for the purposes of aged trial balance reporting. “Dilution Horizon Ratio” means, for any Fiscal Month, the ratio (expressed as a  percentage and rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward)  computed as of the last day of such Fiscal Month by dividing:  (a) the aggregate initial Outstanding  Balance of all Pool Receivables (other than Unbilled Receivables) originated by the Originators  during the two (2) most recently ended Fiscal Months (including such Fiscal Month), by (b) the  Net Receivables Pool Balance as of the last day of such Fiscal Month.  The numerator of the  Dilution Horizon Ratio may be adjusted by the Administrative Agent upon not less than five (5)  Business Days’ notice to the Borrower to reflect such number of Fiscal Months as the  Administrative Agent believes best reflects the business practices of the Servicer and the  Originators and the actual amount of dilution and Deemed Collections that occur with respect to  Pool Receivables based on the weighted average dilution lag calculation completed as part of such  audit or field exam. “Dilution Ratio” means, for any Fiscal Month, the ratio (expressed as a percentage and  rounded to the nearest 1/100th of 1%, with 5/1000th of 1% rounded upward), computed as of the  last day of each Fiscal Month by dividing: (a) the aggregate amount of Deemed Collections during  such Fiscal Month (other than any Deemed Collections with respect to any Receivables that were  both (I) generated by an Originator during such Fiscal Month and (II) written off the applicable  Originator’s or the Borrower’s books as uncollectible during such Fiscal Month), by (b) the  aggregate initial Outstanding Balance of all Pool Receivables (other than Unbilled Receivables)  originated by the Originators during the Fiscal Month that is one (1) month prior to such Fiscal  Month. 

 

-10- “Dilution Reserve Percentage” means, on any day, the product of (a) the sum of (i) the  product of (x) 2.25, multiplied by (y) the arithmetic average of the Dilution Ratios for the twelve  most recent Fiscal Months, plus (ii) the Dilution Volatility Component, multiplied by (b) the  Dilution Horizon Ratio. “Dilution Volatility Component” means, for any Fiscal Month, the product (expressed as a  percentage) of: (a) the positive difference, if any, between:  (i) the highest Dilution Ratio for any  Fiscal Month during the twelve most recent Fiscal Months and (ii) the arithmetic average of the  Dilution Ratios for such twelve Fiscal Months times (b) a fraction equal to (i) the highest Dilution  Ratio for any Fiscal Month during the twelve (12) most recent Fiscal Months, divided by (ii) the  arithmetic average of the Dilution Ratios for such twelve (12) Fiscal Months. “Dollars” and “$” each mean the lawful currency of the United States of America. “Drawing Date” has the meaning set forth in Section 3.04(a). “Eligible Assignee” means (i) the LC Bank or any of its Affiliates and (ii) any other  financial institution of recognized standing having capital and surplus in excess of $500,000,000. “Eligible Chapter 11 Receivable” means, at any time of determination, a Pool Receivable: (a) the related Obligor of which is the debtor in a case pending under Chapter  11 of the Bankruptcy Code; (b) with respect to which a final order has been entered by the applicable  United States Bankruptcy Court having jurisdiction over the related Obligor that (i)  authorizes and approves the assumption of the related Contract that gave rise to such Pool  Receivable, (ii) authorizes the related Obligor to perform (prior to assumption)  post-petition under the terms of the Contract that gave rise to such Pool Receivable and (iii)  has not been subsequently stayed, reversed or vacated; (c) that has been approved by the Administrative Agent in its sole discretion;  provided, however, that the Administrative Agent may revoke any such approval upon no  less than five (5) Business Days’ prior written notice to the Borrower. “Eligible Receivable” means, at any time of determination, a Pool Receivable: (a) the Obligor of which is: (i) a U.S. Obligor; (ii) not a Sanctioned Person; (iii)  not an Affiliate of the Borrower, the Servicer or any Originator; (iv) not the Obligor with  respect to Defaulted Receivables with an aggregate Outstanding Balance exceeding 50%  of the aggregate Outstanding Balance of all such Obligor’s Pool Receivables; and (v) not a  Specified Obligor; provided that this clause (v) shall not apply to any Pool Receivable that  is an Eligible Chapter 11 Receivable; (b) for which an Insolvency Proceeding shall not have occurred with respect to  the Obligor thereof or any other Person obligated thereon or owning any Related Security  with respect thereto unless such Pool Receivable is an Eligible Chapter 11 Receivable; 

 

-11- (c) that is denominated and payable only in U.S. dollars in the United States of  America, and the Obligor with respect to which has been instructed to remit Collections in  respect thereof directly to a Lock-Box or Collection Account in the United States of  America; (d) that is neither a Defaulted Receivable nor a Delinquent Receivable; (e) in which the Borrower owns good and marketable title, free and clear of any  Adverse Claims, and that is freely assignable (including without any consent of the related  Obligor or any Governmental Authority); (f) that does not have a due date which is 31 days or more after the original  invoice date of such Receivable; (g) that satisfies all applicable requirements of the Credit and Collection  Policy; (h) that arises under a duly authorized Contract that is in full force and effect  and that is a legal, valid and binding obligation of the related Obligor, enforceable against  such Obligor in accordance with its terms, except (i) as such enforceability may be limited  by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws  affecting the enforcement of creditors’ rights generally and (ii) as such enforceability may  be limited by general principles of equity, regardless of whether such enforceability is  considered in a proceeding in equity or at law; (i) that arises under a Contract for the sale of goods or services entered into on  an arm’s length basis in the ordinary course of the applicable Originator’s business; (j) that is not subject to (i) any dispute, litigation, set-off, counterclaim, hold  back, right of rescission or any other defense against the applicable Originator (or any  assignee of such Originator) (including, without limitation, customer deposits, advance  payments and similar items (including payments related to unearned revenues)), (ii) any  Adverse Claim, or (iii) any netting arrangements with the related Obligor, and the Obligor  of which holds no right as against the applicable Originator to cause such Originator to  repurchase the goods or merchandise, the sale of which shall have given right to such  Receivable; provided, however, that if such dispute, litigation, set-off, counterclaim, hold  back, right of rescission or other defense or Adverse Claim affects only a portion of the  Outstanding Balance of such Receivable, then such Receivable may be deemed an Eligible  Receivable to the extent of the portion of such Outstanding Balance which is not so  affected; (k) that, together with the Contract related thereto, has not been modified,  waived or restructured since its creation, except as permitted pursuant to Section 9.02 of  this Agreement; (l) that, together with the Contract related thereto, conforms in all material  respects with all Applicable Laws (including any applicable laws relating to usury, truth in  lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt  

 

-12- collection practices and privacy); (m) for which the Administrative Agent (on behalf of the Secured Parties) shall  have a valid and enforceable first priority perfected security interest therein and in the  Related Security and Collections with respect thereto, in each case free and clear of any  Adverse Claim; (n) that has been transferred by an Originator (or, in the case of Davey Tree,  contributed) to the Borrower pursuant to the Receivables Purchase Agreement, and with  respect to which transfer all conditions precedent under the Receivables Purchase  Agreement have been met; (o) that represents amounts earned and payable by the Obligor that are not  subject to the performance of additional services by the Originator thereof or the Borrower,  and the related goods or merchandise shall have been delivered and/or all services  performed other than, in the case of an Eligible Unbilled Receivable, the billing or  invoicing of such Receivable; provided, that if such Receivable is subject to the  performance of additional services, only the portion of such Receivable attributable to such  additional services shall be excluded; (p) with respect to which all consents, licenses, approvals or authorizations of,  or registrations or declarations with or notices to, any Governmental Authority or other  Person required to be obtained, effected or given by an Originator in connection with the  creation of such Receivable, the execution, delivery and performance by such Originator of  the related Contract or the assignment thereof under the Receivables Purchase Agreement  have been duly obtained, effected or given and are in full force and effect; (q) that constitutes an “account” or a “general intangible” as defined in the  UCC, and that is not evidenced by instruments or chattel paper; (r) that is an Eligible Unbilled Receivable; (s) that does not arise from the sale of as-extracted collateral, as such term is  used in the UCC; (t) that (i) does not arise from a sale of accounts made as part of a sale of a  business or constitute an assignment for the purpose of collection only, (ii) is not a transfer  of a single account made in whole or partial satisfaction of a preexisting indebtedness or an  assignment of a right to payment under a contract to an assignee that is also obligated to  perform under the contract, and (iii) is not a transfer of an interest in or an assignment of a  claim under a policy of insurance; and (u) that does not relate to the sale of any consigned goods or finished goods  which have incorporated any consigned goods into such finished goods. “Eligible Unbilled Receivable” means, at any time, any Unbilled Receivable if (a) the  related Originator has recognized the related revenue on its financial books and records under  GAAP and (b) not more than ninety (90) days have expired since the date such Unbilled  

 

-13- Receivable arose. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from  time to time, and any rule or regulation issued thereunder. “ERISA Affiliate” means, with respect to any Person, any corporation, trade or business  which together with the Person is a member of a controlled group of corporations or a controlled  group of trades or businesses and would be deemed a “single employer” within the meaning of  Sections 414(b), (c), (m) of the Code or Section 4001(b) of ERISA. “Euro-Rate Reserve Percentage” means, the maximum effective percentage in effect on  such day as prescribed by the Board of Governors of the Federal Reserve System (or any  successor) for determining the reserve requirements (including without limitation, supplemental,  marginal, and emergency reserve requirements) with respect to eurocurrency funding (currently  referred to as “Eurocurrency Liabilities”). “Event of Default” has the meaning specified in Section 10.01.  For the avoidance of  doubt, any Event of Default that occurs shall be deemed to be continuing at all times thereafter  unless and until waived in accordance with Section 14.01. “Excess Concentration” means, the sum of the following amounts, without duplication: (a) the sum of the amounts calculated for each of the Obligors equal to the  excess (if any) of (i) an amount equal to the aggregate Outstanding Balance of the Eligible  Receivables of such Obligor, over (ii) the product of (x) such Obligor’s Concentration  Percentage, multiplied by (y) the aggregate Outstanding Balance of all Eligible  Receivables then in the Receivables Pool; plus (b) the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible  Receivables that are Eligible Unbilled Receivables, over (ii) the product of (x) 30.00%,  multiplied by (y) the aggregate Outstanding Balance of all Eligible Receivables then in the  Receivables Pool; plus (c) the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible  Receivables the Obligor of which is the government of the United States of America or any  agency, authority, department or instrumentality of the government of the United States of  America, over (ii) the product of (x) 5.00%, multiplied by (y) the aggregate Outstanding  Balance of all Eligible Receivables then in the Receivables Pool; plus (d)  the excess (if any) of (i) the aggregate Outstanding Balance of all Eligible  Receivables that are Bill Plan Receivables, over (ii) the product of (x) 10.00%, multiplied  by (y) the aggregate Outstanding Balance of all Eligible Receivables then in the  Receivables Pool.  Notwithstanding the foregoing, the Administrative Agent may at any  time reduce the percentage set forth in this clause (d) (including to zero percent) upon five  (5) Business Days’ prior written notice to the Borrower. “Exchange Act” means the Securities Exchange Act of 1934, as amended or otherwise  modified from time to time. 

 

-14- “Excluded Receivable” means, from time to time, each Receivable identified as such on  Schedule IV, as such Schedule may be amended, modified or supplemented from time to time with  the written consent of the Borrower and the Administrative Agent. “Excluded Taxes” means any of the following Taxes imposed on or with respect to an  Affected Person or required to be withheld or deducted from a payment to an Affected Person: (a)  Taxes imposed on or measured by net income (however denominated), franchise Taxes and branch  profits Taxes, in each case, (i) imposed as a result of such Affected Person being organized under  the laws of, or having its principal office or, in the case of the LC Bank, its applicable lending  office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii)  that are Other Connection Taxes, (b) in the case of the LC Bank, U.S. federal withholding Taxes  imposed on amounts payable to or for the account of the LC Bank with respect to an applicable  interest in any Reimbursement Obligations or the Commitment pursuant to a law in effect on the  date on which (i) the LC Bank’s Commitment arises or (ii) the LC Bank changes its lending office,  except in each case to the extent that amounts with respect to such Taxes were payable either to the  LC Bank’s assignor immediately before the LC Bank became a party hereto or to the LC Bank  immediately before it changed its lending office, and (c) any U.S. federal withholding Taxes  imposed pursuant to FATCA. “Facility Limit” means $85,000,000 as increased or reduced from time to time pursuant to  Section 3.11, as applicable; provided, however, the Facility Limit shall not exceed $100,000,000 at  any time.  References to the unused portion of the Facility Limit shall mean, at any time of  determination, an amount equal to (x) the Facility Limit at such time, minus (y) the sum of (i) the  Outstanding Reimbursement Obligations plus (ii) the LC Amount at such time. “FATCA” means 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) and any current or future regulations or official interpretations thereof  and any agreement entered into pursuant to Section 1471(b)(1) of the Code. “Federal Reserve Board” means the Board of Governors of the Federal Reserve System,  or any entity succeeding to any of its principal functions. “Fee Letter” has the meaning specified in Section 3.05(b). “Fees” has the meaning specified in Section 3.05(b). “Final Payout Date” means the date on or after the Termination Date when (i) the  Outstanding Reimbursement Obligations and Aggregate Interest have been paid in full, (ii) the LC  Amount has been reduced to zero ($0) and no Letters of Credit issued hereunder remain  outstanding and undrawn, (iii) all other Borrower Obligations shall have been paid in full, (iv) all  other amounts owing to the Credit Parties and any other Borrower Indemnified Party or Affected  Person hereunder and under the other Transaction Documents have been paid in full, and (v) all  accrued Servicing Fees have been paid in full. “Financial Officer” of any Person means, the chief executive officer, the chief financial  officer, the chief accounting officer, the principal accounting officer, the controller, the treasurer  or the assistant treasurer of such Person. 

 

-15- “Fiscal Month” means each fiscal month as specified on Exhibit B hereto. “GAAP” means generally accepted accounting principles in the United States of America,  consistently applied. “Governmental Acts” has the meaning set forth in Section 3.09. “Governmental Authority” means the government of the United States of America or any  other nation, or of any political subdivision thereof, whether state or local, and any agency,  authority, instrumentality, regulatory body, court, central bank or other entity exercising  executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or  pertaining to government (including any supra-national bodies such as the European Union or the  European Central Bank). “Group A Obligor” means any Obligor with a short-term rating of at least:  (a) “A-1” by  S&P, or if such Obligor does not have a short-term rating from S&P, a rating of at least “A+” or  better by S&P on such Obligor’s long-term senior unsecured and uncredit-enhanced debt  securities, and (b) “P-1” by Moody’s, or if such Obligor does not have a short-term rating from  Moody’s, a rating of at least “A1” or better by Moody’s on such Obligor’s long-term senior  unsecured and uncredit-enhanced debt securities; provided, however, if such Obligor is rated by  only one of such rating agencies, then such Obligor will be a “Group A Obligor” if it satisfies  either clause (a) or clause (b) above.  Notwithstanding the foregoing, any Obligor that is a  Subsidiary of an Obligor that satisfies the definition of “Group A Obligor” shall be deemed to be a  Group A Obligor and shall be aggregated with the Obligor that satisfies such definition for the  purposes of determining the “Concentration Reserve Percentage” and clause (a) of the definition  of “Excess Concentration” for such Obligors, unless such deemed Obligor separately satisfies the  definition of “Group B Obligor”, “Group C Obligor” or “Group D Obligor”, in which case such  Obligor shall be separately treated as a Group B Obligor, a Group C Obligor or a Group D Obligor,  as the case may be, and shall be aggregated and combined for such purposes with any of its  Subsidiaries that are Obligors. “Group B Obligor” means an Obligor that is not a Group A Obligor, with a short-term  rating of at least:  (a) “A-2” by S&P, or if such Obligor does not have a short-term rating from  S&P, a rating of at least “BBB+” to “A” by S&P on such Obligor’s long-term senior unsecured  and uncredit-enhanced debt securities, and (b) “P-2” by Moody’s, or if such Obligor does not have  a short-term rating from Moody’s, a rating of at least “Baal” to “A2” by Moody’s on such  Obligor’s long-term senior unsecured and uncredit-enhanced debt securities; provided, however, if  such Obligor is rated by only one of such rating agencies, then such Obligor will be a “Group B  Obligor” if it satisfies either clause (a) or clause (b) above.  Notwithstanding the foregoing, any  Obligor that is a Subsidiary of an Obligor that satisfies the definition of “Group B Obligor” shall  be deemed to be a Group B Obligor and shall be aggregated with the Obligor that satisfies such  definition for the purposes of determining the “Concentration Reserve Percentage” and the  definition of “Excess Concentration” for such Obligors, unless such deemed Obligor separately  satisfies the definition of “Group A Obligor”, “Group C Obligor” or “Group D Obligor”, in which  case such Obligor shall be separately treated as a Group A Obligor, a Group C Obligor or a Group  D Obligor, as the case may be, and shall be aggregated and combined for such purposes with any  of its Subsidiaries that are Obligors. 

 

-16- “Group C Obligor” means an Obligor that is not a Group A Obligor or a Group B Obligor,  with a short-term rating of at least:  (a) “A-3” by S&P, or if such Obligor does not have a  short-term rating from S&P, a rating of at least “BBB-” to “BBB” by S&P on such Obligor’s  long-term senior unsecured and uncredit-enhanced debt securities, and (b) “P-3” by Moody’s, or if  such Obligor does not have a short-term rating from Moody’s, a rating of at least “Baa3” to “Baa2”  by Moody’s on such Obligor’s long-term senior unsecured and uncredit-enhanced debt securities;  provided, however, if such Obligor is rated by only one of such rating agencies, then such Obligor  will be a “Group C Obligor” if it satisfies either clause (a) or clause (b) above.  Notwithstanding  the foregoing, any Obligor that is a Subsidiary of an Obligor that satisfies the definition of “Group  C Obligor” shall be deemed to be a Group C Obligor and shall be aggregated with the Obligor that  satisfies such definition for the purposes of determining the “Concentration Reserve Percentage”  and the definition of “Excess Concentration” for such Obligors, unless such deemed Obligor  separately satisfies the definition of “Group A Obligor”, “Group B Obligor” or “Group D  Obligor”, in which case such Obligor shall be separately treated as a Group A Obligor, a Group B  Obligor or a Group D Obligor, as the case may be, and shall be aggregated and combined for such  purposes with any of its Subsidiaries that are Obligors. “Group D Obligor” means any Obligor that is not a Group A Obligor, Group B Obligor or  Group C Obligor; provided, that any Obligor that is not rated by either Moody’s or S&P shall be a  Group D Obligor.  Notwithstanding the foregoing, any Obligor that is a Subsidiary of an Obligor  that satisfies the definition of “Group D Obligor” shall be deemed to be a Group D Obligor and  shall be aggregated with the Obligor that satisfies such definition for the purposes of determining  the “Concentration Reserve Percentage” and the definition of “Excess Concentration” for such  Obligors, unless such deemed Obligor separately satisfies the definition of “Group A Obligor”,  “Group B Obligor” or “Group C Obligor”, in which case such Obligor shall be separately treated  as a Group A Obligor, a Group B Obligor or a Group C Obligor, as the case may be, and shall be  aggregated and combined for such purposes with any of its Subsidiaries that are Obligors. “Guaranty” of any Person means any obligation of such Person guarantying or in effect  guarantying any liability or obligation of any other Person in any manner, whether directly or  indirectly, including any such liability arising by virtue of partnership agreements, including any  agreement to indemnify or hold harmless any other Person, any performance bond or other  suretyship arrangement and any other form of assurance against loss, except endorsement of  negotiable or other instruments for deposit or collection in the ordinary course of business. “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with  respect to any payment made by or on account of any obligation of the Borrower or any of its  Affiliates under any Transaction Document and (b) to the extent not otherwise described in clause  (a) above, Other Taxes. “Independent Director” has the meaning set forth in Section 8.03(c). “Information Package” means a report, in substantially the form of Exhibit F. “Insolvency Proceeding” means (a) any case, action or proceeding before any court or  other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation,  receivership, dissolution, winding-up or relief of debtors or (b) any general assignment for the  

 

-17- benefit of creditors of a Person, composition, marshaling of assets for creditors of a Person, or  other, similar arrangement in respect of its creditors generally or any substantial portion of its  creditors, in each of clauses (a) and (b) undertaken under U.S. Federal, state or foreign law,  including the Bankruptcy Code. “Intended Tax Treatment” has the meaning set forth in Section 14.14. “Interest” means, for any Reimbursement Obligation outstanding during any Settlement  Period (or portion thereof), the amount of interest accrued on such Reimbursement Obligation  during such Settlement Period (or portion thereof) in accordance with Section 3.05. “Interest Rate” means, (i) for any day with respect to any Outstanding Reimbursement  Obligation, an interest rate per annum equal to LMIRthe Term SOFR Rate plus the SOFR  Adjustment (or if the Base Rate is applicable pursuant to Section 5.04, the Base Rate in effect on  such day) and (ii) for any day while an Event of Default has occurred and is continuing shall be an  interest rate per annum equal to the sum of 2.00% per annum plus the greater of (i) the Base Rate in  effect on such day and (ii) Adjusted LIBOR for such daythe Term SOFR Rate plus the SOFR  Adjustment; provided, further, that no provision of this Agreement shall require the payment or  permit the collection of Interest in excess of the maximum permitted by Applicable Law; and  provided, further, however, that Interest in respect of any Outstanding Reimbursement Obligation  shall not be considered paid by any distribution to the extent that at any time all or a portion of such  distribution is rescinded or must otherwise be returned for any reason. “Investment Company Act” means the Investment Company Act of 1940, as amended or  otherwise modified from time to time. “Joinder Agreement” means a joinder agreement, in substantially the form of Exhibit C to  the Receivables Purchase Agreement (appropriately completed), that has been duly executed by  the applicable Originator and the Borrower pursuant to which such Originator becomes a party to  the Receivables Purchase Agreement and which sets forth certain terms and conditions applicable  to such Originator under such Receivables Purchase Agreement. “LC Amount” means at any time of determination, the sum of the amounts then available  to be drawn under all outstanding Letters of Credit. “LC Bank” has the meaning set forth in the preamble to this Agreement. “LC Collateral Account” means the account at any time designated as the LC Collateral  Account established and maintained with the LC Bank by the Administrative Agent (for the  benefit of the LC Bank), or such other account as may be so designated as such by the  Administrative Agent. “LC Fee Expectation” has the meaning set forth in Section 3.05(b). “LC Request” means a letter in substantially the form of Exhibit A hereto executed and  delivered by the Borrower to the Administrative Agent and the LC Bank pursuant to Section  3.02(a). 

 

-18- “Letter of Credit” means any stand-by letter of credit issued by the LC Bank at the request  of the Borrower pursuant to this Agreement.  “Letter of Credit Application” has the meaning set forth in Section 3.02(a). “LMIR” means for any day, the greater of (x) 0% per annum and (y) the interest rate per  annum determined by the Administrative Agent (which determination shall be conclusive absent  manifest error) by dividing (i) the one-month Eurodollar rate for U.S. dollar deposits as reported  by Bloomberg Finance L.P. and shown on US0001M Screen or any other service or page that may  replace such page from time to time for the purpose of displaying offered rates of leading banks for  London interbank deposits in United States dollars, as of 11:00 a.m. (London time) on such day, or  if such day is not a Business Day, then the immediately preceding Business Day (or if not so  reported, then as determined by the Administrative Agent from another recognized source for  interbank quotation), in each case, changing when and as such rate changes, by (ii) a number equal  to 1.00 minus the Euro-Rate Reserve Percentage on such day.  The calculation of LMIR may also  be expressed by the following formula: One-month Eurodollar rate for  U.S. Dollars shown on Bloomberg US0001M  Screen or appropriate successor LMIR = 1.00 - Euro-Rate Reserve  Percentage. LMIR shall be adjusted on the effective date of any change in the Euro-Rate Reserve  Percentage as of such effective date.  Notwithstanding the foregoing, if LMIR as determined  herein would be less than zero (0.00), such rate shall be deemed to be zero percent (0.00%) for  purposes of this Agreement. “Lock-Box” means each locked postal box with respect to which a Collection Account  Bank has executed an Account Control Agreement pursuant to which it has been granted exclusive  access for the purpose of retrieving and processing payments made on the Receivables and which  is listed on Schedule II (as such schedule may be modified from time to time in connection with  the addition or removal of any Lock-Box in accordance with the terms hereof). “Loss Horizon Ratio” means, at any time of determination, the ratio (expressed as a  percentage and rounded to the nearest 1/100 of 1%, with 5/1000th of 1% rounded upward)  computed by dividing: (a) the aggregate initial Outstanding Balance of all Pool Receivables (other  than Unbilled Receivables) originated by the Originators during the seven (7) most recent Fiscal  Months ending prior to such time of determination, by (b) the Net Receivables Pool Balance as of  such date. “Loss Reserve Percentage” means, at any time of determination, the product of (a) 2.25,  multiplied by (b) the highest arithmetic average of the Default Ratios for any three consecutive  Fiscal Months during the twelve most recent Fiscal Months, multiplied by (c) the Loss Horizon  Ratio. 

 

-19- “Material Adverse Effect” means, relative to any Person (provided that if no particular  Person is specified, “Material Adverse Effect” shall be deemed to be relative to the Borrower, the  Servicer and the Originators, individually and in the aggregate) with respect to any event or  circumstance, a material adverse effect on any of the following: (a) the assets, operations, business or financial condition of such Person with  its consolidated Subsidiaries, taken as a whole; (b) the ability of any such Person to perform its obligations under this  Agreement or any other Transaction Document to which it is a party; (c) the validity or enforceability of this Agreement or any other Transaction  Document, or the validity, enforceability or collectability of any material portion of the  Pool Receivables; (d) the status, perfection, enforceability or priority of the Administrative  Agent’s or the Borrower’s security interest in the Collateral; or (e) the rights and remedies of any Credit Party under the Transaction  Documents or associated with its respective interest in the Collateral. “Maturity Date” means the earlier to occur of (a) the date occurring twelve (12) months  following the Scheduled Termination Date and (b) the date on which the “Termination Date” is  declared or deemed to have occurred under Section 10.01. “Minimum Dilution Reserve Percentage” means, at any time of determination, the product  of (a) the average of the Dilution Ratios for the twelve most recent Fiscal Months ended that are  covered by the most recently delivered Information Package, multiplied by (b) the Dilution  Horizon Ratio for the most recent Fiscal Month ended that is covered by the most recently  delivered Information Package. “Monthly Settlement Date” means the 25th day of each calendar month (or if such day is  not a Business Day, the next occurring Business Day). “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that is a  nationally recognized statistical rating organization. “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of  ERISA to which the Borrower, the Servicer, any Originator, the Performance Guarantor or any of  their respective ERISA Affiliates (other than one considered an ERISA Affiliate only pursuant to  subsection (m) or (o) of Section 414 of the Code) is making or accruing an obligation to make  contributions, or has within any of the preceding five plan years made or accrued an obligation to  make contributions. “Net Receivables Pool Balance” means, at any time of determination:  (a) the aggregate  Outstanding Balance of all Eligible Receivables then in the Receivables Pool, minus (b) the Excess  Concentration. 

 

-20- “Notice Date” has the meaning set forth in Section 3.02(b). “Obligor” means, with respect to any Receivable, the Person obligated to make payments  pursuant to the Contract relating to such Receivable. “Obligor Percentage” means, at any time of determination, for each Obligor, a fraction,  expressed as a percentage, (a) the numerator of which is the aggregate Outstanding Balance of the  Eligible Receivables of such Obligor minus the amount (if any) then included in the calculation of  the Excess Concentration with respect to such Obligor and (b) the denominator of which is the  aggregate Outstanding Balance of all Eligible Receivables at such time. “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control. “Order” has the meaning set forth in Section 3.10. “Originator” and “Originators” means Davey Tree and each other Person identified as  such in the Receivables Purchase Agreement, as the same may be modified from time to time by  adding new Originators or removing Originators, in each case with the prior written consent of the  Administrative Agent. “Other Connection Taxes” means, with respect to any Affected Person, Taxes imposed as  a result of a present or former connection between such Affected Person and the jurisdiction  imposing such Tax (other than connections arising from such Affected Person having executed,  delivered, become a party to, performed its obligations under, received payments under, received  or perfected a security interest under, engaged in any other transaction pursuant to or enforced any  Transaction Document, or sold or assigned an interest in any Reimbursement Obligation or LC  Amount or Transaction Document). “Other Taxes” means any and all present or future stamp or documentary Taxes, charges  or similar levies or fees arising from any payment made hereunder or from the execution, delivery,  filing, recording or enforcement of, or otherwise in respect of, this Agreement, the other  Transaction Documents and the other documents or agreements to be delivered hereunder or  thereunder, except any such Taxes that are Other Connection Taxes imposed with respect to an  assignment. “Outstanding Balance” means, at any time of determination, with respect to any  Receivable, the then outstanding principal balance thereof. “Outstanding Reimbursement Obligations” means, at any time of determination, any  Reimbursement Obligation that has not been paid in full. “Overnight Bank Funding Rate” means for any day, the rate comprised of both overnight  federal funds and overnight eurocurrency borrowings by U.S.-managed banking offices of  depository institutions, as such composite rate shall be determined by the Federal Reserve Bank of  New York (“NYFRB”), as set forth on its public website from time to time, and as published on  the next succeeding Business Day as the overnight bank funding rate by the NYFRB (or by such  other recognized electronic source (such as Bloomberg) selected by the Administrative Agent for  the purpose of displaying such rate); provided, that if such day is not a Business Day, the  

 

-21- Overnight Bank Funding Rate for such day shall be such rate on the immediately preceding  Business Day; provided, further, that if such rate shall at any time, for any reason, no longer exist,  a comparable replacement rate determined by PNCthe Administrative Agent at such time (which  determination shall be conclusive absent manifest error).  If the Overnight Bank Funding Rate  determined as above would be less than zero, then such rate shall be deemed to be zero.  The rate of  interest charged shall be adjusted as of each Business Day based on changes in the Overnight Bank  Funding Rate without notice to the Borrower.  “Participant” has the meaning set forth in Section 14.03(a). “Participant Register” has the meaning set forth in Section 14.03(b). “PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto. “Patriot Act” has the meaning set forth in Section 14.15. “Pension Plan” means a pension plan as defined in Section 3(2) of ERISA that is subject  to Title IV of ERISA with respect to which any Originator, the Borrower or any other member of  the Controlled Group may have any liability, contingent or otherwise. “Performance Guarantor” means Davey Tree. “Performance Guaranty” means the Performance Guaranty, dated as of the Closing Date,  by the Performance Guarantor in favor of the Administrative Agent for the benefit of the Secured  Parties, as such agreement may be amended, restated, supplemented or otherwise modified from  time to time. “Person” means an individual, partnership, corporation (including a business trust), joint  stock company, trust, unincorporated association, joint venture, limited liability company or other  entity, or a government or any political subdivision or agency thereof. “PNC” has the meaning set forth in the preamble to this Agreement. “Pool Receivable” means a Receivable in the Receivables Pool. “Portion of Reimbursement Obligation” means the portion of such Reimbursement  Obligation being funded or maintained by the LC Bank by reference to a particular interest rate  basis. “Receivable” means any right to payment of a monetary obligation, whether or not earned  by performance, owed to any Originator or the Borrower (as assignee of an Originator), whether  constituting an account, chattel paper, payment intangible, instrument or general intangible, in  each instance arising in connection with the sale of goods that have been or are to be sold or for  services rendered or to be rendered, and includes, without limitation, the obligation to pay any  finance charges, fees and other charges with respect thereto.  Any such right to payment arising  from any one transaction, including, without limitation, any such right to payment represented by  an individual invoice or agreement, shall constitute a Receivable separate from a Receivable  consisting of any such right to payment arising from any other transaction; provided, however, that  

 

-22- an Excluded Receivable shall not be a “Receivable” hereunder or under the Transaction  Documents. “Receivables Pool” means, at any time of determination, all of the then outstanding  Receivables transferred (or purported to be transferred) to the Borrower pursuant to the  Receivables Purchase Agreement prior to the Termination Date. “Receivables Purchase Agreement” means the Receivables Purchase Agreement, dated as  of the Closing Date, among the Servicer, the Originators and the Borrower, as such agreement may  be amended, amended and restated, supplemented or otherwise modified from time to time. “Receivables Purchase Termination Event” means an event that causes the “Termination  Date” to occur under the Receivables Purchase Agreement. “Reimbursement Obligation” has the meaning set forth in Section 3.04(a). “Reinvestment” has the meaning set forth in Section 4.01(a). “Related Security” means, with respect to any Receivable: (a) all of the Borrower’s and each Originator’s interest in any goods (including  returned goods), and documentation of title evidencing the shipment or storage of any  goods (including returned goods), the sale of which gave rise to such Receivable; (b) all instruments and chattel paper that may evidence such Receivable; (c) all other security interests or liens and property subject thereto from time to  time purporting to secure payment of such Receivable, whether pursuant to the Contract  related to such Receivable or otherwise, together with all UCC financing statements or  similar filings relating thereto;  (d) all of the Borrower’s and each Originator’s rights, interests and claims  under the related Contracts and all guaranties, indemnities, insurance and other agreements  (including the related Contract) or arrangements of whatever character from time to time  supporting or securing payment of such Receivable or otherwise relating to such  Receivable, whether pursuant to the Contract related to such Receivable or otherwise; and (e) all of the Borrower’s rights, interests and claims under the Receivables  Purchase Agreement and the other Transaction Documents. “Reportable Compliance Event” shall mean that any Covered Entity becomes a  Sanctioned Person, or is charged by indictment, criminal complaint or similar charging instrument,  arraigned, or custodially detained in connection with any Anti-Terrorism Law or any predicate  crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to the effect that it is  reasonably likely that any aspect of its operations is in actual or probable violation of any  Anti-Terrorism Law. “Reportable Event” means any reportable event as defined in Section 4043(c) of ERISA or  

 

-23- the regulations issued thereunder with respect to a Pension Plan (other than a Pension Plan  maintained by an ERISA Affiliate which is considered an ERISA Affiliate only pursuant to  subsection (m) or (o) of Section 414 of the Code). “Representatives” has the meaning set forth in Section 14.06(c). “Required Capital Amount” means $6,000,000. “Restricted Payments” has the meaning set forth in Section 8.01(s). “S&P” means Standard & Poor’s Rating Services, a Standard & Poor’s Financial Services  LLC business, and any successor thereto that is a nationally recognized statistical rating  organization. “Sanctioned Country” means a country subject to a sanctions program identified on the list  maintained by OFAC and available at: http://www.treasury.gov/resource center/sanctions/  Programs/Pages/Programs.aspx, or as otherwise published from time to time. “Sanctioned Person” means (i) A person named on the list of “Specially Designated  Nationals” or “Blocked Persons” maintained by OFAC available at: http://www.treasury.gov/  resource center/sanctions/SDN List/Pages/default.aspx, or as otherwise published from time to  time, (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, or (iii) any individual person, group, regime, entity or  thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred  person, group, regime, entity or thing, or subject to any limitations or prohibitions (including but  not limited to the blocking of property or rejection of transactions), under any Anti-Terrorism  Law. “Scheduled Termination Date” means June 3029, 20222023. “SEC” means the U.S. Securities and Exchange Commission or any governmental  agencies substituted therefor. “Secured Parties” means each Credit Party, each Borrower Indemnified Party and each  Affected Person. “Securities Act” means the Securities Act of 1933, as amended or otherwise modified from  time to time. “Servicer” has the meaning set forth in the preamble to this Agreement. “Servicer Indemnified Amount” has the meaning set forth in Section 13.02(a). “Servicer Indemnified Party” has the meaning set forth in Section 13.02(a). “Servicing Fee” means the fee referred to in Section 9.06(a) of this Agreement. 

 

-24- “Servicing Fee Rate” means the rate referred to in Section 9.06(a) of this Agreement. “Settlement Date” means (i) prior to an Event of Default that is continuing or the  occurrence of the Termination Date, the Monthly Settlement Date and (ii) during the occurrence  and continuance of an Event of Default or on and after the Termination Date, each day selected  from time to time by the Administrative Agent (with the consent or at the direction of the LC  Bank) (it being understood that the Administrative Agent (with the consent or at the direction of  the LC Bank) may select such Settlement Date to occur as frequently as daily), or, in the absence of  such selection, the Monthly Settlement Date. “Settlement Period” means: (a) before the Termination Date: (i) initially the period  commencing on the Closing Date and ending on (but not including) the next Monthly Settlement  Date and (ii) thereafter, each period commencing on such Monthly Settlement Date and ending on  (but not including) the next Monthly Settlement Date and (b) on and after the Termination Date,  such period (including a period of one day) as shall be selected from time to time by the  Administrative Agent (with the consent or at the direction of the LC Bank) or, in the absence of  any such selection, each period of thirty (30) days from the last day of the preceding Settlement  Period. “Six-Month Average Days’ Sales Outstanding” means, for any Fiscal Month, an amount  computed as of the last day of such Fiscal Month equal to:  (a) the average of the aggregate  Outstanding Balance of all Pool Receivables (other than Unbilled Receivables) as of the last day of  each of the six most recent Fiscal Months ended on the last day of such Fiscal Month, divided by  (b) an amount equal to (i) the aggregate initial Outstanding Balance of all Pool Receivables (other  than Unbilled Receivables) originated by the Originators during the six most recent Fiscal Months  ended on the last day of such Fiscal Month, divided by (ii) 180.  “SOFR” means, for any day, a rate equal to the secured overnight financing rate as  administered by the Federal Reserve Bank of New York (or a successor administrator of the  secured overnight financing rate). “SOFR Adjustment” means an interest rate per annum equal to ten basis points (0.10%). “SOFR Floor” means a rate of interest per annum equal to 0 basis points (0.00%). “SOFR Reserve Percentage” means, for any day, the maximum effective percentage in  effect on such day, if any, as prescribed by the Board of Governors of the Federal Reserve System  (or any successor) for determining the reserve requirements (including, without limitation,  supplemental, marginal and emergency reserve requirements) with respect to SOFR funding. “Solvent” means, with respect to any Person and as of any particular date, (i) the present  fair market value (or present fair saleable value) of the assets of such Person is not less than the  total amount required to pay the probable liabilities of such Person on its total existing debts and  liabilities (including contingent liabilities) as they become absolute and matured, (ii) such Person  is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and  commitments as they mature and become due in the normal course of business, (iii) such Person is  not incurring debts or liabilities beyond its ability to pay such debts and liabilities as they mature  and (iv) such Person is not engaged in any business or transaction, and is not about to engage in  

 

-25- any business or transaction, for which its property would constitute unreasonably small capital  after giving due consideration to the prevailing practice in the industry in which such Person is  engaged. “Specified Obligor” means, from time to time, each Obligor identified on Schedule V, as  such Schedule may be amended, modified or supplemented from time to time with the written  consent of the Borrower and the Administrative Agent. “Specified Obligor Receivable” means a Pool Receivable other than an Eligible Chapter  11 Receivable the related Obligor of which is a Specified Obligor. “Structuring Agent” means PNC Capital Markets LLC, a Pennsylvania limited liability  company. “Subordinated Note” has the meaning set forth in the Receivables Purchase Agreement. “Sub-Servicer” has the meaning set forth in Section 9.01(d). “Subsidiary” means, as to any Person, a corporation, partnership, limited liability  company or other entity of which shares of stock of each class or other interests having ordinary  voting power (other than stock or other interests having such power only by reason of the  happening of a contingency) to elect a majority of the Board of Directors or other managers of  such entity are at the time owned, or management of which is otherwise controlled: (a) by such  Person, (b) by one or more Subsidiaries of such Person or (c) by such Person and one or more  Subsidiaries of such Person. “Taxes” means any and all present or future taxes, levies, imposts, duties, deductions,  charges or withholdings imposed by any Governmental Authority and all interest, penalties,  additions to tax and any similar liabilities with respect thereto. “Term SOFR Administrator” means CME Group Benchmark Administration Limited  (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the  Administrative Agent in its reasonable discretion). “Term SOFR Rate” means the interest rate per annum determined by the Administrative  Agent by dividing (the resulting quotient rounded upwards, at the Administrative Agent’s  discretion, to the nearest 1/100th of 1%) (A) the Term SOFR Reference Rate for a one (1) month  period, as such rate is published by the Term SOFR Administrator on the day (the “Term SOFR  Determination Date”) that is two (2) Business Days prior to the first day of such one month period  of determination, by (B) a number equal to 1.00 minus the SOFR Reserve Percentage.  If the Term  SOFR Reference Rate for the applicable tenor has not been published or replaced with a  Benchmark Replacement by 5:00 p.m. (New York City time) on the Term SOFR Determination  Date, then the Term SOFR Reference Rate, for purposes of clause (A) in the preceding sentence,  shall be the Term SOFR Reference Rate for such tenor on the first Business Day preceding such  Term SOFR Determination Date for which such Term SOFR Reference Rate for such tenor was  published in accordance herewith, so long as such first preceding Business Day is not more than  three (3) Business Days prior to such Term SOFR Determination Date.  If the Term SOFR Rate,  determined as provided above, would be less than the SOFR Floor, then the Term SOFR Rate shall  

 

-26- be deemed to be the SOFR Floor.  The Term SOFR Rate shall be adjusted automatically without  notice to the Borrower on and as of the effective date of any change in the SOFR Reserve  Percentage. “Term SOFR Reference Rate” means the forward-looking term rate based on SOFR. “Termination Date” means the earliest to occur of (a) the Scheduled Termination Date, (b)  the date on which the “Termination Date” is declared or deemed to have occurred under Section  10.01 and (c) the date selected by the Borrower on which all Commitments have been reduced to  zero pursuant to Section 3.11. “Total Adjusted Usage” means, at any time of determination, the sum of (x) the  Outstanding Reimbursement Obligations plus (y) the Adjusted LC Amount at such time. “Total Reserves” means, at any time of determination, the product of (a) the sum of (i) the  Yield Reserve Percentage, plus (ii) the greater of (x) the sum of the Concentration Reserve  Percentage plus the Minimum Dilution Reserve Percentage and (y) the sum of the Dilution  Reserve Percentage plus the Loss Reserve Percentage, multiplied by (b) the Net Receivables Pool  Balance on such day. “Total Usage” means, at any time of determination, the sum of (x) the Outstanding  Reimbursement Obligations plus (y) the LC Amount at such time. “Transaction Documents” means this Agreement, the Receivables Purchase Agreement  and each Joinder Agreement thereto, the Account Control Agreements, the Fee Letter, each  Subordinated Note, the Performance Guaranty, the Letter of Credit Applications and all other  certificates, instruments, UCC financing statements, reports, notices, agreements and documents  executed or delivered under or in connection with this Agreement, in each case as the same may be  amended, supplemented or otherwise modified from time to time in accordance with this  Agreement. “UCC” means the Uniform Commercial Code as from time to time in effect in the  applicable jurisdiction. “Unbilled Receivable” means, at any time, any Receivable as to which the invoice or bill  with respect thereto has not yet been sent to the Obligor thereof. “Unmatured Event of Default” means an event that but for notice or lapse of time or both  would constitute an Event of Default. “U.S. Government Securities Business Day” means any day except for (a) a Saturday or  Sunday or (b) a day on which the Securities Industry and Financial Markets Association  recommends that the fixed income departments of its members be closed for the entire day for  purposes of trading in United States government securities. “U.S. Obligor” means an Obligor that is a corporation or other business organization and  is organized under the laws of the United States of America (or of a United States of America  territory, district, state, commonwealth, or possession, including, without limitation, Puerto Rico  

 

-27- and the U.S. Virgin Islands) or any political subdivision thereof. “U.S. Tax Compliance Certificate” has the meaning set forth in Section 5.03(f)(ii)(B)(3). “Voting Power” shall mean, with respect to any Person, the exclusive ability to control,  through the ownership of shares of capital stock, partnership interests, membership interests or  otherwise, the election of members of the board of directors or other similar governing body of  such Person, and the holding of a designated percentage of Voting Power of a Person means the  ownership of shares of capital stock, partnership interests, membership interests or other interests  of such Person sufficient to control exclusively the election of that percentage of the members of  the board of directors or similar governing body of such Person. “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or  partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E  of Title IV of ERISA. “Yield Reserve Percentage” means, at any time of determination: 1.50 x DSO x (BR + SFR) 360 where: BR = the Base Rate at such time; DSO = the Days’ Sales Outstanding for the most recently ended Fiscal  Month; and SFR = the Servicing Fee Rate. Section 1.02. Other Interpretative Matters.  All accounting terms 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 not specifically defined herein, are used herein as defined in such Article 9.   Unless otherwise expressly indicated, all references herein to “Article,” “Section,” “Schedule,”  “Exhibit” or “Annex” shall mean articles and sections of, and schedules, exhibits and annexes to,  this Agreement.  For purposes of this Agreement, the other Transaction Documents and all such  certificates and other documents, unless the context otherwise requires: (a) references to any  amount as on deposit or outstanding on any particular date means such amount at the close of  business on such day; (b) the words “hereof,” “herein” and “hereunder” and words of similar  import refer to such agreement (or the certificate or other document in which they are used) as a  whole and not to any particular provision of such agreement (or such certificate or document); (c)  references to any Section, Schedule or Exhibit are references to Sections, Schedules and Exhibits  in or to such agreement (or the certificate or other document in which the reference is made), and  references to any paragraph, subsection, clause or other subdivision within any Section or  definition refer to such paragraph, subsection, clause or other subdivision of such Section or  definition; (d) the term “including” means “including without limitation”; (e) references to any  Applicable Law refer to that Applicable Law as amended from time to time and include any  successor Applicable Law; (f) references to any agreement refer to that agreement as from time to  

 

-28- time amended, restated or supplemented or as the terms of such agreement are waived or modified  in accordance with its terms; (g) references to any Person include that Person’s permitted  successors and assigns; (h) headings are for purposes of reference only and shall not otherwise  affect the meaning or interpretation of any provision hereof; (i) unless otherwise provided, in the  calculation of time from a specified date to a later specified date, the term “from” means “from and  including”, and the terms “to” and “until” each means “to but excluding”; (j) terms in one gender  include the parallel terms in the neuter and opposite gender; (k) references to any amount as on  deposit or outstanding on any particular date means such amount at the close of business on such  day, and (l) the term “or” is not exclusive. Section 1.03. SOFR Notifications.  Section 5.04(c) of this Agreement provides a  mechanism for determining an alternative rate of interest in the event that the Term SOFR Rate is  no longer available or in certain other circumstances. The Administrative Agent does not warrant  or accept any responsibility for and shall not have any liability with respect to, the administration,  submission or any other matter related to the Term SOFR Rate or with respect to any alternative or  successor rate thereto, or replacement rate therefor. Section 1.04. Conforming Changes Relating to SOFR.  With respect to the Term SOFR  Rate, the Administrative Agent will have the right to make Conforming Changes from time to time  and, notwithstanding anything to the contrary herein or in any other Transaction Document, any  amendments implementing such Conforming Changes will become effective without any further  action or consent of any other party to this Agreement or any other Transaction Document;  provided that, with respect to any such amendment effected, the Administrative Agent shall  provide notice to the Borrower and the LC Bank of each such amendment implementing such  Conforming Changes reasonably promptly after such amendment becomes effective. ARTICLE II [RESERVED] ARTICLE III LETTER OF CREDIT FACILITY  Section 3.01. Letters of Credit.  (a) Subject to the terms and conditions hereof and the  satisfaction of the applicable conditions set forth in Article VI, the LC Bank shall issue or cause the  issuance of Letters of Credit on behalf of the Borrower (and, if applicable, on behalf of, or for the  account of, an Originator or an Affiliate of such Originator in favor of such beneficiaries as such  Originator or an Affiliate of such Originator may elect with the consent of the Borrower);  provided, however, that the LC Bank will not be required to issue or cause to be issued any Letters  of Credit to the extent that after giving effect thereto:  (i) the Total Usage would exceed the Facility Limit at such time; or (ii) the Total Adjusted Usage would exceed the Borrowing Base at such time. (b) Interest shall accrue on all amounts drawn under Letters of Credit for each day on and  after the applicable Drawing Date so long as such drawn amounts shall have not been reimbursed  

 

-29- to the LC Bank in accordance with Section 3.05(c). Section 3.02. Issuance of Letters of Credit.  (a) The Borrower may request the LC Bank,  upon three (3) Business Days’ prior written notice submitted on or before 1:00 p.m. (New York  City time), to issue a Letter of Credit by delivering to the Administrative Agent and the LC Bank,  the LC Bank’s form of Letter of Credit Application (the “Letter of Credit Application”),  substantially in the form of Exhibit D attached hereto and an LC Request, in each case completed  to the satisfaction of the Administrative Agent and the LC Bank; and such other certificates,  documents and other papers and information as the Administrative Agent or the LC Bank may  reasonably request.  The LC Bank agrees to issue amendments to the Letters of Credit increasing  the amount, or extending the expiration date, thereof at the request of the Borrower subject to the  conditions of Section 6.02 and the other terms of this Article III. (b) Each Letter of Credit shall, among other things, (i) provide for the payment of sight  drafts or other written demands for payment when presented for honor thereunder in accordance  with the terms thereof and when accompanied by the documents described therein and (ii) have an  expiry date not later than twelve (12) months after such Letter of Credit’s date of issuance,  extension or renewal, as the case may be, and in no event later than twelve (12) months after the  Scheduled Termination Date.  The terms of each Letter of Credit may include customary  “evergreen” provisions providing that such Letter of Credit’s expiry date shall automatically be  extended for additional periods not to exceed twelve (12) months unless, not less than thirty (30)  days (or such longer period as may be specified in such Letter of Credit) (the “Notice Date”) prior  to the applicable expiry date, the LC Bank delivers written notice to the beneficiary thereof  declining such extension; provided, however, that if (x) any such extension would cause the expiry  date of such Letter of Credit to occur after the date that is twelve (12) months after the Scheduled  Termination Date or (y) the LC Bank determines that any condition precedent (including, without  limitation, those set forth in Sections 3.01 and Article VI) to issuing such Letter of Credit  hereunder are not satisfied (other than any such condition requiring the Borrower to submit an LC  Request or Letter of Credit Application in respect thereof), then the LC Bank, in the case of clause  (x) above, may or, in the case of clause (y) above, shall, use reasonable efforts in accordance with  (and to the extent permitted by) the terms of such Letter of Credit to prevent the extension of such  expiry date (including notifying the Borrower and the beneficiary of such Letter of Credit in  writing prior to the Notice Date that such expiry date will not be so extended).  Each Letter of  Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits (2007  Revision), International Chamber of Commerce Publication No. 600, and any amendments or  revisions thereof adhered to by the LC Bank or the International Standby Practices  (ISP98-International Chamber of Commerce Publication Number 590), and any amendments or  revisions thereof adhered to by the LC Bank, as determined by the LC Bank. Section 3.03. Requirements For Issuance of Letters of Credit.  The Borrower shall  authorize and direct the LC Bank to name the Borrower, an Originator or an Affiliate of an  Originator as the “Applicant” or “Account Party” of each Letter of Credit. Section 3.04. Disbursements, Reimbursement.  (a)  In the event of any request for a  drawing under a Letter of Credit by the beneficiary or transferee thereof, the LC Bank will  promptly notify the Administrative Agent and the Borrower of such request.  The Borrower shall  reimburse (such obligation to reimburse the LC Bank shall sometimes be referred to as a  

 

-30- “Reimbursement Obligation”) the LC Bank prior to noon (New York City time), on each date that  an amount is paid by the LC Bank under any Letter of Credit (each such date, a “Drawing Date”)  in an amount equal to the amount so paid by the LC Bank if the Borrower shall have received  notice of such payment prior to 10:00 a.m. (New York City time), on such date, or, if such notice  has not been received by the Borrower prior to such time on such date, then not later than noon  (New York City time), on the Business Day immediately following the day that the Borrower  receives such notice, provided that failure to receive any such notice shall not affect the Borrower's  obligation to honor its Reimbursement Obligation on a timely basis and pay any interest that  accrues upon failure to do so.  The Borrower shall honor its Reimbursement Obligation first, from  funds on deposit in the LC Collateral Account, if any, and, second, from its own funds.  Any notice  given by the LC Bank pursuant to this Section may be oral if promptly confirmed in writing;  provided that the lack of such a prompt written confirmation shall not affect the conclusiveness or  binding effect of such oral notice. (b) If any Letters of Credit are outstanding and undrawn on the Termination  Date, without limiting any rights or remedies contained in Section 10.01 or any other Transaction  Document, the LC Collateral Account shall be funded from Collections (or, in the Borrower’s sole  discretion, by other funds available to the Borrower) in an amount equal to the aggregate undrawn  face amount of such Letters of Credit plus all related fees to accrue through the stated expiration  dates thereof (such fees to accrue, as reasonably estimated by the LC Bank, the “LC Fee  Expectation”). Section 3.05. Maturity Date; Interest and Fees; Reimbursement Obligations.  (a)  On the  Maturity Date, the Total Usage shall be zero ($0) and all outstanding Borrower Obligations shall  be paid in full. (b)   On each Settlement Date, the Borrower shall, in accordance with the terms and  priorities for payment set forth in Section 4.01, pay to the LC Bank, the Structuring Agent and the  Administrative Agent certain fees (collectively, the “Fees”) in the amounts set forth in the fee  letter agreements from time to time entered into, among the Borrower, the LC Bank and/or the  Administrative Agent and the Structuring Agent (each such fee letter agreement, as amended,  restated, supplemented or otherwise modified from time to time, collectively being referred to  herein as the “Fee Letter”). (c) Each outstanding Reimbursement Obligation shall accrue interest on each day when  such Reimbursement Obligation remains outstanding at the Interest Rate then applicable thereto.   The Borrower shall pay all Interest and Fees accrued during each Settlement Period on the  immediately following Settlement Date in accordance with the terms and priorities for payment set  forth in Section 4.01. (d) The LC Bank shall record in its records, the date and amount of each Reimbursement  Obligation hereunder, the interest rate with respect thereto, the Interest accrued thereon and each  payment thereof.  Subject to Section 14.03(b), such records shall be conclusive and binding absent  manifest error.  The failure to so record any such information or any error in so recording any such  information shall not, however, limit or otherwise affect the obligations of the Borrower hereunder  or under the other Transaction Documents to repay the Reimbursement Obligations, together with  all Interest accruing thereon and all other Borrower Obligations. 

 

-31- Section 3.06. Documentation.  The Borrower agrees to be bound by the terms of the Letter  of Credit Application and by the LC Bank’s interpretations of any Letter of Credit issued for the  Borrower and by the LC Bank’s written regulations and customary practices relating to letters of  credit, though the LC Bank’s interpretation of such regulations and practices may be different from  the Borrower’s own.  In the event of a conflict between the Letter of Credit Application and this  Agreement, this Agreement shall govern.  The LC Bank shall not be liable for any error,  negligence and/or mistakes, whether of omission or commission, in following the Borrower’s  instructions or those contained in the Letters of Credit or any modifications, amendments or  supplements thereto. Section 3.07. Determination to Honor Drawing Request.  In determining whether to honor  any request for drawing under any Letter of Credit by the beneficiary thereof, the LC Bank shall be  responsible only to determine that the documents and certificates required to be delivered under  such Letter of Credit have been delivered and that they comply on their face with the requirements  of such Letter of Credit and that any other drawing condition appearing on the face of such Letter  of Credit has been satisfied in the manner so set forth. Section 3.08. Nature of Reimbursement Obligations.  The obligations of the Borrower to  reimburse the LC Bank upon a draw under a Letter of Credit, shall be absolute, unconditional and  irrevocable, and shall be performed strictly in accordance with the terms of this Agreement and  under all circumstances, including the following circumstances: (i) any set-off, counterclaim, recoupment, defense or other right which the  Borrower may have against any Credit Party, the Servicer, an Originator, the Performance  Guarantor or any other Person for any reason whatsoever; (ii) the failure of the Borrower or any other Person to comply with the  conditions set forth in this Agreement for requests for Letters of Credit or otherwise; (iii) any lack of validity or enforceability of any Letter of Credit or any set-off,  counterclaim, recoupment, defense or other right which the Borrower, the Performance  Guarantor, the Servicer, an Originator or any Affiliate thereof on behalf of which a Letter  of Credit has been issued may have against any Credit Party or any other Person for any  reason whatsoever; (iv) any claim of breach of warranty that might be made by the Borrower, an  Originator, the Servicer or any Affiliate thereof, or the LC Bank against the beneficiary of  a Letter of Credit, or the existence of any claim, set-off, defense or other right which the  Borrower or the LC Bank may have at any time against a beneficiary, any successor  beneficiary or any transferee of any Letter of Credit or the proceeds thereof (or any Persons  for whom any such transferee may be acting), the LC Bank or any other Person, whether in  connection with this Agreement, the transactions contemplated herein or any unrelated  transaction (including any underlying transaction between the Borrower or any Affiliates  of the Borrower and the beneficiary for which any Letter of Credit was procured); (v) the lack of power or authority of any signer of, or lack of validity,  sufficiency, accuracy, enforceability or genuineness of, any draft, demand, instrument,  

 

-32- certificate or other document presented under any Letter of Credit, or any such draft,  demand, instrument, certificate or other document proving to be forged, fraudulent,  invalid, defective or insufficient in any respect or any statement therein being untrue or  inaccurate in any respect, even if the Administrative Agent or the LC Bank has been  notified thereof; (vi) payment by the LC Bank under any Letter of Credit against presentation of  a demand, draft or certificate or other document which does not comply with the terms of  such Letter of Credit; (vii) the solvency of, or any acts or omissions by, any beneficiary of any Letter  of Credit, or any other Person having a role in any transaction or obligation relating to a  Letter of Credit, or the existence, nature, quality, quantity, condition, value or other  characteristic of any property or services relating to a Letter of Credit; (viii) any failure by the LC Bank or any of the LC Bank’s Affiliates to issue any  Letter of Credit in the form requested by the Borrower; (ix) any Material Adverse Effect; (x) any breach of this Agreement or any other Transaction Document by any  party thereto; (xi) the occurrence or continuance of an Insolvency Proceeding with respect to  the Borrower, the Performance Guarantor, any Originator or any Affiliate thereof; (xii) the fact that an Event of Default or an Unmatured Event of Default shall  have occurred and be continuing; (xiii) the fact that this Agreement or the obligations of the Borrower or the  Servicer hereunder shall have been terminated; and (xiv) any other circumstance or happening whatsoever, whether or not similar to  any of the foregoing. Section 3.09. Indemnity.  In addition to other amounts payable hereunder, the Borrower  hereby agrees to protect, indemnify, pay and save harmless the Administrative Agent, the LC  Bank, each other Credit Party and each of the LC Bank’s Affiliates that have issued a Letter of  Credit from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest,  judgments, losses, costs, charges and expenses (including Attorney Costs) which any Credit Party  or any of their respective Affiliates may incur or be subject to as a consequence, direct or indirect,  of the issuance of any Letter of Credit, except to the extent resulting from (a) the gross negligence  or willful misconduct of the party to be indemnified as determined by a final non-appealable  judgment of a court of competent jurisdiction or (b) the wrongful dishonor by the LC Bank of a  proper demand for payment made under any Letter of Credit, except if such dishonor resulted from  any act or omission, whether rightful or wrongful, of any present or future de jure or de facto  Governmental Authority (all such acts or omissions herein called “Governmental Acts”).  

 

-33- Section 3.10. Liability for Acts and Omissions.  As between the Borrower, on the one hand,  and the Credit Parties, on the other, the Borrower assumes all risks of the acts and omissions of, or  misuse of any Letter of Credit by, the respective beneficiaries of such Letter of Credit.  In  furtherance and not in limitation of the foregoing, no Credit Party shall be responsible for: (i) the  form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by  any party in connection with the application for an issuance of any such Letter of Credit, even if it  should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or  forged (even if any Credit Party shall have been notified thereof); (ii) the validity or sufficiency of  any instrument transferring or assigning or purporting to transfer or assign any such Letter of  Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may  prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such  Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply  fully with any conditions required in order to draw upon such Letter of Credit or any other claim of  the Borrower against any beneficiary of such Letter of Credit, or any such transferee, or any  dispute between or among the Borrower and any beneficiary of any Letter of Credit or any such  transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any  messages, by mail, electronic mail, cable, telegraph, telex, facsimile or otherwise, whether or not  they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the  transmission or otherwise of any document required in order to make a drawing under any such  Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such  Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any  consequences arising from causes beyond the control of the Credit Parties, including any  Governmental Acts, and none of the above shall affect or impair, or prevent the vesting of, any of  the LC Bank’s rights or powers hereunder.  In no event shall the Credit Parties or their respective  Affiliates, be liable to the Borrower or any other Person for any indirect, consequential, incidental,  punitive, exemplary or special damages or expenses (including without limitation Attorney Costs),  or for any damages resulting from any change in the value of any property relating to a Letter of  Credit. Without limiting the generality of the foregoing, the Credit Parties and each of their  respective Affiliates (i) may rely on any written communication believed in good faith by such  Person to have been authorized or given by or on behalf of the applicant for a Letter of Credit; (ii)  may honor any presentation if the documents presented appear on their face to comply with the  terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored  presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to settle  or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to  reimbursement to the same extent as if such presentation had initially been honored, together with  any interest paid by the LC Bank or its Affiliates; (iv) may honor any drawing that is payable upon  presentation of a statement advising negotiation or payment, upon receipt of such statement (even  if such statement indicates that a draft or other document is being delivered separately), and shall  not be liable for any failure of any such draft or other document to arrive, or to conform in any way  with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it  rightfully honored under the laws or practices of the place where such bank is located; and (vi)  may settle or adjust any claim or demand made on the Credit Parties or their respective Affiliates,  in any way related to any order issued at the applicant’s request to an air carrier, a letter of  guarantee or of indemnity issued to a carrier or any similar document (each, an “Order”) and may  honor any drawing in connection with any Letter of Credit that is the subject of such Order,  

 

-34- notwithstanding that any drafts or other documents presented in connection with such Letter of  Credit fail to conform in any way with such Letter of Credit. In furtherance and extension and not in limitation of the specific provisions set forth above,  any action taken or omitted by the LC Bank under or in connection with any Letter of Credit issued  by it or any documents and certificates delivered thereunder, if taken or omitted in good faith and  without gross negligence or willful misconduct, as determined by a final non-appealable judgment  of a court of competent jurisdiction, shall not put the LC Bank under any resulting liability to the  Borrower, any Credit Party or any other Person. Section 3.11. Changes in Facility Limit.  (a) The Borrower may, on any Business Day prior  to the Termination Date, request an increase to the Facility Limit by delivering to the  Administrative Agent a request substantially in the form attached as Exhibit I hereto (each, an  “Aggregate Facility Limit Increase Request”) or in such other form as may be acceptable to the  Administrative Agent at least ten (10) Business Days prior to the desired effective date of such  increase (the “Aggregate Facility Limit Increase”); provided, however, that (i) any increase of the  Facility Limit will require the consent and approval of the Administrative Agent and the LC Bank  in their respective sole discretion, (ii) any incremental increase of the Facility Limit shall be in an  amount not less than $1,000,000 and shall be in an integral multiple of $100,000 in excess thereof,  (iii) no Unmatured Event of Default or Event of Default shall have occurred and be continuing at  the time of the request or the effective date of the Aggregate Facility Limit Increase, and (iv) all  conditions precedent to the making of any Credit Extension contained in Section 6.02 hereof shall  be satisfied immediately after giving effect to such Aggregate Facility Limit Increase.  The  effective date of an Aggregate Facility Limit Increase shall be agreed upon by the Borrower, the  Administrative Agent and the LC Bank in the Aggregate Facility Limit Increase Request.  The  Borrower agrees to pay any reasonable expenses incurred by the Administrative Agent and the LC  Bank relating to any Aggregate Facility Limit Increase.  Notwithstanding anything herein to the  contrary, the LC Bank shall not have any obligation to increase its Commitment and the LC  Bank’s Commitment shall not be increased without its consent thereto, and the LC Bank may at its  option, unconditionally and without cause, decline to increase its Commitment. (b) In connection with any reduction of the Facility Limit, the Borrower shall  remit to the Administrative Agent (i) instructions regarding such reduction, (ii) for payment to the  LC Bank, cash in an amount sufficient to pay (x) any outstanding Reimbursement Obligations and  (y) all other outstanding Borrower Obligations with respect to such reduction (determined based  on the ratio of the reduction of the Facility Limit being effected to the amount of the Facility Limit  prior to such reduction or, if the Administrative Agent reasonably determines that any portion of  the outstanding Borrower Obligations is allocable solely to that portion of the Facility Limit being  reduced or has arisen solely as a result of such reduction, all of such portion).  Upon receipt of any  such amounts, the Administrative Agent shall apply such amounts first, to the outstanding  Reimbursement Obligations, and second, to the payment of the remaining outstanding Borrower  Obligations with respect to such reduction by paying such amounts to the Credit Party entitled  thereto. Section 3.12. LIBOR Notification .  Section 5.06 of this Agreement provides a mechanism  for determining an alternative rate of interest in the event that the London interbank offered rate is  no longer available or in certain other circumstances. The Administrative Agent does not warrant  

 

-35- or accept any responsibility for and shall not have any liability with respect to, the administration,  submission or any other matter related to the London interbank offered rate or other rates in the  definition of "LMIR" or with respect to any alternative or successor rate thereto, or replacement  rate therefor. ARTICLE IV SETTLEMENT PROCEDURES AND PAYMENT PROVISIONS Section 4.01. Settlement Procedures.  (a) The Servicer shall set aside and hold in trust for  the benefit of the Secured Parties (or, if so requested by the Administrative Agent, segregate in a  separate account in the name of the Borrower and approved by the Administrative Agent), for  application in accordance with the priority of payments set forth below, all Collections on Pool  Receivables that are received by the Servicer or the Borrower or received in any Lock-Box or  Collection Account; provided, however, that so long as each of the conditions precedent set forth  in Section 6.03 are satisfied, the Servicer may release to the Borrower from such Collections the  amount (if any) necessary to pay the purchase price for Receivables purchased by the Borrower  (including by payments on the Subordinated Notes) in accordance with the terms of the  Receivables Purchase Agreement (each such release, a “Reinvestment”).  On each Settlement  Date, the Servicer (or, following its assumption of control of the Collection Accounts, the  Administrative Agent) shall, distribute such Collections in the following order of priority: (i) first, to the Servicer for the payment of the accrued Servicing Fees payable  for the immediately preceding Settlement Period (plus, if applicable, the amount of  Servicing Fees payable for any prior Settlement Period to the extent such amount has not  been distributed to the Servicer); (ii) second, to each Credit Party (ratably, based on the amount then due and  owing), all accrued and unpaid Interest and Fees due to such Credit Party for the  immediately preceding Settlement Period (including any additional amounts or  indemnified amounts payable under Section 5.03 and Section 13.01 in respect of such  payments), plus, if applicable, the amount of any such Interest and Fees (including any  additional amounts or indemnified amounts payable under Section 5.03 and Section 13.01  in respect of such payments) payable for any prior Settlement Period to the extent such  amount has not been distributed to such Credit Party; (iii) third, as set forth in clause (x) or (y) below, as applicable: (x) prior to the occurrence of the Termination Date: (i) first, to the LC  Bank for the payment in full of the aggregate outstanding Reimbursement  Obligations at such time and (ii) second, to the extent that a Borrowing Base Deficit  exists on such date, to the LC Collateral Account, in reduction of the Adjusted LC  Amount, in an amount equal to the amount necessary (after giving effect to clause  (i) above) to reduce the Borrowing Base Deficit to zero ($0); or (y) on and after the occurrence of the Termination Date: (i) first, to the  LC Bank for the payment in full of the aggregate outstanding Reimbursement  Obligations at such time, and (ii) second to the LC Collateral Account (a) the  

 

-36- amount necessary to reduce the Adjusted LC Amount to zero ($0) and (b) an  amount equal to the LC Fee Expectation at such time;  (iv) fourth, to the Credit Parties, the Affected Persons and the Borrower  Indemnified Parties (ratably, based on the amount due and owing at such time), for the  payment of all other Borrower Obligations then due and owing by the Borrower to the  Credit Parties, the Affected Persons and the Borrower Indemnified Parties; and (v) fifth, the balance, if any, to be paid to the Borrower for its own account. (b) All payments or distributions to be made by the Servicer, the Borrower and any other  Person to the LC Bank or its related Affected Persons and the Borrower Indemnified Parties  hereunder shall be paid or distributed to the Administrative Agent’s Account.  The Administrative  Agent, upon its receipt in the Administrative Agent’s Account of any such payments or  distributions, shall distribute such amounts to the LC Bank, Affected Persons and the Borrower  Indemnified Parties ratably; provided that if the Administrative Agent shall have received  insufficient funds to pay all of the above amounts in full on any such date, the Administrative  Agent shall pay such amounts to the LC Bank, Affected Persons and the Borrower Indemnified  Parties in accordance with the priority of payments forth above, and with respect to any such  category above for which there are insufficient funds to pay all amounts owing on such date,  ratably (based on the amounts in such categories owing to each such Person) among all such  Persons entitled to payment thereof. (c) If and to the extent any Credit Party, any Affected Person or any Borrower  Indemnified Party shall be required for any reason to pay over to any Person (other than to any  Person that is a party hereto as contemplated by this Agreement) any amount received on its behalf  hereunder, such amount shall be deemed not to have been so received but rather to have been  retained by the Borrower and, accordingly, such Credit Party, such Affected Person or such  Borrower Indemnified Party, as the case may be, shall have a claim against the Borrower for such  amount. (d) For the purposes of this Section 4.01: (i) if on any day the Outstanding Balance of any Pool Receivable is reduced or  adjusted as a result of any defective, rejected, returned, repossessed or foreclosed goods or  services, or any revision, cancellation, allowance, rebate, credit memo, discount or other  adjustment made by the Borrower, any Originator, the Servicer or any Affiliate of the  Servicer, or any setoff, counterclaim or dispute between or among the Borrower or any  Affiliate of the Borrower, an Originator or any Affiliate of an Originator, or the Servicer or  any Affiliate of the Servicer, and an Obligor, the Borrower shall be deemed to have  received on such day a Collection of such Pool Receivable in the amount of such reduction  or adjustment and shall immediately pay any and all such amounts in respect thereof to a  Collection Account (or as otherwise directed by the Administrative Agent at such time) for  the benefit of the Credit Parties for application pursuant to Section 4.01(a); (ii) if on any day any of the representations or warranties in Section 7.01 is not  true with respect to any Pool Receivable, the Borrower shall be deemed to have received on  

 

-37- such day a Collection of such Pool Receivable in full and shall immediately pay the  amount of such deemed Collection to a Collection Account (or as otherwise directed by the  Administrative Agent at such time) for the benefit of the Credit Parties for application  pursuant to Section 4.01(a) (Collections deemed to have been received pursuant to Section  4.01(d) are hereinafter sometimes referred to as “Deemed Collections”); (iii) except as provided in clauses (i) or (ii) above or otherwise required by  Applicable Law or the relevant Contract, all Collections received from an Obligor of any  Receivable shall be applied to the Receivables of such Obligor in the order of the age of  such Receivables, starting with the oldest such Receivable, unless such Obligor designates  in writing its payment for application to specific Receivables; and (iv) if and to the extent the Administrative Agent, any Credit Party, any  Affected Person or any Borrower Indemnified Party shall be required for any reason to pay  over to an Obligor (or any trustee, receiver, custodian or similar official in any Insolvency  Proceeding) any amount received by it hereunder, such amount shall be deemed not to have  been so received by such Person but rather to have been retained by the Borrower and,  accordingly, such Person shall have a claim against the Borrower for such amount, payable  when and to the extent that any distribution from or on behalf of such Obligor is made in  respect thereof. Section 4.02. Payments and Computations, Etc.  (a) All amounts to be paid by the  Borrower or the Servicer to the Administrative Agent, any Credit Party, any Affected Person or  any Borrower Indemnified Party hereunder shall be paid no later than 12:00 Noon (New York City  time) on the day when due in same day funds to the Administrative Agent’s Account. (b) Each of the Borrower and the Servicer shall, to the extent permitted by Applicable  Law, pay interest on any amount not paid or deposited by it when due hereunder, at an interest rate  per annum equal to 2.00% per annum above the Base Rate, payable on demand. (c) All computations of interest under subsection (b) above and all computations of  Interest, Fees and other amounts hereunder shall be made on the basis of a year of 360 days (or, in  the case of amounts determined by reference to the Base Rate, 365 or 366 days, as applicable) for  the actual number of days (including the first but excluding the last day) elapsed.  Whenever any  payment or deposit to be made hereunder shall be due on a day other than a Business Day, such  payment or deposit shall be made on the next succeeding Business Day and such extension of time  shall be included in the computation of such payment or deposit. ARTICLE V INCREASED COSTS; FUNDING LOSSES; TAXES; ILLEGALITY AND SECURITY INTEREST Section 5.01. Increased Costs. (a) Increased Costs Generally.  If any Change in Law shall: (i) impose, modify or deem applicable any reserve, special deposit, liquidity,  compulsory loan, insurance charge or similar requirement against assets of, deposits with  

 

-38- or for the account of, or credit extended or participated in by, any Affected Person (except  any such reserve requirements reflected in Adjusted LIBOR or LMIRthe Term SOFR  Rate); (ii) subject any Affected Person to any Taxes (except to the extent such Taxes  are Indemnified Taxes for which relief is sought under Section 5.03 or are Excluded Taxes)  on its loans, loan principal, letters of credit, commitments or other obligations, or its  deposits, reserves, other liabilities or capital attributable thereto; or (iii) impose on any Affected Person any other condition, cost or expense (other  than Taxes) (A) affecting the Collateral, this Agreement, any other Transaction Document,  the Reimbursement Obligations or any Letter of Credit or (B) affecting its obligations or  rights to issue or participate in Letters of Credit; and the result of any of the foregoing shall be to increase the cost to such Affected Person of (A)  acting as the Administrative Agent or a Credit Party hereunder, (B) funding or maintaining any  Reimbursement Obligations or issuing or participating in, any Letter of Credit (or interests therein)  or (C) issuing or participating in, any Letter of Credit or maintaining its obligation to do so), or to  reduce the amount of any sum received or receivable by such Affected Person hereunder, then,  upon request of such Affected Person, the Borrower shall pay to such Affected Person such  additional amount or amounts as will compensate such Affected Person for such additional costs  incurred or reduction suffered. (b) Capital and Liquidity Requirements.  If any Affected Person determines that any  Change in Law affecting such Affected Person or any lending office of such Affected Person or  such Affected Person’s holding company, if any, regarding capital or liquidity requirements, has  or would have the effect of (x) increasing the amount of capital required to be maintained by such  Affected Person or Affected Person’s holding company, if any, (y) reducing the rate of return on  such Affected Person’s capital or on the capital of such Affected Person’s holding company, if  any, to a level below that which such Affected Person or such Affected Person’s holding company  could have achieved but for such Change in Law or (z) causing an internal capital or liquidity  charge or other imputed cost to be assessed upon such Affected Person or Affected Person’s  holding company, if any, in each case, as a consequence of (A) this Agreement or any other  Transaction Document, (B) the commitments of such Affected Person hereunder or under any  other Transaction Document, (C) the Letters of Credit, the Letter of Credit Applications or  participations in Letters of Credit, made or issued by such Affected Person or (D) any  Reimbursement Obligations, in each case taking into consideration such Affected Person’s  policies and the policies of such Affected Person’s holding company with respect to capital  adequacy and liquidity, then from time to time, upon request of such Affected Person, the  Borrower will pay to such Affected Person such additional amount or amounts as will compensate  such Affected Person or such Affected Person’s holding company for any such increase in capital,  reduction in rate of return on capital or capital or liquidity charge. (c) Adoption of Changes in Law.  The Borrower acknowledges that any Affected Person  may institute measures in anticipation of a Change in Law that has been adopted but is not yet  effective (including, without limitation, the imposition of internal charges on such Affected  Person’s interests or obligations under any Transaction Document), and may commence allocating  

 

-39- charges to or seeking compensation from the Borrower under this Section 5.01 in connection with  such measures, in advance of the effective date of such Change in Law, and the Borrower agrees to  pay such charges or compensation to such Affected Person, following demand therefor in  accordance with the terms of this Section 5.01, without regard to whether such effective date has  occurred. (d) Certificates for Reimbursement.  A certificate of an Affected Person setting forth the  amount or amounts necessary to compensate such Affected Person or its holding company, as the  case may be, as specified in clause (a), (b) or (c) of this Section and delivered to the Borrower,  shall be conclusive absent manifest error.  The Borrower shall, subject to the priorities of payment  set forth in Section 4.01, pay such Affected Person the amount shown as due on any such  certificate on the first Settlement Date occurring after the Borrower’s receipt of such certificate. (e) Delay in Requests.  Failure or delay on the part of any Affected Person to demand  compensation pursuant to this Section 5.01 shall not constitute a waiver of such Affected Person’s  right to demand such compensation; provided, that the Borrower shall not be required to  compensate an Affected Person pursuant to this Section 5.01 for any increased costs, reductions,  increases or charges incurred more than 180 days prior to the date that such Affected Person  notifies the Borrower of the Change in Law giving rise to such increased costs, reductions,  increases or charges and of such Affected Person’s intention to claim compensation therefor. Section 5.02. Reserved.   Section 5.03. Taxes. (a) Payments Free of Taxes.  Any and all payments by or on account of any obligation of  the Borrower under any Transaction Document shall be made without deduction or withholding  for any Taxes, except as required by Applicable Law.  If any Applicable Law (as determined in the  good faith discretion of the applicable Credit Party, Affected Person or Borrower Indemnified  Party) requires the deduction or withholding of any Tax from any such payment by a Credit Party,  Affected Person or Borrower Indemnified Party, then the applicable Credit Party, Affected Person  or Borrower Indemnified Party shall be entitled to make such deduction or withholding and shall  timely pay the full amount deducted or withheld to the relevant Governmental Authority in  accordance with Applicable Law, and, if such Tax is an Indemnified Tax, then the sum payable by  the Borrower shall be increased as necessary so that after such deduction or withholding has been  made (including such deductions and withholdings applicable to additional sums payable under  this Section 5.03), the applicable Credit Party, Affected Person or Borrower Indemnified Party  receives an amount equal to the sum it would have received had no such deduction or withholding  been made.  (b) Payment of Other Taxes by the Borrower.  The Borrower shall timely pay to the  relevant Governmental Authority in accordance with Applicable Law, or, at the option of the  Administrative Agent, timely reimburse it for the payment of, any Other Taxes. (c) Indemnification by the Borrower.  To the extent not paid, reimbursed or compensated  pursuant to Section 5.03(a), the Borrower shall indemnify each Affected Person, within ten days  after delivery of the certificate referred to in the last sentences of this clause (c), for the full amount  

 

-40- of any (I) Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable  to amounts payable under this Section 5.03) payable or paid by such Affected Person or required to  be withheld or deducted from a payment to such Affected Person and any penalties, interest and  reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified  Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority and  (II) the excess of any Taxes that arise because any Reimbursement Obligation is not treated for  U.S. federal, state, local or franchise tax purposes as intended under Section 5.03(j) over the  amount of Taxes that would have been payable had such Reimbursement Obligation been treated  by such Governmental Authority for U.S. federal, state, local or franchise tax purposes as intended  under Section 5.03(j) (such indemnification will include any U.S. federal, state or local income  and franchise taxes necessary to make such Affected Person whole on an after-tax basis taking into  account the taxability of receipt of payments under this clause (II) and any reasonable expenses  (other than Taxes) arising out of, relating to, or resulting from the foregoing).  Promptly upon  having knowledge that any such Indemnified Taxes have been levied, imposed or assessed, and  promptly upon notice by the Administrative Agent or any Affected Person, to the extent not  previously paid by the Affected Person, the Borrower shall pay such Indemnified Taxes directly to  the relevant taxing authority or Governmental Authority; provided that neither the Administrative  Agent nor any Affected Person shall be under any obligation to provide any such notice to the  Borrower.  A certificate that describes in reasonable detail the basis for the indemnified claim,  along with copies of any receipts, evidence of payment or other correspondence to or from a  Governmental Authority relating to or supporting such indemnified claim shall be delivered to the  Borrower by an Affected Person (with a copy to the Administrative Agent), or by the  Administrative Agent on its own behalf or on behalf of an Affected Person, and shall be conclusive  as to the amounts paid or payable absent manifest error. (d) Indemnification by the LC Bank.  The LC Bank shall severally indemnify the  Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes  attributable to the LC Bank or any of its respective Affiliates that are Affected Persons (but only to  the extent that the Borrower and its Affiliates have not already indemnified the Administrative  Agent for such Indemnified Taxes and without limiting any obligation of the Borrower, the  Servicer or their Affiliates to do so), (ii) any Taxes attributable to the failure of the LC Bank or any  of its respective Affiliates that are Affected Persons to comply with Section 14.03(b) relating to the  maintenance of a Participant Register, and (iii) any Excluded Taxes attributable to the LC Bank or  any of their respective Affiliates that are Affected Persons, in each case, that are payable or paid by  the Administrative Agent in connection with any Transaction Document, 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 the LC Bank by the Administrative Agent shall be  conclusive absent manifest error.  The LC Bank hereby authorizes the Administrative Agent to set  off and apply any and all amounts at any time owing to the LC Bank or any of its respective  Affiliates that are Affected Persons under any Transaction Document or otherwise payable by the  Administrative Agent to the LC Bank or any of its respective Affiliates that are Affected Persons  from any other source against any amount due to the Administrative Agent under this clause (d). (e) Evidence of Payments.  As soon as practicable after any payment of Taxes by the  Borrower to a Governmental Authority pursuant to this Section 5.03, the Borrower shall deliver to  the Administrative Agent the original or a certified copy of a receipt issued by such Governmental  

 

-41- Authority evidencing such payment, a copy of the return reporting such payment or other evidence  of such payment reasonably satisfactory to the Administrative Agent. (f) Status of Affected Persons.  (i) Any Affected Person that is entitled to an exemption  from or reduction of withholding Tax with respect to payments made under any Transaction  Document shall deliver to the Borrower and the Administrative Agent, at the time or times  reasonably requested by the Borrower or the Administrative Agent, such properly completed and  executed documentation reasonably requested by the Borrower or the Administrative Agent as  will permit such payments to be made without withholding or at a reduced rate of withholding.  In  addition, any Affected Person, if reasonably requested by the Borrower or the Administrative  Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably  requested by the Borrower or the Administrative Agent as will enable the Borrower or the  Administrative Agent to determine whether or not such Affected Person is subject to backup  withholding or information reporting requirements.  Notwithstanding anything to the contrary in  the preceding two sentences, the completion, execution and submission of such documentation  (other than such documentation set forth in Sections 5.03(f)(ii)(A), 5.03(f)(ii)(B) and 5.03(g))  shall not be required if, in the Affected Person’s reasonable judgment, such completion, execution  or submission would subject such Affected Person to any material unreimbursed cost or expense  or would materially prejudice the legal or commercial position of such Affected Person. (ii) Without limiting the generality of the foregoing: (A) any Affected Person that is a “United States Person” within the meaning of  Section 7701(a)(30) of the Code, and not an exempt recipient described in Section  6049(b)(4) of the Code, shall deliver to the Borrower and the Administrative Agent on or  prior to the date on which such Affected Person would, contingently or otherwise, become  entitled to payments hereunder, and from time to time upon the reasonable request of the  Borrower or the Administrative Agent, executed originals of Internal Revenue Service  Form W-9 or such other documentation or information prescribed by Applicable Laws or  reasonably requested by the Borrower or the Administrative Agent certifying that such  Affected Person is exempt from U.S. federal withholding Tax (including backup  withholding Tax) along with such other information reasonably requested by the Borrower  or the Administrative Agent as is required to meet their U.S. federal information reporting  requirements; (B) any Affected Person that is organized under the laws of a jurisdiction other  than the United States (including each State thereof and the District of Columbia) (a  “Foreign Affected Person”) that is entitled under the Code or any applicable treaty to an  exemption from or reduction of withholding tax with respect to payments hereunder shall  deliver to the Borrower and the Administrative Agent (in such number of copies as shall be  reasonably requested by the Borrower or the Administrative Agent) on or prior to the date  on which such Foreign Affected Person becomes an Affected Person with respect to this  Agreement (and from time to time thereafter upon the reasonable request of the Borrower  or the Administrative Agent, but only if such Foreign Affected Person is legally entitled to  do so), whichever of the following is applicable: (1) in the case of such a Foreign Affected Person claiming the benefits  

 

-42- of an income tax treaty to which the United States is a party, (x) with respect to  payments of interest under any Transaction Document, executed originals of  Internal Revenue Service Form W-8BEN or Internal Revenue Service Form  W-8BEN-E (or successor form) establishing an exemption from, or reduction of,  U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty  and (y) with respect to any other applicable payments under any Transaction  Document, Internal Revenue Service Form W-8BEN or Internal Revenue Form  W-8BEN-E (or successor form) establishing an exemption from, or reduction of,  U.S. Federal withholding Tax pursuant to the “business profits” or “other income”  article of such tax treaty; (2) in the case of a Foreign Affected Person claiming that its extension  of credit will generate U.S. effectively connected income, executed originals of  Internal Revenue Service Form W-8ECI; (3) in the case of a Foreign Affected Person claiming the benefits of the  exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate  to the effect that such Foreign Affected Person is not a “bank” within the meaning  of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower  within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign  corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax  Compliance Certificate”) and (y) executed originals of Internal Revenue Service  Form W-8BEN or Internal Revenue Service Form W-8BEN-E (or successor form);  or (4) to the extent such Foreign Affected Person is not the beneficial  owner, executed originals of Internal Revenue Service Form W-8IMY,  accompanied by Internal Revenue Service Form W-8ECI, Internal Revenue  Service Form W-8BEN or Internal Revenue Service Form W-8BEN-E (or  successor form), a U.S. Tax Compliance Certificate, Internal Revenue Service  Form W-9, and/or other certification documents from each beneficial owner, as  applicable; provided that, if such Foreign Affected Person is a partnership and one  or more direct or indirect partners of such Foreign Affected Person are claiming the  portfolio interest exemption, such Foreign Affected Person may provide a U.S. Tax  Compliance Certificate on behalf of each such direct and indirect partner; and (C) any Foreign Affected Person, to the extent it is legally entitled to do so,  shall deliver to the Borrower and the Administrative Agent (in such number of copies as  shall be requested by the recipient), on or prior to the date on which such Foreign Affected  Person would, contingently or otherwise, become entitled to payments hereunder, and  from time to time upon the reasonable request of the Borrower or the Administrative  Agent, executed originals of any other form prescribed by Applicable Law as a basis for  claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed,  together with such supplementary documentation as may be prescribed by Applicable Law  to permit the Borrower or the Administrative Agent to determine the withholding or  deduction required to be made.  

 

-43- (g) Documentation Required by FATCA.  If a payment made to an Affected Person under  any Transaction Document would be subject to U.S. federal withholding Tax imposed by FATCA  if such Affected Person 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  Affected Person shall deliver to the Borrower and the Administrative Agent at the time or times  prescribed by Applicable Law and at such time or times reasonably requested by the Borrower or  the Administrative 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 Administrative Agent as may be necessary for the  Borrower and the Administrative Agent to comply with their obligations under FATCA and to  determine that such Affected Person has complied with such Affected Person’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 and any fiscal or regulatory legislation, rules or practices adopted pursuant  to any intergovernmental agreement entered into in connection with FATCA. (h) Survival.  Each party’s obligations under this Section 5.03 shall survive the  resignation or replacement of the Administrative Agent or any assignment of rights by, or the  replacement of, a Credit Party or any other Affected person, the termination of the Commitments  and the repayment, satisfaction or discharge of all the Borrower Obligations and the Servicer’s  obligations hereunder. (i) Updates.  Each Affected Person agrees that if any form or certification it previously  delivered pursuant to this Section 5.03 expires or becomes obsolete or inaccurate in any respect, it  shall update such form or certification or promptly notify the Borrower and the Administrative  Agent in writing of its legal inability to do so. (j) Intended Tax Treatment.  Notwithstanding anything to the contrary herein or in any  other Transaction Document, all parties to this Agreement covenant and agree to treat all  Reimbursement Obligations under this Agreement as debt (and all Interest as interest) for all  federal, state, local and franchise tax purposes and agree not to take any position on any tax return  inconsistent with the foregoing. (k) Treatment of Certain Refunds.  If any party determines, in its sole discretion  exercised in good faith, that it has received a refund of any Taxes as to which it has been  indemnified pursuant to this Section 5.03 (including by the payment of additional amounts  pursuant to this Section 5.03), it shall pay to the indemnifying party an amount equal to such  refund (but only to the extent of indemnity payments made under this Section 5.03 with respect to  the Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses (including  Taxes) of such indemnified party and without interest (other than any interest paid by the relevant  Governmental Authority with respect to such refund).  Such indemnifying party, upon the request  of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to  this paragraph (k) (plus any penalties, interest or other charges imposed by the relevant  Governmental Authority) in the event that such indemnified party is required to repay such refund  to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (k),  in no event will the indemnified party be required to pay any amount to an indemnifying party  pursuant to this paragraph (k) the payment of which would place the indemnified party in a less  

 

-44- favorable net after-Tax position than the indemnified party would have been in if the Tax subject  to indemnification and giving rise to such refund had not been deducted, withheld or otherwise  imposed and the indemnification payments or additional amounts with respect to such Tax had  never been paid.  This paragraph shall not be construed to require any indemnified party to make  available its Tax returns (or any other information relating to its Taxes that it deems confidential)  to the indemnifying party or any other Person. Section 5.04. Inability to Determine Adjusted LIBOR or LMIRTerm SOFR Rate; Change  in Legality .   (a)  If the LC Bank shall have determined (which determination shall be conclusive and  binding upon the parties hereto absent manifest error) on any day, by reason of circumstances  affecting the interbank Eurodollar market, either that:  (i) dollar deposits in the relevant amounts  and for the relevant day, arethe Term SOFR Rate cannot be determined because it is not available  or published on a current basis, (ii) adequate and reasonable means do not exist for ascertaining  Adjusted LIBOR or LMIR for such day, as applicablethe Term SOFR Rate, or (iii) Adjusted  LIBOR or LMIRthe Term SOFR Rate determined pursuant hereto does not accurately reflect the  cost to the LC Bank (as conclusively determined by the LC Bank) of funding or maintaining any  Portion of Reimbursement Obligation during such day, as applicable, the LC Bank shall promptly  give telephonic notice of such determination, confirmed in writing, to the Administrative Agent  and the Borrower on such day.  Upon delivery of such notice: (i) no Portion of Reimbursement  Obligation shall be funded thereafter at Adjusted LIBOR or LMIRthe Term SOFR Rate, and shall  instead be funded at the Base Rate, unless and until the LC Bank shall have given notice to the  Borrower and the Administrative Agent and the Borrower that the circumstances giving rise to  such determination no longer exist and (ii) with respect to any outstanding Portion of  Reimbursement Obligation then funded at Adjusted LIBOR or LMIRthe Term SOFR Rate, the  Interest Rate with respect to such Portion of Reimbursement Obligation shall automatically and  immediately be converted to the Base Rate.  (b) If, onat any day,time the LC Bank shall have been notified by any Affected Person  that such Affected Person has determined (which determination shall be final and conclusive  absent manifest error) that any Change in Law, or compliance by such Affected Person with any  Change in Law, shall make it unlawful or impossible for such Affected Person to fund or  maintainthe funding or maintenance of any Portion of Reimbursement Obligation at or by  reference to the Adjusted LIBOR or LMIRTerm SOFR Rate has been made impracticable or  unlawful by compliance by the LC Bank in good faith with any Applicable Law or any  interpretation or application thereof by any Governmental Authority or with any request or  directive of any such Governmental Authority (whether or not having the force of law), the LC  Bank shall notify the Borrower and the Administrative Agent thereof.  Upon receipt of such notice,  until the LC Bank notifies the Borrower and the Administrative Agent that the circumstances  giving rise to such determination no longer apply, (i) no Portion of Reimbursement Obligation  shall be funded at or by reference to Adjusted LIBOR or LMIR and (ii)thereafter at the Term  SOFR Rate, and shall instead be funded at the Base Rate, unless and until the LC Bank shall have  given notice to the Administrative Agent and the Borrower that the circumstances giving rise to  such determination no longer exist and (ii) with respect to any outstanding Reimbursement  Obligations then funded at the Term SOFR Rate, the Interest Rate for any outstanding Portion  ofwith respect to such Reimbursement Obligation then funded at Adjusted LIBOR or  

 

-45- LMIRObligations shall automatically and immediately be converted to the Base Rate. Section 5.05. Security Interest.  (a) As security for the performance by the Borrower of all  the terms, covenants and agreements on the part of the Borrower to be performed under this  Agreement or any other Transaction Document, including the punctual payment when due of the  Outstanding Reimbursement Obligations and all Interest in respect thereof, and all other Borrower  Obligations, the Borrower hereby grants to the Administrative Agent for its benefit and the ratable  benefit of the Secured Parties, a continuing security interest in, all of the Borrower’s right, title and  interest in, to and under all of the following, whether now or hereafter owned, existing or arising  (collectively, the “Collateral”): (i) all Pool Receivables, (ii) all Related Security with respect to  such Pool Receivables, (iii) all Collections with respect to such Pool Receivables, (iv) the  Lock-Boxes and Collection Accounts and all amounts on deposit therein, and all certificates and  instruments, if any, from time to time evidencing such Lock-Boxes and Collection Accounts and  amounts on deposit therein, (v) the LC Collateral Account and all amounts from time to time on  deposit therein, (vi) all rights (but none of the obligations) of the Borrower under the Receivables  Purchase Agreement, (vii) all other personal and fixture property or assets of the Borrower of  every kind and nature including, without limitation, all goods (including inventory, equipment and  any accessions thereto), instruments (including promissory notes), documents, accounts, chattel  paper (whether tangible or electronic), deposit accounts, securities accounts, securities  entitlements, letter-of-credit rights, commercial tort claims, securities and all other investment  property, supporting obligations, money, any other contract rights or rights to the payment of  money, insurance claims and proceeds, and all general intangibles (including all payment  intangibles) (each as defined in the UCC), and (viii) all proceeds of, and all amounts received or  receivable under any or all of, the foregoing. (b) The Administrative Agent (for the benefit of the Secured Parties) shall have, with  respect to all the Collateral, and in addition to all the other rights and remedies available to the  Administrative Agent (for the benefit of the Secured Parties), all the rights and remedies of a  secured party under any applicable UCC.  The Borrower hereby authorizes the Administrative  Agent to file financing statements describing as the collateral covered thereby “all of the debtor’s  personal property or assets” or words to that effect, notwithstanding that such wording may be  broader in scope than the collateral described in this Agreement. (c) Immediately upon the occurrence of the Final Payout Date, the Collateral shall be  automatically released from the lien created hereby, and this Agreement and all obligations (other  than those expressly stated to survive such termination) of the Credit Parties hereunder shall  terminate, all without delivery of any instrument or performance of any act by any party, and all  rights to the Collateral shall revert to the Borrower; provided, however, that promptly following  written request therefor by the Borrower delivered to the Administrative Agent following any such  termination, and at the sole expense of the Borrower, the Administrative Agent shall execute and  deliver to the Borrower UCC-3 termination statements and such other documents as the Borrower  shall reasonably request to evidence such termination. Section 5.06. Successor LMIR .   (c) (ai) Benchmark Replacement.  Notwithstanding anything to the contrary herein  or in any other Transaction Document, if a Benchmark Transition Event or an Early Opt-in  

 

-46- Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the  Reference Time in respect of any setting of the then-current Benchmark, then (x) if a Benchmark  Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark  Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace  such Benchmark for all purposes hereunder and under any Transaction Document in respect of  such Benchmark setting and subsequent Benchmark settings without any amendment to, or further  action or consent of any other party to, this Agreement or any other Transaction Document and (y)  if a Benchmark Replacement is determined in accordance with clause (3) of the definition of  “Benchmark Replacement” for such Benchmark Replacement Date, suchthe Benchmark  Replacement will replace such Benchmark for all purposes hereunder and under any Transaction  Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the  fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the  LC Bank without any amendment to, or further action or consent of any other party to, this  Agreement or any other Transaction Document so long as the Administrative Agent has not  received, by such time, written notice of objection to such Benchmark Replacement from the LC  Bank.  (bii) Benchmark Replacement Conforming Changes.  In connection with the  implementation and administration of a Benchmark Replacement, the Administrative  Agent will have the right to make Benchmark Replacement Conforming Changes from  time to time and, notwithstanding anything to the contrary herein or in any other  Transaction Document, any amendments implementing such Benchmark Replacement  Conforming Changes will become effective without any further action or consent of any  other party to this Agreement or any other Transaction Document.  (c(iii) Notices; Standards for Decisions and Determinations.  The Administrative  Agent will promptly notify the Borrower and the LC Bank of (iA) any occurrence of a  Benchmark Transition Event , a Term SOFR Transition Event or an Early Opt-in Election,  as applicable, and its related Benchmark Replacement Date, (iiB) the implementation of  any Benchmark Replacement, (iiiC) the effectiveness of any Benchmark Replacement  Conforming Changes, (ivD) the removal or reinstatement of any tenor of a Benchmark  pursuant to paragraph (div) below and (vE) the commencement or conclusion of any  Benchmark Unavailability Period. Any determination, decision or election that may be  made by the Administrative Agent or, if applicable, the LC Bank pursuant to this Section  5.065.04(c), including any determination with respect to a tenor, rate or adjustment or of  the occurrence or non-occurrence of an event, circumstance or date and any decision to  take or refrain from taking any action or any selection, will be conclusive and binding  absent manifest error and may be made in its or their sole discretion and without consent  from any other party to this Agreement or any other Transaction Document, except, in each  case, as expressly required pursuant to this Section 5.065.04(c).  (div) Unavailability of Tenor of Benchmark.  Notwithstanding anything to the  contrary herein or in any other Transaction Document, at any time (including in connection  with the implementation of a Benchmark Replacement), (iA) if the then-current  Benchmark is a term rate (including Term SOFR or USD LIBOR) and either (AI) any tenor  for such Benchmark is not displayed on a screen or other information service that publishes  such rate from time to time as selected by the Administrative Agent in its reasonable  

 

-47- discretion or (BII) the regulatory supervisor for the administrator of such Benchmark has  provided a public statement or publication of information announcing that any tenor for  such Benchmark is or will be no longer representative, then the Administrative Agent may  modify the tenor for any Benchmark settings at or after such time to remove such  unavailable or non-representative tenor and (iiB) if a tenor that was removed pursuant to  clause (iA) above either (AI) is subsequently displayed on a screen or information service  for a Benchmark (including a Benchmark Replacement) or (BII) is not, or is no longer,  subject to an announcement that it is or will no longer be representative for a Benchmark  (including a Benchmark Replacement), then the Administrative Agent may modify the  tenor for all Benchmark settings at or after such time to reinstate such previously removed  tenor.   (ev) Benchmark Unavailability Period.  Upon the Borrower’s receipt of notice of  the commencement of a Benchmark Unavailability Period, the Borrower may revoke any  request for an issuance of a Letter of Credit bearing interest based on USD  LIBOR,accruing Interest at such Benchmark, or a conversion to or continuation of a Letter  of Credit bearing interest based on USD LIBORaccruing Interest at the Term SOFR Rate  to be made, converted or continued during any Benchmark Unavailability Period and,  failing that, the Borrower will be deemed to have converted any such request into a request  for a Letter of Credit of, or a conversion of Letters of Credit to Letters of Credit bearing  interest under, accruing Interest at the Base Rate, and, for the avoidance of doubt, all  outstanding Letters of Credit accruing Interest at the Term SOFR Rate shall automatically  be converted to Letters of Credit accruing Interest at the Base Rate.   During any  Benchmark Unavailability Period or at any time that a tenor for the then-current  Benchmark is not an Available Tenor, the component of the Base Rate based upon the  then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used  in any determination of the Base Rate.  (f) Secondary Term SOFR Conversion.  Notwithstanding anything to the contrary  herein or in any other Transaction Document and subject to the proviso below in this paragraph, if  a Term SOFR Transition Event and its related Benchmark Replacement Date have occurred prior  to the Reference Time in respect of any setting of the then-current Benchmark, then (i) the  applicable Benchmark Replacement will replace the then-current Benchmark for all purposes  hereunder or under any Transaction Document in respect of such Benchmark setting (the  “Secondary Term SOFR Conversion Date”) and subsequent Benchmark settings, without any  amendment to, or further action or consent of any other party to, this Agreement or any other  Transaction Document; and (ii) Letters of Credit outstanding on the Secondary Term SOFR  Conversion Date bearing interest based on the then-current Benchmark shall be deemed to have  been converted to Loans bearing interest at the Benchmark Replacement with a tenor  approximately the same length as the interest payment period of the then-current Benchmark;  provided that, this paragraph (f) shall not be effective unless the Administrative Agent has  delivered to the LC Bank and the Borrower a Term SOFR Notice. (gvi) Certain Defined Terms.  As used in this Section 5.065.04(c): 

 

-48- “Available Tenor” means, as of any date of determination and with respect to the  then-current Benchmark, as applicable, (x) if the then -current Benchmark is a term rate or  is based on a term rate, any tenor for such Benchmark that is or may be used for  determining the length of tenor of a Benchmark pursuant to this Agreement as of such date  and not including, for the avoidance of doubt, any tenor for such Benchmark that is  then-removed pursuant to paragraph (d) of this Section 5.06, or (y) if the then current  Benchmark is not a term rate nor based on a term rateor (y) otherwise, any payment period  for interestInterest calculated with reference to such Benchmark, as applicable, in each  case, pursuant to this Agreement as of such date.   “Benchmark” means, initially, USD LIBORthe Term SOFR Rate; provided that if a  Benchmark Transition Event a Term SOFR Transition Event or an Early Opt-in Election,  as applicable, and its related Benchmark Replacement Date have occurred with respect to  USD LIBORthe Term SOFR Rate or the then-current Benchmark, then “Benchmark”  means the applicable Benchmark Replacement to the extent that such Benchmark  Replacement has replaced such prior benchmark rate pursuant to paragraph (a) of this  Section 5.065.04(c). Any reference to “Benchmark” shall include, as applicable, the  published component used in the calculation thereof.  “Benchmark Replacement” means, for any Available Tenor, the first alternative set  forth in the order below that can be determined by the Administrative Agent for the  applicable Benchmark Replacement Date:   (1) the sum of: (a) Term SOFR and (b) the related Benchmark Replacement  Adjustment;  (2) the sum of: (a) Daily Simple SOFR and (b) the related Benchmark  Replacement Adjustment;  (3) the sum of: (aA) the alternate benchmark rate that has been selected  by the Administrative Agent and the Borrower as the replacement for the then-current  Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any  selection or recommendation of a replacement benchmark rate or the mechanism for  determining such a rate by the Relevant Governmental Body or (ii) any evolving or  then-prevailing market convention for determining a benchmark rate as a replacement for  the then-current Benchmark, including any applicable recommendations made by the  Relevant Governmental Body, for U.S. dollar-denominated syndicated credit facilities at  such time and (bB) the related Benchmark Replacement Adjustment;  provided that, inif the case of clause (1), such Unadjusted Benchmark Replacement  is displayed on a screen or other information service that publishes such rate from time to  time as selected by the Administrative Agent in its reasonable discretion; provided, further,  that, with respect to a Term SOFR Transition Event, on the applicable Benchmark  Replacement Date, the “Benchmark Replacement” shall revert to and shall be determined  as set forth in clause (1) of this definition. If the Benchmark Replacement as determined  pursuant to clause (1), (2) or (3)as so determined above would be less than the Floor, the  Benchmark Replacement will be deemed to be the Floor for the purposes of this  Agreement and the other Transaction Documents and provided further, that any such  

 

-49- Benchmark Replacement shall be administratively feasible as determined by the  Administrative Agent in its sole discretion.  “Benchmark Replacement Adjustment” means, with respect to any replacement of  the then-current Benchmark with an Unadjusted Benchmark Replacement for any  applicable Available Tenor for any setting of such Unadjusted Benchmark Replacement:  (1) for purposes of clauses (1) and (2) of the definition of “Benchmark  Replacement,” the first alternative set forth in the order below that can be determined by the  Administrative Agent:  (a) the spread adjustment, or method for calculating or determining such  spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time  such Benchmark Replacement is first set for such Available Tenor that has been selected or  recommended by the Relevant Governmental Body for the replacement of such Benchmark with  the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor;  (b) the spread adjustment (which may be a positive or negative value or  zero) as of the Reference Time such Benchmark Replacement is first set for such Available Tenor  that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions  to be effective upon an index cessation event with respect to such Benchmark for the applicable  Corresponding Tenor; and  (2) for purposes of clause (3) of the definition of “Benchmark  Replacement,” the spread adjustment, or method for calculating or determining such  spread adjustment, (which may be a positive or negative value or zero) that has been  selected by the Administrative Agent and the Borrower for the applicable Corresponding  Tenor giving due consideration to (i) any selection or recommendation of a spread  adjustment, or method for calculating or determining such spread adjustment, for the  replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement  by the Relevant Governmental Body on the applicable Benchmark Replacement Date or  (ii) any evolving or then-prevailing market convention for determining a spread  adjustment, or method for calculating or determining such spread adjustment, for the  replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement,  including any applicable recommendations made by the Relevant Governmental Body, for  U.S. dollar-denominated syndicated credit facilities at such time; provided that, (x) in the  case of clause (1) above, such adjustment is displayed on a screen or other information  service that publishes such Benchmark Replacement Adjustment from time to time as  selected by the Administrative Agent in its reasonable discretion and (y) if the then-current  Benchmark is a term rate, more than one tenor of such Benchmark is available as of the  applicable Benchmark Replacement Date and the applicable Unadjusted Benchmark  Replacement will not be a term rate, the Available Tenor of such Benchmark for purposes  of this definition of “Benchmark Replacement Adjustment” shall be deemed to be the  Available Tenor that has approximately the same length (disregarding business day  adjustments) as the payment period for interest calculated with reference to such  Unadjusted Benchmark Replacement.  

 

-50- “Benchmark Replacement Conforming Changes” means, with respect to any Benchmark  Replacement, any technical, administrative or operational changes (including changes to the  definition of “Base Rate,” the definition of “Business Day,” timing and frequency of determining  rates and making payments of interest, timing of borrowing requests or prepayment, conversion or  continuation notices, length of lookback periods, the applicability of breakage provisions, and  other technical, administrative or operational matters) that the Administrative Agent decides may  be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to  permit the administration thereof by the Administrative Agent in a manner substantially consistent  with market practice (or, if the Administrative Agent decides that adoption of any portion of such  market practice is not administratively feasible or if the Administrative Agent determines that no  market practice for the administration of such Benchmark Replacement exists, in such other  manner of administration as the Administrative Agent decides is reasonably necessary in  connection with the administration of this Agreement and the other Transaction Documents).  “Benchmark Replacement Date” means a date and time determined by the  Administrative Agent, and no later than the earliest to occur of the following events with  respect to the then-current Benchmark:   (1)  in the case of clause (1) or (2) of the definition of “Benchmark Transition  Event”,” the later of (aA) the date of the public statement or publication of information  referenced therein and (bB) the date on which the administrator of such Benchmark (or the  published component used in the calculation thereof) permanently or indefinitely ceases to  provide all Available Tenors of such Benchmark (or such component thereof); or  (2)  in the case of clause (3) of the definition of “Benchmark Transition Event”,”  the date determined by the Administrative Agent, which date shall promptly follow the  date of the public statement or publication of information referenced therein;  (3) in the case of a Term SOFR Transition Event, the date that is set forth in the  Term SOFR Notice provided to the LC Bank and the Borrower pursuant to this Section titled  “Benchmark Replacement Setting”, which date shall be at least 30 days from the date of the Term  SOFR Notice; or (4) in the case of an Early Opt-in Election, the sixth (6th) Business Day  after the date notice of such Early Opt-in Election is provided to the LC Bank, so long as  the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth  (5th) Business Day after the date notice of such Early Opt-in Election is provided to the LC  Bank, written notice of objection to such Early Opt-in Election from LC Bank.  For the avoidance of doubt, (i) if the event giving rise to the Benchmark  Replacement Date occurs on the same day as, but earlier than, the Reference Time in  respect of any determination, the Benchmark Replacement Date will be deemed to have  occurred prior to the Reference Time for such determination and (ii) the “Benchmark  Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with  respect to any Benchmark upon the occurrence of the applicable event or events set forth  therein with respect to all then-current Available Tenors of such Benchmark (or the  published component used in the calculation thereof).  “Benchmark Transition Event” means, the occurrence of one or more of the  

 

-51- following events, with respect to theany then-current Benchmark:   (1) a public statement or publication of information by or on behalf of the  administrator of such Benchmark (or the published component used in the calculation  thereof) announcing that such administrator has ceased or will cease to provide all  Available Tenors of such Benchmark (or such component thereof), permanently or  indefinitely, provided that, at the time of such statement or publication, there is no  successor administrator that will continue to provide any Available Tenor of such  Benchmark (or such component thereof);   (2) a public statement or publication of information by a Governmental  Authority having jurisdiction over the Administrative Agent, the regulatory supervisor for  the administrator of such Benchmark (or the published component used in the calculation  thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an  insolvency official with jurisdiction over the administrator for such Benchmark (or such  component), a resolution authority with jurisdiction over the administrator for such  Benchmark (or such component) or a court or an entity with similar insolvency or  resolution authority over the administrator for such Benchmark (or such component),  which states that the administrator of such Benchmark (or such component) has ceased or  will cease to provide all Available Tenors of such Benchmark (or such component thereof)  permanently or indefinitely, provided that, at the time of such statement or publication,  there is no successor administrator that will continue to provide any Available Tenor of  such Benchmark (or such component thereof); or   (3) a public statement or publication of information by the regulatory  supervisor for the administrator of such Benchmark (or the published component used in  the calculation thereof) or a Governmental Authority having jurisdiction over the  Administrative Agent announcing that all Available Tenors of such Benchmark (or such  component thereof) are no longer representative.  For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to  have occurred with respect to any Benchmark if a public statement or publication of  information set forth above has occurred with respect to each then-current Available Tenor  of such Benchmark (or the published component used in the calculation thereof).  “Benchmark Unavailability Period” means the period (if any) (x) beginning at the  time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition  has occurred if, at such time, no Benchmark Replacement has replaced the then-current  Benchmark for all purposes hereunder and under any Transaction Document in accordance  with this Section 5.065.04(c) and (y) ending at the time that a Benchmark Replacement has  replaced the then-current Benchmark for all purposes hereunder and under any Transaction  Document in accordance with this Section 5.06 5.04(c). “Corresponding Tenor” with respect to any Available Tenor means, as applicable,  either a tenor (including overnight) or an interest payment period having approximately the  same length (disregarding business day adjustment) as such Available Tenor.  

 

-52- “Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which  will include a lookback) being established by the Administrative Agent in accordance with the  conventions for this rate selected or recommended by the Relevant Governmental Body for  determining “Daily Simple SOFR” for business loans; provided, that if the Administrative Agent  decides that any such convention is not administratively feasible for the Administrative Agent,  then the Administrative Agent may establish another convention in its reasonable discretion.  “Early Opt-in Election” means, if the then-current Benchmark is USD LIBOR, the  occurrence of:  (1)  a notification by the Administrative Agent to (or the request by the  Borrower to the Administrative Agent to notify) each of the other parties hereto that at least five  currently outstanding U.S. dollar-denominated syndicated credit facilities at such time contain (as  a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term  SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit  facilities are identified in such notice and are publicly available for review), and  (2)  the joint election by the Administrative Agent and the Borrower to trigger a  fallback from USD LIBOR and the provision by the Administrative Agent of written notice of  such election to the LC Bank.  “Floor” means the benchmark rate floor, if any, provided in this Agreement  initially (as of the execution of this Agreement, the modification, amendment or renewal of  this Agreement or otherwise) with respect to USD LIBORthe Term SOFR Rate or, if no  floor is specified, zero.  “ISDA Definitions” means the 2006 ISDA Definitions published by the International  Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented  from time to time, or any successor definitional booklet for interest rate derivatives published from  time to time by the International Swaps and Derivatives Association, Inc. or such successor  thereto.  “Reference Time” means, with respect to any setting of the then-current  Benchmark means (1) if such Benchmark is USD LIBOR, 11:00 a.m. (London time) on the  day that is two London banking days preceding the date of such setting, and (2) if such  Benchmark is not USD LIBOR, the time determined by the Administrative Agent in its  reasonable discretion.  “Relevant Governmental Body” means the Board of Governors of the Federal  Reserve BoardSystem or the Federal Reserve Bank of New York, or a committee officially  endorsed or convened by the Board of Governors of the Federal Reserve BoardSystem or  the Federal Reserve Bank of New York, or any successor thereto.  “SOFR” means, with respect to any Business Day, a rate per annum equal to the secured  overnight financing rate for such Business Day published by the SOFR Administrator on the  SOFR Administrator’s Website on the immediately succeeding Business Day.  “SOFR Administrator” means the Federal Reserve Bank of New York (or a successor  

 

-53- administrator of the secured overnight financing rate).  “SOFR Administrator’s Website” means the website of the Federal Reserve Bank of New  York, currently at http://www.newyorkfed.org, or any successor source for the secured overnight  financing rate identified as such by the SOFR Administrator from time to time.  “Term SOFR” means, for the applicable Corresponding Tenor as of the applicable  Reference Time, the forward-looking term rate based on SOFR that has been selected or  recommended by the Relevant Governmental Body.  “Term SOFR Notice” means a notification by the Administrative Agent to the LC Bank  and the Borrower of the occurrence of a Term SOFR Transition Event. “Term SOFR Transition Event” means the determination by the Administrative Agent that  (a) Term SOFR has been recommended for use by the Relevant Governmental Body, and is  determinable for each Available Tenor, (b) the administration of Term SOFR is administratively  feasible for the Administrative Agent and (c) a Benchmark Transition Event has previously  occurred resulting in a Benchmark Replacement in accordance with Section titled “Benchmark  Replacement Setting” that is not Term SOFR. “Unadjusted Benchmark Replacement” means the applicable Benchmark  Replacement excluding the related Benchmark Replacement Adjustment.  “USD LIBOR” means the London interbank offered rate for U.S. dollars Section 5.05. Security Interest.  (a) As security for the performance by the Borrower of all  the terms, covenants and agreements on the part of the Borrower to be performed under this  Agreement or any other Transaction Document, including the punctual payment when due of the  Outstanding Reimbursement Obligations and all Interest in respect thereof, and all other Borrower  Obligations, the Borrower hereby grants to the Administrative Agent for its benefit and the ratable  benefit of the Secured Parties, a continuing security interest in, all of the Borrower’s right, title and  interest in, to and under all of the following, whether now or hereafter owned, existing or arising  (collectively, the “Collateral”): (i) all Pool Receivables, (ii) all Related Security with respect to  such Pool Receivables, (iii) all Collections with respect to such Pool Receivables, (iv) the  Lock-Boxes and Collection Accounts and all amounts on deposit therein, and all certificates and  instruments, if any, from time to time evidencing such Lock-Boxes and Collection Accounts and  amounts on deposit therein, (v) the LC Collateral Account and all amounts from time to time on  deposit therein, (vi) all rights (but none of the obligations) of the Borrower under the Receivables  Purchase Agreement, (vii) all other personal and fixture property or assets of the Borrower of  every kind and nature including, without limitation, all goods (including inventory, equipment and  any accessions thereto), instruments (including promissory notes), documents, accounts, chattel  paper (whether tangible or electronic), deposit accounts, securities accounts, securities  entitlements, letter-of-credit rights, commercial tort claims, securities and all other investment  property, supporting obligations, money, any other contract rights or rights to the payment of  money, insurance claims and proceeds, and all general intangibles (including all payment  intangibles) (each as defined in the UCC), and (viii) all proceeds of, and all amounts received or  receivable under any or all of, the foregoing. 

 

-54- (b) The Administrative Agent (for the benefit of the Secured Parties) shall have, with  respect to all the Collateral, and in addition to all the other rights and remedies available to the  Administrative Agent (for the benefit of the Secured Parties), all the rights and remedies of a  secured party under any applicable UCC.  The Borrower hereby authorizes the Administrative  Agent to file financing statements describing as the collateral covered thereby “all of the debtor’s  personal property or assets” or words to that effect, notwithstanding that such wording may be  broader in scope than the collateral described in this Agreement. (c) Immediately upon the occurrence of the Final Payout Date, the Collateral shall be  automatically released from the lien created hereby, and this Agreement and all obligations (other  than those expressly stated to survive such termination) of the Credit Parties hereunder shall  terminate, all without delivery of any instrument or performance of any act by any party, and all  rights to the Collateral shall revert to the Borrower; provided, however, that promptly following  written request therefor by the Borrower delivered to the Administrative Agent following any such  termination, and at the sole expense of the Borrower, the Administrative Agent shall execute and  deliver to the Borrower UCC-3 termination statements and such other documents as the Borrower  shall reasonably request to evidence such termination. ARTICLE VI CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS Section 6.01. Conditions Precedent to Effectiveness.  This Agreement shall become  effective as of the Closing Date when (a) the Administrative Agent shall have received each of the  documents, agreements (in fully executed form), opinions of counsel, lien search results, UCC  filings, certificates and other deliverables listed on the closing memorandum attached as Exhibit H  hereto, in each case, in form and substance acceptable to the Administrative Agent and (b) all fees  and expenses payable by the Borrower on the Closing Date to the Credit Parties have been paid in  full in accordance with the terms of the Transaction Documents. Section 6.02. Conditions Precedent to All Credit Extensions.  Each Credit Extension  hereunder on or after the Closing Date shall be subject to the conditions precedent that: (a) the Borrower shall have delivered to the Administrative Agent and the LC  Bank, a Letter of Credit Application and an LC Request, in each case, in accordance with  Section 3.02(a); (b) the Servicer shall have delivered to the Administrative Agent and the LC  Bank all Information Packages required to be delivered hereunder; (c) the conditions precedent to such Credit Extension specified in Section  3.01(a) shall be satisfied; and (d) on the date of such Credit Extension the following statements shall be true  and correct (and upon the occurrence of such Credit Extension, the Borrower and the  Servicer shall be deemed to have represented and warranted that such statements are then  true and correct): 

 

-55- (i) the representations and warranties of the Borrower and the Servicer  contained in Sections 7.01 and 7.02 are true and correct in all material respects on  and as of the date of such Credit Extension as though made on and as of such date  unless such representations and warranties by their terms refer to an earlier date, in  which case they shall be true and correct in all material respects on and as of such  earlier date; (ii) no Event of Default or Unmatured Event of Default has occurred  and is continuing, and no Event of Default or Unmatured Event of Default would  result from such Credit Extension; (iii) no Borrowing Base Deficit exists or would exist after giving effect  to such Credit Extension; and (iv) the Termination Date has not occurred. Section 6.03. Conditions Precedent to All Reinvestments.  Each Reinvestment hereunder  on or after the Closing Date shall be subject to the conditions precedent that: (a) after giving effect to such Reinvestment, the Servicer shall be holding in trust for the  benefit of the Secured Parties an amount of Collections sufficient to pay the sum of (x) all accrued  and unpaid Servicing Fees, Interest and Fees, in each case, through the date of such Reinvestment,  (y) the amount of any Borrowing Base Deficit, and (z) the amount of all other accrued and unpaid  Borrower Obligations through the date of such Reinvestment; (b) the Borrower shall use the proceeds of such Reinvestment solely to pay the  purchase price for Receivables purchased by the Borrower in accordance with the terms of the  Receivables Purchase Agreement; and (c) on the date of such Reinvestment the following statements shall be true and correct  (and upon the occurrence of such Reinvestment, the Borrower and the Servicer shall be deemed to  have represented and warranted that such statements are then true and correct):  (i) the representations and warranties of the Borrower and the Servicer  contained in Sections 7.01 and 7.02 are true and correct in all material respects on  and as of the date of such Reinvestment as though made on and as of such date  unless such representations and warranties by their terms refer to an earlier date, in  which case they shall be true and correct in all material respects on and as of such  earlier date; (ii) no Event of Default has occurred and is continuing, and no Event of Default  would result from such Reinvestment; (iii) no Borrowing Base Deficit exists or would exist after giving effect to such  Reinvestment; and (iv) the Termination Date has not occurred. 

 

-56- ARTICLE VII REPRESENTATIONS AND WARRANTIES Section 7.01. Representations and Warranties of the Borrower.  The Borrower represents  and warrants to each Credit Party as of the Closing Date, on each Settlement Date and on each day  on which a Credit Extension shall have occurred: (a) Organization and Good Standing.  The Borrower is a limited liability  company and validly existing in good standing under the laws of the State of Ohio and has  full power and authority to own its properties and to conduct its business as such properties  are currently owned and such business is presently conducted. (b) Due Qualification.  The Borrower is duly qualified to do business, is in  good standing as a foreign entity and has obtained all necessary licenses and approvals in  all jurisdictions in which the conduct of its business requires such qualification, licenses or  approvals, except where the failure to do so could not reasonably be expected to have a  Material Adverse Effect. (c) Power and Authority; Due Authorization.  The Borrower (i) has all  necessary power and authority to (A) execute and deliver this Agreement and the other  Transaction Documents to which it is a party, (B) perform its obligations under this  Agreement and the other Transaction Documents to which it is a party and (C) grant a  security interest in the Collateral to the Administrative Agent on the terms and subject to  the conditions herein provided and (ii) has duly authorized by all necessary action such  grant and the execution, delivery and performance of, and the consummation of the  transactions provided for in, this Agreement and the other Transaction Documents to  which it is a party. (d) Binding Obligations.  This Agreement and each of the other Transaction  Documents to which the Borrower is a party constitutes legal, valid and binding  obligations of the Borrower, enforceable against the Borrower in accordance with their  respective terms, except (i) as such enforceability may be limited by applicable  bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the  enforcement of creditors’ rights generally and (ii) as such enforceability may be limited by  general principles of equity, regardless of whether such enforceability is considered in a  proceeding in equity or at law. (e) No Violation.  The execution, delivery and performance of, and 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) result in any breach of any of the terms or provisions of, or constitute  (with or without notice or lapse of time or both) a default under its organizational  documents or any indenture, sale agreement, credit agreement, loan agreement, security  agreement, mortgage, deed of trust, or other material agreement or instrument to which the  Borrower is a party or by which it or any of its properties is bound, (ii) result in the creation  or imposition of any Adverse Claim upon any of the Collateral pursuant to the terms of any  

 

-57- such indenture, credit agreement, loan agreement, security agreement, mortgage, deed of  trust, or other material agreement or instrument other than this Agreement and the other  Transaction Documents or (iii) violate any Applicable Law. (f) Litigation and Other Proceedings.  (i)  There is no action, suit, proceeding  or investigation pending or, to the best knowledge of the Borrower, threatened, against the  Borrower before any Governmental Authority and (ii) the Borrower is not subject to any  order, judgment, decree, injunction, stipulation or consent order of or with any  Governmental Authority that, in the case of either of the foregoing clauses (i) and (ii), (A)  asserts the invalidity of this Agreement or any other Transaction Document, (B) seeks to  prevent the grant of a security interest in any Collateral by the Borrower to the  Administrative Agent, the ownership or acquisition by the Borrower of any Pool  Receivables or other Collateral or the consummation of any of the transactions  contemplated by this Agreement or any other Transaction Document, (C) seeks any  determination or ruling that could materially and adversely affect the performance by the  Borrower of its obligations under, or the validity or enforceability of, this Agreement or  any other Transaction Document or (D) individually or in the aggregate for all such  actions, suits, proceedings and investigations could reasonably be expected to have a  Material Adverse Effect. (g) Governmental Approvals.  Except where the failure to obtain or make such  authorization, consent, order, approval or action could not reasonably be expected to have  a Material Adverse Effect, all authorizations, consents, orders and approvals of, or other  actions by, any Governmental Authority that are required to be obtained by the Borrower  in connection with the grant of a security interest in the Collateral to the Administrative  Agent hereunder or the due execution, delivery and performance by the Borrower of this  Agreement or any other Transaction Document to which it is a party and the consummation  by the Borrower of the transactions contemplated by this Agreement and the other  Transaction Documents to which it is a party have been obtained or made and are in full  force and effect. (h) Margin Regulations.  The Borrower is not engaged, principally or as one of  its important activities, in the business of extending credit for the purpose of purchasing or  carrying margin stock (within the meanings of Regulations T, U and X of the Board of  Governors of the Federal Reserve System). (i) Taxes.  The Borrower has filed all material Tax returns and reports required  by Applicable Law to have been filed by it and has paid all material Taxes, assessments  and governmental charges thereby shown to be owing by it, other than any such Taxes,  assessments or charges that are being contested in good faith by appropriate proceedings  and for which appropriate reserves in accordance with GAAP have been established. (j) Solvency.  After giving effect to the transactions contemplated by this  Agreement and the other Transaction Documents, the Borrower is Solvent. (k) Offices; Legal Name.  The Borrower’s sole jurisdiction of organization, and  its “location” within the meaning of Section 9-307 of the applicable UCC, is the State of  

 

-58- Ohio and such jurisdiction has not changed within four (4) months prior to the date of this  Agreement.  The office of the Borrower is located at the applicable address specified on  Schedule III hereto.  The legal name of the Borrower is Davey Receivables LLC. (l) Investment Company Act.  The Borrower is not, and is not controlled by an  “investment company” registered or required to be registered under the Investment  Company Act.  The Borrower is not a “covered fund” under Section 13 of the U.S. Bank  Holding Company Act of 1956, as amended, and the applicable rules and regulations  thereunder (the “Volcker Rule”).  In determining that Borrower is not a “covered fund”  under the Volcker Rule, the Borrower relies on the exemption from the definition of  “investment company” set forth in Section 3(c)(5) of the Investment Company Act and  does not rely solely on the exemption from the definition of “investment company” set  forth in Section 3(c)(1) and/or 3(c)(7) of the Investment Company Act.  (m) No Material Adverse Effect.  Since the date of formation of the Borrower  there has been no Material Adverse Effect with respect to the Borrower. (n) Accuracy of Information.  All Information Packages (if prepared by the  Borrower or one of its Affiliates, or to the extent that the information contained therein is  supplied by the Borrower or an Affiliate of the Borrower), LC Requests, Letter of Credit  Applications, certificates, reports, statements, documents and other information furnished  to the Administrative Agent or any other Credit Party by or on behalf of the Borrower  pursuant to any provision of this Agreement or any other Transaction Document, or in  connection with or pursuant to any amendment or modification of, or waiver under, this  Agreement or any other Transaction Document, is, at the time the same are so furnished,  complete and correct in all material respects on the date the same are furnished to the  Administrative Agent or such other Credit Party, and does not contain any material  misstatement of fact or omit to state a material fact or any fact necessary to make the  statements contained therein, in light of the circumstances under which they were made,  not misleading. (o) Anti-Money Laundering/International Trade Law Compliance.  No  Covered Entity is a Sanctioned Person.  To the Borrower’s knowledge, no Obligor was a  Sanctioned Person at the time of origination of any Pool Receivable owing by such  Obligor.  None of the Borrower, the Servicer or any Originator, either in its own right or  through any third party, (i) has any of its assets in a Sanctioned Country or in the  possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism  Law; (ii) does business in or with, or derives any of its income from investments in or  transactions with, any Sanctioned Country or Sanctioned Person in violation of any  Anti-Terrorism Law; or (iii) engages in any dealings or transactions prohibited by any  Anti-Terrorism Law. (p) Perfection Representations.  (i) This Agreement creates a valid and  continuing security interest (as defined in the applicable UCC) in the Borrower’s right, title  and interest in, to and under the Collateral which (A) security interest has been perfected  and is enforceable against creditors of and purchasers from the Borrower and (B) is and  will be free of all Adverse Claims in such Collateral.   

 

-59- (ii) The Receivables constitute “accounts” or “general intangibles”  within the meaning of Section 9-102 of the UCC. (iii) The Borrower owns and has good and marketable title to the  Collateral free and clear of any Adverse Claim of any Person. (iv) All appropriate financing statements, financing statement  amendments and continuation statements have been filed in the proper filing office  in the appropriate jurisdictions under Applicable Law in order to perfect (and  continue the perfection of) the sale (or, in the case of Davey Tree, contribution) of  the Receivables and Related Security from each Originator to the Borrower  pursuant to the Receivables Purchase Agreement and the grant by the Borrower of a  security interest in the Collateral to the Administrative Agent pursuant to this  Agreement. (v) Other than the security interest granted to the Administrative Agent  pursuant to this Agreement, the Borrower has not pledged, assigned, sold, granted a  security interest in, or otherwise conveyed any of the Collateral except as permitted  by this Agreement and the other Transaction Documents.  The Borrower has not  authorized the filing of and is not aware of any financing statements filed against  the Borrower that include a description of collateral covering the Collateral other  than any financing statement (i) in favor of the Administrative Agent or (ii) that has  been terminated.  The Borrower is not aware of any judgment lien, ERISA lien or  tax lien filings against the Borrower. (vi) Notwithstanding any other provision of this Agreement or any other  Transaction Document, the representations contained in this Section 7.01(p) shall  be continuing and remain in full force and effect until the Final Payout Date. (q) The Lock-Boxes and Collection Accounts. (i) Nature of Collection Accounts.  Each Collection Account  constitutes a “deposit account” within the meaning of the applicable UCC. (ii) Ownership.  Each Lock-Box and Collection Account is in the name  of the Borrower, and the Borrower owns and has good and marketable title to the  Collection Accounts free and clear of any Adverse Claim. (iii) Perfection.  The Borrower has delivered to the Administrative  Agent a fully executed Account Control Agreement relating to each Lock-Box and  Collection Account, pursuant to which each applicable Collection Account Bank  has agreed to comply with the instructions originated by the Administrative Agent  directing the disposition of funds in such Lock-Box and Collection Account  without further consent by the Borrower, the Servicer or any other Person.  The  Administrative Agent has “control” (as defined in Section 9-104 of the UCC) over  each Collection Account. (iv) Instructions.  Neither the Lock-Boxes nor the Collection Accounts  

 

-60- are in the name of any Person other than the Borrower.  Neither the Borrower nor  the Servicer has consented to the applicable Collection Account Bank complying  with instructions of any Person other than the Administrative Agent. (r) Ordinary Course of Business.  Each remittance of Collections by or on  behalf of the Borrower to the Credit Parties under this Agreement will have been (i) in  payment of a debt incurred by the Borrower in the ordinary course of business or financial  affairs of the Borrower and (ii) made in the ordinary course of business or financial affairs  of the Borrower. (s) Compliance with Law.  The Borrower has complied in all material respects  with all Applicable Laws to which it may be subject. (t) Bulk Sales Act.  No transaction contemplated by this Agreement requires  compliance by it with any bulk sales act or similar law. (u) Eligible Receivables.  Each Receivable included as an Eligible Receivable  in the calculation of the Net Receivables Pool Balance as of any date is an Eligible  Receivable as of such date. (v) Opinions.  The facts regarding the Borrower, the Servicer, each Originator,  the Performance Guarantor, the Receivables, the Related Security and the related matters  set forth or assumed in each of the opinions of counsel delivered in connection with this  Agreement and the Transaction Documents are true and correct in all material respects. (w) Other Transaction Documents.  Each representation and warranty made by  the Borrower under each other Transaction Document to which it is a party is true and  correct in all material respects as of the date when made, except for representations and  warranties which apply as to an earlier date (in which case such representations and  warranties shall be true and correct in all material respects as of such earlier date). (x) Reaffirmation of Representations and Warranties.  On the date of each  Credit Extension, on the date of each Reinvestment, on each Settlement Date and on the  date each Information Package or other report is delivered to the Administrative Agent or  the LC Bank hereunder, the Borrower shall be deemed to have certified that (i) all  representations and warranties of the Borrower hereunder are true and correct in all  material respects on and as of such day as though made on and as of such day, except for  representations and warranties which apply as to an earlier date (in which case such  representations and warranties shall be true and correct in all material respects as of such  earlier date) and (ii) no Event of Default or an Unmatured Event of Default has occurred  and is continuing or will result from such Credit Extension or Reinvestment. (y) Issuance of Debt or Other Obligations.  The Borrower has not, does not and  will not during this Agreement (i) issue any obligations that (A) constitute asset-backed  commercial paper, or (B) are securities required to be registered under the Securities Act or  that may be offered for sale under Rule 144A or a similar exemption from registration  under the Securities Act or the rules promulgated thereunder, or (ii) issue any other debt  obligations or equity interest other than debt obligations substantially similar to the  

 

-61- obligations of the Borrower under this Agreement that are (A) issued to other banks or  asset-backed commercial paper conduits in privately negotiated transactions, and (B)  subject to transfer restrictions substantially similar to the transfer restrictions set forth in  this Agreement.  The Borrower further represents and warrants that its assets and liabilities  are consolidated with the assets and liabilities of Davey Tree Group for purposes of  generally accepted accounting principles. Notwithstanding any other provision of this Agreement or any other Transaction  Document, the representations and warranties contained in this Section 7.01 shall be continuing,  and remain in full force and effect until the Final Payout Date. Section 7.02. Representations and Warranties of the Servicer.  The Servicer represents and  warrants to each Credit Party as of the Closing Date, on each Settlement Date and on each day on  which a Credit Extension shall have occurred: (a) Organization and Good Standing.  The Servicer is a duly organized and  validly existing corporation in good standing under the laws of the State of Ohio, with the  power and authority under its organizational documents and under the laws of the State of  Ohio to own its properties and to conduct its business as such properties are currently  owned and such business is presently conducted. (b) Due Qualification.  The Servicer is duly qualified to do business, is in good  standing as a foreign entity and has obtained all necessary licenses and approvals in all  jurisdictions in which the conduct of its business or the servicing of the Pool Receivables  as required by this Agreement requires such qualification, licenses or approvals, except  where the failure to do so could not reasonably be expected to have a Material Adverse  Effect. (c) Power and Authority; Due Authorization.  The Servicer has all necessary  power and authority to (i) execute and deliver this Agreement and the other Transaction  Documents to which it is a party and (ii) perform its obligations under this Agreement and  the other Transaction Documents to which it is a party and the execution, delivery and  performance of, and the consummation of the transactions provided for in, this Agreement  and the other Transaction Documents to which it is a party have been duly authorized by  the Servicer by all necessary action. (d) Binding Obligations.  This Agreement and each of the other Transaction  Documents to which it is a party constitutes legal, valid and binding obligations of the  Servicer, enforceable against the Servicer in accordance with their respective terms, except  (i) as such enforceability may be limited by applicable bankruptcy, insolvency,  reorganization, moratorium or other similar laws affecting the enforcement of creditors’  rights generally and (ii) as such enforceability may be limited by general principles of  equity, regardless of whether such enforceability is considered in a proceeding in equity or  at law. (e) No Violation.  The execution and delivery of this Agreement and each other  Transaction Document to which the Servicer is a party, the performance of the transactions  

 

-62- contemplated by this Agreement and the other Transaction Documents and the fulfillment  of the terms of this Agreement and the other Transaction Documents by the Servicer will  not (i) result in any breach of any of the terms or provisions of, or constitute (with or  without notice or lapse of time or both) a default under, the organizational documents of  the Servicer or any indenture, sale agreement, credit agreement, loan agreement, security  agreement, mortgage, deed of trust or other material agreement or instrument to which the  Servicer is a party or by which it or any of its property is bound, (ii) result in the creation or  imposition of any Adverse Claim upon any of its properties pursuant to the terms of any  such indenture, credit agreement, loan agreement, agreement, mortgage, deed of trust or  other material agreement or instrument, other than this Agreement and the other  Transaction Documents or (iii) violate any Applicable Law, except to the extent that any  such breach, default, Adverse Claim or violation could not reasonably be expected to have  a Material Adverse Effect. (f) Litigation and Other Proceedings.  There is no action, suit, proceeding or  investigation pending, or to the Servicer’s knowledge threatened, against the Servicer  before any Governmental Authority: (i) asserting the invalidity of this Agreement or any of  the other Transaction Documents; (ii) seeking to prevent the consummation of any of the  transactions contemplated by this Agreement or any other Transaction Document; or (iii)  seeking any determination or ruling that could materially and adversely affect the  performance by the Servicer of its obligations under, or the validity or enforceability of,  this Agreement or any of the other Transaction Documents, except, in each case that, if  adversely determined, could not reasonably be expected, individually or in the aggregate,  to result in a Material Adverse Effect. (g) No Consents.  The Servicer is not required to obtain the consent of any other  party or any consent, license, approval, registration, authorization or declaration of or with  any Governmental Authority in connection with the execution, delivery, or performance of  this Agreement or any other Transaction Document to which it is a party that has not  already been obtained or the failure of which to obtain could not reasonably be expected to  have a Material Adverse Effect. (h) Compliance with Applicable Law.  The Servicer (i) has maintained in effect  all qualifications required under Applicable Law in order to properly service the Pool  Receivables and (ii) has complied in all material respects with all Applicable Law in  connection with servicing the Pool Receivables. (i) Accuracy of Information.  All Information Packages (if prepared by the  Servicer or one of its Affiliates, or to the extent that the information contained therein is  supplied by the Servicer or an Affiliate of the Servicer), LC Requests, Letter of Credit  Applications, certificates, reports, statements, documents and other information furnished  to the Administrative Agent or any other Credit Party by the Servicer pursuant to any  provision of this Agreement or any other Transaction Document, or in connection with or  pursuant to any amendment or modification of, or waiver under, this Agreement or any  other Transaction Document, is, at the time the same are so furnished, complete and correct  in all material respects on the date the same are furnished to the Administrative Agent or  such other Credit Party, and does not contain any material misstatement of fact or omit to  

 

-63- state a material fact or any fact necessary to make the statements contained therein, in light  of the circumstances under which they were made, not misleading. (j) Location of Records.  The offices where the initial Servicer keeps all of its  records relating to the servicing of the Pool Receivables are located at 1500 N. Mantua St.,  Kent, Ohio 44240. (k) Credit and Collection Policy.  The Servicer has complied in all material  respects with the Credit and Collection Policy with regard to each Pool Receivable and the  related Contracts. (l) Eligible Receivables.  Each Receivable included as an Eligible Receivable  in the calculation of the Net Receivables Pool Balance as of any date is an Eligible  Receivable as of such date. (m) Servicing Programs.  No license or approval is required for the  Administrative Agent’s use of any software or other computer program used by the  Servicer, any Originator or any Sub-Servicer in the servicing of the Pool Receivables, other  than those which have been obtained and are in full force and effect. (n) Servicing of Pool Receivables.  Since the Closing Date there has been no  material adverse change in the ability of the Servicer or any Sub-Servicer to service and  collect the Pool Receivables and the Related Security. (o) Other Transaction Documents.  Each representation and warranty made by  the Servicer under each other Transaction Document to which it is a party (including,  without limitation, each Receivables Purchase Agreement) is true and correct in all  material respects as of the date when made, except for representations and warranties  which apply as to an earlier date (in which case such representations and warranties shall  be true and correct in all material respects as of such date). (p) No Material Adverse Effect.  Since December 31, 2015 there has been no  Material Adverse Effect on the Servicer. (q) Investment Company Act.  The Servicer is not an “investment company,” or  a company “controlled” by an “investment company,” within the meaning of the  Investment Company Act. (r) Anti-Money Laundering/International Trade Law Compliance.  No  Covered Entity is a Sanctioned Person.  To the Servicer’s knowledge, no Obligor was a  Sanctioned Person at the time of origination of any Pool Receivable owing by such  Obligor.  None of the Borrower, the Servicer or any Originator, either in its own right or  through any third party, (i) has any of its assets in a Sanctioned Country or in the  possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism  Law; (ii) does business in or with, or derives any of its income from investments in or  transactions with, any Sanctioned Country or Sanctioned Person in violation of any  Anti-Terrorism Law; or (iii) engages in any dealings or transactions prohibited by any  Anti-Terrorism Law. 

 

-64- (s) Financial Condition.  The consolidated balance sheets of the Servicer and  its consolidated Subsidiaries as of December 31, 2015 and the related statements of income  and shareholders’ equity of the Servicer and its consolidated Subsidiaries for the fiscal year  then ended, copies of which have been furnished to the Administrative Agent and the LC  Bank, present fairly in all material respects the consolidated financial position of the  Servicer and its consolidated Subsidiaries for the period ended on such date, all in  accordance with GAAP. (t) Bulk Sales Act.  No transaction contemplated by this Agreement requires  compliance by it with any bulk sales act or similar law. (u) Taxes.  The Servicer has (i) timely filed all tax returns (federal, state and  local) required to be filed by it and (ii) paid, or caused to be paid, all taxes, assessments and  other governmental charges, if any, other than (a) taxes, assessments and other  governmental charges being contested in good faith by appropriate proceedings and as to  which adequate reserves have been provided in accordance with GAAP or (b) to the extent  that the failure to do so could not reasonably be expected to result in a Material Adverse  Effect. (v) Opinions.  The facts regarding the Borrower, the Servicer, each Originator,  the Performance Guarantor, the Receivables, the Related Security and the related matters  set forth or assumed in each of the opinions of counsel delivered in connection with this  Agreement and the Transaction Documents are true and correct in all material respects. (w) Reaffirmation of Representations and Warranties.  On the date of each  Credit Extension, on the date of each Reinvestment, on each Settlement Date and on the  date each Information Package or other report is delivered to the Administrative Agent or  the LC Bank hereunder, the Servicer shall be deemed to have certified that (i) all  representations and warranties of the Servicer hereunder are true and correct in all material  respects on and as of such day as though made on and as of such day, except for  representations and warranties which apply as to an earlier date (in which case such  representations and warranties shall be true and correct in all material respects as of such  date) and (ii) no Event of Default or an Unmatured Event of Default has occurred and is  continuing or will result from such Credit Extension or Reinvestment. Notwithstanding any other provision of this Agreement or any other Transaction  Document, the representations contained in this Section 7.02 shall be continuing, and remain in  full force and effect until the Final Payout Date. ARTICLE VIII COVENANTS Section 8.01. Covenants of the Borrower.  At all times from the Closing Date until the  Final Payout Date: (a) Payment of Principal and Interest.  The Borrower shall duly and punctually  pay Reimbursement Obligations, Interest, Fees and all other amounts payable by the  

 

-65- Borrower hereunder in accordance with the terms of this Agreement. (b) Existence.  The Borrower shall keep in full force and effect its existence and  rights as a limited liability company under the laws of the State of Ohio, and shall obtain  and preserve its qualification to do business in each jurisdiction in which such qualification  is or shall be necessary to protect the validity and enforceability of this Agreement, the  other Transaction Documents and the Collateral. (c) Financial Reporting.  The Borrower will maintain a system of accounting  established and administered in accordance with GAAP, and the Borrower (or the Servicer  on its behalf) shall furnish to the Administrative Agent and the LC Bank: (i) Annual Financial Statements of the Borrower.  Promptly upon  completion and in no event later than ninety (90) days after the close of each fiscal  year of the Borrower, annual unaudited financial statements of the Borrower  certified by a Financial Officer of the Borrower that they fairly present in all  material respects, in accordance with GAAP, the financial condition of the  Borrower as of the date indicated and the results of its operations for the periods  indicated. (ii) Information Packages.  (x) As soon as available and in any event not  later than two (2) Business Days prior to each Settlement Date, an Information  Package as of the most recently completed Fiscal Month, and (y) within two (2)  Business Days following a request from time to time by the Administrative Agent,  an interim report on the Pool Receivables containing such information as the  Administrative Agent may reasonably request. (iii) Other Information.  Such other information (including non-financial  information) as the Administrative Agent or the LC Bank may from time to time  reasonably request. (iv) Quarterly Financial Statements of Davey Tree.  As soon as  available and in no event later than fifty (50) days following the end of each of the  first three (3) fiscal quarters in each of the Servicer’s fiscal years, (A) the unaudited  consolidated balance sheet and statements of income of the Servicer and its  consolidated Subsidiaries as at the end of such fiscal quarter and the related  unaudited consolidated statements of earnings and cash flows for such fiscal  quarter and for the elapsed portion of the fiscal year ended with the last day of such  fiscal quarter, in each case setting forth comparative figures for the corresponding  fiscal quarter in the prior fiscal year, all of which shall be certified by a Financial  Officer of Davey Tree that they fairly present in all material respects, in accordance  with GAAP, the financial condition of Davey Tree and its consolidated  Subsidiaries as of the dates indicated and the results of their operations for the  periods indicated, subject to normal year-end audit adjustments and the absence of  footnotes. (v) Annual Financial Statements of Davey Tree.  Within one hundred  

 

-66- (100) days after the close of each of Davey Tree’s fiscal years, the consolidated  balance sheet of Davey Tree and its consolidated Subsidiaries as at the end of such  fiscal year and the related consolidated statements of earnings and cash flows for  such fiscal year setting forth comparative figures for the preceding fiscal year, all  reported on by independent certified public accountants of recognized national  standing (without a “going concern” or like qualification or exception) to the effect  that such consolidated financial statements present fairly in all material respects, in  accordance with GAAP, the financial condition of Davey Tree and its consolidated  Subsidiaries as of the dates indicated and the results of their operations for the  periods indicated. (vi) Other Reports and Filings.  Promptly (but in any event within ten  (10) days) after the filing or delivery thereof, copies of all financial information,  proxy materials, reports, if any, which Davey Tree or any of its consolidated  Subsidiaries shall publicly file with the SEC or deliver to holders (or any trustee,  agent or other representative therefor) of any of its material Debt pursuant to the  terms of the documentation governing the same. Notwithstanding anything herein to the contrary, any financial information, proxy  statements or other material required to be delivered pursuant to this paragraph (c)  shall be deemed to have been furnished to each of the Administrative Agent and the  LC Bank on the date that such report, proxy statements or other material is posted  on the SEC’s website at www.sec.gov. (d) Notices.  The Borrower (or the Servicer on its behalf) will notify the  Administrative Agent and the LC Bank in writing of any of the following events promptly  upon (but in no event later than two (2) Business Days after (other than with respect to  clause (v) below) a Financial Officer or other officer learning of the occurrence thereof,  with such notice describing the same, and if applicable, the steps being taken by the  Person(s) affected with respect thereto: (i) Notice of Events of Default or Unmatured Events of Default.  A  statement of a Financial Officer of the Borrower setting forth details of any Event  of Default or Unmatured Event of Default that has occurred and is continuing and  the action which the Borrower has taken proposes to take with respect thereto. (ii) Representations and Warranties.  The failure of any representation  or warranty made or deemed to be made by the Borrower under this Agreement or  any other Transaction Document to be true and correct in any material respect when  made or deemed made. (iii) Litigation.  The institution of any litigation, arbitration proceeding  or governmental proceeding on the Borrower, the Servicer, the Performance  Guarantor or any Originator, which with respect to any Person other than the  Borrower that, if adversely determined, could reasonably be expected to have a  Material Adverse Effect. 

 

-67- (iv) Adverse Claim.  (A) Any Person shall obtain an Adverse Claim  upon the Collateral or any material portion thereof, (B) any Person other than the  Borrower, the Servicer or the Administrative Agent shall obtain any rights or direct  any action with respect to any Collection Account (or related Lock-Box) or (C) any  Obligor shall receive any change in payment instructions with respect to Pool  Receivable(s) from a Person other than the Borrower, the Originators at the request  of the Borrower, the Servicer or the Administrative Agent.   (v) Name Changes.  At least thirty (30) days before any change in any  Originator’s or the Borrower’s name, jurisdiction of organization or any other  change requiring the amendment of, or the filing of new, UCC financing  statements, a notice setting forth such changes and the effective date thereof. (vi) Change in Accountants or Accounting Policy.  Any change in (i) the  external accountants of the Borrower, the Servicer, any Originator, or the  Performance Guarantor, (ii) any accounting policy of the Borrower, or (iii) any  material accounting policy of any Originator that is relevant to the transactions  contemplated by this Agreement or any other Transaction Document (it being  understood that any change to the manner in which any Originator accounts for the  Pool Receivables shall be deemed “material” for such purpose). (vii) Receivables Purchase Termination Event.  The occurrence of a  Receivables Purchase Termination Event under the Receivables Purchase  Agreement. (viii) Material Adverse Change.  Promptly after the occurrence thereof,   notice of any material adverse change in the business, operations, property or  financial or other condition of the Borrower, the Servicer, any Originator or the  Performance Guarantor. (e) Conduct of Business.  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 will do all things necessary to remain duly organized, validly  existing and in good standing as a domestic organization in its jurisdiction of organization  and maintain all requisite authority to conduct its business in each jurisdiction in which its  business is conducted, except where the failure to maintain such authority could not  reasonably be expected to have a Material Adverse Effect. (f) Compliance with Laws.  The Borrower will comply with all Applicable  Laws to which it may be subject if the failure to comply could reasonably be expected to  have a Material Adverse Effect. (g) Furnishing of Information and Inspection of Receivables.  The Borrower  will furnish or cause to be furnished to the Administrative Agent and the LC Bank from  time to time such information with respect to the Pool Receivables and the other Collateral  as the Administrative Agent and the LC Bank may reasonably request.  The Borrower will,  at the Borrower’s expense, during regular business hours with reasonable prior written  

 

-68- notice (i) permit the Administrative Agent and the LC Bank or their respective agents or  representatives to (A) examine and make copies of and abstracts from all books and  records relating to the Pool Receivables or other Collateral, (B) visit the offices and  properties of the Borrower for the purpose of examining such books and records and (C)  discuss matters relating to the Pool Receivables, the other Collateral or the Borrower’s  performance hereunder or under the other Transaction Documents to which it is a party  with any of the officers, directors, employees or independent public accountants of the  Borrower having knowledge of such matters and (ii) without limiting the provisions of  clause (i) above, during regular business hours, at the Borrower’s expense, upon  reasonable prior written notice from the Administrative Agent, permit certified public  accountants or other auditors acceptable to the Administrative Agent to conduct a review  of its books and records with respect to such Pool Receivables and other Collateral;  provided, that the Borrower shall be required to reimburse the Administrative Agent for  only one (1) such review pursuant to clauses (i) and (ii) above in any twelve-month period,  unless an Event of Default has occurred and is continuing. (h) Payments on Receivables, Collection Accounts.  The Borrower (or the  Servicer on its behalf) will, and will cause each Originator to, at all times, instruct all  Obligors to deliver payments on the Pool Receivables to a Collection Account or a  Lock-Box.  The Borrower (or the Servicer on its behalf) will, and will cause each  Originator to, at all times, maintain such books and records necessary to identify  Collections received from time to time on Pool Receivables and to segregate such  Collections from other property of the Servicer and the Originators.  If any payments on the  Pool Receivables or other Collections are received by the Borrower, the Servicer or an  Originator, it shall hold such payments in trust for the benefit of the Administrative Agent  and the other Secured Parties and promptly (but in any event within one (1) Business Day  after receipt) remit such funds into a Collection Account.  The Borrower (or the Servicer on  its behalf) will cause each Collection Account Bank to comply with the terms of each  applicable Account Control Agreement.  The Borrower shall not permit funds other than  Collections on Pool Receivables and other Collateral to be deposited into any Collection  Account.  If such funds are nevertheless deposited into any Collection Account, the  Borrower (or the Servicer on its behalf) will within two (2) Business Days identify and  transfer such funds to the appropriate Person entitled to such funds.  The Borrower will not,  and will not permit the Servicer, any Originator or any other Person to commingle  Collections or other funds to which the Administrative Agent or any other Secured Party is  entitled, with any other funds.  The Borrower shall only add a Collection Account (or a  related Lock-Box) or a Collection Account Bank to those listed on Schedule II to this  Agreement, if the Administrative Agent has received notice of such addition and an  executed and acknowledged copy of an Account Control Agreement (or an amendment  thereto) in form and substance acceptable to the Administrative Agent from the applicable  Collection Account Bank.  The Borrower shall only terminate a Collection Account Bank  or close a Collection Account (or a related Lock-Box) with the prior written consent of the  Administrative Agent, which consent shall not be unreasonably withheld, conditioned or  delayed.  Upon receipt from any Collection Account Bank of notice that such Collection  Account Bank is terminating or intends to terminate any Account Control Agreement, the  Borrower (or the Servicer on its behalf) will, and will cause each Originator to, at all times,  instruct all Obligors to deliver payments on the Pool Receivables to a different Collection  

 

-69- Account or a Lock-Box that is subject to an Account Control Agreement that has not been  terminated (or that the applicable Collection Account Bank does not intend to terminate). (i) Sales, Liens, etc.  Except as otherwise provided herein, the Borrower will  not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or  suffer to exist any Adverse Claim upon (including, without limitation, the filing of any  financing statement) or with respect to, any Pool Receivable or other Collateral, or assign  any right to receive income in respect thereof. (j) Extension or Amendment of Pool Receivables; Compliance with Credit and  Collection Policy.  Except as otherwise permitted in Section 9.02, the Borrower will not,  and will not permit the Servicer to, alter the delinquency status or adjust the Outstanding  Balance or otherwise modify the terms of any Pool Receivable in any material respect, or  amend, modify or waive, in any material respect, any term or condition of any related  Contract.  The Borrower shall at its expense, timely and fully perform and comply in all  material respects with all provisions, covenants and other promises required to be observed  by it under the Contracts related to the Pool Receivables, and timely and fully comply with  the Credit and Collection Policy with regard to each Pool Receivable and the related  Contract. (k) Changes to Credit and Collection Policy.  The Borrower will not make any  material change in the Credit and Collection Policy without the prior written consent of the  Administrative Agent and the LC Bank, which consent shall not be unreasonably withheld,  conditioned or delayed.  Promptly following any change in the Credit and Collection  Policy, the Borrower will deliver a copy of the updated Credit and Collection Policy to the  Administrative Agent and the LC Bank. (l) Fundamental Changes.  The Borrower shall not, without the prior written  consent of the Administrative Agent and the LC Bank, permit itself (i) to merge or  consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one  transaction or in a series of transactions) all or substantially all of its assets (whether now  owned or hereafter acquired) to, any Person or (ii) to be directly owned by any Person other  than Davey Tree.  The Borrower shall provide the Administrative Agent with at least thirty  (30) days’ prior written notice before making any change in the Borrower’s name or  location or making any other change in the Borrower’s identity or corporate structure that  could impair or otherwise render any UCC financing statement filed in connection with  this Agreement or any other Transaction Document “seriously misleading” as such term  (or similar term) is used in the applicable UCC; each notice to the Administrative Agent  pursuant to this sentence shall set forth the applicable change and the proposed effective  date thereof.   (m) Books and Records.  The Borrower shall maintain and implement (or cause  the Servicer to maintain and implement) administrative and operating procedures  (including an ability to recreate records evidencing Pool Receivables and related Contracts  in the event of the destruction of the originals thereof), and keep and maintain (or cause the  Servicer to keep and maintain) all documents, books, records, computer tapes and disks  and other information reasonably necessary or advisable for the collection of all Pool  

 

-70- Receivables (including records adequate to permit the daily identification of each Pool  Receivable and all Collections of and adjustments to each existing Pool Receivable). (n) Identifying of Records.  The Borrower shall: (i) identify (or cause the  Servicer to identify) its master data processing records relating to Pool Receivables and  related Contracts with a legend that indicates that the Pool Receivables have been pledged  in accordance with this Agreement and (ii) cause each Originator to identify its master data  processing records with such a legend. (o) Change in Payment Instructions to Obligors.  The Borrower shall not (and  shall not permit the Servicer or any Sub-Servicer to) add, replace or terminate any  Collection Account (or any related Lock-Box) or make any change in its (or their)  instructions to the Obligors regarding payments to be made to the Collection Accounts (or  any related Lock-Box), other than any instruction to remit payments to a different  Collection Account (or any related Lock-Box), unless the Administrative Agent shall have  received (i) prior written notice of such addition, termination or change and (ii) a signed  and acknowledged Account Control Agreement (or an amendment thereto) with respect to  such new Collection Accounts (or any related Lock-Box), and the Administrative Agent  shall have consented to such change in writing, which consent shall not be unreasonably  withheld, conditioned or delayed. (p) Security Interest, Etc.  The Borrower shall (and shall cause the Servicer to),  at its expense, take all action necessary or reasonably desirable to establish and maintain a  valid and enforceable first priority perfected security interest in the Collateral, in each case  free and clear of any Adverse Claim, in favor of the Administrative Agent (on behalf of the  Secured Parties), including taking such action to perfect, protect or more fully evidence the  security interest of the Administrative Agent (on behalf of the Secured Parties) as the  Administrative Agent or any Secured Party may reasonably request.  In order to evidence  the security interests of the Administrative Agent under this Agreement, the Borrower  shall, from time to time take such action, or execute and deliver such instruments as may be  necessary (including, without limitation, such actions as are reasonably requested by the  Administrative Agent) to maintain and perfect, as a first-priority interest, the  Administrative Agent’s security interest in the Receivables, Related Security and  Collections.  The Borrower shall, from time to time and within the time limits established  by applicable law, prepare and present to the Administrative Agent for the Administrative  Agent’s authorization and approval, all financing statements, amendments, continuations  or initial financing statements in lieu of a continuation statement, or other filings necessary  to continue, maintain and perfect the Administrative Agent’s security interest as a  first-priority interest.  The Administrative Agent’s approval of such filings shall authorize  the Borrower to file such financing statements under the UCC without the signature of the  Borrower, any Originator or the Administrative Agent where allowed by Applicable Law.   Notwithstanding anything else in the Transaction Documents to the contrary, the Borrower  shall not have any authority to file a termination, partial termination, release, partial  release, or any amendment that deletes the name of a debtor or excludes collateral of any  such financing statements filed in connection with the Transaction Documents, without the  prior written consent of the Administrative Agent, except as set forth in Section 5.06(c)  hereof. 

 

-71- (q) Certain Agreements.  Other than in connection with the Final Payout Date,  without the prior written consent of the Administrative Agent and the LC Bank, the  Borrower will not (and will not permit any Originator or the Servicer to) amend, modify,  waive, revoke or terminate any Transaction Document to which it is a party or any  provision of the Borrower’s organizational documents which requires the consent of the  “Independent Manager” (as such term is used in the Borrower’s Operating Agreement). (r) Other Business.  The Borrower will not: (i) engage in any business other  than the transactions contemplated by the Transaction Documents, (ii) create, incur or  permit to exist any Debt of any kind (or cause or permit to be issued for its account any  letters of credit (excluding, for the avoidance of doubt, Letters of Credit issued hereunder))  or bankers’ acceptances other than pursuant to this Agreement or the Subordinated Notes  or (iii) form any Subsidiary or make any investments in any other Person. (s) Restricted Payments.  (i) Except pursuant to clause (ii) below, the Borrower  will not:  (A) purchase or redeem any of its membership interests, (B) declare or pay any  dividend or set aside any funds for any such purpose, (C) prepay, purchase or redeem any  Debt (other than any Borrower Obligations), (D) lend or advance any funds or (E) repay  any loans or advances to, for or from any of its Affiliates (the amounts described in clauses  (A) through (E) being referred to as “Restricted Payments”). (ii) Subject to the limitations set forth in clause (iii) below, the Borrower may  make Restricted Payments so long as such Restricted Payments are made only in one or  more of the following ways:  (A) the Borrower may make cash payments (including  prepayments) on the Subordinated Notes in accordance with their respective terms and (B)  the Borrower may declare and pay dividends if, both immediately before and immediately  after giving effect thereto, the Borrower’s Net Worth is not less than the Required Capital  Amount. (iii) The Borrower may make Restricted Payments only out of the funds, if any,  it receives pursuant to Sections 4.01 of this Agreement; provided, that the Borrower shall  not pay, make or declare any Restricted Payment (including any dividend) if, after giving  effect thereto, any Event of Default or Unmatured Event of Default shall have occurred and  be continuing. (t) Use of Collections Available to the Borrower.  The Borrower shall apply the  Collections available to the Borrower to make payments in the following order of priority:  (i) the payment (or securing) of its obligations under this Agreement and each of the other  Transaction Documents (other than the Subordinated Notes), (ii) the payment of accrued  and unpaid interest on the Subordinated Notes and (iii) other legal and valid purposes. (u) Further Assurances; Change in Name or Jurisdiction of Organization, etc.   (i) The Borrower hereby authorizes and hereby agrees from time to time, at its own  expense, promptly to execute (if necessary) and deliver all further instruments and  documents, and to take all further actions, that may be necessary or desirable, or that the  Administrative Agent may reasonably request, to perfect, protect or more fully evidence  the security interest granted pursuant to this Agreement or any other Transaction  

 

-72- Document, or to enable the Administrative Agent (on behalf of the Secured Parties) to  exercise and enforce the Secured Parties’ rights and remedies under this Agreement and the  other Transaction Documents.  Without limiting the foregoing, the Borrower hereby  authorizes, and will, upon the request of the Administrative Agent, at the Borrower’s own  expense, execute (if necessary) and file such financing statements or continuation  statements, or amendments thereto, and such other instruments and documents, that may be  necessary or desirable, or that the Administrative Agent may reasonably request, to perfect,  protect or evidence any of the foregoing.   (ii) The Borrower authorizes the Administrative Agent to file financing  statements, continuation statements and amendments thereto and assignments  thereof, relating to the Receivables, the Related Security, the related Contracts,  Collections with respect thereto and the other Collateral without the signature of  the Borrower.  A photocopy or other reproduction of this Agreement shall be  sufficient as a financing statement where permitted by law. (iii) The Borrower shall at all times be organized under the laws of the  State of Ohio and shall not take any action to change its jurisdiction of  organization. (iv) The Borrower will not change its name, location, identity or  corporate structure unless (x) the Borrower, at its own expense, shall have taken all  action necessary or appropriate to perfect or maintain the perfection of the security  interest under this Agreement (including, without limitation, the filing of all  financing statements and the taking of such other action as the Administrative  Agent may reasonably request in connection with such change or relocation) and  (y) if requested by the Administrative Agent, the Borrower shall cause to be  delivered to the Administrative Agent, an opinion, in form and substance  reasonably satisfactory to the Administrative Agent as to such UCC perfection and  priority matters as the Administrative Agent may request at such time. (v) OFAC.  The Borrower has not used and will not use the proceeds of any  Credit Extension to fund any operations in, finance any investments or activities in or make  any payments to, a Sanctioned Person or a Sanctioned Country. (w) Anti-Money Laundering/International Trade Law Compliance.  No  Covered Entity will become a Sanctioned Person.  None of the Borrower, the Servicer or  any Originator, either in its own right or through any third party, will (i) have any of its  assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned  Person in violation of any Anti-Terrorism Law; (ii) do business in or with, or derive any of  its income from investments in or transactions with, any Sanctioned Country or Sanctioned  Person in violation of any Anti-Terrorism Law; (iii) engage in any dealings or transactions  prohibited by any Anti-Terrorism Law or (iv) use the proceeds of any Credit Extension to  fund any operations in, finance any investments or activities in, or, make any payments to,  a Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law.  The  funds used to repay each Credit Extension will not be derived from any unlawful activity.   The Borrower shall comply with all Anti-Terrorism Laws applicable to it.  The Borrower  

 

-73- shall promptly notify the Administrative Agent and the LC Bank in writing upon the  occurrence of a Reportable Compliance Event with respect to the Borrower, the Servicer,  any Originator, or any Subsidiary thereof and upon becoming aware of the occurrence of a  Reportable Compliance Event with respect to any other Covered Entity. (x) Borrower’s Net Worth.  The Borrower shall not permit the Borrower’s Net  Worth to be less than the Required Capital Amount; provided, that the foregoing shall not  require Davey Tree to make any additional capital contributions to the Borrower.  (y) Credit Risk Retention.  The Borrower shall cooperate with each Credit Party  (including by providing such information and entering into or delivering such additional  agreements or documents reasonably requested by such Credit Party) to the extent  reasonably necessary to assure such Credit Party that the Originators retain credit risk in  the amount and manner required by the Credit Risk Retention Rules and to permit such  Credit Party to perform its due diligence and monitoring obligations (if any) under the  Credit Risk Retention Rules. Section 8.02. Covenants of the Servicer.  At all times from the Closing Date until the Final  Payout Date: (a) Financial Reporting.  The Servicer will maintain a system of accounting  established and administered in accordance with GAAP, and the Servicer shall furnish to  the Administrative Agent and the LC Bank: (i) Quarterly Financial Statements of Servicer.  As soon as available  and in no event later than fifty (50) days following the end of each of the first three  fiscal quarters in each of the Servicer’s fiscal years, (A) the unaudited consolidated  balance sheet and statements of income of the Servicer and its consolidated  Subsidiaries as at the end of such fiscal quarter and the related unaudited  consolidated statements of earnings and cash flows for such fiscal quarter and for  the elapsed portion of the fiscal year ended with the last day of such fiscal quarter,  in each case setting forth comparative figures for the corresponding fiscal quarter in  the prior fiscal year, all of which shall be certified by a Financial Officer of Davey  Tree that they fairly present in all material respects, in accordance with GAAP, the  financial condition of the Servicer and its consolidated Subsidiaries as of the dates  indicated and the results of their operations for the periods indicated, subject to  normal year-end audit adjustments and the absence of footnotes. (ii) Annual Financial Statements of the Servicer.  Within one hundred  (100) days after the close of each of Servicer’s fiscal years, the consolidated  balance sheet of the Servicer and its consolidated Subsidiaries as at the end of such  fiscal year and the related consolidated statements of earnings and cash flows for  such fiscal year setting forth comparative figures for the preceding fiscal year, all  reported on by independent certified public accountants of recognized national  standing (without a “going concern” or like qualification or exception) to the effect  that such consolidated financial statements present fairly in all material respects, in  accordance with GAAP, the financial condition of the Servicer and its consolidated  

 

-74- Subsidiaries as of the dates indicated and the results of their operations for the  periods indicated. (iii) Compliance Certificates.  (a) A compliance certificate promptly  upon delivery to the Administrative Agent and the LC Bank of the audited financial  statements pursuant to Section 8.01(c)(v) and in no event later than one hundred  (100) days after the close of the Servicer’s fiscal year, in form and substance  substantially similar to Exhibit G signed by a Financial Officer of the Servicer,  solely in his or her capacity as an officer of the Servicer, stating that no Event of  Default or Unmatured Event of Default has occurred and is continuing, or if any  Event of Default or Unmatured Event of Default has occurred and is continuing,  stating the nature and status thereof and (b) within fifty (50) days after the close of  each fiscal quarter of the Servicer, a compliance certificate in form and substance  substantially similar to Exhibit G signed by a Financial Officer of the Servicer,  solely in his or her capacity as an officer of the Servicer, stating that no Event of  Default or Unmatured Event of Default has occurred and is continuing, or if any  Event of Default or Unmatured Event of Default has occurred and is continuing,  stating the nature and status thereof. (iv) Information Packages.  (x) As soon as available and in any event not  later than two (2) Business Days prior to each Settlement Date, an Information  Package as of the most recently completed Fiscal Month and (y) within two (2)  Business Days following a request from time to time by the Administrative Agent,  an interim report on the Pool Receivables containing such information as the  Administrative Agent may reasonably request. (v) Other Reports and Filings.  Promptly (but in any event within ten  days) after the filing or delivery thereof, copies of all financial information, proxy  materials and reports, if any, which the Servicer or any of its consolidated  Subsidiaries shall publicly file with the SEC or deliver to holders (or any trustee,  agent or other representative therefor) of any of its material Debt pursuant to the  terms of the documentation governing the same.  (vi) Other Information.  Such other information (including non-financial  information) as the Administrative Agent or the LC Bank may from time to time  reasonably request, including any information available to the Borrower, the  Servicer or any Originator as the Administrative Agent or the LC Bank may  reasonably request. Notwithstanding anything herein to the contrary, any financial information, proxy  statements or other material required to be delivered pursuant to this paragraph (a)  shall be deemed to have been furnished to each of the Administrative Agent and the  LC Bank on the date that such report, proxy statements or other material is posted  on the SEC’s website at www.sec.gov. (b) Notices.  The Servicer will notify the Administrative Agent and the LC  Bank in writing of any of the following events promptly upon (but in no event later than  

 

-75- two (2) Business Days after (other than with respect to clause (v) below)) a Financial  Officer or other officer learning of the occurrence thereof, with such notice describing the  same, and if applicable, the steps taken or being taken by the Person(s) affected with  respect thereto: (i) Notice of Events of Default or Unmatured Events of Default.  A  statement of a Financial Officer of the Servicer setting forth details of any Event of  Default or Unmatured Event of Default that has occurred and is continuing and the  action which the Servicer has taken or proposes to take with respect thereto. (ii) Representations and Warranties.  The failure of any representation  or warranty made or deemed made by the Servicer under this Agreement or any  other Transaction Document to be true and correct in any material respect when  made or deemed made. (iii) Litigation.  The institution of any litigation, arbitration proceeding  or governmental proceeding which could reasonably be expected to have a Material  Adverse Effect. (iv) Adverse Claim.  (A) Any Person shall obtain an Adverse Claim  upon the Collateral or any material portion thereof, (B) any Person other than the  Borrower, the Servicer or the Administrative Agent shall obtain any rights or direct  any action with respect to any Collection Account (or related Lock-Box) or (C) any  Obligor shall receive any change in payment instructions with respect to Pool  Receivable(s) from a Person other than the Borrower, the Servicer or the  Administrative Agent.   (v) Name Changes.  At least thirty (30) days before any change in any  Originator’s or the Borrower’s name, jurisdiction of organization or any other  change requiring the amendment of, or the filing of new, UCC financing  statements, a notice setting forth such changes and the effective date thereof. (vi) Change in Accountants or Accounting Policy.  Any change in (i) the  external accountants of the Borrower, the Servicer, any Originator or the  Performance Guarantor, (ii) any accounting policy of the Servicer or the Borrower  or (iii) any material accounting policy of any Originator that is relevant to the  transactions contemplated by this Agreement or any other Transaction Document  (it being understood that any change to the manner in which any Originator  accounts for the Pool Receivables shall be deemed “material” for such purpose). (vii) Material Adverse Change.  Promptly after the occurrence thereof,  notice of any material adverse change in the business, operations, property or  financial or other condition of any Originator, the Servicer, the Performance  Guarantor, or the Borrower.   (c) Conduct of Business.  The Servicer will 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  

 

-76- each jurisdiction in which its business is conducted if the failure to have such authority  could reasonably be expected to have a Material Adverse Effect. (d) Compliance with Laws.  The Servicer will comply with all Applicable Laws  to which it may be subject if the failure to comply could reasonably be expected to have a  Material Adverse Effect.  The Servicer shall service the Receivables in accordance with the  terms hereof and the terms of the related Contracts. (e) Furnishing of Information and Inspection of Receivables.  The Servicer will  furnish or cause to be furnished to the Administrative Agent and the LC Bank from time to  time such information with respect to the Pool Receivables and the other Collateral as the  Administrative Agent or the LC Bank may reasonably request.  The Servicer will, at the  Servicer’s expense, during regular business hours with reasonable prior written notice, (i)  permit the Administrative Agent and the LC Bank or their respective agents or  representatives to (A) examine and make copies of and abstracts from all books and  records relating to the Pool Receivables or other Collateral, (B) visit the offices and  properties of the Servicer for the purpose of examining such books and records and (C)  discuss matters relating to the Pool Receivables, the other Collateral or the Servicer’s  performance hereunder or under the other Transaction Documents to which it is a party  with any of the officers, directors, employees or independent public accountants of the  Servicer (provided, that representatives of the Servicer are present during such  discussions) having knowledge of such matters and (ii) without limiting the provisions of  clause (i) above, during regular business hours, at the Servicer’s expense, upon reasonable  prior written notice from the Administrative Agent, permit certified public accountants or  other auditors acceptable to the Administrative Agent to conduct a review of its books and  records with respect to the Pool Receivables and other Collateral; provided, that the  Servicer shall be required to reimburse the Administrative Agent for only one (1) such  review pursuant to clause (ii) above in any twelve-month period unless an Event of Default  has occurred and is continuing. (f) Payments on Receivables, Collection Accounts.  The Servicer will at all  times, instruct all Obligors to deliver payments on the Pool Receivables to a Collection  Account or a Lock-Box.  The Servicer will, at all times, maintain such books and records  necessary to identify Collections received from time to time on Pool Receivables and to  segregate such Collections from other property of the Servicer and the Originators.  If any  payments on the Pool Receivables or other Collections are received by the Borrower, the  Servicer or an Originator, it shall hold such payments in trust for the benefit of the  Administrative Agent and the other Secured Parties and promptly (but in any event within  one (1) Business Day after receipt) remit such funds into a Collection Account.  The  Servicer shall not permit funds other than Collections on Pool Receivables and other  Collateral to be deposited into any Collection Account.  If such funds are nevertheless  deposited into any Collection Account, the Servicer will within two (2) Business Days  identify and transfer such funds to the appropriate Person entitled to such funds.  The  Servicer will not, and will not permit the Borrower, any Originator or any other Person to  commingle Collections or other funds to which the Administrative Agent or any other  Secured Party is entitled, with any other funds.  The Servicer shall only add a Collection  Account (or a related Lock-Box), or a Collection Account Bank to those listed on Schedule  

 

-77- II to this Agreement, if the Administrative Agent has received notice of such addition and  an executed and acknowledged copy of an Account Control Agreement (or an amendment  thereto) in form and substance acceptable to the Administrative Agent from the applicable  Collection Account Bank.  The Servicer shall only terminate a Collection Account Bank or  close a Collection Account (or a related Lock-Box) with the prior written consent of the  Administrative Agent, which consent shall not be unreasonably withheld, conditioned or  delayed.  Upon receipt from any Collection Account Bank of notice that such Collection  Account Bank is terminating or intends to terminate any Account Control Agreement, the  Servicer will, and will cause each Originator to, at all times, instruct all Obligors to deliver  payments on the Pool Receivables to a different Collection Account or a Lock-Box that is  subject to an Account Control Agreement that has not been terminated (or that the  applicable Collection Account Bank does not intend to terminate). (g) Extension or Amendment of Pool Receivables; Compliance with Credit and  Collection Policy.  Except as otherwise permitted in Section 9.02, the Servicer will not  alter the delinquency status or adjust the Outstanding Balance or otherwise modify the  terms of any Pool Receivable in any material respect, or amend, modify or waive, in any  material respect, any term or condition of any related Contract.  The Servicer shall at its  expense, timely and fully perform and comply in all material respects with all provisions,  covenants and other promises required to be observed by it under the Contracts related to  the Pool Receivables, and timely and fully comply with the Credit and Collection Policy  with regard to each Pool Receivable and the related Contract. (h) Changes to Credit and Collection Policy.  The Servicer will not make any  material change in the Credit and Collection Policy without the prior written consent of the  Administrative Agent and the LC Bank, which consent shall not be unreasonably withheld,  conditioned or delayed.  Promptly following any change in the Credit and Collection  Policy, the Servicer will deliver a copy of the updated Credit and Collection Policy to the  Administrative Agent and the LC Bank. (i) Records.  The Servicer will maintain and implement administrative and  operating procedures (including an ability to recreate records evidencing Pool Receivables  and related Contracts in the event of the destruction of the originals thereof), and keep and  maintain all documents, books, records, computer tapes and disks and other information  reasonably necessary or advisable for the collection of all Pool Receivables (including  records adequate to permit the daily identification of each Pool Receivable and all  Collections of and adjustments to each existing Pool Receivable). (j) Identifying of Records.  The Servicer shall identify its master data  processing records relating to Pool Receivables and related Contracts with a legend that  indicates that the Pool Receivables have been pledged in accordance with this Agreement. (k) Change in Payment Instructions to Obligors.  The Servicer shall not (and  shall not permit any Sub-Servicer to) add, replace or terminate any Collection Account (or  any related Lock-Box) or make any change in its instructions to the Obligors regarding  payments to be made to the Collection Accounts (or any related Lock-Box), other than any  instruction to remit payments to a different Collection Account (or any related Lock-Box),  

 

-78- unless the Administrative Agent shall have received (i) prior written notice of such  addition, termination or change and (ii) a signed and acknowledged Account Control  Agreement (or an amendment thereto) with respect to such new Collection Accounts (or  any related Lock-Box) and the Administrative Agent shall have consented to such change  in writing, which consent shall not be unreasonably withheld, conditioned or delayed. (l) Security Interest, Etc.  The Servicer shall, at its expense, take all action  necessary or reasonably desirable to establish and maintain a valid and enforceable first  priority perfected security interest in the Collateral, in each case free and clear of any  Adverse Claim in favor of the Administrative Agent (on behalf of the Secured Parties),  including taking such action to perfect, protect or more fully evidence the security interest  of the Administrative Agent (on behalf of the Secured Parties) as the Administrative Agent  or any Secured Party may reasonably request.  In order to evidence the security interests of  the Administrative Agent under this Agreement, the Servicer shall, from time to time take  such action, or execute and deliver such instruments as may be necessary (including,  without limitation, such actions as are reasonably requested by the Administrative Agent)  to maintain and perfect, as a first-priority interest, the Administrative Agent’s security  interest in the Receivables, Related Security and Collections.  The Servicer shall, from  time to time and within the time limits established by law, prepare and present to the  Administrative Agent for the Administrative Agent’s authorization and approval, all  financing statements, amendments, continuations, or initial financing statements in lieu of  a continuation statement or other filings necessary to continue, maintain and perfect the  Administrative Agent’s security interest as a first-priority interest.  The Administrative  Agent’s approval of such filings shall authorize the Servicer to file such financing  statements under the UCC without the signature of the Borrower, any Originator or the  Administrative Agent where allowed by Applicable Law.  Except in connection with the  Final Payout Date, notwithstanding anything else in the Transaction Documents to the  contrary, the Servicer shall not have any authority to file a termination, partial termination,  release, partial release, or any amendment that deletes the name of a debtor or excludes  collateral of any such financing statements filed in connection with the Transaction  Documents, without the prior written consent of the Administrative Agent. (m) Further Assurances; Change in Name or Jurisdiction of Organization, etc.   The Servicer hereby authorizes and hereby agrees from time to time, at its own expense,  promptly to execute (if necessary) and deliver all further instruments and documents, and  to take all further actions, that may be necessary or desirable, or that the Administrative  Agent may reasonably request, to perfect, protect or more fully evidence the security  interest granted pursuant to this Agreement or any other Transaction Document, or to  enable the Administrative Agent (on behalf of the Secured Parties) to exercise and enforce  their respective rights and remedies under this Agreement or any other Transaction  Document.  Without limiting the foregoing, the Servicer hereby authorizes, and will, upon  the request of the Administrative Agent, at the Servicer’s own expense, execute (if  necessary) and file such financing statements or continuation statements, or amendments  thereto, and such other instruments and documents, that may be necessary or desirable, or  that the Administrative Agent may reasonably request, to perfect, protect or evidence any  of the foregoing. 

 

-79- (n) Tax Election.  If the Borrower is classified as a partnership for U.S. federal  income tax purposes, then as of the date that Sections 6221 through 6241 of the Code (as  enacted by the Bipartisan Budget Act of 2015, P.L. 114-74), including any other Code  provisions for the same subject matter, and any related regulations (adopted or proposed)  and administrative guidance are first applicable to the Borrower, the Servicer (i) is  designated as the partnership representative of the Borrower under Section 6223(a) of the  Code to the extent allowed under law and (ii) will or will cause the Borrower, to the extent  eligible, to make the election under Section 6221(b) of the Code for determinations of  adjustments at the partnership level and take any other action necessary or appropriate for  the election.  If that election is not available, to the extent applicable, the Servicer will or  will cause the Borrower to make the election under Section 6226(a) of the Code for the  alternative to payment of imputed underpayment by a partnership and take any other action  necessary or appropriate for the election. (o) Anti-Money Laundering/International Trade Law Compliance.  No  Covered Entity will become a Sanctioned Person.  None of the Borrower, the Servicer or  any Originator, either in its own right or through any third party, will (a) have any of its  assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned  Person in violation of any Anti-Terrorism Law; (b) do business in or with, or derive any of  its income from investments in or transactions with, any Sanctioned Country or Sanctioned  Person in violation of any Anti-Terrorism Law; (c) engage in any dealings or transactions  prohibited by any Anti-Terrorism Law or (d) use any Credit Extension to fund any  operations in, finance any investments or activities in, or, make any payments to, a  Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law.  The  funds used to repay each Credit Extension will not be derived from any unlawful activity.   The Servicer shall comply with all Anti-Terrorism Laws applicable to it.  The Servicer  shall promptly notify the Administrative Agent and the LC Bank in writing upon the  occurrence of a Reportable Compliance Event with respect to the Borrower, the Servicer,  any Originator, or any Subsidiary thereof and upon becoming aware of the occurrence of a  Reportable Compliance Event with respect to any other Covered Entity. (p) Credit Risk Retention.  The Servicer shall, and shall cause each Originator  to, cooperate with each Credit Party (including by providing such information and entering  into or delivering such additional agreements or documents reasonably requested by such  Credit Party) to the extent reasonably necessary to assure such Credit Party that the  Originators retain credit risk in the amount and manner required by the Credit Risk  Retention Rules and to permit such Credit Party to perform its due diligence and  monitoring obligations (if any) under the Credit Risk Retention Rules.  Section 8.03. Separate Existence of the Borrower.  Each of the Borrower and the Servicer  hereby acknowledges that the Secured Parties and the Administrative Agent are entering into the  transactions contemplated by this Agreement and the other Transaction Documents in reliance  upon the Borrower’s identity as a legal entity separate from any Originator, the Servicer, the  Performance Guarantor and their Affiliates.  Therefore, each of the Borrower and Servicer shall  take all steps specifically required by this Agreement or reasonably required by the Administrative  Agent or the LC Bank to continue the Borrower’s identity as a separate legal entity and to make it  apparent to third Persons that the Borrower is an entity with assets and liabilities distinct from  

 

-80- those of the Performance Guarantor, the Originators, the Servicer and any other Person, and is not  a division of the Performance Guarantor, the Originators, the Servicer, its Affiliates or any other  Person. Without limiting the generality of the foregoing and in addition to and consistent with the  other covenants set forth herein, each of the Borrower and the Servicer shall take such actions as  shall be required in order that: (a) Special Purpose Entity.  The Borrower will be a special purpose company  whose primary activities are restricted in its Articles of Organization or Operating  Agreement to: (i) purchasing or otherwise acquiring from an Originator, owning, holding,  granting security interests or selling interests in, the Collateral, (ii) entering into  agreements for the selling, servicing and financing of the Receivables Pool (including the  Transaction Documents) and (iii) conducting such other activities as it deems necessary or  appropriate to carry out its primary activities. (b) No Other Business or Debt.  The Borrower shall not engage in any business  or activity except as set forth in this Agreement nor, incur any indebtedness or liability  other than as expressly permitted by the Transaction Documents. (c) Independent Director.  Not fewer than one member of the Borrower’s board  of directors (the “Independent Director”) shall be a natural person who (i) has never been,  and shall at no time be, an equityholder, director, officer, manager, member, partner,  officer, employee or associate, or any relative of the foregoing, of any member of the  Davey Tree Group (as hereinafter defined) (other than his or her service as an Independent  Director of the Borrower or an independent director of any other bankruptcy-remote  special purpose entity formed for the sole purpose of securitizing, or facilitating the  securitization of, financial assets of any member or members of the Davey Tree Group),  (ii) is not a customer or supplier of any member of the Davey Tree Group (other than his or  her service as an Independent Director of the Borrower or an independent director of any  other bankruptcy-remote special purpose entity formed for the sole purpose of securitizing,  or facilitating the securitization of, financial assets of any member or members of the  Davey Tree Group), (iii) is not any member of the immediate family of a person described  in (i) or (ii) above, and (iv) has (x) prior experience as an independent director for a  corporation or limited liability company whose organizational or 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 (y) 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 issuers of  securitization or structured finance instruments, agreements or securities.  For purposes of  this clause (c), “Davey Tree Group” shall mean (i) the Servicer, the Performance  Guarantor and each Originator, (ii) each person that directly or indirectly, owns or controls,  whether beneficially, or as a trustee, guardian or other fiduciary, five percent (5%) or more  of the membership interests in Davey Tree, (iii) each person that controls, is controlled by  or is under common control with Davey Tree, and (iv) each of such person’s officers,  directors, managers, joint venturers and partners.  For the purposes of this definition,  “control” of a person means the possession, directly or indirectly, of the power to direct or  

 

-81- cause the direction of the management and policies of a person or entity, whether through  the ownership of voting securities, by contract or otherwise.  A person shall be deemed to  be an “associate” of (A) a corporation or organization of which such person is an officer,  director, partner or manager or is, directly or indirectly, the beneficial owner of ten percent  (10%) or more of any class of equity securities, (B) any trust or other estate in which such  person serves as trustee or in a similar capacity and (C) any relative or spouse of a person  described in clause (A) or (B) of this sentence, or any relative of such spouse. The Borrower shall (A) give written notice to the Administrative Agent of the  election or appointment, or proposed election or appointment, of a new Independent  Director of the Borrower, which notice shall be given not later than ten (10) Business Days  prior to the date such appointment or election would be effective (except when such  election or appointment is necessary to fill a vacancy caused by the death, disability, or  incapacity of the existing Independent Director, or the failure of such Independent Director  to satisfy the criteria for an Independent Director set forth in this clause (c), in which case  the Borrower shall provide written notice of such election or appointment within one (1)  Business Day) and (B) with any such written notice, certify to the Administrative Agent  that the Independent Director satisfies the criteria for an Independent Director set forth in  this clause (c). The Borrower’s Operating Agreement shall provide that: (A) the Borrower’s board  of directors shall not approve, or take any other action to cause the filing of, a voluntary  bankruptcy petition with respect to the Borrower unless the Independent Director shall  approve the taking of such action in writing before the taking of such action and (B) such  provision and each other provision requiring an Independent Director cannot be amended  without the prior written consent of the Independent Director. The Independent Director shall not at any time serve as a trustee in bankruptcy for  the Borrower, the Performance Guarantor, any Originator, the Servicer or any of their  respective Affiliates. (d) Organizational Documents.  The Borrower shall maintain its organizational  documents in conformity with this Agreement, such that it does not amend, restate,  supplement or otherwise modify its ability to comply with the terms and provisions of any  of the Transaction Documents, including, without limitation, Section 8.01(p). (e) Conduct of Business.  The Borrower shall conduct its affairs strictly in  accordance with its organizational documents and observe all necessary, appropriate and  customary company formalities, including, but not limited to, holding all regular and  special members’ and board of directors’ meetings appropriate to authorize all corporate  action, keeping separate and accurate minutes of its meetings, passing all resolutions or  consents necessary to authorize actions taken or to be taken, and maintaining accurate and  separate books, records and accounts, including, but not limited to, payroll and  intercompany transaction accounts. (f) Compensation.  Any employee, consultant or agent of the Borrower will be  compensated from the Borrower’s funds for services provided to the Borrower, and to the  

 

-82- extent that Borrower shares the same officers or other employees as the Servicer (or any  other Affiliate thereof), the salaries and expenses relating to providing benefits to such  officers and other employees shall be fairly allocated among such entities, and each such  entity shall bear its fair share of the salary and benefit costs associated with such common  officers and employees; provided, that the foregoing shall not require Davey Tree to make  any additional capital contributions to the Borrower.  The Borrower will not engage any  agents other than its attorneys, auditors and other professionals, and a servicer and any  other agent contemplated by the Transaction Documents for the Receivables Pool, which  servicer will be fully compensated for its services by payment of the Servicing Fee. (g) Servicing and Costs.  The Borrower will contract with the Servicer to  perform for the Borrower all operations required on a daily basis to service the Receivables  Pool.  The Borrower will not incur any indirect or overhead expenses for items shared with  the Servicer (or any other Affiliate thereof) that are not reflected in the Servicing Fee.  To  the extent, if any, that the Borrower (or any Affiliate thereof) shares items of expenses not  reflected in the Servicing Fee, such as legal, auditing and other professional services, such  expenses will be allocated to the extent practical on the basis of actual use or the value of  services rendered, and otherwise on a basis reasonably related to the actual use or the value  of services rendered. (h) Operating Expenses.  The Borrower’s operating expenses will not be paid  by the Servicer, the Performance Guarantor, any Originator or any Affiliate thereof and  Davey Tree shall have no obligation to make additional capital contributions to the  Borrower for such operating expenses. (i) reserved. (j) Books and Records.  The Borrower’s books and records will be maintained  separately from those of the Servicer, the Performance Guarantor, the Originators and any  of their Affiliates and in a manner such that it will not be difficult or costly to segregate,  ascertain or otherwise identify the assets and liabilities of the Borrower. (k) Disclosure of Transactions.  All financial statements of the Servicer, the  Performance Guarantor, the Originators or any Affiliate thereof that are consolidated to  include the Borrower will disclose that (i) the Borrower’s sole business consists of the  purchase or acceptance through capital contributions of the Receivables and Related  Security from the Originators and the subsequent retransfer of or granting of a security  interest in such Receivables and Related Security to the Administrative Agent pursuant to  this Agreement, (ii) the Borrower is a separate legal entity with its own separate creditors  who will be entitled, upon its liquidation, to be satisfied out of the Borrower’s assets prior  to any assets or value in the Borrower becoming available to the Borrower’s equity holders  and (iii) the assets of the Borrower are not available to pay creditors of the Servicer, the  Performance Guarantor, the Originators or any Affiliate thereof. (l) Segregation of Assets.  The Borrower’s assets will be maintained in a  manner that facilitates their identification and segregation from those of the Servicer, the  Performance Guarantor, the Originators or any Affiliates thereof. 

 

-83- (m) Corporate Formalities.  The Borrower will strictly observe corporate  formalities in its dealings with the Servicer, the Performance Guarantor, the Originators or  any Affiliates thereof, and funds or other assets of the Borrower will not be commingled  with those of the Servicer, the Performance Guarantor, the Originators or any Affiliates  thereof except as permitted by this Agreement in connection with servicing the Pool  Receivables.  The Borrower shall not maintain joint bank accounts or other depository  accounts to which the Servicer, the Performance Guarantor, the Originators or any  Affiliate thereof (other than the Servicer solely in its capacity as such) has independent  access.  The Borrower is not named, and has not entered into any agreement to be named,  directly or indirectly, as a direct or contingent beneficiary or loss payee on any insurance  policy with respect to any loss relating to the property of the Servicer, the Performance  Guarantor, the Originators or any Subsidiaries or other Affiliates thereof.  The Borrower  will pay to the appropriate Affiliate the marginal increase or, in the absence of such  increase, the market amount of its portion of the premium payable with respect to any  insurance policy that covers the Borrower and such Affiliate. (n) Arm’s-Length Relationships.  The Borrower will maintain arm’s-length  relationships with the Servicer, the Performance Guarantor, the Originators and any  Affiliates thereof.  Any Person that renders or otherwise furnishes services to the Borrower  will be compensated by the Borrower at market rates for such services it renders or  otherwise furnishes to the Borrower.  Neither the Borrower on the one hand, nor the  Servicer, the Performance Guarantor, any Originator or any Affiliate thereof, on the other  hand, will be or will hold itself out to be responsible for the debts of the other or the  decisions or actions respecting the daily business and affairs of the other.  The Borrower,  the Servicer, the Performance Guarantor, the Originators and their respective Affiliates  will immediately correct any known misrepresentation with respect to the foregoing, and  they will not operate or purport to operate as an integrated single economic unit with  respect to each other or in their dealing with any other entity. (o) Allocation of Overhead.  To the extent that Borrower, on the one hand, and  the Servicer, the Performance Guarantor, any Originator or any Affiliate thereof, on the  other hand, have offices in the same location, there shall be a fair and appropriate  allocation of overhead costs between them, and the Borrower shall bear its fair share of  such expenses, which may be paid through the Servicing Fee or otherwise. ARTICLE IX ADMINISTRATION AND COLLECTION OF RECEIVABLES Section 9.01. Appointment of the Servicer.  (a) The servicing, administering and collection  of the Pool Receivables shall be conducted by the Person so designated from time to time as the  Servicer in accordance with this Section 9.01.  Until the Administrative Agent gives notice to  Davey Tree (in accordance with this Section 9.01) of the designation of a new Servicer, Davey  Tree is hereby designated as, and hereby agrees to perform the duties and obligations of, the  Servicer pursuant to the terms hereof.  Upon the occurrence of an Event of Default, the  Administrative Agent may (with the consent of the LC Bank) and shall (at the direction of the LC  

 

-84- Bank) designate as Servicer any Person (including itself) to succeed Davey Tree or any successor  Servicer, on the condition in each case that any such Person so designated shall agree to perform  the duties and obligations of the Servicer pursuant to the terms hereof. (b) Upon the designation of a successor Servicer as set forth in clause (a) above, Davey  Tree agrees that it will terminate its activities as Servicer hereunder in a manner that the  Administrative Agent reasonably determines will facilitate the transition of the performance of  such activities to the new Servicer, and Davey Tree shall cooperate with and assist such new  Servicer.  Such cooperation shall include access to and transfer of records (including all Contracts)  related to Pool Receivables and use by the new Servicer of all licenses (or the obtaining of new  licenses), hardware or software necessary or reasonably desirable to collect the Pool Receivables  and the Related Security. (c) Davey Tree acknowledges that, in making its decision to execute and deliver this  Agreement, the Administrative Agent and each Credit Party have relied on Davey Tree’s  agreement to act as Servicer hereunder.  Accordingly, Davey Tree agrees that it will not  voluntarily resign as Servicer without the prior written consent of the Administrative Agent and  the LC Bank. (d) The Servicer may delegate its duties and obligations hereunder to any subservicer  (each a “Sub-Servicer”); provided, that, in each such delegation: (i) such Sub-Servicer shall agree  in writing to perform the delegated duties and obligations of the Servicer pursuant to the terms  hereof, (ii) the Servicer shall remain liable for the performance of the duties and obligations so  delegated, (iii) the Borrower, the Administrative Agent, and each Credit Party shall have the right  to look solely to the Servicer for performance, (iv) the terms of any agreement with any  Sub-Servicer shall provide that the Administrative Agent may terminate such agreement upon the  termination of the Servicer hereunder by giving notice of its desire to terminate such agreement to  the Servicer (and the Servicer shall provide appropriate notice to each such Sub-Servicer), and (v)  if such Sub-Servicer is not an Affiliate of the Servicer, the Administrative Agent and the LC Bank  shall have consented in writing in advance to such delegation. Section 9.02. Duties of the Servicer.  (a) The Servicer shall take or cause to be taken  all such action as may be necessary or reasonably advisable to service, administer and collect each  Pool Receivable from time to time, all in accordance with this Agreement and all Applicable  Laws, with reasonable care and diligence, and in accordance with the Credit and Collection Policy  and consistent with the past practices of the Originators.  The Servicer shall set aside, for the  accounts of each Credit Party, the amount of Collections to which each such Credit Party is  entitled in accordance with Article IV hereof.  The Servicer may, in accordance with the Credit and  Collection Policy and consistent with past practices of the Originators, take such action, including  modifications, waivers or restructurings of Pool Receivables and related Contracts, as the Servicer  may reasonably determine to be appropriate to maximize Collections thereof or reflect  adjustments expressly permitted under the Credit and Collection Policy or as expressly required  under Applicable Laws or the applicable Contract; provided, that for purposes of this Agreement:  (i) such action shall not, and shall not be deemed to, change the number of days such Pool  Receivable has remained unpaid from the date of the original invoice and/or due date related to  such Pool Receivable, (ii) such action shall not alter the status of such Pool Receivable as a  Delinquent Receivable or a Defaulted Receivable or limit the rights of any Secured Party under  

 

-85- this Agreement or any other Transaction Document and (iii) if an Event of Default has occurred  and is continuing, the Servicer may take such action only upon the prior written consent of the  Administrative Agent.  The Borrower shall deliver to the Servicer and the Servicer shall hold for  the benefit of the Administrative Agent (individually and for the benefit of each Credit Party), in  accordance with their respective interests, all records and documents (including computer tapes or  disks) with respect to each Pool Receivable. Notwithstanding anything to the contrary contained  herein, if an Event of Default has occurred and is continuing, the Administrative Agent may direct  the Servicer to commence or settle any legal action to enforce collection of any Pool Receivable  that is a Defaulted Receivable or to foreclose upon or repossess any Related Security with respect  to any such Defaulted Receivable. (b) The Servicer shall, as soon as reasonably practicable following actual receipt of  collected funds, turn over to the Borrower the collections of any indebtedness that is not a Pool  Receivable, less, if Davey Tree or an Affiliate thereof is not the Servicer, all reasonable and  appropriate out-of-pocket costs and expenses of such Servicer of servicing, collecting and  administering such collections.  The Servicer, if other than Davey Tree or an Affiliate thereof,  shall, as soon as reasonably practicable upon written demand, deliver to the Borrower all records  in its possession that evidence or relate to any indebtedness that is not a Pool Receivable, and  copies of records in its possession that evidence or relate to any indebtedness that is a Pool  Receivable. (c) The Servicer’s obligations hereunder shall terminate on the Final Payout Date.   Promptly following the Final Payout date, the Servicer shall deliver to the Borrower all books,  records and related materials that the Borrower previously provided to the Servicer, or that have  been obtained by the Servicer, in connection with this Agreement. Section 9.03. Collection Account Arrangements.  Prior to the Closing Date, the Borrower  shall have entered into Account Control Agreements with all of the Collection Account Banks and  delivered executed counterparts of each Account Control Agreement to the Administrative Agent.   Upon the occurrence and during the continuance of an Event of Default or the date that is five (5)  Business Days prior to the date on which any Account Control Agreement will be terminated in  accordance with a notice delivered to the Administrative Agent by any Collection Account Bank  per the terms of such Account Control Agreement, the Administrative Agent may (with the  consent of the LC Bank) and shall (upon the direction of the LC Bank) at any time thereafter give  notice to each Collection Account Bank that the Administrative Agent is exercising its rights under  the Account Control Agreements to do any or all of the following: (a) to have the exclusive  ownership and control of the Collection Accounts transferred to the Administrative Agent (for the  benefit of the Secured Parties) and to exercise exclusive dominion and control over the funds  deposited therein, (b) to have the proceeds that are sent to the respective Collection Accounts  redirected pursuant to the Administrative Agent’s instructions rather than deposited in the  applicable Collection Account, and (c) to take any or all other actions permitted under the  applicable Account Control Agreement.  The Borrower hereby agrees that if the Administrative  Agent at any time takes any action set forth in the preceding sentence, the Administrative Agent  shall have exclusive control (for the benefit of the Secured Parties) of the proceeds (including  Collections) of all Pool Receivables and the Borrower hereby further agrees to take any other  action that the Administrative Agent may reasonably request to transfer such control.  Any  proceeds of Pool Receivables received by the Borrower or the Servicer thereafter shall be sent  

 

-86- immediately to, or as otherwise instructed by, the Administrative Agent. Section 9.04. Enforcement Rights.  (a) At any time following the occurrence and  during the continuation of an Event of Default: (i) the Administrative Agent (at the Borrower’s expense) may direct the  Obligors that payment of all amounts payable under any Pool Receivable is to be made  directly to the Administrative Agent or its designee; (ii) the Administrative Agent may instruct the Borrower or the Servicer to give  notice of the Secured Parties’ interest in Pool Receivables to each Obligor, which notice  shall direct that payments be made directly to the Administrative Agent or its designee (on  behalf of the Secured Parties), and the Borrower or the Servicer, as the case may be, shall  give such notice at the expense of the Borrower or the Servicer, as the case may be;  provided, that if the Borrower or the Servicer, as the case may be, fails to so notify each  Obligor within two (2) Business Days following instruction by the Administrative Agent,  the Administrative Agent (at the Borrower’s or the Servicer’s, as the case may be, expense)  may so notify the Obligors; (iii) the Administrative Agent may request the Servicer to, and upon such  request the Servicer shall: (A) assemble all of the records necessary or desirable to collect  the Pool Receivables and the Related Security, and transfer or license to a successor  Servicer the use of all software necessary or desirable to collect the Pool Receivables and  the Related Security, and make the same available to the Administrative Agent or its  designee (for the benefit of the Secured Parties) at a place selected by the Administrative  Agent and (B) segregate all cash, checks and other instruments received by it from time to  time constituting Collections in a manner reasonably acceptable to the Administrative  Agent and, promptly upon receipt, remit all such cash, checks and instruments, duly  endorsed or with duly executed instruments of transfer, to the Administrative Agent or its  designee;  (iv) assume exclusive control of each Collection Account and notify the  Collection Account Banks that the Borrower and the Servicer will no longer have any  access to the Collection Accounts; (v) the Administrative Agent may (or, at the direction of the LC Bank shall)  replace the Person then acting as Servicer;  (vi) the Administrative Agent may collect any amounts due from an Originator  under the Receivables Purchase Agreement or the Performance Guarantor under the  Performance Guaranty; and (vii) the Administrative Agent may cause Settlement Dates to occur as  frequently as daily and apply all Collections to reduce the Borrower Obligations in  accordance with the priorities set forth in Section 4.01. (b) The Borrower hereby authorizes the Administrative Agent (on behalf of the Secured  Parties), and irrevocably appoints the Administrative Agent as its attorney-in-fact with full power  

 

-87- of substitution and with full authority in the place and stead of the Borrower, which appointment is  coupled with an interest, to take any and all steps in the name of the Borrower and on behalf of the  Borrower necessary or desirable, in the reasonable determination of the Administrative Agent,  after the occurrence and during the continuation of an Event of Default, to collect any and all  amounts or portions thereof due under any and all Collateral, including endorsing the name of the  Borrower on checks and other instruments representing Collections and enforcing such Collateral.   Notwithstanding anything to the contrary contained in this subsection, none of the powers  conferred upon such attorney-in-fact pursuant to the preceding sentence shall subject such  attorney-in-fact to any liability if any action taken by it shall prove to be inadequate or invalid, nor  shall they confer any obligations upon such attorney-in-fact in any manner whatsoever. (c) The Servicer hereby authorizes the Administrative Agent (on behalf of the Secured  Parties), and irrevocably appoints the Administrative Agent as its attorney-in-fact with full power  of substitution and with full authority in the place and stead of the Servicer, which appointment is  coupled with an interest, to take any and all steps in the name of the Servicer and on behalf of the  Servicer necessary or desirable, in the reasonable determination of the Administrative Agent, after  the occurrence and during the continuation of an Event of Default, to collect any and all amounts  or portions thereof due under any and all Collateral, including endorsing the name of the Servicer  on checks and other instruments representing Collections and enforcing such Collateral.   Notwithstanding anything to the contrary contained in this subsection, none of the powers  conferred upon such attorney-in-fact pursuant to the preceding sentence shall subject such  attorney-in-fact to any liability if any action taken by it shall prove to be inadequate or invalid, nor  shall they confer any obligations upon such attorney-in-fact in any manner whatsoever. Section 9.05. Responsibilities of the Borrower.  (a) Anything herein to the contrary  notwithstanding, the Borrower shall: (i) perform all of its obligations, if any, under the Contracts  related to the Pool Receivables to the same extent as if interests in such Pool Receivables had not  been transferred hereunder, and the exercise by the Administrative Agent, or any other Credit  Party of their respective rights hereunder shall not relieve the Borrower from such obligations and  (ii) pay when due any taxes, including any sales taxes payable in connection with the Pool  Receivables and their creation and satisfaction. None of the Credit Parties shall have any  obligation or liability with respect to any Collateral, nor shall any of them be obligated to perform  any of the obligations of the Borrower, the Servicer or any Originator thereunder. (b) Davey Tree hereby irrevocably agrees that if at any time it shall cease to be the  Servicer hereunder, it shall act (if the then-current Servicer so requests) as the data-processing  agent of the Servicer and, in such capacity, Davey Tree shall conduct the data-processing functions  of the administration of the Receivables and the Collections thereon in substantially the same way  that Davey Tree conducted such data-processing functions while it acted as the Servicer.  In  connection with any such processing functions, the Borrower shall pay to Davey Tree its  reasonable out-of-pocket costs and expenses from the Borrower’s own funds (subject to the  priority of payments set forth in Section 4.01).  Section 9.06. Servicing Fee.  (a) Subject to clause (b) below, the Borrower shall pay the  Servicer a fee (the “Servicing Fee”) equal to 1.00% per annum (the “Servicing Fee Rate”) of the  daily average aggregate Outstanding Balance of the Pool Receivables.  Accrued Servicing Fees  shall be payable from Collections to the extent of available funds in accordance with Section 4.01. 

 

-88- (b) If the Servicer ceases to be Davey Tree or an Affiliate thereof, the Servicing Fee shall  be the greater of: (i) the amount calculated pursuant to clause (a) above and (ii) an alternative  amount specified by the successor Servicer not to exceed 110% of the aggregate reasonable costs  and expenses incurred by such successor Servicer in connection with the performance of its  obligations as Servicer hereunder. ARTICLE X EVENTS OF DEFAULT Section 10.01. Events of Default.  If any of the following events (each, an “Event of  Default”) shall occur: (a) (i) the Borrower, any Originator, the Performance Guarantor or the Servicer  shall fail to perform or observe any term, covenant or agreement contained in Sections  8.01(d)(i), (i), (l) or (s) or 8.02(b)(i) of this Agreement to be performed or observed by the  Borrower, such Originator, the Performance Guarantor or the Servicer, as applicable, (ii)  the Borrower, any Originator, the Performance Guarantor or the Servicer shall fail to make  when due any payment or deposit to be made by it under this Agreement or any other  Transaction Document to which it is a party and such failure shall continue unremedied for  two (2) Business Days, (iii) Davey Tree shall resign as Servicer, and no successor Servicer  reasonably satisfactory to the Administrative Agent shall have been appointed, or (iv) the  Borrower, any Originator, the Performance Guarantor or the Servicer shall fail to perform  or observe any term, covenant or agreement under this Agreement or any other Transaction  Document to be performed or observed by the Borrower, such Originator or the Servicer,  as applicable (other than any such failure which would constitute an Event of Default under  another provision of this Section 10.01), and such failure, solely to the extent capable of  cure, shall continue for five (5) Business Days; or (b) any representation or warranty made or deemed made by the Borrower, any  Originator, the Performance Guarantor or the Servicer (or any of their respective officers)  under or in connection with this Agreement or any other Transaction Document or any  information or report delivered by the Borrower, any Originator, the Performance  Guarantor or the Servicer pursuant to this Agreement or any other Transaction Document,  shall prove to have been incorrect or untrue in any material respect when made or deemed  made or delivered;  (c) the Borrower or the Servicer shall fail to deliver an Information Package  pursuant to this Agreement, and such failure shall remain unremedied for two (2) Business  Days; (d) (i) the Receivables Purchase Agreement ceases to create a valid and  enforceable first priority perfected ownership interest in the Receivables, the Related  Security or Collections in favor of the Borrower or (ii) this Agreement or any security  interest granted pursuant to this Agreement or any other Transaction Document shall for  any reason (other than through an affirmative action of the Administrative Agent) cease to  create, or for any reason cease to be, a valid and enforceable first priority perfected security  

 

-89- interest in favor of the Administrative Agent with respect to the Collateral, free and clear of  any Adverse Claim; (e) the Borrower, any Originator, the Performance Guarantor or the Servicer  shall generally not pay its debts as such debts become due, or shall admit in writing its  inability to pay its debts generally, or shall make a general assignment for the benefit of  creditors; or any Insolvency Proceeding shall be instituted by or against the Borrower, any  Originator, the Performance Guarantor or the Servicer and, in the case of any such  proceeding instituted against such Person (but not instituted by such Person), either such  proceeding shall remain undismissed or unstayed for a period of thirty (30) consecutive  days, or any of the actions sought in such proceeding (including the entry of an order for  relief against, or the appointment of a receiver, trustee, custodian or other similar official  for, it or for any substantial part of its property) shall occur; or the Borrower, any  Originator, the Performance Guarantor or the Servicer shall take any corporate or  organizational action to authorize any of the actions set forth above in this paragraph; (f) (i) the average for three (3) consecutive Fiscal Months of: (A) the Default  Ratio shall exceed 5.00%, (B) the Delinquency Ratio shall exceed 12.50% or (C) the  Dilution Ratio shall exceed 5.00%, or (ii) the Six-Month Average Days’ Sales Outstanding  shall exceed 60 days for any Fiscal Month; (g) a Change in Control shall occur; (h) a Borrowing Base Deficit shall occur, and shall not have been cured within  two (2) consecutive Business Days; (i) (i) the Borrower shall fail to pay any principal of or premium or interest on  any of its Debt (other than the Borrower Obligations and Debt under the Subordinated  Notes) 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, mortgage, indenture or  instrument relating to such Debt (whether or not such failure shall have been waived under  the related agreement); (ii) any Originator, the Performance Guarantor or the Servicer, or  any of their respective Subsidiaries, individually or in the aggregate, shall fail to pay any  principal of or premium or interest on any of its Debt that is outstanding in a principal  amount in excess of $5,000,000 in the aggregate 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, mortgage, indenture or instrument relating to such Debt (whether or not such  failure shall have been waived under the related agreement); or (iii) any other event shall  occur or condition shall exist under any agreement, mortgage, indenture or instrument  relating to any such Debt (as referred to in clause (i) or (ii) of this paragraph) and shall  continue after the applicable grace period, if any, specified in such agreement, mortgage,  indenture or instrument (whether or not such failure shall have been waived under the  related agreement), if the effect of such event or condition is to give the applicable  debtholders the right (whether acted upon or not) to accelerate the maturity of such Debt  (as referred to in clause (i) or (ii) of this paragraph) or to terminate the commitment of any  

 

-90- lender thereunder; (j) the Performance Guarantor shall fail to perform any of its obligations under  the Performance Guaranty and such failure continues beyond any applicable grace period; (k) the Borrower shall fail (x) at any time (other than for ten (10) Business Days  following notice of the death or resignation of any Independent Director) to have an  Independent Director who satisfies each requirement and qualification specified in Section  8.03(c) of this Agreement for Independent Directors, on the Borrower’s board of managers  or (y) to timely notify the Administrative Agent of any replacement or appointment of any  director that is to serve as an Independent Director on the Borrower’s board of managers as  required pursuant to Section 8.03(c) of this Agreement; (l) there shall have occurred any event which materially adversely impairs, in  the reasonable discretion of Administrative Agent, the collectability of the Pool  Receivables generally or any material portion thereof; (m) any Letter of Credit is drawn upon and is not fully reimbursed by the  Borrower within two (2) consecutive Business Days; (n) either (i) the Internal Revenue Service shall file notice of a lien pursuant to  Section 6323 of the Code with regard to any assets of the Borrower, any Originator or the  Servicer or (ii) the PBGC shall, or shall indicate its intention to, file notice of a lien  pursuant to Section 4068 of ERISA with regard to any material portion of the assets of the  Borrower, any Originator, the Performance Guarantor or the Servicer; (o) (i) the occurrence of a Reportable Event; (ii) the adoption of an amendment  to a Pension Plan that would require the provision of security pursuant to Section  401(a)(29) of the Code or Section 307 of ERISA; (iii) the existence with respect to any  Multiemployer Plan of an “accumulated funding deficiency” (as defined in Section 412 of  the Code or Section 302 of ERISA), whether or not waived; (iv) the failure to satisfy the  minimum funding standard under Section 412 of the Code with respect to any Pension Plan  (v) the incurrence of any liability under Title IV of ERISA with respect to the termination  of any Pension Plan or the withdrawal or partial withdrawal of any of the Borrower, any  Originator, the Performance Guarantor, the Servicer or any of their respective ERISA  Affiliates from any Multiemployer Plan; (vi) the receipt by any of the Borrower, any  Originator, the Performance Guarantor, the Servicer or any of their respective ERISA  Affiliates from the PBGC or any plan administrator of any notice relating to the intention  to terminate any Pension Plan or Multiemployer Plan or to appoint a trustee to administer  any Pension Plan or Multiemployer Plan; (vii) the receipt by the Borrower, any Originator,  the Performance Guarantor, the Servicer or any of their respective ERISA Affiliates of any  notice concerning the imposition of Withdrawal Liability or a determination that a  Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the  meaning of Title IV of ERISA; (viii) the occurrence of a prohibited transaction with  respect to any of the Borrower, any Originator, the Performance Guarantor, the Servicer or  any of their respective ERISA Affiliates (pursuant to Section 4975 of the Code); (ix) the  occurrence or existence of any other similar event or condition with respect to a Pension  

 

-91- Plan or a Multiemployer Plan, with respect to each of clause (i) through (ix), either  individually or in the aggregate, could reasonably be expected to result in a Material  Adverse Effect; (p) a Material Adverse Effect shall occur with respect to the Borrower, any  Originator, the Performance Guarantor or the Servicer; (q) a Receivables Purchase Termination Event shall occur under the  Receivables Purchase Agreement; (r) the Borrower shall be required to register as an “investment company”  within the meaning of the Investment Company Act; (s) any material provision of this Agreement or any other Transaction  Document shall cease to be in full force and effect or any of the Borrower, any Originator,  the Performance Guarantor or the Servicer (or any of their respective Affiliates) shall so  state in writing; or (t) one or more judgments or decrees shall be entered against the Borrower,  any Originator, the Performance Guarantor or the Servicer, or any Affiliate of any of the  foregoing involving in the aggregate a liability (not paid or to the extent not covered by a  reputable and solvent insurance company) and such judgments and decrees either shall be  final and non-appealable or shall not be vacated, discharged or stayed or bonded pending  appeal for any period of sixty (60) consecutive days, and the aggregate amount of all such  judgments equals or exceeds $1,000,000 (or solely with respect to the Borrower, $13,500); then, and in any such event, the Administrative Agent may (or, at the direction of the LC Bank  shall) by notice to the Borrower (x) declare the Termination Date to have occurred (in which case  the Termination Date shall be deemed to have occurred) and (y) declare the Outstanding  Reimbursement Obligations and all other Borrower Obligations to be immediately due and  payable (in which case the Outstanding Reimbursement Obligations and all other Borrower  Obligations shall be immediately due and payable); provided that, automatically upon the  occurrence of any event (without any requirement for the giving of notice) described in subsection  (e) of this Section 10.01 with respect to the Borrower, the Termination Date shall occur and the  Outstanding Reimbursement Obligations and all other Borrower Obligations shall be immediately  due and payable.  Upon any such declaration or designation or upon such automatic termination,  the Administrative Agent and the other Secured Parties shall have, in addition to the rights and  remedies which they may have under this Agreement and the other Transaction Documents, all  other rights and remedies provided after default under the UCC and under other Applicable Law,  which rights and remedies shall be cumulative.  Any proceeds from liquidation of the Collateral  shall be applied in the order of priority set forth in Section 4.01. ARTICLE XI THE ADMINISTRATIVE AGENT Section 11.01. Authorization and Action.  Each Credit Party hereby appoints and authorizes  the Administrative Agent to take such action as agent on its behalf and to exercise such powers  

 

-92- under this Agreement as are delegated to the Administrative Agent by the terms hereof, together  with such powers as are reasonably incidental thereto.  The Administrative Agent shall not have  any duties other than those expressly set forth in the Transaction Documents, and no implied  obligations or liabilities shall be read into any Transaction Document, or otherwise exist, against  the Administrative Agent.  The Administrative Agent does not assume, nor shall it be deemed to  have assumed, any obligation to, or relationship of trust or agency with, the Borrower or any  Affiliate thereof or any Credit Party except for any obligations expressly set forth herein.   Notwithstanding any provision of this Agreement or any other Transaction Document, in no event  shall the Administrative Agent ever be required to take any action which exposes the  Administrative Agent to personal liability or which is contrary to any provision of any Transaction  Document or Applicable Law. Section 11.02. Administrative Agent’s Reliance, Etc.  Neither the Administrative Agent nor  any of its directors, officers, agents or employees shall be liable for any action taken or omitted to  be taken by it or them as Administrative Agent under or in connection with this Agreement  (including, without limitation, the Administrative Agent’s servicing, administering or collecting  Pool Receivables in the event it replaces the Servicer in such capacity pursuant to Section 9.01), in  the absence of its or their own gross negligence or willful misconduct.  Without limiting the  generality of the foregoing, the Administrative Agent: (a) may consult with legal counsel  (including counsel for any Credit Party or the Servicer), independent certified public accountants  and other experts selected by it and shall not be liable for any action taken or omitted to be taken in  good faith by it in accordance with the advice of such counsel, accountants or experts; (b) makes  no warranty or representation to any Credit Party (whether written or oral) and shall not be  responsible to any Credit Party for any statements, warranties or representations (whether written  or oral) made by any other party in or in connection with this Agreement; (c) shall not have any  duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants  or conditions of this Agreement on the part of any Credit Party or to inspect the property (including  the books and records) of any Credit Party; (d) shall not be responsible to any Credit Party for the  due execution, legality, validity, enforceability, genuineness, sufficiency or value of this  Agreement or any other instrument or document furnished pursuant hereto; and (e) shall be  entitled to rely, and shall be fully protected in so relying, upon any notice (including notice by  telephone), consent, certificate or other instrument or writing (which may be by facsimile)  believed by it to be genuine and signed or sent by the proper party or parties. Section 11.03. Administrative Agent and Affiliates.  With respect to any Credit Extension or  interests therein owned by any Credit Party that is also the Administrative Agent, such Credit Party  shall have the same rights and powers under this Agreement as any other Credit Party and may  exercise the same as though it were not the Administrative Agent.  The Administrative Agent and  any of its Affiliates may generally engage in any kind of business with the Borrower or any  Affiliate thereof and any Person who may do business with or own securities of the Borrower or  any Affiliate thereof, all as if the Administrative Agent were not the Administrative Agent  hereunder and without any duty to account therefor to any other Secured Party. Section 11.04. Indemnification of Administrative Agent.  The LC Bank agrees to indemnify  the Administrative Agent (to the extent not reimbursed by the Borrower or any Affiliate thereof),  from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,  suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed  

 

-93- on, incurred by, or asserted against the Administrative Agent in any way relating to or arising out  of this Agreement or any other Transaction Document or any action taken or omitted by the  Administrative Agent under this Agreement or any other Transaction Document; provided that the  LC Bank shall not be liable for any portion of such liabilities, obligations, losses, damages,  penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the  Administrative Agent’s gross negligence or willful misconduct. Section 11.05. Delegation of Duties.  The Administrative Agent may execute any of its  duties through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all  matters pertaining to such duties.  The Administrative Agent shall not be responsible for the  negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. Section 11.06. Action or Inaction by Administrative Agent.  The Administrative Agent shall  in all cases be fully justified in failing or refusing to take action under any Transaction Document  unless it shall first receive such advice or concurrence of the LC Bank and assurance of its  indemnification by the LC Bank, as it deems appropriate.  The Administrative Agent shall in all  cases be fully protected in acting, or in refraining from acting, under this Agreement or any other  Transaction Document in accordance with a request or at the direction of the LC Bank, and such  request or direction and any action taken or failure to act pursuant thereto shall be binding upon all  Credit Parties.  The Credit Parties and the Administrative Agent agree that unless any action to be  taken by the Administrative Agent under a Transaction Document (i) specifically requires the  advice or concurrence of the LC Bank or (ii) may be taken by the Administrative Agent alone or  without any advice or concurrence of the LC Bank, then the Administrative Agent may take action  based upon the advice or concurrence of the LC Bank. Section 11.07. Notice of Events of Default; Action by Administrative Agent.  The  Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any  Unmatured Event of Default or Event of Default unless the Administrative Agent has received  notice from any Credit Party or the Borrower stating that an Unmatured Event of Default or Event  of Default has occurred hereunder and describing such Unmatured Event of Default or Event of  Default.  If the Administrative Agent receives such a notice, it shall promptly give notice thereof to  each Credit Party.  The Administrative Agent may (but shall not be obligated to) take such action,  or refrain from taking such action, concerning an Unmatured Event of Default or Event of Default  or any other matter hereunder as the Administrative Agent deems advisable and in the best  interests of the Secured Parties. Section 11.08. Non-Reliance on Administrative Agent and Other Parties.  Each Credit Party  expressly acknowledges that neither the Administrative Agent nor any of its directors, officers,  agents or employees has made any representations or warranties to it and that no act by the  Administrative Agent hereafter taken, including any review of the affairs of the Borrower or any  Affiliate thereof, shall be deemed to constitute any representation or warranty by the  Administrative Agent.  Each Credit Party represents and warrants to the Administrative Agent  that, independently and without reliance upon the Administrative Agent or any other Credit Party  and based on such documents and information as it has deemed appropriate, it has made and will  continue to make its own appraisal of and investigation into the business, operations, property,  prospects, financial and other conditions and creditworthiness of the Borrower, each Originator,  the Performance Guarantor or the Servicer and the Pool Receivables and its own decision to enter  

 

-94- into this Agreement and to take, or omit, action under any Transaction Document.  Except for  items expressly required to be delivered under any Transaction Document by the Administrative  Agent to any Credit Party, the Administrative Agent shall not have any duty or responsibility to  provide any Credit Party with any information concerning the Borrower, any Originator, the  Performance Guarantor or the Servicer that comes into the possession of the Administrative Agent  or any of its directors, officers, agents, employees, attorneys-in-fact or Affiliates. Section 11.09. Successor Administrative Agent.  (a) The Administrative Agent may, upon at  least thirty (30) days’ notice to the Borrower, the Servicer and each Credit Party, resign as  Administrative Agent.  Except as provided below, such resignation shall not become effective  until a successor Administrative Agent is appointed by the LC Bank as a successor Administrative  Agent and has accepted such appointment.  If no successor Administrative Agent shall have been  so appointed by the LC Bank, within thirty (30) days after the departing Administrative Agent’s  giving of notice of resignation, the departing Administrative Agent may, on behalf of the Secured  Parties, appoint a successor Administrative Agent as successor Administrative Agent.  If no  successor Administrative Agent shall have been so appointed by the LC Bank within sixty (60)  days after the departing Administrative Agent’s giving of notice of resignation, the departing  Administrative Agent may, on behalf of the Secured Parties, petition a court of competent  jurisdiction to appoint a successor Administrative Agent. (b) Upon such acceptance of its appointment as Administrative Agent hereunder by a  successor Administrative Agent, such successor Administrative Agent shall succeed to and  become vested with all the rights and duties of the resigning Administrative Agent, and the  resigning Administrative Agent shall be discharged from its duties and obligations under the  Transaction Documents.  After any resigning Administrative Agent’s resignation hereunder, the  provisions of this Article XI and Article XIII shall inure to its benefit as to any actions taken or  omitted to be taken by it while it was the Administrative Agent. Section 11.10. Structuring Agent.  Each of the parties hereto hereby acknowledges and  agrees that the Structuring Agent shall not have any right, power, obligation, liability,  responsibility or duty under this Agreement.  Each Credit Party acknowledges that it has not relied,  and will not rely, on the Structuring Agent in deciding to enter into this Agreement and to take, or  omit to take, any action under any Transaction Document. ARTICLE XII [RESERVED] ARTICLE XIII INDEMNIFICATION Section 13.01. Indemnities by the Borrower.  Without limiting any other rights that the  Administrative Agent, the Credit Parties, the Affected Persons and their respective assigns,  officers, directors, agents and employees (each, a “Borrower Indemnified Party”) may have  hereunder or under Applicable Law, the Borrower hereby agrees to indemnify each Borrower  Indemnified Party from and against any and all claims, losses and liabilities (including Attorney  

 

-95- Costs) (all of the foregoing being collectively referred to as “Borrower Indemnified Amounts”)  arising out of or resulting from this Agreement or any other Transaction Document or any Credit  Extension or the security interest in respect of any Pool Receivable or any other Collateral;  excluding, however, (x) Borrower Indemnified Amounts to the extent a final non-appealable  judgment of a court of competent jurisdiction holds that such Borrower Indemnified Amounts  resulted primarily from the gross negligence or willful misconduct by the Borrower Indemnified  Party seeking indemnification, (y) Borrower Indemnified Amounts to the extent a final  non-appealable judgment of a court of competent jurisdiction holds that such Borrower  Indemnified Amounts result from a claim by the Borrower against a Borrower Indemnified Party  for a material breach by such Borrower Indemnified Party of its obligations under any Transaction  Document, and (z) Taxes that are covered by Section 5.03.  Without limiting or being limited by  the foregoing, the Borrower shall pay on written demand (which demand shall be accompanied by  documentation of the Borrower Indemnified Amounts in reasonable detail) (it being understood  that if any portion of such payment obligation is made from Collections, such payment will be  made at the time and in the order of priority set forth in Section 4.01), to each Borrower  Indemnified Party any and all amounts necessary to indemnify such Borrower Indemnified Party  from and against any and all Borrower Indemnified Amounts relating to or resulting from any of  the following (but excluding Borrower Indemnified Amounts and Taxes described in clauses (x),  (y) and (z) above): (i) any Pool Receivable which the Borrower or the Servicer includes as an  Eligible Receivable as part of the Net Receivables Pool Balance but which is not an  Eligible Receivable at such time; (ii) any written representation, warranty or statement made or deemed made by  the Borrower (or any of its respective officers) under or in connection with this Agreement,  any of the other Transaction Documents, any Information Package or any other written  information or report (other than projections, forward-looking statements and information  of a general economic or industry nature) delivered by or on behalf of the Borrower  pursuant hereto which shall have been untrue or incorrect when made or deemed made; (iii) the failure by the Borrower to comply with any Applicable Law with  respect to any Pool Receivable or the related Contract; or the failure of any Pool  Receivable or the related Contract to conform to any such Applicable Law; (iv) the failure to vest in the Administrative Agent a first priority perfected  security interest in all or any portion of the Collateral, in each case free and clear of any  Adverse Claim; (v) the failure to have filed, or any delay in filing, financing statements,  financing statement amendments, continuation statements or other similar instruments or  documents under the UCC of any applicable jurisdiction or other Applicable Laws with  respect to any Pool Receivable and the other Collateral and Collections in respect thereof,  whether at the time of any Credit Extension or at any subsequent time; (vi) any failure of the Borrower to perform any of its duties or obligations in  accordance with the provisions hereof and of each other Transaction Document related to  

 

-96- Pool Receivables or to timely and fully comply with the Credit and Collection Policy in  regard to each Pool Receivable or to deliver timely an invoice with respect to any  Receivable to the related Obligor; (vii) any products liability, environmental or other claim arising out of or in  connection with any Pool Receivable or other merchandise, goods or services which are  the subject of or related to any Pool Receivable; (viii) the commingling of Collections of Pool Receivables at any time with other  funds; (ix) any investigation, litigation or proceeding (actual or threatened) (other than  in connection with disputes solely between Borrower Indemnified Parties and in each case  not involving any action or inaction by Borrower or its Affiliates in violation of this  Agreement or any other Transaction Document) related to this Agreement or any other  Transaction Document or the use of proceeds of any Credit Extension or in respect of any  Pool Receivable or other Collateral or any related Contract; (x) any failure of the Borrower to comply with its covenants, obligations and  agreements contained in this Agreement or any other Transaction Document; (xi) any setoff with respect to any Pool Receivable; (xii) any claim brought by any Person other than a Borrower Indemnified Party  arising from any activity by the Borrower or any Affiliate of the Borrower in servicing,  administering or collecting any Pool Receivable;  (xiii) the failure by the Borrower to pay when due any taxes, including, without  limitation, sales, excise or personal property taxes; (xiv) any failure of a Collection Account Bank to comply with the terms of the  applicable Account Control Agreement, the termination by a Collection Account Bank of  any Account Control Agreement or any amounts payable by the Administrative Agent to a  Collection Account Bank under any Account Control Agreement; (xv) any dispute, claim, offset or defense (other than discharge in bankruptcy of  the Obligor) of the Obligor to the payment of any Pool Receivable (including, without  limitation, a defense based on such Pool Receivable or the related Contract not being a  legal, valid and binding obligation of such Obligor enforceable against it in accordance  with its terms), or any other claim resulting from or relating to collection activities with  respect to such Pool Receivable or the sale of goods or the rendering of services related to  such Pool Receivable or the furnishing or failure to furnish any such goods or services or  other similar claim or defense not arising from the financial inability of any Obligor to pay  undisputed indebtedness; (xvi) any action taken by the Administrative Agent as attorney-in-fact for the  Borrower, any Originator or the Servicer pursuant to this Agreement or any other  Transaction Document; 

 

-97- (xvii) the usage of any Letter of Credit; or (xviii) any reduction in Reimbursement Obligations as a result of the distribution  of Collections if all or a portion of such distributions shall thereafter be rescinded or  otherwise must be returned for any reason. (b) Notwithstanding anything to the contrary in this Agreement, solely for purposes of  the Borrower’s indemnification obligations in clauses (ii), (iii), (vi) and (x) of this Article XIII, any  representation, warranty or covenant qualified by the occurrence or non-occurrence of a material  adverse effect or similar concepts of materiality shall be deemed to be not so qualified. (c) If for any reason the foregoing indemnification is unavailable to any Borrower  Indemnified Party or insufficient to hold it harmless, then the Borrower shall contribute to such  Borrower Indemnified Party the amount paid or payable by such Borrower Indemnified Party as a  result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the  relative economic interests of the Borrower on the one hand and such Borrower Indemnified Party  on the other hand in the matters contemplated by this Agreement as well as the relative fault of the  Borrower and such Borrower Indemnified Party with respect to such loss, claim, damage or  liability and any other relevant equitable considerations.  The reimbursement, indemnity and  contribution obligations of the Borrower under this Section 13.01 shall be in addition to any  liability which the Borrower may otherwise have, shall extend upon the same terms and conditions  to each Borrower Indemnified Party, and shall be binding upon and inure to the benefit of any  successors, assigns, heirs and personal representatives of the Borrower and the Borrower  Indemnified Parties. (d) Any indemnification or contribution under this Section 13.01 shall survive the  termination of this Agreement. Section 13.02. Indemnification by the Servicer.  (a) The Servicer hereby agrees to  indemnify and hold harmless the Borrower, the Administrative Agent, the Credit Parties, the  Affected Persons and their respective assigns, officers, directors, agents and employees (each, a  “Servicer Indemnified Party”), from and against any loss, liability, expense, damage or injury  suffered or sustained by reason of any acts, omissions or alleged acts or omissions arising out of  activities of the Servicer pursuant to this Agreement or any other Transaction Document, including  any judgment, award, settlement, Attorney Costs and other costs or expenses incurred in  connection with the defense of any actual or threatened action, proceeding or claim (all of the  foregoing being collectively referred to as, “Servicer Indemnified Amounts”), excluding (i)  Servicer Indemnified Amounts to the extent a final, non-appealable judgment of a court of  competent jurisdiction holds that such Servicer Indemnified Amounts resulted from the gross  negligence or willful misconduct by the Servicer Indemnified Party seeking indemnification, (ii)  Taxes that are covered by Section 5.03, (iii) Servicer Indemnified Amounts to the extent a final  non-appealable judgment of a court of competent jurisdiction holds that such Servicer Indemnified  Amounts result primarily from a claim brought by the Servicer against a Servicer Indemnified  Party for a material breach by such Servicer Indemnified Party of its obligations under any  Transaction Document, and (iv) Servicer Indemnified Amounts to the extent the same includes  losses in respect of Pool Receivables that are uncollectible solely on account of the insolvency,  bankruptcy or lack of creditworthiness of the related Obligor.  Without limiting or being limited by  

 

-98- the foregoing, the Servicer shall pay on demand, to each Servicer Indemnified Party any and all  amounts necessary to indemnify such Servicer Indemnified Party from and against any and all  Servicer Indemnified Amounts relating to or resulting from any of the following (but excluding  Servicer Indemnified Amounts described in clauses (i), (ii), (iii) and (iv) above): (i) any representation, warranty or statement made or deemed made by the  Servicer (or any of its respective officers) under or in connection with this Agreement, any  of the other Transaction Documents, any Information Package or any other information or  report (other than projections, forward-looking statements and information of a general  economic or industry nature) delivered by or on behalf of the Servicer pursuant hereto  which shall have been untrue or incorrect when made or deemed made; (ii) the failure by the Servicer to comply with any Applicable Law with respect  to any Pool Receivable or the related Contract; (iii) any failure of the Servicer to comply with its covenants, obligations and  agreements contained in this Agreement or any other Transaction Document to which it is  a party in its capacity as Servicer; or (iv) the commingling of Collections of Pool Receivables at any time with other  funds. (b) If for any reason the foregoing indemnification is unavailable to any Servicer  Indemnified Party or insufficient to hold it harmless, then the Servicer shall contribute to the  amount paid or payable by such Servicer Indemnified Party as a result of such loss, claim, damage  or liability in such proportion as is appropriate to reflect the relative economic interests of the  Servicer on the one hand and such Servicer Indemnified Party on the other hand in the matters  contemplated by this Agreement as well as the relative fault of the Servicer and such Servicer  Indemnified Party with respect to such loss, claim, damage or liability and any other relevant  equitable considerations.  The reimbursement, indemnity and contribution obligations of the  Servicer under this Section shall be in addition to any liability which the Servicer may otherwise  have, shall extend upon the same terms and conditions to Servicer Indemnified Party, and shall be  binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives  of the Servicer and the Servicer Indemnified Parties. (c) Any indemnification or contribution under this Section 13.02 shall survive the  termination of this Agreement. ARTICLE XIV MISCELLANEOUS Section 14.01. Amendments, Etc.  (a) No failure on the part of any Credit Party to exercise,  and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any  single or partial exercise of any right hereunder preclude any other or further exercise thereof or  the exercise of any other right.  No amendment or waiver of any provision of this Agreement or  consent to any departure by any of the Borrower, the Servicer or any Affiliate thereof shall be  effective unless in a writing signed by the Administrative Agent, the LC Bank and the LC Bank  

 

-99- (and, in the case of any amendment, also signed by the Borrower), and then such amendment,  waiver or consent shall be effective only in the specific instance and for the specific purpose for  which given; provided, however, that no amendment, waiver or consent shall, unless in writing and  signed by the Servicer, affect the rights or duties of the Servicer under this Agreement. Section 14.02. Notices, Etc.  All notices and other communications hereunder shall, unless  otherwise stated herein, be in writing (which shall include facsimile communication) and faxed or  delivered, to each party hereto, at its address set forth under its name on Schedule III hereto or at  such other address as shall be designated by such party in a written notice to the other parties  hereto.  Notices and communications by facsimile shall be effective when sent (and shall be  followed by hard copy sent by regular mail), and notices and communications sent by other means  shall be effective when received. Section 14.03. Participations.  (a) Participations.  The LC Bank may sell participations to  one or more Eligible Assignees (each, a “Participant”) in or to all or a portion of its rights and/or  obligations under this Agreement (including, without limitation, all or a portion of its Commitment  and the interests in the Reimbursement Obligations owned by it); provided, however, that: (i) the LC Bank’s obligations under this Agreement (including, without  limitation, its Commitment to the Borrower hereunder) shall remain unchanged, and (ii) the LC Bank shall remain solely responsible to the other parties to this  Agreement for the performance of such obligations. The Administrative Agent, the LC Bank, the Borrower and the Servicer shall have the right  to continue to deal solely and directly with the LC Bank in connection with the LC Bank’s rights  and obligations under this Agreement. (b) Participant Register.  The LC Bank shall, acting solely for this purpose as an agent of  the Borrower, maintain a register on which it enters the name and address of each Participant and  the principal amounts (and stated interest) of each Participant’s interest in the Reimbursement  Obligations or other obligations under this Agreement (the “Participant Register”); provided that  the LC Bank shall not 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  any Commitments, Letters of Credit or its other obligations under any this Agreement) to any  Person except to the extent that such disclosure is necessary to establish that such Commitment,  Letter of Credit or other 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 the LC Bank shall treat each Person whose name is recorded in the Participant  Register as the owner of such participation for all purposes of this Agreement notwithstanding any  notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as  Administrative Agent) shall have no responsibility for maintaining a Participant Register. (c) Assignments by Administrative Agent.  This Agreement and the rights and obligations  of the Administrative Agent herein shall be assignable by the Administrative Agent and its  successors and assigns; provided that in the case of an assignment to a Person that is neither an  Affiliate of the Administrative Agent nor the LC Bank, so long as no Event of Default or  

 

-100- Unmatured Event of Default has occurred and is continuing, such assignment shall require the  Borrower’s consent (not to be unreasonably withheld, conditioned or delayed). (d) Assignments by the Borrower or the Servicer.  Neither the Borrower nor, except as  provided in Section 9.01, the Servicer may assign any of its respective rights or obligations  hereunder or any interest herein without the prior written consent of the Administrative Agent and  the LC Bank (such consent to be provided or withheld in the sole discretion of such Person).   (e) Pledge to a Federal Reserve Bank.  Notwithstanding anything to the contrary set  forth herein, (i) any Credit Party or any of their respective Affiliates may at any time pledge or  grant a security interest in all or any portion of its interest in, to and under this Agreement  (including, without limitation, rights to payment of Reimbursement Obligations and Interest) and  any other Transaction Document to secure its obligations to a Federal Reserve Bank, without  notice to or the consent of the Borrower, the Servicer, any Affiliate thereof or any Credit Party;  provided, however, that that no such pledge shall relieve such assignor of its obligations under this  Agreement. (f) Transfer Restriction.  No right or obligation of the LC Bank may be transferred or  assigned other than through the Participant Register.  Any attempt to transfer an interest of the LC  Bank other than through the Participant Register will not be recognized by the Borrower or the  Administrative Agent. Section 14.04. Costs and Expenses.  In addition to the rights of indemnification granted  under Section 13.01 hereof, the Borrower agrees to pay on written demand (which demand shall be  accompanied by documentation thereof in reasonable detail) all reasonable out-of-pocket costs  and expenses in connection with the preparation, negotiation, execution, delivery and  administration of this Agreement and the other Transaction Documents (together with all  amendments, restatements, supplements, consents and waivers, if any, from time to time hereto  and thereto), including, without limitation, (i) the reasonable Attorney Costs for the  Administrative Agent and the other Credit Parties and any of their respective Affiliates with  respect thereto and with respect to advising the Administrative Agent and the other Credit Parties  and their respective Affiliates as to their rights and remedies under this Agreement and the other  Transaction Documents and (ii) reasonable accountants’, auditors’ and consultants’ fees and  expenses for the Administrative Agent and the other Credit Parties and any of their respective  Affiliates incurred in connection with the administration and maintenance of this Agreement or  advising the Administrative Agent or any other Credit Party as to their rights and remedies under  this Agreement or as to any actual or reasonably claimed breach of this Agreement or any other  Transaction Document.  In addition, the Borrower agrees to pay on written demand (which  demand shall be accompanied by documentation thereof in reasonable detail) all reasonable  out-of-pocket costs and expenses (including reasonable Attorney Costs), of the Administrative  Agent and the other Credit Parties and their respective Affiliates, incurred in connection with the  enforcement of any of their respective rights or remedies under the provisions of this Agreement  and the other Transaction Documents. Section 14.05. No Proceedings.  The Servicer hereby covenants and agrees that it will not  institute against, or join any other Person in instituting against, the Borrower any Insolvency  Proceeding until one year and one day after the Final Payout Date; provided, that the  

 

-101- Administrative Agent may take any such action in its sole discretion following the occurrence of  an Event of Default. Section 14.06. Confidentiality.  (a) Each of the Borrower and the Servicer covenants and  agrees to hold in confidence, and not disclose to any Person, the terms of this Agreement  (including any fees payable in connection with this Agreement or any other Transaction Document  or the identity of the Administrative Agent or any other Credit Party), except as the Administrative  Agent and the LC Bank may have consented to in writing prior to any proposed disclosure;  provided, however, that it may disclose such information (i) to its Advisors and Representatives,  (ii) to the extent such information has become available to the public other than as a result of a  disclosure by or through the Borrower, the Servicer or their Advisors and Representatives or (iii)  to the extent it should be (A) required by Applicable Law, or in connection with any legal or  regulatory proceeding or (B) requested by any Governmental Authority to disclose such  information; provided, that, in the case of clause (iii) above, the Borrower and the Servicer will use  reasonable efforts to maintain confidentiality and will (unless otherwise prohibited by Applicable  Law) notify the Administrative Agent and the affected Credit Party of its intention to make any  such disclosure prior to making such disclosure.  Each of the Borrower and the Servicer agrees to  be responsible for any breach of this Section by its Representatives and Advisors and agrees that  its Representatives and Advisors will be advised by it of the confidential nature of such  information and shall agree to comply with this Section.  Notwithstanding the foregoing, it is  expressly agreed that each of the Borrower, the Servicer and their respective Affiliates may  publish a press release or otherwise publicly announce the existence and principal amount of the  Commitments under this Agreement and the transactions contemplated hereby; provided that the  Administrative Agent shall be provided a reasonable opportunity to review such press release or  other public announcement prior to its release and provide comment thereon; and provided,  further, that no such press release shall name or otherwise identify the Administrative Agent, any  other Credit Party or any of their respective Affiliates without such Person’s prior written consent  (such consent not to be unreasonably withheld, conditioned or delayed).  Notwithstanding the  foregoing, the Borrower consents to the publication by the Administrative Agent or any other  Credit Party of a tombstone or similar advertising material relating to the financing transactions  contemplated by this Agreement. (b) Each of the Administrative Agent and each other Credit Party, severally and with  respect to itself only, agrees to hold in confidence, and not disclose to any Person, any confidential  and proprietary information concerning the Borrower, the Servicer and their respective Affiliates  and their businesses or the terms of this Agreement (including any fees payable in connection with  this Agreement or the other Transaction Documents), except as the Borrower or the Servicer may  have consented to in writing prior to any proposed disclosure; provided, however, that it may  disclose such information (i) to its Advisors and Representatives, (ii) to its assignees and  Participants and potential assignees and Participants and their respective counsel if they agree in  writing to hold it confidential, (iii) to the extent such information has become available to the  public other than as a result of a disclosure by or through it or its Representatives or Advisors, (iv)  at the request of a bank examiner or other regulatory authority or in connection with an  examination of any of the Administrative Agent or the LC Bank or their respective Affiliates or (v)  to the extent it should be (A) required by Applicable Law, or in connection with any legal or  regulatory proceeding or (B) requested by any Governmental Authority to disclose such  information; provided, that, in the case of clause (v) above, the Administrative Agent and the LC  

 

-102- Bank will use reasonable efforts to maintain confidentiality and will (unless otherwise prohibited  by Applicable Law) notify the Borrower and the Servicer of its making any such disclosure as  promptly as reasonably practicable thereafter.  Each of the Administrative Agent and the LC Bank,  severally and with respect to itself only, agrees to be responsible for any breach of this Section by  its Representatives and Advisors and agrees that its Representatives and Advisors will be advised  by it of the confidential nature of such information and shall agree to comply with this Section. (c) As used in this Section, (i) “Advisors” means, with respect to any Person, such  Person’s accountants, attorneys and other confidential advisors and (ii) “Representatives” means,  with respect to any Person, such Person’s Affiliates, Subsidiaries, directors, managers, officers,  employees, members, investors, financing sources (other than any Credit Party), insurers,  professional advisors, representatives and agents; provided that such Persons shall not be deemed  to Representatives of a Person unless (and solely to the extent that) confidential information is  furnished to such Person. (d) Notwithstanding the foregoing, to the extent not inconsistent with applicable  securities laws, each party hereto (and each of its employees, representatives or other agents) may  disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure  (as defined in Section 1.6011-4 of the Treasury Regulations) of the transactions contemplated by  the Transaction Documents and all materials of any kind (including opinions or other tax analyses)  that are provided to such Person relating to such tax treatment and tax structure. Section 14.07. GOVERNING LAW.  THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF  THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS  OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL  OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS  OF LAW PROVISIONS THEREOF, EXCEPT TO THE EXTENT THAT THE PERFECTION, THE EFFECT OF  PERFECTION OR PRIORITY OF THE INTERESTS OF ADMINISTRATIVE AGENT OR THE LC BANK IN THE  COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW  YORK). Section 14.08. Execution in Counterparts.  This Agreement may be executed in any number  of 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.  Delivery of an executed  counterpart hereof by facsimile or other electronic means shall be equally effective as delivery of  an originally executed counterpart. Section 14.09. Integration; Binding Effect; Survival of Termination.  This Agreement and  the other Transaction Documents contain 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 subject matter hereof superseding all  prior oral or written understandings.  This Agreement shall be binding upon and inure to the  benefit of the parties hereto and their respective successors and permitted assigns.  This Agreement  shall create and constitute the continuing obligations of the parties hereto in accordance with its  terms and shall remain in full force and effect until the Final Payout Date; provided, however, that  the provisions of Sections 3.08, 3.09, 3.10, 5.01, 5.02, 5.03, 11.04, 11.06, 13.01, 13.02, 14.04,  14.05, 14.06, 14.09, 14.10, and 14.13 shall survive any termination of this Agreement. 

 

-103- Section 14.10. CONSENT TO JURISDICTION.  (a) EACH PARTY HERETO HEREBY IRREVOCABLY  SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT  SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR  RELATING TO THIS AGREEMENT, AND EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT  ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH  NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  EACH  OF THE BORROWER AND THE SERVICER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT  MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF  SUCH ACTION OR PROCEEDING.  NOTHING IN THIS SECTION 14.10 SHALL AFFECT THE RIGHT OF THE  ADMINISTRATIVE AGENT OR ANY OTHER CREDIT PARTY TO BRING ANY ACTION OR PROCEEDING  AGAINST THE BORROWER OR THE SERVICER OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS  OF OTHER JURISDICTIONS.  THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH  ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY  SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. (b) EACH OF THE BORROWER AND THE SERVICER CONSENTS TO THE SERVICE OF ANY AND  ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO  IT AT ITS ADDRESS SPECIFIED IN SECTION 14.02.  NOTHING IN THIS SECTION 14.10 SHALL AFFECT THE  RIGHT OF THE ADMINISTRATIVE AGENT OR ANY OTHER CREDIT PARTY TO SERVE LEGAL PROCESS IN  ANY OTHER MANNER PERMITTED BY APPLICABLE LAW. Section 14.11. WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE  MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY JUDICIAL PROCEEDING  INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR  OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR  ANY OTHER TRANSACTION DOCUMENT. Section 14.12. Ratable Payments.  If any Credit Party, whether by setoff or otherwise, has  payment made to it with respect to any Borrower Obligations in a greater proportion than that  received by any other Credit Party entitled to receive a ratable share of such Borrower Obligations,  such Credit Party agrees, promptly upon demand, to purchase for cash without recourse or  warranty a portion of such Borrower Obligations held by the other Credit Parties so that after such  purchase each Credit Party will hold its ratable proportion of such Borrower Obligations; provided  that if all or any portion of such excess amount is thereafter recovered from such Credit Party, such  purchase shall be rescinded and the purchase price restored to the extent of such recovery, but  without interest. Section 14.13. Limitation of Liability.  (a) No claim may be made by the Borrower or  any Affiliate thereof or any other Person against any Credit Party or their respective Affiliates,  members, directors, officers, employees, incorporators, attorneys or agents for any special,  indirect, consequential or punitive damages in respect of any claim for breach of contract or any  other theory of liability arising out of or related to the transactions contemplated by this  Agreement or any other Transaction Document, or any act, omission or event occurring in  connection herewith or therewith; and each of the Borrower and the Servicer hereby waives,  releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and  whether or not known or suspected to exist in its favor.  None of the Credit Parties and their  respective Affiliates shall have any liability to the Borrower or any Affiliate thereof or any other  

 

-104- Person asserting claims on behalf of or in right of the Borrower or any Affiliate thereof in  connection with or as a result of this Agreement or any other Transaction Document or the  transactions contemplated hereby or thereby, except to the extent that any losses, claims, damages,  liabilities or expenses incurred by the Borrower or any Affiliate thereof result from the breach of  contract, gross negligence or willful misconduct of such Credit Party in performing its duties and  obligations hereunder and under the other Transaction Documents to which it is a party. (b) The obligations of the Administrative Agent and each of the other Credit Parties  under this Agreement and each of the Transaction Documents are solely the corporate obligations  of such Person.  No recourse shall be had for any obligation or claim arising out of or based upon  this Agreement or any other Transaction Document against any member, director, officer,  employee or incorporator of any such Person. Section 14.14. Intent of the Parties.  The Borrower has structured this Agreement with the  intention that the issuance and usage of Letters of Credit, the Reimbursement Obligations and the  other obligations of the Borrower hereunder will be treated under United States federal, and  applicable state, local and foreign tax law as debt (the “Intended Tax Treatment”).  The Borrower,  the Servicer, the Administrative Agent and the other Credit Parties agree to file no tax return, or  take any action, inconsistent with the Intended Tax Treatment unless required by applicable law.   Each assignee and each Participant acquiring an interest in a Credit Extension, by its acceptance of  such assignment or participation, agrees to comply with the immediately preceding sentence. Section 14.15. USA Patriot Act.  Each of the Administrative Agent and each of the other  Credit Parties hereby notifies the Borrower and the Servicer that pursuant to the requirements of  the USA Patriot Act, Title III of Pub. L.  107-56 (signed into law October 26, 2001) (the “Patriot  Act”), the Administrative Agent and the other Credit Parties may be required to obtain, verify and  record information that identifies the Borrower, the Originators, the Servicer and the Performance  Guarantor, which information includes the name, address, tax identification number and other  information regarding the Borrower, the Originators, the Servicer and the Performance Guarantor  that will allow the Administrative Agent and the other Credit Parties to identify the Borrower, the  Originators, the Servicer and the Performance Guarantor in accordance with the Patriot Act.  This  notice is given in accordance with the requirements of the Patriot Act.  Each of the Borrower and  the Servicer agrees to provide the Administrative Agent and each other Credit Party, from time to  time, with all documentation and other information required by bank regulatory authorities under  “know your customer” and anti-money laundering rules and regulations, including, without  limitation, the Patriot Act. Section 14.16. Right of Setoff.  Each Credit Party is hereby authorized (in addition to any  other rights it may have), at any time during the continuance of an Event of Default, to setoff,  appropriate and apply (without presentment, demand, protest or other notice which are hereby  expressly waived) any deposits and any other indebtedness held or owing by such Credit Party  (including by any branches or agencies of such Credit Party) to, or for the account of, the Borrower  or the Servicer against amounts owing by the Borrower or the Servicer hereunder (even if  contingent or unmatured); provided that such Credit Party shall notify the Borrower or the  Servicer, as applicable, promptly following such setoff.   Section 14.17. Severability.  Any provisions of this Agreement which are prohibited or  

 

-105- unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such  prohibition or unenforceability without invalidating the remaining provisions hereof, and any such  prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable  such provision in any other jurisdiction. Section 14.18. Mutual Negotiations.  This Agreement and the other Transaction Documents  are the product of mutual negotiations by the parties thereto and their counsel, and no party shall be  deemed the draftsperson of this Agreement or any other Transaction Document or any provision  hereof or thereof or to have provided the same.  Accordingly, in the event of any inconsistency or  ambiguity of any provision of this Agreement or any other Transaction Document, such  inconsistency or ambiguity shall not be interpreted against any party because of such party’s  involvement in the drafting thereof. Section 14.19. Captions and Cross References.  The various captions (including the table of  contents) in this Agreement are provided solely for convenience of reference and shall not affect  the meaning or interpretation of any provision of this Agreement.  Unless otherwise indicated,  references in this Agreement to any Section, Schedule or Exhibit are to such Section, Schedule or  Exhibit to this Agreement, as the case may be, and references in any Section, subsection, or clause  to any subsection, clause or subclause are to such subsection, clause or subclause of such Section,  subsection or clause. [SIGNATURE PAGES FOLLOW] 

 

[Signature Page to Receivables Financing Agreement] 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. DAVEY RECEIVABLES LLC By:____________________________________ Name: ______________________________ Title: _______________________________ THE DAVEY TREE EXPERT COMPANY, as the Servicer By:____________________________________ Name: ______________________________ Title: _______________________________ 

 

[Signature Page to Receivables Financing Agreement] PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent By:____________________________________ Name: ______________________________ Title: _______________________________ PNC BANK, NATIONAL ASSOCIATION, as LC Bank By:____________________________________ Name: ______________________________ Title: _______________________________ PNC CAPITAL MARKETS LLC, as Structuring Agent By:____________________________________   Name: _____________________________   Title: ______________________________ 

 

EXHIBIT A FORM OF LC REQUEST [Letterhead of Borrower] [Date] [Administrative Agent] Re: LC Request Ladies and Gentlemen: Reference is hereby made to that certain Receivables Financing Agreement, dated as of  May 9, 2016, among Davey Receivables LLC (the “Borrower”), The Davey Tree Expert  Company, as Servicer (the “Servicer”), and PNC Bank, National Association, as Administrative  Agent (in such capacity, the “Administrative Agent”) and as the LC Bank (as amended,  supplemented or otherwise modified from time to time, the “Agreement”).  Capitalized terms used  in this LC Request and not otherwise defined herein shall have the meanings assigned thereto in  the Agreement.   This letter constitutes an LC Request pursuant to Section 3.02(a) of the Agreement.  The  Borrower hereby request that the LC Bank issue a Letter of Credit with a face amount of  [$_______] on [_____, 201_].  After giving effect to such issuance, the LC Amount will be  [$_______]. The Borrower hereby represents and warrants as of the date hereof, and after giving effect  to the issuance of such Letter of Credit, as follows: (i) the representations and warranties of the Borrower and the Servicer  contained in Sections 7.01 and 7.02 of the Agreement are true and correct in all material  respects on and as of the date of issuance of such Letter of Credit as though made on and as  of such date unless such representations and warranties by their terms refer to an earlier  date, in which case they shall be true and correct in all material respects on and as of such  earlier date; (ii) no Event of Default or Unmatured Event of Default has occurred and is  continuing, and no Event of Default or Unmatured Event of Default would result from the  issuance of such Letter of Credit; (iii) no Borrowing Base Deficit exists or would exist after giving effect to the  issuance of such Letter of Credit; and (iv) the Termination Date has not occurred. 

 

-2- IN WITNESS WHEREOF, the undersigned has executed this letter by its duly authorized  officer as of the date first above written. Very truly yours, DAVEY RECEIVABLES LLC By:____________________________________ Name: ______________________________ Title: _______________________________ 

 

2/24/24 5 Month End Date 4 Wks 6/28/25 Fiscal Year 2025 Month End Date 5 Wks Month End Date Wks 7/30/22 Month End Date 4 2/22/25 1/24/26 4 7/29/23 1/30/27 4 4 4 1/29/28 4 7/27/24 Wks 4 2/21/26 4/2/22 4 2/27/27 7/27/25 4 5 4 2/26/28 4 8/27/22 3/28/26 4 5 4/3/27 4/1/23 5 8/26/23 1/29/22 4/1/28 4 5 5 8/24/24 4/25/26 4 4 4 5/1/27 4 3/30/24 8/23/25 4/29/28 Month End Date 4 4 5 5/23/26 10/1/22 4 5 5/29/27 4 Fiscal Year 2023 5/27/28 9/30/23 4 3/29/25 5 1/28/23 6/27/26 5 5 9/28/24 7/3/27 5 5 7/1/28 Wks 5 9/27/25 4/30/22 5 7/25/26 4 4 10/29/22 7/31/27 4 4 4 7/29/28 4 10/28/23 4 8/22/26 4/29/23 4 8/28/27 10/26/24 4 4 4 8/26/28 1/27/24 4 10/25/25 9/26/26 4 5 10/2/27 4/27/24 5 12/3/22 4 9/30/28 5 5 4 Month End Date 12/2/23 10/24/26 4 5 10/30/27 4 4/26/25 11/30/24 10/28/28 Fiscal Year 2022 4 5 4 11/28/26 11/29/25 5 5 12/4/27 5 1/25/25 12/4/28 12/31/22 5 5/28/22 4 Wks 1/2/27 4 5 12/30/23 4 1/1/28 4 4 1/2/29 4 12/28/24 5/27/23 4 Wks in Year 53 4 12/27/25 Wks in Year Fiscal Year 2024 52 4 Wks in Year 52 Wks in Year 2/26/22 52 5/25/24 Wks in Year 4 52 4 Wks in Year EXHIBIT B THE TEXT BELOW HAS BEEN AMENDED. FISCAL MONTH THE DAVEY TREE EXPERT COMPANY MONTH END DATES THROUGH 2031 52 5/24/25 Wks in Year 4 52 Month End Date 7/2/22 2/25/23 5 4 7/1/23 Wks 5 Fiscal Year 2026 Fiscal Year 2027 6/29/24 Fiscal Year 2028 

 

4/27/30 4 4/26/31 4 Month End Date Wks 5/26/29 4 Month End Date 5/25/30 4 Wks 5/24/31 4 Month End Date Wks 6/30/29 5 6/29/30 5 6/28/31 5 1/27/29 7/28/29 4 4 7/27/30 4 1/26/30 7/26/31 4 4 1/25/31 8/25/29 4 4 8/24/30 4 8/23/31 4 9/29/29 2/24/29 5 4 9/28/30 5 9/27/31 2/23/30 5 4 10/27/29 4 2/22/31 10/26/30 4 4 10/25/31 4 12/1/29 5 3/31/29 11/30/30 Fiscal Year 2029 5 5 11/29/31 5 3/30/30 5 12/29/29 Fiscal Year 2030 4 12/28/30 3/29/31 4 5 12/27/31 4 Fiscal Year 2031 Wks in Year 52 Wks in Year 52 4/28/29 Wks in Year 4 52 

 

EXHIBIT C [RESERVED] 

 

EXHIBIT D FORM OF LETTER OF CREDIT APPLICATION (Attached) 

 

EXHIBIT E CREDIT AND COLLECTION POLICY (Attached) 

 

EXHIBIT F FORM OF INFORMATION PACKAGE (Attached) 

 

EXHIBIT G FORM OF COMPLIANCE CERTIFICATE To: PNC Bank, National Association, as Administrative Agent This Compliance Certificate is furnished pursuant to that certain Receivables Financing  Agreement, dated as of May 9, 2016 among Davey Receivables LLC (the “Borrower”), The  Davey Tree Expert Company, as Servicer (the “Servicer”), and PNC Bank, National Association,  as Administrative Agent (in such capacity, the “Administrative Agent”) and as the LC Bank (as  amended, supplemented or otherwise modified from time to time, the “Agreement”).  Capitalized  terms used herein and not otherwise defined herein shall have the meanings assigned to them in the  Agreement. The undersigned hereby certifies that: 1. I am the duly elected ________________of the Servicer. 2. I have reviewed the terms of the Agreement and each of the other  Transaction Documents and I have made, or have caused to be made under my supervision,  a detailed review of the transactions and condition of the Borrower during the accounting  period covered by the attached financial statements. 3. The examinations described in paragraph 2 above did not disclose, and I  have no knowledge of, the existence of any condition or event which constitutes an Event  of Default or an Unmatured Event of Default, as each such term is defined under the  Agreement, during or at the end of the accounting period covered by the attached financial  statements or as of the date of this Certificate[, except as set forth in paragraph 5 below]. 4. Schedule I attached hereto sets forth financial statements of the Servicer  and its Subsidiaries for the period referenced on such Schedule I. [5. Described below are the exceptions, if any, to paragraph 3 above by listing,  in detail, the nature of the condition or event, the period during which it has existed and the  action which Servicer has taken, is taking, or proposes to take with respect to each such  condition or event:] 

 

-2- The foregoing certifications are made and delivered this ______ day of ______________,  201_. THE DAVEY TREE EXPERT COMPANY By:____________________________________ Name: ______________________________ Title: _______________________________ 

 

-3- SCHEDULE I TO COMPLIANCE CERTIFICATE A. Schedule of Compliance as of ___________________, 201_ with Section(s) ____ of  the Agreement.  Unless otherwise defined herein, the terms used in this Compliance Certificate  have the meanings ascribed thereto in the Agreement. This schedule relates to the [quarter] [fiscal year] ended: __________________. B. The following financial statements of the Servicer and its Subsidiaries for the period  ending on ______________, 201_, are attached hereto: 

 

EXHIBIT H CLOSING MEMORANDUM (Attached) 

 

EXHIBIT I FORM OF AGGREGATE COMMITMENT INCREASE REQUEST _____________, 201__ To: PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent for the LC Bank  and LC Bank party to the Receivables Financing Agreement dated as of May 9,  2016 (as extended, renewed, amended or restated from time to time, the  “Financing Agreement”), among Davey Receivables LLC (the “Borrower”), The  Davey Tree Expert Company, as initial Servicer, the LC Bank thereunder, PNC  Capital Markets LLC, as Structuring Agent and PNC Bank, National Association,  as Administrative Agent.  Capitalized terms defined in the Financing Agreement  are used herein with the same meanings. Ladies and Gentlemen: The undersigned, Davey Receivables LLC (the “Borrower”) hereby refers to the  Financing Agreement and requests that the Administrative Agent and the LC Bank consent to an  increase in the Facility Limit (the “Aggregate Facility Limit Increase”), in accordance with  Section 3.11 of the Financing Agreement, to be effected by an increase in the Commitment of the  LC Bank under the terms of the Financing Agreement. The Borrower requests that the Aggregate Facility Limit Increase become effective on  _____, 201__1 (the “Aggregate Facility Limit Increase Date”), and after giving effect to such  requested Aggregate Facility Limit Increase, the Commitment of the LC Bank shall be  $_____________.   The requested Aggregate Facility Limit Increase shall be effective on the later of (i) the  Aggregate Facility Limit Increase Date and (ii) the date on which the executed consent of the  Administrative Agent and the LC Bank to this Aggregate Facility Limit Increase is received and  the conditions to any such increase in the Facility Limit set forth in Section 3.11 of the Financing  Agreement are satisfied.  It shall be a condition to the effectiveness of the Aggregate Facility Limit  Increase that all expenses referred to in Section 3.11 of the Financing Agreement shall have been  paid to the extent invoiced.  Upon the satisfaction of the conditions to such Aggregate Facility  Limit Increase, the Borrower hereby agrees to pay to the LC Bank a fee equal to [$______] on or  before the date on which the requested Aggregate Facility Limit Increase becomes effective.  The Borrower hereby certifies that no Unmatured Event of Default or Event of Default has  occurred and is continuing and that each of the conditions precedent to Credit Extensions set forth  in Section 6.02 of the Financing Agreement are satisfied as of the date hereof and shall be satisfied  immediately after giving effect to such Aggregate Facility Limit Increase. 1 To be at least 10 Business Days after the date of the delivery of the Aggregate Facility Limit Increase Request. 

 

-2- Please indicate the Administrative Agent’s and the LC Bank’s consent to such Aggregate  Commitment Increase by signing the enclosed copy of this letter in the space provided below.   THIS AGGREGATE COMMITMENT INCREASE REQUEST, INCLUDING THE RIGHTS AND DUTIES OF THE  PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF  THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL  OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS  OF LAW PROVISIONS THEREOF. [SIGNATURE PAGE FOLLOWS] 

 

-3- Very truly yours, DAVEY RECEIVABLES LLC By: Name: ______________________________ Title: _______________________________ The undersigned hereby consents on this  __ day of _____________, 201__ to the  above-requested Aggregate Facility  Limit Increase. PNC BANK, NATIONAL ASSOCIATION,    as Administrative Agent By:_________________________________ Name: ___________________________ Title: ____________________________ PNC BANK, NATIONAL ASSOCIATION,    as LC Bank By:_________________________________ Name: ___________________________ Title: ____________________________ 

 

Third Amended and Restated Fee Letter June 30, 2022 The Davey Tree Expert Company 1500 North Mantua Street Kent, Ohio 44240 Re: Third Amended and Restated Fee Letter – Receivables Financing Agreement  Ladies and Gentlemen: This Third Amended and Restated Fee Letter (as amended, restated, supplemented or  otherwise modified from time to time, this “Fee Letter”) sets forth certain fees payable by  Davey Receivables LLC (the “Borrower”), in connection with that certain Receivables  Financing Agreement Amendment No. 10, dated as of the date hereof, among the Borrower, The  Davey Tree Expert Company, as Servicer (the “Servicer”), PNC Bank, National Association  (“PNC”), as LC Bank (in such capacity, the “LC Bank”), and PNC, as Administrative Agent (in  such capacity, the “Administrative Agent”). Capitalized terms used but not defined herein have  the respective meanings assigned thereto in that certain Receivables Financing Agreement dated  as of May 9, 2016 (as amended, restated, supplemented or otherwise modified from time to time,  the “Receivables Financing Agreement”) among the Borrower, the Servicer, the LC Bank, the  Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent. This Fee Letter is  one of the “Fee Letters” referred to in Section 3.05(b) of the Receivables Financing Agreement. The Borrower hereby agrees to pay the following fees: (a) A “Closing Fee” in an amount equal to $42,500, which Closing Fee shall be paid  by wire transfer of immediately available funds on or prior to the date hereof to PNC for the  account of the Structuring Agent. (b) A “Commitment Fee” payable to the LC Bank for each day in an amount equal to  the product of (i) the Commitment Fee Rate, times (ii) the excess, if any of (x) the Facility Limit  on such day over (y) the Total Usage on such day, times (iii) 1/360. The Commitment Fee shall  accrue on each day from the Closing Date to (but excluding) the Maturity Date and shall be  payable in arrears on each Settlement Date for the prior Settlement Period (or portion thereof)  most recently ended and on the Maturity Date. As used herein, the “Commitment Fee Rate” shall  equal (A) 0.35% per annum for each day in which the Total Usage is greater than or equal to  50.0% of the Facility Limit, and (B) 0.45% per annum for each day in which the Total Usage is  less than 50.0% of the Facility Limit. (c) An “LC Fee” payable to the LC Bank for each day in an amount equal to the  product of (i) 0.90% per annum, times (ii) the sum of (x) the face amount of all Letters of Credit  outstanding on such day and (y) any Outstanding Reimbursement Obligations, times (iii) 1/360.  The LC Fee shall accrue from the Closing Date to (but excluding) the Maturity Date and shall be  payable in arrears on each Settlement Date for the prior Settlement Period (or portion thereof)  most recently ended and on the Maturity Date. Each of the fees payable by the Borrower hereunder will be (and shall be deemed to be  for all purposes) fully earned as of the day on which it accrues, and none of the foregoing fees,  once paid, shall be refundable under any circumstances. For the avoidance of doubt, each of the  1 

 

fees payable by the Borrower hereunder are payable in addition to, and not in lieu of, any other  fees or amounts payable by the Borrower under, or in connection with, the Receivables  Financing Agreement and the other Transaction Documents. This Fee Letter may be executed in any number of 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. Delivery of an executed counterpart hereof by facsimile or other  electronic means shall be equally effective as delivery of an originally executed counterpart.  Each party agrees that this Fee Letter and any documents to be delivered in connection herewith  may be electronically signed, and that any electronic signatures appearing on this Fee Letter and  such other documents are the same as handwritten signatures for the purposes of validity,  enforceability, and admissibility. This Fee Letter amends and restates in its entirety that certain Second Amended and  Restated Fee Letter dated as of May 18, 2021 (the “Prior Fee Letter”), among the parties hereto  and is not a novation of any of the agreements or obligations incurred pursuant to the terms of  the Prior Fee Letter. This Fee Letter contains the final and complete integration of all prior  expressions by the parties hereto with respect to the subject matter hereof and the payment of the  fees specified above and shall (together with each of the other documents related hereto)  constitute the entire agreement among the parties hereto with respect thereto superseding all prior  oral or written understandings. This Fee Letter may only be amended, restated, supplemented or otherwise modified by  a written instrument, signed by each of the parties hereto. This Fee Letter shall be binding upon  and inure to the benefit of the parties hereto and their respective successors and assigns;  provided, however, that the Borrower may not assign any of its rights or obligations under this  Fee Letter without the prior written consent of each of the parties hereto. THIS FEE LETTER, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES  HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,  THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402  OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT  WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF).  EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE  JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW  YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR  RELATING TO THIS FEE LETTER, AND EACH PARTY HERETO HEREBY  IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR  PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE  COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE  PARTIES HEREBY HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT  THAT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO  THE MAINTENANCE OF SUCH ACTION OR PROCEEDING. TO THE  HERETO AGREE  THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE  CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE  JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. [Signature Pages Follow] 2 

 

Please evidence your agreement to the terms of this Fee Letter by signing the enclosed copy and  returning it to the undersigned. Very truly yours, PNC BANK, NATIONAL ASSOCIATION, as LC Bank and as Administrative Agent By: /s/ Deric Bradford Name: Deric Bradford Title: Senior Vice President PNC CAPITAL MARKETS LLC, as Structuring  Agent By: /s/ Deric Bradford Name: Deric Bradford Title: Managing Director [Signature Page to Third Amended and Restated Fee Letter] 

 

Acknowledged and Agreed to as of the date first above written Davey Receivables LLC By: /s/Christopher J. Bast Name: Christopher J. Bast Title: Treasurer [Signature Page to Third Amended and Restated Fee Letter]PURCHASE AND SALE AGREEMENT
  

   
  

  
   THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of  _March 3, 2022_ (the “Effective Date”) by and between AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP, a Minnesota limited partnership, as to an undivided 28% interest, and AEI INCOME & GROWTH FUND 25 LLC, a Delaware limited liability company, as to an undivided 72% interest, together as tenants-in-common  (collectively, “Seller”) and ERIC HERMAN and MATT LOVETT (collectively, “Buyer”). Seller desires to sell, and Buyer desires to purchase, all of Seller’s right, title and interest in the real property and improvements thereupon located at 1600 South Grand Highway, Clermont, Florida, 34711, as more particularly described on Exhibit “A” attached hereto (the “Property”).
  

   
  

  
   In consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the parties hereto covenant and agree as follows:
  

   
  

  
    
     1.
    

    
     Property.  The property to be sold to Buyer in this transaction consists of an undivided 100% interest in the Property. Seller owns no interest in any personalty with respect to the Property. 
    

  

   
  

  
    
     2.
    

    
     Lease.  The Property is being sold subject to an existing Lease Agreement of the Property dated December 21, 2015 by and between Seller, as lessor, and The Music House, LLC, a Florida limited liability company, and Ricardo A. Barclay, as lessee (collectively, jointly and severally, the “Tenant”) (the “Lease”). The Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller, all right, title, and interest of Seller in and to all leases and other agreements to occupy all or any portion of the Property that are in effect on the Effective Date or which Seller executed prior to Closing (as hereinafter defined) pursuant to the terms of this Agreement.
    

  

   
  

  
    
     3.
    

    
     Purchase Price.  The Purchase Price for the Property is $2,900,000 (the “Purchase Price”). If all conditions precedent to Buyer’s obligations to purchase have been satisfied, Buyer shall deposit the Purchase Price with the Closing Agent (as defined below) on or before the Closing Date.
    

  

   
  

  
    
     4.
    

    
     Terms.  The Purchase Price will be paid by Buyer as follows:
    

  

   
  

  
    
     a)
    

    
     Within three (3) business days of the Effective Date of this Agreement, Buyer will deposit $50,000 (the “Earnest Money”) into an interest-bearing account with First American Title Insurance Company, 1380 17th Street, Denver, CO 80202, Attn: Lisa Ray; phone number: (303) 876-1134; email: liray@firstam.com (the “Closing Agent” or “Title Company” or “Escrow Agent”). Upon expiration of the Review Period (as defined below), Earnest Money shall become non-refundable. The Earnest Money shall be credited against the Purchase Price when and if escrow closes and the sale is completed.
    

  

   
  

  
    
     b)
    

    
     Buyer will deposit the balance of the Purchase Price into escrow in sufficient time to allow escrow to close on the Closing Date.
    

  

  
  1

  

 
  

  
    
     5.
    

    
     Due Diligence.  Buyer will have forty-five (45) days from the Effective Date of this Agreement (the “Review Period”) to conduct all of its inspections and due diligence and satisfy itself regarding the Property and this transaction. Buyer agrees to indemnify and hold Seller harmless for any loss or damage to the Property or persons caused by Buyer or its agents arising out of such physical inspections of the Property, and this indemnity shall survive Closing or termination of this Agreement. Within three (3) business days of the Effective Date of this Agreement, Seller shall provide, to the extent such items are in its possession, the items listed on Exhibit “B” (“Seller’s Materials”). 
    

  

   
  

  
   Buyer may cancel this Agreement before the expiration of the Review Period for any reason in its sole discretion by delivering a cancellation notice to Seller and Closing Agent prior to the expiration of the Review Period. If this Agreement is not cancelled as set forth above, the Earnest Money shall be non-refundable unless Seller shall default hereunder, or in the event of a casualty or condemnation, subject to the provisions of Section 16 below.
  

   
  

  
   If Buyer cancels this Agreement before the expiration of the Review Period, as permitted under this Section, except for any escrow cancellation fees charged by the Title Company and any liabilities under the first paragraph of Section 5 of this Agreement and those provisions stating otherwise (which will survive), Seller (after execution of such documents reasonably requested by Seller to evidence the termination hereof) shall return to Buyer its Earnest Money and Buyer will have absolutely no rights, claims or interest of any type in connection with the Property or this transaction, regardless of any alleged conduct by Buyer, Seller or anyone else.
  

   
  

  
   If Buyer fails to close this transaction at no fault of Seller, Buyer will be irrevocably deemed in default of this Agreement. Upon default by Buyer, Seller may, as its option, retain the Earnest Money as its sole and exclusive remedy and declare this Agreement null and void, in which event Buyer will be deemed to have cancelled this Agreement and relinquish all rights in and to the Property, or Seller may exercise its rights hereunder. The Review Period will be deemed satisfied if Buyer has deposited the Earnest Money as required by Section 4 hereof, and this agreement is not cancelled.
  

   
  

  
    
     6.
    

    
     Closing Date.  Escrow shall close (the “Closing”) on or before fifteen (15) days following the expiration of the Review Period set forth below (the “Closing Date”), unless the parties mutually agree otherwise.
    

  

   
  

  
    
     7.
    

    
     Escrow.  Escrow shall be opened upon execution of this Agreement by both parties. A copy of this Agreement will be delivered to the Title Company and will serve as escrow instructions together with the Title Company’s standard instructions, any additional instructions required by Seller and/or Buyer or their respective counsels, and any additional instructions required by the Title Company to clarify its rights and duties. The parties agree to sign these additional instructions. If there is any conflict between these other instructions and this Agreement, this Agreement shall control.
    

  

   
  

  
  2

  

    
     8.
    

    
     Title.  Buyer, at its sole expense, within three (3) business days of the Effective Date, shall order a title insurance commitment, along with underlying documents to include any easement or declarations/CAM affecting the Property, for an Owner’s Title Insurance Policy (collectively, the “Title Commitment”). Closing will be conditioned on the agreement of the Title Company to issue an Owner’s Title Insurance Policy, dated as of the Closing Date, in an amount equal to the Purchase Price, insuring that Buyer will own insurable fee simple title to the Property subject only to: the Title Company’s standard exceptions; current real property taxes and assessments; survey exceptions; the rights of parties in possession pursuant to the Lease; the Permitted Exceptions, as defined herein. Buyer shall, at its sole expense, order and obtain an updated survey of the Property. Buyer hereby acknowledges that if Buyer desires to remove the survey exception from the Title Commitment, it shall be Buyer’s responsibility to obtain such updated survey. Seller shall have no obligation to execute any “no change” or equivalent affidavit with respect to the existing survey of the real property, nor shall Seller have any obligation to make any representations or warranties regarding such survey or any measurements or depictions thereon.
    

  

   
  

  
   Buyer shall be allowed ten (10) days after receipt of said Title Commitment for examination and the making of any title objections thereto (the “Title Objections”), said Title Objections to be made in writing or deemed waived (such written notice of Buyer’s Title Objections to be hereinafter referred to as the “Notice of Objections”). Except as set forth below, any title exception disclosed by the Title Commitment or Buyer’s survey and not listed in such Notice of Objections shall be deemed a “Permitted Title Exception” under this Agreement.
  

   
  

  
   If Seller shall fail to cure (or commence to cure) or eliminate all the Title Objections listed in the Notice of Defect within fifteen (15) business days after receipt of the Notice of Objections (the “Title Cure Period”), then Buyer may elect either to: (a) accept the Property subject to the title exception(s) not cured (in which case such title exception(s) shall become a Permitted Title Exception(s) hereunder), or (b) terminate this Agreement.
  

   
  

  
   In the event that Seller agrees to cure a Title Objection and commences such cure, but the same cannot be cured within the Title Cure Period, the Buyer may, by written notice to Seller, preserve such Title Objection such that the cure of such Title Objection shall be a condition precedent to Buyer’s obligation to close. 
  

   
  

  
   Buyer shall elect to either accept the Property subject to the Permitted Exceptions or terminate the Agreement by written notice to Seller delivered within three (3) business days following the end of the Title Cure Period, and the failure to deliver such election notice shall constitute an election to proceed under clause (a) above.  Any mortgage, security deed, lien, lis pendens, judgment, or other claim in a liquidated amount incurred by Seller during Seller’s ownership of the Property and which constitutes an exception to the title to the Property shall not in any event be a Permitted Title Exception hereunder, but such claim shall be paid or satisfied out of the sums payable by Buyer at Closing, and the proceeds of sale payable to Seller shall be reduced accordingly.
  

   
  

  
   At any time after the Effective Date of this Agreement and prior to Closing, Buyer shall have the right to notify Seller of any additional title exception which first appears of record after the effective date of the Title Commitment, or otherwise becomes known to Buyer. Buyer shall be allowed three (3) business days after notice of such additional title exception for examination 
  

  
  3

  

   and the making of any new Title Objections thereto by written notice to Seller (“Notice of New Objections”). Except as set forth herein, any title exception disclosed to Buyer and not listed in such Notice of New Objections shall be deemed a Permitted Title Exception. If Seller shall fail to cure (or commence to cure) or eliminate all the new Title Objections listed in the Notice of New Objections within ten (10) business days after receipt of the Notice of New Objections (the “Second Title Cure Period”), then Buyer may elect either to: (a) accept the Property subject to the new title exception(s) not cured (in which case such new title exception(s) shall become a Permitted Title Exception(s) hereunder), or (b) terminate this Agreement.
  

   
  

  
    
     9.
    

    
     Closing Costs.  Seller shall pay all transfer taxes (state, county, and municipal, as applicable). Seller shall pay any and all brokerage commissions to SRS Real Estate Partners Southeast, LLC (“Seller’s Broker”) and Bosshardt Realty Services, LLC (“Buyer’s Broker”) per separate agreement. Except for Seller’s Broker and Buyer’s Broker, both parties represent to the other that they have not been represented by a broker, and agree to hold the other harmless from any claim of brokerage commission by, through, or as a result of representation of the other party. 
    

  

   
  

  
   Buyer shall pay the Standard Owner’s Title Insurance Policy premium along with any title search and exam fees and the full cost of any endorsements or extended coverage as Buyer may require for such policy. Buyer will pay any and all recording fees. Buyer will pay the cost of updating any due diligence provided by Seller, including the cost of an updated survey to be ordered by Buyer as set forth in Section 8 above. Buyer and Seller will split all escrow and closing fees equally. Each party will pay its own attorney’s fees and costs to document and close this transaction.
  

   
  

  
    
     10.
    

    
     Real Estate Taxes, Special Assessments and Prorations.  The responsibility for all real property taxes for the current tax period and all expenses (including but not limited to common area maintenance expenses and fees), if any, that are the responsibility of Seller, shall be prorated between Buyer and Seller as of the Closing Date. 
    

  

   
  

  
   All income and all operating expenses from the Property, if any, shall be prorated between the parties and adjusted by them as of the Closing Date. Seller shall be entitled to all income earned, and shall be responsible for all expenses incurred, prior to the Closing Date. Buyer shall be entitled to all income earned, and shall be responsible for all operating expenses of the Property incurred, on and after the Closing Date.
  

   
  

  
    
     11.
    

    
     Seller’s Representations and Agreements.
    

  

   
  

  
    
     a)
    

    
     Seller represents and warrants as of this date that:
    

  

   
  

  
    
     i.
    

    
     Except for the existing Lease with the existing Tenant, Seller is not aware of any leases of the Property.
    

  

   
  

  
    
     ii.
    

    
     Seller has not received notice of any pending litigation or condemnation proceedings against the Property or Seller’s interest in the Property.
    

  

   
  

  
  4

  

    
     iii.
    

    
     Except as previously disclosed to Buyer and as permitted in paragraph (b) below, Seller is not aware of any contracts Seller has executed that would be binding on Buyer after the Closing Date.
    

  

   
  

  
    
     iv.
    

    
     Seller is not aware of any current or threatened litigation with respect to the Property, except for a pending Complaint filed by Seller, as plaintiff, against Tenant, as defendant, alleging certain lease defaults and nonpayment of rents, among other things, filed in the County Court of the Fifth Judicial Circuit in and for Lake County Florida under Case No. 2020-CC-3584.
    

  

   
  

  
    
     b)
    

    
     Provided that Buyer performs its obligations as required, Seller agrees that it will not enter into any new contracts that would materially affect the Property and be binding on Seller after the Closing Date without Buyer’s prior consent, which will not be unreasonably withheld or delayed.
    

  

   
  

  
    
     12.
    

    
     Disclosures.
    

  

   
  

  
    
     a)
    

    
     As of the Effective Date hereof, Seller has not received any notice of any material, physical, or mechanical defects of the Property, including without limitation, the plumbing, heating, air conditioning, and ventilating, electrical system. To the best of Seller’s knowledge without inquiry, all such items are in good operating condition and repair and in compliance with all applicable governmental, zoning, and land use laws, ordinances, regulations and requirements. If Seller shall receive any such notice to the contrary prior to the Closing Date, Seller will inform Buyer prior to the Closing Date, and Buyer may terminate this Agreement within ten (10) days after receipt of Seller’s notice and the Earnest Money will be returned. If Buyer does not inform Seller of its intent to terminate this Agreement, the Buyer shall have waived its right to terminate the contract under this provision.
    

  

   
  

  
    
     b)
    

    
     As of the Effective Date hereof, Seller has not received any notice that the use and operation of the Property is not in full compliance with applicable building codes, safety, fire, zoning, and land use laws, and other applicable local, state and federal laws, ordinances, regulations and requirements. If Seller shall receive any such notice to the contrary prior to the Closing Date, Seller will inform Buyer prior to the Closing Date, and Buyer may terminate this Agreement within ten (10) days after receipt of Seller’s notice and the Earnest Money will be returned. If Buyer does not inform Seller of its intent to terminate this Agreement, the Buyer shall have waived its right to terminate the contract under this provision.
    

  

   
  

  
  5

  

    
     c)
    

    
     As of the Effective Date hereof, Seller has not received any notice that the Property is in violation of any federal, state or local law, ordinance, or regulations relating to industrial hygiene or the environmental conditions on, under, or about the Property, including, but not limited to, soil, and groundwater conditions. To the best of Seller’s knowledge, there is no proceeding or inquiry by any governmental authority with respect to the presence of Hazardous Materials on the Property or the migration of Hazardous Materials from or to other property. Buyer agrees that Seller will have no liability of any type to Buyer or Buyer’s successors, assigns, or affiliates in connection with any Hazardous Materials on or in connection with the Property either before or after the Closing Date, except such Hazardous Materials on or in connection with the Property arising out of Seller’s gross negligence or intentional misconduct. If Seller shall receive any such notice to the contrary prior to the Closing Date, Seller will inform Buyer prior to the Closing Date, and Buyer may terminate this Agreement within ten (10) days after receipt of Seller’s notice and the Earnest Money will be returned. If Buyer does not inform Seller of its intent to terminate this Agreement, the Buyer shall have waived its right to terminate the contract under this provision.
    

  

   
  

  
    
     d)
    

    
     Buyer agrees that it is purchasing the Property in its present condition, “as is, where is,” and Seller has no obligations to construct or repair any improvements thereon or to perform any other act regarding the Property, except as expressly provided herein.
    

  

   
  

  
    
     e)
    

    
     Buyer acknowledges that, having been given the opportunity to inspect the Property, Buyer is relying solely on its own investigation of the Property and not on any representations or information provided by Seller or to be provided by Seller, except as set forth herein. Buyer further acknowledges that the information provided, or to be provided, by Seller with respect to the Property was obtained from a variety of sources and Seller has not (a) made independent investigation or verification of such information, and (b) makes no representations as to the accuracy or completeness of such information, except as herein set forth. The sale of the Property as provided for herein is made on an “as-is, where-is” basis and Buyer expressly acknowledges that, in consideration of the agreements of Seller herein, except as otherwise specified herein, Seller makes no warranty or representation, express or implied, or arising by operation of law, including, but not limited to, any warranty of condition, habitability, suitability for lease, suitability for commercial purposes, merchantability, or fitness for a particular purpose, in respect of the Property. Seller makes no representations of any sort that ownership of the Property will result in a profit to any Buyer.
    

  

   
  

  
    
     f)
    

    
     Buyer acknowledges that Seller cannot, and does not, make any representation as to (a) the success, or lack thereof, of the Property or continuation of the Lease post-Closing, or (b) the appropriateness of purchasing the Property for the Buyer’s individual tax or financial situation or tax or financial objectives. Buyer acknowledges that he or she is relying solely upon his or her own examination of the Property and all facts surrounding the purchase of the Property including the merits and risks involved therein.
    

  

   
  

  
   The Parties agree that the provisions of this Section 12, subsections (a) through (f), shall survive the Closing Date for a period of six (6) months.
  

   
  

  
    
     13.
    

    
     Closing.
    

  

   
  

  
    
     a)
    

    
     Before the Closing Date, Seller will deposit into escrow an executed special warranty deed warranting title against lawful claims by, through, or under a conveyance from Seller, but not further or otherwise, conveying insurable title of the Property to Buyer, subject to the exceptions provided herein.
    

  

  
  6

  

    
     b)
    

    
     On or before the Closing Date, Buyer will deposit into escrow the balance of the Purchase Price when required hereunder and any additional funds required of Buyer (pursuant to this Agreement or any other agreement executed by Buyer) to close escrow. Both parties will deliver to the Title Company any other documents reasonably required by the Title Company to close escrow.
    

  

   
  

  
    
     c)
    

    
     On or before the Closing Date, Seller and Buyer will deliver or cause to be delivered to Escrow Agent an Assignment and Assumption of Lease, duly executed and acknowledged by Seller and Buyer, assigning all of Seller’s interest in, to, and under the Lease to Buyer. 
    

  

   
  

  
    
     d)
    

    
     If required by the terms of the Lease, on or before the Closing Date, Seller will deposit into escrow a notice to Tenant of the sale of the Property to Buyer and of the Assignment and Assumption of Lease, such notice to be delivered by the Title Company to Tenant upon Closing. 
    

  

   
  

  
    
     e)
    

    
     On the Closing Date, if escrow is ready to close, the Title Company will: record the deed in the official records of the county where the Property is located; cause the Title Company to commit to issue the title policy; immediately deliver to Seller the portion of the Purchase Price deposited into escrow by cashier’s check or wire transfer (less debits and prorations, if any); deliver to Seller and Buyer a signed counterpart of the Title Company’s certified combined Closing statement showing all charges to all parties and take all other actions necessary to close escrow.
    

  

   
  

  
    
     14.
    

    
     Defaults.  IN THE EVENT THE SALE OF THE PROPERTY AS CONTEMPLATED HEREUNDER IS NOT CONSUMMATED BY REASON OF A DEFAULT OF BUYER UNDER THIS AGREEMENT, THE EARNEST MONEY (INCLUDING ALL INTEREST EARNED FROM THE INVESTMENT THEREOF) SHALL BE PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES, AS SELLER’S SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT, AT LAW OR IN EQUITY AS A RESULT OF SUCH DEFAULT. THE PARTIES ACKNOWLEDGE THAT SELLER’S ACTUAL DAMAGES IN THE EVENT THAT THE SALE IS NOT CONSUMMATED WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THE PARTIES ACKNOWLEDGE THAT THE EARNEST MONEY HAS BEEN AGREED UPON AFTER NEGOTIATION AS THE PARTIES’ REASONABLE ESTIMATE OF SELLER’S DAMAGES AND AS SELLER’S SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT, AT LAW OR IN EQUITY AGAINST BUYER IN THE EVENT THE CLOSING DOES NOT OCCUR BY REASON OF BUYER’S DEFAULT. BUYER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD THE ABOVE PROVISIONS COVERING LIQUIDATED DAMAGES, AND THAT EACH PARTY WAS REPRESENTED BY COUNSEL OR HAD THE OPPORTUNITY TO SEEK COUNSEL TO UNDERSTAND THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS EXECUTED. IF SELLER SHALL DEFAULT HEREUNDER,  THE ENTIRE EARNEST MONEY SHALL BE RETURNED TO BUYER (TOGETHER WITH ALL INTEREST, IF

  
  7

  

 ANY, EARNED THEREON) AND BUYER SHALL BE ENTITLED TO ELECT EITHER TO: (i) EXERCISE THEIR RIGHT TO TERMINATE THIS AGREEMENT OR (ii) MAINTAIN AN ACTION AGAINST SELLER FOR SPECIFIC PERFORMANCE.  IN THE EVENT THAT ANY ACTION IS BROUGHT TO ENFORCE THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE NON-PREVAILING PARTY IN SUCH ACTION SHALL BE RESPONSIBLE FOR PAYMENT OF ALL REASONABLE ATTORNEYS’ FEES AND COURT COSTS INCURRED BY THE PREVAILING PARTY.
    

   
  

  
    
     15.
    

    
     Buyer’s Representations and Warranties.
    

  

   
  

  
    
     a)
    

    
     Buyer represents and warrants to Seller as follows:
    

  

   
  

  
    
     i.
    

    
     In addition to the acts and deeds recited herein and contemplated to be performed, executed, and delivered by Buyer, Buyer shall perform, execute and deliver or cause to be performed, executed, and delivered at the closing or after the Closing Date, any and all further acts, deeds and assurances as Seller or the Title Company may require and be reasonable in order to consummate the transactions contemplated herein.
    

  

   
  

  
    
     ii.
    

    
     Buyer has all requisite power and authority to consummate the transaction contemplated by this Agreement and has by proper proceedings duly authorized the execution and delivery of this Agreement and the consummation of the transaction contemplated hereby.
    

  

   
  

  
    
     iii.
    

    
     To Buyer’s knowledge, neither the execution and delivery of this Agreement nor the consummation of the transaction contemplated hereby will violate or be in conflict with (a) any applicable provisions of law, (b) any order of any court or other agency of government having jurisdiction hereof, or (c) any agreement or instrument to which Buyer is a party or by which Buyer is bound.
    

  

   
  

  
    
     16.
    

    
     Damages, Destruction and Eminent Domain.
    

  

   
  

  
    
     a)
    

    
     If, prior to the Closing Date, the Property or any part thereof be destroyed or further damaged by fire, the elements, or any cause, due to events occurring subsequent to the date of this Agreement to the extent that the cost of repair exceeds $10,000.00, this Agreement shall become null and void, at Buyer’s option exercised, if at all, by written notice to Seller within ten (10) days after Buyer has received written notice from Seller of said destruction or damage. Seller, however, shall have the right to adjust or settle any insured loss until (i) all contingencies set forth in Paragraph 5 hereof have been satisfied, or waived; and (ii) any ten-day period provided for above in this Subparagraph 16a for Buyer to elect to terminate this Agreement has expired or Buyer has, by written notice to Seller, waived Buyer’s right to terminate this Agreement. If Buyer elects to proceed and to consummate the purchase despite said damage or destruction, there shall be no reduction in or abatement of the Purchase Price, and Seller shall assign to Buyer the Seller’s right, title, and interest in and to all insurance proceeds (pro-rata in relation to the Property) resulting from said damage or 

  
  8

  

 
destruction to the extent that the same are payable with respect to damage to the Property, subject to rights of any Tenant of the Property.
    

   
  

  
    
     b)
    

    
     If the cost of repair is less than $10,000.00, Seller shall credit Buyer for the cost of the repairs. Buyer shall then be obligated to otherwise perform hereunder.
    

  

   
  

  
    
     c)
    

    
     If, prior to the Closing Date, the Property, or any part thereof, is taken by eminent domain, this Agreement shall become null and void at Buyer’s option. If Buyer elects to proceed to consummate the purchase despite said taking, there shall be no reduction in, or abatement of, the Purchase Price, and Seller shall assign to Buyer the Seller’s right, title, and interest in and to any award made, or to be made, in the condemnation proceeding pro-rata in relation to the Property, subject to rights of any Tenant of the Property.
    

  

   
  

  
    
     d)
    

    
     In the event that this Agreement is terminated by Buyer pursuant to this Agreement, the Earnest Money shall be immediately returned to Buyer after execution by Buyer of such documents reasonably requested by Seller to evidence the termination hereof.
    

  

   
  

  
    
     17.
    

    
     1031 Exchange.  Buyer and Seller shall reasonably cooperate with each other, at no additional cost, obligation, or liability if either party intends to structure this transaction as a tax-deferred exchange pursuant to Section 1031 of the Internal Revenue Code, as amended.
    

  

   
  

  
    
     18.
    

    
     Cancellation.  If any party elects to cancel this Agreement because of any breach by another party or because escrow fails to close by the agreed date, the party electing to cancel shall deliver to Escrow Agent a notice containing the address of the party in breach and stating that this Agreement shall be cancelled unless the breach is cured within three (3) days following the delivery of the notice to the breaching party. Within three (3) days after receipt of such notice, the Escrow Agent shall send it by a nationally recognized courier service guaranteeing overnight delivery to the party in breach at the address contained in the Notice and no further notice shall be required. If the breach is not cured within three (3) days following the delivery of the notice to the breaching party, this Agreement shall be cancelled.
    

  

   
  

  
    
     19.
    

    
     Counterparts.  This Agreement may be executed and delivered in any number of counterparts, each of which, when so executed and delivered, shall be deemed to be an original, and all of which shall constitute one and the same instrument. Any person may rely upon a photocopy, facsimile, or electronically transmitted signature to this Agreement.
    

  

   
  

  
    
     20.
    

    
     Expiration.  Buyer is submitting this offer by signing a copy of this Agreement and delivering it to Seller, and Seller has five (5) days from receipt hereof within which to accept this offer. When executed by both parties, this Agreement will be a binding agreement for valid and sufficient consideration which will bind and benefit Buyer, Seller, and their respective successors and assigns.
    

  

   
  

  
    
     21.
    

    
     Choice of Law.  This Agreement shall be governed by, and construed in accordance with the laws of the state in which the Property is located.
    

  

   
  

  
  9

  

    
     22.
    

    
     Notices.  All notices from either of the parties hereto to the other shall be in writing and shall be considered to have been duly given or served if sent by first class certified mail, or by a nationally recognized courier service guaranteeing overnight delivery to the party at his or its address set forth below, or by email to the respective email address set forth below, or to such other address as such party may hereafter designate by written notice to the other party. Refusal, rejection, or return of any notice otherwise properly delivered as set forth herein shall be deemed to constitute delivery of such notice.  Notice given in accordance herewith shall be deemed effectively given upon delivery to the address of the addressee.
    

  

   
  

  
    
     If to Seller:
    

    
      
    

    
      
    

    
     c/o AEI Fund Management, Inc.
    

  

  
   1300 Wells Fargo Place
  

  
   30 East Seventh Street
  

  
   St. Paul, MN 55101
  

  
   Attn: Kyle Hagen
  

  
   Email: khagen@aeifunds.com 
  

   
  

  
    
     With a copy to:
    

    
      
    

    
      
    

    
     c/o AEI Fund Management, Inc.
    

  

  
   1300 Wells Fargo Place
  

  
   30 East Seventh Street
  

  
   St. Paul, MN 55101
  

  
   Attn: Marissa Lassaux & Stacee Windle
  

  
   Email: mlassaux@aeifunds.com / swindle@aeifunds.com 
  

   
  

  
    
     If to Buyer:
    

    
      
    

    
      
    

    
     Eric Herman/Matt Lovett
    

  

   
  

   
  

  
    
     With a copy to:
    

    
      
    

    
      
    

    
     Raymond M. Ivey
    

  

  
    
      
    

    
      
    

    
      
    

    
      
    

    
      
    

    
     Scruggs, Carmichael & Wershow, P. A
    

  

  
    
      
    

    
      
    

    
      
    

    
      
    

    
      
    

    
     2234 NW 40th Terrace, Suite B
    

  

  
    
      
    

    
      
    

    
      
    

    
      
    

    
      
    

    
     Gainesville, FL 32605
    

  

  
    
      
    

    
      
    

    
      
    

    
      
    

    
      
    

    
     352-376-5242
    

  

  
    
      
    

    
      
    

    
      
    

    
      
    

    
      
    

    
     ivey@scwlegal.org 
    

  

   
  

  
    
     23.
    

    
     Miscellaneous.
    

  

   
  

  
    
     a)
    

    
     This Agreement may be amended only by written agreement signed by both Seller and Buyer, and all waivers must be in writing and signed by the waiving party. Time is of the essence. This Agreement will not be construed for or against a party whether or not that party has drafted this Agreement. If there is any action or proceeding between the parties relating to this Agreement the prevailing party will be entitled to recover attorney’s fees and costs. This is an integrated agreement containing all agreements of the parties about the Property and the other matters described and it supersedes any other agreements or understandings. Exhibits attached to this Agreement are incorporated into this Agreement.
    

  

   
  

  
  10

  

    
     b)
    

    
     If this escrow has not closed by the Closing Date through no fault of Seller, Seller may, at its election, extend the Closing Date or exercise any remedy available to it by law, including terminating this Agreement.
    

  

   
  

  
    
     c)
    

    
     Funds to be deposited or paid by Buyer must be good and clear funds in the form of cash, cashier’s checks or wire transfers, subject to the Title Company’s requirements.
    

  

   
  

  
    
     d)
    

    
     Buyer shall have the right to assign this Contract at Closing to any entity or entities affiliated with or related to Buyer without the consent of Seller (provided that Buyer shall notify Seller at least five (5) days prior to Closing to allow the parties to modify the Closing documentation accordingly).  Other than the foregoing, Buyer shall not be entitled to assign any of its right, title, and interest herein without Seller’s prior consent. Any assignee shall expressly assume all of Buyer’s duties, obligations, and liabilities hereunder, and Buyer shall not be released from any of its obligations hereunder.
    

  

   
  

  
    
     e)
    

    
     Whenever the last day for the exercise of any right or the discharge of any obligation under this Contract shall fall upon a Saturday, Sunday, or any public or legal holiday, the party having such right or obligation shall have until 5:00 p.m. (Central Standard Time) on the next succeeding regular business day to exercise such right or discharge such obligation.  Time is of the essence of this Contract.
    

  

   
  

  
    
     f)
    

    
     The invalidity or unenforceability of any provision hereof shall not affect or impair any other provisions hereof.
    

  

   
  

  
    
     g)
    

    
     All of the provisions of this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Parties hereto.
    

  

   
  

  
    
     h)
    

    
     No failure to strictly enforce any provision hereof shall be deemed to be a waiver of any other provision hereof or of any subsequent breach by the other party of the same or any other provision.
    

  

   
  

  
    
     i)
    

    
     This Agreement may be executed in one or more counterparts by the Parties hereto.  All counterparts shall be construed together and shall constitute one agreement.  Each counterpart shall be deemed an original hereof notwithstanding less than all of the Parties may have executed it.  All facsimile and emailed executions shall be treated as originals for all purposes.
    

  

   
  

  
    
     j)
    

    
     All Parties agree to sign any and all further documents reasonably necessary to implement the terms hereof.
    

  

   
  

   
  

  
   [SIGNATURE PAGES FOLLOW]
  

  
  11

  

   IN WITNESS WHEREOF, the Seller and Buyer have executed this Agreement to be effective as of the Effective Date.
  

   
  

  
   SELLER:
  

   
  

  
   AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP,
  

  
   a Minnesota limited partnership
  

   
  

  
    
     By: 
    

    
     AEI Fund Management XXI, Inc. 
    

  

  
   a Minnesota corporation
  

  
   its Corporate General Partner
  

   
  

   
  

  
   By: _/s/ Marni Nygard________________
  

  
   Name: Marni Nygard
  

  
   Title: President
  

  
   Date: ___3/2/2022___________________
  

   
  

   
  

  
   AEI INCOME & GROWTH FUND 25 LLC,
  

  
   a Delaware limited liability company
  

   
  

  
    
     By: 
    

    
     AEI Fund Management XXI, Inc. 
    

  

  
   a Minnesota corporation
  

  
   its Managing Member
  

   
  

   
  

  
   By: _/s/ Marni Nygard________________
  

   Name: Marni Nygard
  

  
   Title: President
  

  
   Date: ___3/2/2022___________________
  
 
  

   
  

  
   [SIGNATURES CONTINUE ON NEXT PAGE]
  

  
  12

  

   BUYER:
  

   
  

  
   ERIC HERMAN
  

   
  

   
  

  
   By: _/s Eric Herman________________
  

  
   Name: Eric Herman
  

  
   Date: _March 3, 2022_______________
  

   
  

   
  

  
   MATT LOVETT
  

   
  

   
  

  
   By: __/s/ Matt Lovett_________________
  

  
   Name: Matt Lovett
  

  
   Date: _March 3, 2022_______________
  
 
  

   
  

   
  

  
  13

  

   Exhibit A
  

  
   (Legal Description)
  

  THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF LAKE, STATE OF FLORIDA AND IS DESCRIBED AS FOLLOWS:
 
ALL OR A PORTION OF:
 
PARCEL 1:
 
LOT 3, OAK HILL COMMONS - UNIT I, ACCORDING TO THE PLAT THEREOF, AS RECORDED IN PLAT BOOK 62, PAGES 87 THRU 89, INCLUSIVE, OF THE PUBLIC RECORDS OF LAKE COUNTY, FLORIDA; AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
 
A PORTION OF THE NORTHEAST 1/4 OF SECTION 30, TOWNSHIP 22 SOUTH, RANGE 26 EAST, LAKE COUNTY, FLORIDA; BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
 
COMMENCE AT THE SOUTHEAST CORNER OF SAID NORTHEAST 1/4 OF SECTION 30; THENCE RUN NORTH 00 30' 11" EAST, ALONG THE EAST LINE OF SAID NORTHEAST 1/4, A DISTANCE OF 885.19 FEET; THENCE, DEPARTING SAID EAST LINE, RUN NORTH 89 29' 49" WEST, A DISTANCE OF 40.00 FEET FOR A POINT OF BEGINNING; THENCE RUN NORTH 89 29' 48" WEST, A DISTANCE OF 517.30 FEET TO A POINT ON THE EAST RIGHT OF WAY LINE OF U.S. HIGHWAY 27 (STATE ROAD 25) PER FLORIDA DEPARTMENT OF TRANSPORTATION RIGHT OF WAY MAP DATED OCTOBER 2005 (FIN. PROJECT ID: 238423-1); THENCE RUN NORTH 10 41' 42" EAST, ALONG SAID RIGHT OF WAY LINE, A DISTANCE OF 160.69 FEET; THENCE, DEPARTING SAID RIGHT OF WAY LINE, RUN SOUTH 80 21' 07" EAST, A DISTANCE OF 4.65 FEET; THENCE RUN NORTH 10 41' 42" EAST, A DISTANCE OF 6.85 FEET TO THE POINT OF CURVATURE OF A CURVE, CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 80.00 FEET; THENCE RUN NORTHEASTERLY ALONG THE ARC OF SAID CURVE, A DISTANCE OF 111.43 FEET THROUGH A CENTRAL ANGLE OF 79 48' 30" TO THE POINT OF TANGENCY; THENCE RUN SOUTH 89 29' 48" EAST, A DISTANCE OF 179.96 FEET; THENCE RUN NORTH 00 27' 54" EAST, A DISTANCE OF 149.24 FEET TO THE POINT OF CURVATURE OF A CURVE, CONCAVE SOUTHWESTERLY, HAVING A RADIUS OF 229.15 FEET; THENCE RUN NORTHWESTERLY ALONG THE ARC OF SAID CURVE, A DISTANCE OF 98.96 FEET THROUGH A CENTRAL ANGLE OF 24 44' 34" TO THE POINT OF REVERSE CURVATURE OF A CURVE, CONCAVE NORTHEASTERLY, HAVING A RADIUS OF 81.34 FEET; THENCE RUN NORTHWESTERLY ALONG THE ARC OF SAID CURVE, A DISTANCE OF 39.23 FEET THROUGH A CENTRAL ANGLE OF 27 38' 01" TO A POINT ON THE SOUTH RIGHT OF WAY LINE OF SATE ROAD 50 PER FLORIDA DEPARTMENT OF TRANSPORTATION RIGHT OF WAY MAP DATED OCTOBER 2005 (FIN. PROJECT ID: 238423-1), SAID POINT BEING ON A NON-TANGENT CURVE, CONCAVE NORTHEASTERLY, HAVING A RADIUS OF 8669.42 FEET AND A CHORD BEARING SOUTH 80 09' 25" EAST FOR A DISTANCE OF 55.98 FEET; THENCE RUN SOUTHEASTERLY ALONG THE ARC OF SAID CURVE AND ALONG SAID SOUTH RIGHT OF WAY LINE OF STATE ROAD 50, A DISTANCE OF 55.98 FEET THROUGH A CENTRAL ANGLE OF 00 22' 12"; THENCE, DEPARTING SAID CURVE AND SAID SOUTH RIGHT OF WAY LINE, RUN SOUTH 00 30' 11" WEST, A DISTANCE OF 274.20 FEET; THENCE RUN SOUTH 89 29' 48" EAST, A DISTANCE OF 197.71 FEET TO A POINT ON A LINE LYING 40.00 FEET WEST OF AND PARALLEL TO THE AFOREMENTIONED EAST LINE OF THE NORTHEAST 1/4 OF SAID SECTION 30; THENCE RUN SOUTH 00 30' 11" WEST, ALONG SAID LINE, A DISTANCE OF 230.00 FEET TO THE POINT OF BEGINNING.
 
PARCEL 2:
 
EASEMENT RIGHTS, AS CONTAINED IN THAT CERTAIN EASEMENTS WITH COVENANTS AND RESTRICTIONS AFFECTING LAND, RECORDED IN OFFICIAL RECORDS BOOK 3549, PAGE 1845; AS AFFECTED BY OFFICIAL RECORDS BOOK 3647, PAGE 2182; AND OFFICIAL RECORDS BOOK 3939, PAGE 1310; ALL OF THE PUBLIC RECORDS OF LAKE COUNTY, FLORIDA.

  
  14

  

   Exhibit B
  

   
  

  
   (Seller’s Materials)
  

   
  

  
   The following Seller’s Materials will be provided by Seller, to the extent such items exist in Seller’s possession:
  

  
    
     a)
    

    
     A copy of Seller’s existing Owner’s Title Policy for the Property, with copies of its underlying documents;
    

  

  
    
     b)
    

    
     A copy of Seller’s existing as-built ALTA survey of the Property;
    

  

  
    
     c)
    

    
     A complete copy of the Lease, and any amendments thereto, including but not limited to guaranties, amendments, assignments of lease and/or letter agreements, commencement agreements, and memorandum of leases;
    

  

  
    
     d)
    

    
     A copy of Seller’s existing Phase I Environmental Site Assessment report;
    

  

  
    
     e)
    

    
     A copy of the Seller or Tenant’s existing insurance certificate(s) for the Property;
    

  

  
    
     f)
    

    
     A copy of the Certificate of Occupancy from the governing municipality;
    

  

  
    
     g)
    

    
     Copies of the existing final building plans and specifications for the improvements; and
    

  

  
    
     h)
    

    
     A copy of the most recent real estate tax statement for the Property.
    

  

 
  15

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