Document:

Exhibit

Exhibit 10.1

==========================================================================================================================================

AMENDED AND RESTATED
CREDIT AGREEMENT

among

CORE MOLDING TECHNOLOGIES, INC.

and

1137925 B.C. LTD.

as Borrowers

THE LENDERS NAMED HEREIN
as Lenders

and

KEYBANK NATIONAL ASSOCIATION
as Administrative Agent, Swing Line Lender and Issuing Lender

KEYBANC CAPITAL MARKETS INC. 
as Lead Arranger and Sole Book Runner
_____________________

dated as of
January 16, 2018
_____________________

==========================================================================================================================================

TABLE OF CONTENTS

	
							
	 
	 
	 
	 
	Page
	

	 
	ARTICLE 1 DEFINITIONS
	2
	

	 
	 
	 
	 
	 

	 
	 
	1.1
	

	Definitions
	2
	

	 
	 
	 
	 
	 

	 
	 
	1.2
	

	Accounting Terms
	41
	

	 
	 
	 
	 
	 

	 
	 
	1.3
	

	Terms Generally
	41
	

	 
	 
	 
	 
	 

	 
	 
	1.4
	

	Rules of Interpretation
	42
	

	 
	 
	 
	 
	 

	 
	 
	1.5
	

	Confirmation of Recitals
	42
	

	 
	 
	 
	 
	 

	 
	ARTICLE 2 AMOUNT AND TERMS OF CREDIT
	42
	

	 
	 
	 
	 
	 

	 
	 
	2.1
	

	Amount and Nature of Credit
	43
	

	 
	 
	 
	 
	 

	 
	 
	2.2
	

	US Revolving Credit Commitment
	48
	

	 
	 
	 
	 
	 

	 
	 
	2.3
	

	Canadian Revolving Credit Commitment
	53
	

	 
	 
	 
	 
	 

	 
	 
	2.4
	

	Canadian Term Loan Commitment
	54
	

	 
	 
	 
	 
	 

	 
	 
	2.5
	

	Interest
	55
	

	 
	 
	 
	 
	 

	 
	 
	2.6
	

	Evidence of Indebtedness
	58
	

	 
	 
	 
	 
	 

	 
	 
	2.7
	

	Notice of Loans and Credit Events;Funding of Loans
	59
	

	 
	 
	 
	 
	 

	 
	 
	2.8
	

	Payment on Loans and Other Obligations
	61
	

	 
	 
	 
	 
	 

	 
	 
	2.9
	

	Prepayment
	62
	

	 
	 
	 
	 
	 

	 
	 
	2.10
	

	Commitment and Other Fees
	63
	

	 
	 
	 
	 
	 

	 
	 
	2.11
	

	Modifications to Commitment
	64
	

	 
	 
	 
	 
	 

	 
	 
	2.12
	

	Computation of Interest and Fees
	67
	

	 
	 
	 
	 
	 

	 
	 
	2.13
	

	Mandatory Fees
	67
	

	 
	 
	 
	 
	 

	 
	 
	2.14
	

	Cash Collateral
	71
	

	 
	 
	 
	 
	 

	 
	 
	2.15
	

	Liability of Borrowers
	72
	

	 
	 
	 
	 
	 

	 
	ARTICLE 3 ADDITIONAL PROVISIONS RELATING TO EURODOLLAR LOANS AND DAILY LIBOR LOANS; INCREASED CAPITAL;TAXES
	74
	

	 
	 
	 
	 
	 

	 
	 
	3.1
	

	Requirements of Law
	74
	

	 
	 
	 
	 
	 

	 
	 
	3.2
	

	Taxes
	75
	

	 
	 
	 
	 
	 

	 
	 
	3.3
	

	Funding Losses
	79
	

	 
	 
	 
	 
	 

	 
	 
	3.4
	

	EuroDollar Rate or Daily LIBOR Rate Lending Unlawful; Inability to Determine Rate
	80
	

	 
	 
	 
	 
	 

	 
	 
	3.5
	

	Discretion of Lenders as to the Manner of Funding
	81
	

	 
	 
	 
	 
	 

	 
	 
	3.6
	

	Replacement of Lenders
	81
	

	 
	 
	 
	 
	 

	 
	ARTICLE 4 CONDITIONS PRECEDENT
	81
	

	 
	 
	 
	 
	 

	 
	 
	4.1
	

	Conditions of Each Credit Event
	81
	

	 
	 
	 
	 
	 

	 
	 
	4.2
	

	Certain Closing Deliveries Under Original Credit Agreement
	82
	

	 
	 
	 
	 
	 

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TABLE OF CONTENTS

	
							
	 
	 
	4.3
	

	Conditions to the First Credit Event
	83
	

	 
	 
	 
	 
	 

	 
	 
	4.4
	

	Post-Closing Conditions
	87
	

	 
	 
	 
	 
	 

	 
	ARTICLE 5 COVENANTS
	90
	

	 
	 
	 
	 
	 

	 
	 
	5.1
	

	Insurance
	90
	

	 
	 
	 
	 
	 

	 
	 
	5.2
	

	Money Obligations
	91
	

	 
	 
	 
	 
	 

	 
	 
	5.3
	

	Financial Statements and Information
	91
	

	 
	 
	 
	 
	 

	 
	 
	5.4
	

	Financial Records
	93
	

	 
	 
	 
	 
	 

	 
	 
	5.5
	

	Franchises; Change in Business
	93
	

	 
	 
	 
	 
	 

	 
	 
	5.6
	

	ERISA Pension and Benefit Plan Compliance
	93
	

	 
	 
	 
	 
	 

	 
	 
	5.7
	

	Financial Covenants
	95
	

	 
	 
	 
	 
	 

	 
	 
	5.8
	

	Borrowing
	95
	

	 
	 
	 
	 
	 

	 
	 
	5.9
	

	Liens
	96
	

	 
	 
	 
	 
	 

	 
	 
	5.10
	

	Regulations T, U and X
	97
	

	 
	 
	 
	 
	 

	 
	 
	5.11
	

	Investments, Loans and Guaranties
	97
	

	 
	 
	 
	 
	 

	 
	 
	5.12
	

	Merger and Sale of Assets
	98
	

	 
	 
	 
	 
	 

	 
	 
	5.13
	

	Acquisitions
	99
	

	 
	 
	 
	 
	 

	 
	 
	5.14
	

	Notice
	100
	

	 
	 
	 
	 
	 

	 
	 
	5.15
	

	Restricted Payments
	101
	

	 
	 
	 
	 
	 

	 
	 
	5.16
	

	Environmental Compliance
	101
	

	 
	 
	 
	 
	 

	 
	 
	5.17
	

	Affiliate Transactions
	101
	

	 
	 
	 
	 
	 

	 
	 
	5.18
	

	Use of Proceeds
	101
	

	 
	 
	 
	 
	 

	 
	 
	5.19
	

	Corporate Names and Locations of Collateral
	102
	

	 
	 
	 
	 
	 

	 
	 
	5.20
	

	Lease Rentals
	102
	

	 
	 
	 
	 
	 

	 
	 
	5.21
	

	Subsidiary Guaranties, Security Documents and Pledge of Stock or Other Ownership Interest
	102
	

	 
	 
	 
	 
	 

	 
	 
	5.22
	

	Flood Hazard
	104
	

	 
	 
	 
	 
	 

	 
	 
	5.23
	

	Restrictive Agreements
	104
	

	 
	 
	 
	 
	 

	 
	 
	5.24
	

	Other Covenants and Provisions
	104
	

	 
	 
	 
	 
	 

	 
	 
	5.25
	

	Guaranty Under Material Indebtedness Agreement
	105
	

	 
	 
	 
	 
	 

	 
	 
	5.26
	

	Amendment of Organizational Documents
	105
	

	 
	 
	 
	 
	 

	 
	 
	5.27
	

	Fiscal Year Borrowers
	105
	

	 
	 
	 
	 
	 

	 
	 
	5.28
	

	Negative Pledge of US Borrower's Stock
	105
	

	 
	 
	 
	 
	 

	 
	 
	5.29
	

	Banking Relationship
	105
	

	 
	 
	 
	 
	 

	 
	 
	5.30
	

	Amendments to Horizon Plastics Acquisition Documents
	105
	

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TABLE OF CONTENTS

	
							
	 
	 
	5.31
	

	Compliance with Laws
	105
	

	 
	 
	 
	 
	 

	 
	 
	5.32
	

	Credit Pay as Trustee
	105
	

	 
	 
	 
	 
	 

	 
	 
	5.33
	

	Spanish Language Translation
	106
	

	 
	 
	 
	 
	 

	 
	 
	5.34
	

	Further Assurances
	106
	

	 
	 
	 
	 
	 

	 
	ARTICLE 6 REPRESENTATIONS AND WARRANTIES
	106
	

	 
	 
	 
	 
	 

	 
	 
	6.1
	

	Corporate Existence; Subsidiaries; Foreign Qualifications
	106
	

	 
	 
	 
	 
	 

	 
	 
	6.2
	

	Corporate Authority
	107
	

	 
	 
	 
	 
	 

	 
	 
	6.3
	

	Compliance with Laws and Contracts
	107
	

	 
	 
	 
	 
	 

	 
	 
	6.4
	

	Litigations and Administrative Proceedings
	108
	

	 
	 
	 
	 
	 

	 
	 
	6.5
	

	Title to Assets
	108
	

	 
	 
	 
	 
	 

	 
	 
	6.6
	

	Liens and Security Interests
	108
	

	 
	 
	 
	 
	 

	 
	 
	6.7
	

	Tax Returns
	109
	

	 
	 
	 
	 
	 

	 
	 
	6.8
	

	Environmental Laws
	109
	

	 
	 
	 
	 
	 

	 
	 
	6.9
	

	Locations
	109
	

	 
	 
	 
	 
	 

	 
	 
	6.10
	

	Continued Business
	109
	

	 
	 
	 
	 
	 

	 
	 
	6.11
	

	Employee Benefit Plans
	110
	

	 
	 
	 
	 
	 

	 
	 
	6.12
	

	Consents or Approvals
	111
	

	 
	 
	 
	 
	 

	 
	 
	6.13
	

	Solvency
	111
	

	 
	 
	 
	 
	 

	 
	 
	6.14
	

	Financial Statements
	111
	

	 
	 
	 
	 
	 

	 
	 
	6.15
	

	Regulations
	112
	

	 
	 
	 
	 
	 

	 
	 
	6.16
	

	Material Agreements
	112
	

	 
	 
	 
	 
	 

	 
	 
	6.17
	

	Intellectual Property
	112
	

	 
	 
	 
	 
	 

	 
	 
	6.18
	

	Insurance
	112
	

	 
	 
	 
	 
	 

	 
	 
	6.19
	

	Deposit Accounts and Securities Accounts
	112
	

	 
	 
	 
	 
	 

	 
	 
	6.20
	

	Accurate and Complete Statements
	113
	

	 
	 
	 
	 
	 

	 
	 
	6.21
	

	Investment Company; Other Restrictions
	113
	

	 
	 
	 
	 
	 

	 
	 
	6.22
	

	Acquisition Agreement Representations
	113
	

	 
	 
	 
	 
	 

	 
	 
	6.23
	

	Defaults
	113
	

	 
	 
	 
	 
	 

	 
	ARTICLE 7 EVENTS OF DEFAULT
	113
	

	 
	 
	 
	 
	 

	 
	 
	7.1
	

	Payments
	113
	

	 
	 
	 
	 
	 

	 
	 
	7.2
	

	Special Covenants
	113
	

	 
	 
	 
	 
	 

	 
	 
	7.3
	

	Other Covenants
	113
	

	 
	 
	 
	 
	 

	 
	 
	7.4
	

	Representations and Warranties
	114
	

	 
	 
	 
	 
	 

	 
	 
	7.5
	

	Cross Default
	114
	

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TABLE OF CONTENTS

	
							
	 
	 
	7.6
	

	ERISA or Pension Plan Default
	114
	

	 
	 
	 
	 
	 

	 
	 
	7.7
	

	Change in Control
	114
	

	 
	 
	 
	 
	 

	 
	 
	7.8
	

	Judgments
	114
	

	 
	 
	 
	 
	 

	 
	 
	7.9
	

	Material Adverse Change
	115
	

	 
	 
	 
	 
	 

	 
	 
	7.10
	

	Security
	115
	

	 
	 
	 
	 
	 

	 
	 
	7.11
	

	Validity of Loan Documents
	115
	

	 
	 
	 
	 
	 

	 
	 
	7.12
	

	Solvency
	115
	

	 
	 
	 
	 
	 

	 
	ARTICLE 8 REMEDIES UPON DEFAULT
	116
	

	 
	 
	 
	 
	 

	 
	 
	8.1
	

	Optional Defaults
	116
	

	 
	 
	 
	 
	 

	 
	 
	8.2
	

	Automatic Defaults
	117
	

	 
	 
	 
	 
	 

	 
	 
	8.3
	

	Letters of Credit
	117
	

	 
	 
	 
	 
	 

	 
	 
	8.4
	

	Offsets
	117
	

	 
	 
	 
	 
	 

	 
	 
	8.5
	

	Equalization Provisions
	118
	

	 
	 
	 
	 
	 

	 
	 
	8.6
	

	Other Remedies
	119
	

	 
	 
	 
	 
	 

	 
	 
	8.7
	

	Application of Proceeds
	119
	

	 
	 
	 
	 
	 

	 
	ARTICLE 9 THE ADMINISTRATIVE AGENT
	121
	

	 
	 
	 
	 
	 

	 
	 
	9.1
	

	Appointment and Authorization
	121
	

	 
	 
	 
	 
	 

	 
	 
	9.2
	

	Note Holders
	122
	

	 
	 
	 
	 
	 

	 
	 
	9.3
	

	Consultation with Council
	122
	

	 
	 
	 
	 
	 

	 
	 
	9.4
	

	Documents
	122
	

	 
	 
	 
	 
	 

	 
	 
	9.5
	

	Administrative Agent and Affiliates
	122
	

	 
	 
	 
	 
	 

	 
	 
	9.6
	

	Knowledge or Notice of Default
	123
	

	 
	 
	 
	 
	 

	 
	 
	9.7
	

	Action by Administrative Agent
	123
	

	 
	 
	 
	 
	 

	 
	 
	9.8
	

	Release of Collateral or Guarantor of Payment
	123
	

	 
	 
	 
	 
	 

	 
	 
	9.9
	

	Delegation of Duties
	124
	

	 
	 
	 
	 
	 

	 
	 
	9.10
	

	Indemnification of Administrative Agent
	124
	

	 
	 
	 
	 
	 

	 
	 
	9.11
	

	Successor Administrative Agent
	124
	

	 
	 
	 
	 
	 

	 
	 
	9.12
	

	Issuing Lender
	125
	

	 
	 
	 
	 
	 

	 
	 
	9.13
	

	Swing Line Lender
	125
	

	 
	 
	 
	 
	 

	 
	 
	9.14
	

	Administrative Agent May File Proofs of Claim
	125
	

	 
	 
	 
	 
	 

	 
	 
	9.15
	

	No Reliance of Administrative Agent's Customer Identification Program
	126
	

	 
	 
	 
	 
	 

	 
	 
	9.16
	

	Other Agents
	126
	

	 
	 
	 
	 
	 

	 
	 
	9.17
	

	Platform
	126
	

	 
	 
	 
	 
	 

iv

TABLE OF CONTENTS

	
							
	 
	ARTICLE 10 GUARANTY BY US BORROWER OF OBLGIATIONS OF CANADIAN BORROWER
	127
	

	 
	 
	 
	 
	 

	 
	 
	10.1
	

	The Guaranty
	127
	

	 
	 
	 
	 
	 

	 
	 
	10.2
	

	Obligations Unconditional
	127
	

	 
	 
	 
	 
	 

	 
	 
	10.3
	

	Reinstatement
	129
	

	 
	 
	 
	 
	 

	 
	 
	10.4
	

	Certain Additional Waivers
	129
	

	 
	 
	 
	 
	 

	 
	 
	10.5
	

	Remedies
	129
	

	 
	 
	 
	 
	 

	 
	 
	10.6
	

	Guarantee of Payment, Continuing Guarantee
	129
	

	 
	 
	 
	 
	 

	 
	 
	10.7
	

	Payments
	129
	

	 
	 
	 
	 
	 

	 
	ARTICLE 11 MISCELLANEOUS
	130
	

	 
	 
	 
	 
	 

	 
	 
	11.1
	

	Lenders' Independent Investigation
	130
	

	 
	 
	 
	 
	 

	 
	 
	11.2
	

	No Waiver; Cumulative Remedies
	130
	

	 
	 
	 
	 
	 

	 
	 
	11.3
	

	Amendments, Waivers and Consents
	130
	

	 
	 
	 
	 
	 

	 
	 
	11.4
	

	Notices
	132
	

	 
	 
	 
	 
	 

	 
	 
	11.5
	

	Costs, Expenses and Documentary Taxes
	132
	

	 
	 
	 
	 
	 

	 
	 
	11.6
	

	Indemnification
	133
	

	 
	 
	 
	 
	 

	 
	 
	11.7
	

	Obligations Several; No Fiduciary Obligations
	133
	

	 
	 
	 
	 
	 

	 
	 
	11.8
	

	Execution in Counterparts
	133
	

	 
	 
	 
	 
	 

	 
	 
	11.9
	

	Successors and Assigns
	134
	

	 
	 
	 
	 
	 

	 
	 
	11.1
	

	Defaulting Lenders
	138
	

	 
	 
	 
	 
	 

	 
	 
	11.11
	

	Patriot Act Notice
	141
	

	 
	 
	 
	 
	 

	 
	 
	11.12
	

	Severability of Provisions; Captions; Attachments
	141
	

	 
	 
	 
	 
	 

	 
	 
	11.13
	

	Investment Purpose
	141
	

	 
	 
	 
	 
	 

	 
	 
	11.14
	

	Entire Agreement
	141
	

	 
	 
	 
	 
	 

	 
	 
	11.15
	

	Confidentiality
	142
	

	 
	 
	 
	 
	 

	 
	 
	11.16
	

	Limitations on Liability of the Issuing Lender
	142
	

	 
	 
	 
	 
	 

	 
	 
	11.17
	

	General Limitation of Liability
	143
	

	 
	 
	 
	 
	 

	 
	 
	11.18
	

	No Duty
	143
	

	 
	 
	 
	 
	 

	 
	 
	11.19
	

	Legal Representation of Parties
	143
	

	 
	 
	 
	 
	 

	 
	 
	11.20
	

	Judgment Currency
	144
	

	 
	 
	 
	 
	 

	 
	 
	11.21
	

	Acknowledgment and Consent to Bail-in of EEA Financial Institutions
	144
	

	 
	 
	 
	 
	 

	 
	 
	11.22
	

	Canadian Limitation Periods
	145
	

	 
	 
	 
	 
	 

	 
	 
	11.23
	

	Governing Law; Submission to Jurisdiction
	145
	

	 
	 
	 
	 
	 

	 
	 
	 
	Jury Trial Waiver
	Signature Page 1
	

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TABLE OF CONTENTS

Exhibit A-1    Form of US Revolving Credit Note
Exhibit A-2    Form of Canadian Revolving Credit Note
Exhibit B-1    Form of US Swing Line Note
Exhibit B-2    Form of Canadian Swing Line Note
Exhibit C    Form of US Term Note
Exhibit D    Form of Canadian Term Note
Exhibit E    Form of Notice Of Loan
Exhibit F    Form of Compliance Certificate
Exhibit G    Form of Assignment and Assumption Agreement
		
	Exhibit H-1
	Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

		
	Exhibit H-2
	Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

		
	Exhibit H-3
	Form of U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

		
	Exhibit H-4
	Form of U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Schedule 1    Commitments of Lenders
Schedule 2    Guarantors of Payment
Schedule 2.2    Existing Letters of Credit
Schedule 3    Domestic Real Property
Schedule 4    Pledged Securities
Schedule 5.8    Indebtedness
Schedule 5.9    Liens
Schedule 5.11    Permitted Foreign Subsidiary Loans and Investments
Schedule 6.1    Corporate Existence; Subsidiaries; Foreign Qualification
Schedule 6.4    Litigation and Administrative Proceedings
Schedule 6.5    Real Estate Owned by the Companies
Schedule 6.9    Locations
Schedule 6.11    Employee Benefits Plans
Schedule 6.16    Material Agreements
Schedule 6.17    Intellectual Property
Schedule 6.18    Insurance
Schedule 6.19    Deposit Accounts and Securities Accounts

vi

This CREDIT AGREEMENT (as the same may from time to time be amended, restated or otherwise modified, this “Agreement”) is made effective as of the 16th day of January, 2018 among:

(a)    CORE MOLDING TECHNOLOGIES, INC., a Delaware corporation (the “US Borrower”);

(b)    1137925 B.C. Ltd., a corporation incorporated under the laws of British Columbia, Canada (the “Canadian Borrower” and, together with the US Borrower, collectively, the “Borrowers” and, individually, each a “Borrower”);

(c)    the lenders listed on Schedule 1 hereto and each other Eligible Assignee, as hereinafter defined, that from time to time becomes a party hereto pursuant to Section 2.11(b) or 11.9 hereof (collectively, the “Lenders” and, individually, each a “Lender”); and

(d)    KEYBANK NATIONAL ASSOCIATION, a national banking association, as the administrative agent for the Lenders under this Agreement (the “Administrative Agent”), the Swing Line Lender and the Issuing Lender.

WITNESSETH:

WHEREAS, the US Borrower, Corecomposites de México, S. de R.L. de C.V., a sociedad de responsabilidad limitada de capital variable incorporated under the laws of Mexico (“Core Mexico”), the Administrative Agent and the lenders named therein (the “Original Lenders”) entered into that certain Credit Agreement, dated as of December 9, 2008 (as amended, the “Original Credit Agreement”);

WHEREAS, this Agreement amends and restates in its entirety the Original Credit Agreement and, upon the effectiveness of this Agreement, the terms and provisions of the Original Credit Agreement shall be superseded hereby.  All references to “Credit Agreement” contained in the Loan Documents, as defined in the Original Credit Agreement, delivered in connection with the Original Credit Agreement shall be deemed to refer to this Agreement.  Notwithstanding the amendment and restatement of the Original Credit Agreement by this Agreement, the obligations outstanding (including, but not limited to, the letters of credit issued and outstanding) under the Original Credit Agreement as of the Closing Date shall remain outstanding and constitute continuing Obligations hereunder; provided that, on the Closing Date, the Administrative Agent shall, with the cooperation of the Lenders, cause the amounts of the commitments, existing loans and participations in letters of credit under the Original Credit Agreement to be, as applicable, re-allocated among the Lenders in accordance with their respective Applicable Commitment Percentages established pursuant to this Agreement.  Such outstanding Obligations and the guaranties of payment thereof shall in all respects be continuing, and this Agreement shall not be deemed to evidence or result in a novation or repayment and re-borrowing of such Obligations.  In furtherance of and, without limiting the foregoing, from and after the date hereof and except as expressly specified herein, the terms, conditions, and covenants governing the obligations outstanding under the Original Credit 

Agreement shall be solely as set forth in this Agreement, which shall supersede the Original Credit Agreement in its entirety;

WHEREAS, Core Mexico repaid its obligations owing to the Administrative Agent and the Original Lenders pursuant to the Original Credit Agreement, with the result that the US Borrower has requested, and the parties hereto have agreed, that Core Mexico not be a “Borrower” under this Agreement;

WHEREAS, it is the intent of the Borrowers, the Administrative Agent and the Lenders that the provisions of this Agreement be effective commencing on the Closing Date; and

WHEREAS, the Borrowers, the Administrative Agent and the Lenders have contracted for the establishment of credits in the aggregate principal amounts hereinafter set forth, to be made available to the Borrowers upon the terms and subject to the conditions hereinafter set forth;

NOW, THEREFORE, it is mutually agreed as follows:

ARTICLE I.  DEFINITIONS

Section 1.1.  Definitions.  As used in this Agreement, the following terms shall have the meanings set forth below:

“Account” means an account, as that term is defined in the U.C.C.

“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of any Person (other than a Company), or any business or division of any Person (other than a Company), (b) the acquisition of in excess of fifty percent (50%) of the outstanding capital stock (or other equity interest) of any Person (other than a Company), or (c) the acquisition of another Person (other than a Company) by a merger, amalgamation or consolidation or any other combination with such Person. 

“Additional Commitment” means that term as defined in Section 2.11(b) hereof.

“Additional Lender” means an Eligible Assignee that shall become a Lender during the Commitment Increase Period pursuant to Section 2.11(b) hereof.

“Additional Lender Assumption Agreement” means an additional lender assumption agreement, in form and substance satisfactory to the Administrative Agent, wherein an Additional Lender shall become a Lender.

“Additional Lender Assumption Effective Date” means that term as defined in Section 2.11(b)(ii) hereof.

“Additional Term Loan Facility” means that term as defined in Section 2.11(b)(i) hereof.

2

“Additional Term Loan Facility Amendment” means that term as defined in Section 2.11(c)(ii) hereof.

“Administrative Agent” means that term as defined in the first paragraph of this Agreement.

“Administrative Agent Fee Letter” means the Administrative Agent Fee Letter between the US Borrower and the Administrative Agent, dated as of the Closing Date, as the same may from time to time be amended, restated or otherwise modified.

“Administrative Borrower” means the US Borrower.

“Advantage” means any payment (whether made voluntarily or involuntarily, by offset of any deposit or other indebtedness or otherwise) received by any Lender (a) prior to an Equalization Event, in respect of the Applicable Debt, if such payment results in that Lender having less than its pro rata share (based upon its Applicable Commitment Percentage) of the Applicable Debt then outstanding, and (b) on and after an Equalization Event, in respect of the Obligations, if such payment results in that Lender having less than its pro rata share (based upon its Equalization Percentage) of the Obligations then outstanding.

“Affiliate” means, with respect to a specified Person, another Person that directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Agent Parties” means that term as defined in Section 9.17(b) hereof.

“Agreement” means that term as defined in the first paragraph of this agreement.

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Companies from time to time concerning or relating to bribery or corruption (including, without limitation, the Foreign Corrupt Practices Act of 1977 (FCPA) (15 U.S.C. § 78dd-1, et seq.), as amended, and the rules and regulations thereunder, and the Corruption of Foreign Public Officials Act (S.C. 1998, c. 34), as amended, and the rules and regulations thereunder).

“Applicable Commitment Fee Rate” means: 

(a)    for the period from the Closing Date through May 31, 2018, twenty (20.00) basis points; and

(b)    commencing with the Consolidated financial statements of the US Borrower for the fiscal quarter ending March 31, 2018, the number of basis points set forth in the following matrix, based upon the result of the computation of the Leverage Ratio as set forth in the Compliance Certificate for such fiscal period and, thereafter, as set forth in each successive Compliance Certificate, as provided below:

3

	
		
	Leverage Ratio
	Applicable Commitment Fee Rate

	Greater than or equal to 2.75 to 1.00
	22.50 basis points

	Greater than or equal 1.75 to 1.00 but less than 2.75 to 1.00
	20.00 basis points

	Less than 1.75 to 1.00
	17.50 basis points

The first date on which the Applicable Commitment Fee Rate is subject to change is June 1, 2018.  After June 1, 2018, changes to the Applicable Commitment Fee Rate shall be effective on the first day of each calendar month following the date upon which the Administrative Agent should have received, pursuant to Section 5.3(c) hereof, the Compliance Certificate (provided that, if the internal financial statements for the last fiscal quarter of the fiscal year of the US Borrower, as required by Section 5.3(a) hereof, are not consistent with the audited financial statements required by Section 5.3(b) hereof, the Applicable Commitment Fee Rate shall be retroactively adjusted upon receipt of the audited statements).  The above pricing matrix does not modify or waive, in any respect, the requirements of Section 5.7 hereof, the rights of the Administrative Agent and the Lenders to charge the Default Rate, or the rights and remedies of the Administrative Agent and the Lenders pursuant to Articles VII and VIII hereof.  Notwithstanding anything herein to the contrary, (i) during any period when the Borrowers shall have failed to timely deliver the Consolidated financial statements pursuant to Section 5.3(a) or (b) hereof, or the Compliance Certificate pursuant to Section 5.3(c) hereof, until such time as the appropriate Consolidated financial statements and Compliance Certificate are delivered, the Applicable Commitment Fee Rate shall, at the election of the Administrative Agent (which may be retroactively effective), be the highest rate per annum indicated in the above pricing grid regardless of the Leverage Ratio at such time, and (ii) in the event that any financial information or certification provided to the Administrative Agent in the Compliance Certificate is shown to be inaccurate (regardless of whether this Agreement or the Commitment is in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Commitment Fee Rate for any period (an “Applicable Commitment Fee Period”) than the Applicable Commitment Fee Rate applied for such Applicable Commitment Fee Period, then (A) the US Borrower shall promptly deliver to the Administrative Agent a corrected Compliance Certificate for such Applicable Commitment Fee Period, (B) the Applicable Commitment Fee Rate shall be determined based on such corrected Compliance Certificate, and (C) the US Borrower shall promptly pay to the Administrative Agent, for the benefit of the Lenders, the accrued additional fees owing as a result of such increased Applicable Commitment Fee Rate for such Applicable Commitment Fee Period.

“Applicable Commitment Percentage” means, for each Lender:

(a)    with respect to the Revolving Credit Commitment, the percentage, if any, set forth opposite such Lender’s name in the column titled “Revolving Credit Commitment Percentage”, as set forth on Schedule 1 hereto, subject to assignments of interests pursuant to Section 11.9 hereof and revisions pursuant to Section 2.11(b)(ii)(B) hereof;

(b)    with respect to the US Term Loan Commitment (or the US Term Loan if the US Term Loan Commitment is no longer in effect), the percentage, if any, set forth opposite 

4

such Lender’s name in the column titled “US Term Loan Commitment Percentage”, as set forth on Schedule 1 hereto, subject to assignments of interests pursuant to Section 11.9 hereof and revisions pursuant to Section 2.11(b)(ii)(B) hereof; and

(c)    with respect to the Canadian Term Loan Commitment (or the Canadian Term Loan if the Canadian Term Loan Commitment is no longer in effect), the percentage, if any, set forth opposite such Lender’s name in the column titled “Canadian Term Loan Commitment Percentage”, as set forth on Schedule 1 hereto, subject to assignments of interests pursuant to Section 11.9 hereof.

“Applicable Debt” means:

(a)    with respect to the Revolving Credit Commitment, collectively, (i) all Indebtedness incurred by the Borrowers to the Revolving Lenders pursuant to this Agreement and the other Loan Documents, and includes, without limitation, the principal of and interest on all Revolving Loans and all Swing Loans and all obligations with respect to Letters of Credit, (ii) each extension, renewal or refinancing of the foregoing, in whole or in part, (iii) the commitment, prepayment and other fees and amounts payable hereunder in connection with the Revolving Credit Commitment, and (iv) all Related Expenses incurred in connection with the foregoing; 

(b)    with respect to the US Term Loan Commitment, collectively, (i) all Indebtedness incurred by the US Borrower to the US Term Lenders pursuant to this Agreement and the other Loan Documents, and includes, without limitation, the principal of and interest on the US Term Loan, (ii) each extension, renewal or refinancing of the foregoing in whole or in part, (iii) all prepayment and other fees and amounts payable hereunder in connection with the US Term Loan Commitment, and (iv) all Related Expenses incurred in connection with the foregoing; and

(c)    with respect to the Canadian Term Loan Commitment, collectively, (i) all Indebtedness incurred by the Canadian Borrower to the Canadian Term Lenders pursuant to this Agreement and the other Loan Documents, and includes, without limitation, the principal of and interest on the Canadian Term Loan, (ii) each extension, renewal or refinancing of the foregoing in whole or in part, (iii) all prepayment and other fees and amounts payable hereunder in connection with the Canadian Term Loan Commitment, and (iv) all Related Expenses incurred in connection with the foregoing.

“Applicable Margin” means:

(a)    for the period from the Closing Date through May 31, 2018, (i) two hundred (200.00) basis points for Eurodollar Loans and Daily LIBOR Loans, and (ii) one hundred (100.00) basis points for Base Rate Loans; and

(b)    commencing with the Consolidated financial statements of the US Borrower for the fiscal quarter ending March 31, 2018, the number of basis points (depending upon 

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whether Loans are Daily LIBOR Loans, Eurodollar Loans or Base Rate Loans) set forth in the following matrix, based upon the result of the computation of the Leverage Ratio as set forth in the Compliance Certificate for such fiscal period and, thereafter, as set forth in each successive Compliance Certificate, as provided below:

	
			
	Leverage Ratio
	Applicable Basis Points for Eurodollar Loans and Daily LIBOR Loans
	Applicable Basis Points for Base Rate Loans

	Greater than or equal to 2.75 to 1.00
	225.00
	125.00

	Greater than or equal 1.75 to 1.00 but less than 2.75 to 1.00
	200.00
	100.00

	Less than 1.75 to 1.00
	175.00
	75.00

The first date on which the Applicable Margin is subject to change is June 1, 2018.  After June 1, 2018, changes to the Applicable Margin shall be effective on the first day of each calendar month following the date upon which the Administrative Agent should have received, pursuant to Section 5.3(c) hereof, the Compliance Certificate (provided that, if the internal financial statements for the last fiscal quarter of the fiscal year of the US Borrower, as required by Section 5.3(a) hereof, are not consistent with the audited financial statements required by Section 5.3(b) hereof, the Applicable Margin shall be retroactively adjusted upon receipt of the audited statements).  The above pricing matrix does not modify or waive, in any respect, the requirements of Section 5.7 hereof, the rights of the Administrative Agent and the Lenders to charge the Default Rate, or the rights and remedies of the Administrative Agent and the Lenders pursuant to Articles VII and VIII hereof.  Notwithstanding anything herein to the contrary, (i) during any period when the Borrowers shall have failed to timely deliver the Consolidated financial statements pursuant to Section 5.3(a) or (b) hereof, or the Compliance Certificate pursuant to Section 5.3(c) hereof, until such time as the appropriate Consolidated financial statements and Compliance Certificate are delivered, the Applicable Margin shall, at the election of the Administrative Agent (which may be retroactively effective), be the highest rate per annum indicated in the above pricing grid for Loans of that type, regardless of the Leverage Ratio at such time, and (ii) in the event that any financial information or certification provided to the Administrative Agent in the Compliance Certificate is shown to be inaccurate (regardless of whether this Agreement or the Commitment is in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Margin Period”) than the Applicable Margin applied for such Applicable Margin Period, then (A) the Borrowers shall promptly deliver to the Administrative Agent a corrected Compliance Certificate for such Applicable Margin Period, (B) the Applicable Margin shall be determined based on such corrected Compliance Certificate, and (C) the Borrowers, as applicable, shall promptly pay to the Administrative Agent, for the benefit of the Lenders, the accrued additional interest owing as a result of such increased Applicable Margin for such Applicable Margin Period.

“Approved Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of its activities that is administered or managed by (a) a 

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Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Assignment Agreement” means an Assignment and Assumption Agreement entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.9 hereof), and accepted by the Administrative Agent, in substantially the form of Exhibit G hereto, or any other form approved by the Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease Obligations of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease Obligations, and (c) all Synthetic Indebtedness of such Person.

“Authorized Officer” means a Financial Officer or other individual authorized by a Financial Officer in writing (with a copy to the Administrative Agent) to handle certain administrative matters in connection with this Agreement.

“Bail‐In Action” means (i) the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution and (ii) in relation to any other applicable Bail‐In Legislation: (A) any powers under such Bail‐In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under such Bail‐In Legislation that are related or ancillary to any of those powers; and (B) any similar or analogous powers under such Bail‐In Legislation.

“Bail‐In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time that is described in the EU Bail-In Legislation Schedule, and in relation to any other jurisdiction, any analogous law or regulation from time to time that requires contractual recognition of any Write‐Downs and Conversion Powers contained in such law or regulation.

“Bailee’s Waiver” means a bailee’s waiver, in form and substance reasonably satisfactory to the Administrative Agent, delivered by a Company in connection with this Agreement, as such waiver may from time to time be amended, restated or otherwise modified.

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“Bank Product Agreements” means those certain cash management services and other agreements entered into from time to time between a Company and the Administrative Agent or a Lender (or an Affiliate of a Lender) in connection with any of the Bank Products.

“Bank Product Obligations” means all obligations, liabilities, contingent reimbursement obligations, fees and expenses owing by a Company to the Administrative Agent or any Lender (or an Affiliate of a Lender) pursuant to or evidenced by the Bank Product Agreements.

“Bank Products” means a service or facility extended to a Company by the Administrative Agent or any Lender (or an Affiliate of a Lender) for (a) credit cards and credit card processing services, (b) debit cards, purchase cards and stored value cards, (c) ACH transactions, and (d) cash management, including controlled disbursement, accounts or services.

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as now or hereafter in effect, or any successor thereto, as hereafter amended.

“Base Rate” means, for any day, a rate per annum equal to the highest of (a) the Prime Rate, (b) one‐half of one percent (.50%) in excess of the Federal Funds Effective Rate, and (c) one percent (1%) in excess of the London interbank offered rate for loans in Eurodollars for a period of one month (or, if such day is not a Business Day, such rate as calculated on the most recent Business Day).  Any change in the Base Rate shall be effective immediately from and after such change in the Base Rate.  Notwithstanding the foregoing, if at any time the Base Rate as determined above is less than zero, it shall be deemed to be zero for purposes of this Agreement.

“Base Rate Loan” means a Revolving Loan described in Section 2.2A(a) or Section 2.2B(a) hereof, a portion of the US Term Loan described in Section 2.3 hereof, or a portion of the Canadian Term Loan described in Section 2.4 hereof, in each case that shall be denominated in Dollars and on which a Borrower shall pay interest at the Derived Base Rate.

“Borrower” means that term as defined in the first paragraph of this Agreement.

“Borrowers” means that term as defined in the first paragraph of this Agreement.

“Business Day” means a day that is not a Saturday, a Sunday or another day of the year on which national banks are authorized or required to close in Cleveland, Ohio, and, in addition, if the applicable Business Day relates to a Eurodollar Loan, is a day of the year on which dealings in Dollar deposits are carried on in the London interbank Eurodollar market.

“Canadian Anti-Money Laundering & Anti-Terrorism Legislation” means the Criminal Code, R.S.C. 1985, c. C-46, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17 and the United Nations Act, R.S.C. 1985, c. U-2 or any similar Canadian legislation, together with all rules, regulations and interpretations thereunder or related thereto including, without limitation, the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism and the United Nations Al-Qaida and Taliban Regulations promulgated under the United Nations Act.

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“Canadian Borrower” means that term as defined in the first paragraph of this Agreement.

“Canadian Guaranty Date” means the date on which both (a) the shares of capital stock or other equity interests issued by each Credit Party organized in Canada cease to be Excluded Collateral, and (b) each Credit Party organized in Canada has executed and delivered to the Administrative Agent a Guaranty of Payment in respect of the Secured Obligations of the US Borrower and the Domestic Subsidiaries, in form and substance reasonably satisfactory to the Administrative Agent.

“Canadian Letter of Credit” means a commercial documentary letter of credit or standby letter of credit that shall be issued in Dollars by the Issuing Lender for the account of the Canadian Borrower, including amendments thereto, if any, and shall have an expiration date no later than one year after its date of issuance (provided that such Canadian Letter of Credit may provide for the renewal thereof for additional one year periods).

“Canadian Letter of Credit Commitment” means the commitment of the Issuing Lender, on behalf of the Revolving Lenders, to issue Canadian Letters of Credit in an aggregate face amount of up to Two Million Five Hundred Thousand Dollars ($2,500,000) (provided that the Letter of Credit Exposure does not exceed the Letter of Credit Commitment).

“Canadian Letter of Credit Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all issued and outstanding Canadian Letters of Credit, and (b) the aggregate of the draws made on Canadian Letters of Credit that have not been reimbursed by the Canadian Borrower or converted to a Canadian Revolving Loan pursuant to Section 2.2B(b)(v) hereof.

“Canadian MEPP” means a “multi-employer plan”, as defined under Regulation 8500(1) of the Income Tax Act (Canada) to which the Canadian Borrower is required to contribute but which is not maintained or administered by the Canadian Borrower.

“Canadian Pension Plan” means a “registered pension plan” as defined under subsection 248(1) of the Income Tax Act (Canada), to which the Canadian Borrower is required to contribute but does not include a Canadian MEPP.

“Canadian Qualified Lender” means a financial institution that (a) is listed on Schedule I, II, or III of the Bank Act (Canada), (b) has received an approval to have a financial establishment in Canada pursuant to Section 522.21 of the Bank Act (Canada) or (c) is not a foreign bank for purposes of the Bank Act (Canada), and, if such financial institution is not deemed to be resident of Canada for purposes of the Income Tax Act (Canada), such financial institution deals at arm's length with the Canadian Borrower for purposes of the Income Tax Act (Canada).

“Canadian Revolving Amount” means Ten Million Dollars ($10,000,000).

“Canadian Revolving Credit Commitment” means the obligation hereunder, during the Commitment Period, of (a) the Revolving Lenders (and each Revolving Lender) to make Canadian 

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Revolving Loans, (b) the Issuing Lender to issue and each Revolving Lender to participate in, Canadian Letters of Credit pursuant to the Canadian Letter of Credit Commitment, and (c) the Swing Line Lender to make, and each Revolving Lender to participate in, Canadian Swing Loans pursuant to the Canadian Swing Line Commitment; up to an aggregate principal amount outstanding at any time equal to the Canadian Revolving Amount. 

“Canadian Revolving Credit Exposure” means, at any time, the sum of (a) the aggregate principal amount of all Canadian Revolving Loans outstanding, (b) the Canadian Swing Line Exposure, and (c) the Canadian Letter of Credit Exposure.

“Canadian Revolving Credit Note” means a Canadian Revolving Credit Note, in the form of the attached Exhibit A-2, executed and delivered pursuant to Section 2.6(a)(ii) hereof.

“Canadian Revolving Loan” means a loan that shall be denominated in Dollars made to the Canadian Borrower by the Revolving Lenders in accordance with Section 2.2B(a) hereof.

“Canadian Swing Line Commitment” means the commitment of the Swing Line Lender to make Swing Loans to the Canadian Borrower, on a discretionary basis, up to the aggregate amount at any time outstanding of Two Million Five Hundred Thousand Dollars ($2,500,000) (provided that the Swing Line Exposure does not exceed the Swing Line Commitment).

“Canadian Swing Line Exposure” means, at any time, the aggregate principal amount of all Canadian Swing Loans outstanding.

“Canadian Swing Line Note” means the Canadian Swing Line Note, in the form of the attached Exhibit B-2, executed and delivered pursuant to Section 2.6(b)(ii) hereof.

“Canadian Swing Loan” means a loan that shall be denominated in Dollars made to the Canadian Borrower by the Swing Line Lender under the Canadian Swing Line Commitment, in accordance with Section 2.2B(c) hereof.

“Canadian Term Lender” means a Lender with a percentage of the Canadian Term Loan Commitment as set forth on Schedule 1 hereto, or that acquires a percentage of the Canadian Term Loan Commitment pursuant to Section 11.9 hereof. 

“Canadian Term Loan” means the loan made to the Canadian Borrower by the Canadian Term Lenders in the original principal amount of Thirteen Million Dollars ($13,000,000), in accordance with Section 2.4 hereof.

“Canadian Term Loan Commitment” means the obligation hereunder of each Canadian Term Lender to participate in the making of the Canadian Term Loan, up to the amount set forth opposite such Canadian Term Lender’s name in the column titled “Canadian Term Loan Commitment Amount” as set forth on Schedule 1 hereto.

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“Canadian Term Loan Exposure” means, at any time, the outstanding principal amount of the Canadian Term Loan.

“Canadian Term Note” means a Canadian Term Note, in the form of the attached Exhibit D executed and delivered pursuant to Section 2.6(d) hereof.

“Capital Distribution” means a payment made, liability incurred or other consideration given by a Company to any Person that is not a Company, (a) for the purchase, acquisition, redemption, repurchase, payment or retirement of any capital stock or other equity interest of such Company, or (b) as a dividend, return of capital or other distribution (other than any stock dividend, stock split or other equity distribution payable only in capital stock or other equity of such Company) in respect of such Company’s capital stock or other equity interest.

“Capitalized Lease Obligations” means obligations of the Companies for the payment of rent for any real or personal property under leases or agreements to lease that, in accordance with GAAP, have been or should be capitalized on the books of the lessee and, for purposes hereof, the amount of any such obligation shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Collateralize” means to deposit into a cash collateral account maintained with (or on behalf of) the Administrative Agent, and under the sole dominion and control of the Administrative Agent, or to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Issuing Lender, as collateral for any Letter of Credit Exposure or obligations of the Lenders to fund participations in respect of any Letter of Credit Exposure, cash or deposit account balances, or, if the Administrative Agent and the Issuing Lender shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the Issuing Lender.  For the purposes of this Agreement, “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Change in Control” means:

(a)    the acquisition of, or, if earlier, the shareholder or director approval of the acquisition of, ownership or voting control, directly or indirectly, beneficially (within the meaning of Rules 13d-3 and 13d-5 of the Exchange Act) or of record, on or after the Closing Date, by any Person or group (within the meaning of Sections 13d and 14d of the Exchange Act), of shares representing more than thirty-five percent (35%) of the aggregate ordinary Voting Power represented by the issued and outstanding capital stock of the US Borrower;

(b)    if, at any time during any period of twenty-four (24) consecutive months, a majority of the members of the board of directors of the US Borrower cease to be composed of individuals (i) who were members of that board of directors on the first day of such period, (ii) whose election or nomination to that board of directors was approved by individuals referred to in subpart (i) hereof that constituted, at the time of such election or nomination, at least a majority of that board of directors, or (iii) whose election or nomination to that 

11

board of directors was approved by individuals referred to in subparts (i) and (ii) hereof that constituted, at the time of such election or nomination, at least a majority of that board of directors;

(c)    if the US Borrower shall cease to own, directly or indirectly, one hundred percent (100%) of the outstanding capital stock of the Canadian Borrower; or

(d)    the occurrence of a change in control, or other term of similar import used therein, as defined in any Material Indebtedness Agreement.

“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, (i) the Dodd-Frank Act and all requests, rules, guidelines or directives thereunder, or issued in connection therewith, and (ii) 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 Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Closing Date” means the effective date of this Agreement as set forth in the first paragraph of this Agreement.

“Closing Fee Letter” means the Closing Fee Letter between the US Borrower and the Administrative Agent, dated as of the Closing Date.

“Code” means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder.

“Collateral” means all assets or property, or rights, title and interests of any sort in which any Credit Party has granted, or purported to grant, a security interest or other Lien to the Administrative Agent, for the benefit of the Lenders, pursuant to any of the Loan Documents; provided that in no event shall any Excluded Collateral, as defined in the Security Agreement, be deemed “Collateral”.

“Commitment” means the obligation hereunder of the Lenders, (a) during the Commitment Period, to make Revolving Loans and to participate in Swing Loans and the issuance of Letters of Credit pursuant to the Revolving Credit Commitment, (b) to make the US Term Loan pursuant to the US Term Loan Commitment, and (c) to make the Canadian Term Loan pursuant to the Canadian Term Loan Commitment; up to the Total Commitment Amount.

“Commitment Increase Period” means the period from the Closing Date to the date that is six months prior to the last day of the Commitment Period. 

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“Commitment Percentage” means, for each Lender, the percentage set forth opposite such Lender’s name under the column headed “Commitment Percentage”, as listed in Schedule 1 hereto (taking into account any assignments pursuant to Section 11.9 hereof).

“Commitment Period” means the period from the Closing Date to January 15, 2023, or such earlier date on which the Commitment shall have been terminated pursuant to Article VIII hereof.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, together with the rules and regulations promulgated thereunder.

“Communications” means, that term as defined in Section 9.17(b) hereof.

“Companies” means all Borrowers and all Subsidiaries of all Borrowers.

“Company” means a Borrower or a Subsidiary of a Borrower.

“Compliance Certificate” means a Compliance Certificate in the form of the attached Exhibit F.

“Confidential Information” means all confidential or proprietary information about the Companies that has been furnished by any Company to the Administrative Agent or any Lender, whether furnished before or after the Closing Date and regardless of the manner in which it is furnished, but does not include any such information that (a) is or becomes generally available to the public other than as a result of a disclosure by the Administrative Agent or such Lender not permitted by this Agreement, (b) was available to the Administrative Agent or such Lender on a nonconfidential basis prior to its disclosure to the Administrative Agent or such Lender, or (c) becomes available to the Administrative Agent or such Lender on a nonconfidential basis from a Person other than any Company. 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Consideration” means, in connection with an Acquisition, the aggregate consideration paid or to be paid, including borrowed funds, cash, deferred payments, the issuance of securities or notes, the assumption or incurring of liabilities (direct or contingent), the payment of consulting fees or fees for a covenant not to compete and any other consideration paid or to be paid for such Acquisition.

“Consolidated” means the resultant consolidation of the financial statements of the US Borrower and its Subsidiaries in accordance with GAAP, including principles of consolidation consistent with those applied in preparation of the consolidated financial statements referred to in Section 6.14 hereof.

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“Consolidated Capital Expenditures” means, for any period, the amount of capital expenditures of the US Borrower (specifically including any software development costs that are capitalized), as determined on a Consolidated basis.

“Consolidated Depreciation and Amortization Charges” means, for any period, the aggregate of all depreciation and amortization charges for fixed assets, leasehold improvements and general intangibles (specifically including goodwill) of the US Borrower for such period, as determined on a Consolidated basis.

“Consolidated EBITDA” means, for any period, as determined on a Consolidated basis, (a) Consolidated Net Earnings for such period plus, without duplication, the aggregate amounts deducted in determining such Consolidated Net Earnings in respect of (i) Consolidated Interest Expense, (ii) Consolidated Income Tax Expense, (iii) Consolidated Depreciation and Amortization Charges, (iv) reasonable non-recurring non-cash losses not incurred in the ordinary course of business, (v) non-cash compensation expenses recognized under Statement of Financial Accounting Standards 123R in connection with the US Borrower’s equity incentive stock option plan and restricted stock grants, and (vi) non-cash post-retirement expenses minus retirement benefits paid in cash; minus, (b) to the extent included in Consolidated Net Earnings for such period, non-recurring gains not incurred in the ordinary course of business; provided that, for any period ending within one year after the Closing Date, Consolidated EBITDA shall be recalculated to include the EBITDA of Horizon Plastics and its Subsidiaries on a consolidated basis in accordance with GAAP (with appropriate pro-forma adjustments, reasonably acceptable to the Administrative Agent, due to discontinued operations) calculated after giving pro forma effect to the Horizon Plastics Acquisition as if the Horizon Plastics Acquisition had been completed on the first day of the relevant measuring period.

“Consolidated Fixed Charges” means, for any period, as determined on a Consolidated basis, the aggregate, without duplication, of (a) Consolidated Interest Expense paid in cash, and (b) scheduled principal payments on Consolidated Funded Indebtedness (other than optional prepayments of the Revolving Loans), including payments on Capitalized Lease Obligations.

“Consolidated Funded Indebtedness” means, at any date, all Indebtedness (including, but not limited to, current, long-term and subordinated Indebtedness, if any) of the US Borrower, as determined on a Consolidated basis.

“Consolidated Income Tax Expense” means, for any period, as determined on a Consolidated basis, all provisions for taxes based on the gross or net income of the US Borrower (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto).

“Consolidated Interest Expense” means, for any period, the interest expense (including, without limitation, capitalized interest, the “imputed interest” portion of Capitalized Lease Obligations, synthetic leases and asset securitizations, if any, and excluding deferred financing costs) of the US Borrower for such period, as determined on a Consolidated basis.

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“Consolidated Net Earnings” means, for any period, the net income (loss) of the US Borrower for such period, as determined on a Consolidated basis.

“Consolidated Net Worth” means, at any date, the stockholders’ equity of the US Borrower, as determined as of such date on a Consolidated basis.

“Consolidated Unfunded Capital Expenditures” means, for any period, Consolidated Capital Expenditures that are not directly financed by the Companies with (a) long-term Indebtedness (other than Revolving Loans), or (b) Capitalized Lease Obligations; provided that an aggregate amount not to exceed Ten Million Dollars ($10,000,000) during the Commitment Period of Consolidated Capital Expenditures, which are growth capital expenditures and are funded with Revolving Loans, shall not be deemed to be Consolidated Unfunded Capital Expenditures to the extent designated by the US Borrower.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

“Control Agreement” means a Deposit Account Control Agreement or Securities Account Control Agreement.

“Controlled Group” means a Company and each Person required to be aggregated with a Company under Code Section 414(b), (c), (m) or (o).

“Core Mexico” means that term as defined in the first Whereas clause on the first page of this Agreement.

“Credit Event” means the making by the Lenders of a Loan, the conversion by the Lenders of a Base Rate Loan to a Daily LIBOR Loan or a Eurodollar Loan, the conversion of a Daily LIBOR Loan to a Eurodollar Loan, the continuation by the Lenders of a Eurodollar Loan after the end of the applicable Interest Period, the making by the Swing Line Lender of a Swing Loan, or the issuance (or amendment or renewal) by the Issuing Lender of a Letter of Credit.

“Credit Exposure” means, at any time, with respect to a Specific Commitment, the sum of (a) the aggregate principal amount of all Loans outstanding under such Specific Commitment, and (b) the Letter of Credit Exposure, if any, applicable to such Specific Commitment.

“Credit Party” means a Borrower, and any Subsidiary or other Person that is a Guarantor of Payment.

“Daily Interest Period” means, with respect to a Daily LIBOR Loan, the period commencing on the date such Daily LIBOR Loan is made and ending on the next day, with successive Daily Interest Periods automatically commencing daily thereafter.

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“Daily LIBOR Loan” means a Revolving Loan described in Section 2.2A(a) or Section 2.2B(a) hereof, a portion of a US Term Loan described in Section 2.3 hereof, or a portion of the Canadian Term Loan described in Section 2.4 hereof, that shall be denominated in Dollars and on which the applicable Borrower shall pay interest at a rate based on the Derived Daily LIBOR Rate. 

“Daily LIBOR Rate” means, for any Daily Interest Period with respect to a Daily LIBOR Loan or a Swing Loan, the per annum rate of interest at which, determined by the Administrative Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) as of approximately 11:00 A.M. (London time) on the same day as the beginning of such Daily Interest Period, Dollar deposits in immediately available funds in an amount comparable to such Daily LIBOR Loan and with a maturity of one day are offered to prime banks by leading banks in the London interbank market.  Notwithstanding the foregoing, if at any time the Daily LIBOR Rate as determined above is less than zero, it shall be deemed to be zero for purposes of this Agreement.

“Debtor Relief Laws” means the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-Up and Restructuring Act (Canada) and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, arrangement, rearrangement, receivership, insolvency, administration, suspension of payments, reorganization, or similar debtor relief Laws of the United States, Canada or any other applicable jurisdictions from time to time in effect.

“Default” means an event or condition that constitutes, or with the lapse of any applicable grace period or the giving of notice or both would constitute, an Event of Default, and that has not been waived by the Required Lenders (or, if required hereunder, all of the Lenders) in writing.

“Default Rate” means (a) with respect to any Loan or other Obligation for which a rate is specified, a rate per annum equal to two percent (2%) in excess of the rate otherwise applicable thereto, and (b) with respect to any other amount, if no rate is specified or available, a rate per annum equal to two percent (2%) in excess of the Derived Base Rate from time to time in effect.

“Defaulting Lender” means, subject to Section 11.10(b) hereof, any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder, unless such Lender notifies the Administrative Agent and the Administrative Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the Issuing Lender, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Loans) within two Business Days of the date when due, (b) has notified the Administrative Borrower, the Administrative Agent, the Issuing Lender or the Swing Line Lender in writing that it does not intend to comply with its funding obligations under this Agreement, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any 

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applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Administrative Borrower, to confirm in writing to the Administrative Agent and the Administrative Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this subpart (c) upon receipt of such written confirmation by the Administrative Agent and the Administrative Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-In Action; provided that, a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender, or any direct or indirect parent company thereof, by a Governmental Authority, so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States, or from the enforcement of judgments or writs of attachment on its assets, or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of subparts (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 11.10(b) hereof) upon delivery of written notice of such determination to the Administrative Borrower, the Issuing Lender, the Swing Line Lender and each Lender.

“Defined Benefit Plan” means any Canadian Pension Plan which contains a “defined benefit provision”, as defined in subsection 147.1(1) of the Income Tax Act (Canada), but excludes a Canadian MEPP. 

“Deposit Account” means a deposit account, as that term is defined in the U.C.C.

“Deposit Account Control Agreement” means each Deposit Account Control Agreement (or similar agreement with respect to a Deposit Account) among a Credit Party, the Administrative Agent and a depository institution, to be in form and substance reasonably satisfactory to the Administrative Agent, as the same may from time to time be amended, restated or otherwise modified.

“Derived Base Rate” means a rate per annum equal to the sum of the Applicable Margin (from time to time in effect) for Base Rate Loans plus the Base Rate.

“Derived Daily LIBOR Rate” means a rate per annum equal to the sum of the Applicable Margin (from time to time in effect) for Daily LIBOR Loans plus the Daily LIBOR Rate.

“Derived Eurodollar Rate” means a rate per annum equal to the sum of the Applicable Margin (from time to time in effect) for Eurodollar Loans plus the Eurodollar Rate.

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“Dodd-Frank Act” means the Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173) signed into law on July 21, 2010, as amended from time to time.

“Dollar” or the $ sign means lawful currency of the United States.

“Domestic Credit Party” means the US Borrower or a Domestic Guarantor of Payment.

“Domestic Guarantor of Payment” means each of the Companies designated a “Domestic Guarantor of Payment” on Schedule 2 hereto, each of which is executing and delivering a Guaranty of Payment, and any other Domestic Subsidiary that shall deliver a Guaranty of Payment to the Administrative Agent subsequent to the Closing Date.

“Domestic Real Property” means each parcel of the real estate owned by the US Borrower or a Domestic Guarantor of Payment that is set forth on Schedule 3 hereto, together with all improvements and buildings thereon and all appurtenances, easements or other rights thereto belonging, and being defined collectively as the “Property” in each of the Mortgages.

“Domestic Subsidiary” means a Subsidiary that is not a Foreign Subsidiary.

“Dormant Subsidiary” means a Company that (a) is not a Credit Party or the direct or indirect equity holder of a Credit Party, (b) has aggregate assets of less than One Hundred Thousand Dollars ($100,000) (or the foreign currency equivalent of such amount), (c) has no direct or indirect Subsidiaries with aggregate assets, for such Company and all such Subsidiaries, of more than One Hundred Thousand Dollars ($100,000) (or the foreign currency equivalent of such amount), and (d) is not a Guarantor of Indebtedness incurred pursuant to any Material Indebtedness Agreement.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in subpart (a) of this definition, or (c) any financial institution established in an EEA Member Country that is a subsidiary of an institution described in subparts (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.9(b)(iii), (v) and (vi) hereof (subject to such consents, if any, as may be required under Section 11.9 (b)(iii) hereof). 

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“Environmental Laws” means all provisions of law (including the common law), statutes, ordinances, codes, rules, guidelines, policies, procedures, orders-in-council, regulations, permits, licenses, judgments, writs, injunctions, decrees, orders, authorizations, certificates, approvals, registrations, awards and standards promulgated by a Governmental Authority or by any court, agency, instrumentality, regulatory authority or commission of any of the foregoing having the force and effect of law concerning environmental health or safety and protection of natural resources, or regulation of the discharge of substances including without limitation Hazardous Materials into, the environment.

“Environmental Permits” means all permits, licenses, authorizations, certificates, approvals or registrations required by any Governmental Authority under any Environmental Laws.

“Equalization Event” means the earlier of (a) the occurrence of an Event of Default under Section 7.12 hereof, or (b) the acceleration of the maturity of the Obligations after the occurrence of an Event of Default.

“Equalization Maximum Amount” means that term as defined in Section 8.5(b)(i) hereof.

“Equalization Percentage” means that term as defined in Section 8.5(b)(ii) hereof.

“Equipment” means equipment, as that term is defined in the U.C.C.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated pursuant thereto.

“ERISA Event” means (a) the existence of a condition or event with respect to an ERISA Plan that presents a significant risk of the imposition of an excise tax or any other material liability on a Company or of the imposition of a Lien on the assets of a Company; (b) the engagement by a Company in a non-exempt “prohibited transaction” (as defined under ERISA Section 406 or Code Section 4975) or a breach of a fiduciary duty under ERISA that in either case could result in material liability to a Company; (c) the application by a Controlled Group member for a waiver from the minimum funding requirements of Code Section 412 or ERISA Section 302 or a Controlled Group member is required to provide security under Code Section 412(c)(4) or ERISA Section 302(c)(4); (d) the occurrence of a Reportable Event with respect to any Pension Plan as to which notice is required to be provided to the PBGC; (e) the withdrawal by a Controlled Group member from a Multiemployer Plan in a “complete withdrawal” or a “partial withdrawal” (as such terms are defined in ERISA Sections 4203 and 4205, respectively); (f) the occurrence of a Multiemployer Plan being in endangered or critical status, as defined in Section 432 of the Code; (g) the failure of an ERISA Plan (and any related trust) that is intended to be qualified under Code Sections 401 and 501 to be so qualified or the failure of any “cash or deferred arrangement” under any such ERISA Plan to meet the requirements of Code Section 401(k) if such failure is reasonably likely to result in a material liability; (h) the taking by the PBGC of any steps to terminate a Pension Plan or appoint a trustee to administer a Pension Plan, or the taking by a Controlled Group member of any steps to terminate a Pension Plan; (i) the failure by a Controlled Group member or an ERISA Plan to satisfy, in all material respects, any requirements of law applicable to an ERISA Plan; (j) the commencement, 

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existence or threatening of a material claim, action, suit, audit or investigation with respect to an ERISA Plan, other than a routine claim for benefits; or (k) any incurrence by or any expectation of the incurrence by a Controlled Group member of any liability for post-retirement benefits under any Welfare Plan in excess of Fifteen Million Dollars ($15,000,000), other than as required by ERISA Section 601, et. seq. or Code Section 4980B other than limited payment in connection with severance benefits or with respect to senior executives of a Company. 

“ERISA Plan” means an “employee benefit plan” (within the meaning of ERISA Section 3(3)) that a Controlled Group member at any time sponsors, maintains, contributes to, has liability with respect to or has an obligation to contribute to such plan.

“EU Bail‐In Legislation Schedule” means the EU Bail‐In Legislation Schedule published by the Loan Market Association (or any successor entity), as in effect from time to time.

“Eurocurrency Liabilities” shall have the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Eurodollar” means a Dollar denominated deposit in a bank or branch outside of the United States.

“Eurodollar Loan” means a Revolving Loan described in Section 2.2A(a) or Section 2.2B(a) hereof, a portion of the US Term Loan described in Section 2.3 hereof, or a portion of the Canadian Term Loan described in Section 2.4 hereof, in each case that shall be denominated in Dollars and on which a Borrower shall pay interest at the Derived Eurodollar Rate.

“Eurodollar Rate” means, with respect to a Eurodollar Loan, for any Interest Period, a rate per annum equal to the quotient obtained by dividing (a) the rate of interest, determined by the Administrative Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) as of approximately 11:00 A.M. (London time) two Business Days prior to the beginning of such Interest Period pertaining to such Eurodollar Loan, as listed as the London interbank offered rate, as published by Thomson Reuters or Bloomberg (or, if for any reason such rate is unavailable from Thomson Reuters or Bloomberg, from any other similar company or service that provides rate quotations comparable to those currently provided by Thomson Reuters or Bloomberg) for Dollar deposits in immediately available funds with a maturity comparable to such Interest Period, provided that, in the event that such rate quotation is not available for any reason, or cannot be determined in accordance with the foregoing, the Administrative Agent may select, in its commercially reasonable judgment, a successor or alternate rate that the Administrative Agent determines is, at such time, broadly accepted as the prevailing market practice for syndicated leveraged loans of this type in lieu of the London interbank offered rate and applied generally by the Administrative Agent to similarly situated loan transactions; by (b) 1.00 minus the Reserve Percentage.  Notwithstanding the foregoing, if at any time the Eurodollar Rate, as determined above, is less than zero, it shall be deemed to be zero for purposes of this Agreement.

“Event of Default” means an event or condition that shall constitute an event of default as defined in Article VII hereof.

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“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Swap Obligations” means, with respect to any Credit Party, any Swap Obligation if, and to the extent that, all or a portion of the guarantee of such Credit Party of, or the grant by such Credit Party of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Credit Party’s failure to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to any “keepwell, support or other agreement” for the benefit of such Credit Party and any and all guarantees of such Credit Party’s Swap Obligations by other Credit Parties), at the time such guarantee or grant of security interest of such Credit Party becomes, or would become, effective with respect to such Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is, or becomes, illegal.

“Excluded Taxes” means, with respect to a Recipient, any of the following Taxes imposed on or with respect to such Recipient or required to be withheld or deducted from a payment to such Recipient, (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 Recipient being organized under the laws of, or having its principal office located in, or, in the case of any Lender, having 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 a Lender, withholding Taxes imposed by the country in which the applicable Credit Party is organized on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Administrative Borrower under Sections 3.6 or 11.3(c) hereof); or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 3.2 hereof, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto, or to such Lender immediately before it changed its lending office; (c) Taxes attributable to such Recipient’s failure to comply with Section 3.2(e) hereof; and (d) any United States federal withholding Taxes imposed with respect to such Recipient pursuant to FATCA. 

“Existing Letter of Credit” means that term as defined in Section 2.2A(b)(vii) hereof.

“FATCA” means Sections 1471 through 1474 of the Code as in effect on the Closing Date (or any amended or successor version that is substantively comparable to and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with the implementation of such sections of the Code, and any fiscal or regulatory legislation, rules, or practices adopted pursuant to such intergovernmental agreement.

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“Federal Funds Effective Rate” means, for any day, the rate per annum (rounded upward to the nearest one one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the Closing Date.

“Financial Officer” means any of the following officers: chief executive officer, president, chief financial officer or treasurer.  Unless otherwise qualified, all references to a Financial Officer in this Agreement shall refer to a Financial Officer of the US Borrower.

“Fixed Charge Coverage Ratio” means, as determined for the most recently completed four fiscal quarters of the US Borrower, on a Consolidated basis, the ratio of (a) Consolidated EBITDA, minus the total of (i) Consolidated Unfunded Capital Expenditures, (ii) Capital Distributions and other Restricted Payments made in an aggregate amount in excess of Two Million Five Hundred Thousand Dollars ($2,500,000), and (iii) Consolidated Income Tax Expense paid in cash; to (b) Consolidated Fixed Charges; provided that (A) Consolidated Income Tax Expense paid in cash shall not include the Dollar equivalent of up to Four Million Three Hundred Thousand Canadian Dollars (CAD 4,300,000) of taxes paid in cash by Horizon Plastics between January 1, 2017 and the Closing Date in connection with the sale of goodwill, (B) for the period of four fiscal quarters ending March 31, 2018, the amount of Consolidated Fixed Charges shall be deemed to be the product obtained by multiplying (y) Consolidated Fixed Charges incurred during the fiscal quarter ending March 31, 2018 by (z) four, (C) for the period of four fiscal quarters ending June 30, 2018, the amount of Consolidated Fixed Charges shall be deemed to be the product obtained by multiplying (y) Consolidated Fixed Charges incurred during the two consecutive fiscal quarters ending June 30, 2018, by (z) two, (D) for the period of four fiscal quarters ending September 30, 2018, the amount of Consolidated Fixed Charges shall be deemed to be the product obtained by multiplying (y) Consolidated Fixed Charges incurred during the three consecutive fiscal quarters ending September 30, 2018, by (z) one and one-third, and (E) for any period ending within one year after the Closing Date,  the amount of Consolidated Unfunded Capital Expenditures set forth in subpart (a)(i) above and the amount of Consolidated Income Tax Expense set forth in subpart (a)(ii) above shall be recalculated to include, respectively, the unfunded capital expenditures or income tax expense of Horizon Plastics and its Subsidiaries on a consolidated basis in accordance with GAAP calculated after giving pro forma effect to the Horizon Plastics Acquisition as if the Horizon Plastics Acquisition had been completed on the first day of the relevant measuring period (in each case to the extent included in the calculation of Consolidated EBITDA for such period). 

“Flood Insurance Laws” means, collectively (a) the National Flood Insurance Reform Act of 1994 (which comprehensively revised the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973), as now or hereafter in effect or any successor statute thereto, (b) the Flood Insurance Reform Act of 2004, as now or hereafter in effect or any successor statute thereto, and (c) the Biggert-Waters Flood Insurance Reform Act of 2012, as now or hereafter in effect or any successor statute thereto.

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“Foreign Benefit Plan” means each material plan, fund, program or policy established under the law of a jurisdiction other than the United States or Canada (or a state, province or local government thereof), whether formal or informal, funded or unfunded, insured or uninsured, providing employee benefits, including medical, hospital care, dental, sickness, accident, disability, life insurance, pension, retirement or savings benefits, under which one or more Companies have any liability with respect to any employee or former employee, but excluding any Foreign Pension Plan.

“Foreign Guarantor of Payment” means each of the Foreign Subsidiaries set forth on Schedule 2 hereto that shall have been designated a “Foreign Guarantor of Payment”, that are each executing and delivering a Guaranty of Payment, or any other Foreign Subsidiary that shall execute and deliver a Guaranty of Payment to the Administrative Agent.

“Foreign Lender” means (a) with respect to a Borrower that is a U.S. Person, a Lender that is not a U.S. Person, and (b) with respect to a Borrower that is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which such Borrower is resident for tax purposes.

“Foreign Obligations” means any Secured Obligations related to, or incurred in connection with, Loans made to, Letters of Credit issued for the benefit of, Bank Product Obligations of, or Hedge Agreements executed by, the Canadian Borrower or any other Foreign Subsidiary.

“Foreign Pension Plan” means a pension plan required to be registered under the law of a jurisdiction other than the United States or Canada (or a state or a province or local government thereof), that is maintained or contributed to by one or more Companies for their employees or former employees, other than a plan sponsored by a Governmental Authority.

“Foreign Subsidiary” means a Subsidiary that is organized under the laws of any jurisdiction other than the United States, any state thereof or the District of Columbia.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to the Issuing Lender, such Defaulting Lender’s outstanding Letter of Credit Exposure (to the extent of such Defaulting Lender’s Applicable Commitment Percentage of the Revolving Credit Commitment) with respect to Letters of Credit issued by the Issuing Lender, other than Letter of Credit Exposure as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof; and (b) with respect to the Swing Line Lender, such Defaulting Lender’s Swing Line Exposure (to the extent of such Defaulting Lender’s Applicable Commitment Percentage of the Revolving Credit Commitment) made by such Swing Line Lender, other than Swing Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.

“GAAP” means generally accepted accounting principles in the United States as then in effect, which shall include the official interpretations thereof by the Financial Accounting Standards Board, applied on a basis consistent with the past accounting practices and procedures of the US Borrower.

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“Governmental Authority” means the government of the United States, Canada or any other nation, or of any political subdivision thereof, whether state, provincial, territorial 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).

“Guaranteed Obligations” means that term as defined in Section 10.1 hereof.

“Guarantor” means a Person that shall have pledged its credit or property in any manner for the payment or other performance of the indebtedness, contract or other obligation of another and includes (without limitation) any guarantor (whether of payment or of collection), surety, co-maker, endorser or Person that shall have agreed conditionally or otherwise to make any purchase, loan or investment in order thereby to enable another to prevent or correct a default of any kind.

“Guarantor of Payment” means a Domestic Guarantor of Payment or Foreign Guarantor of Payment, or any other Person that shall execute and deliver a Guaranty of Payment to the Administrative Agent.

“Guaranty of Payment” means each Guaranty of Payment executed and delivered on or after the Closing Date in connection with this Agreement by one or more Credit Parties, as the same may from time to time be amended, restated or otherwise modified.

“Guaranty of Payment Joinder” means each Guaranty of Payment Joinder, executed and delivered by a Credit Party for the purpose of adding such Guarantor of Payment as a party to a previously executed Guaranty of Payment.

“Hazardous Material” means petroleum and petroleum products, and compounds containing them, including, without limitation, gasoline, diesel fuel and oil, toxic, corrosive, infectious, carcinogenic, mutagenic, explosive and flammable materials, substances, or wastes, or any constituents thereof, radioactive materials, polychlorinated biphenyls and compounds containing them, lead and lead-based paint, asbestos or asbestos-containing materials in any form that is or could become friable, urea formaldehyde foam insulation, radon gas, and any substance, material or waste (whether solid, liquid or gas) which is or becomes regulated by or under any Environmental Law.

“Hedge Agreement” means any (a) hedge agreement, interest rate swap, cap, collar or floor agreement, or other interest rate management device entered into by a Company with any Person in connection with any Indebtedness of such Company, or (b) currency swap agreement, forward currency purchase agreement or similar arrangement or agreement designed to protect against fluctuations in currency exchange rates entered into by a Company with any Person.

“Horizon Plastics” means Horizon Plastics International Inc., a corporation incorporated under the laws of Ontario.

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“Horizon Plastics Acquisition” means the Acquisition by the Canadian Borrower of all or substantially all of the assets of Horizon Plastics and its Subsidiaries pursuant to the Horizon Plastics Acquisition Agreement.

“Horizon Plastics Acquisition Agreement” means that certain Asset Purchase Agreement, dated as of the Closing Date, by and among the Canadian Borrower, its Subsidiaries and Brian Read.

“Horizon Plastics Acquisition Documents” means the Horizon Plastics Acquisition Agreement, and any material document executed and delivered in connection therewith or in connection with the Horizon Plastics Acquisition.

“Indebtedness” means, for any Company, without duplication, (a) all obligations to repay borrowed money, direct or indirect, incurred, assumed, or guaranteed, (b) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (c) all obligations under conditional sales or other title retention agreements, (d) all obligations (contingent or otherwise) under any letter of credit or banker’s acceptance, (e) all net obligations under any currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device or any Hedge Agreement, (f) all Attributable Indebtedness of such Company, (g) all obligations of such Company with respect to asset securitization financing programs to the extent that there is recourse against such Company or such Company is liable (contingent or otherwise) under any such program, (h) all obligations to advance funds to, or to purchase assets, property or services from, any other Person in order to maintain the financial condition of such Person, (i) all indebtedness of the types referred to in subparts (a) through (h) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Company is a general partner or joint venturer, unless such indebtedness is expressly made non-recourse to such Company, (j) any other transaction (including forward sale or purchase agreements) having the commercial effect of a borrowing of money entered into by such Company to finance its operations or capital requirements, and (k) any guaranty of any obligation described in subparts (a) through (j) above.

“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 any Credit Party under any Loan Document, and (b) to the extent not otherwise described in the foregoing subpart (a), Other Taxes.

“Intellectual Property Security Agreement” means each Intellectual Property Security Agreement, executed and delivered on or after the Closing Date by the US Borrower or a Domestic Guarantor of Payment, wherein such Borrower or Guarantor of Payment, as the case may be, has granted to the Administrative Agent, for the benefit of the Lenders, a security interest in all intellectual property owned by such Borrower or Domestic Guarantor of Payment, as the same may from time to time be amended, restated or otherwise modified.

“Interest Adjustment Date” means the last day of each Interest Period.

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“Interest Period” means, with respect to a Eurodollar Loan, the period commencing on the date such Eurodollar Loan is made and ending on the last day of such period, as selected by the Administrative Borrower pursuant to the provisions hereof, and, thereafter (unless such Eurodollar Loan is converted to a Base Rate Loan or a Daily LIBOR Loan), each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of such period, as selected by the Administrative Borrower pursuant to the provisions hereof.  The duration of each Interest Period for a Eurodollar Loan shall be one month, two months, three months or six months, in each case as the Administrative Borrower may select upon notice, as set forth in Section 2.7 hereof; provided that if the Administrative Borrower shall fail to so select the duration of any Interest Period at least three Business Days prior to the Interest Adjustment Date applicable to such Eurodollar Loan, the Administrative Borrower shall be deemed to have continued such Eurodollar Loan as a Eurodollar Loan with a one-month Interest Period at the end of the then current Interest Period (unless such new Interest Period would violate the terms of the next sentence, in which case such Eurodollar Loan shall be converted into a Base Rate Loan).  Notwithstanding the foregoing, no Interest Period shall extend beyond the last day of the Commitment Period.

“Inventory” means inventory, as that term is defined in the U.C.C.

“IRS” means the United States Internal Revenue Service.

“Issuing Lender” means, (a) as to any Letter of Credit transaction hereunder, the Administrative Agent as issuer of the Letter of Credit, or, in the event that the Administrative Agent shall be unable to issue a Letter of Credit, such other Revolving Lender as shall be acceptable to the Administrative Agent and the Administrative Borrower and shall agree to issue the Letter of Credit in its own name, but in each instance on behalf of the Revolving Lenders, or (b) as to any Existing Letter of Credit, KeyBank.

“KeyBank” means KeyBank National Association, and its successors and assigns.

“Landlord’s Waiver” means a landlord’s waiver or mortgagee’s waiver, each in form and substance reasonably satisfactory to the Administrative Agent, delivered by a Credit Party in connection with this Agreement, as such waiver may from time to time be amended, restated or otherwise modified.

“Laws” means, collectively, all international, foreign, federal, provincial, territorial, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities or the like, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority.

“Lender” means that term as defined in the first paragraph of this Agreement and, as the context requires, shall include the Issuing Lender and the Swing Line Lender.

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“Lender Credit Exposure” means, for any Lender, at any time, the aggregate of such Lender’s respective pro rata shares of the Revolving Credit Exposure, the US Term Loan Exposure and the Canadian Term Loan Exposure.

“Letter of Credit” means a US Letter of Credit or a Canadian Letter of Credit.

“Letter of Credit Commitment” means the commitment of the Issuing Lender, on behalf of the Revolving Lenders, to issue Letters of Credit in an aggregate face amount of up to Ten Million Dollars ($10,000,000).

“Letter of Credit Exposure” means, at any time, the sum of the US Letter of Credit Exposure and the Canadian Letter of Credit Exposure.

“Letter of Credit Fee” means, with respect to any Letter of Credit, for any day, an amount equal to (a) the undrawn amount of such Letter of Credit, multiplied by (b) the Applicable Margin for Eurodollar Loans in effect on such day divided by three hundred sixty (360).

“Leverage Ratio” means, as determined on a Consolidated basis, the ratio of (a) Consolidated Funded Indebtedness (as determined on the last day of the most recently completed fiscal quarter of the US Borrower); to (b) Consolidated EBITDA (for the most recently completed four fiscal quarters of the US Borrower).

“Lien” means any mortgage, deed of trust, security interest, lien (statutory or other), charge, assignment, hypothecation, encumbrance on, pledge or deposit of, or conditional sale, lease (other than Operating Leases not deemed to be a security interest), sale with a right of redemption or other title retention agreement and any capitalized lease with respect to any property (real or personal) or asset.

“Loan” means a US Revolving Loan, a Canadian Revolving Loan, a US Swing Loan, a Canadian Swing Loan the US Term Loan or the Canadian Term Loan.

“Loan Documents” means, collectively, this Agreement, each Note, each Guaranty of Payment, each Guaranty of Payment Joinder, all documentation relating to each Letter of Credit, each Security Document, the Administrative Agent Fee Letter and the Closing Fee Letter, as any of the foregoing may from time to time be amended, restated or otherwise modified or replaced, and any other document delivered pursuant thereto.

“Management Fees” means management, consulting or other similar fees paid by any Company to any Affiliate of any Company.

“Mandatory Prepayment” means that term as defined in Section 2.13(c) hereof.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of any Borrower, (b) the business, assets, liabilities (actual or contingent), operations, condition (financial 

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or otherwise) or prospects of the Companies taken as a whole, (c) the rights and remedies of the Administrative Agent or the Lenders under any Loan Document, (d) the ability of any Credit Party to perform its obligations under any Loan Document to which it is a party, or (e) the legality, validity, binding effect or enforceability against any Credit Party of any Loan Document to which it is a party.

“Material Indebtedness Agreement” means any debt instrument, lease (capital, operating or otherwise), guaranty, contract, commitment, agreement or other arrangement evidencing or entered into in connection with any Indebtedness of any Company or the Companies equal to or in excess of the amount of Seven Hundred Fifty Thousand Dollars ($750,000).  

“Material Domestic Recovery Determination Notice” means that term as defined in Section 2.13(c) hereof.

“Material Domestic Recovery Event” means (a) any casualty loss in respect of assets of the US Borrower or a Domestic Subsidiary covered by casualty insurance, and (b) any compulsory transfer or taking under threat of compulsory transfer of any asset of the US Borrower or a Domestic Subsidiary by any Governmental Authority; provided that, in the case of either subpart (a) or (b) hereof, the proceeds received by such Companies from such loss, transfer or taking exceeds Five Hundred Thousand Dollars ($500,000).

“Material Foreign Recovery Determination Notice” means that term as defined in Section 2.13(c) hereof.

“Material Foreign Recovery Event” means (a) any casualty loss in respect of assets of the Canadian Borrower or another Foreign Subsidiary covered by casualty insurance, and (b) any compulsory transfer or taking under threat of compulsory transfer of any asset of the Canadian Borrower or another Foreign Subsidiary by any Governmental Authority; provided that, in the case of either subpart (a) or (b) hereof, the proceeds received by such Companies from such loss, transfer or taking exceeds Two Hundred Fifty Thousand Dollars ($250,000).

“Maximum Amount” means, for each Lender, the amount set forth opposite such Lender’s name in the titled headed “Maximum Amount” as set forth on Schedule 1 hereto, subject to (a) decreases pursuant to Section 2.11(a) hereof, (b) increases pursuant to Section 2.11(b) hereof, (c) decreases of a Term Loan by virtue of principal payments made, and (d) assignments of interests pursuant to Section 11.9 hereof; provided that the Maximum Amount for the Swing Line Lender shall exclude the Swing Line Commitment (other than its pro rata share), and the Maximum Amount of the Issuing Lender shall exclude the Letter of Credit Commitment (other than its pro rata share thereof).

“Maximum Rate” means that term as defined in Section 2.5(f) hereof.

     “Mexican 2008 Security Agreement” means the non-possessory pledge agreement dated December 9, 2008, entered among and between the US Borrower, and Core Composites Corporation as pledgors, Core Mexico as obligor and the Administrative Agent as pledgee.

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“Mexican Security Agreement” means a Mexican law “pledge without transfer of possession” (prenda sin transmisión de posesión) in form and substance satisfactory to the Administrative Agent, whereby a first priority pledge is created over any and all existing and future chattels, including but not limited to tangible and intangible assets, personal property, rights and proceeds located in Mexico and Mexican registered intellectual property of the Specified Credit Parties to secure any and all Secured Obligations.

“Mexican Subsidiary” means a Foreign Subsidiary organized under the laws of Mexico, or any political subdivision thereof.

 “Mexico” means the United Mexican States.

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to one hundred three percent (103%) of the Fronting Exposure of the Issuing Lender with respect to Letters of Credit issued and outstanding at such time, and (b) otherwise, an amount determined by the Administrative Agent and the Issuing Lender in their sole discretion.  

“Moody’s” means Moody’s Investors Service, Inc., and any successor to such company.

“Mortgage” means each Open-End Mortgage, Assignment of Leases and Rents and Security Agreement (or deed of trust or comparable document), relating to the Domestic Real Property, executed and delivered by the US Borrower or a Domestic Subsidiary, to further secure the Secured Obligations, as the same may from time to time be amended, restated or otherwise modified. 

“Multiemployer Plan” means a Pension Plan that is subject to the requirements of Subtitle E of Title IV of ERISA.

“Non‐Consenting Lender” means that term as defined in Section 11.3(c) hereof.

“Non-Credit Party” means a Company that is not a Credit Party.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

“Note” means a Revolving Credit Note, a Swing Line Note, a US Term Note or a Canadian Term Note, or any other promissory note delivered pursuant to this Agreement.

“Notice of Loan” means a Notice of Loan in the form of the attached Exhibit E.

“Obligations” means, collectively, (a) all Indebtedness and other obligations now owing or hereafter incurred by one or more Borrowers to the Administrative Agent, the Swing Line Lender, the Issuing Lender, or any Lender (or any Affiliate thereof party to a Loan Document) pursuant to this Agreement and the other Loan Documents, and includes the principal of and interest on all 

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Loans, and all obligations of one or more Borrowers or any other Credit Party pursuant to Letters of Credit; (b) each extension, renewal, consolidation or refinancing of any of the foregoing, in whole or in part; (c) the commitment and other fees, and any prepayment fees, payable pursuant to this Agreement or any other Loan Document; (d) all fees and charges in connection with Letters of Credit; (e) all other debts, liabilities and obligations, now or hereafter owing or incurred to the Administrative Agent or any Lender by any Company pursuant to this Agreement or any other Loan Document; and (f) all Related Expenses.  

“Ohio Real Property” means that term as defined in Section 4.2(a) hereof.

“Operating Leases” means all real or personal property leases under which any Company is bound or obligated as a lessee or sublessee and which, under GAAP, are not required to be capitalized on a balance sheet of such Company.

“Original Credit Agreement” means that term as defined in the first Whereas clause on the first page of this Agreement.

“Original Lenders” means that term as defined in the first Whereas clause on the first page of this Agreement.

“Organizational Documents” means, with respect to any Person (other than an individual), such Person’s Articles (Certificate) of Incorporation, notice of articles, operating agreement or equivalent formation documents, and Regulations (Bylaws or Articles), or equivalent governing documents, and any amendments to any of the foregoing.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than connections arising solely from such Recipient 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 described in any Loan Document, or sold or assigned pursuant to Section 11.9 hereof an interest in any Loan, Letter of Credit or any Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made hereunder or under any other Loan Document, or from the execution, delivery, performance, or enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any other Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.6 or 11.3(c) hereof). 

“Overall Commitment Percentage” means, for any Lender, the percentage determined by dividing (a) the sum, based upon such Lender’s Applicable Commitment Percentages, of (i) the principal outstanding on the US Term Loan, (ii) the principal outstanding on the Canadian Term Loan, and (iii) the Revolving Credit Exposure; by (b) the sum of (i) the aggregate principal amount of all Loans outstanding, plus (ii) the Letter of Credit Exposure.

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“Participant” means that term as defined in Section 11.9(d) hereof.

“Participant Register” means that term as defined in Section 11.9(e) hereof.

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001, as amended from time to time.

“PBGC” means the Pension Benefit Guaranty Corporation, and its successor.

“Pension Plan” means an ERISA Plan that is a “pension plan” (within the meaning of ERISA Section 3(2)).

“Permitted Foreign Subsidiary Loans and Investments” means: 

(a)    the investments by the US Borrower or a Domestic Subsidiary in a Foreign Subsidiary, existing as of the Closing Date and set forth on Schedule 5.11 hereto;

(b)    the loans by the US Borrower or a Domestic Subsidiary to a Foreign Subsidiary, in such amounts existing as of the Closing Date and set forth on Schedule 5.11 hereto (and any extension, renewal or refinancing thereof but, only to the extent that the principal amount thereof does not increase after the Closing Date);

(c)     any investment by a Foreign Subsidiary in, or loan from a Foreign Subsidiary to, or guaranty from a Foreign Subsidiary of Indebtedness of, a Company that is a Credit Party;

(d)    any investment or loan by the US Borrower or a Domestic Subsidiary in or to, or guaranty (excluding any guaranty of the Obligations pursuant to the Loan Documents, but specifically including any payments made on Foreign Obligations absent written consent or demand from the Administrative Agent to the US Borrower or such Domestic Subsidiary) from the US Borrower or a Domestic Subsidiary of Indebtedness of, the Canadian Borrower, made after the Closing Date, up to the aggregate amount not to exceed (i) in any given fiscal year (A) Three Million Dollars ($3,000,000) (or, on and after the Canadian Guaranty Date, Five Million Dollars ($5,000,000)), plus (B) amounts not expended in any prior fiscal year, and (ii) Seven Million Five Hundred Thousand Dollars ($7,500,000) (or, on and after the Canadian Guaranty Date, Ten Million Dollars ($10,000,000)) at any time outstanding; 

(e)    any investment or loan by the US Borrower or a Domestic Subsidiary in or to, or guaranty (excluding any guaranty of the Obligations pursuant to the Loan Documents, but specifically including any payments made on Foreign Obligations absent written consent or demand from the Administrative Agent to the US Borrower or such Domestic Subsidiary) from the US Borrower or a Domestic Subsidiary of Indebtedness of, a Mexican Subsidiary, made after the Closing Date, up to the aggregate amount not to exceed (in addition to amounts permitted pursuant to Section 5.11(vii) hereof) (i) in any given fiscal year (A) Three Million 

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Dollars ($3,000,000) plus (B) amounts not expended in any prior fiscal year and (ii) Seven Million Five Hundred Thousand Dollars ($7,500,000) at any time outstanding; and

(f)    any investment by a Foreign Subsidiary that is a Non-Credit Party in, or loan by a Foreign Subsidiary that is a Non-Credit Party to, a Company. 

“Permitted Investment” means:

(a)    the investments of a Company in the stock (or other debt or equity instruments) of a Person (other than a Company) existing as of the Closing Date and as set forth on Schedule 5.11 hereto; and

(b)    an investment of a Company in the stock (or other debt or equity instruments) of a Person (other than a Company), so long as (i) the Company making the investment is a Credit Party; and (ii) the aggregate amount of all such investments of all Companies made after the Closing Date does not exceed, at any time, an aggregate amount (as determined when each such investment is made) of Five Hundred Thousand Dollars ($500,000).

“Person” means any individual, sole proprietorship, partnership, limited partnership, joint venture, unincorporated organization, company, corporation, limited liability company, unlimited liability company, institution, trust, estate, Governmental Authority or any other entity.

“Platform” means Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system selected by the Administrative Agent.

“Pledge Agreement” means each of the Pledge Agreements, relating to the Pledged Securities, executed and delivered by a Borrower or a Guarantor of Payment, as applicable, in favor of the Administrative Agent, for the benefit of the Lenders, as any of the foregoing may from time to time be amended, restated or otherwise modified.

“Pledged Securities” means all of the shares of capital stock or other equity interests of a direct Subsidiary of a Credit Party, whether now owned or hereafter acquired or created, and all proceeds thereof; provided that the Pledged Securities shall not include any Excluded Collateral.  (Schedule 4 hereto lists, as of the Closing Date, all of the Pledged Securities).

“PPSA” means the Personal Property Security Act (Ontario) together with any regulations thereto and related Minister’s Orders as in effect from time to time; provided, however, if granting, attachment, perfection or priority of the Liens in any Collateral are governed by the personal property security or any other applicable laws of any Canadian jurisdiction other than Ontario, “PPSA” shall mean those personal property security laws or other applicable laws in such other jurisdiction for the purposes of the provisions of this Agreement relating to such granting, attachment, perfection or priority and for the definitions related to such provisions.

“Prime Rate” means the interest rate established from time to time by the Administrative Agent as the Administrative Agent’s prime rate, whether or not such rate shall be publicly announced; 

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the Prime Rate may not be the lowest interest rate charged by the Administrative Agent for commercial or other extensions of credit.  Each change in the Prime Rate shall be effective immediately from and after such change.

“Processor’s Waiver” means a processor’s waiver (or similar agreement), in form and substance reasonably satisfactory to the Administrative Agent, delivered by a Credit Party in connection with this Agreement, as such waiver may from time to time be amended, restated or otherwise modified.

“Recipient” means, as applicable (a) the Administrative Agent, (b) any Lender, or (c) the Issuing Lender.

“Register” means that term as described in Section 11.9(c) hereof.

“Regularly Scheduled Payment Date” means the last Business Day of each March, June, September and December of each year.

“Related Expenses” means any and all costs, liabilities and expenses (including, without limitation, losses, damages, penalties, claims, actions, reasonable attorneys’ fees, legal expenses, judgments, suits and disbursements) (a) incurred by the Administrative Agent, or imposed upon or asserted against the Administrative Agent or any Lender, in any attempt by the Administrative Agent and the Lenders to (i) enforce this Agreement or any other Loan Document or obtain, preserve, perfect or enforce any Loan Document or any security interest evidenced by any Loan Document; (ii) obtain payment, performance or observance of any and all of the Secured Obligations; or (iii) maintain, insure, audit, collect, preserve, repossess or dispose of any of the Collateral or any part thereof, including, without limitation, costs and expenses for appraisals, assessments and audits of any Company or any such collateral; or (b) incidental or related to subpart (a) above, including, without limitation, interest thereupon from the date incurred, imposed or asserted until paid at the Default Rate.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

“Related Writing” means each Loan Document and any other assignment, mortgage, security agreement, guaranty agreement, subordination agreement, financial statement, audit report or other writing furnished by any Credit Party, or any of its officers, to the Administrative Agent or the Lenders pursuant to or otherwise in connection with this Agreement; provided that no Bank Product Agreement or Hedge Agreement shall constitute a Related Writing hereunder.

“Reportable Event” means a “reportable event” as that term is defined in Title IV of ERISA, except actions of general applicability by the Secretary of Labor under Section 110 of such Act.

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“Required Lenders” means the holders, based upon each Lender’s Applicable Commitment Percentages, of more than sixty-six and two-thirds percent (66 2/3%) of an amount (the “Total Amount”) equal to the sum of:

(a)    (i) during the Commitment Period, the Revolving Amount, or (ii) after the Commitment Period, the Revolving Credit Exposure; 

(b)    the principal outstanding on the US Term Loan; and 

(c)    the principal outstanding on the Canadian Term Loan;

provided that (A) the portion of the Total Amount held or deemed to be held by any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders, and (B) if there shall be two or more Lenders (that are not Defaulting Lenders and not Affiliates), Required Lenders shall constitute at least two Lenders that are not Affiliates.

“Requirement of Law” means, as to any Person, any Law applicable to or binding upon such Person or any of its property.

“Reserve Percentage” means, for any day, that percentage (expressed as a decimal) that is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, all basic, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) for a member bank of the Federal Reserve System in Cleveland, Ohio, in respect of Eurocurrency Liabilities.  The Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve Percentage.

“Restricted Payment” means, with respect to any Company, (a) any Capital Distribution, (b) any amount paid by such Company in repayment, redemption, retirement or repurchase, directly or indirectly, of any Subordinated Indebtedness, or (c) any amount paid by such Company in respect of Management Fees or any other similar arrangement with any equity holder (other than a Company) of a Company or an Affiliate of a Company. 

“Restricted Pledged Securities” means that term as defined in the Security Agreement executed on the Closing Date.

“Revolving Amount” means Forty Million Dollars ($40,000,000), as such amount may be increased pursuant to Section 2.11(b) hereof, or decreased pursuant to Section 2.11(a) hereof.

“Revolving Credit Commitment” means the obligation hereunder, during the Commitment Period, of (a) the Revolving Lenders (and each Revolving Lender) to make Revolving Loans, (b) the Issuing Lender to issue and each Revolving Lender to participate in, Letters of Credit pursuant to the Letter of Credit Commitment, and (c) the Swing Line Lender to make, and each Revolving 

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Lender to participate in, Swing Loans pursuant to the Swing Line Commitment; up to an aggregate principal amount outstanding at any time equal to the Revolving Amount.

“Revolving Credit Exposure” means, at any time, the sum of (a) the aggregate principal amount of all Revolving Loans outstanding, (b) the Swing Line Exposure, and (c) the Letter of Credit Exposure.

“Revolving Credit Note” means a US Revolving Credit Note or a Canadian Revolving Note.

“Revolving Lender” means a Lender with a percentage of the Revolving Credit Commitment as set forth on Schedule 1 hereto, or that acquires a percentage of the Revolving Credit Commitment pursuant to Section 2.11(b) or 11.9 hereof.

“Revolving Loan” means a US Revolving Loan or a Canadian Revolving Loan.

“RUG” means that term as defined in Section 4.4(a)(i) hereof.

“Sanctions” means any sanctions administered or enforced from time to time by (a) the U.S. government, including those administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control or the U.S. Department of State, (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom, or other relevant sanctions authorities, or (c) the Government of Canada or any department, agency, instrumentality (or the like) thereof.

“SEC” means the United States Securities and Exchange Commission, or any governmental body or agency succeeding to any of its principal functions.

“Secured Obligations” means, collectively, (a) the Obligations, (b) all obligations and liabilities of the Companies owing to a Lender (or an entity that is an Affiliate of a then existing Lender) under Hedge Agreements, and (c) the Bank Product Obligations owing to a Lender (or an entity that is an Affiliate of a then existing Lender) under Bank Product Agreements; provided that Secured Obligations of a Credit Party shall not include Excluded Swap Obligations owing from such Credit Party.

“Securities Account” means a securities account, as that term is defined in the U.C.C. 

“Securities Account Control Agreement” means each Securities Account Control Agreement (or similar agreement with respect to a Securities Account) among a Credit Party, the Administrative Agent and a Securities Intermediary, to be in form and substance reasonably satisfactory to the Administrative Agent, as the same may from time to time be amended, restated or otherwise modified.

“Securities Intermediary” means a clearing corporation or a Person, including, without limitation, a bank or broker, that in the ordinary course of its business maintains Securities Accounts for others and is acting in that capacity.

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“Security Agreement” means each Security Agreement, executed and delivered by one or more Credit Parties in favor of the Administrative Agent, for the benefit of the Lenders, dated as of the Closing Date, and any other Security Agreement executed after the Closing Date, as the same may from time to time be amended, restated or otherwise modified.

“Security Agreement Joinder” means each Security Agreement Joinder, executed and delivered by a Guarantor of Payment for the purpose of adding such Guarantor of Payment as a party to a previously executed Security Agreement.

“Security Document” means each Security Agreement, each Security Agreement Joinder, each Pledge Agreement, each Intellectual Property Security Agreement, each Mortgage, each Processor’s Waiver, each consignee’s waiver, each Landlord’s Waiver, each Bailee’s Waiver, each Control Agreement, each U.C.C. Financing Statement or similar filing as to a jurisdiction located outside of the United States filed in connection herewith or perfecting any interest created in any of the foregoing documents, and any other document pursuant to which any Lien is granted by a Company or any other Person to the Administrative Agent, for the benefit of the Lenders, as security for the Secured Obligations, or any part thereof, and each other agreement executed or provided to the Administrative Agent in connection with any of the foregoing, as any of the foregoing may from time to time be amended, restated or otherwise modified or replaced.

“Specific Commitment” means the Revolving Credit Commitment, the US Term Loan Commitment or the Canadian Term Loan Commitment.

“Specified Credit Party” means that term as defined in Section 4.4(a)(i) hereof.

“Specified Representations” means the representations and warranties with respect to the Canadian Borrower and its Subsidiaries set forth in Sections 6.1, 6.2, 6.3(d) through (h), 6.6, 6.13(b) 6.15, 6.21 hereof.

“Standard & Poor’s” means S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc., and any successor thereto.

“Subordinated Indebtedness” means Indebtedness that shall have been subordinated (by written terms or written agreement being, in either case, in form and substance reasonably satisfactory to the Administrative Agent) in favor of the prior payment in full of the Obligations.

“Subsidiary” means, with respect to any Person, (a) a corporation more than fifty percent (50%) of the Voting Power of which is owned, directly or indirectly, by such Person or by one or more other subsidiaries of such Person or by such Person and one or more subsidiaries of such Person, (b) a partnership, limited liability company or unlimited liability company of which such Person, one or more other subsidiaries of such Person or such Person and one or more subsidiaries of such Person, directly or indirectly, is a general partner or managing member, as the case may be, or otherwise has an ownership interest greater than fifty percent (50%) of all of the ownership interests in such partnership, limited liability company or unlimited liability company, or (c) any 

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other Person (other than a corporation, partnership, limited liability company or unlimited liability company) in which such Person, one or more other subsidiaries of such Person or such Person and one or more subsidiaries of such Person, directly or indirectly, has at least a majority interest in the Voting Power or the power to elect or direct the election of a majority of directors or other governing body of such Person.  Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of the US Borrower.

“Supporting Letter of Credit” means a standby letter of credit, in form and substance reasonably satisfactory to the Administrative Agent and the Issuing Lender, issued by an issuer satisfactory to the Administrative Agent and the Issuing Lender.

“Swap Obligations” means, with respect to any Company, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Swing Line Commitment” means the commitment of the Swing Line Lender to make Swing Loans up to the aggregate amount at any time outstanding of Ten Million Dollars ($10,000,000).

“Swing Line Exposure” means, at any time, the aggregate principal amount of all Swing Loans outstanding.

“Swing Line Lender” means KeyBank as holder of the Swing Line Commitment.

“Swing Line Note” means a US Swing Line Note or a Canadian Swing Line Note.

“Swing Loan” means a US Swing Loan or a Canadian Swing Loan.

“Swing Loan Maturity Date” means, with respect to any Swing Loan, the earlier of (a) fifteen (15) days after the date such Swing Loan is made, (b) demand by the Swing Line Lender; or (c) the last day of the Commitment Period.

“Synthetic Indebtedness” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including, any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a “synthetic”, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws (including, without limitation the Bankruptcy Code) to such Person or any of its Subsidiaries, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

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“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Term Lender” means a Canadian Term Lender or a US Term Lender.

“Term Loan” means the Canadian Term Loan or the US Term Loan.

“Total Commitment Amount” means the principal amount of Eighty-Five Million Dollars ($85,000,000, as such amount may be increased pursuant to Section 2.11(b) hereof, or decreased pursuant to Section 2.11(a) hereof.

“Trade Date” means that term as defined in Section 11.9(f)(i) hereof.

“U.C.C.” means the Uniform Commercial Code, as in effect from time to time in the State of Ohio; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of Ohio, “U.C.C.” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” means that term as defined in Section 3.2(e) hereof.

“United States” means the United States of America.

“US Borrower” means that term as defined in the first paragraph of this Agreement.

“US Letter of Credit” means a commercial documentary letter of credit or standby letter of credit that shall be issued in Dollars by the Issuing Lender for the account of the US Borrower or a Domestic Guarantor of Payment, including amendments thereto, if any, and shall have an expiration date no later than one year after its date of issuance (provided that such US Letter of Credit may provide for the renewal thereof for additional one year periods).

“US Letter of Credit Commitment” means the commitment of the Issuing Lender, on behalf of the Revolving Lenders, to issue US Letters of Credit in an aggregate face amount of up to Ten Million Dollars ($10,000,000) (provided that the Letter of Credit Exposure does not exceed the Letter of Credit Commitment).

“US Letter of Credit Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all issued and outstanding US Letters of Credit, and (b) the aggregate of the draws made on US Letters of Credit that have not been reimbursed by the Borrowers or converted to a US Revolving Loan pursuant to Section 2.2A(b)(v) hereof.

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“US Revolving Credit Commitment” means the obligation hereunder, during the Commitment Period, of (a) the Revolving Lenders (and each Revolving Lender) to make US Revolving Loans, (b) the Issuing Lender to issue and each Revolving Lender to participate in, US Letters of Credit pursuant to the US Letter of Credit Commitment, and (c) the Swing Line Lender to make, and each Revolving Lender to participate in, US Swing Loans pursuant to the US Swing Line Commitment; up to an aggregate principal amount outstanding at any time equal to the Revolving Amount.

“US Revolving Credit Exposure” means, at any time, the sum of (a) the aggregate principal amount of all US Revolving Loans outstanding, (b) the US Swing Line Exposure, and (c) the US Letter of Credit Exposure.

“US Revolving Credit Note” means a US Revolving Credit Note, in the form of the attached Exhibit A-1, executed and delivered pursuant to Section 2.6(a)(i) hereof.

“US Revolving Loan” means a loan made to the US Borrower by the Revolving Lenders in accordance with Section 2.2A(a) hereof.

“US Swing Line Commitment” means the commitment of the Swing Line Lender to make US Swing Loans to the US Borrower, on a discretionary basis, up to the aggregate amount at any time outstanding of Ten Million Dollars ($10,000,000) (provided that the Swing Line Exposure does not exceed the Swing Line Commitment).

“US Swing Line Exposure” means, at any time, the aggregate principal amount of all US Swing Loans outstanding.

“US Swing Line Note” means the US Swing Line Note, in the form of the attached Exhibit B-2, executed and delivered pursuant to Section 2.6(b)(i) hereof.

“US Swing Loan” means a loan that shall be denominated in Dollars made to the US Borrower by the Swing Line Lender under the US Swing Line Commitment, in accordance with Section 2.2A(c) hereof.

“US Term Lender” means a Lender with a percentage of the US Term Loan Commitment as set forth on Schedule 1 hereto, or that acquires a percentage of the US Term Loan Commitment pursuant to Section 2.11(b) or 11.9 hereof.

“US Term Loan” means the loan made to the US Borrower by the US Term Lenders in the original principal amount of Thirty-Two Million Dollars ($32,000,000), in accordance with Section 2.3 hereof (as such amount may be increased pursuant to Section 2.11(b) hereof).

“US Term Loan Commitment” means the obligation hereunder of each US Term Lender to participate in the making of the US Term Loan, up to the amount set forth opposite such US Term 

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Lender’s name in the column titled “US Term Loan Commitment Amount” as set forth on Schedule 1 hereto.

“US Term Loan Exposure” means, at any time, the outstanding principal amount of the US Term Loan.

“US Term Note” means a US Term Note, in the form of the attached Exhibit D executed and delivered pursuant to Section 2.6(d) hereof.

“Voting Power” means, 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.  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.

“Waterfall” means that term as defined in Section 8.7(b)(ii) hereof.

“Welfare Plan” means an ERISA Plan that is a “welfare plan” within the meaning of ERISA Section 3(l).

“Withholding Agent” means any Credit Party and the Administrative Agent.

“Write‐Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail‐In Legislation for the applicable EEA Member Country, which write‐down and conversion powers are described in the EU Bail‐In Legislation Schedule.

“Xylem Factoring Agreement” means that certain Citi Supplier Agreement, dated as of December 21, 2015, by and among the Canadian Borrower (by assignment from Horizon Plastics International Inc.), as supplier, Xylem Inc., as buyer and Citibank, N.A., together with all supplements, amendments, restatements and modifications thereto.

Section 1.2.  Accounting Terms. 

(a)    Any accounting term not specifically defined in this Article I shall have the meaning ascribed thereto by GAAP.

(b)    If any change in the rules, regulations, pronouncements, opinions or other requirements of the Financial Accounting Standards Board (or any successor thereto or agency with similar function) is made with respect to GAAP, or if the US Borrower adopts the International Financial Reporting Standards, and such change or adoption results in a change in the calculation of any component (or components in the aggregate) of the financial covenants set forth in Section 5.7 hereof or the related financial definitions, at the option of the Administrative Agent, the Required Lenders or the Administrative Borrower, the parties hereto will enter into good faith negotiations to amend such financial covenants and financial definitions in such manner as the parties shall agree, each acting reasonably, in order to reflect fairly such change or adoption so that the criteria for evaluating the financial condition of the US Borrower shall be the same in commercial effect after, as well as before, such change or adoption is made (in which case the method and calculating such financial covenants and definitions hereunder shall be determined in the manner so agreed); provided that, until so amended, such calculations shall continue to be computed in accordance with GAAP as in effect prior to such change or adoption.

Section 1.3.  Terms Generally.  The foregoing definitions shall be applicable to the singular and plural forms of the foregoing defined terms.  Unless otherwise defined in this Article I, terms that are defined in the U.C.C. are used herein as so defined.

Section 1.4  Rules of Interpretation.  A “Loan Document” or any other agreement or instrument is a reference to that Loan Document or other agreement or instrument as amended, supplemented, restated, replaced or otherwise modified from time to time.  Any reference to a Credit Party shall be construed so as to include its successors and permitted assigns.  Where the context so requires, (a) all references in this Agreement to any term defined by reference to the “U.C.C.” or the “Uniform Commercial Code” shall also have any extended, alternative or analogous meaning given to such term in applicable Canadian personal property security and other laws (including, without limitation, the PPSA, The Bills of Exchange Act (Canada) and the Depository Bills and Notes Act (Canada)), in all cases for the extension, preservation or betterment of the security and rights in the Collateral or any other collateral under any Loan Document, (b) all references in this Agreement to “Article 8” shall be deemed to refer also to applicable Canadian securities transfer 

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laws (including, without limitation, the Securities Transfer Act in any jurisdiction), (c) all references in this Agreement to a financing statement, continuation statement, amendment or termination statement (or the like) shall be deemed to refer also to the analogous documents used under applicable Canadian personal property security laws, (d) all references in this Agreement to filing under the U.C.C. shall be deemed to refer to the analogous registration under applicable Canadian personal property security laws, and (e) all references to federal or state securities law of the United States shall be deemed to refer also to analogous federal and provincial securities laws in Canada.

Section 1.5.  Confirmation of Recitals.  The Borrowers, the Administrative Agent and the Lenders hereby confirm the statements set forth in the recitals of this Agreement and agree that this Agreement amends and restates in its entirety the Original Credit Agreement as set forth in the recitals of this Agreement.  

ARTICLE II.  AMOUNT AND TERMS OF CREDIT

Section 2.1.  Amount and Nature of Credit.

(a)    Subject to the terms and conditions of this Agreement, the Lenders, during the Commitment Period and to the extent hereinafter provided, shall make Loans to the Borrowers, participate in Swing Loans made by the Swing Line Lender to a Borrower, and issue or participate in Letters of Credit at the request of a Borrower in such aggregate amount as the applicable Borrower shall request pursuant to the Commitment; provided that in no event shall the aggregate principal amount of all Loans and Letters of Credit outstanding under this Agreement be in excess of the Total Commitment Amount.

(b)    Each Lender, for itself and not one for any other, agrees to make Loans, participate in Swing Loans, and issue or participate in Letters of Credit, during the Commitment Period, on such basis that, immediately after the completion of any borrowing by the Borrowers or the issuance of a Letter of Credit:

(i)    the aggregate outstanding principal amount of Loans made by such Lender (other than Swing Loans made by the Swing Line Lender), when combined with such Lender’s pro rata share, if any, of the Letter of Credit Exposure and the Swing Line Exposure, shall not be in excess of the Maximum Amount for such Lender; and

(ii)    with respect to each Specific Commitment, the aggregate outstanding principal amount of Loans (other than Swing Loans) made by such Lender with respect to such Specific Commitment shall represent that percentage of the aggregate principal amount then outstanding on all Loans (other than Swing Loans) within such Specific Commitment that shall be such Lender’s Applicable Commitment Percentage.

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Within each Specific Commitment, each borrowing (other than Swing Loans which shall be risk participated on a pro rata basis) from the Lenders shall be made pro rata according to the respective Applicable Commitment Percentages of the Lenders.

(c)    The Loans may be made as US Revolving Loans as described in Section 2.2A(a) hereof, Canadian Revolving Loans as described in Section 2.2B(a) hereof, as the U.S. Term Loan as described in Section 2.3 hereof, as the Canadian Term Loan as described in Section 2.4 hereof, as US Swing Loans as described in Section 2.2A(c) hereof, and as Canadian Swing Loans as described in Section 2.2B(c) hereof, and US Letters of Credit may be issued in accordance with Section 2.2A(b) hereof and Canadian Letters of Credit may be issued in accordance with Section 2.2B(b) hereof.

Section 2.2A.  US Revolving Credit Commitment.

(a)    US Revolving Loans.  Subject to the terms and conditions of this Agreement, during the Commitment Period, the Revolving Lenders shall make a US Revolving Loan or US Revolving Loans to the US Borrower in such amount or amounts as the Administrative Borrower, through an Authorized Officer, may from time to time request, but not exceeding in aggregate principal amount at any time outstanding hereunder the Revolving Amount, when such US Revolving Loans are combined with the US Letter of Credit Exposure, the US Swing Line Exposure and the Canadian Revolving Credit Exposure.  The US Borrower shall have the option, subject to the terms and conditions set forth herein, to borrow US Revolving Loans, maturing on the last day of the Commitment Period, by means of any combination of Base Rate Loans, Daily LIBOR Loans or Eurodollar Loans.  Subject to the provisions of this Agreement, the US Borrower shall be entitled under this Section 2.2A(a) to borrow US Revolving Loans, repay the same in whole or in part and re-borrow US Revolving Loans hereunder at any time and from time to time during the Commitment Period.  The aggregate outstanding amount of all US Revolving Loans shall be payable in full on the last day of the Commitment Period.

(b)    Letters of Credit.

(i)    Generally.  Subject to the terms and conditions of this Agreement, during the Commitment Period, the Issuing Lender shall, in its own name, on behalf of the Revolving Lenders, issue such US Letters of Credit for the account of the US Borrower or a Domestic Guarantor of Payment, as the Administrative Borrower may from time to time request.  The Administrative Borrower shall not request any US Letter of Credit (and the Issuing Lender shall not be obligated to issue any US Letter of Credit) if, after giving effect thereto, (A) the US Letter of Credit Exposure would exceed the US Letter of Credit Commitment, or (B) the Revolving Credit Exposure would exceed the Revolving Amount.  The issuance of each US Letter of Credit shall confer upon each Revolving Lender the benefits and liabilities of a participation consisting of an undivided pro rata interest in the US Letter of Credit to the extent of such Revolving Lender’s Applicable Commitment Percentage.  For the avoidance of doubt, such US Letters of Credit may be used to secure payment obligations of a Mexican Subsidiary under a commercial lease.

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(ii)    Request for US Letter of Credit.  Each request for a US Letter of Credit shall be delivered to the Administrative Agent (and to the Issuing Lender, if the Issuing Lender is a Lender other than the Administrative Agent) by an Authorized Officer not later than 11:00 A.M. (Eastern time) three Business Days prior to the date of the proposed issuance of the US Letter of Credit (or such shorter period as may be acceptable to the Issuing Lender).  Each such request shall be in a form acceptable to the Administrative Agent (and the Issuing Lender, if the Issuing Lender is a Lender other than the Administrative Agent) and shall specify the face amount thereof, whether such US Letter of Credit is a commercial documentary or a standby US Letter of Credit, the account party, the beneficiary, the requested date of issuance, amendment, renewal or extension, the expiry date thereof, and the nature of the transaction or obligation to be supported thereby.  Concurrently with each such request, the US Borrower, and any Domestic Guarantor of Payment for whose account the US Letter of Credit is to be issued, shall execute and deliver to the Issuing Lender an appropriate application and agreement, being in the standard form of the Issuing Lender for such letters of credit, as amended to conform to the provisions of this Agreement if required by the Administrative Agent.  The Administrative Agent shall give the Issuing Lender and each Revolving Lender notice of each such request for a US Letter of Credit.

(iii)    Commercial Documentary Letters of Credit Fees.  With respect to each US Letter of Credit that shall be a commercial documentary letter of credit and the drafts thereunder, whether issued for the account of the US Borrower or a Domestic Guarantor of Payment, the US Borrower agrees to (A) pay to the Administrative Agent, for the pro rata benefit of the Revolving Lenders, a non-refundable commission based upon the undrawn amount of such US Letter of Credit, which shall be paid quarterly in arrears, on each Regularly Scheduled Payment Date, in an amount equal to the aggregate sum of the Letter of Credit Fee for such US Letter of Credit for each day of such quarter; (B) pay to the Administrative Agent, for the sole benefit of the Issuing Lender, an additional Letter of Credit fee, which shall be paid on each date that such US Letter of Credit is issued, amended or renewed, at the rate of one-eighth percent (1/8%) of the undrawn amount of such US Letter of Credit; and (C) pay to the Administrative Agent, for the sole benefit of the Issuing Lender, such other issuance, amendment, renewal, negotiation, draw, acceptance, telex, courier, postage and similar transactional fees as are customarily charged by the Issuing Lender in respect of the issuance and administration of similar letters of credit under its fee schedule as in effect from time to time.

(iv)    Standby Letters of Credit Fees.  With respect to each US Letter of Credit that shall be a standby letter of credit and the drafts thereunder, if any, whether issued for the account of the US Borrower or a Domestic Guarantor of Payment, the US Borrower agrees to (A) pay to the Administrative Agent, for the pro rata benefit of the Revolving Lenders, a non-refundable commission based upon the undrawn amount of such US Letter of Credit, which shall be paid quarterly in arrears, on each Regularly Scheduled Payment Date, in an amount equal to the aggregate sum of the Letter of Credit Fee for such US Letter of Credit for each day of such quarter; (B) pay to the Administrative Agent, for the sole benefit of the Issuing Lender, an additional Letter of Credit fee, which shall be paid on each date that such US Letter of Credit is issued, amended or renewed at the rate of one-eighth percent (1/8%) 

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of the undrawn amount of such US Letter of Credit; and (C) pay to the Administrative Agent, for the sole benefit of the Issuing Lender, such other issuance, amendment, renewal, negotiation, draw, acceptance, telex, courier, postage and similar transactional fees as are customarily charged by the Issuing Lender in respect of the issuance and administration of similar letters of credit under its fee schedule as in effect from time to time.

(v)    Refunding of US Letters of Credit with US Revolving Loans.  Whenever a US Letter of Credit shall be drawn, the US Borrower shall promptly reimburse the Issuing Lender for the amount drawn.  In the event that the amount drawn shall not have been reimbursed by the US Borrower on the date of the drawing of such US Letter of Credit, at the sole option of the Administrative Agent, the US Borrower shall be deemed to have requested a US Revolving Loan, subject to the provisions of Sections 2.2A(a) and 2.7 hereof (other than the requirement set forth in Section 2.7(d) hereof), in the amount drawn.  Such US Revolving Loan shall be evidenced by the US Revolving Credit Notes (or, if a Lender has not requested a US Revolving Credit Note, by the records of the Administrative Agent and such Lender).  Each Revolving Lender agrees to make a US Revolving Loan on the date of such notice, subject to no conditions precedent whatsoever.  Each Revolving Lender acknowledges and agrees that its obligation to make a US Revolving Loan pursuant to Section 2.2A(a) hereof when required by this Section 2.2A(b)(v) shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or Event of Default, and that its payment to the Administrative Agent, for the account of the Issuing Lender, of the proceeds of such US Revolving Loan shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Revolving Credit Commitment shall have been reduced or terminated.  The US Borrower irrevocably authorizes and instructs the Administrative Agent to apply the proceeds of any borrowing pursuant to this Section 2.2A(b)(v) to reimburse, in full (other than the Issuing Lender’s pro rata share of such borrowing), the Issuing Lender for the amount drawn on such US Letter of Credit.  Each such US Revolving Loan shall be deemed to be a Base Rate Loan unless otherwise requested by and available to the US Borrower hereunder.  Each Revolving Lender is hereby authorized to record on its records relating to its US Revolving Credit Note (or, if such Revolving Lender has not requested a US Revolving Credit Note, its records relating to US Revolving Loans) such Revolving Lender’s pro rata share of the amounts paid and not reimbursed on the US Letters of Credit.

(vi)    Participation in US Letters of Credit.  If, for any reason, the Administrative Agent (and the Issuing Lender if the Issuing Lender is a Revolving Lender other than the Administrative Agent) shall be unable to or, in the opinion of the Administrative Agent, it shall be impracticable to, convert any amount drawn under a US Letter of Credit to a US Revolving Loan pursuant to the preceding subsection, the Administrative Agent (and the Issuing Lender if the Issuing Lender is a Revolving Lender other than the Administrative Agent) shall have the right to request that each Revolving Lender fund a participation in the amount due with respect to such US Letter of Credit, and the Administrative Agent shall promptly notify each Revolving Lender thereof (by facsimile or email (in each case confirmed by telephone) or telephone (confirmed in writing).  Upon such notice, but without 

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further action, the Issuing Lender hereby agrees to grant to each Revolving Lender, and each Revolving Lender hereby agrees to acquire from the Issuing Lender, an undivided participation interest in the amount due with respect to such US Letter of Credit in an amount equal to such Revolving Lender’s Applicable Commitment Percentage of the principal amount due with respect to such US Letter of Credit.  In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Issuing Lender, such Revolving Lender’s ratable share of the amount due with respect to such US Letter of Credit (determined in accordance with such Revolving Lender’s Applicable Commitment Percentage).  Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in the amount due under any US Letter of Credit that is drawn but not reimbursed by the US Borrower pursuant to this subsection (vi) shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or Event of Default, and that each such payment shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Revolving Credit Commitment shall have been reduced or terminated.  Each Revolving Lender shall comply with its obligation under this subsection (vi) by wire transfer of immediately available funds, in the same manner as provided in Section 2.7 hereof with respect to US Revolving Loans.  Each Revolving Lender is hereby authorized to record on its records such Revolving Lender’s pro rata share of the amounts paid and not reimbursed on the Letters of Credit.  In addition, each Revolving Lender agrees to risk participate in the Existing Letters of Credit as provided in subsection (vii) below.

(vii)    Existing Letters of Credit.  Schedule 2.2 hereto contains a description of all letters of credit outstanding on, and to continue in effect after, the Closing Date.  Each such letter of credit issued by a bank that is or becomes a Revolving Lender under this Agreement on the Closing Date (each, an “Existing Letter of Credit”) shall constitute a “US Letter of Credit” for all purposes of this Agreement, issued, for purposes of Section 2.2A(b)(v) hereof, on the Closing Date.  The US Borrower, the Administrative Agent and the Revolving Lenders hereby agree that, from and after such date, the terms of this Agreement shall apply to the Existing Letters of Credit, superseding any other agreement theretofore applicable to them to the extent inconsistent with the terms hereof.  Notwithstanding anything to the contrary in any reimbursement agreement applicable to the Existing Letters of Credit, the fees payable in connection with each Existing Letter of Credit to be shared with the Revolving Lenders shall accrue from the Closing Date at the rate provided in Section 2.2A(b)(iii) and (iv) hereof.

(viii)    Auto-Renewal of US Letters of Credit.  If the Administrative Borrower so requests, a US Letter of Credit shall have an automatic renewal provision; provided that any US Letter of Credit that has an automatic renewal provision must permit the Administrative Agent (or the Issuing Lender if the Issuing Lender is a Lender other than the Administrative Agent) to prevent any such renewal by giving prior notice to the beneficiary thereof not later than thirty (30) days prior to the renewal date of such US Letter of Credit.  Once any such US Letter of Credit that has automatic renewal provisions has been issued, the Revolving Lenders shall be deemed to have authorized (but may not require) the 

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Administrative Agent (and the Issuing Lender) to permit at any time the renewal of such US Letter of Credit to an expiry date not later than one year after the last day of the Commitment Period.

(ix)    US Letters of Credit Outstanding Beyond the Commitment Period.  If any US Letter of Credit is or will be outstanding upon the termination of the US Revolving Credit Commitment, then, prior to such termination, the US Borrower shall deposit with the Administrative Agent, for the benefit of the Issuing Lender, with respect to all outstanding US Letters of Credit, either cash or a Supporting Letter of Credit, which, in each case, is (A) in an amount equal to one hundred three percent (103%) of the undrawn amount of the outstanding US Letters of Credit, and (B) free and clear of all rights and claims of third parties.  The cash shall be deposited in an escrow account at a financial institution designated by the Issuing Lender.  The Issuing Lender shall be entitled to withdraw (with respect to the cash) or draw (with respect to the Supporting Letter of Credit) amounts necessary to reimburse the Issuing Lender for payments to be made under the US Letters of Credit and any fees and expenses associated with such US Letters of Credit, or incurred pursuant to the reimbursement agreements with respect to such US Letters of Credit.  The US Borrower shall also execute such documentation as the Administrative Agent or the Issuing Lender may reasonably require in connection with the survival of the US Letters of Credit beyond the Commitment or this Agreement.  After expiration of all undrawn US Letters of Credit, the Supporting Letter of Credit or the remainder of the cash, as the case may be, shall promptly be returned to the US Borrower.

(c)    US Swing Loans.

(i)    Generally.  Subject to the terms and conditions of this Agreement, during the Commitment Period, the Swing Line Lender shall make a US Swing Loan or US Swing Loans to the US Borrower in such amount or amounts as the US Borrower, through an Authorized Officer, may from time to time request; provided that the US Borrower shall not request any US Swing Loan if, after giving effect thereto, (A) the US Revolving Credit Exposure would exceed the US Revolving Credit Commitment, (B) the US Swing Line Exposure would exceed the US Swing Line Commitment, or (C) the Swing Line Exposure would exceed the Swing Line Commitment.  Each US Swing Loan shall be due and payable on the Swing Loan Maturity Date applicable thereto.  Each US Swing Loan shall be made in Dollars.

(ii)    Refunding of US Swing Loans.  If the Swing Line Lender so elects, by giving notice to the Administrative Borrower and the Revolving Lenders, the US Borrower agrees that the Swing Line Lender shall have the right, in its sole discretion, to require that the then outstanding US Swing Loans be refinanced as a US Revolving Loan.  Such US Revolving Loan shall be a Base Rate Loan unless otherwise requested by and available to the US Borrower hereunder.  Upon receipt of such notice by Borrower and the Revolving Lenders, the US Borrower shall be deemed, on such day, to have requested a US Revolving Loan in the principal amount of such US Swing Loan in accordance with Sections 2.2A(a) and 2.7 hereof (other than the requirement set forth in Section 2.7(d) hereof).  Such US Revolving 

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Loan shall be evidenced by the US Revolving Credit Notes (or, if a Revolving Lender has not requested a US Revolving Credit Note, by the records of the Administrative Agent and such Revolving Lender).  Each Revolving Lender agrees to make a US Revolving Loan on the date of such notice, subject to no conditions precedent whatsoever.  Each Revolving Lender acknowledges and agrees that such Revolving Lender’s obligation to make a US Revolving Loan pursuant to Section 2.2A(a) hereof when required by this Section 2.2A(c)(ii) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or Event of Default, and that its payment to the Administrative Agent, for the account of the Swing Line Lender, of the proceeds of such US Revolving Loan shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Revolving Credit Commitment shall have been reduced or terminated.  The US Borrower irrevocably authorizes and instructs the Administrative Agent to apply the proceeds of any borrowing pursuant to this Section 2.2A(c)(ii) to repay in full such US Swing Loan.  Each Revolving Lender is hereby authorized to record on its records relating to its US Revolving Credit Note (or, if such Revolving Lender has not requested a US Revolving Credit Note, its records relating to US Revolving Loans) such Revolving Lender’s pro rata share of the amounts paid to refund such US Swing Loan.

(iii)    Participation in US Swing Loans.  If, for any reason, the Swing Line Lender is unable to or, in the opinion of the Administrative Agent, it is impracticable to, convert any US Swing Loan to a US Revolving Loan pursuant to the preceding Section 2.2A(c)(ii), then on any day that a US Swing Loan is outstanding (whether before or after the maturity thereof), the Administrative Agent shall have the right to request that each Revolving Lender fund a participation in such US Swing Loan, and the Administrative Agent shall promptly notify each Revolving Lender thereof (by facsimile or email (in each case confirmed by telephone) or telephone (confirmed in writing)).  Upon such notice, but without further action, the Swing Line Lender hereby agrees to grant to each Revolving Lender, and each Revolving Lender hereby agrees to acquire from the Swing Line Lender, an undivided participation interest in the right to share in the payment of such US Swing Loan in an amount equal to such Revolving Lender’s Applicable Commitment Percentage of the principal amount of such US Swing Loan.  In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the benefit of the Swing Line Lender, such Revolving Lender’s ratable share of such US Swing Loan (determined in accordance with such Revolving Lender’s Applicable Commitment Percentage).  Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in US Swing Loans pursuant to this Section 2.2A(c)(iii) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Revolving Credit Commitment shall have been reduced or terminated.  Each Revolving Lender shall comply with its obligation under this Section 2.2A(c)(iii) by wire transfer of immediately available funds, 

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in the same manner as provided in Section 2.7 hereof with respect to US Revolving Loans to be made by such Revolving Lender.

Section 2.2B.  Canadian Revolving Credit Commitment.

(a)    Canadian Revolving Loans.  Subject to the terms and conditions of this Agreement, during the Commitment Period, the Revolving Lenders shall make a Canadian Revolving Loan or Canadian Revolving Loans to the Canadian Borrower in such amount or amounts as the Administrative Borrower, through an Authorized Officer, may from time to time request, but not exceeding in aggregate principal amount at any time outstanding hereunder (a) the Canadian Revolving Amount, when such Canadian Revolving Loans are combined with the Canadian Letter of Credit Exposure and the Canadian Swing Line Exposure, and (b) the Revolving Amount, when such Canadian Revolving Loans are combined with the Canadian Letter of Credit Exposure, the Canadian Swing Line Exposure and the US Revolving Credit Exposure.  The Canadian Borrower shall have the option, subject to the terms and conditions set forth herein, to borrow Canadian Revolving Loans, maturing on the last day of the Commitment Period, by means of any combination of Base Rate Loans, Daily LIBOR Loans or Eurodollar Loans.  Subject to the provisions of this Agreement, the Canadian Borrower shall be entitled under this Section 2.2B(a) to borrow Canadian Revolving Loans, repay the same in whole or in part and re-borrow Canadian Revolving Loans hereunder at any time and from time to time during the Commitment Period.  The aggregate outstanding amount of all Canadian Revolving Loans shall be payable in full on the last day of the Commitment Period.

(b)    Letters of Credit.

(i)    Generally.  Subject to the terms and conditions of this Agreement, during the Commitment Period, the Issuing Lender shall, in its own name, on behalf of the Revolving Lenders, issue such Letters of Credit for the account of the Canadian Borrower, as the Administrative Borrower may from time to time request.  The Administrative Borrower shall not request any Canadian Letter of Credit (and the Issuing Lender shall not be obligated to issue any Canadian Letter of Credit) if, after giving effect thereto, (A) the Canadian Letter of Credit Exposure would exceed the Canadian Letter of Credit Commitment, (B) the Canadian Revolving Credit Exposure would exceed the Canadian Revolving Credit Commitment, or (C) the Revolving Credit Exposure would exceed the Revolving Credit Commitment.  The issuance of each Canadian Letter of Credit shall confer upon each Revolving Lender the benefits and liabilities of a participation consisting of an undivided pro rata interest in the Canadian Letter of Credit to the extent of such Revolving Lender’s Applicable Commitment Percentage.

(ii)    Request for Canadian Letter of Credit.  Each request for a Canadian Letter of Credit shall be delivered to the Administrative Agent (and to the Issuing Lender, if the Issuing Lender is a Lender other than the Administrative Agent) by an Authorized Officer not later than 11:00 A.M. (Eastern time) three Business Days prior to the date of the proposed issuance of the Canadian Letter of Credit (or such shorter period as may be acceptable to the Issuing Lender).  Each such request shall be in a form acceptable to the Administrative 

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Agent (and the Issuing Lender, if the Issuing Lender is a Lender other than the Administrative Agent) and shall specify the face amount thereof, whether such Canadian Letter of Credit is a commercial documentary or a standby Canadian Letter of Credit, the account party, the beneficiary, the requested date of issuance, amendment, renewal or extension, the expiry date thereof, and the nature of the transaction or obligation to be supported thereby.  Concurrently with each such request, the Canadian Borrower, shall execute and deliver to the Issuing Lender an appropriate application and agreement, being in the standard form of the Issuing Lender for such letters of credit, as amended to conform to the provisions of this Agreement if required by the Administrative Agent.  The Administrative Agent shall give the Issuing Lender and each Revolving Lender notice of each such request for a Canadian Letter of Credit.

(iii)    Commercial Documentary Letters of Credit Fees.  With respect to each Canadian Letter of Credit that shall be a commercial documentary letter of credit and the drafts thereunder, the Canadian Borrower agrees to (A) pay to the Administrative Agent, for the pro rata benefit of the Revolving Lenders, a non-refundable commission based upon the undrawn amount of such Canadian Letter of Credit, which shall be paid quarterly in arrears, on each Regularly Scheduled Payment Date, in an amount equal to the aggregate sum of the Letter of Credit Fee for such Canadian Letter of Credit for each day of such quarter; (B) pay to the Administrative Agent, for the sole benefit of the Issuing Lender, an additional Letter of Credit fee, which shall be paid on each date that such Canadian Letter of Credit is issued, amended or renewed, at the rate of one-eighth percent (1/8%) of the undrawn amount of such Canadian Letter of Credit; and (C) pay to the Administrative Agent, for the sole benefit of the Issuing Lender, such other issuance, amendment, renewal, negotiation, draw, acceptance, telex, courier, postage and similar transactional fees as are customarily charged by the Issuing Lender in respect of the issuance and administration of similar letters of credit under its fee schedule as in effect from time to time.

(iv)    Standby Letters of Credit Fees.  With respect to each Canadian Letter of Credit that shall be a standby letter of credit and the drafts thereunder, if any, the Canadian Borrower agrees to (A) pay to the Administrative Agent, for the pro rata benefit of the Revolving Lenders, a non-refundable commission based upon the undrawn amount of such Canadian Letter of Credit, which shall be paid quarterly in arrears, on each Regularly Scheduled Payment Date, in an amount equal to the aggregate sum of the Letter of Credit Fee for such Canadian Letter of Credit for each day of such quarter; (B) pay to the Administrative Agent, for the sole benefit of the Issuing Lender, an additional Letter of Credit fee, which shall be paid on each date that such Canadian Letter of Credit is issued, amended or renewed at the rate of one-eighth percent (1/8%) of the undrawn amount of such Canadian Letter of Credit; and (C) pay to the Administrative Agent, for the sole benefit of the Issuing Lender, such other issuance, amendment, renewal, negotiation, draw, acceptance, telex, courier, postage and similar transactional fees as are customarily charged by the Issuing Lender in respect of the issuance and administration of similar letters of credit under its fee schedule as in effect from time to time.

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(v)    Refunding of Canadian Letters of Credit with Canadian Revolving Loans.  Whenever a Canadian Letter of Credit shall be drawn, the Canadian Borrower shall promptly reimburse the Issuing Lender for the amount drawn.  In the event that the amount drawn shall not have been reimbursed by the Canadian Borrower on the date of the drawing of such Canadian Letter of Credit, at the sole option of the Administrative Agent, the Canadian Borrower shall be deemed to have requested a Canadian Revolving Loan, subject to the provisions of Sections 2.2B(a) and 2.7 hereof (other than the requirement set forth in Section 2.7(d) hereof), in the amount drawn.  Such Canadian Revolving Loan shall be evidenced by the Canadian Revolving Credit Notes (or, if a Lender has not requested a Canadian Revolving Credit Note, by the records of the Administrative Agent and such Lender).  Each Revolving Lender agrees to make a Canadian Revolving Loan on the date of such notice, subject to no conditions precedent whatsoever.  Each Revolving Lender acknowledges and agrees that its obligation to make a Canadian Revolving Loan pursuant to Section 2.2B(a) hereof when required by this Section 2.2B(b)(v) shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or Event of Default, and that its payment to the Administrative Agent, for the account of the Issuing Lender, of the proceeds of such Canadian Revolving Loan shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Canadian Revolving Credit Commitment shall have been reduced or terminated.  The Canadian Borrower irrevocably authorizes and instructs the Administrative Agent to apply the proceeds of any borrowing pursuant to this Section 2.2B(b)(v) to reimburse, in full (other than the Issuing Lender’s pro rata share of such borrowing), the Issuing Lender for the amount drawn on such Canadian Letter of Credit.  Each such Canadian Revolving Loan shall be deemed to be a Base Rate Loan unless otherwise requested by and available to the Canadian Borrower hereunder.  Each Revolving Lender is hereby authorized to record on its records relating to its Canadian Revolving Credit Note (or, if such Revolving Lender has not requested a Canadian Revolving Credit Note, its records relating to Canadian Revolving Loans) such Revolving Lender’s pro rata share of the amounts paid and not reimbursed on the Canadian Letters of Credit.

(vi)    Participation in Canadian Letters of Credit.  If, for any reason, the Administrative Agent (and the Issuing Lender if the Issuing Lender is a Revolving Lender other than the Administrative Agent) shall be unable to or, in the opinion of the Administrative Agent, it shall be impracticable to, convert any amount drawn under a Canadian Letter of Credit to a Canadian Revolving Loan pursuant to the preceding subsection, the Administrative Agent (and the Issuing Lender if the Issuing Lender is a Revolving Lender other than the Administrative Agent) shall have the right to request that each Revolving Lender fund a participation in the amount due with respect to such Canadian Letter of Credit, and the Administrative Agent shall promptly notify each Revolving Lender thereof (by facsimile or email (in each case confirmed by telephone) or telephone (confirmed in writing).  Upon such notice, but without further action, the Issuing Lender hereby agrees to grant to each Revolving Lender, and each Revolving Lender hereby agrees to acquire from the Issuing Lender, an undivided participation interest in the amount due with respect to such Canadian Letter of Credit in an amount equal to such Revolving Lender’s Applicable Commitment Percentage of the principal amount due with respect to such Canadian Letter of Credit.  In 

50

consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Issuing Lender, such Revolving Lender’s ratable share of the amount due with respect to such Canadian Letter of Credit (determined in accordance with such Revolving Lender’s Applicable Commitment Percentage).  Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in the amount due under any Canadian Letter of Credit that is drawn but not reimbursed by the Canadian Borrower pursuant to this subsection (vi) shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or Event of Default, and that each such payment shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Canadian Revolving Credit Commitment shall have been reduced or terminated.  Each Revolving Lender shall comply with its obligation under this subsection (vi) by wire transfer of immediately available funds, in the same manner as provided in Section 2.7 hereof with respect to Canadian Revolving Loans.  Each Revolving Lender is hereby authorized to record on its records such Revolving Lender’s pro rata share of the amounts paid and not reimbursed on the Canadian Letters of Credit.

(vii)    Auto-Renewal of Canadian Letters of Credit.  If the Administrative Borrower so requests, a Canadian Letter of Credit shall have an automatic renewal provision; provided that any Canadian Letter of Credit that has an automatic renewal provision must permit the Administrative Agent (or the Issuing Lender if the Issuing Lender is a Lender other than the Administrative Agent) to prevent any such renewal by giving prior notice to the beneficiary thereof not later than thirty (30) days prior to the renewal date of such Canadian Letter of Credit.  Once any such Canadian Letter of Credit that has automatic renewal provisions has been issued, the Revolving Lenders shall be deemed to have authorized (but may not require) the Administrative Agent (and the Issuing Lender) to permit at any time the renewal of such Canadian Letter of Credit to an expiry date not later than one year after the last day of the Commitment Period.

(viii)    Canadian Letters of Credit Outstanding Beyond the Commitment Period.  If any Canadian Letter of Credit is or will be outstanding upon the termination of the Canadian Revolving Credit Commitment, then, prior such termination, the Canadian Borrower shall deposit with the Administrative Agent, for the benefit of the Issuing Lender, with respect to all outstanding Canadian Letters of Credit, either cash or a Supporting Letter of Credit, which, in each case, is (A) in an amount equal to one hundred three percent (103%) of the undrawn amount of the outstanding Canadian Letters of Credit, and (B) free and clear of all rights and claims of third parties.  The cash shall be deposited in an escrow account at a financial institution designated by the Issuing Lender.  The Issuing Lender shall be entitled to withdraw (with respect to the cash) or draw (with respect to the Supporting Letter of Credit) amounts necessary to reimburse the Issuing Lender for payments to be made under the Canadian Letters of Credit and any fees and expenses associated with such Canadian Letters of Credit, or incurred pursuant to the reimbursement agreements with respect to such Canadian Letters of Credit.  The Canadian Borrower shall also execute such documentation as the Administrative Agent or the Issuing Lender may reasonably require in connection 

51

with the survival of the Canadian Letters of Credit beyond the Commitment or this Agreement.  After expiration of all undrawn Canadian Letters of Credit, the Supporting Letter of Credit or the remainder of the cash, as the case may be, shall promptly be returned to the Canadian Borrower.

(c)    Canadian Swing Loans.

(i)    Generally.  Subject to the terms and conditions of this Agreement, during the Commitment Period, the Swing Line Lender shall make a Canadian Swing Loan or Canadian Swing Loans to the Canadian Borrower in such amount or amounts as the Canadian Borrower, through an Authorized Officer, may from time to time request; provided that the Canadian Borrower shall not request any Canadian Swing Loan if, after giving effect thereto, (A) the Canadian Revolving Credit Exposure would exceed the Canadian Revolving Credit Commitment, (B) the Canadian Swing Line Exposure would exceed the Canadian Swing Line Commitment, or (C) the Swing Line Exposure would exceed the Swing Line Commitment.  Each Canadian Swing Loan shall be due and payable on the Swing Loan Maturity Date applicable thereto.  Each Canadian Swing Loan shall be made in Dollars.

(ii)    Refunding of Canadian Swing Loans.  If the Swing Line Lender so elects, by giving notice to the Administrative Borrower and the Revolving Lenders, the Canadian Borrower agrees that the Swing Line Lender shall have the right, in its sole discretion, to require that the then outstanding Canadian Swing Loans be refinanced as a Canadian Revolving Loan.  Such Canadian Revolving Loan shall be a Base Rate Loan unless otherwise requested by and available to the Canadian Borrower hereunder.  Upon receipt of such notice by Borrower and the Revolving Lenders, the Canadian Borrower shall be deemed, on such day, to have requested a Canadian Revolving Loan in the principal amount of such Canadian Swing Loan in accordance with Sections 2.2B(a) and 2.7 hereof (other than the requirement set forth in Section 2.7(d) hereof).  Such Canadian Revolving Loan shall be evidenced by the Canadian Revolving Credit Notes (or, if a Revolving Lender has not requested a Canadian Revolving Credit Note, by the records of the Administrative Agent and such Revolving Lender).  Each Revolving Lender agrees to make a Canadian Revolving Loan on the date of such notice, subject to no conditions precedent whatsoever.  Each Revolving Lender acknowledges and agrees that such Revolving Lender’s obligation to make a Canadian Revolving Loan pursuant to Section 2.2B(a) hereof when required by this Section 2.2B(c)(ii) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or Event of Default, and that its payment to the Administrative Agent, for the account of the Swing Line Lender, of the proceeds of such Canadian Revolving Loan shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Canadian Revolving Credit Commitment shall have been reduced or terminated.  The Canadian Borrower irrevocably authorizes and instructs the Administrative Agent to apply the proceeds of any borrowing pursuant to this Section 2.2B(c)(ii) to repay in full such Canadian Swing Loan.  Each Revolving Lender is hereby authorized to record on its records relating to its Canadian Revolving Credit Note (or, if such Revolving Lender has not requested a Canadian Revolving Credit Note, its records relating to Canadian Revolving 

52

Loans) such Revolving Lender’s pro rata share of the amounts paid to refund such Canadian Swing Loan.

(iii)    Participation in Canadian Swing Loans.  If, for any reason, the Swing Line Lender is unable to or, in the opinion of the Administrative Agent, it is impracticable to, convert any Canadian Swing Loan to a Canadian Revolving Loan pursuant to the preceding Section 2.2B(c)(ii), then on any day that a Canadian Swing Loan is outstanding (whether before or after the maturity thereof), the Administrative Agent shall have the right to request that each Revolving Lender fund a participation in such Canadian Swing Loan, and the Administrative Agent shall promptly notify each Revolving Lender thereof (by facsimile or email (in each case confirmed by telephone) or telephone (confirmed in writing)).  Upon such notice, but without further action, the Swing Line Lender hereby agrees to grant to each Revolving Lender, and each Revolving Lender hereby agrees to acquire from the Swing Line Lender, an undivided participation interest in the right to share in the payment of such Canadian Swing Loan in an amount equal to such Revolving Lender’s Applicable Commitment Percentage of the principal amount of such Canadian Swing Loan.  In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the benefit of the Swing Line Lender, such Revolving Lender’s ratable share of such Canadian Swing Loan (determined in accordance with such Revolving Lender’s Applicable Commitment Percentage).  Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Canadian Swing Loans pursuant to this Section 2.2B(c)(iii) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Canadian Revolving Credit Commitment shall have been reduced or terminated.  Each Revolving Lender shall comply with its obligation under this Section 2.2B(c)(iii) by wire transfer of immediately available funds, in the same manner as provided in Section 2.7 hereof with respect to Canadian Revolving Loans to be made by such Revolving Lender.

Section 2.3.  US Term Loan Commitment.  Subject to the terms and conditions of this Agreement, the US Term Lenders shall make the US Term Loan to the US Borrower on the Closing Date, in the amount of Thirty-Two Million Dollars ($32,000,000).  The principal outstanding on the US Term Loan shall be payable in consecutive quarterly installments, in the amounts set forth in the table below, commencing March 30, 2018, and continuing on each Regularly Scheduled Payment Date thereafter, with the balance thereof payable in full on January 15, 2023.  The US Borrower shall notify the Administrative Agent, in accordance with the notice provisions of Section 2.7 hereof, whether the US Term Loan will be a Base Rate Loan, a Daily LIBOR Loan or one or more Eurodollar Loans.  The US Term Loan may be a mixture of a Base Rate Loan, a Daily LIBOR Loan and one or more Eurodollar Loans.  Once the US Term Loan is made, any portion of the US Term Loan repaid may not be re-borrowed.  The US Term Loan Commitment shall terminate on the date that the US Term Loan is made.

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	Year
	March
	June
	September
	December

	2018
	$600,000
	$600,000
	$600,000
	$600,000

	2019
	$600,000
	$600,000
	$600,000
	$600,000

	2020
	$800,000
	$800,000
	$800,000
	$800,000

	2021
	$1,000,000
	$1,000,000
	$1,000,000
	$1,000,000

	2022
	$1,000,000
	$1,000,000
	$1,000,000
	$1,000,000

Section 2.4.  Canadian Term Loan Commitment.  Subject to the terms and conditions of this Agreement, the Canadian Term Lenders shall make the Canadian Term Loan to the Canadian Borrower on the Closing Date, in the amount of Thirteen Million Dollars ($13,000,000).  The principal outstanding on the Canadian Term Loan shall be payable in consecutive quarterly installments, in the amounts set forth in the table below, commencing March 30, 2018, and continuing on each Regularly Scheduled Payment Date thereafter, with the balance thereof payable in full on January 15, 2023.  The Canadian Borrower shall notify the Administrative Agent, in accordance with the notice provisions of Section 2.7 hereof, whether the Canadian Term Loan will be a Base Rate Loan, a Daily LIBOR Loan or one or more Eurodollar Loans.  The Canadian Term Loan may be a mixture of a Base Rate Loan, a Daily LIBOR Loan and one or more Eurodollar Loans.  Once the Canadian Term Loan is made, any portion of the Canadian Term Loan repaid may not be re-borrowed.  The Canadian Term Loan Commitment shall terminate on the date that the Canadian Term Loan is made.

	
					
	Year
	March
	June
	September
	December

	2018
	$243,750
	$243,750
	$243,750
	$243,750

	2019
	$243,750
	$243,750
	$243,750
	$243,750

	2020
	$325,000
	$325,000
	$325,000
	$325,000

	2021
	$406,250
	$406,250
	$406,250
	$406,250

	2022
	$406,250
	$406,250
	$406,250
	$406,250

Section 2.5.  Interest.

(a)    Revolving Loans.

(i)    US Revolving Loans.

(A)    Base Rate Loan.  The US Borrower shall pay interest on the unpaid principal amount of a US Revolving Loan that is a Base Rate Loan outstanding from time to time from the date thereof until paid at the Derived Base Rate from time to time in effect.  Interest on such Base Rate Loan shall be payable, commencing March 30, 2018, and continuing on each Regularly Scheduled Payment Date thereafter and at the maturity thereof.

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(B)    Daily LIBOR Loans.  The US Borrower shall pay interest on the unpaid principal amount of a US Revolving Loan that is a Daily LIBOR Loan outstanding from time to time from the date thereof until paid, at the Derived Daily LIBOR Rate from time to time in effect.  Interest on such Daily LIBOR Loan shall be payable, commencing March 30, 2018, and continuing on each Regularly Scheduled Payment Date thereafter and at the maturity thereof.

(C)    Eurodollar Loans.  The US Borrower shall pay interest on the unpaid principal amount of each US Revolving Loan that is a Eurodollar Loan outstanding from time to time, with the interest rate to be fixed in advance on the first day of the Interest Period applicable thereto through the last day of the Interest Period applicable thereto (but subject to any increases or decreases in the Applicable Margin for Eurodollar Loans in accordance with the definition of “Applicable Margin”), at the Derived Eurodollar Rate.  Interest on such Eurodollar Loan shall be payable on each Interest Adjustment Date with respect to an Interest Period (provided that, if an Interest Period shall exceed three months, the interest must also be paid every three months, commencing three months from the beginning of such Interest Period).

(ii)    Canadian Revolving Loans.

(A)    Base Rate Loan.  The Canadian Borrower shall pay interest on the unpaid principal amount of a Canadian Revolving Loan that is a Base Rate Loan outstanding from time to time from the date thereof until paid at the Derived Base Rate from time to time in effect.  Interest on such Base Rate Loan shall be payable, commencing March 30, 2018, and continuing on each Regularly Scheduled Payment Date thereafter and at the maturity thereof.

(B)    Daily LIBOR Loans.  The Canadian Borrower shall pay interest on the unpaid principal amount of a Canadian Revolving Loan that is a Daily LIBOR Loan outstanding from time to time from the date thereof until paid, at the Derived Daily LIBOR Rate from time to time in effect.  Interest on such Daily LIBOR Loan shall be payable, commencing March 30, 2018, and continuing on each Regularly Scheduled Payment Date thereafter and at the maturity thereof.

(C)    Eurodollar Loans.  The Canadian Borrower shall pay interest on the unpaid principal amount of each Canadian Revolving Loan that is a Eurodollar Loan outstanding from time to time, with the interest rate to be fixed in advance on the first day of the Interest Period applicable thereto through the last day of the Interest Period applicable thereto (but subject to any increases or decreases in the Applicable Margin for Eurodollar Loans in accordance with the definition of “Applicable Margin”), at the Derived Eurodollar Rate.  Interest on such Eurodollar Loan shall be payable on each Interest Adjustment Date with respect to an Interest Period (provided that, if an Interest Period shall exceed three months, the interest must also be paid every three months, commencing three months from the beginning of such Interest Period).

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(b)    Swing Loans. 

(i)    US Swing Loans.  The US Borrower shall pay interest to the Administrative Agent, for the sole benefit of the Swing Line Lender (and any Revolving Lender that shall have funded a participation in such US Swing Loan), on the unpaid principal amount of each US Swing Loan outstanding from time to time from the date thereof until paid at the Derived Daily LIBOR Rate from time to time in effect.  Interest on US Swing Loans shall be payable on the Swing Loan Maturity Date applicable thereto.  Each US Swing Loan shall bear interest for a minimum of one day.

(ii)    Canadian Swing Loans.  The Canadian Borrower shall pay interest to the Administrative Agent, for the sole benefit of the Swing Line Lender (and any Revolving Lender that shall have funded a participation in such Canadian Swing Loan), on the unpaid principal amount of each Canadian Swing Loan outstanding from time to time from the date thereof until paid at the Derived Daily LIBOR Rate from time to time in effect.  Interest on Canadian Swing Loans shall be payable on each Regularly Scheduled Payment Date.  Each Canadian Swing Loan shall bear interest for a minimum of one day.

(c)    US Term Loan.

(i)    Base Rate Loan.  With respect to any portion of the US Term Loan that is a Base Rate Loan, the US Borrower shall pay interest on the unpaid principal amount thereof outstanding from time to time from the date thereof until paid, commencing March 30, 2018, and continuing on each Regularly Scheduled Payment Date thereafter and at the maturity thereof, at the Derived Base Rate from time to time in effect.

(ii)    Daily LIBOR Loans.  With respect to any portion of the US Term Loan that is a Daily LIBOR Loan, the US Borrower shall pay interest on the unpaid principal amount thereof outstanding from time to time, from the date thereof until paid, at the Derived Daily LIBOR Rate from time to time in effect.  Interest on such Daily LIBOR Loan shall be payable, commencing March 30, 2018, and continuing on each Regularly Scheduled Payment Date thereafter and at the maturity thereof.

(iii)    Eurodollar Loans.  With respect to any portion of the US Term Loan that is a Eurodollar Loan, the US Borrower shall pay interest on the unpaid principal amount of such Eurodollar Loan outstanding from time to time, with the interest rate to be fixed in advance on the first day of the Interest Period applicable thereto through the last day of the Interest Period applicable thereto (but subject to any increases or decreases in the Applicable Margin for Eurodollar Loans in accordance with the definition of “Applicable Margin”), at the Derived Eurodollar Rate.  Interest on such Eurodollar Loan shall be payable on each Interest Adjustment Date with respect to an Interest Period (provided that, if an Interest Period shall exceed three months, the interest must also be paid every three months, commencing three months from the beginning of such Interest Period).

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(d)    Canadian Term Loan.

(i)    Base Rate Loan.  With respect to any portion of the Canadian Term Loan that is a Base Rate Loan, the Canadian Borrower shall pay interest on the unpaid principal amount thereof outstanding from time to time from the date thereof until paid, commencing March 30, 2018, and continuing on each Regularly Scheduled Payment Date thereafter and at the maturity thereof, at the Derived Base Rate from time to time in effect.  

(ii)    Daily LIBOR Loans.  With respect to any portion of the Canadian Term Loan that is a Daily LIBOR Loan, the Canadian Borrower shall pay interest on the unpaid principal amount thereof outstanding from time to time, from the date thereof until paid, at the Derived Daily LIBOR Rate from time to time in effect.  Interest on such Daily LIBOR Loan shall be payable, commencing March 30, 2018, and continuing on each Regularly Scheduled Payment Date thereafter and at the maturity thereof.

(iii)    Eurodollar Loans.  With respect to any portion of the Canadian Term Loan that is a Eurodollar Loan, the Canadian Borrower shall pay interest on the unpaid principal amount of such Eurodollar Loan outstanding from time to time, with the interest rate to be fixed in advance on the first day of the Interest Period applicable thereto through the last day of the Interest Period applicable thereto (but subject to any increases or decreases in the Applicable Margin for Eurodollar Loans in accordance with the definition of “Applicable Margin”), at the Derived Eurodollar Rate.  Interest on such Eurodollar Loan shall be payable on each Interest Adjustment Date with respect to an Interest Period (provided that, if an Interest Period shall exceed three months, the interest must also be paid every three months, commencing three months from the beginning of such Interest Period).

(e)    Default Rate.  Anything herein to the contrary notwithstanding and to the extent authorized by applicable Laws, if an Event of Default shall occur, upon the election of the Administrative Agent or the Required Lenders (i) the principal of each Loan and the unpaid interest thereon shall bear interest, until paid, at the Default Rate, (ii) the fee for the aggregate undrawn amount of all issued and outstanding Letters of Credit shall be increased by two percent (2%) in excess of the rate otherwise applicable thereto, and (iii) in the case of any other amount not paid when due from the Borrowers hereunder or under any other Loan Document, such amount shall bear interest at the Default Rate; provided that, during an Event of Default under Section 7.1 or 7.12 hereof, the applicable Default Rate shall apply without any election, notice or action on the part of the Administrative Agent or any Lender.

(f)    Limitation on Interest.

(i)    Generally.  In no event shall the rate of interest hereunder exceed the maximum rate allowable by Law.  Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal 

57

of the Loans or, if it exceeds such unpaid principal, refunded to the applicable Borrower.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (A) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (B) exclude voluntary prepayments and the effects thereof, and (C) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations.

(ii)    Foreign Jurisdiction Interest.  In the event that any provision of this Agreement or any other Loan Documents would obligate the Canadian Borrower to make any payment of interest or other amount payable to any Lender in an amount or calculated at a rate which would be prohibited by Law or would result in a receipt by such Lender of interest at a criminal or prohibited rate (as such terms are construed under the Criminal Code (Canada) or any other applicable Law), then notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with the same effect as if adjusted at the Closing Date to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by law or so result in a receipt by such Lender of interest at a criminal or prohibited rate, such adjustment to be effected to the extent necessary in each case, as follows: (A) by reducing any fees and other amounts which would constitute interest for the purposes of Section 347 of the Criminal Code (Canada) or any other applicable Law; (B) by reducing the amount or rate of interest exigible under this Article II; and (C) any amount or rate of interest referred to in this Section 2.5 shall be determined in accordance with generally accepted actuarial practices and principles over the maximum term of this Agreement (or over such shorter term as may be required by Section 347 of the Criminal Code (Canada) or any other applicable Law) and, in the event of a dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by the Administrative Agent shall be conclusive for the purposes of such determination, absent manifest error.

Section 2.6.  Evidence of Indebtedness.

(a)    Revolving Loans.

(i)    US Revolving Loans.  Upon the request of a Revolving Lender, to evidence the obligation of the US Borrower to repay the portion of the US Revolving Loans made by such Revolving Lender and to pay interest thereon, the US Borrower shall execute a US Revolving Credit Note, payable to the order of such Revolving Lender in the principal amount equal to its Applicable Commitment Percentage of the Revolving Amount, or, if less, the aggregate unpaid principal amount of US Revolving Loans made by such Revolving Lender; provided that the failure of a Revolving Lender to request a US Revolving Credit Note shall in no way detract from the US Borrower’s obligations to such Revolving Lender hereunder.

(ii)    Canadian Revolving Loans.  Upon the request of a Revolving Lender, to evidence the obligation of the Canadian Borrower to repay the portion of the Canadian Revolving Loans made by such Revolving Lender and to pay interest thereon, the Canadian 

58

Borrower shall execute a Canadian Revolving Credit Note, payable to the order of such Revolving Lender in the principal amount equal to its Applicable Commitment Percentage of the Canadian Revolving Amount, or, if less, the aggregate unpaid principal amount of Canadian Revolving Loans made by such Revolving Lender; provided that the failure of a Revolving Lender to request a Canadian Revolving Credit Note shall in no way detract from the Canadian Borrower’s obligations to such Revolving Lender hereunder.

(b)    Swing Loans.

(i)    US Swing Loans.  Upon the request of the Swing Line Lender, to evidence the obligation of the US Borrower to repay the US Swing Loans and to pay interest thereon, the US Borrower shall execute a US Swing Line Note, payable to the order of the Swing Line Lender in the principal amount of the US Swing Line Commitment, or, if less, the aggregate unpaid principal amount of US Swing Loans made by the Swing Line Lender; provided that the failure of the Swing Line Lender to request a US Swing Line Note shall in no way detract from the US Borrower’s obligations to the Swing Line Lender hereunder.

(ii)    Canadian Swing Loans.  Upon the request of the Swing Line Lender, to evidence the obligation of the Canadian Borrower to repay the Canadian Swing Loans and to pay interest thereon, the Canadian Borrower shall execute a Canadian Swing Line Note, payable to the order of the Swing Line Lender in the principal amount of the Canadian Swing Line Commitment, or, if less, the aggregate unpaid principal amount of Canadian Swing Loans made by the Swing Line Lender; provided that the failure of the Swing Line Lender to request a Canadian Swing Line Note shall in no way detract from the Canadian Borrower’s obligations to the Swing Line Lender hereunder.

(c)    US Term Loan.  Upon the request of a US Term Lender, to evidence the obligation of the US Borrower to repay the portion of the US Term Loan made by such US Term Lender and to pay interest thereon, the US Borrower shall execute a US Term Note, payable to the order of such US Term Lender in the principal amount of its Applicable Commitment Percentage of the US Term Loan Commitment; provided that the failure of such US Term Lender to request a US Term Note shall in no way detract from the US Borrower’s obligations to such US Term Lender hereunder.

(d)    Canadian Term Loan.  Upon the request of a Canadian Term Lender, to evidence the obligation of the Canadian Borrower to repay the portion of the Canadian Term Loan made by such Canadian Term Lender and to pay interest thereon, the Canadian Borrower shall execute a Canadian Term Note, payable to the order of such Canadian Term Lender in the principal amount of its Applicable Commitment Percentage of the Canadian Term Loan Commitment; provided that the failure of such Canadian Term Lender to request a Canadian Term Note shall in no way detract from the Canadian Borrower’s obligations to such Canadian Term Lender hereunder.

Section 2.7.  Notice of Loans and Credit Events; Funding of Loans.

(a)    Notice of Loans and Credit Events.  The Administrative Borrower, through an Authorized Officer, shall provide to the Administrative Agent a Notice of Loan prior to (i) 11:00 

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A.M. (Eastern time) on the proposed date of borrowing of, or conversion of a Loan to, a Base Rate Loan, (ii) 11:00 A.M. (Eastern time) three Business Days prior to the proposed date of borrowing of, continuation of, or conversion of a Loan to, a Eurodollar Loan, (iii) 11:00 A.M. (Eastern time) on the proposed date of borrowing of, or conversion of a Loan to, a Daily LIBOR Loan, and (iv) 2:00 P.M. (Eastern time) on the proposed date of borrowing of a Swing Loan (or such later time as agreed to from time to time by the Swing Line Lender).  An Authorized Officer of the Administrative Borrower may verbally request a Loan, so long as a Notice of Loan is received by the end of the same Business Day, and, if the Administrative Agent or any Lender provides funds or initiates funding based upon such verbal request, the Borrowers shall bear the risk with respect to any information regarding such funding that is later determined to have been incorrect.  The Borrowers shall comply with the notice provisions set forth in Section 2.2A(b) and 2.2B(b) hereof with respect to Letters of Credit.

(b)    Funding of Loans.  The Administrative Agent shall notify the appropriate Lenders of the date, amount and Interest Period (if applicable) promptly upon the receipt of a Notice of Loan (other than for a Swing Loan, or a Revolving Loan to be funded as a Swing Loan), and, in any event, by 2:00 P.M. (Eastern time) on the date such Notice of Loan is received.  On the date that the Credit Event set forth in such Notice of Loan is to occur, each such Revolving Lender shall provide to the Administrative Agent, not later than 3:00 P.M. (Eastern time), the amount in Dollars in federal or other immediately available funds, required of it.  If the Administrative Agent shall elect to advance the proceeds of such Loan prior to receiving funds from such Revolving Lender, the Administrative Agent shall have the right, upon prior notice to the Administrative Borrower, to debit any account of the appropriate Borrower or otherwise receive such amount from the appropriate Borrower, promptly after demand, in the event that such Revolving Lender shall fail to reimburse the Administrative Agent in accordance with this subsection (b).  The Administrative Agent shall also have the right to receive interest from such Revolving Lender at the Federal Funds Effective Rate in the event that such Revolving Lender shall fail to provide its portion of the Loan on the date requested and the Administrative Agent shall elect to provide such funds.

(c)    Conversion and Continuation of Loans.

(i)    At the request of the Administrative Borrower to the Administrative Agent, subject to the notice and other provisions of this Agreement, the appropriate Lenders shall convert a Base Rate Loan or a Daily LIBOR Loan to one or more Eurodollar Loans at any time and shall convert a Eurodollar Loan to a Base Rate Loan or a Daily LIBOR Loan on any Interest Adjustment Date applicable thereto.  US Swing Loans may be converted by the Swing Line Lender to US Revolving Loans in accordance with Section 2.2A(c)(ii) hereof.  Canadian Swing Loans may be converted by the Swing Line Lender to Canadian Revolving Loans in accordance with Section 2.2B(c)(ii) hereof.

(ii)    At the request of the Administrative Borrower to the Administrative Agent, subject to the notice and other provisions of this Agreement, the appropriate Lenders shall continue one or more Eurodollar Loans as of the end of the applicable Interest Period as a new Eurodollar Loan with a new Interest Period; provided that if the Administrative Borrower fails to elect to continue any Eurodollar Loan then outstanding prior to the end 

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of Interest Period applicable thereto, then at the end of such Interest Period such Eurodollar Loan shall continue in accordance with the definition of “Interest Period”. 

(d)    Minimum Amount.  Each request for:

(i)    a Base Rate Loan shall be in an amount of not less than One Hundred Thousand Dollars ($100,000), increased by increments of Fifty Thousand Dollars ($50,000);

(ii)    a Eurodollar Loan or Daily LIBOR Loan shall be in an amount of not less than Two Hundred Fifty Thousand Dollars ($250,000), increased by increments of Fifty Thousand Dollars ($50,000); and

(iii)    a Swing Loan may be in any amount as may be agreed to by the Swing Line Lender.

(e)    Interest Periods.  The Administrative Borrower shall not request that Daily LIBOR Loans and Eurodollar Loans be outstanding for more than eight different interest periods at the same time.

Section 2.8.  Payment on Loans and Other Obligations.

(a)    Payments Generally.  Each payment made hereunder or under any other Loan Document by a Credit Party shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever.  To the extent that any payment by or on behalf of any Borrower is made to the Administrative Agent, to any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (i) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (ii) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect.  The obligations of the Lenders under clause (ii) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

(b)    Payments in Dollars.  All payments (including prepayments) to the Administrative Agent of the principal of or interest on each Loan or other payment, including but not limited to principal, interest, fees or any other amount owed by any Borrower under this Agreement, shall be made in Dollars.  All payments described in this subsection (b) shall be remitted to the Administrative Agent, at the address of the Administrative Agent for notices referred to in Section 11.4 hereof for the account of the appropriate Lenders (or the Issuing Lender or the Swing Line Lender, as 

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appropriate) not later than 11:00 A.M. (Eastern time) on the due date thereof in immediately available funds.  Any such payments received by the Administrative Agent (or the Issuing Lender or the Swing Line Lender) after 11:00 A.M. (Eastern time) shall be deemed to have been made and received on the next Business Day.

(c)    Payments to Lenders.  Upon the Administrative Agent’s receipt of payments hereunder, the Administrative Agent shall immediately distribute to the appropriate Lenders (except with respect to Swing Loans, which shall be paid to the Swing Line Lender and any Lender that has funded a participation in the Swing Loans, or, with respect to Letters of Credit, certain of which payments shall be paid to the Issuing Lender) their respective ratable shares, if any, of the amount of principal, interest, and commitment and other fees received by the Administrative Agent for the account of such Lender.  Payments received by the Administrative Agent shall be delivered to the Lenders in immediately available funds.  Each appropriate Lender shall record any principal, interest or other payment, the principal amounts of Base Rate Loans, Daily LIBOR Loans, Eurodollar Loans, Swing Loans and Letters of Credit, all prepayments and the applicable dates, including Interest Periods, with respect to the Loans made, and payments received by such Lender, by such method as such Lender may generally employ; provided that failure to make any such entry shall in no way detract from the obligations of any Borrower under this Agreement or any Note.  The aggregate unpaid amount of Loans, types of Loans, Interest Periods and similar information with respect to the Loans and Letters of Credit set forth on the records of the Administrative Agent shall be rebuttably presumptive evidence with respect to such information, including the amounts of principal, interest and fees owing to each Lender.

(d)    Timing of Payments.  Whenever any payment to be made hereunder, including, without limitation, any payment to be made on any Loan, shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next Business Day and such extension of time shall in each case be included in the computation of the interest payable on such Loan; provided that, with respect to a Eurodollar Loan, if the next Business Day shall fall in the succeeding calendar month, such payment shall be made on the preceding Business Day and the relevant Interest Period shall be adjusted accordingly.

Section 2.9.  Prepayment.

(a)    Right to Prepay.

(i)    Each Borrower shall have the right at any time or from time to time to prepay, on a pro rata basis for all of the appropriate Lenders (except with respect to Swing Loans, which shall be paid to the Swing Line Lender and any Revolving Lender that has funded a participation in such Swing Loan), all or any part of the principal amount of the Loans then outstanding, as designated by the Administrative Borrower (subject to subsection (d) below) representing the obligations under any Specific Commitment with the proceeds of such prepayment to be distributed on a pro rata basis to the holders of the Specific Commitment being prepaid.  Such payment shall include interest accrued on the amount so prepaid to the date of such prepayment and any amount payable under Article III hereof with respect to 

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the amount being prepaid.  Prepayments of Base Rate Loans and Daily LIBOR Loans shall be without any premium or penalty.

(ii)    Each Borrower shall have the right, at any time or from time to time, to prepay, for the benefit of the Swing Line Lender (and any Revolving Lender that has funded a participation in such Swing Loan), all or any part of the principal amount of the Swing Loans made to such Borrower then outstanding, as designated by the Administrative Borrower, plus interest accrued on the amount so prepaid to the date of such prepayment.

(b)    Notice of Prepayment.  The Administrative Borrower shall give the Administrative Agent irrevocable written notice of prepayment of (i) a Base Rate Loan, a Daily LIBOR Loan or Swing Loan by no later than 11:00 A.M. (Eastern time) on the Business Day on which such prepayment is to be made, and (ii) a Eurodollar Loan by no later than 1:00 P.M. (Eastern time) three Business Days before the Business Day on which such prepayment is to be made.  Swing Loans may be prepaid without advance notice if prepaid through a “sweep” cash management arrangement with the Administrative Agent.

(c)    Minimum Amount.  Each prepayment of a Loan shall be in the principal amount of not less than One Million Dollars ($1,000,000), or the principal amount of such Loan or, with respect to a Swing Loan, the principal balance of such Swing Loan, except in the case of a mandatory payment pursuant to Section 2.11(c) or Article III hereof.

(d)    Application of Prepayments.  Each voluntary and Mandatory prepayment of a Term Loan shall be applied to the principal installments thereof in the inverse order of their respective maturities.

Section 2.10.  Commitment and Other Fees .

(a)    Commitment Fee.  The US Borrower shall pay to the Administrative Agent, for the ratable account of the Revolving Lenders, as a consideration for the Revolving Credit Commitment, a commitment fee, for each day from the Closing Date through the last day of the Commitment Period, in an amount equal to (i) (A) the Revolving Amount at the end of such day, minus (B) the Revolving Credit Exposure (exclusive of the Swing Line Exposure) at the end of such day, multiplied by (ii) the Applicable Commitment Fee Rate in effect on such day divided by three hundred sixty (360).  The commitment fee shall be payable quarterly in arrears, commencing on March 30, 2018 and continuing on each Regularly Scheduled Payment Date thereafter, and on the last day of the Commitment Period.

(b)    Administrative Agent Fee.  The US Borrower shall pay to the Administrative Agent, for its sole benefit, the fees set forth in the Administrative Agent Fee Letter.

(c)    Collateral Audit and Appraisal Fees.  The US Borrower shall promptly reimburse the Administrative Agent, for its sole benefit, for all out-of-pocket expenses relating to (i) collateral field audits, (ii) fixed asset appraisals, and (iii) any other collateral assessment expenses, that may be conducted by or on behalf of the Administrative Agent.  The US Borrower shall promptly 

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reimburse the Administrative Agent for all reasonable and documented costs and expenses incurred in connection with (A) collateral field audits (which, other than during the continuance of an Event of Default, shall be conducted no more frequently than four times per year), (B) inventory appraisals (which, other than during the continuance of an Event of Default, shall be conducted no more frequently than two times per year), and (C) any other collateral assessment that may be conducted from time to time by or on behalf of the Administrative Agent, the scope and frequency of which shall be in the sole discretion of the Administrative Agent.

(d)    Authorization to Debit Account.  Each Borrower hereby agrees that the Administrative Agent has the right to debit from any Deposit Account of such Borrower, amounts due and owing to the Administrative Agent and the Lenders by such Borrower under this Agreement and the Loan Documents for payment of fees, expenses and other amounts incurred or owing in connection therewith.

Section 2.11.  Modifications to Commitment.

(a)    Optional Reduction of Revolving Credit Commitment.  The Administrative Borrower may at any time and from time to time permanently reduce in whole or ratably in part the Revolving Amount to an amount not less than the then existing Revolving Credit Exposure, by giving the Administrative Agent not fewer than three Business Days’ written notice of such reduction, provided that any such partial reduction shall be in an aggregate amount, for all of the Lenders, of not less than One Million Dollars ($1,000,000), increased in increments of Five Hundred Thousand Dollars ($500,000).  The Administrative Agent shall promptly notify each Revolving Lender of the date of each such reduction and such Revolving Lender’s proportionate share thereof.  After each such partial reduction, the commitment fees payable hereunder shall be calculated upon the Revolving Amount as so reduced.  If the Administrative Borrower reduces in whole the Revolving Credit Commitment, on the effective date of such reduction (the Borrowers having prepaid in full the unpaid principal balance, if any, of the Loans, together with all interest (if any) and commitment and other fees accrued and unpaid with respect thereto, and provided that no Letter of Credit Exposure or Swing Line Exposure shall exist), all of the Revolving Credit Notes shall be delivered to the Administrative Agent marked “Canceled” and the Administrative Agent shall redeliver such Revolving Credit Notes to the Administrative Borrower.  Any partial reduction in the Revolving Amount shall be effective during the remainder of the Commitment Period.  Upon each decrease of the Revolving Amount, the Total Commitment Amount shall be decreased by the same amount and the Canadian Revolving Amount shall be proportionally decreased.

(b)    Increase in Commitment.

(i)    At any time during the Commitment Increase Period, the Administrative Borrower may request that the Administrative Agent increase the Total Commitment Amount by (A) increasing the Revolving Amount, or (B) adding an additional term loan facility to this Agreement (the “Additional Term Loan Facility”) (which Additional Term Loan Facility shall be subject to subsection (c) below); provided that the aggregate amount of all increases (revolver and term) made pursuant to this subsection (b) shall not exceed Twenty-Five Million Dollars ($25,000,000).  Each such request for an increase shall be in an amount of 

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at least Seven Million Five Hundred Thousand Dollars ($7,500,000), and may be made by either (1) increasing, for one or more Revolving Lenders, with their prior written consent, their respective Revolving Credit Commitments, (2) adding a new commitment for one or more Lenders, with their prior written consent, with respect to the Additional Term Loan Facility, or (3) including one or more Additional Lenders, each with a new commitment (in a minimum amount of at least Seven Million Five Hundred Thousand Dollars ($7,500,000)) under the Revolving Credit Commitment or the Additional Term Loan Facility, as a party to this Agreement (each an “Additional Commitment” and, collectively, the “Additional Commitments”).  The US Borrower shall not request any increase pursuant to this subsection (b), and no such increase shall be permitted, if (y) a Default or an Event of Default shall then exist, or, after giving pro forma effect to any such increase, would exist, or (z) the Leverage Ratio would exceed 2.75 to 1.00 after giving pro forma effect to any such increase. For clarification purposes, nothing contained in this Section 2.11(b) shall be construed as a commitment by any Lender to make any Additional Commitment and any such commitment by a Lender shall be at such Lender’s sole and absolute discretion. 

(ii)    During the Commitment Increase Period, all of the Lenders agree that the Administrative Agent, in its sole discretion, may permit one or more Additional Commitments upon satisfaction of the following requirements: (A) each Additional Lender, if any, shall execute an Additional Lender Assumption Agreement, (B) the Administrative Agent shall provide to the US Borrower and each Lender a revised Schedule 1 to this Agreement, including revised Applicable Commitment Percentages for each of the Lenders, if appropriate, at least three Business Days prior to the date of the effectiveness of such Additional Commitments (each an “Additional Lender Assumption Effective Date”), and (C) the US Borrower shall (1) deliver to the Administrative Agent the resolutions of the board of directors of the US Borrower, in form and substance reasonably satisfactory to the Administrative Agent, evidencing approval of such increase and the consummation of the transactions contemplated thereby, (2) if requested by the Administrative Agent, deliver to the Administrative Agent an opinion of counsel with respect to such increase, in form and substance reasonably satisfactory to the Administrative Agent, and (3) execute and deliver to the Administrative Agent and the applicable Lenders such appropriate replacement or additional Notes as shall be required by the Administrative Agent (if Notes have been requested by such Lender or Lenders).  The Lenders hereby authorize the Administrative Agent to execute each Additional Lender Assumption Agreement on behalf of the Lenders.

(iii)    On each Additional Lender Assumption Effective Date and any other date on which any Specific Commitment is increased pursuant to this subsection (b), as appropriate, the Lenders shall make adjustments among themselves with respect to the Loans then outstanding and amounts of principal, interest, commitment fees and other amounts paid or payable with respect thereto as shall be necessary, in the opinion of the Administrative Agent, in order to reallocate among the applicable Lenders such outstanding amounts, based on the revised Applicable Commitment Percentages and to otherwise carry out fully the intent and terms of this Section 2.11(b) and Section 11.9(b)(ii) hereof (and the US Borrower shall pay to the applicable Lenders any amounts that would be payable pursuant to Section 3.3 hereof if such adjustments among the applicable Lenders would cause a prepayment of 

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one or more Fixed Rate Loans).  In connection therewith, it is understood and agreed that the Maximum Amount of any Lender will not be increased (or decreased except pursuant to subsection (a) hereof) without the prior written consent of such Lender.  At the time of any such increase, at the request of the Administrative Agent, the applicable Credit Parties and the Lenders shall enter into an amendment to evidence such increase and to address related provisions as deemed necessary or appropriate by the Administrative Agent.  Upon each increase of the Revolving Amount or the addition of the Additional Term Loan Facility, the Total Commitment Amount shall be increased by the same amount.

(c)    Additional Term Loan Facility.

(i)    The Additional Term Loan Facility (A) shall rank pari passu in right of payment with the Revolving Loans, the US Term Loan and the Canadian Term Loan; (B) shall mature on the same date as the US Term Loan (but may have amortization prior to such date); (C) shall be treated substantially the same as (and in any event no more favorably than) the Revolving Loans and the Term Loans, including, without limitation, market interest rates for such Additional Term Loan Facility and amortization consistent with that in effect for the US Term Loan; provided that (1) in the event that the interest rate margins for such Additional Term Loan Facility are higher than the interest rate margins for the Term Loans by more than (in either case) fifty (50.00) basis points, then the interest rate margins for the Term Loans shall be increased to the extent necessary so that such interest rate margins are equal to the interest rate margins for such Additional Term Loan Facility minus fifty (50.00) basis points, and (2) in determining the interest rate margins applicable to the Additional Term Loan Facility and the Term Loans (x) customary arrangement or commitment fees payable to a lead arranger (or its Affiliates) in connection therewith or to one or more arrangers (or their affiliates) of any Additional Term Loan Facility shall be excluded, (y) any original issue discount and upfront fees paid to the lenders thereunder shall be included (with any original issue discount being equated to interest based on assumed four-year life to maturity or, if shorter, the actual weighted average life to maturity) and (z) if such Additional Term Loan Facility includes an interest rate floor greater than the applicable interest rate floor under any existing Term Loan, such difference between interest rate floors shall be equated to the applicable interest rate margin for purposes of determining whether an increase to the interest rate margin under such existing Term Loan shall be required; and (D) shall made to the US Borrower.  

(ii)    An Additional Term Loan Facility may be added hereunder pursuant to an amendment or restatement (an “Additional Term Loan Facility Amendment”) of this Agreement and, as appropriate, the other Loan Documents, executed by the US Borrower, each Lender providing a commitment with respect to the Additional Term Loan Facility, each Additional Lender providing a commitment with respect to the Additional Term Loan Facility, and the Administrative Agent.  Notwithstanding anything herein to the contrary, the Additional Term Loan Facility Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent, to effect the provisions of this Section 2.11(b) and (c) (including, without limitation, amendments to 

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the definitions in this Agreement and Section 8.7 hereof for the purpose of treating such Additional Term Loan Facility pari passu with the US Term Loan). 

Section 2.12.  Computation of Interest and Fees.  

(a)    Generally.  With the exception of Base Rate Loans, interest on Loans, Letter of Credit fees, Related Expenses and commitment and other fees and charges hereunder shall be computed on the basis of a year having three hundred sixty (360) days and calculated for the actual number of days elapsed.  With respect to Base Rate Loans, interest shall be computed on the basis of a year having three hundred sixty-five (365) days or three hundred sixty-six (366) days, as the case may be, and calculated for the actual number of days elapsed.

(b)    Interest Act (Canada).  For purposes of disclosure pursuant to the Interest Act (Canada), the rate of interest payable on any basis other than a full calendar year may be determined by multiplying the applicable interest rate by a fraction, the numerator of which is the actual number of days in the period in which interest is payable and the denominator of which is three hundred sixty-five (365) days or three hundred sixty-six (366) days, as the case may be.

Section 2.13.  Mandatory Payments.

(a)    Revolving Credit Facility.  

(i)    Revolving Credit Exposure.  If, at any time, the Revolving Credit Exposure shall exceed the Revolving Credit Commitment, the US Borrower shall, as promptly as practicable, but in no event later than the next Business Day, pay an aggregate principal amount of the Revolving Loans sufficient to bring the Revolving Credit Exposure within the Revolving Credit Commitment.  

(ii)    Canadian Revolving Credit Exposure.  If, at any time, the Canadian Revolving Credit Exposure shall exceed the Canadian Revolving Credit Commitment, the Canadian Borrower shall, as promptly as practicable, but in no event later than the next Business Day, pay an aggregate principal amount of the Canadian Revolving Loans sufficient to bring the Canadian Revolving Credit Exposure within the Canadian Revolving Credit Commitment.

(b)    Swing Line Exposure.  

(i)    Swing Line Exposure Generally.  If, at any time, the Swing Line Exposure shall exceed the Swing Line Commitment, the US Borrower shall, as promptly as practicable, but in no event later than the next Business Day, pay an aggregate principal amount of the US Swing Loans sufficient to bring the Swing Line Exposure within the Swing Line Commitment.  

(ii)    Canadian Swing Line Exposure.  If, at any time, the Canadian Swing Line Exposure shall exceed the Canadian Swing Line Commitment, the Canadian Borrower shall, 

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as promptly as practicable, but in no event later than the next Business Day, pay an aggregate principal amount of the Canadian Swing Loans sufficient to bring the Canadian Swing Line Exposure within the Canadian Swing Line Commitment.  

(c)    Mandatory Prepayments.  The applicable Borrowers shall, until each Term Loan is paid in full, make Mandatory Prepayments (each a “Mandatory Prepayment”) in accordance with the following provisions:  

(i)    Sale of Domestic Assets.  Upon the sale or other disposition of any assets by the US Borrower or Domestic Subsidiary to any Person other than to another Company or in the ordinary course of business, and, to the extent the proceeds of such sale or other disposition are in excess of One Hundred Seventy-Five Thousand Dollars ($175,000) during any fiscal year of the US Borrower and are not to be reinvested in fixed assets or other similar assets within (A) one hundred eighty (180) days of such sale or other disposition or (B) if committed to be reinvested pursuant to a binding agreement within such 180 day period, two hundred seventy (270) days of such sale or other disposition, the US Borrower shall make a Mandatory Prepayment, on the date of such sale or other disposition, in an amount equal to one hundred percent (100%) of the proceeds of such disposition net of amounts required to pay taxes and reasonable costs applicable to such sale or disposition.  Notwithstanding the foregoing, the US Borrower shall not be required to make a Mandatory Prepayment to the extent that such proceeds are received as a result of the sale of any of the two 3 cavity tools used to produce 4’ x 8’ sheets of plastic lattice for Universal Forest Products owned by the US Borrower on the Closing Date (or replacements thereof) (the “UFP Tools”). 

(ii)    Sale of Foreign Assets.  Upon the sale or other disposition of any assets by the Canadian Borrower or a Foreign Subsidiary to any Person other than to another Company or in the ordinary course of business, and, to the extent the proceeds of such sale or other disposition are in excess of One Hundred Seventy-Five Thousand Dollars ($175,000)  during any fiscal year of the US Borrower and are not to be reinvested in fixed assets or other similar assets within (A) one hundred eighty (180) days of such sale or other disposition or (B) if committed to be reinvested pursuant to a binding agreement within such 180 day period, two hundred seventy (270) days of such sale or other disposition, the Canadian Borrower shall make a Mandatory Prepayment, on the date of such sale or other disposition, in an amount equal to one hundred percent (100%) of the proceeds of such disposition net of amounts required to pay taxes and reasonable costs applicable to such sale or disposition. Notwithstanding the foregoing, the Canadian Borrower shall not be required to make a Mandatory Prepayment to the extent that such proceeds are received as a result of the sale of any of the UFP Tools.

(iii)    Material Domestic Recovery Event.  Within ten days after the occurrence of a Material Domestic Recovery Event, the US Borrower shall furnish to the Administrative Agent written notice thereof.  Within forty-five (45) days after such Material Recovery Event, the US Borrower shall notify the Administrative Agent of the US Borrower’s determination as to whether or not to replace, rebuild or restore the affected property (a “Material Domestic Recovery Determination Notice”).  If the US Borrower decides not to 

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replace, rebuild or restore such property, or if the US Borrower has not delivered the Material Domestic Recovery Determination Notice within forty-five (45) days after such Material Domestic Recovery Event, then the proceeds of insurance paid in connection with such Material Domestic Recovery Event, when received, shall be paid as a Mandatory Prepayment.  If the US Borrower decides to replace, rebuild or restore such property, then any such replacement, rebuilding or restoration must be (A) commenced within six months of the date of the Material Domestic Recovery Event, and (B) substantially completed within twelve (12) months of such commencement date or such longer period of time necessary to complete the work with reasonable diligence and approved in writing by the Administrative Agent, in its reasonable discretion, with such casualty insurance proceeds and other funds available to the appropriate Companies for replacement, rebuilding or restoration of such property.  Any amounts of such insurance proceeds in connection with such Material Domestic Recovery Event not applied to the costs of replacement or restoration shall be applied as a Mandatory Prepayment.

(iv)    Material Foreign Recovery Event.  Within ten days after the occurrence of a Material Foreign Recovery Event, the Administrative Borrower shall furnish to the Administrative Agent written notice thereof.  Within forty-five (45) after such Material Recovery Event, the Administrative Borrower shall notify the Administrative Agent of the Borrowers’ determination as to whether or not to replace, rebuild or restore the affected property (a “Material Foreign Recovery Determination Notice”).  If the Borrowers decide not to replace, rebuild or restore such property, or if the Administrative Borrower has not delivered the Material Foreign Recovery Determination Notice within forty-five (45) days after such Material Foreign Recovery Event, then the proceeds of insurance paid in connection with such Material Foreign Recovery Event, when received, shall be paid as a Mandatory Prepayment.  If the Borrowers decide to replace, rebuild or restore such property, then any such replacement, rebuilding or restoration must be (A) commenced within six months of the date of the Material Foreign Recovery Event, and (B) substantially completed within twelve (12) months of such commencement date or such longer period of time necessary to complete the work with reasonable diligence and approved in writing by the Administrative Agent, in its reasonable discretion, with such casualty insurance proceeds and other funds available to the appropriate Companies for replacement, rebuilding or restoration of such property.  Any amounts of such insurance proceeds in connection with such Material Foreign Recovery Event not applied to the costs of replacement or restoration shall be applied as a Mandatory Prepayment.  

(v)    Additional Domestic Indebtedness.  If, at any time, any of the US Borrower or a Domestic Subsidiary shall incur Indebtedness other than Indebtedness permitted pursuant to Section 5.8 hereof (which other Indebtedness shall not be incurred without the prior written consent of the Administrative Agent and the Required Lenders), the US Borrower shall make a Mandatory Prepayment, on the date that such Indebtedness is incurred, in an amount equal to one hundred percent (100%) of the net cash proceeds of such Indebtedness, net of costs and expenses related thereto.

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(vi)    Additional Foreign Indebtedness.  If, at any time, the Canadian Borrower or any Foreign Guarantor of Payment shall incur Indebtedness other than Indebtedness permitted pursuant to Section 5.8 hereof (which other Indebtedness shall not be incurred without the prior written consent of the Administrative Agent and the Required Lenders), the Canadian Borrower shall make a Mandatory Prepayment, on the date that such Indebtedness is incurred, in an amount equal to one hundred percent (100%) of the net cash proceeds of such Indebtedness, net of costs and expenses related thereto.

(d)    Application of Mandatory Prepayments.

(i)    Involving a Company Prior to an Event of Default.  So long as no Event of Default shall have occurred, (A) each Mandatory Prepayment required to be made pursuant to subsection (c)(i), (iii) or (v) hereof shall be applied to the Term Loans, on a pro rata basis between the US Term Loan and the Canadian Term Loan, and (B) each Mandatory Prepayment required to be made pursuant to subsection (c)(ii), (iv) or (vi) hereof shall be applied to the Canadian Term Loan.

(ii)    Involving a Company After an Event of Default.  

(A)    Domestic Mandatory Prepayments.  If an Event of Default shall have occurred and be continuing each Mandatory Prepayment required to be made pursuant to subsection (c)(i), (iii) or (v) hereof shall be applied, on a pro rata basis among: (1) the Revolving Amount (with payments to be made in the following order: Revolving Loans, Swing Loans, and to be held by the Administrative Agent in a special account as security for any Letter of Credit Exposure pursuant to subsection (iii) hereof), (2) the unpaid principal balance of the US Term Loan, and (3) the unpaid principal balance of the Canadian Term Loan.  Unless otherwise agreed by the Required Lenders, the Revolving Credit Commitment shall be permanently reduced by the amount of such Mandatory Prepayment allocated thereto, whether or not there shall be any Credit Exposure thereunder; provided that, if there shall be no Credit Exposure under any Specific Commitment, the then remaining Mandatory Prepayment shall be paid to the other Specific Commitments.

(B)    Foreign Mandatory Prepayments.  If an Event of Default shall have occurred and be continuing each Mandatory Prepayment required to be made pursuant to subsection (c)(ii), (iv) or (vi) hereof shall be applied, on a pro rata basis among: (1) the Canadian Revolving Amount (with payments to be made in the following order: Canadian Revolving Loans, Canadian Swing Loans, and to be held by the Administrative Agent in a special account as security for any Canadian Letter of Credit Exposure pursuant to subsection (iii) hereof), and (2) the unpaid principal balance of the Canadian Term Loan.  Unless otherwise agreed by the Required Lenders, the Canadian Revolving Credit Commitment shall be permanently reduced by the amount of such Mandatory Prepayment allocated thereto, whether or not there shall be any Credit Exposure thereunder; provided that, if there shall be no Credit Exposure under any Specific Commitment which constitutes Foreign Obligations, 

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the then remaining Mandatory Prepayment shall be paid to the other Specific Commitments which constitute Foreign Obligations.

(iii)    Involving Letters of Credit.  Any amounts to be distributed for application to a Revolving Lender’s liabilities with respect to any Letter of Credit Exposure as a result of a Mandatory Prepayment shall be held by the Administrative Agent in an interest bearing trust account (the “Special Trust Account”) as collateral security for such liabilities until a drawing on any Letter of Credit, at which time such amounts, together with interest accrued thereon, shall be released by the Administrative Agent and applied to such liabilities.  If any such Letter of Credit shall expire without having been drawn upon in full, the amounts held in the Special Trust Account with respect to the undrawn portion of such Letter of Credit, together with interest accrued thereon, shall be applied by the Administrative Agent in accordance with the provisions of subsections (i) and (ii) above.

(e)    Mandatory Payments Generally.  Unless otherwise designated by the Administrative Borrower, each Mandatory Prepayment made with respect to a Specific Commitment pursuant to subsection (a) or (c) hereof shall be applied in the following order: (i) first, to the outstanding Base Rate Loans, (ii) second, to the outstanding Daily LIBOR Loans, and (iii) third to the outstanding Eurodollar Loans, provided that, in each case, if the outstanding principal amount of any Eurodollar Loan shall be reduced to an amount less than the minimum amount set forth in Section 2.7(d) hereof as a result of such prepayment, then such Eurodollar Loan shall be converted into a Base Rate Loan on the date of such prepayment.  Any prepayment of a Eurodollar Loan pursuant to this Section 2.13 shall be subject to the prepayment provisions set forth in Article III hereof.

Section 2.14.  Cash Collateral.  At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent or the Issuing Lender (with a copy to the Administrative Agent), the US Borrower (and the Canadian Borrower with respect to any Canadian Letter of Credit Exposure) shall Cash Collateralize the Issuing Lender’s Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 11.10(a)(iv) hereof and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount. 

(a)    Grant of Security Interest.  The US Borrower (and the Canadian Borrower with respect to any Canadian Letter of Credit Exposure), and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grant to the Administrative Agent, for the benefit of the Issuing Lender, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lender’s obligation to fund participations in respect of the Letter of Credit Exposure, to be applied pursuant to subsection (b) below.  If, at any time, the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent and the Issuing Lender as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the US Borrower (or the Canadian Borrower with respect to any Canadian Letter of Credit Exposure) will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by such Defaulting Lender).

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(b)    Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 2.14 or Section 11.10 in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of the Letter of Credit Exposure (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

(c)    Termination of Requirement.  Cash Collateral (or the appropriate portion thereof) provided to reduce the Issuing Lender’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.14 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent and the Issuing Lender that there exists excess Cash Collateral; provided that (A) subject to Section 11.10 hereof, the Person providing Cash Collateral and the Issuing Lender may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations, and (B) the extent that such Cash Collateral was provided by the US Borrower (or the Canadian Borrower with respect to any Canadian Letter of Credit Exposure), such Cash Collateral shall remain subject to any security interest granted pursuant to the Loan Documents.

Section 2.15.  Liability of Borrowers.

(a)    Liability.  Each Borrower hereby authorizes the Administrative Borrower to request Loans or Letters of Credit hereunder.  The US Borrower acknowledges and agrees that the Administrative Agent and the Lenders are entering into this Agreement at the request of the US Borrower and with the understanding that the US Borrower is and shall remain fully liable, jointly and severally, for payment in full of the Secured Obligations (including the Secured Obligations of the Canadian Borrower through Article X hereof), and any other amount payable under this Agreement and the other Loan Documents.  The US Borrower agrees that it is receiving or will receive a direct pecuniary benefit for each Loan made or Letter of Credit issued hereunder (including Loans and Letters of Credit made to the Canadian Borrower).

(b)    Appointment of Administrative Borrower.  Each Borrower hereby irrevocably appoints the Administrative Borrower as the borrowing agent and attorney-in-fact for all Borrowers, which appointment shall remain in full force and effect unless and until the Administrative Agent shall have received prior written notice signed by each Borrower that such appointment has been revoked and that another Borrower has been appointed the Administrative Borrower.  Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower to (i) provide the Administrative Agent with all notices with respect to Loans and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement, (ii) take such action as the Administrative Borrower deems appropriate on its behalf to obtain Loans and Letters of Credit, and (iii) exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement.

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(c)    Waivers of Each Borrower.  In the event that any obligation of the US Borrower under this Agreement is deemed to be an agreement by the US Borrower to answer for the debt or default of another Credit Party or as an hypothecation of property as security therefor, the US Borrower represents and warrants that (i) no representation has been made to the US Borrower as to the creditworthiness of such other Credit Party, and (ii) the US Borrower has established adequate means of obtaining from such other Credit Party on a continuing basis, financial or other information pertaining to such other Credit Party’s financial condition.  Each Borrower expressly waives, except as expressly required under this Agreement, diligence, demand, presentment, protest and notice of every kind and nature whatsoever, consents to the taking by the Administrative Agent and the Lenders of any additional security of another Credit Party for the obligations secured hereby, or the alteration or release in any manner of any security of another Credit Party now or hereafter held in connection with the Obligations, and consents that the Administrative Agent, the Lenders and any other Credit Party may deal with each other in connection with such obligations or otherwise, or alter any contracts now or hereafter existing between them, in any manner whatsoever, including without limitation the renewal, extension, acceleration or changes in time for payment of any such obligations or in the terms or conditions of any security held.  The Administrative Agent and the Lenders are hereby expressly given the right, at their option, to proceed in the enforcement of any of the Obligations independently of any other remedy or security they may at any time hold in connection with such obligations secured and it shall not be necessary for the Administrative Agent and the Lenders to proceed upon or against or exhaust any other security or remedy before proceeding to enforce their rights against any Borrower.  Each Borrower further waives any right of subrogation, reimbursement, exoneration, contribution, indemnification, setoff or other recourse in respect of sums paid to the Administrative Agent and the Lenders by any other Credit Party until such time as the Commitment has been terminated and the Secured Obligations have been repaid in full.

(d)    Liability of Canadian Borrower.  Anything herein to the contrary notwithstanding, the Canadian Borrower shall not at any time be liable for the Indebtedness of the US Borrower under this Agreement (exclusive of Foreign Obligations that are guaranteed by the US Borrower under this Agreement).

(e)    Swap Obligations Keepwell Provision.  The US Borrower hereby jointly and severally, absolutely, unconditionally and irrevocably, undertakes to provide such funds or other support as may be needed from time to time by each other Credit Party in order for such Credit Party to honor its obligations under the Loan Documents in respect of the Swap Obligations. The Canadian Borrower, to the extent that it is an “eligible contract participant” as defined in the Commodity Exchange Act, hereby jointly and severally, absolutely, unconditionally and irrevocably, undertakes to provide such funds or other support as may be needed from time to time by each Foreign Guarantor of Payment in order for such Foreign Guarantor of Payment to honor its obligations under the Loan Documents in respect of the Swap Obligations.  The obligations of each such Borrower under this Section 2.15(e) shall remain in full force and effect until all Secured Obligations are paid in full.  The Borrowers intend that this Section 2.15(e) constitute, and this Section 2.15(e) shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Credit Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

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ARTICLE III.  ADDITIONAL PROVISIONS RELATING TO
 
EURODOLLAR LOANS AND DAILY LIBOR LOANS; INCREASED CAPITAL; TAXES

Section 3.1.  Requirements of Law.

(a)    If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Eurodollar Rate or Daily LIBOR Rate) or the Issuing Lender;

(ii)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B)  Excluded Taxes and (C) Connection Income Taxes) on any Loan, Letter of Credit, or commitment or other obligation hereunder, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii)    impose on any Lender or the Issuing Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing is to increase the cost to such Lender of making, converting into, continuing or maintaining such Loans or issuing or participating in Letters of Credit, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the US Borrower (and the Canadian Borrower with respect to applicable Foreign Obligations) shall pay to such Lender, promptly after receipt of a written request therefor, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable.  If any Lender becomes entitled to claim any additional amounts pursuant to this subsection (a), such Lender shall promptly notify the Administrative Borrower (with a copy to the Administrative Agent) of the event with reasonable detail by reason of which it has become so entitled.

(b)    If any Lender shall have determined that, after the Closing Date, a Change in Law regarding capital adequacy or liquidity, or liquidity requirements, or in the interpretation or application thereof by a Governmental Authority or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy or liquidity (whether or not having the force of law) from any Governmental Authority shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder, or under or in respect of any Letter of Credit, to a level below that which such Lender or such corporation could have achieved but for such Change in Law (taking into consideration the policies of such Lender or such corporation with respect to capital adequacy and liquidity), then from time to time, upon submission by such Lender to the Administrative Borrower (with a copy to the Administrative Agent) of a written request therefor (which shall include the method for calculating such amount and reasonable detail with respect to such calculation), the US 

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Borrower (and the Canadian Borrower with respect to applicable Foreign Obligations) shall promptly pay or cause to be paid to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction.

(c)    A certificate as to any additional amounts payable pursuant to this Section 3.1 submitted by any Lender to the Administrative Borrower, together with a reasonably detailed calculation and description of such amounts contemplated by this Section 3.1 (with a copy to the Administrative Agent) shall be rebuttably presumptive evidence of the amounts so payable.  In determining any such additional amounts, such Lender may use any method of averaging and attribution that it (in its reasonable credit judgment) shall deem applicable.  The obligations of the Borrowers pursuant to this Section 3.1 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

Section 3.2.  Taxes.

(a)    Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.  Any and all payments by or on account of any obligation of any Credit Party under any Loan Document shall be made without set off, counterclaim, deduction or withholding for, and free and clear of any present or future, Taxes, except as required by applicable Laws.  If any applicable Laws (as determined in the reasonable discretion of the applicable Withholding Agent) require the deduction or withholding of any Tax (including, without limitation, both United States federal backup withholding and withholding taxes) from any such payment by the applicable Withholding Agent then (i) the applicable Withholding Agent shall withhold or make such deductions in amounts as determined by the applicable Withholding Agent in its reasonable discretion based in part upon the information and documentation it has received pursuant to subsection (e) below, (ii) the applicable Withholding Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with applicable Laws, and (iii) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable to the applicable Recipient by the applicable Credit Party shall be increased as necessary so that, after any required withholding or the making of all required deductions (including, without limitation, any such withholdings and deductions applicable to additional sums payable under this Section 3.2), the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(b)    Payment of Other Taxes by the Credit Parties.  Without limiting the provisions of subsection (a) above, the Credit Parties shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or, at the option of the Administrative Agent, timely reimburse the Administrative Agent for the payment of, any Other Taxes.

(c)    Tax Indemnifications.

(i)    Each of the Credit Parties shall, and does hereby, jointly and severally indemnify each Recipient, and shall make payment in respect thereof within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on, attributable to or payable under this Section 3.2) payable or 

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paid by the Administrative Agent or such Recipient, or required to be withheld or deducted from a payment to the Administrative Agent or such Recipient, 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.  A certificate as to the amount of such payment or liability delivered to the Administrative Borrower by a Lender or the Issuing Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Lender, shall be conclusive absent manifest error.

(ii)    Each Lender and the Issuing Lender shall, and does hereby, severally indemnify, and shall make payment in respect thereof within ten (10) days after demand therefor, (A) the Administrative Agent against any Indemnified Taxes attributable to such Lender or the Issuing Lender (but only to the extent that any Credit Party has not already indemnified the Administrative Agent for such Indemnified Taxes and, without limiting the obligation of the Credit Parties to do so), (B) the Administrative Agent against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.9(d) hereof relating to the maintenance of a Participant Register, and (C) the Administrative Agent against any Excluded Taxes attributable to such Lender or the Issuing Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan 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 any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender and the Issuing Lender hereby authorize the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or the Issuing lender, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this subpart (ii).

(d)    Evidence of Payments.  As soon as practicable after any payment of Taxes by any Credit Party to a Governmental Authority, as provided in this Section 3.2, the Borrowers shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)    Status of Lenders; Tax Documentation.

(i)    Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Administrative Borrower and the Administrative Agent, at the time or times reasonably requested by the Administrative Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Administrative 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 Lender, if reasonably requested by the Administrative Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the 

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Administrative Borrower or the Administrative Agent as will enable the Administrative Borrower or the Administrative Agent to determine whether or not such Lender 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 Section 3.2(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if, in the Lender’s reasonable judgment, such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense, or would materially prejudice the legal or commercial position of such Lender.

(ii)    Without limiting the generality of the foregoing, in the event that any Borrower is a U.S. Person,

(A)    any Lender that is a U.S. Person shall deliver to the Administrative Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable written request of the Administrative Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B)    any Foreign Lender in respect of such applicable Borrower shall, to the extent it is legally entitled to do so, deliver to the Administrative 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 Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Administrative Borrower or the Administrative Agent), whichever of the following is applicable:

(1)    in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (y) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty, and (z) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN-E (or W-8BEN, as applicable) 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)    executed originals of IRS Form W-8ECI;

(3)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (y) a certificate substantially in the form of Exhibit H-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) 

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of the Code, a “10 percent shareholder” of such 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 (z) executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable); or

(4)    to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or W-8BEN, as applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit H-2 or Exhibit H-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if, the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate, substantially in the form of Exhibit H-4 hereto on behalf of each such direct and indirect partner;

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Administrative 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 Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Administrative Borrower or the Administrative Agent), executed copies (or originals, as required) 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 Administrative Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D)    if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Administrative Borrower and the Administrative Agent at the time or times prescribed by Law and at such time or times reasonably requested by the Administrative 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 Administrative Borrower or the Administrative Agent as may be necessary for the Borrowers and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this subpart (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

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(iii)    Each Lender agrees that if, any form or certification it previously delivered pursuant to this Section 3.2 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Administrative Borrower and the Administrative Agent in writing of its legal inability to do so.

(f)    Treatment of Certain Refunds.  Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or the Issuing Lender, or have any obligation to pay to any Lender or the Issuing Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or the Issuing Lender, as the case may be.  If any Recipient receives a refund of any Taxes as to which it has been indemnified by any Credit Party or with respect to which any Credit Party has paid additional amounts pursuant to this Section 3.2, it shall pay to such Credit Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by such Credit Party under this Section 3.2 with respect to the Taxes giving rise to such refund); net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that each Credit Party, upon the request of the Recipient, agrees to repay the amount paid over to such Credit Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this subsection, in no event will the applicable Recipient be required to pay any amount to such Credit Party pursuant to this Section 3.2(f) the payment of which would place the Recipient in a less favorable net after-Tax position than such Recipient 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 Section 3.2(f) shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its Taxes that it deems confidential) to any Credit Party or any other Person.

(g)    Survival.  Each party’s obligations under this Section 3.2 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender or the Issuing Lender, the termination of the Commitment and the repayment, satisfaction or discharge of all other Obligations.

Section 3.3.  Funding Losses.  The US Borrower (and the Canadian Borrower, to the extent relating to applicable Foreign Obligations) agree to indemnify each Lender, promptly after receipt of a written request therefor, and to hold each Lender harmless from, any loss or expense that such Lender may sustain or incur as a consequence of (a) default by a Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans after such Borrower has given a notice (including a written or verbal notice that is subsequently revoked) requesting the same in accordance with the provisions of this Agreement, (b) default by a Borrower in making any prepayment of or conversion from Eurodollar Loans after such Borrower has given a notice (including a written or verbal notice that is subsequently revoked) thereof in accordance with the provisions of this Agreement, (c) the making of a prepayment of a Eurodollar Loan on a day that is not the last day of an Interest Period applicable thereto, (d) any conversion of a Eurodollar Loan to a Base Rate Loan or a Daily LIBOR Loan on a day that is not the last day of an Interest Period applicable thereto, 

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or (e) any compulsory assignment of such Lender’s interests, rights and obligations under this Agreement pursuant to Section 3.6, 11.3(c) or 11.10(d) hereof.  Such indemnification shall be in an amount equal to the excess, if any, of (i) the amount of interest (with no additional premium or penalty thereon) that would have accrued on the amounts so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) or in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the appropriate London interbank market, along with any administration fee charged by such Lender.  A certificate as to any amounts payable pursuant to this Section 3.3 submitted to the Administrative Borrower (with a copy to the Administrative Agent) by any Lender, together with a reasonably detailed calculation and description of such amounts (with a copy to the Administrative Agent) by any Lender shall be rebuttably presumptive evidence of the amount so payable.  The obligations of the Borrowers pursuant to this Section 3.3 shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.

Section 3.4.  Eurodollar Rate or Daily LIBOR Rate Lending Unlawful; Inability to Determine Rate.

(a)    If any Lender shall determine (which determination shall, upon notice thereof to the Administrative Borrower and the Administrative Agent, be conclusive and binding on the Borrowers) that, after the Closing Date, (i) the introduction of or any change in or in the interpretation of any Law makes it unlawful, or (ii) any Governmental Authority asserts that it is unlawful, for such Lender to make or continue any Loan as, or to convert (if permitted pursuant to this Agreement) any Loan into, a Eurodollar Loan or a Daily LIBOR Loan, the obligations of such Lender to make, continue or convert into any such Eurodollar Loan or Daily LIBOR Loan shall, upon such determination, be suspended until such Lender shall notify the Administrative Agent that the circumstances causing such suspension no longer exist, and all outstanding Eurodollar Loans and Daily LIBOR Loans payable to such Lender shall automatically convert (if conversion is permitted under this Agreement) into a Base Rate Loan, or be repaid (if no conversion is permitted) at the end of the then current Interest Periods with respect thereto or sooner, if required by Law or such assertion.

(b)    If the Administrative Agent or the Required Lenders determine that for any reason adequate and reasonable means do not exist for determining the Eurodollar Rate or the Daily LIBOR Rate with respect to a proposed Daily LIBOR Loan, for any requested Interest Period with respect to a proposed Eurodollar Loan, or that the Eurodollar Rate or Daily LIBOR Rate for any requested Interest Period with respect to a proposed Eurodollar Loan or the Daily LIBOR Rate with respect to a proposed Daily LIBOR Loan does not adequately and fairly reflect the cost to the Lenders of funding such Loan, the Administrative Agent will promptly so notify the Administrative Borrower and each Lender.  Thereafter, the obligation of the Lenders to make or maintain such Eurodollar Loan or Daily LIBOR Loan shall be suspended until the Administrative Agent (upon the instruction 

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of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Administrative Borrower may revoke any pending request for a borrowing of, conversion to or continuation of such Eurodollar Loan or Daily LIBOR Loan or, failing that, will be deemed to have converted such request into a request for a borrowing of a Base Rate Loan in the amount specified therein

Section 3.5.  Discretion of Lenders as to Manner of Funding.  Notwithstanding any provision of this Agreement to the contrary, each Lender shall be entitled to fund and maintain its funding of all or any part of such Lender’s Loans in any manner such Lender deems to be appropriate; it being understood, however, that for the purposes of this Agreement all determinations hereunder shall be made as if such Lender had actually funded and maintained each Eurodollar Loan during the applicable Interest Period for such Loan through the purchase of deposits having a maturity corresponding to such Interest Period and bearing an interest rate equal to the Eurodollar Rate for such Interest Period.

Section 3.6.  Replacement of Lenders.  The Administrative Borrower shall be permitted to replace any Lender (or Participant) that requests reimbursement for amounts owing pursuant to Section 3.1 or 3.2(a) hereof, or asserts its inability to make a Eurodollar Loan or Daily LIBOR Loan pursuant to Section 3.4 hereof; provided that (a) such replacement does not conflict with any Law, (b) no Default or Event of Default shall have occurred and be continuing at the time of such replacement, (c) the replacement financial institution shall purchase, at par, all Loans and other amounts owing to such replaced Lender (or Participant) on or prior to the date of replacement and assume all commitments and obligations of such replaced Lender (or Participant), (d) the appropriate Borrower shall be liable to such replaced Lender (or Participant) under Section 3.3 hereof if any Eurodollar Loan owing to such replaced Lender (or Participant) shall be purchased other than on the last day of the Interest Period relating thereto, (e) the replacement Lender, if not already a Lender, shall be satisfactory to the Administrative Agent (or, in the case of a replacement Participant, satisfactory to the applicable participating Lender), (f) the replaced Lender (or Participant) shall be obligated to make such replacement in accordance with the provisions of Section 11.9 hereof (provided that the appropriate Borrower (or the succeeding Lender, if such Lender is willing) shall be obligated to pay the assignment fee referred to therein), and (g) until such time as such replacement shall be consummated, the appropriate Borrower shall pay all additional amounts (if any) required pursuant to Section 3.1 or 3.2(a) hereof, as the case may be; provided that a Lender (or Participant) shall not be required to make any such assignment if, prior thereto, as a result of a waiver by such Lender (or Participant)  or otherwise, the circumstances entitling any Borrower to replace such Lender (or Participant) cease to apply. 

ARTICLE IV.  CONDITIONS PRECEDENT

Section 4.1.  Conditions to Each Credit Event.  The obligation of the Lenders, the Issuing Lender and the Swing Line Lender to participate in any Credit Event shall be conditioned, in the case of each Credit Event, upon the following:

(a)    all conditions precedent as listed in Sections 4.2 and 4.3 hereof shall have been satisfied prior to or as of the first Credit Event occurring on or after the Closing Date;

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(b)    the Administrative Borrower shall have submitted a Notice of Loan (or with respect to a Letter of Credit, complied with the provisions of Section 2.2A(b)(ii) or 2.2B(b)(ii) hereof, as applicable) and otherwise complied with Section 2.7 hereof;

(c)    no Default or Event of Default shall then exist or immediately after such Credit Event would exist; and

(d)    each of the representations and warranties contained in Article VI hereof (other than such representations and warranties of the Canadian Borrower and its Subsidiaries with respect to the Credit Event occurring on the Closing Date, which representations and warranties shall be true to the extent set forth in the certificate referenced in Section 4.3(r) hereof) shall be true in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or Material Adverse Effect in the text thereof) as if made on and as of the date of such Credit Event, except to the extent that any thereof expressly relate to an earlier date, in which case such representations and warranties shall have been true in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or Material Adverse Effect in the text thereof) as of such earlier date.

Each request by the Administrative Borrower for a Credit Event shall be deemed to be a representation and warranty by the Borrowers (other than the Canadian Borrower with respect to the Credit Event occurring on the Closing Date which shall be deemed to be a representation and warranty to the extent set forth in the certificate referenced in Section 4.3(r) hereof) as of the date of such request as to the satisfaction of the conditions precedent specified in subsections (c) and (d) above.  Notwithstanding the failure to satisfy the conditions precedent set forth in this Section 4.1, unless otherwise directed by the Required Lenders, the Administrative Agent may, but shall have no obligation to, continue to make Loans, and the Issuing Lender may, but shall have no obligation to, issue, amend, renew or extend, or cause to be issued, amended, renewed or extended, any Letter of Credit for the ratable account and risk of the Lenders from time to time, if the Administrative Agent believes that making such Loans or issuing, amending, renewing or extending, or causing the issuance, amendment, renewal or extension of, any such Letter of Credit is in the best interests of the Lenders.

Section 4.2.  Certain Closing Deliveries Under Original Credit Agreement.  The following deliveries have been made (and were satisfactory to the Administrative Agent) prior to the Closing Date in connection with the Original Credit Agreement.

(a)    Domestic Real Estate Matters.  The US Borrower delivered a fully executed original of the Mortgage with respect to the Domestic Real Property located in Columbus, Ohio (the “Ohio Real Property”).

(b)    Landlords’ Waivers, Mortgagees’ Waivers and Processors’ Waivers.  The US Borrower delivered (i) a Landlord’s Waiver and a mortgagee’s waiver, if applicable, each in form and substance reasonably satisfactory to the Administrative Agent, for each location of the US 

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Borrower or a Domestic Guarantor of Payment as requested by the Administrative Agent where any of the Collateral is located, unless such location is owned by the Company that owns the Collateral located there, and (ii) a Processor’s Waiver as requested by the Administrative Agent for each location where the US Borrower or a Domestic Guarantor of Payment maintains any inventory with a processor, together with filed U.C.C. Financing Statements, in form and substance reasonably satisfactory to Agent.

Section 4.3.  Conditions to the First Credit Event.  The Borrowers shall cause the following conditions to be satisfied on or prior to the Closing Date.  The obligation of the Lenders, the Issuing Lender and the Swing Line Lender to participate in the first Credit Event is subject to the Borrowers satisfying each of the following conditions prior to or concurrently with such Credit Event:

(a)    Notes as Requested.  The US Borrower shall have executed and delivered to (i) each Revolving Lender requesting a US Revolving Credit Note such Revolving Lender’s US Revolving Credit Note, (ii) each US Term Lender requesting a US Term Note such US Term Lender’s US Term Note, and (iii) the Swing Line Lender the US Swing Line Note, if requested by the Swing Line Lender.  The Canadian Borrower shall have executed and delivered to (i) each Revolving Lender requesting a Canadian Revolving Credit Note such Revolving Lender’s Canadian Revolving Credit Note, (ii) the Swing Line Lender the Canadian Swing Line Note, if requested by the Swing Line Lender, and (iii) each Canadian Term Lender requesting a Canadian Term Note such Canadian Term Lender’s Canadian Term Note.

(b)    Guaranties of Payment.  Each Guarantor of Payment shall have executed and delivered to the Administrative Agent, for the benefit of the Lenders, a Guaranty of Payment, in form and substance reasonably satisfactory to the Administrative Agent.

(c)    Security Agreements.  Each Borrower and each Guarantor of Payment shall have executed and delivered to the Administrative Agent, for the benefit of the Lenders, a Security Agreement and such other documents or instruments, as may be required by the Administrative Agent to create or perfect the Liens of the Administrative Agent, for the benefit of the Lenders, in the assets of such Credit Party, all to be in form and substance reasonably satisfactory to the Administrative Agent.

(d)    Pledge Agreements.  Each Credit Party that has a Subsidiary shall have (i) executed and delivered to the Administrative Agent, for the benefit of the Lenders, a Pledge Agreement, in form and substance reasonably satisfactory to the Administrative Agent, with respect to the Pledged Securities, (ii) executed and delivered to the Administrative Agent, for the benefit of the Lenders, appropriate transfer powers for each of the Pledged Securities that are certificated, (iii) delivered to the Administrative Agent, for the benefit of the Lenders, the Pledged Securities (to the extent such Pledged Securities are certificated), and (iv) delivered to the Administrative Agent any other documentation (including legal opinions from Canadian counsel) reasonably required by the Administrative Agent regarding the perfection of the security interest of the Administrative Agent, for the benefit of the Lenders, in such Pledged Securities.

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(e)    Real Estate Matters.  With respect to each parcel of the Domestic Real Property of the US Borrower or a Domestic Guarantor of Payment, the US Borrowers shall have delivered to the Administrative Agent:

(i)    evidence to the Administrative Agent’s satisfaction in its sole discretion that no portion of such Domestic Real Property is located in a Special Flood Hazard Area or is otherwise classified as Class A or Class BX on the Flood Maps maintained by the Federal Emergency Management Agency; and

(ii)    an executed original amendment to the Mortgage with respect to the Ohio Real Property; and

(iii)     with respect to the Domestic Real Property of the US Borrower located in Gaffney, South Carolina:

(A)    an executed original Mortgage with respect to such Domestic Real Property; and

(B)    an ALTA Mortgagee’s Loan Policy of title insurance insuring the Mortgage to be a valid, first-priority lien on such Domestic Real Property, free and clear of all defects and encumbrances except such matters of record as accepted by the Administrative Agent, in its reasonable discretion, and shown as Permitted Encumbrances in “Exhibit B” to the Mortgage, and otherwise reasonably acceptable to the Administrative Agent issued to the Administrative Agent, for the benefit of the Lenders, by a title company acceptable to the Administrative Agent, in an amount no less than, and having provisions, endorsements and affirmative insurance reasonably consistent with, the loan policy obtained for such Domestic Real Property in connection with the Original Credit Agreement (with updates to account for this Credit Agreement and the nature of the US Borrower’s interest in such the Domestic Real Property).

(f)    Collateral Access Agreements.  The Borrowers shall have delivered the applicable Collateral Access Agreement (as defined in the Security Agreements) in form and substance satisfactory to the Administrative Agent, for each location of a Credit Party in the United States or Canada where a Collateral Access Agreement would be required, as of the Closing Date, pursuant to the terms of Section 8(e) of any Security Agreement, unless the such Collateral Access Agreement was previously delivered pursuant to Section 4.2 hereof.
 
(g)    Delivery of Pledged Notes.  With respect to any Pledged Notes, each Borrower, as appropriate, has executed an appropriate endorsement on (or separate from) each such Pledged Note and has deposited such Pledged Note with the Administrative Agent.

(h)    Lien Searches.  With respect to the property interests owned, leased or otherwise held by any Credit Party, and any other property securing the Obligations, the Borrowers shall have caused to be delivered to the Administrative Agent (i) the results of Uniform Commercial Code and 

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PPSA lien searches, satisfactory to the Administrative Agent, (ii) the results of federal, state and provincial tax lien and judicial lien searches and pending litigation and bankruptcy searches, in each case satisfactory to the Administrative Agent, and (iii) termination statements, discharges or the like reflecting the termination and discharge of all filings or registrations previously filed by any Person and not expressly permitted pursuant to Section 5.9 hereof. 

(i)    Officer’s Certificate, Resolutions, Organizational Documents.  The Borrowers shall have delivered to the Administrative Agent an officer’s certificate (or comparable domestic or foreign documents) certifying the names of the officers of each Credit Party authorized to sign the Loan Documents, together with the true signatures of such officers and certified copies of (i) the resolutions of the board of directors (or comparable domestic or foreign documents) of such Credit Party evidencing approval of the execution, delivery and performance of the Loan Documents and the execution, delivery and performance of other Related Writings to which such Credit Party is a party, and the consummation of the transactions contemplated thereby, and (ii) the Organizational Documents of such Credit Party.

(j)    Good Standing and Full Force and Effect Certificates.  The Borrowers shall have delivered to the Administrative Agent a good standing certificate or full force and effect certificate (or comparable document, if neither certificate is available in the applicable jurisdiction), as the case may be, for each Credit Party, issued on or about the Closing Date by the Secretary of State (or comparable Governmental Authority) in the state or states (or other jurisdiction) where such Credit Party is (i) incorporated or formed and (ii) in such other jurisdictions where the conduct of its business requires such qualification, except where the failure to qualify, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(k)    Legal Opinion.  The Borrowers shall have delivered to the Administrative Agent opinions of counsel for each Credit Party, in form and substance reasonably satisfactory to the Administrative Agent.

(l)    Acquisition Documents.  The Administrative Borrower shall have provided to the Administrative Agent copies of the Horizon Plastics Acquisition Agreement and all material documents executed in connection therewith, certified by a Financial Officer as true and complete, which documents shall be in form and substance reasonably satisfactory to the Administrative Agent, including evidence that (i) the total Consideration for the Horizon Plastics Acquisition does not exceed Sixty-Six Million Dollars ($66,000,000), excluding any harmonized sales taxes payable in connection therewith, and (ii) the Acquisitions contemplated therein have been consummated, contemporaneously with the making of the first Credit Event, in accordance with the terms of the Horizon Plastics Acquisition Agreement and in compliance with applicable Law and regulatory approvals, all in form and substance reasonably satisfactory to the Administrative Agent.

(m)    Pro Forma Balance Sheet.  The Borrowers shall have delivered to the Administrative Agent a balance sheet (adjusted to give effect to the transactions contemplated by the Horizon Plastics Acquisition Documents) as of the Closing Date, to be in form and substance reasonably satisfactory to the Administrative Agent.

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(n)    Insurance Certificates.  The Borrowers shall have delivered to the Administrative Agent certificates of insurance on ACORD 25 and 27 or 28 form (or, in the case of the Canadian Borrower, otherwise in such form satisfactory to the Administrative Agent) and proof of endorsements satisfactory to the Administrative Agent, providing for adequate real property, personal property and liability insurance for each Company, with the Administrative Agent, on behalf of the Lenders, listed as mortgagee, lender’s loss payee and additional insured, as appropriate.

(o)    Quality of Earnings Report.  The Borrowers shall have delivered to the Administrative Agent a copy of the quality of earnings report prepared by an independent third party with respect to Horizon Plastics, in form and substance reasonably satisfactory to the Administrative Agent.  

(p)    Leverage Ratio.  The Administrative Borrower shall have delivered to the Administrative Agent and the Lenders evidence, certified by a Financial Officer and in form and substance reasonably satisfactory to the Administrative Agent, that the Leverage Ratio, as determined for the most recently completed four (4) fiscal quarters prior to the Closing Date, is no greater than 2.75 to 1.00 provided that, for purposes of calculating the Leverage Ratio under this Section 4.3(p), Consolidated Funded Indebtedness and Consolidated EBITDA shall be calculated to give pro forma effect to the Horizon Plastics Acquisition as if it had occurred on the first day of the relevant measurement period, the borrowing of the Loans being requested on the Closing Date and any repayment of Consolidated Indebtedness to be made on the Closing Date.

(q)    Administrative Agent Fee Letter, Closing Fee Letter and Other Fees.  The US Borrower shall have (i) executed and delivered to the Administrative Agent, the Administrative Agent Fee Letter and paid to the Administrative Agent, for its sole account, the fees stated therein, (ii) executed and delivered to the Administrative Agent, the Closing Fee Letter and paid to the Administrative Agent, for the benefit of the Lenders, the fees stated therein, and (iii) paid all legal fees and expenses of the Administrative Agent in connection with the preparation and negotiation of the Loan Documents.

(r)    Closing Certificate.  The Administrative Borrower shall have delivered to the Administrative Agent and the Lenders an officer’s certificate certifying that, as of the Closing Date, (i) all conditions precedent set forth in this Article IV have been satisfied (or waived in writing by the Administrative Agent), (ii) no Default or Event of Default exists nor immediately after the first Credit Event will exist, (iii) the Leverage Ratio, as calculated pursuant to Section 4.3(p) hereof, is no greater than 2.75 to 1.00, (iv) each of the representations and warranties contained in Article VI hereof (other than the representation and warranties of the Canadian Borrower and its Subsidiaries) are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or Material Adverse Effect in the text thereof) as of the Closing Date, except to the extent that any thereof expressly relate to an earlier date, in which case such representations and warranties shall have been true in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or Material Adverse Effect in the text thereof) as of such earlier date, (v) each of the representations and warranties contained in Article 3 of the Horizon Plastics Acquisition Agreement as are material to 

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the interests of the Administrative Agent and the Lenders are true and correct in all material respects (except that if any such representation or warranty contains any materiality qualifier, such representation or warranty shall be true and correct in all respects) but only to the extent that the US Borrower or the Canadian Borrower has the right to terminate its obligations under the Horizon Plastics Acquisition Agreement or to not consummate the Horizon Plastics Acquisition as a result of a breach of such representations and warranties or the failure of such representations and warranties to be true and correct as set forth above, and (vi) each of the Specified Representations are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or Material Adverse Effect in the text thereof) as of the Closing Date.

(s)    Letter of Direction.  The Borrowers shall have delivered to the Administrative Agent a letter of direction authorizing the Administrative Agent, on behalf of the Lenders, to disburse the proceeds of the Loans, which letter of direction includes the authorization to transfer funds under this Agreement and the wire instructions that set forth the locations to which such funds shall be sent.

(t)    No Material Adverse Change.  No material adverse change, in the opinion of the Administrative Agent, shall have occurred in the financial condition, operations or prospects of (i) the Companies, or (ii) Horizon Plastics, its Subsidiaries or their respective assets, in each case since December 31 2016.

(u)    Union Contract Negotiation.  The Administrative Agent shall have received evidence, in form and substance reasonably satisfactory to it, that the wages and other benefits being requested by (or on behalf of) the employees of Horizon Plastics and its Subsidiaries are not unreasonable, as determined by the Administrative Agent in its sole and absolute discretion.

(v)    Miscellaneous.  The Borrowers shall have provided to the Administrative Agent and the Lenders such other items and shall have satisfied such other conditions as may be reasonably required by the Administrative Agent or the Lenders.

Section 4.4.  Post-Closing Conditions.  On or before the date specified in this Section 4.4 (unless a longer period is agreed to in writing by the Administrative Agent, in its reasonable discretion), the Borrowers shall satisfy each of the following items specified in the subsections below: 

(a)    Mexican Security Agreement Documentation. 

(i)    Lien Searches.  No later than February 15, 2018, with respect to the chattels, including but not limited to tangible and intangible assets, personal property rights and proceeds physically located or registered in Mexico which are owned by any Domestic Credit Party and whose value exceeds One Hundred Thousand Dollars ($100,000) (each such Domestic Credit Party, a “Specified Credit Party”), the US Borrower shall have caused to be delivered to the Administrative Agent, a list of any filings and Liens from the Sole Registry of Security over Movable Assets (Registro Único de Garantías Mobiliarias) 

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(“RUG”), as issued by the RUG, on such Specified Credit Party and Core Mexico as the party having possession over such assets.

(ii)    Specified Credit Parties’ and Core Mexico Officers’ Certificates, Resolutions, Organizational Documents.  No later than February 15, 2018, the Specified Credit Parties and Core Mexico shall have delivered to the Administrative Agent an officer’s certificate, in form and substance reasonably satisfactory to the Administrative Agent, certifying the names of the officers of the Specified Credit Parties and Core Mexico authorized to sign the termination agreement to the Mexican 2008 Security Agreement and the Mexican Security Agreement, as the case may be, together with true signatures of such officers and notarial certified copies of: 

(A)     the resolutions of the partners, shareholders or comparable body or of the administration body (or comparable body) as necessary or required under applicable Law, of the Specified Credit Parties and Core Mexico evidencing approval of the execution, delivery and performance, as the case may be, of the termination agreement to the Mexican 2008 Security Agreement and the Mexican Security Agreement and the execution and performance of other Related Writings with respect thereto, and the consummation of the transactions contemplated thereby;

(B)     the resolutions by the Specified Credit Parties and Core Mexico, which contain the appointment of the officers of the Specified Credit Parties and Core Mexico to sign, as the case may be, the termination agreement to the Mexican 2008 Security Agreement, the Mexican Security Agreement, and the powers of attorney vested on such authorized signatories of the Specified Credit Parties and Core Mexico, in form and substance reasonably satisfactory to the Administrative Agent, and in respect of United States powers of attorney, duly notarized by a notary public licensed in the United States, apostilled and granted in accordance with the Washington Protocol on Uniformity of Powers of Attorney which are to be Utilized Abroad and afterwards notarized by a local notary public, and in respect of Core Mexico, duly notarized by a local notary public; and

(C)     the Organizational Documents of  the Specified Credit Parties and Core Mexico.

(iii)    Mexican Security Agreement.  No later than March 1, 2018, each Company party to the Mexican 2008 Security Agreement shall have executed and delivered to the Administrative Agent a termination agreement to the Mexican 2008 Security Agreement, and each Specified Credit Party and Core Mexico shall have executed and delivered to the Administrative Agent a Mexican Security Agreement with Core Mexico as the party having possession over such assets, provided that the termination agreement with respect to the Mexican 2008 Security Agreement and the new Mexican Security Agreement shall be memorialized in the same document as simultaneous agreements, duly reaffirmed before a Mexican public attestor (“fedatario público”), and such other documents or instruments as may be required by the Administrative Agent to create or perfect (if and to the extent 

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perfection is required pursuant to the Mexican Security Agreement) the Lien of the Administrative Agent (for the benefit of the Lenders) in all of the chattels, including but not limited to tangible and intangible assets, personal property, rights and proceeds physically located in Mexico (but excluding the interest rights of the Specified Credit Parties in the equity of Core Mexico) of the Specified Credit Parties and to register such Lien in the RUG, all to be in form and substance reasonably satisfactory to the Administrative Agent; provided that:

(A)    no later than fifteen (15) calendar days prior to the execution of the Mexican Security Agreement, the Specified Credit Parties shall have caused, instructed, and/or provided to the Administrative Agent and the relevant Mexican local public attestor, with instructions, documents, and information pertaining to the Specified Credit Parties and Core Mexico that may be required to the relevant Mexican public attestor for the reaffirmation of the termination agreement to the Mexican 2008 Security Agreement, the reaffirmation of the Mexico Security Agreement and/or to file a pre-emptive notice before the RUG on the Mexican Security Agreement, as the case may be, and within twenty-four (24) hours thereafter, shall have delivered to the Administrative Agent evidence of the filing of such pre-emptive notice before the RUG.

(B)    at the execution of the Mexican Security Agreement,  the Specified Credit Parties shall deliver to the Administrative Agent or provide the relevant Mexican public attestor, with instructions, documents, and information pertaining to the Specified Credit Parties that may be required, and take such other actions (including, without limitation, the filing of the Mexican Security Agreement for registration (as a first priority Lien) with the RUG on that same day), so that the relevant Mexican public attestor may provide to the Administrative Agent:

(1)    evidence from the Specified Credit Parties, in form and substance reasonably satisfactory to the Administrative Agent, that all registration fees for the filing of the cancellation of the termination agreement to the Mexican 2008 Security Agreement with the Public Registry of Property and Commerce of Matamoros, Tamaulipas and the filing of the Mexican Security Agreement with the RUG have been paid; 

(2)    a copy of the (i) evidence on the filing of termination agreement to the Mexican 2008 Security Agreement with the Public Registry of Property and Commerce of Matamoros, Tamaulipas; and (ii) electronic registration (boleta electrónica) from the RUG and an original counterpart of the public instrument issued by the Mexican public attestor formalizing the reaffirmation of the termination agreement to the Mexican 2008 Security Agreement and the reaffirmation of the Mexican Security Agreement (original del acta de ratificación del convenio de terminación de prenda sin transmisión de posesión y del contrato de prenda sin transmisión de posesión) within forty-eight (48) hours following the execution of the 

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termination agreement to the Mexican 2008 Security Agreement and the Mexican Security Agreement; and

(3)    a copy of the cancellation of the current insurance policy endorsement and appointment of KeyBank (as Administrative Agent) as first loss payee related to the Mexican 2008 Security Agreement, and a copy of the current insurance policy covering the pledged chattels, including but not limited to tangible and intangible assets, personal property, rights and proceeds under the Mexican Security Agreement, and an original insurance certificate and endorsement (endoso de la póliza de seguro) appointing KeyBank (as Administrative Agent) as first loss payee (beneficiario preferente) thereunder.

(iv)    Legal Opinion.  No later than March 1, 2018, the US Borrower shall have delivered to Lender an opinion of counsel for the Specified Credit Parties and Core Mexico, in form and substance reasonably satisfactory to the Administrative Agent.

(b)    Future Specified Credit Parties.   If, after the Closing Date, any Specified Credit Party is acquired, or any Domestic Subsidiary, which was not a Specified Credit Party on the Closing Date, becomes a Specified Credit Party, such Specified Credit Party shall notify the Administrative Agent and, within sixty (60) days of the request of the Administrative Agent, provide all of the documents and take all other steps as set forth in Section 4.4(a) above. 

ARTICLE V.  COVENANTS

Section 5.1.  Insurance.  Each Company shall at all times maintain insurance upon its Inventory, Equipment and other personal and real property (including, if applicable, insurance required by the National Flood Insurance Reform Act of 1994) in such form, written by such companies, in such amounts, for such periods, and against such risks as is reasonable and standard for other companies engaged in similar businesses as those of the Companies, with provisions satisfactory to the Administrative Agent for, with respect to Credit Parties, payment of all losses thereunder to the Administrative Agent, for the benefit of the Lenders, and such Company as their interests may appear (with lender’s loss payable and additional insured endorsements, as appropriate, in favor of the Administrative Agent, for the benefit of the Lenders), and, if required by the Administrative Agent, the Borrowers shall deposit the policies with the Administrative Agent.  Any such policies of insurance shall provide for no fewer than thirty (30) days prior written notice of cancellation to the Administrative Agent and the Lenders.  Any sums received by the Administrative Agent, for the benefit of the Lenders, in payment of insurance losses, returns, or unearned premiums under the policies shall be applied as set forth in Section 2.11(b) and (c) hereof.  The Administrative Agent is hereby authorized to act as attorney-in-fact for the Companies in obtaining, adjusting, settling and canceling such insurance and indorsing any drafts.  In the event of failure to provide such insurance as herein provided, the Administrative Agent may, at its option, provide such insurance and the Borrowers shall pay to the Administrative Agent, upon demand, the cost thereof.  Should the Borrowers fail to pay such sum to the Administrative Agent upon demand, interest shall 

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accrue thereon, from the date of demand until paid in full, at the Default Rate.  Within ten days of the Administrative Agent’s written request, the Borrowers shall furnish to the Administrative Agent such information about the insurance of the Companies as the Administrative Agent may from time to time reasonably request, which information shall be prepared in form and detail satisfactory to the Administrative Agent and certified by a Financial Officer.

Section 5.2.  Money Obligations.  Each Company shall pay in full (a) prior in each case to the date when penalties would attach, all material taxes, assessments and governmental charges and levies (except only those so long as and to the extent that the same shall be contested in good faith by appropriate and timely proceedings and for which adequate provisions have been established in accordance with GAAP) for which it may be or become liable or to which any or all of its properties may be or become subject; (b) in the case of the US Borrower and the Domestic Subsidiaries, all of their respective material wage obligations to their respective employees in compliance with the Fair Labor Standards Act (29 U.S.C. §§ 206‐207) or any comparable provisions and, in the case of the Canadian Borrower and the Foreign Subsidiaries, those obligations under foreign Laws with respect to employee source deductions, obligations and employer obligations to its employees; and (c) all of its other material obligations calling for the payment of money (except only those so long as and to the extent that the same shall be contested in good faith and for which adequate provisions have been established in accordance with GAAP) before such payment becomes overdue. 

Section 5.3.  Financial Statements and Information.

(a)    Quarterly Financials.  The Borrowers shall deliver to the Administrative Agent and the Lenders, within fifty (50) days after the end of each fiscal quarter of each fiscal year of the US Borrower (or, if earlier, within five days after the date on which the US Borrower shall be required to submit its Form 10-Q), balance sheets of the Companies as of the end of such period and statements of income (loss), stockholders’ equity and cash flow for the quarter and fiscal year to date periods, all prepared on a Consolidated and consolidating basis, in accordance with GAAP, and in form and detail satisfactory to the Administrative Agent and the Lenders and certified by a Financial Officer.

(b)    Annual Audit Report.  The Borrowers shall deliver to the Administrative Agent and the Lenders, within ninety-five (95) days after the end of each fiscal year of the US Borrower (or, if earlier, within five days after the date on which the US Borrower shall be required to submit its Form 10-K), an annual audit report of the Companies for that year prepared on a Consolidated and consolidating basis, in accordance with GAAP, and in form and detail satisfactory to the Administrative Agent and the Lenders and certified by an unqualified opinion of an independent public accountant satisfactory to the Administrative Agent, which report shall include balance sheets and statements of income (loss), stockholders’ equity and cash-flow for that period. 

(c)    Compliance Certificate.  The Borrowers shall deliver a Compliance Certificate to the Administrative Agent and the Lenders, concurrently with the delivery of the financial statements set forth in subsections (a) and (b) above, which Compliance Certificate shall contain calculations of the financial covenants set forth in Section 5.7 in form and detail reasonably satisfactory to the Administrative Agent.

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(d)    Management Reports.  The Borrowers shall deliver to the Administrative Agent and the Lenders, concurrently with the delivery of the quarterly and annual financial statements set forth in subsections (a) and (b) above, a copy of the summary report or summary letter prepared with respect to any management report, letter or similar writing furnished to the Companies by the accountants in respect of the systems, operations, financial condition or properties of the Companies.

(e)    Pro-Forma Projections.  The Borrowers shall deliver to the Administrative Agent and the Lenders, within ninety-five (95) days after the end of each fiscal year of the US Borrower, annual pro-forma projections of the Companies for the then current fiscal year and the next two succeeding fiscal years, to be in form and detail reasonably acceptable to the Administrative Agent (including, without limitation, pro-forma calculations of the financial covenants).  

(f)    Shareholder and SEC Documents.  The Borrowers shall deliver to the Administrative Agent and the Lenders, as soon as available, copies of all notices, reports, definitive proxy or other statements and other documents sent by the US Borrower to its shareholders, to the holders of any of its debentures or bonds or the trustee of any indenture securing the same or pursuant to which they are issued, or sent by the US Borrower (in final form) to any securities exchange or over the counter authority or system, or to the SEC or any similar federal agency having regulatory jurisdiction over the issuance of any Borrower’s securities (the “Shareholder Information”).  The Borrowers shall deliver the Administrative Agent, promptly after the sending or filing thereof, copies of all reports, notices, prospectuses and registration statements which any Borrower files with a securities commission or securities regulatory authority in any Province or Territory of Canada.

(g)    Financial Information of the Companies.  The Borrowers shall deliver to the Administrative Agent and the Lenders, within ten days of the written request of the Administrative Agent or any Lender, such other information about the financial condition, properties and operations of any Company, as the Administrative Agent or such Lender may from time to time reasonably request, which information shall be submitted in form and detail reasonably satisfactory to the Administrative Agent or such Lender and certified by a Financial Officer of the Company or Companies in question.

(h)    SEC Reporting.  Notwithstanding anything to the contrary contained in this Agreement:

(i)    The financial statements and reports required pursuant to Section 5.3(a) hereof shall, upon written notice of such filing from the US Borrower to the Administrative Agent, be deemed delivered to the Administrative Agent and the Lenders upon delivery of the US Borrower’s 10-Q report to the SEC for such fiscal quarter pursuant to the US Borrower’s public company reporting requirements (if such financial statements and reports shall be readily available to the Administrative Agent and Lenders).  In addition, upon the filing of the US Borrower’s 10-Q report with the SEC for any fiscal year, such report shall be deemed to satisfy the requirements of Section 5.3(a) hereof.

(ii)    The financial statements and reports required pursuant to Section 5.3(b) hereof shall, upon written notice of such filing from the US Borrower to the Administrative 

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Agent, be deemed delivered to the Administrative Agent and the Lenders upon delivery of the US Borrower’s 10-K report to the SEC for such fiscal year pursuant to the US Borrower’s public company reporting requirements (and such financial statements and reports shall be readily available to the Administrative Agent and Lenders).  In addition, upon the filing of the US Borrower’s 10-K report with the SEC for any fiscal year, such report shall be deemed to satisfy the requirements of Section 5.3(b) hereof.

(iii)    The Shareholders Information required pursuant to Section 5.3(f) hereof shall, upon notice of such filing from the US Borrower to the Administrative Agent, be deemed delivered to the Administrative Agent and the Lenders upon delivery of such Shareholder Information to the SEC pursuant to the US Borrower’s public company reporting requirements (if such Shareholder Information shall be readily available to the Administrative Agent and Lenders).  In addition, upon the filing of such Shareholder Information with the SEC, such documents shall be deemed to satisfy the requirements of Section 5.3(f) hereof.

Section 5.4.  Financial Records.  Each Company shall at all times maintain true and complete records and books of account, including, without limiting the generality of the foregoing, appropriate provisions for possible losses and liabilities, all in accordance with GAAP, and at all reasonable times (during normal business hours and upon notice to such Company) permit the Administrative Agent or any Lender, or any representative of the Administrative Agent or such Lender, to examine such Company’s books and records and to make excerpts therefrom and transcripts thereof.

Section 5.5.  Franchises; Change in Business.

(a)    Each Company (other than a Dormant Subsidiary) shall preserve and maintain at all times its existence, and its rights and franchises necessary for its business, except as otherwise permitted pursuant to Section 5.12 hereof.

(b)    No Company shall engage in any business if, as a result thereof, the general nature of the business of the Companies taken as a whole would be substantially changed from the general nature of the business the Companies are engaged in on the Closing Date.

Section 5.6.  ERISA Pension and Benefit Plan Compliance.  

(a)    Generally.

No Company shall incur any material accumulated funding deficiency within the meaning of ERISA, or any material liability to the PBGC, established thereunder in connection with any ERISA Plan.  The Borrowers shall furnish to the Administrative Agent and the Lenders (i) as soon as possible and in any event within thirty (30) days after any Company knows or has reason to know that any Reportable Event with respect to any ERISA Plan has occurred, a statement of a Financial Officer of such Company, setting forth details as to such Reportable Event and the action that such Company proposes to take with respect thereto, together with a copy of the notice of such Reportable Event given to the PBGC if a copy of such notice is available to such Company, and (ii) promptly 

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after receipt thereof a copy of any notice such Company, or any member of the Controlled Group may receive from the PBGC or the IRS with respect to any ERISA Plan administered by such Company; provided that this latter subpart shall not apply to notices of general application promulgated by the PBGC or the IRS or to letters or notices such as a favorable Determination Letter with respect to an ERISA Plan, which does not threaten a material liability to a Company. The Borrowers shall promptly notify the Administrative Agent of any material taxes assessed, proposed to be assessed or that the Borrowers have reason to believe may be assessed against a Company by the IRS with respect to any ERISA Plan.  As used in this Section 5.6(a), “material” means the measure of a matter of significance that shall be determined as being an amount equal to five percent (5%) of Consolidated Net Worth.  As soon as practicable, and in any event within thirty (30) days, after any Company shall become aware that an ERISA Event shall have occurred, such Company shall provide the Administrative Agent with notice of such ERISA Event with a certificate by a Financial Officer of such Company setting forth the details of the event and the action such Company or another Controlled Group member proposes to take with respect thereto.  The Borrowers shall, at the request of the Administrative Agent or any Lender, deliver or cause to be delivered to the Administrative Agent or such Lender, as the case may be, true and correct copies of any documents relating to the ERISA Plan of any Company.

(b)    Foreign Pension Plans and Benefit Plans.

(i)    For each existing, or hereafter adopted, Foreign Pension Plan, Canadian Pension Plan, Canadian MEPP and Foreign Benefit Plan, the Administrative Borrower and any appropriate Foreign Subsidiary shall in a timely fashion comply with and perform in all material respects all of its obligations under and in respect of such Foreign Pension Plan, Canadian Pension Plan, Canadian MEPP or Foreign Benefit Plan, including under any funding agreements and all applicable Laws (including any fiduciary, funding, investment and administration obligations).

(ii)    All employer or employee payments, contributions or premiums required to be remitted, paid to or in respect of each Foreign Pension Plan, Canadian Pension Plan, Canadian MEPP or Foreign Benefit Plan shall be paid or remitted by the Administrative Borrower and any appropriate Foreign Subsidiary in a timely fashion in accordance with the terms thereof, any funding agreements and all applicable Laws.

(iii)    The Administrative Borrower and any appropriate Foreign Subsidiary shall deliver to the Administrative Agent if so requested by the Administrative Agent, (A) copies of each annual and other return, report or valuation with respect to each Foreign Pension Plan or Canadian Pension Plan as filed with any applicable Governmental Authority; (B) promptly after receipt thereof, a copy of any material direction, order, notice, ruling or opinion that the Administrative Borrower and any appropriate Foreign Subsidiary may receive from any applicable Governmental Authority with respect to any Foreign Pension Plan or Canadian Pension Plan; and (C) notification within thirty (30) days of any increases having a cost to the Companies in excess of Two Hundred Fifty Thousand Dollars ($250,000) per annum in the aggregate, in the benefits of any existing Foreign Pension Plan, Canadian Pension Plan, Canadian MEPP or Foreign Benefit Plan, or the establishment of any new 

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Foreign Pension Plan, Canadian Pension Plan or Foreign Benefit Plan, or the commencement of contributions to any such plan to which the Companies were not previously contributing.

(iv)    As of the Closing Date, there is no Defined Benefit Plan contributed to by a Canadian Borrower.  Notwithstanding any other provision of this Agreement or any other Loan Document, no Foreign Subsidiary will (i) establish or contribute to any Defined Benefit Plan, or (ii) acquire an interest in any Person if such Person sponsors, administers, maintains or contributes to, or has any liability in respect of, any Defined Benefit Plan, without the written consent of the Administrative Agent.

Section 5.7.  Financial Covenants.

(a)    Leverage Ratio.  The Borrowers shall not suffer or permit at any time the Leverage Ratio to exceed (i) 3.50 to 1.00 on March 31, 2018 through March 30, 2019, (ii) 3.25 to 1.00 on March 31, 2019 through March 30, 2020, and (iii) 3.00 to 1.00 on March 31, 2020 and thereafter. 

(b)    Fixed Charge Coverage Ratio.  The Borrowers shall not suffer or permit at any time the Fixed Charge Coverage Ratio to be less than (i) 1.10 to 1.00 on March 31, 2018  through March 31, 2019, (ii) 1.15 to 1.00 on April 1, 2019 through March 31, 2020, and (ii) 1.20 to 1.00 on April 1, 2020 and thereafter.

Section 5.8.  Borrowing.  No Company shall create, incur or have outstanding any Indebtedness of any kind; provided that this Section 5.8 shall not apply to the following:

(a)    the Loans, the Letters of Credit and any other Indebtedness under this Agreement;

(b)    Attributable Indebtedness in respect of Capitalized Lease Obligations entered into by any Company for the purchase or lease of fixed assets (and refinancings of such loans or Capitalized Lease Obligations), which loans and Capitalized Lease Obligations shall only be secured by the fixed assets being purchased or leased, so long as the aggregate principal amount of all such loans and Capitalized Lease Obligations for all Companies shall not exceed Seven Hundred Fifty Thousand Dollars ($750,000) at any time outstanding; 

(c)    the Indebtedness existing on the Closing Date, in addition to the other Indebtedness permitted to be incurred pursuant to this Section 5.8, as set forth in Schedule 5.8 hereto (and any extension, renewal or refinancing thereof but only to the extent that the principal amount thereof does not increase after the Closing Date);

(d)    loans to, and guaranties of Indebtedness of, a Company from a Company so long as each such Company is the US Borrower or a Domestic Guarantor of Payment;

(e)    Indebtedness under any Hedge Agreement, so long as such Hedge Agreement shall have been entered into in the ordinary course of business and not for speculative purposes;

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(f)    Permitted Foreign Subsidiary Loans and Investments, so long as no Default or Event of Default shall then exist or would result therefrom; 

(g)    to the extent deemed Indebtedness, obligations of the Canadian Borrower incurred under the Xylem Factoring Agreement incurred in the ordinary course of business and consistent with past business practices of the Canadian Borrower and Horizon Plastics; and

(h)    other unsecured Indebtedness, in addition to the Indebtedness listed above, in an aggregate principal amount for all Companies not to exceed Five Hundred Thousand Dollars ($500,000) at any time outstanding.

Section 5.9.  Liens.  No Company shall create, assume or suffer to exist (upon the happening of a contingency or otherwise) any Lien upon any of its property or assets, whether now owned or hereafter acquired; provided that this Section 5.9 shall not apply to the following:

(a)    Liens for taxes, assessments or governmental charges or levies on such Company’s property or assets if, in each case, the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being actively contested in good faith by appropriate and timely proceedings and for which adequate reserves have been established in accordance with GAAP;

(b)    other statutory Liens (including Liens created pursuant to Michigan Compiled Laws Section 445.611 et seq.) incidental to the conduct of its business or the ownership of its property and assets that (i) were not incurred in connection with the borrowing of money or the obtaining of advances or credit, and (ii) do not in the aggregate materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business;

(c)    Liens on property or assets of a Subsidiary to secure obligations of such Subsidiary to a Borrower or a Guarantor of Payment;

(d)    any Lien granted to the Administrative Agent, for the benefit of the Lenders;

(e)    the Liens existing on the Closing Date as set forth in Schedule 5.9 hereto and replacements, extensions, renewals, refundings or refinancings thereof, but only to the extent that the amount of debt secured thereby shall not be increased;

(f)    purchase money Liens on fixed assets securing the loans and Capitalized Lease Obligations pursuant to Section 5.8(b) hereof, provided that such Lien is limited to the purchase price and only attaches to the property being acquired;

(g)    easements or other minor defects or irregularities in title of real property not interfering in any material respect with the use of such property in the business of any Company;

(h)    Liens arising out of deposits to secure the performance of bids, trade contracts (other than contracts for the payment of money), leases, licenses, franchises, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary 

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course of business in an aggregate amount, for all Companies, not in excess of Two Hundred Fifty Thousand Dollars ($250,000);

(i)    Liens arising with respect to rights of lessees or sublessees under operating leases in assets leased by a Company under an operating lease; 

(j)    Liens securing the Indebtedness permitted pursuant to Section 5.8(g) hereof, so long as such Liens attach only to the interests of the Canadian Borrower in the Accounts sold or otherwise transferred pursuant to the Xylem Factoring Agreement; 

(k)    other Liens, in addition to the Liens listed above, not incurred in connection with the borrowing of money, securing amounts, in the aggregate for all Companies, not to exceed Two Hundred Fifty Thousand Dollars ($250,000) at any time.

No Company shall enter into any contract or agreement (other than (i) a contract or agreement entered into in connection with the purchase or lease of fixed assets or equipment that prohibits Liens on such fixed assets or equipment or (ii) any agreement with a restriction that is not enforceable under Section 9-406, 9-407 or 9-408 of the U.C.C. or any laws of similar effect) that would prohibit the Administrative Agent or the Lenders from acquiring a security interest, mortgage or other Lien on, or a collateral assignment of, any of the property or assets of such Company.

Section 5.10.  Regulations T, U and X.  No Company shall take any action that would result in any non‐compliance of the Loans or Letters of Credit with Regulations T, U or X, or any other applicable regulation, of the Board of Governors of the Federal Reserve System.

Section 5.11.  Investments, Loans and Guaranties.  No Company shall (a) create, acquire or hold any Subsidiary, (b) make or hold any investment in any stocks, bonds or securities of any kind, (c) be or become a party to any joint venture or other partnership, (d) make or keep outstanding any advance or loan to any Person, or (e) be or become a Guarantor of any kind (other than a Guarantor of Payment under the Loan Documents); provided that this Section 5.11 shall not apply to the following:

(i)    any endorsement of a check or other medium of payment for deposit or collection through normal banking channels or similar transaction in the normal course of business;

(ii)    any investment in direct obligations of the United States or in certificates of deposit issued by a member bank (having capital resources in excess of Five Hundred Million Dollars ($500,000,000)) of the Federal Reserve System;

(iii)    any investment in commercial paper or securities that at the time of such investment is assigned the highest quality rating in accordance with the rating systems employed by either Moody’s or Standard & Poor’s;

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(iv)    the holding of each of the Subsidiaries listed on Schedule 6.1 hereto, and the creation, acquisition and holding of, and any investment in, any new Subsidiary after the Closing Date, so long as such new Subsidiary shall have been created, acquired or held, and investments made, in accordance with the terms and conditions of this Agreement;

(v)    loans to, investments in and guaranties of the Indebtedness of, a Company from or by a Company so long as each such Company is the US Borrower or a Domestic Guarantor of Payment;

(vi)    any advance or loan to an officer or employee of a Company as an advance on commissions, travel and other items in the ordinary course of such Company’s business, so long as all such advances and loans from all Companies aggregate not more than the maximum principal sum of One Hundred Thousand Dollars ($100,000) at any time outstanding; 

(vii)    the guaranty of the payment obligations of a Company under the Lease Agreement between Parque Internacional Escobedo S.A. de C.V., as lessor, and Horizon Plastics de Mexico S.A. de C.V., as lessee, effective as of October, 2017, and assumed by CC HPM, S. de R.L. de C.V. as such Lease Agreement may be amended, extended or replaced; so long as the amount of the payment obligations under such Lease Agreement does not exceed (A) Four Hundred Thousand Dollars ($400,000) in any fiscal year of the US Borrower, and (B) an aggregate amount of Two Million Dollars ($2,000,000) during the remaining term of such Lease Agreement; and

(viii)    any Permitted Investments or Permitted Foreign Subsidiary Loans and Investments, so long as no Default or Event of Default shall then exist or would result therefrom.

For purposes of this Section 5.11, the amount of any investment in equity interests shall be based upon the initial amount invested and shall not include any appreciation in value or return on such investment but shall take into account repayments, redemptions and return of capital.

Section 5.12.  Merger and Sale of Assets.  No Company shall merge, amalgamate or consolidate with any other Person, or sell, lease or transfer or otherwise dispose of any assets to any Person other than in the ordinary course of business, except that, if no Default or Event of Default shall then exist or immediately thereafter shall begin to exist:

(a)    the US Borrower or a Domestic Subsidiary Guarantor of Payment may merge, amalgamate or consolidate with any other Domestic Subsidiary (provided that (i) if one of such Companies is the US Borrower, the US Borrower shall be the continuing or surviving Company, and (ii) if at least one of such Companies is a Credit Party, a Credit Party shall be the continuing or surviving Person); 

(b)    the Canadian Borrower or a Foreign Subsidiary Guarantor of Payment may merge, amalgamate or consolidate with any other Foreign Subsidiary (provided that (i) if one of such 

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Companies is the Canadian Borrower, the Canadian Borrower shall be the continuing or surviving Company, and (ii) if at least one of such Companies is a Credit Party, a Credit Party shall be the continuing or surviving Person); 

(c)    a Non-Credit Party may merge, amalgamate or consolidate with any other Company (provided that if such Company is a Credit Party, such Credit Party shall be the continuing or surviving Company);

(d)    the US Borrower or any Domestic Guarantor of Payment may sell, lease, transfer or otherwise dispose of any of its assets to the US Borrower or any other Domestic Guarantor of Payment (provided that the US Borrower may not transfer all or substantially all of its assets pursuant to this subsection (d));

(e)    the Canadian Borrower or any Foreign Guarantor of Payment may sell, lease, transfer or otherwise dispose of any of its assets to any other Credit Party;

(f)    a Non-Credit Party may sell, lease, transfer or otherwise dispose of any of its assets to any other Company;

(g)    a Company may sell, lease, transfer or otherwise dispose of any assets that are obsolete or no longer useful in such Company’s business;

(h)    a Company may sell, lease, transfer or otherwise dispose of any assets in an amount not to exceed Five Hundred Thousand Dollars ($500,000) in any fiscal year so long as the net proceeds thereof are either reinvested in similar assets within one hundred eighty (180) days of such sale or other disposition or applied to the prepayment of obligations in accordance with Section 2.11(b) and (c) hereof; 

(i)    the sale or transfer of Accounts of the Canadian Borrower in the ordinary of course of business pursuant to the Xylem Factoring Agreement and consistent with past business practices of the Canadian Borrower and Horizon Plastics;

(j)    Acquisitions may be effected in accordance with the provisions of Section 5.13 hereof.

Section 5.13.  Acquisitions.  No Company shall effect an Acquisition; provided that a Credit Party may effect an Acquisition so long as:  

(a)    such Acquisition is the Horizon Plastics Acquisition and such Acquisition is consummated on the Closing Date; or

(b)    such Acquisition meets all of the following requirements:

(i)    in the case of an Acquisition that involves a merger, amalgamation or other combination including a Borrower, such Borrower shall be the surviving entity;

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(ii)    in the case of an Acquisition that involves a merger, amalgamation or other combination including a Credit Party (other than a Borrower), a Credit Party shall be the surviving entity;

(iii)    the business to be acquired shall be similar, or related to, or incidental to the lines of business of the Companies;

(iv)    no Default or Event of Default shall exist prior to, or after giving pro forma effect to, such Acquisition;

(v)    Borrowers shall have provided to the Administrative Agent and the Lenders, at least twenty (20) days prior to such Acquisition, historical financial statements of the target entity and a pro forma financial statement of the Companies accompanied by a certificate of a Financial Officer showing pro forma compliance with Section 5.7 hereof, both before and after giving effect to the proposed Acquisition;

(vi)    the aggregate Consideration paid for such Acquisition by the Companies shall not exceed, when combined with all other Acquisitions (other than the Horizon Plastics Acquisition), the aggregate amount of Seven Million Five Hundred Thousand Dollars ($7,500,000); 

(vii)    such Acquisition is not actively opposed by the board of directors (or similar governing body) of the selling Persons or the Persons whose equity interests are to be acquired; and

(viii)    the Leverage Ratio, calculated as of the most recently completed four fiscal quarters of the US Borrower, both prior to and after giving pro forma effect to such Acquisition, shall not exceed 2.75 to 1.00.

Section 5.14.  Notice.  The Administrative Borrower shall cause a Financial Officer of such Borrower to promptly notify the Administrative Agent and the Lenders, in writing, whenever any of the following shall occur:

(a)    a Default or Event of Default may occur hereunder or any representation or warranty made in Article VI hereof or elsewhere in this Agreement or in any Related Writing may for any reason cease in any material respect to be true and complete;

(b)    a Borrower learns of a litigation or proceeding against such Borrower before a court, administrative agency or arbitrator that, if successful, might have a Material Adverse Effect; or

(c)    a Borrower learns that there has occurred or begun to exist any event, condition or thing that is reasonably likely to have a Material Adverse Effect.

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Section 5.15.  Restricted Payments.  No Company shall make or commit itself to make any Restricted Payment at any time, except that, so long as no Default or Event of Default shall then exist or, after giving pro forma effect to such payment, thereafter shall begin to exist, the US Borrower may make Capital Distributions.

Section 5.16.  Environmental Compliance.  Each Company shall comply in all respects with any and all Environmental Laws and Environmental Permits, including, without limitation, all Environmental Laws in jurisdictions in which such Company owns or operates a facility or site, arranges for disposal or treatment of hazardous substances, solid waste or other wastes, accepts for transport any hazardous substances, solid waste or other wastes or holds any interest in real property or otherwise. The Administrative Borrower shall furnish to the Administrative Agent and the Lenders, promptly after receipt thereof, a copy of any notice any Company may receive from any Governmental Authority or private Person, or otherwise, that any material litigation or proceeding pertaining to any environmental, health or safety matter has been filed or is threatened against such Company, any real property in which such Company holds any interest or any past or present operation of such Company.  No Company shall allow the release or disposal of hazardous waste, solid waste or other wastes on, under or to any real property in which any Company holds any ownership interest or performs any of its operations, in violation of any Environmental Law.  As used in this Section 5.16, “litigation or proceeding” means any demand, claim, notice, suit, suit in equity action, administrative action, investigation or inquiry whether brought by any Governmental Authority or private Person, or otherwise. Each Borrower shall defend, indemnify and hold the Administrative Agent and the Lenders harmless against all costs, expenses, claims, damages, penalties and liabilities of every kind or nature whatsoever (including attorneys’ fees) arising out of or resulting from the noncompliance of any Company with any Environmental Law.  Such indemnification shall survive any termination of this Agreement.

Section 5.17.  Affiliate Transactions.  No Company shall, directly or indirectly, enter into or permit to exist any transaction or series of transactions (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of a Company (other than a Company that is a Credit Party) on terms that shall be less favorable to such Company than those that might be obtained at the time in a transaction with a Person that is not an Affiliate of a Company; provided that the foregoing shall not prohibit the payment of customary and reasonable directors’ fees to directors who are not employees of a Company or an Affiliate of a Company.

Section 5.18.  Use of Proceeds.  The Borrowers’ use of the proceeds of the Loans shall be for working capital and other general corporate purposes of the Companies and for the refinancing of existing Indebtedness and for Acquisitions permitted hereunder.  The Borrowers will not, directly or indirectly, use the Letters of Credit or the proceeds of the Loans, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, (a) (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions, or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Loans, whether as underwriter, advisor, investor, or otherwise); or (b) in furtherance of an offer, 

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payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of Anti-Corruption Laws.

Section 5.19.  Corporate Names and Locations of Collateral.  No Company shall (a) change its corporate name, or (b) change its state, province, territory or other jurisdiction, or form of organization; unless, in each case, the Administrative Borrower shall have provided the Administrative Agent and the Lenders with at least five (5) Business Days’ prior written notice thereof.  The Administrative Borrower shall also promptly notify the Administrative Agent of (i) any material change in any location where any Company’s Inventory or Equipment is maintained, and any new locations where any Company’s Inventory or Equipment is to be maintained; (ii) any change in the location of the office where any Company’s records pertaining to its Accounts are kept; (iii) the location of any new places of business and the changing or closing of any of its existing places of business; and (iv) any change in the location of any Company’s chief executive office.  In the event of any of the foregoing or if otherwise deemed appropriate by the Administrative Agent, the Administrative Agent is hereby authorized to file new financing statements or the equivalent as applicable describing the Collateral and otherwise in form and substance sufficient for recordation wherever necessary or appropriate, as determined in the Administrative Agent’s sole discretion, to perfect or continue perfected the security interest of the Administrative Agent, for the benefit of the Lenders, in the Collateral.  The US Borrower shall pay all filing and recording fees and taxes in connection with the filing or recordation of such financing statements and security interests and shall promptly reimburse the Administrative Agent therefor if the Administrative Agent pays the same.  Such amounts not so paid or reimbursed shall be Related Expenses hereunder.

Section 5.20.  Lease Rentals.  The Companies shall not pay or commit themselves to pay lease rentals on operating leases, for all Companies, in excess of the aggregate amount of Three Million Dollars ($3,000,000) during any fiscal year of the US Borrower, commencing with the fiscal year ending December 31, 2018.

Section 5.21.  Subsidiary Guaranties, Security Documents and Pledge of Stock or Other Ownership Interest.  

(a)    Domestic Guaranties and Security Documents.  Each Domestic Subsidiary (that is not a Dormant Subsidiary) created, acquired or held subsequent to the Closing Date, shall promptly execute and deliver to the Administrative Agent, for the benefit of the Lenders, a Guaranty of Payment (or a Guaranty of Payment Joinder) of all of the Secured Obligations and a Security Agreement (or a Security Agreement Joinder) and Mortgages, as appropriate, such agreements to be prepared by the Administrative Agent and in form and substance reasonably acceptable to the Administrative Agent, along with any such other supporting documentation, Security Documents, corporate governance and authorization documents, and an opinion of counsel as may be deemed necessary or advisable by the Administrative Agent.  With respect to a Subsidiary that has been classified as a Dormant Subsidiary, at such time that such Subsidiary no longer meets the requirements of a Dormant Subsidiary, the Administrative Borrower shall provide to the Administrative Agent prompt written notice thereof, and shall provide, with respect to such Subsidiary, all of the documents referenced in the foregoing sentence.

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(b)    Foreign Subsidiary Guaranties and Security Documents.  To the extent there shall be no material adverse tax consequences, each Foreign Subsidiary (that is not a Dormant Subsidiary) shall, if requested in the reasonable discretion of the Administrative Agent or the Required Lenders, execute and deliver to the Administrative Agent, for the benefit of the Lenders, a Guaranty of Payment of the Foreign Obligations and a Security Agreement, such agreements to be prepared by the Administrative Agent and in form and substance reasonably acceptable to the Administrative Agent.  In connection with each of the foregoing Guaranties of Payment and Security Agreement, the Administrative Borrower shall deliver to the Administrative Agent such other supporting documentation, Security Documents, corporate governance and authorization documents, and an opinion of counsel as may be reasonably deemed necessary or advisable by the Administrative Agent.  Anything in this subsection (b) to the contrary notwithstanding, if the execution and delivery of such Guaranty of Payment or Security Agreement under the laws of such foreign jurisdiction is impractical or cost prohibitive, in the reasonable judgment of the Administrative Agent, after consultation with the Administrative Borrower, then the Administrative Agent may forego such Guaranty of Payment or Security Agreement, as applicable, in such foreign jurisdiction. 

(c)    Pledge of Stock or Other Ownership Interest.  With respect to the creation or acquisition of a first-tier Subsidiary by any Credit Party, the Administrative Borrower shall notify the Administrative Agent within three Business Days of the creation or acquisition thereof, and, if requested in the reasonable discretion of the Administrative Agent or the Required Lenders, promptly deliver to the Administrative Agent, for the benefit of the Lenders, all of the share certificates (or other evidence of equity) of such first-tier Subsidiary owned by a Credit Party pursuant to the terms of a Pledge Agreement prepared by the Administrative Agent and in form and substance reasonably satisfactory to the Administrative Agent, and executed by the appropriate Credit Party; provided that, any such pledge securing the Secured Obligations of the US Borrower and any Domestic subsidiary shall not include the Restricted Pledged Securities set forth in part (a) of the definition of “Restricted Pledged Securities”, unless, as a result of a Change in Law, such Credit Party is able, without reasonable risk of any Company incurring a material Tax liability as a result thereof, to pledge such Restricted Pledged Securities as security for the Secured Obligations of the US Borrower and the Domestic Subsidiaries, in which case such Restricted Pledged Securities shall be automatically deemed to be so pledged by such Credit Party but only to the extent that, and only for so long as, such pledge could reasonably be expected not to result in a material Tax liability of any Company.  Anything in this subsection (c) to the contrary notwithstanding, if the execution and delivery of any such pledge of stock under the laws of such foreign jurisdiction is impractical or cost prohibitive, in the reasonable judgment of the Administrative Agent, after consultation with the Administrative Borrower, then the Administrative Agent may forego such pledge of stock (or foreign perfection of such pledge of stock in such foreign jurisdiction).  

(d)    Perfection or Registration of Interest in Foreign Shares.  With respect to any foreign shares pledged to the Administrative Agent, for the benefit of the Lenders, on or after the Closing Date, the Administrative Agent shall at all times, in the reasonable discretion of the Administrative Agent or the Required Lenders, have the right to perfect, at the US Borrower’s cost, payable upon request therefor (including, without limitation, any foreign counsel, or foreign notary, filing, registration or similar, fees, costs or expenses), its security interest in such shares in the respective foreign jurisdiction.  Such perfection may include the requirement that the applicable Company 

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promptly execute and deliver to the Administrative Agent a separate pledge document (prepared by the Administrative Agent and in form and substance reasonably satisfactory to the Administrative Agent), covering such equity interests, that conforms to the requirements of the applicable foreign jurisdiction, together with an opinion of local counsel as to the perfection of the security interest provided for therein, and all other documentation necessary or desirable to effect the foregoing and to permit the Administrative Agent to exercise any of its rights and remedies in respect thereof.

Section 5.22.  Flood Hazard.  If any portion of any Domestic Real Property is at any time located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a special flood hazard area with respect to which flood insurance has been made available under the Flood Insurance Laws, then the Administrative Borrower shall, or shall cause the applicable Credit Parties to (a) maintain, or cause to be maintained, with a financially sound and reputable insurer, flood insurance in an amount and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the Flood Insurance Laws, which such insurance shall (i) identify the addresses of each property located in a special flood hazard area, (ii) indicate the applicable flood zone designation, the flood insurance coverage and deductible relating thereto, (iii) provide that the insurer will give the Administrative Agent at least forty-five (45) days’ written notice of cancellation or non-renewal, and (iv) shall otherwise be in form and substance reasonably satisfactory to the Administrative Agent, and (b) deliver to the Administrative Agent evidence of such compliance, in form and substance reasonably acceptable to the Administrative Agent, including, without limitation, evidence of annual renewals of such insurance.

Section 5.23.  Restrictive Agreements.  Except as set forth in this Agreement, the Borrowers shall not, and shall not permit any of their Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Subsidiary to (a) make, directly or indirectly, any dividend or other capital distribution to any Borrower, (b) make, directly or indirectly, loans or advances or capital contributions to any Borrower or (c) transfer, directly or indirectly, any of the properties or assets of such Subsidiary to any Borrower; except for such encumbrances or restrictions existing under or by reason of (i) applicable Law, (ii) customary non-assignment provisions in leases or other agreements entered in the ordinary course of business and consistent with past practices, or (iii) customary restrictions in security agreements or mortgages securing Indebtedness or Capitalized Lease Obligations, of a Company to the extent such restrictions shall only restrict the transfer of the property subject to such security agreement, mortgage or lease.

Section 5.24.  Other Covenants and Provisions.  In the event that any Company shall enter into, or shall have entered into, any Material Indebtedness Agreement, wherein the covenants and agreements contained therein shall be more restrictive than the covenants and agreements set forth herein, then the Companies shall be bound hereunder by such more restrictive covenants and agreements with the same force and effect as if such covenants and agreements were written herein. 

Section 5.25.  Guaranty Under Material Indebtedness Agreement.  No Foreign Subsidiary shall be or become a primary obligor or Guarantor of the Indebtedness of the US Borrower incurred pursuant to any Material Indebtedness Agreement unless such Foreign Subsidiary shall also be a Guarantor of Payment under this Agreement prior to or concurrently therewith.

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Section 5.26.  Amendment of Organizational Documents.  Without the prior written consent of the Administrative Agent, no Company shall amend its Organizational Documents in any manner adverse to the Lenders.

Section 5.27.  Fiscal Year of Borrowers.  No Borrower shall change the date of its fiscal year-end without the prior written consent of the Administrative Agent and the Required Lenders.  As of the Closing Date, the fiscal year end of each Borrower is December 31 of each year.

Section 5.28.  Negative Pledge of the US Borrower’s Stock.  The Borrowers shall not suffer or permit any Lien to exist upon the capital stock or other equity interest issued by the US Borrower (except for (i) Liens in favor of the Administrative Agent for the benefit of the Lenders and (ii) Liens arising by operation of Law for taxes, assessments or governmental charges not yet due or which are being contested in good faith by appropriate proceedings diligently conducted).

Section 5.29.  Banking Relationship.  Until payment in full of the Obligations, the US Borrower shall maintain its primary banking and depository relationship with Agent.

Section 5.30.  Amendments to Horizon Plastics Acquisition Documentation.  No Borrower shall (a) amend, supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and conditions of the indemnities and licenses furnished to the Companies pursuant to any Horizon Plastics Acquisition Documents in a manner that that is adverse in any material respect to the rights or interests of the Companies or the Lenders with respect such indemnities or licenses or (b) otherwise amend, supplement or otherwise modify the terms and conditions of any Horizon Plastics Acquisition Documents except for any such amendment, supplement or modification that both (i) becomes effective after the Closing Date and (ii) could not reasonably be expected to have a Material Adverse Effect.

Section 5.31.  Compliance with Laws.  The Borrowers shall, and shall cause each Subsidiary to, comply in all material respects with all Laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject including, without limitation, all Environmental Laws, Anti-Corruption Laws and applicable Sanctions, except in such instances in which (a) such Requirement of Law or rule, regulation, order, writ, judgment, injunction, decree or award is being contested in good faith by appropriate proceedings diligently conducted or (b) solely in the cases where the Companies’ compliance with any such Law is specifically qualified by Material Adverse Effect herein,  the failure to comply therewith, either individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect (in which cases the materiality qualifier contained in the first clause of this sentence shall not apply).  The Borrowers shall maintain in effect and enforce such policies and procedures as it has determined to be reasonably necessary to ensure compliance by the Borrowers, the Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

Section 5.32    Credit Party as Trustee.  If any agreement, document or other right, title and interest which is required to be mortgaged, charged or assigned is not assignable to the Administrative Agent because (a) the remedies for the enforcement of such agreement would not, 

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as a matter of law, pass to the Administrative Agent as an incidence of the transfers and assignments made pursuant to the relevant Security Document, (b) the same is not assignable without the consent of the other party or parties thereto or any Governmental Authority and such consent has not been obtained as of the date hereof, (c) the same is not assignable without complying with stated conditions or (d) the same is the subject of an express prohibition against assignment, the applicable Credit Party’s interest in such agreement shall, until such consent to such assignment, compliance with such conditions or waiver of such express prohibition is obtained, be held in trust for the Administrative Agent by such Credit Party and the said interest and all benefits derived under such agreement shall be for the account of the Administrative Agent, subject to the terms of such Security Document.  Each Credit Party shall use all reasonable commercial efforts to obtain, as applicable, the required consent to any such assignment of such Credit Party’s interest in any such agreement, compliance with any such conditions or waiver of any such express prohibition.

Section 5.33.  Spanish Language Translation. In the reasonable discretion of the Administrative Agent, the Administrative Agent may, at the expense of the Borrowers, receive a translation of one or more of the Loan Documents (as reasonably necessary in the reasonable opinion of the Administrative Agent) into the Spanish language, prepared by an expert Mexican translator satisfactory to the Administrative Agent, together with a certificate of the US Borrower to the effect that such Credit Party irrevocably (a) acknowledges and agrees to be bound in accordance with the terms of each such translation, and (b) waives any right that it may have to challenge or invalidate any such translation of any term thereof. 

Section 5.34.  Further Assurances.  The Borrowers shall, promptly upon request by the Administrative Agent, or the Required Lenders through the Administrative Agent, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or the Required Lenders through the Administrative Agent, may reasonably require from time to time in order to carry out more effectively the purposes of the Loan Documents.

ARTICLE VI.  REPRESENTATIONS AND WARRANTIES

Section 6.1.  Corporate Existence; Subsidiaries; Foreign Qualification.  Each Company is duly organized, validly existing and, where applicable, in good standing (or comparable concept in the applicable jurisdiction) under the Laws of its state or jurisdiction of incorporation or organization, and is duly qualified and authorized to do business and, where applicable, is in good standing (or comparable concept in the applicable jurisdiction) as a foreign entity in the jurisdictions set forth opposite its name on Schedule 6.1 hereto, which are all of the states or jurisdictions where the character of its property or its business activities makes such qualification necessary, except where a failure to so qualify would not reasonably be expected to have a Material Adverse Effect.  Schedule 6.1 hereto sets forth, as of the Closing Date, each Subsidiary of a Borrower (and whether such Subsidiary is a Dormant Subsidiary), whether each Credit Party is a Specified Credit Party, and each Person that is an owner of a Borrower’s equity, its state (or jurisdiction) of formation, its 

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relationship to a Borrower, including the percentage of each class of stock or other equity interest owned by a Company, each Person that owns the stock or other equity interest of each Company, its tax identification number, the location of its chief executive office and its principal place of business.  Each Borrower, directly or indirectly, owns all of the equity interests of each of its Subsidiaries (excluding directors’ qualifying shares and, in the case of Foreign Subsidiaries, other nominal amounts of shares held by a Person other than a Company).

Section 6.2.  Corporate Authority.  Each Credit Party has the right and power and is duly authorized and empowered to enter into, execute and deliver the Loan Documents to which it is a party and to perform and observe the provisions of the Loan Documents.  The Loan Documents to which each Credit Party is a party have been duly authorized and approved by such Credit Party’s board of directors or other governing body, as applicable, and are the legal, valid and binding obligations of such Credit Party, enforceable against such Credit Party in accordance with their respective terms, except as enforceability thereof may be limited by bankruptcy, insolvency or, moratorium and similar laws affecting the enforcement of creditors’ rights generally and by equitable principles (regardless of whether enforcement is sought in equity or at law).  The execution, delivery and performance of the Loan Documents do not conflict with, result in a breach in any of the provisions of, constitute a default under, or result in the creation of a Lien (other than Liens permitted under Section 5.9 hereof) upon any assets or property of any Company under the provisions of, such Company’s Organizational Documents or any material agreement to which such Company is a party.

Section 6.3.  Compliance with Laws and Contracts.  Each Company:

(a)    holds all permits, certificates, licenses, orders, registrations, franchises, authorizations, and other approvals from any Governmental Authority necessary for the conduct of its business and is in compliance with all applicable Laws relating thereto, except where the failure to do so would not have a Material Adverse Effect;

(b)    is in compliance with all federal, state, local, or foreign applicable statutes, rules, regulations, and orders including, without limitation, those relating to environmental protection, occupational safety and health, and equal employment practices, except where the failure to be in compliance would not have a Material Adverse Effect;

(c)    is not in violation of or in default under any agreement to which it is a party or by which its assets are subject or bound, except with respect to any violation or default that would not have a Material Adverse Effect;

(d)    has ensured that no Company, or to the knowledge of any Company, any director officer, agent, employee or Affiliate of a Company, is a Person that is, or is owned or controlled by Persons that are (i) the subject of any Sanctions, or (ii) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions;

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(e)    is in material compliance with all applicable Bank Secrecy Act (“BSA”), Canadian Anti-Money Laundering & Anti-Terrorism Legislation and other anti-money laundering Laws and regulations;

(f)    has ensured that no Company or, to the knowledge of any Company, any director, officer, agent, employee or other person acting on behalf of a Company has taken any action, directly or indirectly, that would result in a violation by such Persons of Anti-Corruption Laws, and the Credit Parties have instituted and maintain policies and procedures designed to ensure continued compliance therewith;

(g)    is in compliance, in all material respects, with the Patriot Act; and

(h)    is in compliance, in all material respects, with Anti-Corruption Laws.

Section 6.4.  Litigation and Administrative Proceedings.  Except as disclosed on Schedule 6.4 hereto, there are (a) no lawsuits, actions, investigations, examinations or other proceedings pending or, to the knowledge of the Companies, threatened against any Company, or in respect of which any Company may have any liability, in any court or before or by any Governmental Authority, arbitration board, or other tribunal that could reasonably be expected to have a Material Adverse Effect, (b) no orders, writs, injunctions, judgments, or decrees of any court or Governmental Authority to which any Company is a party or by which the property or assets of any Company are bound that could reasonably be expected to have a Material Adverse Effect, and (c) no grievances, disputes, or controversies outstanding with any union or other organization of the employees of any Company, or threats of work stoppage, strike, or pending demands for collective bargaining that could reasonably be expected to have a Material Adverse Effect. 

Section 6.5.  Title to Assets.  Each Company has good title to and ownership of all property it purports to own, which property is free and clear of all Liens, except those permitted under Section 5.9 hereof.  As of the Closing Date, the Companies own the real property listed on Schedule 6.5 hereto.

Section 6.6.  Liens and Security Interests.  On and after the Closing Date, except for Liens permitted pursuant to Section 5.9 hereof, (a) there is and will be no financing statement or similar notice of Lien (other than notice filings filed under U.C.C. 9-505 not covering collateral securing an obligation) outstanding covering any personal property of any Company; (b) there is and will be no mortgage or charge outstanding covering any Domestic Real Property or other owned real property of any Company; and (c) no real or personal property of any Company is subject to any Lien of any kind.  The Administrative Agent, for the benefit of the Lenders, upon the filing of the financing statements contemplated by the Loan Documents and taking such other actions necessary to perfect its Lien against collateral of the corresponding type as authorized hereunder will have a valid and enforceable first Lien on such Collateral.  No Company has entered into any contract or agreement (other than (i) a contract or agreement entered into in connection with the purchase or lease of fixed assets that prohibits Liens on such fixed assets or a contract or agreement entered into in the ordinary course of business that does not permit Liens on, or collateral assignment of, the property relating to such contract or agreement or (ii) any agreement with a restriction that is 

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not enforceable under Section 9‐406, 9‐407 or 9‐408 of the U.C.C.) that exists on or after the Closing Date that would prohibit the Administrative Agent or the Lenders from acquiring a Lien on, or a collateral assignment of, any of the property or assets of any Company.

Section 6.7.  Tax Returns.  All federal, state, provincial and local tax returns and other reports required by law to be filed in respect of the income, business, properties and employees of each Company have been timely filed (or extended as permitted by applicable Law) and all taxes, assessments, fees and other governmental charges that are due and payable have been timely paid, except as otherwise permitted herein.  The provision for taxes on the books of each Company is adequate for all years not closed by applicable statutes and for the current fiscal year.

Section 6.8.  Environmental Laws.  Except as could not, either individually or in the aggregate, be reasonably likely to result in a Material Adverse Effect, each Company is in substantial compliance with all Environmental Laws, including, without limitation, all Environmental Laws in all jurisdictions in which any Company owns or operates, or has owned or operated, a facility or site, arranges or has arranged for disposal or treatment of hazardous substances, solid waste or other wastes, accepts or has accepted for transport any hazardous substances, solid waste or other wastes or holds or has held any interest in real property or otherwise.  No material litigation or proceeding arising under, relating to or in connection with any Environmental Law or Environmental Permit is pending or, to the best knowledge of each Company, threatened, against any Company, any Domestic Real Property or other owned real property in which any Company holds or has held an interest or any past or present operation of any Company which could reasonably be expected to have Material Adverse Effect.  No release, threatened release or disposal of hazardous waste, solid waste or other wastes is occurring, or has occurred (other than those that are currently being remediated in accordance with Environmental Laws), on, under or to any Domestic Real Property or other owned real property in which any Company holds any interest or performs any of its operations, in violation of any Environmental Law, that either individually or in the aggregate, could be reasonably expected to result in a Material Adverse Effect.  As used in this Section 6.8, “litigation or proceeding” means any demand, claim, notice, suit, suit in equity, action, administrative action, investigation or inquiry whether brought by any Governmental Authority or private Person, or otherwise.

Section 6.9.  Locations.  As of the Closing Date, the Companies have places of business or maintain their Accounts, Inventory and Equipment at the locations (including third party locations) set forth on Schedule 6.9 hereto, and each Company’s chief executive office is set forth on Schedule 6.9 hereto.  Schedule 6.9 hereto further specifies whether each location, as of the Closing Date, (a) is owned by the Companies, or (b) is leased by a Company from a third party, and, if leased by a Company from a third party, if a Landlord’s Waiver has been requested.  As of the Closing Date, Schedule 6.9 hereto correctly identifies the name and address of each third party location where assets of the Companies are located.

Section 6.10.  Continued Business.  There exists no actual, pending, or, to each Borrower’s knowledge, any threatened termination, cancellation or limitation of, or any modification or change in the business relationship of any Company and any customer or supplier, which any Credit Party reasonably expects to have a Material Adverse Effect.

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Section 6.11.  Employee Benefits Plans.  

(a)    US Employee Benefit Plans.  Schedule 6.11 hereto identifies each ERISA Plan as of the Closing Date.  No ERISA Event has occurred or is expected to occur with respect to an ERISA Plan.  Full payment has been made of all amounts that a Controlled Group member is required, under applicable Law or under the governing documents, to have paid as a contribution to or a benefit under each ERISA Plan.  The liability of each Controlled Group member with respect to each ERISA Plan has been fully funded based upon reasonable and proper actuarial assumptions, has been fully insured, or has been fully reserved for on its financial statements.  No changes have occurred or are expected to occur that would cause a material increase in the cost of providing benefits under the ERISA Plan.  With respect to each ERISA Plan that is intended to be qualified under Code Section 401(a), in all material respects or are subject to cure under a correction program approved by a Governmental Authority; (i) the ERISA Plan and any associated trust operationally comply with the applicable requirements of Code Section 401(a); (ii) to the extent applicable, the ERISA Plan and any associated trust have been amended to comply with all such requirements as currently in effect, other than those requirements for which a retroactive amendment can be made within the “remedial amendment period” available under Code Section 401(b) (as extended under Treasury Regulations and other Treasury pronouncements upon which taxpayers may rely); (iii) the ERISA Plan and any associated trust have received a favorable determination letter from the IRS stating that the ERISA Plan qualifies under Code Section 401(a), that the associated trust qualifies under Code Section 501(a) and, if applicable, that any cash or deferred arrangement under the ERISA Plan qualifies under Code Section 401(k), unless the ERISA Plan was first adopted at a time for which the above-described “remedial amendment period” has not yet expired; (iv) the ERISA Plan currently satisfies the requirements of Code Section 410(b), without regard to any retroactive amendment that may be made within the above-described “remedial amendment period”; and (v) no contribution made to the ERISA Plan is subject to an excise tax under Code Section 4972.  With respect to any Pension Plan, the “accumulated benefit obligation” of Controlled Group members with respect to the Pension Plan (as determined in accordance with Statement of Accounting Standards No. 87, “Employers’ Accounting for Pensions”) does not exceed the fair market value of Pension Plan assets.

(b)    Foreign Pension Plan and Benefit Plans.  As of the Closing Date, Schedule 6.11 hereto lists all Foreign Benefit Plans, Canadian Pension Plans, Canadian MEPPs and Foreign Pension Plans currently maintained or contributed to by the US Borrower and any appropriate Foreign Subsidiaries.  The Foreign Pension Plans and Canadian Pension Plans are duly registered under all applicable Laws which require registration.  The US Borrower and any appropriate Foreign Subsidiaries have complied with and performed all of its obligations under and in respect of the Foreign Pension Plans, Canadian Pension Plans, Canadian MEPPs and Foreign Benefit Plans under the terms thereof, any funding agreements and all applicable Laws (including any fiduciary, funding, investment and administration obligations) except to the extent as would not reasonably be expected to have a Material Adverse Effect.  All employer and employee payments, contributions or premiums to be remitted, paid to or in respect of each Canadian Pension Plan, Canadian MEPP, Foreign Pension Plan or Foreign Benefit Plan have been paid in a timely fashion in accordance with the terms thereof, any funding agreement and all applicable Laws except to the extent the failure to do so would not 

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reasonably be expected to have a Material Adverse Effect.  There are no outstanding actions or suits concerning the assets of the Foreign Pension Plans or the Foreign Benefit Plans.  Each of the Foreign Pension Plans is fully funded on an ongoing basis as required by all Laws applicable to such Foreign Pension Plans (using actuarial methods and assumptions as of the date of the valuations last filed with the applicable Governmental Authorities and that are consistent with generally accepted actuarial principles).

Section 6.12.  Consents or Approvals.  No consent, approval or authorization of, or filing, registration or qualification with, any Governmental Authority or any other Person is required to be obtained or completed by any Company in connection with the execution, delivery or performance of any of the Loan Documents, that has not already been obtained or completed.

Section 6.13.  Solvency.

(a)    US Borrower.  The US Borrower has received consideration that is the reasonably equivalent value of the obligations and liabilities that the US Borrower has incurred to the Administrative Agent and the Lenders.  The US Borrower is not insolvent as defined in any applicable state, federal or relevant foreign statute, nor will the US Borrower be rendered insolvent by the execution and delivery of the Loan Documents to the Administrative Agent and the Lenders.  The US Borrower is not engaged or about to engage in any business or transaction for which the assets retained by it are or will be an unreasonably small amount of capital, taking into consideration the obligations to the Administrative Agent and the Lenders incurred hereunder.  The US Borrower does not intend to, nor does it believe that it will, incur debts beyond its ability to pay such debts as they mature.  

(b)    Canadian Borrower.  The Canadian Borrower has received consideration that is the reasonably equivalent value of the obligations and liabilities that the Canadian Borrower has incurred to the Administrative Agent and the Lenders.  The property of the Canadian Borrower is (i) sufficient, if disposed of at a fairly conducted sale under legal process, to enable payment of all its obligations due and accruing due, and (ii) at a fair valuation, greater than the total amount of liabilities, including contingent liabilities, of the Canadian Borrower.  The Canadian Borrower has not ceased paying its current obligations in the ordinary course of business as they generally become due.  The Canadian Borrower is not for any reason (and will not by reason of the execution and delivery of the Loan Documents) be unable to meet its obligations as they generally become due.  

(c)    Generally.  Each Credit Party acknowledges that its business and financial relationship with the Administrative Agent and the Lenders is unique from such Credit Party’s relationship with any other of its creditors and agrees that it shall not file any plan of arrangement under the Companies’ Creditors Arrangement Act (Canada) or make any proposal under the Bankruptcy and Insolvency Act (Canada) which provides for, or would permit directly or indirectly, the Administrative Agent and the Lenders to be classified with any other creditor for purposes of such plan or proposal or otherwise. 

Section 6.14.  Financial Statements.  The audited Consolidated financial statements of the US Borrower, for the fiscal year ended December 31, 2016 and the unaudited Consolidated financial statements of the US Borrower for the fiscal quarter ended June 30, 2017, furnished to the Administrative Agent and the Lenders, are true and complete, have been prepared in accordance with GAAP, and fairly present the financial condition of the Companies as of the dates of such financial statements and the results of their operations for the periods then ending.  Since the ending dates of the periods addressed in such statements, there has been no material adverse change in any 

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Company’s financial condition, properties or business or any change in any Company’s accounting procedures.

Section 6.15.  Regulations.  No Company is engaged principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any “margin stock” (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System of the United States).  Neither the granting of any Loan (or any conversion thereof) or Letter of Credit nor the use of the proceeds of any Loan or Letter of Credit will violate, or be inconsistent with, the provisions of Regulation T, U or X or any other Regulation of such Board of Governors.

Section 6.16.  Material Agreements.  Except as disclosed on Schedule 6.16 hereto, as of the Closing Date, no Company is a party to any (a) debt instrument (excluding the Loan Documents); (b) lease (capital, operating or otherwise), whether as lessee or lessor thereunder; (c) contract, commitment, agreement, or other arrangement involving the purchase or sale of any inventory by it, or the license of any right to or by it; (d) contract, commitment, agreement, or other arrangement with any of its Affiliates other than a Company; (e) management or employment contract or contract for personal services with any of its Affiliates that is not otherwise terminable at will or on less than ninety (90) days’ notice without liability; (f) collective bargaining agreement; or (g) other contract, agreement, understanding, or arrangement with a third party; that, as to subparts (a) through (g), above, if violated, breached, or terminated for any reason, would have or would be reasonably expected to have a Material Adverse Effect.

Section 6.17.  Intellectual Property.  Each Company owns, or has the right to use, all of the patents, patent applications, industrial designs, designs, trademarks, service marks, copyrights and licenses, and rights with respect to the foregoing, reasonably necessary for the conduct of its business without any known conflict with the rights of others.  Schedule 6.17 hereto sets forth all federally registered patents, trademarks, copyrights, service marks and license agreements owned by each Company as of the Closing Date.

Section 6.18.  Insurance.  Each Company maintains with financially sound and reputable insurers insurance with coverage (including, if applicable, flood insurance on all mortgaged property that is in a Special Flood Hazard Zone, from such providers, on such terms and in such amounts as required by the Flood Disaster Protection Act as amended from time to time or as otherwise required by the Administrative Agent) and limits as required by law and as is customary with Persons engaged in the same businesses as the Companies.  Schedule 6.18 hereto sets forth all insurance carried by the Companies on the Closing Date, setting forth in detail the amount and type of such insurance.

Section 6.19.  Deposit Accounts and Securities Accounts.  Schedule 6.19 hereto lists all banks, other financial institutions and Securities Intermediaries at which any Company maintains Deposit Accounts or Securities Accounts as of the Closing Date, and Schedule 6.19 hereto correctly identifies the name, address and telephone number of each such financial institution or Securities Intermediary, the name in which the account is held, a description of the purpose of the account, and the complete account number therefor.

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Section 6.20.  Accurate and Complete Statements.  Neither the Loan Documents nor any written statement made by any Company in connection with any of the Loan Documents contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained therein or in the Loan Documents not misleading.  After due inquiry by the Borrowers, there is no known fact that any Company has not disclosed to the Administrative Agent and the Lenders that has or is likely to have a Material Adverse Effect.

Section 6.21.  Investment Company; Other Restrictions.  No Company is (a) an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, or (b) subject to regulation under any foreign, federal, state or local statute or regulation limiting its ability to incur Indebtedness.

Section 6.22.  Acquisition Agreement Representations.  To the extent reasonably necessary to preserve or protect the rights of the Administrative Agent and the Lenders in respect of the Collateral, the Borrowers covenant and agree to enforce and pursue all remedies reasonably available to it in connection with any material breach of a representation and warranty made by Seller under the Horizon Plastics Acquisition Agreement.

Section 6.23.  Defaults.  No Default or Event of Default exists, nor will any begin to exist immediately after the execution and delivery hereof.

ARTICLE VII.  EVENTS OF DEFAULT

Any of the following specified events shall constitute an Event of Default (each an “Event of Default”):

Section 7.1.  Payments.  If (a) the interest on any Loan, any commitment or other fee, or any other Obligation not listed in subpart (b) hereof, shall not be paid in full within five Business Days of being due and payable, or (b) the principal of any Loan, any reimbursement obligation under any Letter of Credit that has been drawn, or any amount owing pursuant to Section 2.11(a) hereof shall not be paid in full when due and payable.

Section 7.2.  Special Covenants.  If any Company shall fail or omit to perform and observe Section 5.7, 5.8, 5.9, 5.11, 5.12, 5.13, 5.15, 5.20 or 5.24  hereof.

Section 7.3.  Other Covenants.  

(a)    If any Company shall fail or omit to perform and observe Section 5.3 and that Default shall not have been fully corrected within five days after the earlier of (i) any Financial Officer of such Company becomes aware of the occurrence thereof, or (ii) the giving of written notice thereof to the Administrative Borrower by the Administrative Agent that the specified Default is to be remedied.

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(b)    If any Company shall fail or omit to perform and observe any agreement or other provision (other than those referred to in Section 7.1, 7.2 or 7.3(a) hereof) contained or referred to in this Agreement or any other Related Writing that is on such Company’s part to be complied with, and that Default shall not have been fully corrected within thirty (30) days after the earlier of (a) any Financial Officer of such Company becomes aware of the occurrence thereof, or (b) the giving of written notice thereof to the Administrative Borrower by the Administrative Agent or the Required Lenders that the specified Default is to be remedied.

Section 7.4.  Representations and Warranties.  If any representation, warranty or statement made in or pursuant to this Agreement or any other Related Writing or any other material information furnished by any Company to the Administrative Agent or the Lenders, or any thereof, or any other holder of any Note, shall be false or erroneous in any material respect.

Section 7.5.  Cross Default.  If any Company shall default in the payment of principal or interest due and owing under any Material Indebtedness Agreement beyond any period of grace provided with respect thereto or in the performance or observance of any other agreement, term or condition contained in any agreement under which such obligation is created, if the effect of such default is to allow the acceleration of the maturity of such Indebtedness or to permit the holder thereof to cause such Indebtedness to become due prior to its stated maturity.

Section 7.6.  ERISA or Pension Plan Default.  

(a)     ERISA Default.  The occurrence of one or more ERISA Events or similar event with respect to a Foreign Plan that (a) the Required Lenders determine could have a Material Adverse Effect, or (b) results in a Lien on any of the assets of any Company, to the extent that the aggregate of all such Liens for all Companies exceeds Five Hundred Thousand Dollars ($500,000).

(b)    Foreign Pension Plan Default.  The institution of any steps by any Company or any applicable regulatory authority to terminate a Foreign Pension Plan, Canadian Pension Plan or Canadian MEPP (wholly or in part) if, as a result of such termination, such Company may be required to make an additional contribution to such Foreign Pension Plan, Canadian Pension Plan or Canadian MEPP, or to incur an additional liability or obligation to such Foreign Pension Plan, Canadian Pension Plan or Canadian MEPP, equal to or in excess of Five Hundred Thousand Dollars ($500,000) or the equivalent thereof in another currency.

Section 7.7.  Change in Control.  If any Change in Control shall occur.

Section 7.8.  Judgments.  There is entered against any Company:

(a)    a final judgment or order for the payment of money by a court of competent jurisdiction, that remains unpaid or unstayed and undischarged for a period (during which execution shall not be effectively stayed) of thirty (30) days after the date on which the right to appeal has expired, provided that such occurrence shall constitute an Event of Default only if the aggregate of all such judgments for all such Companies, shall exceed Five Hundred Thousand Dollars ($500,000) 

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(less any amount that will be covered by the proceeds of insurance and is not subject to dispute by the insurance provider); or

(b)    any one or more non-monetary final judgments that are not covered by insurance, or, if covered by insurance, for which the insurance company has not agreed to or acknowledged coverage, and that, in either case, the Required Lenders reasonably determine have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (i) enforcement proceedings are commenced by the prevailing party or any creditor upon such judgment or order, or (ii) there is a period of three consecutive Business Days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect.

Section 7.9.  Material Adverse Change.  There shall have occurred any condition or event that the Administrative Agent or the Required Lenders reasonably determine has or is reasonably likely to have a Material Adverse Effect.

Section 7.10. Security.  If any Lien granted in this Agreement or any other Loan Document in favor of the Administrative Agent, for the benefit of the Lenders, shall be determined to be (a) void, voidable or invalid, or is subordinated or not otherwise given the priority contemplated by this Agreement or such Loan Document and the Borrowers have (or the appropriate Credit Party has) failed to promptly execute appropriate documents reasonably requested by the Administrative Agent to correct such matters, or (b) unperfected as to any material amount of Collateral (as determined by the Administrative Agent, in its reasonable discretion, or the Required Lenders, in their reasonable discretion) and the Borrowers have (or the appropriate Credit Party has) failed to promptly execute appropriate documents reasonably requested by the Administrative Agent to correct such matters.

Section 7.11.  Validity of Loan Documents.  If (a) any material provision, in the sole opinion of the Administrative Agent, of any Loan Document shall at any time cease to be valid, binding and enforceable against any Credit Party; (b) the validity, binding effect or enforceability of any Loan Document against any Credit Party shall be contested by any Credit Party; (c) any Credit Party shall deny that it has any or further liability or obligation under any Loan Document; or (d) any Loan Document shall be terminated, invalidated or set aside, or be declared ineffective or inoperative or in any way cease to give or provide to the Administrative Agent and the Lenders the benefits purported to be created thereby.

Section 7.12.  Solvency.  If any Company (other than a Dormant Subsidiary) shall (a) except as permitted pursuant to Section 5.12 hereof, discontinue business; (b) generally not pay its debts as such debts become due; (c) make a general assignment for the benefit of creditors; (d) apply for or consent to the appointment of an interim receiver, a receiver, a receiver and manager, an administrator, a sequestrator, a monitor, a custodian, a trustee, an interim trustee, a liquidator, an agent or any other similar official of all or a substantial part of its assets or of such Company; (e) be adjudicated a debtor or insolvent or have entered against it an order for relief under the Bankruptcy Code, or under any other bankruptcy insolvency, liquidation, winding-up, corporate or similar statute or Law, foreign, federal, state or provincial, in any applicable jurisdiction, now or hereafter existing, 

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as any of the foregoing may be amended from time to time, or other applicable statute for jurisdictions outside of the United States, as the case may be; (f) file a voluntary petition under the Bankruptcy Code or seek relief under any bankruptcy or insolvency or analogous Law in any jurisdiction outside of the United States, or file a proposal or notice of intention to file such petition; (g) have an involuntary proceeding under the Bankruptcy Code (or any bankruptcy or insolvency or analogous law in any jurisdiction outside of the United States) filed against it and the same shall not be controverted within thirty (30) days (or such longer period as agreed to in writing by the Administrative Agent in its reasonable discretion), or shall continue undismissed for a period of sixty (60) days from commencement of such proceeding or case; (h) file a petition, an answer, an application or a proposal seeking reorganization or an arrangement with creditors or seeking to take advantage of any other Law (whether federal, provincial or state, or, if applicable, other jurisdiction) relating to relief of debtors, or admit (by answer, by default or otherwise) the material allegations of a petition filed against it in any bankruptcy, reorganization, insolvency or other proceeding (whether federal, provincial or state, or, if applicable, other jurisdiction) relating to relief of debtors; (i) suffer or permit to continue unstayed and in effect for sixty (60) consecutive days any judgment, decree or order entered by a court of competent jurisdiction, that approves a petition or an application or a proposal seeking its reorganization or appoints an interim receiver, a receiver and manager, an administrator, custodian, trustee, interim trustee or liquidator of all or a substantial part of its assets, or of such Company; (j) have an administrative receiver appointed over the whole or substantially the whole of its assets, or of such Company; (k) have assets, the value of which is less than its liabilities (taking into account prospective and contingent liabilities, and rights of contribution from other Persons); or (l) have a moratorium declared in respect of any of its Indebtedness, or any analogous procedure or step is taken in any jurisdiction.

ARTICLE VIII.  REMEDIES UPON DEFAULT

Notwithstanding any contrary provision or inference herein or elsewhere:

Section 8.1.  Optional Defaults.  If any Event of Default referred to in Section 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9, 7.10 or 7.11 hereof shall occur, the Administrative Agent may, with the consent of the Required Lenders, and shall, at the written request of the Required Lenders, give written notice to the Borrowers to:

(a)    terminate the Commitment, if not previously terminated, and, immediately upon such election, the obligations of the Lenders, and each thereof, to make any further Loan, and the obligation of the Issuing Lender to issue any Letter of Credit, immediately shall be terminated; and/or

(b)    accelerate the maturity of all of the Obligations (if the Obligations are not already due and payable), whereupon all of the Obligations shall become and thereafter be immediately due and payable in full without any presentment or demand and without any further or other notice of any kind, all of which are hereby waived by each Borrower.

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Section 8.2.  Automatic Defaults.  If any Event of Default referred to in Section 7.12 hereof shall occur:

(a)    all of the Commitment shall automatically and immediately terminate, if not previously terminated, and no Lender thereafter shall be under any obligation to grant any further Loan, nor shall the Issuing Lender be obligated to issue any Letter of Credit; and

(b)    the principal of and interest then outstanding on all of the Loans, and all of the other Obligations, shall thereupon become and thereafter be immediately due and payable in full (if the Obligations are not already due and payable), all without any presentment, demand or notice of any kind, which are hereby waived by each Borrower.

Section 8.3.  Letters of Credit.  If the maturity of the Obligations shall be accelerated pursuant to Section 7.1 or 7.2 hereof, each Borrower shall immediately deposit with the Administrative Agent, as security for the obligations of such Borrower with respect to Letters of Credit, cash equal to one hundred three percent (103%) of the sum of the aggregate undrawn balance of any such Letters of Credit that are then outstanding.  The Administrative Agent and the Lenders are hereby authorized, at their option, to deduct any and all such amounts from any deposit balances then owing by any Lender (or any Affiliate of such Lender, wherever located) to or for the credit or account of any Credit Party, as security for the obligations of such Credit Parties to reimburse the Administrative Agent and the Revolving Lenders for any then outstanding Letters of Credit.  

Section 8.4.  Offsets.  If there shall occur or exist any Event of Default referred to in Section 7.12 hereof or if the maturity of the Obligations is accelerated pursuant to Section 7.1 or 7.2 hereof, each Lender shall have the right at any time to set off against, and to appropriate and apply toward the payment of, any and all of the Obligations then owing by any Borrower or Guarantor of Payment to such Lender (including, without limitation, any participation purchased or to be purchased pursuant to Section 2.2A(b), 2.2A(c), 2.2B(b), 2.2B(c) or 8.5 hereof), whether or not the same shall then have matured, any and all deposit (general or special) balances and all other indebtedness then held or owing by such Lender (including, without limitation, by branches and agencies or any affiliate of such Lender, wherever located) to or for the credit or account of such Borrower or Guarantor of Payment, all without notice to or demand upon any Borrower or any other Person, all such notices and demands being hereby expressly waived by each Borrower.  Each Lender agrees to notify the Administrative Borrower and the Administrative Agent promptly after any such set off and application (provided that the failure to give such notice shall not affect the validity of such set off and application).  In the event that any Defaulting Lender shall exercise any such right of setoff, (a) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 11.10 hereof and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lender, and the Lenders, and (b) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  The rights of each Lender, the Issuing Lender and their respective Affiliates under this Section 8.4 are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Lender or their respective Affiliates may have.

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Section 8.5.  Equalization Provisions.  

(a)    Equalization Within Commitments Prior to an Equalization Event.  Each Revolving Lender agrees with the other Revolving Lenders that, if it at any time shall obtain any Advantage over the other Revolving Lenders, or any thereof, in respect of the Applicable Debt (except as to Swing Loans and Letters of Credit prior to the Administrative Agent’s giving of notice to participate and amounts under Article III hereof), such Revolving Lender, upon written request of the Administrative Agent, shall purchase from the other Revolving Lenders, for cash and at par, such additional participation in the Applicable Debt as shall be necessary to nullify the Advantage.  Each US Term Lender agrees with the other US Term Lenders that, if it at any time shall obtain any Advantage over the other US Term Lenders, or any thereof, in respect of the Applicable Debt (except as to amounts under Article III hereof), such US Term Lender shall purchase from the other US Term Lenders, for cash and at par, such additional participation in the Applicable Debt as shall be necessary to nullify the Advantage.  Each Canadian Term Lender agrees with the other Canadian Term Lenders that, if it at any time shall obtain any Advantage over the other Canadian Term Lenders, or any thereof, in respect of the Applicable Debt (except as to amounts under Article III hereof), such Canadian Term Lender shall purchase from the other Canadian Term Lenders, for cash and at par, such additional participation in the Applicable Debt as shall be necessary to nullify the Advantage.

(b)    Equalization Between Commitments After an Equalization Event.  After the occurrence of an Equalization Event, each Lender agrees with the other Lenders that, if such Lender at any time shall obtain any Advantage over the other Lenders or any thereof determined in respect of the Obligations (including Swing Loans and Letters of Credit but excluding amounts under Article III hereof) then outstanding, such Lender shall purchase from the other Lenders, for cash and at par, such additional participation in the Obligations as shall be necessary to nullify the Advantage in respect of the Obligations.  For purposes of determining whether or not, after the occurrence of an Equalization Event, an Advantage in respect of the Obligations shall exist, the Administrative Agent shall, as of the date that the Equalization Event occurs:

(i)    add the Revolving Credit Exposure, the US Term Loan Exposure and the Canadian Term Loan Exposure to determine the equalization maximum amount (the “Equalization Maximum Amount”); and

(ii)    determine an equalization percentage (the “Equalization Percentage”) for each Lender by dividing the aggregate amount of its Lender Credit Exposure by the Equalization Maximum Amount.

After the date of an Equalization Event, the Administrative Agent shall determine whether an Advantage exists among the Lenders by using the Equalization Percentage.  Such determination shall be conclusive absent manifest error.

(c)    Recovery of Amount.  If any such Advantage resulting in the purchase of an additional participation as set forth in subsection (a) or (b) hereof shall be recovered in whole or in part from 

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the Lender receiving the Advantage, each such purchase shall be rescinded, and the purchase price restored (but without interest unless the Lender receiving the Advantage is required to pay interest on the Advantage to the Person recovering the Advantage from such Lender) ratably to the extent of the recovery.

(d)    Application and Sharing of Set-Off Amounts.  Each Lender further agrees with the other Lenders that, if it at any time shall receive any payment for or on behalf of a Borrower on any Secured Obligations owing by such Borrower to that Lender (whether by voluntary payment, by realization upon security, by reason of offset of any deposit or other Indebtedness, by counterclaim or cross action, by enforcement of any right under any Loan Document, or otherwise), it shall apply such payment first to any and all Indebtedness owing by such Borrower to that Lender pursuant to this Agreement (including, without limitation, any participation purchased or to be purchased pursuant to this Section 8.5 or any other section of this Agreement).  Each Credit Party agrees that any Lender so purchasing a participation from the other Lenders, or any thereof, pursuant to this Section 8.5 may exercise all of its rights of payment (including the right of set‐off) with respect to such participation as fully as if such Lender were a direct creditor of such Credit Party in the amount of such participation.

Section 8.6.  Other Remedies.  The remedies in this Article VIII are in addition to, and not in limitation of, any other right, power, privilege, or remedy, either in law, in equity, or otherwise, to which the Lenders may be entitled.  The Administrative Agent shall exercise the rights under this Article VIII and all other collection efforts on behalf of the Lenders and no Lender shall act independently with respect thereto, except as otherwise specifically set forth in this Agreement.  In addition, the Administrative Agent shall be entitled to exercise remedies, pursuant to the Loan Documents, against Collateral, on behalf of any Affiliate of a Lender that holds Secured Obligations, and no Affiliate of a Lender shall act independently with respect thereto, except as otherwise specifically set forth in this Agreement.

Section 8.7.  Application of Proceeds.

(a)    Payments Prior to Exercise of Remedies.  Prior to the exercise by the Administrative Agent, on behalf of the Lenders, of remedies under this Agreement or the other Loan Documents, all monies received by the Administrative Agent shall be applied, unless otherwise required by the terms of the other Loan Documents or by applicable Law, as follows (provided that the Administrative Agent shall have the right at all times to apply any payment received from the Borrowers first to the payment of all obligations (to the extent not paid by the Borrowers) incurred by the Administrative Agent pursuant to Section 11.5 hereof and to the payment of Related Expenses to the Administrative Agent):

(i)    with respect to payments received in connection with the Revolving Credit Commitment, to the Revolving Lenders;

(ii)    with respect to payments received in connection with the US Term Loan Commitment, to the US Term Loan Lenders; and

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(iii)    with respect to payments received in connection with the Canadian Term Loan Commitment, to the Canadian Term Loan Lenders.

(b)    Payments Subsequent to Exercise of Remedies.  After the exercise by the Administrative Agent or the Required Lenders of remedies under this Agreement or the other Loan Documents, all monies received by the Administrative Agent shall be applied, unless otherwise required by the terms of the other Loan Documents or by applicable law, as follows:

(i)    with respect to:

(A)    payments from assets of Companies organized in the United States (or a state thereof), (1) first, to the Secured Obligations of the US Borrower, and (2) second, to the Secured Obligations of the Canadian Borrower, in each case applied in accordance with the Waterfall;

(B)    payments from assets of Companies that are not organized in the United States (or a state thereof), to the Secured Obligations of the Canadian Borrower, applied in accordance with the Waterfall; and

(C)    any other payments, in accordance with the Waterfall; and

(ii)    in accordance with the following priority (the “Waterfall”):

(A)    first, to the extent incurred in connection with obligations payable by a specific Borrower, to the payment of all costs, expenses and other amounts (to the extent not paid by the Borrowers) incurred by the Administrative Agent pursuant to Section 11.5 hereof and to the payment of Related Expenses to the Administrative Agent;

(B)    second, to the extent incurred in connection with the obligations payable by a specific Borrower, to the payment pro rata of (1) interest then accrued and payable on the outstanding Loans, (2) any fees then accrued and payable to the Administrative Agent, (3) any fees then accrued and payable to the Issuing Lender or the holders of the Letter of Credit Commitment in respect of the Letter of Credit Exposure, (4) any commitment fees, amendment fees and similar fees shared pro rata among the Lenders entitled thereto under this Agreement that are then accrued and payable, and (5) to the extent not paid by the Borrowers, to the obligations incurred by the Lenders (other than the Administrative Agent) pursuant to Section 11.5 hereof;

(C)    third, for payment of (1) principal outstanding on the Loans and the Letter of Credit Exposure, on a pro rata basis to the Lenders, based upon each such Lender’s Overall Commitment Percentage; provided that the amounts payable in respect of the Letter of Credit Exposure shall be held and applied by the Administrative Agent as security for the reimbursement obligations in respect 

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thereof, and, if any Letter of Credit shall expire without being drawn, then the amount with respect to such Letter of Credit shall be distributed to the Lenders, on a pro rata basis in accordance with this subpart (C), (2) the Indebtedness under any Hedge Agreement with a Lender (or an entity that is an Affiliate of a then existing Lender), such amount to be based upon the net termination obligation of the Borrowers under such Hedge Agreement, and (3) the Bank Product Obligations owing to a Lender (or an entity that is an Affiliate of a then existing Lender) under Bank Product Agreements; with such payment to be pro rata among (1), (2) and (3) of this subpart (C); 

(D)    fourth, to any remaining Secured Obligations; and

(E)    finally, any remaining surplus after all of the Secured Obligations have been paid in full, to the Administrative Borrower for distribution to the appropriate Borrowers, or to whomsoever shall be lawfully entitled thereto.

Each Lender hereby agrees to promptly provide all information reasonably requested by the Administrative Agent regarding any Bank Product Obligations owing to such Lender (or Affiliate of such Lender) or any Hedge Agreement entered into by a Company with such Lender (or Affiliate of such Lender), and each such Lender, on behalf of itself and any of its Affiliates, hereby agrees to promptly provide notice to the Administrative Agent upon such Lender (or any of its Affiliates) entering into any such Hedge Agreement or cash management services agreement.

ARTICLE IX.  THE ADMINISTRATIVE AGENT

The Lenders authorize KeyBank and KeyBank hereby agrees to act as agent for the Lenders in respect of this Agreement upon the terms and conditions set forth elsewhere in this Agreement, and upon the following terms and conditions:

Section 9.1.  Appointment and Authorization.  

(a)    General.  Each Lender hereby irrevocably appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers hereunder as are delegated to the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto and to execute various Security Documents pertaining to the Canadian Borrower and Foreign Guarantors of Payment on behalf of the Lenders.  Neither the Administrative Agent nor any of its Affiliates, directors, officers, attorneys or employees shall (i) be liable for any action taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own gross negligence or willful misconduct (as determined by a final non-appealable judgment of a court of competent jurisdiction), or be responsible in any manner to any of the Lenders for the effectiveness, enforceability, genuineness, validity or due execution of this Agreement or any other Loan Documents, (ii) be under any obligation to any Lender to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions hereof or thereof on the part of the Borrowers or any other Company, or the financial condition of the Borrowers or any 

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other Company, or (iii) be liable to any of the Companies for consequential damages resulting from any breach of contract, tort or other wrong in connection with the negotiation, documentation, administration or collection of the Loans or Letters of Credit or any of the Loan Documents.  Notwithstanding any provision to the contrary contained in this Agreement or in any other Loan Document, the Administrative Agent shall not have any duty or responsibility except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent.  Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.  The provisions of this Article IX are solely for the benefit of the Administrative Agent and the Lenders, and no Borrower nor any other Credit Party shall have rights as a third‐party beneficiary of any of such provisions.

(b)    Bank Products and Hedging Products.  Each Lender that is providing Bank Products or products in connection with a Hedge Agreement (or whose Affiliate is providing such products) hereby irrevocably authorizes the Administrative Agent to take such action as agent on its behalf (and its Affiliate’s behalf) with respect to the Collateral and the realization of payments with respect thereto pursuant to Section 8.7 hereof.  Each Borrower and each Lender agree that the indemnification and reimbursement provisions of this Agreement shall be equally applicable to the actions of the Administrative Agent pursuant to this subsection (b).  Each Lender hereby represents and warrants to the Administrative Agent that it has the authority to authorize the Administrative Agent as set forth above.

Section 9.2.  Note Holders.  The Administrative Agent may treat the payee of any Note as the holder thereof (or, if there is no Note, the holder of the interest as reflected on the books and records of the Administrative Agent) until written notice of transfer shall have been filed with the Administrative Agent, signed by such payee and in form satisfactory to the Administrative Agent (such transfer to have been made in accordance with Section 11.9 hereof).

Section 9.3.  Consultation With Counsel.  The Administrative Agent may consult with legal counsel selected by the Administrative Agent and shall not be liable for any action taken or suffered in good faith by the Administrative Agent in accordance with the opinion of such counsel.

Section 9.4.  Documents.  The Administrative Agent shall not be under any duty to examine into or pass upon the validity, effectiveness, genuineness or value of any Loan Document or any other Related Writing furnished pursuant hereto or in connection herewith or the value of any collateral obtained hereunder, and the Administrative Agent shall be entitled to assume that the same are valid, effective and genuine and what they purport to be.

Section 9.5.  Administrative Agent and Affiliates.  KeyBank and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in 

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and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Companies and Affiliates as though KeyBank were not the Administrative Agent hereunder and without notice to or consent of any Lender.  Each Lender acknowledges that, pursuant to such activities, KeyBank or its Affiliates may receive information regarding any Company or any Affiliate (including information that may be subject to confidentiality obligations in favor of such Company or such Company’s Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to other Lenders.  With respect to Loans and Letters of Credit (if any), KeyBank and its Affiliates shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though KeyBank were not the Administrative Agent, and the terms “Lender” and “Lenders” include KeyBank and its Affiliates, to the extent applicable, in their individual capacities.

Section 9.6.  Knowledge or Notice of Default.  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless the Administrative Agent has received written notice from a Lender or the Administrative Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders.  The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders); provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable, in its discretion, for the protection of the interests of the Lenders.

Section 9.7.  Action by Administrative Agent.  Subject to the other terms and conditions hereof, so long as the Administrative Agent shall be entitled, pursuant to Section 9.6 hereof, to assume that no Default or Event of Default shall have occurred and be continuing, the Administrative Agent shall be entitled to use its discretion with respect to exercising or refraining from exercising any rights that may be vested in it by, or with respect to taking or refraining from taking any action or actions that it may be able to take under or in respect of, this Agreement.  The Administrative Agent shall incur no liability under or in respect of this Agreement by acting upon any notice, certificate, warranty or other paper or instrument believed by it to be genuine or authentic or to be signed by the proper party or parties, or with respect to anything that it may do or refrain from doing in the reasonable exercise of its judgment, or that may seem to it to be necessary or desirable in the premises.  Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent’s acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders.

Section 9.8.  Release of Collateral or Guarantor of Payment.  In the event of a merger, transfer of assets or other transaction permitted pursuant to Section 5.12 hereof (or otherwise permitted pursuant to this Agreement) where the proceeds of such merger, transfer or other transaction are applied in accordance with the terms of this Agreement to the extent required to be so applied, or in the event of a merger, consolidation, dissolution or similar event, permitted pursuant to this Agreement, the Administrative Agent, at the request and expense of the Borrowers, is hereby 

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authorized by the Lenders to (a) release the relevant Collateral from this Agreement or any other Loan Document, (b) release a Guarantor of Payment in connection with such permitted transfer or event, and (c) duly assign, transfer and deliver to the affected Person (without recourse and without any representation or warranty) such Collateral as is then (or has been) so transferred or released and as may be in the possession of the Administrative Agent and has not theretofore been released pursuant to this Agreement.

Section 9.9.  Delegation of Duties.  The Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys‐in‐fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties.  The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney‐in‐fact that it selects in the absence of gross negligence or willful misconduct, as determined by a final and non-appealable judgment of a court of competent jurisdiction.

Section 9.10.  Indemnification of Administrative Agent.  The Lenders agree to indemnify the Administrative Agent (to the extent not reimbursed by the Borrowers) ratably, according to their respective Overall Commitment Percentages, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including reasonable attorneys’ fees and expenses) or disbursements of any kind or nature whatsoever that may be imposed on, incurred by or asserted against the Administrative Agent in its capacity as agent in any way relating to or arising out of this Agreement or any other Loan Document, or any action taken or omitted by the Administrative Agent with respect to this Agreement or any other Loan Document, provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including reasonable attorneys’ fees and expenses) or disbursements resulting from the Administrative Agent’s gross negligence or willful misconduct, as determined by a final and non-appealable judgment of a court of competent jurisdiction, or from any action taken or omitted by the Administrative Agent in any capacity other than as agent under this Agreement or any other Loan Document.  No action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section 9.10.  The undertaking in this Section 9.10 shall survive repayment of the Loans, cancellation of the Notes, if any, expiration or termination of the Letters of Credit, termination of the Commitment, any foreclosure under, or modification, release or discharge of, any or all of the Loan Documents, termination of this Agreement and the resignation or replacement of the administrative agent.

Section 9.11.  Successor Administrative Agent.  The Administrative Agent may resign as agent hereunder by giving not fewer than thirty (30) days prior written notice to the Administrative Borrower and the Lenders.  If the Administrative Agent shall resign under this Agreement, then either (a) the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders (with the consent of the Administrative Borrower so long as an Event of Default does not exist and which consent shall not be unreasonably withheld), or (b) if a successor agent shall not be so appointed and approved within the thirty (30) day period following the Administrative Agent’s notice to the Lenders of its resignation, then the Administrative Agent shall appoint a successor agent that shall serve as agent until such time as the Required Lenders appoint a successor agent.  

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If no successor agent has accepted appointment as the Administrative Agent by the date that is thirty (30) days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective, and the Lenders shall assume and perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.  Upon its appointment, such successor agent shall succeed to the rights, powers and duties as agent, and the term “Administrative Agent” means such successor effective upon its appointment, and the former agent’s rights, powers and duties as agent shall be terminated without any other or further act or deed on the part of such former agent or any of the parties to this Agreement.  After any retiring Administrative Agent’s resignation as the Administrative Agent, the provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under this Agreement and the other Loan Documents.

Section 9.12.  Issuing Lender.  The Issuing Lender shall act on behalf of the Revolving Lenders with respect to any Letters of Credit issued by the Issuing Lender and the documents associated therewith.  The Issuing Lender shall have all of the benefits and immunities (a) provided to the Administrative Agent in this Article IX with respect to any acts taken or omissions suffered by the Issuing Lender in connection with the Letters of Credit and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term “Administrative Agent”, as used in this Article IX, included the Issuing Lender with respect to such acts or omissions, and (b) as additionally provided in this Agreement with respect to the Issuing Lender.

Section 9.13.  Swing Line Lender.  The Swing Line Lender shall act on behalf of the Revolving Lenders with respect to any Swing Loans.  The Swing Line Lender shall have all of the benefits and immunities (a) provided to the Administrative Agent in this Article IX with respect to any acts taken or omissions suffered by the Swing Line Lender in connection with the Swing Loans as fully as if the term “Administrative Agent”, as used in this Article IX, included the Swing Line Lender with respect to such acts or omissions, and (b) as additionally provided in this Agreement with respect to the Swing Line Lender.

Section 9.14.  Administrative Agent May File Proofs of Claim.  In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Credit Party, (a) the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise, to (i) file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent) allowed in such judicial proceedings, and (ii) collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and (b) any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized 

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by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent.  Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

Section 9.15.  No Reliance on Administrative Agent’s Customer Identification Program.  Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on the Administrative Agent to carry out such Lender’s or its Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other anti‐terrorism Law, including any programs involving any of the following items relating to or in connection with the Borrowers, their respective Affiliates or agents, the Loan Documents or the transactions hereunder: (a) any identity verification procedures, (b) any record keeping, (c) any comparisons with government lists, (d) any customer notices, or (e) any other procedures required under the CIP Regulations or such other Laws.

Section 9.16.  Other Agents.  The Administrative Agent shall have the continuing right from time to time to designate one or more Lenders (or its or their Affiliates) as “syndication agent”, “co-syndication agent”, “documentation agent”, “co-documentation agent”, “book runner”, “lead arranger”, “joint lead arranger”, “arrangers” or other designations for purposes hereof.  Any such designation referenced in the previous sentence or listed on the cover of this Agreement shall have no substantive effect, and any such Lender and its Affiliates so referenced or listed shall have no additional powers, duties, responsibilities or liabilities as a result thereof, except in its capacity, as applicable, as the Administrative Agent, a Lender, the Swing Line Lender or the Issuing Lender hereunder.

Section 9.17.  Platform.

(a)    Each Credit Party agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Issuing Lender, the Swing Line Lender and the other Lenders by posting the Communications on the Platform.

(b)    The Platform is provided “as is” and “as available.”  The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications.  No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any 

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liability to the Borrowers or the other Credit Parties, any Lender or any other Person or entity for damages of any kind, including, without limitation, direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of any Borrower’s, any Credit Party’s or the Administrative Agent’s transmission of communications through the Platform.  “Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Credit Party pursuant to any Loan Document or the transactions contemplated therein that is distributed to the Administrative Agent, any Lender, the Issuing Lender or the Swing Line Lender by means of electronic communications pursuant to this Section, including through the Platform.

ARTICLE X.  GUARANTY BY US BORROWER OF OBLIGATIONS OF CANADIAN BORROWER

Section 10.1.  The Guaranty.  The US Borrower hereby guarantees to the Administrative Agent, for the benefit of the Lenders, as a primary obligor and not as a surety, the prompt payment of the Secured Obligations owing by the Canadian Borrower in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof.  The US Borrower hereby further agrees that, if any of such Secured Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise), the US Borrower will promptly pay the same, without any demand or notice whatsoever, and that, in the case of any extension of time of payment or renewal of any of such Secured Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms of such extension or renewal.

Section 10.2.  Obligations Unconditional.  The obligations of the US Borrower under Section 10.1 hereof are absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Canadian Borrower under any of the Loan Documents, or any other agreement or instrument referred to therein, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 10.2 that the obligations of the US Borrower hereunder, as a Guarantor, shall be absolute and unconditional under any and all circumstances.  The US Borrower agrees that it shall have no right of subrogation, indemnity, reimbursement or contribution against any other Borrower or any other Guarantor of Payment for amounts paid under this Article X until such time as the Secured Obligations have been irrevocably paid in full.  Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by Law, the occurrence of any one or more of the following shall not alter or impair the liability of the US Borrower as a Guarantor hereunder, which shall remain absolute and unconditional as described above:

(a)    any illegality or lack of validity or enforceability of any of the Secured Obligations or any Loan Document or Related Writing;

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(b)    any change in the time, place or manner of payment of, or in any other term of, any Secured Obligations or any other obligation of any Credit Party under any Loan Document, Hedge Agreement or Bank Products Agreement, or any rescission, waiver, amendment or other modification of any Loan Document or any other agreement, including any increase in the Secured Obligations resulting from any extension of additional credit or otherwise;

(c)    any taking, exchange, substitution, release, impairment or non-perfection of any Collateral, or any taking, release, impairment, amendment, waiver or other modification of any guaranty, for the Secured Obligations;

(d)    any manner of sale, disposition or application of proceeds of any Collateral;

(e)    any default, failure or delay, willful or otherwise, in the performance of the Secured Obligations;

(f)    any change, restructuring or termination of the corporate structure, ownership or existence of any Credit Party or any of its Subsidiaries or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Credit Party or its assets or any resulting release or discharge of any Secured Obligation;

(g)    any failure of the Administrative Agent or any Lender to disclose to any Credit Party any information relating to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Credit Party now or hereafter known to such Person (and each Guarantor waives any duty of the Administrative Agent or any Lender to disclose such information);

(h)    the failure of any other Person to execute or deliver this Agreement, any Guaranty of Payment Joinder or any other guaranty or agreement or the release or reduction of liability of any Guarantor or other obligor with respect to the Secured Obligations;

(i)    the failure of the Administrative Agent or any Lender to assert any claim or demand or to exercise or enforce any right or remedy under the provisions of any Loan Document or otherwise;

(j)    any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to, or be asserted by, the Canadian Borrower against the Administrative Agent or any Lender; or

(k)    any other circumstance (including, without limitation, any statute of limitations) or manner of administering the Loans (or any other financial accommodations) or any existence of, or reliance on, any representation by the Administrative Agent or any Lender that might vary the risk of any Guarantor or otherwise operate as a defense available to, or a legal or equitable discharge of, any Credit Party or any other obligor or surety.

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With respect to its obligations hereunder, the US Borrower hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents or any other agreement or instrument referred to in the Loan Documents, or against any other Person under any other guarantee of, or security for, any of the Secured Obligations.

Section 10.3.  Reinstatement.  The obligations of the US Borrower under this Article X shall be automatically reinstated if and to the extent that, for any reason, any payment by or on behalf of any Person in respect of the Secured Obligations is rescinded or must be otherwise restored by any holder of any of the Secured Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and the US Borrower agrees that it will indemnify the Administrative Agent and each Lender on demand for all reasonable costs and expenses (including, without limitation, reasonable fees and expenses of counsel) incurred by the Administrative Agent or such Lender in connection with such rescission or restoration, including any such reasonable costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.

Section 10.4.  Certain Additional Waivers.  The US Borrower agrees that the US Borrower shall have no right of recourse to security for any of the Secured Obligations guaranteed pursuant to this Article X, except through the exercise of rights of subrogation pursuant to Section 10.2 hereof and through the exercise of rights of contribution pursuant to Section 10.6 hereof.

Section 10.5.  Remedies.  The US Borrower agrees that, to the fullest extent permitted by law, as between the US Borrower, on the one hand, and the Administrative Agent, on behalf of the Lenders, on the other hand, the Obligations may be declared to be forthwith due and payable as provided in Section 7.1 or 7.2 hereof (and shall be deemed to have become automatically due and payable in the circumstances provided in such Section 8.2) for purposes of Section 10.1 hereof, notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the Secured Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Secured Obligations being deemed to have become automatically due and payable), the Secured Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the US Borrower for purposes of Section 10.1 hereof. 

Section 10.6.  Guarantee of Payment; Continuing Guarantee.  The guarantee in this Article X is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to all Obligations owing by the Canadian Borrower, whenever arising.

Section 10.7.  Payments.  All payments by the US Borrower under this Article X shall be made in Dollars, and free and clear of any Taxes.

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ARTICLE XI.  MISCELLANEOUS

Section 11.1.  Lenders’ Independent Investigation.  Each Lender, by its signature to this Agreement, acknowledges and agrees that the Administrative Agent has made no representation or warranty, express or implied, with respect to the creditworthiness, financial condition, or any other condition of any Company or with respect to the statements contained in any information memorandum furnished in connection herewith or in any other oral or written communication between the Administrative Agent and such Lender.  Each Lender represents that it has made and shall continue to make its own independent investigation of the creditworthiness, financial condition and affairs of the Companies in connection with the extension of credit hereunder, and agrees that the Administrative Agent has no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto (other than such notices as may be expressly required to be given by the Administrative Agent to the Lenders hereunder), whether coming into its possession before the first Credit Event hereunder or at any time or times thereafter.  Each Lender further represents that it has reviewed each of the Loan Documents.

Section 11.2.  No Waiver; Cumulative Remedies.  No omission or course of dealing on the part of the Administrative Agent, any Lender or the holder of any Note (or, if there is no Note, the holder of the interest as reflected on the books and records of the Administrative Agent) in exercising any right, power or remedy hereunder or under any of the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder or under any of the Loan Documents.  The remedies herein provided are cumulative and in addition to any other rights, powers or privileges held under any of the Loan Documents or by operation of law, by contract or otherwise.

Section 11.3.  Amendments, Waivers and Consents.  

(a)    General Rule.  No amendment, modification, termination, or waiver of any provision of any Loan Document nor consent to any variance therefrom (other than pursuant to Section 2.11(b) and (c) hereof), shall be effective unless the same shall be in writing and signed by the Required Lenders and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

(b)    Exceptions to the General Rule.  Notwithstanding the provisions of subsection (a) above, but subject to the provisions of Section 2.11(b) and (c) hereof:

(i)    Consent of Lenders Affected Required.  No amendment, modification, waiver or consent shall (A) extend or increase the Commitment of any Lender without the written consent of such Lender, (B) extend the date scheduled for payment of any principal (excluding mandatory prepayments) of or interest on the Loans or Letter of Credit reimbursement obligations or commitment fees payable hereunder without the written consent of each Lender directly affected thereby, (C) reduce the principal amount of any Loan, the stated rate of interest thereon (provided that the institution of the Default Rate or post default interest and a subsequent removal of the Default Rate or post default interest shall not constitute a decrease in interest rate pursuant to this Section 11.3) or the stated rate of commitment fees payable hereunder, without the consent of each Lender directly affected 

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thereby, (D) change the manner of pro rata application of any payments made by the applicable Borrower to the Lenders hereunder, without the consent of each Lender directly affected thereby, (E) without the unanimous consent of the Lenders, change any percentage voting requirement, voting rights, or the Required Lenders definition in this Agreement, (F) without the unanimous consent of the Lenders, release any Borrower or any Guarantor of Payment or release or subordinate any material amount of Collateral, except in connection with a transaction specifically permitted hereunder, (G) without the unanimous consent of the Lenders, amend this Section 11.3 or Section 8.5 or 8.8 hereof, or (H) without the unanimous consent of the Lenders, permit any Borrower to assign its rights hereunder or any interest herein.

(ii)    Provisions Relating to Special Rights and Duties.  No provision of this Agreement affecting the Administrative Agent in its capacity as such shall be amended, modified or waived without the consent of the Administrative Agent.  The Administrative Agent Fee Letter may be amended or modified by the Administrative Agent and the Administrative Borrower without the consent of any other Lender.  No provision of this Agreement relating to the rights or duties of the Issuing Lender in its capacity as such shall be amended, modified or waived without the consent of the Issuing Lender.  No provision of this Agreement relating to the rights or duties of the Swing Line Lender in its capacity as such shall be amended, modified or waived without the consent of the Swing Line Lender.

(iii)    Technical and Conforming Modifications.  Notwithstanding the foregoing, technical and conforming modifications to this Agreement or the other Loan Documents may be made with the consent of the Administrative Borrower and the Administrative Agent (A) if such modifications are not adverse to the Lenders and are requested by Governmental Authorities or necessary to comply with local law or advice of local counsel, (B) to cure any ambiguity, defect or inconsistency, or (C) to the extent necessary to integrate any increase in the Commitment or new Loans pursuant to Section 2.11(b) hereof.

(c)    Replacement of Non‐Consenting Lender.  If the Required Lenders have consented to any amendment, waiver or consent hereunder that requires the consent of all Lenders, or each affected Lender, but the consent of all Lenders, or each affected Lender, has not been obtained (each Lender withholding consent to such amendment, wavier or consent being referred to as a “Non‐Consenting Lender”), then, so long as the Administrative Agent is not the Non‐Consenting Lender, the Administrative Agent may (and shall, if requested by the Administrative Borrower), at the sole expense of the US Borrower, upon notice to such Non‐Consenting Lender and the Administrative Borrower, require such Non‐Consenting Lender to assign and delegate, without recourse (in accordance with the restrictions contained in Section 11.9 hereof) all of its interests, rights and obligations under this Agreement to a financial institution acceptable to the Administrative Agent and the Administrative Borrower that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) such Non‐Consenting Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from such financial institution (to the extent of such outstanding principal and accrued interest and fees) or the Administrative Borrower (in the case of all other amounts, including any breakage compensation 

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under Article III hereof), and (ii) the applicable assignee shall have consented to the proposed amendment, waiver or consent at issue.

(d)    Generally.  Notice of amendments, waivers or consents ratified by the Lenders hereunder shall be forwarded by the Administrative Agent to all of the Lenders.  Each Lender or other holder of a Note, or if there is no Note, the holder of the interest as reflected on the books and records of the Administrative Agent (or interest in any Loan or Letter of Credit) shall be bound by any amendment, waiver or consent obtained as authorized by this Section 11.3, regardless of its failure to agree thereto.

Section 11.4.  Notices.  All notices, requests, demands and other communications provided for hereunder shall be in writing and, if to a Borrower, mailed or delivered to it, addressed to it at the address specified on the signature pages of this Agreement, if to the Administrative Agent or a Lender, mailed or delivered to it, addressed to the address of the Administrative Agent or such Lender specified on the signature pages of this Agreement, or, as to each party, at such other address as shall be designated by such party in a written notice to each of the other parties.  All notices, statements, requests, demands and other communications provided for hereunder shall be deemed to be given or made when delivered (if received during normal business hours on a Business Day, such Business Day, otherwise the following Business Day) or two Business Days after being deposited in the mails with postage prepaid by registered or certified mail, addressed as aforesaid, or sent by facsimile or electronic communication, in each case of facsimile or electronic communication with telephonic confirmation of receipt.  All notices pursuant to any of the provisions hereof shall not be effective until received.  For purposes of Article II hereof, the Administrative Agent shall be entitled to rely on telephonic instructions from any person that the Administrative Agent in good faith believes is an Authorized Officer, and the Borrowers shall hold the Administrative Agent and each Lender harmless from any loss, cost or expense resulting from any such reliance.

Section 11.5.  Costs, Expenses and Documentary Taxes.  The US Borrower and, to the extent relating to the obligations of the Canadian Borrower, the Canadian Borrower, agree to pay on demand all reasonable costs and expenses of the Administrative Agent and all Related Expenses, including but not limited to (a) syndication, administration, travel and properly documented out of pocket expenses, including but not limited to reasonable and documented external attorneys’ fees and expenses, of the Administrative Agent in connection with the preparation, negotiation and closing of the Loan Documents and the administration of the Loan Documents, and the collection and disbursement of all funds hereunder and the other instruments and documents to be delivered hereunder, (b) properly documented extraordinary expenses of the Administrative Agent incurred in connection with the administration of the Loan Documents and the other instruments and documents to be delivered hereunder, and (c) the reasonable and properly documented fees and out of pocket expenses of special counsel for the Administrative Agent, with respect to the foregoing, and of local counsel, if any, who may be retained by said special counsel with respect thereto.  The US Borrowers and, to the extent relating to the obligations of the Canadian Borrower, the Canadian Borrower, to pay on demand all properly documented costs and expenses (including Related Expenses) of the Administrative Agent and the Lenders, including reasonable attorneys’ fees and expenses, in connection with the restructuring or enforcement of the Obligations, this Agreement 

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or any other Related Writing.  In addition, the US Borrower and the Canadian Borrower (if appropriate) shall pay any and all properly documented stamp, transfer, documentary and other taxes, assessments, charges and fees payable or determined to be payable in connection with the execution and delivery of the Loan Documents, and the other instruments and documents to be delivered hereunder, and agree to hold the Administrative Agent and each Lender harmless from and against any and all liabilities with respect to or resulting from any delay in paying or failure to pay such taxes or fees, other than those liabilities resulting from the gross negligence or willful misconduct of the Administrative Agent, or, with respect to amounts owing to a Lender, such Lender, in each case as determined by a final and non-appealable judgment of a court of competent jurisdiction.  All obligations provided for in this Section 11.5 shall survive any termination of this Agreement.

Section 11.6.  Indemnification.  The US Borrower, and the Canadian Borrower to the extent relating to Foreign Obligations, agrees to defend, indemnify and hold harmless the Administrative Agent and the Lenders (and their respective Affiliates, officers, directors, attorneys, agents and employees) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including attorneys’ fees) or disbursements of any kind or nature whatsoever that may be imposed on, incurred by or asserted against the Administrative Agent or any Lender in connection with any investigative, administrative or judicial proceeding (whether or not such Lender or the Administrative Agent shall be designated a party thereto) or any other claim by any Person (including any Borrower or any other Credit Party) relating to or arising out of any Loan Document or any actual or proposed use of proceeds of the Loans or any of the Obligations, or any activities of any Company or its Affiliates; provided that no Lender nor the Administrative Agent (nor their respective Affiliates, officers, directors, attorneys, agents and employees) shall have the right to be indemnified under this Section 11.6 for its or their own gross negligence or willful misconduct, as determined by a final and non-appealable judgment of a court of competent jurisdiction.  All obligations provided for in this Section 11.6 shall survive any termination of this Agreement.

Section 11.7.  Obligations Several; No Fiduciary Obligations.  The obligations of the Lenders hereunder are several and not joint.  Nothing contained in this Agreement and no action taken by the Administrative Agent or the Lenders pursuant hereto shall be deemed to constitute the Administrative Agent or the Lenders a partnership, association, joint venture or other entity.  No default by any Lender hereunder shall excuse the other Lenders from any obligation under this Agreement; but no Lender shall have or acquire any additional obligation of any kind by reason of such default.  The relationship between the Borrowers and the Lenders with respect to the Loan Documents and the other Related Writings is and shall be solely that of debtors and creditors, respectively, and neither the Administrative Agent nor any Lender shall have any fiduciary obligation toward any Credit Party with respect to any such documents or the transactions contemplated thereby. 

Section 11.8.  Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, and by facsimile or other electronic signature, each of which counterparts when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement.

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Section 11.9.  Successors and Assigns.  

(a)    Successors and Assigns Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither any Borrower nor any other Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section 11.9, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section 11.9, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (e) of this Section 11.9 (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section 11.9 and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)    Assignments by Lenders.  Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including, without limitation (i) such Lender’s Commitment, (ii) all Loans made by such Lender, (iii) such Lender’s Notes (if any), and (iv) such Lender’s interest in any Letter of Credit or Swing Loan); provided that any such assignment shall be subject to the following conditions:

(i)    Minimum Amounts.

(A)    no minimum amount is required to be assigned in the case of (x) an assignment of the entire remaining amount of the assigning Lender’s Commitment (to the extent the Commitment is still in effect) and the Loans at the time owing to such Lender, (y) contemporaneous assignments to related Approved Funds (determined after giving effect to such assignments) that equal at least the amount specified in subpart (b)(i)(B) of this Section 11.9 in the aggregate, or (z) in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund; and

(B)    in any case not described in subpart (b)(i)(A) of this Section 11.9, the aggregate amount of each such assignment (determined as of the date the Assignment Agreement with respect to such assignment is delivered to the Administrative Agent (or, if “Trade Date” is specified in the Assignment Agreement, as of the Trade Date) shall not be less than Two Million Five Hundred Thousand Dollars ($2,500,000), unless each of the Administrative Agent and, so long as no Default or Event of Default has occurred and is continuing, the Administrative Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed). 

(ii)    Proportionate Amounts.  Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under 

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this Agreement.  Each Lender shall at all times maintain the same Applicable Commitment Percentage (as rounded to the sixth decimal) with respect to the Revolving Credit Commitment, the US Term Loan Commitment and the Canadian Term Loan Commitment. 

(iii)    Required Consents.  No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section 11.9 and, in addition:

(A)    the consent of the Administrative Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (1) a Default or Event of Default has occurred and is continuing at the time of such assignment, or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that (y) the Administrative Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five Business Days after having received notice thereof, and (z) the Administrative Borrower’s consent shall not be required during the primary syndication of the Commitment;  

(B)    the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund; and

(C)    the consent of the Issuing Lender and the Swing Line Lender shall be required for any assignment in respect of the Revolving Credit Commitment.

(iv)    Assignment Agreement.  The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment Agreement, together with a processing and recordation fee of Three Thousand Five Hundred Dollars ($3,500); provided that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment.  The assignee, if it is not a Lender, shall deliver to the Administrative Agent an administrative questionnaire in a form supplied by the Administrative Agent.

(v)    No Assignment to Certain Persons.  No such assignment shall be made to (A) a Borrower or any of any Borrower’s Affiliates or Subsidiaries, or (B) to any Defaulting Lender or any Person that, upon becoming a Lender, would constitute a Defaulting Lender.  Any assignment of all or a portion of a Lender’s Canadian Commitment or other rights and obligations under this Agreement relating to the Canadian Borrower shall be made to a Canadian Qualified Lender.

(vi)    No Assignment to Natural Persons.  No such assignment shall be made to a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person).

(vii)    Certain Additional Payments.  In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective 

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unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Administrative Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the Issuing Lender, the Swing Line Lender and each other Lender hereunder (and interest accrued thereon), and (B) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Loans in accordance with its Applicable Commitment Percentage.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this subpart (vii), then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

(viii)    Treatment as Lenders.  Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section 11.9, from and after the effective date specified in each Assignment Agreement, the assignee thereunder shall be a party to this Agreement, and, to the extent of the interest assigned by such Assignment Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment Agreement, be released from its obligations under this Agreement (and, in the case of an Assignment Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Article III and Sections 11.5 and 11.6 hereof with respect to facts and circumstances occurring prior to the effective date of such assignment; provided that, except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subpart shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section 11.9.

(c)    Register.  The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at one of its offices a copy of each Assignment Agreement delivered to it and a register (the “Register”) for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amounts (and stated interest) of the Loans owing to, each Lender from time to time.  The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Administrative Borrower and any Lender at any reasonable time and from time to time upon reasonable prior notice.

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(d)    Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person, or any Borrower or any of any Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement and the other Loan Documents (including, without limitation, all or a portion of the Commitment and the Loans and participations owing to it and the Notes, if any, held by it); provided that (i) such Lender’s obligations under this Agreement and the other Loan Documents shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) the Borrowers, the Administrative Agent, the Issuing Lender, the Swing Line Lender and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and each of the other Loan Documents.  For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 9.10 with respect to any payments made by such Lender to any of its Participants.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver with respect to the following (to the extent that it affects such Participant): (i) any increase in the portion of the participation amount of any Participant over the amount thereof then in effect, or any extension of the Commitment Period; or (ii) any reduction of the principal amount of or extension of the time for any payment of principal on any Loan, or the reduction of the rate of interest or extension of the time for payment of interest on any Loan, or the reduction of the commitment fee.  The Borrowers agree that each Participant shall be entitled to the benefits of Article III hereof (subject to the requirements and limitations therein, including the requirements under Section 3.2(e) hereof (it being understood that the documentation required under Section 3.2(e) hereof shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section 11.9; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.6 hereof as if it were an assignee under subsection (b) of this Section 11.9; and (B) shall not be entitled to receive any greater payment under Article III hereof, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Administrative Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 3.6 hereof with respect to any Participant.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 8.4 hereof as though it were a Lender; provided that such Participant agrees to be subject to Section 8.5 hereof as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, 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 Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity 

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of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, 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 such Lender 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.

(e)    Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.  

Section 11.10.  Defaulting Lenders.

(a)    Defaulting Lender Adjustments.  Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law: 

(i)    Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders. 

(ii)    Defaulting Lender Waterfall.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII hereof or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 8.4 hereof shall be applied at such time or times as may be determined by the Administrative Agent as follows: (A) first, to the payment of amounts owing by such Defaulting Lender to the Administrative Agent hereunder; (B) second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the Issuing Lender or Swing Line Lender hereunder; (C) third, to Cash Collateralize the Issuing Lender’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.14 hereof; (D) fourth, as the Administrative Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; (E) fifth, if so determined by the Administrative Agent and the Administrative Borrower, to be held in a deposit account and released pro rata in order to (1) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement, and (2) Cash Collateralize the Issuing Lender’s future Fronting Exposure with respect to such with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.14 hereof; (F) sixth, to the payment of any amounts 

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owing to the Lenders, the Issuing Lender or the Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Lender or the Swing Line Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; (G) seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to any Borrower as a result of any judgment of a court of competent jurisdiction obtained by any Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and (H) eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that, if (y) such payment is a payment of the principal amount of any Loans or any Letters of Credit in respect of which such Defaulting Lender has not fully funded its appropriate share, and (z) such Loans were made or reimbursement of any payment on any Letters of Credit were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.1 hereof were satisfied or waived, such payment shall be applied solely to pay the Loans of, and the Letter of Credit Exposure owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or Letter of Credit Exposure owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in the Letter of Credit Exposure and Swing Loans are held by the Lenders pro rata in accordance with the Commitment under the applicable facility without giving effect to Section 11.10(a)(iv) hereof.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 11.10(a)(ii) hereof shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)    Certain Fees.

(A)    No Defaulting Lender shall be entitled to receive any commitment fee for any period during which that Lender is a Defaulting Lender (and the US Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(B)    Each Defaulting Lender shall be entitled to receive letter of credit fees, as set forth in Section 2.2A(b)(iii), 2.2A(b)(iv), 2.2B(b)(iii) and 2.2B(b)(iv) hereof for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.14 hereof.

(C)    With respect to any fee not required to be paid to any Defaulting Lender pursuant to subpart (A) or (B) above, the US Borrower shall (1) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in the Letter of Credit Exposure or Swing Loans that has been reallocated to such Non-Defaulting Lender pursuant to subpart (iv) below, (2) pay to the Issuing Lender and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to such 

139

Defaulting Lender to the extent allocable to the Issuing Lender’s or Swing Line Lender’s Fronting Exposure to such Defaulting Lender, and (3) not be required to pay the remaining amount of any such fee.

(iv)    Reallocation of Participations to Reduce Fronting Exposure.  All or any part of such Defaulting Lender’s participation in the Letter of Credit Exposure and Swing Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Commitment Percentages with respect thereto (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Applicable Commitment Percentage with respect to the Revolving Credit Commitment.  No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v)    Cash Collateral, Repayment of Swing Loans.  If the reallocation described in subpart (iv) above cannot, or can only partially, be effected, the US Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, (y) first, prepay Swing Loans in an amount equal to the Swing Line Lender’s Fronting Exposure and (z) second, Cash Collateralize the Issuing Lenders’ Fronting Exposure in accordance with the procedures set forth in Section 2.14 hereof. 

(b)    Defaulting Lender Cure.  If the US Borrower, the Administrative Agent, the Swing Line Lender and the Issuing Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), such Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be reasonably necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swing Loans to be held pro rata by the Lenders in accordance with the Commitments under the applicable facility (without giving effect to Section 11.12(a)(iv) hereof), whereupon such Lender will cease to be a Defaulting Lender; provided that (i) no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of any Borrower while that Lender was a Defaulting Lender; and (ii) except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

(c)    New Swing Loan and Letters of Credit.  So long as any Lender is a Defaulting Lender, (i) the Swing Line Lender shall not be required to fund any Swing Loan unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swing Loan, and (ii) the Issuing Lender shall not be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

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(d)    Replacement of Defaulting Lenders.  Each Lender agrees that, during the time in which any Lender is a Defaulting Lender, the Administrative Agent shall have the right (and the Administrative Agent shall, if requested by the US Borrower), at the sole expense of the Borrowers, upon notice to such Defaulting Lender and the US Borrower, to require that such Defaulting Lender assign and delegate, without recourse (in accordance with the restrictions contained in Section 11.9 hereof), all of its interests, rights and obligations under this Agreement to an Eligible Assignee, approved by the US Borrower (unless an Event of Default shall exist) and the Administrative Agent, that shall assume such obligations.

Section 11.11.  Patriot Act Notice.  Each Lender, and the Administrative Agent (for itself and not on behalf of any other party), hereby notifies the Credit Parties that, pursuant to the requirements of the Patriot Act and any other applicable anti-terrorism Law (including Canadian Anti-Money Laundering & Anti-Terrorism Legislation), such Lender and the Administrative Agent are required to obtain, verify and record information that identifies the Credit Parties, which information includes the name and address of each of the Credit Parties and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Credit Parties in accordance with the Patriot Act or such other applicable anti-terrorism Law.  Each Borrower shall provide, to the extent commercially reasonable, such information and take such actions as are reasonably requested by the Administrative Agent or a Lender in order to assist the Administrative Agent or such Lender in maintaining compliance with the Patriot Act and any other applicable anti-terrorism Law.

Section 11.12.  Severability of Provisions; Captions; Attachments.  Any provision of this Agreement that shall be 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 hereof or affecting the validity or enforceability of such provision in any other jurisdiction.  The several captions to sections and subsections herein are inserted for convenience only and shall be ignored in interpreting the provisions of this Agreement.  Each schedule or exhibit attached to this Agreement shall be incorporated herein and shall be deemed to be a part hereof.

Section 11.13.  Investment Purpose.  Each of the Lenders represents and warrants to the Borrowers that such Lender is entering into this Agreement with the present intention of acquiring any Note issued pursuant hereto (or, if there is no Note, the interest as reflected on the books and records of the Administrative Agent) for investment purposes only and not for the purpose of distribution or resale, it being understood, however, that each Lender shall at all times retain full control over the disposition of its assets.

Section 11.14.  Entire Agreement.  
This Agreement, any Note and any other Loan Document or other agreement, document or instrument attached hereto or executed on or as of the Original Closing Date (to the extent such documents may have been amended, amended and restated or replaced in connection herewith) and the Restatement Closing Date integrate all of the terms and conditions mentioned herein or incidental hereto and supersede all oral representations and negotiations and prior writings with respect to the subject matter hereof.

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Section 11.15.  Confidentiality.  The Administrative Agent and each Lender shall hold all Confidential Information in accordance with the customary procedures of the Administrative Agent or such Lender for handling confidential information of this nature, and in accordance with safe and sound banking practices.  Notwithstanding the foregoing, the Administrative Agent or any Lender may in any event make disclosures of, and furnish copies of Confidential Information (a) to another agent under this Agreement or another Lender; (b) when reasonably required by any bona fide transferee or participant in connection with the contemplated transfer of any Loans or Commitment or participation therein (provided that each such prospective transferee or participant shall have an agreement for the benefit of the Borrowers with such prospective transferor Lender or participant containing substantially similar provisions to those contained in this Section 11.15); (c) to the parent corporation or other Affiliates of the Administrative Agent or such Lender, and to their respective auditors and attorneys; and (d) as required or requested by any Governmental Authority or representative thereof, or pursuant to legal process, provided, that, unless specifically prohibited by applicable Law or court order, the Administrative Agent or such Lender, as applicable, shall notify the chief financial officer of the Administrative Borrower of any request by any Governmental Authority or representative thereof (other than any such request in connection with an examination of the financial condition of the Administrative Agent or such Lender by such Governmental Authority), and of any other request pursuant to legal process, for disclosure of any such non-public information prior to disclosure of such Confidential Information.  Notwithstanding anything contained herein to the contrary, the Administrative Agent, each Lender, the Borrowers and their Affiliates may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated hereby and by the other Loan Documents and materials of any kind (including opinions or other tax analyses) that are provided to the Administrative Agent, any Lender, the Borrowers or their Affiliates relating to such tax treatment and tax structure; it being understood that this authorization is retroactively effective to the commencement of the first discussions between or among any of the parties regarding the transactions contemplated hereby and by the other Loan Documents.  In no event shall the Administrative Agent or any Lender be obligated or required to return any materials furnished by or on behalf of any Company.  Each Borrower hereby agrees that the failure of the Administrative Agent or any Lender to comply with the provisions of this 11.15 shall not relieve any Borrower of any of the obligations to the Administrative Agent and the Lenders under this Agreement and the other Loan Documents.

Section 11.16.  Limitations on Liability of the Issuing Lender.  The Borrowers assume all risks of the acts or omissions of any beneficiary or transferee of any Letter of Credit with respect to its use of such Letters of Credit.  Neither the Issuing Lender nor any of its officers or directors shall be liable or responsible for (a) the use that may be made of any Letter of Credit or any acts or omissions of any beneficiary or transferee in connection therewith; (b) the validity, sufficiency or genuineness of documents, or of any endorsement thereon, even if such documents should prove to be in any or all respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing Lender against presentation of documents that do not comply with the terms of a Letter of Credit, including failure of any documents to bear any reference or adequate reference to such Letter of Credit (unless such payment results from the gross negligence or willful misconduct of the Issuing Bank); or (d) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except that the account party on such Letter of Credit shall have a claim against 

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the Issuing Lender, and the Issuing Lender shall be liable to such account party, to the extent of any direct, but not consequential, damages suffered by such account party that such account party proves were caused by (i) the Issuing Lender’s or any of its officer’s or director’s willful misconduct or gross negligence (as determined by a final judgment of a court of competent jurisdiction) in determining whether documents presented under a Letter of Credit comply with the terms of such Letter of Credit, or (ii) the Issuing Lender’s or any of its officer’s or director’s willful failure to make lawful payment under any Letter of Credit after the presentation to it of documentation strictly complying with the terms and conditions of such Letter of Credit.  In furtherance and not in limitation of the foregoing, the Issuing Lender may accept documents that appear on their face to be in order, without responsibility for further investigation.

Section 11.17.  General Limitation of Liability.  No claim may be made by any Credit Party, the Issuing Lender, the Administrative Agent, or any other Lender or the Affiliates, directors, officers, employees, attorneys or agents of any of them or any other Person against any Credit Party, the Administrative Agent, the Issuing Lender, or any other Lender or the Affiliates, directors, officers, employees, attorneys or agents of any of them for any damages other than actual compensatory 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 of the other Loan Documents, or any act, omission or event occurring in connection therewith; and the Borrowers, each Lender, the Administrative Agent and the Issuing Lender hereby, to the fullest extent permitted under applicable Law, waive, release and agree not to sue or counterclaim upon any such claim for any special, indirect, consequential or punitive damages, whether or not accrued and whether or not known or suspected to exist in their favor and regardless of whether any Credit Party, any Lender, Issuing Lender, or the Administrative Agent has been advised of the likelihood of such loss of damage.

Section 11.18.  No Duty.  All attorneys, accountants, appraisers, consultants and other professional persons (including the firms or other entities on behalf of which any such Person may act) retained by the Administrative Agent or any Lender with respect to the transactions contemplated by the Loan Documents shall have the right to act exclusively in the interest of the Administrative Agent or such Lender, as the case may be, and shall have no duty of disclosure, duty of loyalty, duty of care, or other duty or obligation of any type or nature whatsoever to the Borrowers, any other Companies, or any other Person, with respect to any matters within the scope of such representation or related to their activities in connection with such representation.  Each Borrower agrees, on behalf of itself and its Subsidiaries, not to assert any claim or counterclaim against any such persons with regard to such matters, all such claims and counterclaims, now existing or hereafter arising, whether known or unknown, foreseen or unforeseeable, being hereby waived, released and forever discharged, other than those claims and counterclaims arising from the gross negligence or willful misconduct of such persons with regard to such matters.

Section 11.19.  Legal Representation of Parties.  The Loan Documents were negotiated by the parties with the benefit of legal representation and any rule of construction or interpretation otherwise requiring this Agreement or any other Loan Document to be construed or interpreted against any party shall not apply to any construction or interpretation hereof or thereof.

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Section 11.20.  Judgment Currency.

(a)    This is an international transaction in which the obligations of the Credit Parties to make payment to or for account of the Administrative Agent or the Lenders in a specified currency (“Original Currency”) shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any other currency (“Judgment Currency”) except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent or the applicable Lender of the full amount in Original Currency payable to the Administrative Agent or such Lender under this Agreement 

(b)    If the Administrative Agent, on behalf of the Lenders, or any other holder of the Secured Obligations (the “Applicable Creditor”) obtains a judgment or judgments against any Credit Party in respect of any sum adjudged to be due to the Administrative Agent or the Lenders hereunder or under the Notes or any other Loan Document (the “Judgment Amount”) in a Judgment Currency other than the Original Currency, the obligations of such Credit Party in connection with such judgment shall be discharged only to the extent that (i) on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, such Applicable Creditor, in accordance with the normal banking procedures in the relevant jurisdiction, can purchase the Original Currency with the Judgment Currency; and (ii) if the amount of Original Currency that could have been purchased pursuant to subpart (i) above is less than the amount of Original Currency that could have been purchased with the Judgment Amount on the date or dates the Judgment Amount (excluding the portion of the Judgment Amount that has accrued as a result of the failure of such Credit Party to pay the sum originally due hereunder when it was originally due and owing to the Administrative Agent or the Lenders hereunder) was originally due and owing to the Administrative Agent or the Lenders hereunder (the “Loss”), such Credit Party agrees as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or such Lender, as the case may be, against such Loss.  For purposes of determining the equivalent in one currency of another currency as provided in this Section 11.20, such amount shall include any premium and costs payable in connection with the conversion into or from any currency.  The obligations of the Credit Parties contained in this Section 11.20 shall survive the termination of this Agreement and the payment of all other amounts owing hereunder.

Section 11.21.  Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder that may be payable to it by any party hereto that is an EEA Financial Institution; and

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(b)    the effects of any Bail-in Action on any such liability, including, if applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)    the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

Section 11.22.  Canadian Limitation Periods.  To the extent that any limitation period within the meaning of applicable legislation in any jurisdiction of Canada applies to any claim for payment of the Secured Obligations, or remedy for enforcement of such Secured Obligations, each Borrower agrees that:

(a)    any such limitation period is expressly excluded and waived entirely if permitted by applicable law;

(b)    if a complete exclusion and waiver of any such limitation period is not permitted by applicable law, any limitation period is extended to the maximum length permitted by applicable law;

(c)    any applicable limitation period shall not begin before an express demand for payment of such Secured Obligations is made in writing by the Administrative Lender to such Borrower; and

(d)    any applicable limitation period shall begin afresh upon any payment or other acknowledgment of the Secured Obligations by any Borrower.

Section 11.23.  Governing Law; Submission to Jurisdiction.

(a)    Governing Law.  This Agreement, each of the Notes and any other Related Writing (except as otherwise specifically set forth in any Loan Document governed by the Laws of another jurisdiction) shall be governed by and construed in accordance with the Laws of the State of Ohio and the respective rights and obligations of the Borrowers, the Administrative Agent, and the Lenders shall be governed by Ohio law, without regard to principles of conflicts of laws.

(b)    Submission to Jurisdiction.  Each Borrower hereby irrevocably submits to the non‐exclusive jurisdiction of any Ohio state or federal court sitting in Cleveland, Ohio, over any action or proceeding arising out of or relating to this Agreement, the Obligations or any other Related Writing (except as otherwise specifically set forth in any Loan Document governed by the Laws of another jurisdiction), and each Borrower hereby irrevocably agrees that all claims in respect of such 

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action or proceeding may be heard and determined in such Ohio state or federal court.  Each Borrower, on behalf of itself and its Subsidiaries, hereby irrevocably waives, to the fullest extent permitted by law, any objection it may now or hereafter have to the laying of venue in any action or proceeding in any such court as well as any right it may now or hereafter have to remove such action or proceeding, once commenced, to another court on the grounds of FORUM NON CONVENIENS or otherwise.  Each Borrower agrees that a final, non‐appealable 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.

[Remainder of page left intentionally blank]

4824-6316-2704.21

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JURY TRIAL WAIVER.  TO THE EXTENT PERMITTED BY LAW, EACH BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM (AND THE OTHER CREDIT PARTIES) IN CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.  

IN WITNESS WHEREOF, the parties have executed and delivered this Credit Agreement as of the date first set forth above.

	
		
	Address:   800 Manor Park Drive      Columbus, Ohio 43228
   Attention:  John P. Zimmer

	CORE MOLDING TECHNOLOGIES, INC.

By: /s/ John P. Zimmer   
John P. Zimmer
Vice President, Secretary, Treasurer and    Chief Financial Officer

	Address:   800 Manor Park Drive   
   Columbus, Ohio 43228
   Attention:  John P. Zimmer

	1137925 B.C. LTD.

By: /s/ John P. Zimmer   
      John P. Zimmer
      Chief Financial Officer

	Address:   127 Public Square
Cleveland, Ohio  44114-1306
Attention:  Commercial Bank

	KEYBANK NATIONAL ASSOCIATION
   as the Administrative Agent, the Swing Line 
   Lender, the Issuing Lender and as a Lender

By: /s/ David M Raczka   
David M. Raczka
Assistant Vice President

Signature Page 1 of 3 to
Credit Agreement

	
		
	Address:   41 High Street   
   Columbus, Ohio  43215
   Attention:  Ron Wuerth

	THE HUNTINGTON NATIONAL BANK
as a Lender

By: /s/ Ronald B. Wuerth   
Ronald B. Wuerth
Vice President

Signature Page 2 of 3 to
Credit Agreement

	
		
	Address:   TW West Tower, 26th Floor   
   100 Wellington St. W
   Toronto, Ontario M5K 1A2   
   Attention:  Ian Sinclair

	THE TORONTO-DOMINION BANK
as a Lender

By: /s/ Andre Greenwood   
Andre Greenwood
Manager Commercial Credit
National Accounts

	 
	 

Signature Page 3 of 3 to
Credit Agreement

SCHEDULE 1

COMMITMENTS OF LENDERS

	
								
	LENDERS
	REVOLVING CREDIT
COMMITMENT
PERCENTAGE
	REVOLVING
CREDIT
COMMITMENT
AMOUNT
	US TERM LOAN COMMITMENT PERCENTAGE
	US TERM LOAN
COMMITMENT
AMOUNT
	CANADIAN TERM LOAN COMMITMENT PERCENTAGE
	CANADIAN TERM LOAN
COMMITMENT
AMOUNT
	MAXIMUM AMOUNT

	

KeyBank National Association

	41.1764706%
	$16,470,588.24
	41.1764706%
	$13,176,470.58
	41.1764706%
	$5,352,941.18
	$35,000,000

	

The 
Huntington National Bank

	29.4117647%
	$11,764,705.88
	29.4117647%
	$9,411,764.71
	29.4117647%
	$3,823,529.41
	$25,000,000

	

The Toronto-Dominion Bank

	29.4117647%
	$11,764,705.88
	29.4117647%
	$9,411,764.71
	29.4117647%
	$3,823,529.41
	$25,000,000

	

Total Commitment Amount
	

100%
	

$40,000,000

	

100%
	

$32,000,000

	

100%
	

$13,000,000
	

$85,000,000

S-1

SCHEDULE 2

GUARANTORS OF PAYMENT

Domestic Guarantors of Payment

Core Composites Corporation, a Delaware corporation
Core Automotive Technologies LLC, a Delaware limited liability company
Core Composites Cincinnati, LLC, a Delaware limited liability company

Foreign Guarantors of Payment

None, as of the Closing Date

S-2

SCHEDULE 2.2

EXISTING LETTERS OF CREDIT

	
						
	Letter of Credit Number
	

Beneficiary
	

Account Party
	

Type of Letter of Credit
	

Amount
	

Expiration

	S324322

	Liberty Mutual Insurance Company

	Core Molding Technologies, Inc.

	Irrevocable Standby Letter of Credit

	$175,000
	June 1, 2018

S-3

SCHEDULE 3

DOMESTIC REAL PROPERTY

Core Molding Technologies, Inc.
800 Manor Park Drive
Columbus, Ohio 43228

24 Commerce Drive
Meadow Creek Industrial Park
Gaffney, South Carolina 29340

Core Automotive Technologies LLC:
None.

Core Composites Cincinnati, LLC:
None.

Core Composites Corporation:
None.

S-4

SCHEDULE 4

PLEDGED SECURITIES
	
						
	   Pledgor
	Name of Subsidiary
	Jurisdiction of Subsidiary
	Number of Shares Owned and Class
	Certificate Number
	Ownership Percentage

	Core Molding Technologies, Inc.
	Core Composites Corporation
	Delaware
	1,000 Common
	1
	100%

	Core Molding Technologies, Inc.
	Core Automotive Technologies LLC
	Delaware
	N/A
	N/A
	100%

	Core Molding Technologies, Inc.
	Core Composites Cincinnati, LLC
	Delaware
	N/A
	N/A
	100%

	Core Composites Corporation
	Corecomposites de México, S. de R.L. de C.V.
	Mexico
	Class I Equity Interests
Class II Equity Interests, Series A
Class II Equity Interests, Series B
	N/A
	95%

	Core Molding Technologies, Inc.
	Mexico
	5%

	Core Molding Technologies, Inc.
	1137925 B.C. LTD.
	British Columbia, Canada
	9,275,000 common shares
	C2
	35%

	17,225,000 common shares
	C3
	65%

	Core Composites Corporation
	CC HPM, S. de R.L. de C.V.
	Mexico
	Common
	N/A
	95%

	Core Molding Technologies, Inc.
	Mexico
	N/A
	5%

This Schedule 4 is for informational purposes only.  The amount of Restricted Pledged Securities pledged under the Collateral Documents, and the obligations secured thereby, shall be governed by the Collateral Documents, and nothing contained on this Schedule 4 shall be deemed to limit, or grant such Lien beyond, the Lien contemplated by the Collateral Documents. 

S-5

Schedule 5.8

INDEBTEDNESS

None.

S-6

Schedule 5.9

LIENS

	
					
	Debtor
	Secured Party
	Filing Office
	Filing Information
	Collateral

	Core Molding Technologies, Inc.
	KeyBank National Association
	Delaware Secretary of State
	21942147
07/15/2002
	All assets

	Core Molding Technologies, Inc.
	KeyBank National Association, as Agent
	Delaware Secretary of State
	2008 4042709
12/05/2008
	All assets

	Core Automotive Technologies LLC
	KeyBank National Association
	Delaware Secretary of State
	2008 0077402
01/08/2008
	All assets

	Core Automotive Technologies LLC
	KeyBank National Association
	Delaware Secretary of State
	2008 4042667
12/05/2008
	All assets

	Core Composites Cincinnati, LLC
	KeyBank National Association
	Delaware Secretary of State
	2008 0077683
01/08/2008
	All assets

	Core Composites Cincinnati, LLC
	KeyBank National Association, as Agent
	Delaware Secretary of State
	2008 4042725
12/05/2008
	All assets

	Core Composites Corporation
	KeyBank National Association
	Delaware Secretary of State
	62216455
06/26/2006
	All assets

	Core Composites Corporation
	KeyBank National Association, as Agent
	Delaware Secretary of State
	2008 4042642
12/05/2008
	All assets

    

S-7

Schedule 5.11

PERMITTED FOREIGN SUBSIDIARY LOANS AND INVESTMENTS

	
					
	Investor
	Issuer
	Equity Investment (In USD)
	Loan to Subsidiary (In USD)
	Total Investment (In USD)

	Core Molding Technologies, Inc.
	1137925 B.C. LTD.
	$26,500,000
	$16,900,000
	$43,400,000

	
					
	Investor
	Issuer
	Equity Investment (In USD)
	Loan to Subsidiary (In USD)
	Total Investment (In USD)

	Core Composites Corporation

	CC HPM , S. de R.L. de C.V.
	$1,995,000
	$3,200,000
	$5,195,000

	Core Molding Technologies, Inc.

	CC HPM , S. de R.L. de C.V.
	$105,000
	 
	$105,000

	Total
	 
	$2,100,000
	$3,200,000
	$5,300,000

	
					
	Investor
	Issuer
	Equity Investment (In USD)
	Loan to Subsidiary (In USD)
	Total Investment (In USD)

	Core Composites Corporation

	Corecomposites de México, S. de R.L. de C.V.
	$6,445,103
	$1,216,412
	$7,661,515

	Core Molding Technologies, Inc.

	Corecomposites de México, S. de R.L. de C.V.
	$339,216
	 
	$339,216

	Total
	 
	$6,784,319
	$1,216,412
	$8,000,731

S-8

Schedule 6.1

CORPORATE EXISTENCE; SUBSIDIARIES; FOREIGN QUALIFICATION

	
			
	Company
	Jurisdiction of Organization
	Foreign Qualifications

	Core Molding Technologies, Inc.
	Delaware
	South Carolina
Ohio

	Core Composites Corporation
	Delaware
	Texas

	Core Composites Cincinnati, LLC
	Delaware
	Ohio

	Core Automotive Technologies LLC
	Delaware
	None

	Corecomposites de México, S. de R.L. de C.V.
	Tamaulipas, Mexico
	None

	1137925 B.C. Ltd.
	British Columbia, Canada

	Ontario, Canada

	CC HPM, S. de R.L. de C.V.
	Tamaulipas, Mexico
	None

S-9

	
					
	Subsidiary of Borrower
	Dormant Subsidiary
	Chief Executive Office and Principal Place of Business
	Equity Owner
	Percentage of Ownership

	Core Composites Corporation
	No
	800 Manor Park Drive
Columbus, Ohio 43228
	Core Molding Technologies, Inc.
	100%

	Core Composites Cincinnati, LLC
	No
	800 Manor Park Drive
Columbus, Ohio 43228
	Core Molding Technologies, Inc.
	100%

	Core Automotive Technologies LLC
	No
	800 Manor Park Drive
Columbus, Ohio 43228
	Core Molding Technologies, Inc.
	100%

	Corecomposites de México,  
S. de R.L. de C.V.
	No
	Guillermo González Camarena No. 9003, Parque Industrial La Ventana, Matamoros, Tamaulipas, C.P. 87569, Mexico
	Core Molding Technologies, Inc.
	5%

	Core Composites Corporation
	95%

	1137925 B.C. Ltd.
	No
	Building 3, P.O. Box 474,
Northam Industrial Park
Cobourg, Ontario,
K9A 4L1
	Core Molding Technologies, Inc.
	100%

	CC HPM, S. de R.L. de C.V.
	No.
	Guillermo González Camarena No. 9003, Parque Industrial La Ventana, Matamoros, Tamaulipas, C.P. 87569, Mexico
	Core Molding Technologies, Inc.
	5%

	Core Composites Corporation
	95%

S-10

Schedule 6.4

LITIGATION AND ADMINISTRATIVE PROCEEDINGS

None.

S-11

Schedule 6.5

REAL ESTATE OWNED BY THE COMPANIES

US REAL PROPERTY

Domestic Real Property liste don Schedule 3 is hereby incorporated by reference.  In addition:

1700 Wilkie Drive
Winona, Minnesota 55987

MEXICAN REAL PROPERTY
    
Corecomposites de México, S. de R.L. de C.V.:

Guillermo González Camarena No. 9003, Parque Industrial La Ventana, 
Matamoros, Tamaulipas, C.P. 87569, Mexico

CANADIAN REAL PROPERTY

NONE

S-12

Schedule 6.9

LOCATIONS
Chief Executive Offices:    

	
			
	 	Credit Party
	Location of Chief Executive Office

	 	Core Molding Technologies, Inc.
	800 Manor Park Drive
Columbus, Ohio 43228

	 	Core Composites Corporation
	800 Manor Park Drive
Columbus, Ohio 43228

	 	Core Composites Cincinnati, LLC
	800 Manor Park Drive
Columbus, Ohio 43228

	 	Core Automotive Technologies LLC
	800 Manor Park Drive
Columbus, Ohio 43228

	 	Corecomposites de México, S. de R.L. de C.V.
	Guillermo González Camarena No. 9003, Parque Industrial La Ventana, Matamoros, Tamaulipas, C.P. 87569, Mexico

	 
	 	1137925 B.C. Ltd.
	Building 3, P.O. Box 474, Northam Industrial Park
Cobourg, Ontario, K9A 4L1

	 	CC HPM, S. de R.L. de C.V.
	Guillermo González Camarena No. 9003, Parque Industrial La Ventana, Matamoros, Tamaulipas, C.P. 87569, Mexico

Owned and Leased Locations: 
    

S-13

	
				
	Credit Party
	Location
	Owned/Leased
	Landlord’s Waiver Requested

	Core Molding Technologies, Inc.
	800 Manor Park Drive
Columbus, Ohio 43228
	Owned
	N/A

	Core Molding Technologies, Inc.
	24 Commerce Drive
Meadow Creek Industrial Park
Gaffney, South Carolina
	Owned
	N/A

	Core Molding Technologies, Inc.
	1700 Wilkie Drive
Winona, Minnesota  55987
	Owned
	N/A

	Corecomposites de México, S. de R.L. de C.V.
	Guillermo González Camarena No. 9003, Parque Industrial La Ventana, 
Matamoros, Tamaulipas, C.P. 87569, Mexico.
	Owned
	N/A

	CC HPM, S. de R.L. de C.V.
	Guillermo González Camarena No. 9003, Parque Industrial La Ventana, 
Matamoros, Tamaulipas, C.P. 87569, Mexico.
	Leased
	N/A

	Core Composites Corporation
	1385 Cheers Blvd.
Brownsville, Texas 78521
	Leased
	Yes

	Core Composites Cincinnati, LLC
	4174 Half Acre Road
Batavia, Ohio 45103
	Leased
	Yes

	CC HPM, S. de R.L. de C.V.
	Avenida Internacional #220, 
Parque Industrial VYNMSA Escobedo, C.P. 66053, 
Escobedo, Nuevo León, México
	Leased
	N/A

	1137925 B.C. Ltd.
	Building No. 3, Building No. 3 Storage Yard, Building No. 4 Centre, Building No. 4 West, Building No. 16 and the Causeway
Northam Industrial Park
740 Division Street
Cobourg, Ontario
Canada K9A 1A1
	Leased
	Yes

	1137925 B.C. Ltd.
	9726 47th Avenue, S.W.,  
Building #14, Lakewood, WA  98499
	Leased
	No

	1137925 B.C. Ltd.
	2655 Lakeshore Rd., Port Hope, Ontario
	Leased
	Yes

	Core Composites Cincinnati, LLC
	Marine Concepts, 6805 15th Street
East, Sarasota, FL 34243
	Leased
	N/A

	Core Molding Technologies, Inc.
	Peosta Warehousing, 9861 Kapp Court, Iowa 52068
	Leased
	Yes

Other Locations:

S-14

	
		
	Credit Party
	Location

	Core Molding Technologies, Inc.
	Carolina Customs Finishing, 2115 N. Fayetteville St., Asheboro, NC 27203

	Core Molding Technologies, Inc.
	Composite Molding Systems, 2251 E. Front Street, Logan, Ohio 43138

	1137925 B.C. Ltd.
	1017 Olive Street, Suite 1000 C, St. Louis, MO 63101

	1137925 B.C. Ltd.
	Prime Distribution Services, 1750 Allpoints Pkwy, Plainfield, IN 46168

S-15

Schedule 6.11

EMPLOYEE BENEFITS PLANS

Cincinnati, Ohio

Core employees at Cincinnati have a comprehensive medical expense coverage plan, The Core Molding Technologies, Inc. Health Benefit Plan, Non-Represented, Cincinnati, with changes effective January 1, 2017, in which the plan pays 80% of negotiated costs within the network after the deductibles have been satisfied.  The plan also includes a prescription drug expense coverage portion and flexible spending accounts for health care and dependent care.  Employees also receive company paid life insurance that is equal to one year’s salary.  Salary employees receive salary continuation for up to a maximum of 26 weeks at full salary based upon years of service.  All employees receive a vacation entitlement up to a maximum of 4 weeks as well as 10 holidays per year.  They are also eligible to participate in a 401(k) plan, the Core Composites 401(k) Plan which offers a company match of 25% on the first 6% of employee contributions.

Winona, MN

Core employees in Winona have a high deductible health plan (“HDHP”), updated through December 31, 2017, in which the plan pays 100% of negotiated costs for medical and prescription coverage within the network after the deductibles have been satisfied.  Core provides company paid long term disability insurance which provides income of up to 60% of average earnings.  Additionally, Core matches up to $700 of employee annual contributions to their individual Health Savings Accounts (“H.S.A.”).  Employees also receive company paid life insurance equal to one year’s salary.   All employees receive a vacation entitlement up to a maximum of 4 weeks as well as 10 holidays per year.  They are also eligible to participate in a 401(k) plan, the Core Composites 401(k) Plan which offers a company match of 25% on the first 6% of employee contributions.

Columbus, Ohio

Non-Represented Employees

Core’s non-represented employees in Columbus receive a health care plan, entitled the Core Molding Technologies, Inc. Health Benefit Plan of Columbus Ohio with amendments September 30, 2017 in which the plan pays 80% of reasonable and customary charges, dental, and vision, as well as prescription coverage and the flexible spending accounts.  These employees also receive a maximum of 4 weeks of vacation, approximately 14 holidays per year (the specific number varies depending upon Christmas scheduling), and company provided life insurance at two times base salary.  Core provides company paid long term disability insurance which provides income of up to 60% of average earnings. These employees also participate in a defined contribution retirement plan in which the company provides up to 6.5% of the employees base wages depending upon the employee’s age at the end of the plan year.  A 401(k) plan, entitled the Core Molding Technologies, 

S-16

Inc 401(k) Retirement Savings Plan as amended, is also offered that includes a company match of 25% on the first 6% of employee contributions.

Tier 1 Represented Employees

Employees represented by the International Association of Machinists Union and Aerospace Workers (“IAM”) hired prior to August 1, 2007 receive a health care plan that pays 80% of reasonable and customary charges after the satisfaction of a deductible.  This group also receives dental, vision, and prescription coverage through the same plan entitled the Core Molding Technologies, Inc. Health Benefit Plan of Columbus, Ohio for Represented Employees Traditional Plan.    The employees receive company paid life insurance coverage in the amount of $35,000.  Core provides company paid short and long term disability insurance which provides income of $260 per week for qualified disabilities. Employees receive up to 4 weeks of vacation and approximately 14 holidays per year.  The company contributes $1.50 for each hour worked up to a maximum of 40 hours per week for each employee to a pension plan administered by the IAM.  Employees in this group may participate in a 401(k) plan with a company match of 25% for the first 6% of employee contributions.  The 401(k) plan is entitled the Core Molding Technologies, Inc. 401(k) Plan for Represented Employees as Amended and Restated.  

Tier 2 Represented Employees

Employees represented by the IAM hired after August 1, 2007 receive reduced pay and benefits when compared to those hired before that date.  Employees in this group participate in a health care program in which the plan pays 70% of reasonable and customary charges after the satisfaction of a deductible.  This plan is entitled The Core Molding Technologies, Inc. Health Benefit Plan of Columbus, Ohio for Represented Employees Basic Plan.  Employees receive prescription coverage but only receive dental and vision if they pay 100% of the cost of the programs.  Employees in this group receive a maximum of two weeks’ vacation as well as the 14 holidays per year.  The employees receive company paid life insurance coverage in the amount of $25,000.  Core provides company paid short and long term disability insurance which provides income of $260 per week for qualified disabilities.  The company also contributes $1.50 for each hour worked up to a maximum of 40 hours per week for each employee to an IAM administered pension plan.  These employees may also participate in a 401(k) plan with a company match of 25% for the first 6% of employee contributions. The 401(k) plan is entitled the Core Molding Technologies, Inc. 401(k) Plan for Represented Employees as Amended and Restated.  

Gaffney, South Carolina

Employees at Gaffney participate in a medical plan in which the plan pays negotiated costs at 80% after the satisfaction of a deductible.  Employees at this location also receive, dental, vision, and prescription drug coverage as well. These benefits are administered through the Core Molding Technologies, Inc. Health Benefit Plan of Columbus, Ohio Non-Represented, Gaffney Plan as amended through December 31, 2017.  Employees receive a maximum of 4 weeks of vacation as well as 8 holidays per year.   Salary employees receive company paid life insurance at twice their base compensation and hourly employees receive company paid life insurance in the amount of 

S-17

$30,000.  Core provides company paid long term disability insurance which provides income of up to 60% of average earnings. Employees at this location participate in the company’s defined contribution retirement plan with company contributions of up to 6.5% of base wages as well as the 401(k) including a company match of 25% of the first 6% of employee contributions.  The 401(k) and retirement is the same plan document as for Columbus non-represented employees, the Core Molding Technologies, Inc 401(k) Retirement Savings Plan as amended.

Matamoros, Mexico

Salary 

Hourly compensated employees at the Matamoros facility receive in addition to their base salary which is for 48 hours per week, 11% Saving fund per month, food coupons in the amount of 247.50 pesos per month, a Christmas bonus that is the equivalent of 22 days pay, up to 18 vacation days, a 38% vacation premium, 8 holidays per year, life insurance in the amount of one year’s salary, company contribution to medical coverage, and profit sharing.

Hourly

Tier 1

Employees in this group have a 40 hour per week work expectation.  They receive food coupons dependent upon the tax retention rate averaging approximately 800 pesos per month.  Their Annual Christmas bonus is the equivalent of 24 days pay per month.  Their vacation pay is the equivalent of 42% of their pay.  They receive company paid life insurance in the amount of 9,500 pesos. 

Tier 2

Employees in this group are required to work a 48 hour work week.  The receive 90.89 pesos per month for being punctual and the same amount for perfect attendance in the month.  They receive 182.09 peso monthly bonus for achieving production rates.  Their Christmas bonus is the equivalent of 22 days pay per year and their vacation entitlement is 38% of their base pay.  They receive company paid life insurance in the amount of 9,500 pesos as well.

Nuevo Leon, Mexico

Employees are provided with health and disease coverage with a sum of: 73,000,000 pesos
Employees also have an illness/disease policy that covers, after the deductible is payed, the coinsurance. Employees have a 26,000 pesos deductible and a 10% coinsurance with a top of 55,000 pesos. Employees are provided with accident coverage with no deductible payment in the event of an accident. In the event that the cost of the accident exceeds the deductible (26,000 pesos) the coinsurance (10%) will be paid for the difference in the cost of the accident. The maximum amount of money paid in the worst-case scenario is the deductible (26,000) + the top of coinsurance (55,000 pesos), total amount $81,000 pesos. 
 

S-18

Emergencies abroad coverage applies with a sum coverage of $100,000 USD with a payment of deductible of $100 USD. It is important to understand that for the insurance company, an emergency is a situation that puts in danger the life of the client, the loss of an organ or its functionality. The coverage will be always treated as reimbursement. 
 
The individual health insurance policies do not cover dental issues unless they were caused by an accident.   
 
Salary 

Hourly compensated employees receive in addition to their base salary, 7% Saving fund per month, food coupons at 7% of monthly salary, a Christmas bonus that is the equivalent of 20 days pay, up to 17 vacation days, a 30% vacation premium, 8 holidays per year, life insurance for 600K MXN, company contribution to medical coverage, and profit sharing.
 
Hourly
 
Employees in this group have a 40 hour per week work expectation.  They receive food coupons at 7% monthly income.  Their Annual Christmas bonus is up to 20 days pay and they can receive an attendance bonus of 150MXN peso per month.  Their vacation pay is the equivalent of 30% of their pay.  They receive 8 holidays per year

Cobourg, Ontario, Canada

Employees in Canada have a comprehensive benefit plan, in which the plan generally pays for 80% of costs for medical and prescription coverage and the employee pays 20%.  Employees pay 100% of the premiums for the company group coverage provided for long term disability insurance. Prior to long-term disability eligibility, employees are eligible for short term disability coverage through a government plan, known as an Employment Insurance sub-plan for approved medical absences greater than five (5) days. Additionally, HPI provides an annual employee Health Spending Account (“H.S.A.”) for both salaried and hourly employees.  Employees also receive company paid life insurance; hourly workforce insurance is equal to one year’s salary and salary workforce is equal to two year’s salary.   All employees receive a vacation entitlement up to a maximum of six (6) weeks as well as two (2) company determined paid shut down days per year.  They are also eligible to participate in a formal pension plan, which permits employee contributions equal to 1%, 2%, 3%, or 4% of base/regular that will be matched by the company at 100%. Employees have the option to contribute above the 4% into the Plan however, it does not attract a company match. 

S-19

Schedule 6.16

MATERIAL AGREEMENTS

		
	•
	(i) Lease agreement dated May 14, 1999 between Horizon Plastics Company Ltd. and Ontario Development Corporation (as assigned by Ontario Development Corporation to The Corporation of the Town of Cobourg o/a Northam Industrial Park), as amended by an Amendment of Lease Agreement dated August 5, 2003, and (ii) Lease agreement dated February 17, 2003 between Horizon Plastics Company Ltd. and Ontario Realty Corporation (as assigned by Ontario Realty Corporation to The Corporation of the Town of Cobourg o/a Northam Industrial Park), as amended by a Lease Renewal Agreement dated February 6, 2006 (both lease (i) and lease (ii), as amended, are hereinafter collectively referred to as the “Cobourg Lease”), and such Cobourg Lease was assigned by Horizon Plastics Company Ltd. to Horizon Plastics International Inc. and further amended by an Amendment of Lease Agreement dated September 5, 2008, an Amendment of Lease Agreement dated July 22, 2009, a Lease Renewal Agreement dated December 13, 2010 and a Lease Extension and Amending Agreement dated February 10, 2017. The Cobourg Lease was assigned by Horizon Plastics International Inc. to 1137925 B.C. Ltd. by an Assignment of Lease effective as of January 16, 2018.

		
	•
	Supply Agreement, dated August 4, 2014, by and among Core Molding Technologies, Inc., Core Composites Corporation and Navistar, Inc.

		
	•
	Supply Agreement, dated February 1, 2017, by and among Core Molding Technologies, Inc., Core Composites Corporation and Bombardier Recreational Products Inc.

		
	•
	Yamaha Motor Manufacturing Corporation of America Purchase Agreement, dated July 15, 2016, by and among Core Molding Technologies, Inc. and Yamaha Motor Manufacturing of America, Inc.

		
	•
	Lease, dated as of August 1, 2012, among Core Composites Cincinnati, LLC, as tenant, and Diversified Glass, Inc., as landlord, with respect to the location at 4174 Half Acre Road, Batavia, Ohio 45103 leased by Core Composites Cincinnati, LLC.

		
	•
	Second Amended and Restated Executive Severance Agreement between Core Molding Technologies, Inc. and  Kevin Barnett dated December 29, 2008

		
	•
	Executive Severance Agreement between Core Molding Technologies, Inc. and Terrence O’Donovan dated January 1, 2009

		
	•
	Executive Severance Agreement between Core Molding Technologies, Inc. and John Zimmer dated November 4, 2013

		
	•
	Executive Severance Agreement between Core Molding Technologies, Inc. and Robert Price dated December 8, 2016

		
	•
	Collective Bargaining Agreement, dated as of August 7, 2016, between Core Molding Technologies, Inc. and Scioto Lodge No. 1471, District No. 54, of the International Association of Machinists and Aerospace Workers, AFL-CIO/CLC covering the unit located at 800 Manor Park Drive, Columbus, Ohio.

		
	•
	Collective bargaining agreement with Sindicato de Jorneleros y Obreros (Corecomposites de México, S. de R.L. de C.V.).

S-20

		
	•
	Collective bargaining agreement between Horizon Plastics International Inc. and United Food & Commercial Workers Canada, Local 175 (A.F.L., C.I.O., C.L.C.), effective Period: November 2, 2017 to November 1, 2021

		
	•
	Collective bargaining agreement between Horizon Plastics De Mexico, S.A. De C.V. and The Union of Workers of the Metal Industry and Trade of the State of Nuevo Leon, effective Feb 18 2014.

S-21

Schedule 6.17

INTELLECTUAL PROPERTY

All federally registered intellectual property of each Company are deemed immaterial.

U.S.

Patents
	
						
	Name
	Number
	Pending or Issued
	Design or Utility
	Issue Date
	Duration

	Truck Storage Box
	D659,074
	I
	D
	May 8, 2012
	14 Years

	Truck Box Assembly
	8,567,650
	I
	U
	Oct. 29, 2013
	 

	Bracket
	D702,620
	I
	D
	Apr. 15, 2014
	 

	Ladder and Related Methods
	7,481,741
	I
	U
	Jan. 27, 2009
	 

	Solar Panel Supports
	D718,228
	I
	D
	Nov. 25, 2014
	14 Years

	Solar Panel Supports
	8,601,755
	I
	U
	Dec. 10, 2013
	 

Canadian

Patents
	
						
	Name
	Number
	Applied or Issued
	Design or Utility
	Date
	Duration

	Truck Storage Box
	D136850
	I
	D
	04-May-11
	10 Years

	Bracket for Truck Storage Box
	D138615
	I
	D
	04-May-11
	10 Years

	Truck Box Assembly
	2,732,845
	A
	U
	2011
	 

	Solar Panel Supports
	144342
	I
	D
	Mar. 7, 2013
	10 Years

	Solar Panel Supports
	2,767,317
	A
	U
	2012
	 

	Compost Processing Tool
	2,046,409
	I
	D
	Sep. 21, 1999
	 

	Improved Compost Bin
	2,009,437
	I
	D
	Dec. 4, 2001
	 

.

S-22

U.S.

	
			
	MARK
	Reg. No.
	Reg. Date

	SOILSAVER
	1228935
	Mar. 1, 1983

	
	1827486
	Mar. 22, 1994

	
	1840565
	Jun. 21, 1994

	RECYCLING BEGINS AT HOME
	1864441
	Nov. 22, 1994

	HYDRILITE
	5199652
	May 9, 2017

	MIRILITE
	5219457
	Jun. 6, 2017

	FEATHERLITEXL
	4645300
	Nov. 25, 2014

	ECONOLITE
	4644958
	Nov. 25, 2014

	AIRILITE
	4462202
	Jan. 7, 2014

	N-SULGUARD
	4378757
	Aug. 6, 2013

	FEATHERLITE
	4390747
	Aug. 27, 2013

	
	2732943
	Jul. 1, 2003

	ADVANTAGE
	2853045
	Jun. 15, 2004

Canadian

	
			
	TRADE MARK
	Registration Number
	Registration Date

	"Soilsaver" Name
	TMA245249
	23-May-80

	Line Art for Soilsaver
	TMA378202
	Jan. 11, 1991

	Line Art for Soilsaver
	TMA378203
	Jan. 11, 1991

	"Recycling Begins at Home"
	TMA397399
	Apr. 17, 1992

	"Earthsaver" Name
	TMA398340
	15-May-92

	"Garden Catcher" Name
	TMA405,308
	Nov. 20,1992

	"Humus Builder" Name
	TMA405,590
	Nov. 27, 1992

	Soilsaver Line Art
	TMA406,925
	Jan. 15, 1993

Industrial Design Registrations
	
				
	Title
	Serial No
	Owner
	CAN or USA

	SOLAR PANEL SUPPORT MEMBER
	144342
	1541689 ONTARIO INC.
	CAN

	TRUCK STORAGE BOX
	136850
	1541689 ONTARIO INC.
	CAN

	TRUCK STORAGE BOX
	138615
	1541689 ONTARIO INC.
	CAN

S-23

Schedule 6.18

INSURANCE

	
				
	 
	 
	 
	 

	Broker
	Coverage/Carrier
	 
	Limit

	 
	 
	 
	 

	USI
	Workers Comp - Liberty
	 
	$1,000,000

	USI
	Gen Liability - Liberty
	 
	$1,000,000

	USI
	Auto - Liberty
	 
	$1,000,000

	USI
	Umbrella - Liberty
	Primary
	$25,000,000

	USI
	Excess Umbrella - Travelers
	Excess
	$10,000,000

	USI
	Excess WC – Midwest Empl.
	 
	$1,000,000

	USI
	Property - Factory Mutual
	 
	$445,954,451

	USI
	Foreign Liab - ACE Insurance
	 
	$1,000,000

	USI
	EPL - Travelers
	 
	$3,000,000

	USI
	D&O - Chubb
	 
	$10,000,000

	USI
	D&O - Chubb
	Foreign
	$1,000,000

	USI
	Fiduciary - Chubb
	 
	$1,000,000

	USI
	Crime - Chubb
	 
	$1,000,000

S-24

Schedule 6.19

DEPOSIT ACCOUNTS

	
				
	Credit Party
	Depositary Bank
	Account Number
	Description

	Core Automotive Technologies LLC
	KeyBank National Association
	359681154506
	Core Automotive operating account

	Core Molding Technologies, Inc.
	KeyBank National Association
	359681403739
	CPI Operating Account

	Core Molding Technologies, Inc.
	KeyBank National Association
	359681400156
	Workers Compensation Account

	Core Composites Cincinnati, LLC
	KeyBank National Association
	359681170601
	Core Composites Cincinnati operating account

	Core Composites Corporation
	KeyBank National Association
	359681098232
	Core Composites Corporation operating account

	Core Molding Technologies, Inc.
	KeyBank National Association
	14511004013
	Core Molding Technologies operating account

	Core Molding Technologies, Inc.
	KeyBank National Association
	354511002801
	IB fees

	Core Molding Technologies, Inc.
	KeyBank National Association
	14511004005
	Payroll account

	Core Molding Technologies, Inc.
	KeyBank National Association
	359681219341
	Concentration account

	Core Molding Technologies, Inc.
	KeyBank National Association
	720993500712
	Consolidated disbursement account

	Corecomposites de Mexico, S. de R.L. de C.V.
	Banorte (Banco Mercantil del Norte, SA)
	0070 899698
(Swift Code: MENOMXMT)
	Payments to supplies, payroll, government taxes

	Corecomposites de Mexico, S. de R.L. de C.V.
	Banorte (Banco Mercantil del Norte, SA)
	0627 006506
(Swift Code: MENOMXMT)
	Payments of rent, sell U.S. Dollars to buy pesos

	CC HPM de Mexico
	Banorte (Banco Mercantil del Norte, SA)
	0364471098
(Swift Code: MENOMXMT)
	Payments to supplies, payroll, government taxes

	CC HPM de Mexico
	Banorte (Banco Mercantil del Norte, SA)
	0362263226
(Swift Code: MENOMXMT)
	Payments of rent, sell U.S. Dollars to buy pesos

	1137925 B.C. LTD.
	TD Bank, N.A

	5514405-1020 CAD
(Swift Code: TDOMCATTTOR)
	Canadian dollar operating and payroll account

	1137925 B.C. LTD.
	TD Bank, N.A
	7418869-1020 USD
(Swift Code: TDOMCATTTOR)
	US dollar operating and payroll account

	1137925 B.C. LTD.
	TD Bank, N.A
	5514391-1020 CAD
(Swift Code: TDOMCATTTOR)
	Canadian account established, likely will not be used and closed following the Closing Date

	1137925 B.C. LTD.
	TD Bank, N.A
	7418850-1020 USD
(Swift Code: TDOMCATTTOR)
	US dollar account established, likely will not be used and closed following the Closing Date

    
All accounts denominated in U.S. Dollars except account # O1 314 70604 and # 0364471098 which are Peso denominated and #5514405-1020 and # 5514391-1020 which are Canadian dollar denominated.

S-25

EXHIBIT A-1
FORM OF
US REVOLVING CREDIT NOTE

$ __________________________    Cleveland, Ohio
________, 20__

FOR VALUE RECEIVED, the undersigned, CORE MOLDING TECHNOLOGIES, INC., a Delaware corporation (the “US Borrower”), promises to pay, on the last day of the Commitment Period, as defined in the Credit Agreement (as hereinafter defined), to _________, or its registered assigns (“Lender”) at the main office of KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent, as hereinafter defined, 127 Public Square, Cleveland, Ohio 44114‐1306 the principal sum of

[_______________________________ AND 00/100]    DOLLARS

or the aggregate unpaid principal amount of all US Revolving Loans, as defined in the Credit Agreement, made by Lender to the US Borrower pursuant to Section 2.2A(a) of the Credit Agreement, whichever is less, in lawful money of the United States of America.  The US Borrower also agrees to pay any additional amount that is required to be paid to, or for the benefit of, Lender pursuant to Section 11.20 of the Credit Agreement. 

As used herein, “Credit Agreement” means the Amended and Restated Credit Agreement dated as of January 16, 2018, among the US Borrower, the Canadian Borrower, as defined therein, the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”), as the same may from time to time be amended, restated or otherwise modified.  Each capitalized term used herein that is defined in the Credit Agreement and not otherwise defined herein shall have the meaning ascribed to it in the Credit Agreement.

The US Borrower also promises to pay interest on the unpaid principal amount of each US Revolving Loan from time to time outstanding, from the date of such US Revolving Loan until the payment in full thereof, at the rates per annum that shall be determined in accordance with the provisions of Section 2.5(a)(i) of the Credit Agreement.  Such interest shall be payable on each date provided for in such Section 2.5(a)(i); provided that interest on any principal portion that is not paid when due shall be payable on demand.

The portions of the principal sum hereof from time to time representing Base Rate Loans, Daily LIBOR Loans and Eurodollar Loans, interest owing thereon, and payments of principal and interest of any thereof, shall be shown on the records of Lender by such method as Lender may generally employ; provided that failure to make any such entry shall in no way detract from the obligations of the US Borrower under this Note or the Credit Agreement.

If this Note shall not be paid at maturity in accordance with the Credit Agreement, whether such maturity occurs by reason of lapse of time or by operation of any provision for acceleration of maturity contained in the Credit Agreement, the principal hereof and the unpaid interest thereon 

E-1

shall bear interest, pursuant to the terms of the Credit Agreement, until paid, at a rate per annum equal to the Default Rate to the extent set forth in Section 2.5(e) of the Credit Agreement.  All payments of principal of and interest on this Note shall be made in immediately available funds.

This Note is one of the US Revolving Credit Notes referred to in the Credit Agreement and is entitled to the benefits thereof.  Reference is made to the Credit Agreement for a description of the right of the undersigned to anticipate payments hereof, the right of the holder hereof to declare this Note due prior to its stated maturity, and other terms and conditions upon which this Note is issued.

Except as expressly provided in the Credit Agreement, the US Borrower expressly waives presentment, demand, protest and notice of any kind.  This Note shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to conflicts of laws provisions.

[Remainder of page intentionally left blank.]

E-2

JURY TRIAL WAIVER.  THE US BORROWER (AND LENDER BY ACCEPTING THE BENEFITS HEREOF), TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER NOTE OR INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

	
		
	 
	CORE MOLDING TECHNOLOGIES, INC.

By:   
Name:   
Title:   

E-3

EXHIBIT A-2
FORM OF
CANADIAN REVOLVING CREDIT NOTE

$ __________________________    ________, 20__

FOR VALUE RECEIVED, the undersigned, 1137925 B.C. LTD., a corporation incorporated under the laws of British Columbia, Canada (the “Canadian Borrower”), promises to pay, on the last day of the Commitment Period, as defined in the Credit Agreement (as hereinafter defined), to _________, or its registered assigns (“Lender”) at the main office of KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent, as hereinafter defined, 127 Public Square, Cleveland, Ohio 44114‐1306 the principal sum of

[_______________________________ AND 00/100]    DOLLARS

or the aggregate unpaid principal amount of all Canadian Revolving Loans, as defined in the Credit Agreement, made by Lender to the Canadian Borrower pursuant to Section 2.2B(a) of the Credit Agreement, whichever is less, in lawful money of the United States of America.  The Canadian Borrower also agrees to pay any additional amount that is required to be paid to, or for the benefit of, Lender pursuant to Section 11.20 of the Credit Agreement. 

As used herein, “Credit Agreement” means the Amended and Restated Credit Agreement dated as of January 16, 2018, among Core Molding Technologies, Inc., a Delaware corporation, the Canadian Borrower, the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”), as the same may from time to time be amended, restated or otherwise modified.  Each capitalized term used herein that is defined in the Credit Agreement and not otherwise defined herein shall have the meaning ascribed to it in the Credit Agreement.

The Canadian Borrower also promises to pay interest on the unpaid principal amount of each Canadian Revolving Loan from time to time outstanding, from the date of such Canadian Revolving Loan until the payment in full thereof, at the rates per annum that shall be determined in accordance with the provisions of Section 2.5(a)(ii) of the Credit Agreement.  Such interest shall be payable on each date provided for in such Section 2.5(a)(ii); provided that interest on any principal portion that is not paid when due shall be payable on demand.

The portions of the principal sum hereof from time to time representing Base Rate Loans, Daily LIBOR Loans and Eurodollar Loans, interest owing thereon, and payments of principal and interest of any thereof, shall be shown on the records of Lender by such method as Lender may generally employ; provided that failure to make any such entry shall in no way detract from the obligations of the Canadian Borrower under this Note or the Credit Agreement.

If this Note shall not be paid at maturity in accordance with the Credit Agreement, whether such maturity occurs by reason of lapse of time or by operation of any provision for acceleration of maturity contained in the Credit Agreement, the principal hereof and the unpaid interest thereon 

E-4

shall bear interest, pursuant to the terms of the Credit Agreement, until paid, at a rate per annum equal to the Default Rate to the extent set forth in Section 2.5(e) of the Credit Agreement.  All payments of principal of and interest on this Note shall be made in immediately available funds.

This Note is one of the Canadian Revolving Credit Notes referred to in the Credit Agreement and is entitled to the benefits thereof.  Reference is made to the Credit Agreement for a description of the right of the undersigned to anticipate payments hereof, the right of the holder hereof to declare this Note due prior to its stated maturity, and other terms and conditions upon which this Note is issued.

Except as expressly provided in the Credit Agreement, the Canadian Borrower expressly waives presentment, demand, protest and notice of any kind.  This Note shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to conflicts of laws provisions.

[Remainder of page intentionally left blank.]

E-5

JURY TRIAL WAIVER.  THE CANADIAN BORROWER (AND LENDER BY ACCEPTING THE BENEFITS HEREOF), TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER NOTE OR INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
    
	
		
	 
	1137925 B.C. LTD.

By:   
Name:   
Title:   

E-6

EXHIBIT B-1
FORM OF
US SWING LINE NOTE

$[10,000,000]    Cleveland, Ohio
[_____ ___, 20__]

FOR VALUE RECEIVED, the undersigned, CORE MOLDING TECHNOLOGIES, INC., a Delaware corporation (the “US Borrower”), promises to pay to KEYBANK NATIONAL ASSOCIATION, or its registered assigns (the “Swing Line Lender”) at the main office of KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent, as hereinafter defined, 127 Public Square, Cleveland, Ohio 44114‐1306 the principal sum of

[TEN MILLION AND 00/100]    DOLLARS

or the aggregate unpaid principal amount of all US Swing Loans, as defined in the Credit Agreement (as hereinafter defined), made by the Swing Line Lender to the US Borrower pursuant to Section 2.2A(c) of the Credit Agreement, whichever is less, in lawful money of the United States of America on the earlier of the last day of the Commitment Period, as defined in the Credit Agreement, or, with respect to each US Swing Loan, the Swing Loan Maturity Date applicable thereto.  The US Borrower also agrees to pay any additional amount that is required to be paid to Swing Line Lender pursuant to Section 11.20 of the Credit Agreement.

As used herein, “Credit Agreement” means the Amended and Restated Credit Agreement dated as of January 16, 2018, among the US Borrower, the Canadian Borrower, as defined therein, the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”), as the same may from time to time be amended, restated or otherwise modified.  Each capitalized term used herein that is defined in the Credit Agreement and not otherwise defined herein shall have the meaning ascribed to it in the Credit Agreement.

The US Borrower also promises to pay interest on the unpaid principal amount of each US Swing Loan from time to time outstanding, from the date of such US Swing Loan until the payment in full thereof, at the rates per annum that shall be determined in accordance with the provisions of Section 2.5(b)(i) of the Credit Agreement.  Such interest shall be payable on each date provided for in such Section 2.5(b)(i); provided that interest on any principal portion that is not paid when due shall be payable on demand.

The principal sum hereof from time to time, and the payments of principal and interest thereon, shall be shown on the records of the Swing Line Lender by such method as the Swing Line Lender may generally employ; provided that failure to make any such entry shall in no way detract from the obligations of the US Borrower under this Note or the Credit Agreement.

If this Note shall not be paid at maturity in accordance with the Credit Agreement, whether such maturity occurs by reason of lapse of time or by operation of any provision for acceleration of maturity contained in the Credit Agreement, the principal hereof and the unpaid interest thereon 

E-7

shall bear interest, pursuant to the terms of the Credit Agreement, until paid, at a rate per annum equal to the Default Rate to the extent set forth in Section 2.5(e) of the Credit Agreement.  All payments of principal of and interest on this Note shall be made in immediately available funds.

This Note is the US Swing Line Note referred to in the Credit Agreement and is entitled to the benefits thereof.  Reference is made to the Credit Agreement for a description of the right of the undersigned to anticipate payments hereof, the right of the holder hereof to declare this Note due prior to its stated maturity, and other terms and conditions upon which this Note is issued.

Except as expressly provided in the Credit Agreement, the US Borrower expressly waives presentment, demand, protest and notice of any kind.  This Note shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to conflicts of laws provisions.

[Remainder of page intentionally left blank.]

E-8

JURY TRIAL WAIVER.  THE US BORROWER (AND THE SWING LINE LENDER BY ACCEPTING THE BENEFITS HEREOF), TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER NOTE OR INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

	
		
	 
	CORE MOLDING TECHNOLOGIES, INC.

By:   
Name:   
Title:   

E-9

EXHIBIT B-2
FORM OF
CANADIAN SWING LINE NOTE

$[10,000,000]    [_____ ___, 20__]

FOR VALUE RECEIVED, the undersigned, 1137925 B.C. LTD., a corporation incorporated under the laws of British Columbia, Canada (the “Canadian Borrower”), promises to pay to KEYBANK NATIONAL ASSOCIATION, or its registered assigns (the “Swing Line Lender”) at the main office of KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent, as hereinafter defined, 127 Public Square, Cleveland, Ohio 44114‐1306 the principal sum of

[TEN MILLION AND 00/100]    DOLLARS

or the aggregate unpaid principal amount of all Canadian Swing Loans, as defined in the Credit Agreement (as hereinafter defined), made by the Swing Line Lender to the Canadian Borrower pursuant to Section 2.2B(c) of the Credit Agreement, whichever is less, in lawful money of the United States of America on the earlier of the last day of the Commitment Period, as defined in the Credit Agreement, or, with respect to each Canadian Swing Loan, the Swing Loan Maturity Date applicable thereto.  The Canadian Borrower also agrees to pay any additional amount that is required to be paid to Swing Line Lender pursuant to Section 11.20 of the Credit Agreement.

As used herein, “Credit Agreement” means the Amended and Restated Credit Agreement dated as of January 16, 2018, among Core Molding Technologies, Inc., a Delaware corporation, the Canadian Borrower, the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”), as the same may from time to time be amended, restated or otherwise modified.  Each capitalized term used herein that is defined in the Credit Agreement and not otherwise defined herein shall have the meaning ascribed to it in the Credit Agreement.

The Canadian Borrower also promises to pay interest on the unpaid principal amount of each Canadian Swing Loan from time to time outstanding, from the date of such Canadian Swing Loan until the payment in full thereof, at the rates per annum that shall be determined in accordance with the provisions of Section 2.5(b)(ii) of the Credit Agreement.  Such interest shall be payable on each date provided for in such Section 2.5(b)(ii); provided that interest on any principal portion that is not paid when due shall be payable on demand.

The principal sum hereof from time to time, and the payments of principal and interest thereon, shall be shown on the records of the Swing Line Lender by such method as the Swing Line Lender may generally employ; provided that failure to make any such entry shall in no way detract from the obligations of the Canadian Borrower under this Note or the Credit Agreement.

If this Note shall not be paid at maturity in accordance with the Credit Agreement, whether such maturity occurs by reason of lapse of time or by operation of any provision for acceleration of maturity contained in the Credit Agreement, the principal hereof and the unpaid interest thereon 

E-10

shall bear interest, pursuant to the terms of the Credit Agreement, until paid, at a rate per annum equal to the Default Rate to the extent set forth in Section 2.5(e) of the Credit Agreement.  All payments of principal of and interest on this Note shall be made in immediately available funds.

This Note is the Canadian Swing Line Note referred to in the Credit Agreement and is entitled to the benefits thereof.  Reference is made to the Credit Agreement for a description of the right of the undersigned to anticipate payments hereof, the right of the holder hereof to declare this Note due prior to its stated maturity, and other terms and conditions upon which this Note is issued.

Except as expressly provided in the Credit Agreement, the Canadian Borrower expressly waives presentment, demand, protest and notice of any kind.  This Note shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to conflicts of laws provisions.

[Remainder of page intentionally left blank.]

E-11

JURY TRIAL WAIVER.  THE CANADIAN BORROWER (AND THE SWING LINE LENDER BY ACCEPTING THE BENEFITS HEREOF), TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER NOTE OR INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
    
	
		
	 
	1137925 B.C. LTD.

By:   
Name:   
Title:   

E-12

EXHIBIT C
FORM OF
US TERM NOTE

$___________    Cleveland, Ohio
[________ ___, 20__]

FOR VALUE RECEIVED, the undersigned, CORE MOLDING TECHNOLOGIES, INC., a Delaware corporation (the “US Borrower”), promises to pay to [_________], or its registered assigns (“Lender”) at the main office of KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent, as hereinafter defined, 127 Public Square, Cleveland, Ohio 44114‐1306 the principal sum of

[_______________________________ AND 00/100]    DOLLARS

in lawful money of the United States of America in consecutive principal payments as set forth in the Credit Agreement (as hereinafter defined).  The US Borrower also agrees to pay any additional amount that is required to be paid to, or for the benefit of, Lender pursuant to Section 11.20 of the Credit Agreement.

As used herein, “Credit Agreement” means the Amended and Restated Credit Agreement dated as of January 16, 2018, among the US Borrower, the Canadian Borrower, as defined therein, the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”), as the same may from time to time be amended, restated or otherwise modified.  Each capitalized term used herein that is defined in the Credit Agreement and not otherwise defined herein shall have the meaning ascribed to it in the Credit Agreement.

The US Borrower also promises to pay interest on the unpaid principal amount of the US Term Loan from time to time outstanding, from the date of the US Term Loan until the payment in full thereof, at the rates per annum that shall be determined in accordance with the provisions of Section 2.5(c) of the Credit Agreement.  Such interest shall be payable on each date provided for in such Section 2.5(c); provided that interest on any principal portion that is not paid when due shall be payable on demand.

The portions of the principal sum hereof from time to time representing Base Rate Loans, Daily LIBOR Loans and Eurodollar Loans, interest owing thereon, and payments of principal and interest of any thereof, shall be shown on the records of Lender by such method as Lender may generally employ; provided that failure to make any such entry shall in no way detract from the obligations of the US Borrower under this Note or the Credit Agreement.

If this Note shall not be paid at maturity in accordance with the Credit Agreement, whether such maturity occurs by reason of lapse of time or by operation of any provision for acceleration of maturity contained in the Credit Agreement, the principal hereof and the unpaid interest thereon shall bear interest, pursuant to the terms of the Credit Agreement, until paid, at a rate per annum 

E-13

equal to the Default Rate to the extent set forth in Section 2.5(e) of the Credit Agreement.  All payments of principal of and interest on this Note shall be made in immediately available funds.

This Note is one of the US Term Notes referred to in the Credit Agreement and is entitled to the benefits thereof.  Reference is made to the Credit Agreement for a description of the right of the undersigned to anticipate payments hereof, the right of the holder hereof to declare this Note due prior to its stated maturity, and other terms and conditions upon which this Note is issued.

Except as expressly provided in the Credit Agreement, the US Borrower expressly waives presentment, demand, protest and notice of any kind.  This Note shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to conflicts of laws provisions.

[Remainder of page intentionally left blank.]

E-14

JURY TRIAL WAIVER.  THE US BORROWER (AND LENDER BY ACCEPTING THE BENEFITS HEREOF), TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER NOTE OR INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

	
		
	 
	CORE MOLDING TECHNOLOGIES, INC.

By:   
Name:   
Title:   

E-15

EXHIBIT D
FORM OF
CANADIAN TERM NOTE

$___________    [________ ___, 20__]

FOR VALUE RECEIVED, the undersigned, 1137925 B.C. LTD., a corporation incorporated under the laws of British Columbia, Canada (the “Canadian Borrower”), promises to pay to [_________], or its registered assigns (“Lender”) at the main office of KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent, as hereinafter defined, 127 Public Square, Cleveland, Ohio 44114‐1306 the principal sum of

[_______________________________ AND 00/100]    DOLLARS

in lawful money of the United States of America in consecutive principal payments as set forth in the Credit Agreement (as hereinafter defined).  The Canadian Borrower also agrees to pay any additional amount that is required to be paid to, or for the benefit of, Lender pursuant to Section 11.20 of the Credit Agreement.

As used herein, “Credit Agreement” means the Amended and Restated Credit Agreement dated as of January 16, 2018, among the Canadian Borrower, the US Borrower, as defined therein, the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”), as the same may from time to time be amended, restated or otherwise modified.  Each capitalized term used herein that is defined in the Credit Agreement and not otherwise defined herein shall have the meaning ascribed to it in the Credit Agreement.

The Canadian Borrower also promises to pay interest on the unpaid principal amount of the Canadian Term Loan from time to time outstanding, from the date of the Canadian Term Loan until the payment in full thereof, at the rates per annum that shall be determined in accordance with the provisions of Section 2.5(d) of the Credit Agreement.  Such interest shall be payable on each date provided for in such Section 2.5(d); provided that interest on any principal portion that is not paid when due shall be payable on demand.

The portions of the principal sum hereof from time to time representing Base Rate Loans, Daily LIBOR Loans and Eurodollar Loans, interest owing thereon, and payments of principal and interest of any thereof, shall be shown on the records of Lender by such method as Lender may generally employ; provided that failure to make any such entry shall in no way detract from the obligations of the Canadian Borrower under this Note or the Credit Agreement.

If this Note shall not be paid at maturity in accordance with the Credit Agreement, whether such maturity occurs by reason of lapse of time or by operation of any provision for acceleration of maturity contained in the Credit Agreement, the principal hereof and the unpaid interest thereon shall bear interest, pursuant to the terms of the Credit Agreement, until paid, at a rate per annum equal to the Default Rate to the extent set forth in Section 2.5(e) of the Credit Agreement.  All payments of principal of and interest on this Note shall be made in immediately available funds.

E-16

This Note is one of the Canadian Term Notes referred to in the Credit Agreement and is entitled to the benefits thereof.  Reference is made to the Credit Agreement for a description of the right of the undersigned to anticipate payments hereof, the right of the holder hereof to declare this Note due prior to its stated maturity, and other terms and conditions upon which this Note is issued.

Except as expressly provided in the Credit Agreement, the Canadian Borrower expressly waives presentment, demand, protest and notice of any kind.  This Note shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to conflicts of laws provisions.

[Remainder of page intentionally left blank.]

E-17

JURY TRIAL WAIVER.  THE CANADIAN BORROWER (AND LENDER BY ACCEPTING THE BENEFITS HEREOF), TO THE EXTENT PERMITTED BY LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER NOTE OR INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

	
		
	 
	1137925 B.C. LTD.

By:   
Name:   
Title:   

E-18

EXHIBIT E
FORM OF
NOTICE OF LOAN

_______________________, 20____

KeyBank National Association, as the Administrative Agent
127 Public Square
Cleveland, Ohio 44114
Attention:  Commercial Banking

Ladies and Gentlemen:

The undersigned, CORE MOLDING TECHNOLOGIES, INC., a Delaware corporation (the “Administrative Borrower”) refers to the Amended and Restated Credit Agreement, dated as of January 16, 2018 (as the same may from time to time be amended, restated or otherwise modified, the “Credit Agreement”, the terms defined therein being used herein as therein defined), among the Administrative Borrower, 1137925 B.C. LTD., a corporation incorporated under the laws of British Columbia, Canada (together with the Administrative Borrower, collectively, the “Borrowers”), the Lenders, as defined in the Credit Agreement, and KEYBANK NATIONAL ASSOCIATION, as the administrative agent for the Lenders (the “Administrative Agent”), and hereby gives you notice, pursuant to Section [2.7] of the Credit Agreement that the Borrowers hereby request [a Loan (the “Proposed Loan”)][an interest change with respect to a portion of a Loan (the “Interest Change”)], and in connection therewith sets forth below the information relating to the [Proposed Loan][Interest Change] as required by Section [2.7] of the Credit Agreement:

(a)    The Administrative Borrower is requesting the [Proposed Loan][Interest Change] on behalf of __________________________.

(b)    The Business Day of the [Proposed Loan][Interest Change] is __________, 20__.

(c)    The amount of the [Proposed Loan][Interest Change] is $_______________.

(d)    The [Proposed Loan is to be][Interest Change is for]:
a US Revolving Loan ____ / a Canadian Revolving Loan ____ / the US Term Loan ___ /  the Canadian Term Loan_____.  (Check one.)

(e)    The [Proposed Loan][Interest Change] is to be a Base Rate Loan ____ 
/ Eurodollar Loan ___/ Daily LIBOR ____ / US Swing Loan_____    /                 Canadian Swing Loan_____.  (Check one.)

(f)    If the [Proposed Loan][Interest Change] is a Eurodollar Loan, the Interest Period requested is one month ___, two months ___, three months ___, six months ____. (Check one.)

E-19

The undersigned hereby certifies on behalf of the Borrowers that the following statements are true on the date hereof, and will be true on the date of the [Proposed Loan][Interest Change]:

(i)    the representations and warranties contained in each Loan Document are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or Material Adverse Effect in the text thereof), before and after giving effect to the [Proposed Loan][Interest Change] and the application of the proceeds therefrom, as though made on and as of such date, except to the extent that any thereof expressly relate to an earlier date, in which case such representations and warranties are true in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or Material Adverse Effect in the text thereof) as of such earlier date;

(ii)    no event has occurred and is continuing, or would result from such [Proposed Loan][Interest Change], or the application of proceeds therefrom, that constitutes a Default or Event of Default; and

(iii)    the conditions set forth in Section 2.7 and Article IV of the Credit Agreement have been satisfied.

	
		
	 
	CORE MOLDING TECHNOLOGIES, INC.
By:   
Name:   
Title:   

E-20

EXHIBIT F
FORM OF
COMPLIANCE CERTIFICATE

For fiscal [quarter] [year] ended ____________________

THE UNDERSIGNED HEREBY CERTIFIES THAT:

(1)    I am the duly elected [President] or [Chief Financial Officer] of CORE MOLDING TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”, and together with 1137925 B.C. LTD., a corporation incorporated under the laws of British Columbia, Canada, collectively, the “Borrowers”);

(2)    I am familiar with the terms of that certain Amended and Restated Credit Agreement, dated as of January 16, 2018, among the Borrowers, the lenders party thereto (together with their respective successors and assigns, collectively, the “Lenders”) and KEYBANK NATIONAL ASSOCIATION, as the Administrative Agent (as the same may from time to time be amended, restated or otherwise modified, the “Credit Agreement”, the terms defined therein being used herein as therein defined), and the terms of the other Loan Documents, and I have made, or have caused to be made under my supervision, a review in reasonable detail of the transactions and condition of the Companies during the accounting period covered by the attached financial statements;

(3)    The review described in paragraph (2) above did not disclose, and I have no knowledge of, the existence of any condition or event that constitutes or constituted a Default or Event of Default, at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate;

(4)    The representations and warranties made by the Borrowers contained in each Loan Document are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or Material Adverse Effect in the text thereof) on the date hereof, except to the extent that any thereof expressly relate to an earlier date, in which case such representations and warranties are true in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality or Material Adverse Effect in the text thereof) as of such earlier date; and

(5)    Set forth on Attachment I hereto are calculations of the financial covenants set forth in Section 5.7 of the Credit Agreement, which calculations show compliance with the terms thereof.

[Remainder of page intentionally left blank.]

E-21

IN WITNESS WHEREOF, I have signed this certificate the ___ day of _________, 20___.

	
		
	 
	CORE MOLDING TECHNOLOGIES, INC.

By:   
Name:   
Title:   

E-22

EXHIBIT G
FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and Assumption Agreement (this “Assignment Agreement”) is dated as of the Effective Date set forth below and is entered into by and between [the][each] Assignor identified in Section 1 below ([the][each, an] “Assignor”) and [the][each]  Assignee identified in Section 2 below ([the][each, an] “Assignee”).  [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] hereunder are several and not joint.]  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, restated, modified or supplemented, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by [the][each] Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment Agreement as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (a) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including without limitation any letters of credit, guaranties, and swing loans included in such facilities), and (b) to the extent permitted to be assigned under applicable Law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to subpart (a) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to subparts (a) and (b) above being referred to herein collectively as [the][an] “Assigned Interest”).  Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment Agreement, without representation or warranty by [the][any] Assignor.

1.    Assignor[s]:    ______________________________

______________________________

2.    Assignee[s]:    ______________________________

______________________________

E-23

[Assignee is an [Affiliate][Approved Fund] of [identify Lender]]

3.    Borrower(s):    Core Molding Technologies, Inc., and 1137925 B.C. Ltd.

		
	4.
	Administrative Agent:    KeyBank National Association, as the administrative agent under the Credit Agreement

		
	5.
	Credit Agreement:    [The [amount] Credit Agreement dated as of January 16, 2018 among Core Molding Technologies, Inc., and 1137925 B.C. Ltd., the Lenders parties thereto, KeyBank National Association, as Administrative Agent.]

6.    Assigned Interest[s]:

	
							
	Assignor[s]
	Assignee[s]
	Commitment Assigned
	Aggregate Amount of Commitment/Loans for all Lenders
	Amount of Commitment/Loans Assigned
	Percentage Assigned of Commitment/ 
Loans
	CUSIP Number

	 
	 
	 
	$
	$
	%
	 

	 
	 
	 
	$
	$
	%
	 

	 
	 
	 
	$
	$
	%
	 

[7.    Trade Date:    ______________]

8.    Effective Date:  _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

[Remainder of page intentionally left blank.]

E-24

The terms set forth in this Assignment Agreement are hereby agreed to:

	
		
	 
	ASSIGNOR[S]
[NAME OF ASSIGNOR]

By:   
   Title:

[NAME OF ASSIGNOR]

By:   
   Title:

	 
	ASSIGNEE[S]
[NAME OF ASSIGNEE]

By:    
   Title:

[NAME OF ASSIGNEE]

By:    
   Title:

	[Consented to and] Accepted:

[KEYBANK NATIONAL ASSOCIATION], as 
  Administrative Agent

By:    
  Title:

[Consented to:] 

[NAME OF RELEVANT PARTY]

By:    
  Title:  

	 

E-25

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION AGREEMENT

1.    Representations and Warranties.

1.1.    Assignor[s].  [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby, and (iv) it is not a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower[s], any of [its][their] Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower[s], any of [its][their] Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2.    Assignee[s].  [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section [10.9] of the Credit Agreement (subject to such consents, if any, as may be required thereunder), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section [5.3] thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment Agreement and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment Agreement and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached to the Assignment Agreement is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

E-26

2.    Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.  Notwithstanding the foregoing, the Administrative Agent shall make all payments of interest, fees or other amounts paid or payable in kind from and after the Effective Date to [the][the relevant] Assignee.

3.    General Provisions.  This Assignment Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment Agreement may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment Agreement by facsimile or electronic communication shall be effective as delivery of a manually executed counterpart of this Assignment Agreement.  This Assignment Agreement shall be governed by, and construed in accordance with, the law of the State of Ohio, without regard to conflicts of laws.

E-27

EXHIBIT H-1
FORM OF 
U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to that certain Amended and Restated Credit Agreement, dated as of January [___], 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among CORE MOLDING TECHNOLOGIES, INC., a Delaware corporation and 1137925 B.C. LTD., a corporation incorporated under the laws of British Columbia, Canada (collectively, “Borrowers” and, individually, each a “Borrower”), the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”).  

Pursuant to the provisions of Section 3.2 of the Credit Agreement, the undersigned hereby certifies that (a) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (b) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (c) it is not a ten percent (10%) shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Administrative Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E.  By executing this certificate, the undersigned agrees that (i) if the information provided on this certificate changes, the undersigned shall promptly so inform the Administrative Borrower and the Administrative Agent, and (ii) the undersigned shall have at all times furnished the Administrative Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.  

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

	
		
	[NAME OF LENDER]

	By:   

	 
	Name:

	 
	Title:

Date: ________ __, 20[  ]

E-28

EXHIBIT H-2
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to that certain Amended and Restated Credit Agreement, dated as of January 16, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among CORE MOLDING TECHNOLOGIES, INC., a Delaware corporation and 1137925 B.C. LTD., a corporation incorporated under the laws of British Columbia, Canada (collectively, “Borrowers” and, individually, each a “Borrower”), the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders.  

Pursuant to the provisions of Section 3.2 of the Credit Agreement, the undersigned hereby certifies that (a) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (b) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (c) it is not a ten percent (10%) shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (d) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E.  By executing this certificate, the undersigned agrees that (i) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (ii) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

	
		
	[NAME OF PARTICIPANT]

	

By:   

	 
	Name:

	 
	Title:

Date: ________ __, 20[  ]

E-29

EXHIBIT H-3
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to that certain Amended and Restated Credit Agreement, dated as of January 16, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among CORE MOLDING TECHNOLOGIES, INC., a Delaware corporation and 1137925 B.C. LTD., a corporation incorporated under the laws of British Columbia, Canada (collectively, “Borrowers” and, individually, each a “Borrower”), the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders.  

Pursuant to the provisions of Section 3.2 of the Credit Agreement, the undersigned hereby certifies that (a) it is the sole record owner of the participation in respect of which it is providing this certificate, (b) its direct or indirect partners/members are the sole beneficial owners of such participation, (c) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (d) none of its direct or indirect partners/members is a ten percent (10%) shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (e) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (A) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (B) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

	
		
	[NAME OF PARTICIPANT]

	By:   

	 
	Name:

	 
	Title:

Date: ________ __, 20[  ]

E-30

EXHIBIT H-4
FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to that certain Amended and Restated Credit Agreement, dated as of January 16, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among CORE MOLDING TECHNOLOGIES, INC., a Delaware corporation and 1137925 B.C. LTD., a corporation incorporated under the laws of British Columbia, Canada (collectively, “Borrowers” and, individually, each a “Borrower”), the Lenders, as defined therein, and KeyBank National Association, as the administrative agent for the Lenders (the “Administrative Agent”).  

Pursuant to the provisions of Section 3.2 of the Credit Agreement, the undersigned hereby certifies that (a) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (b) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (c) with respect to the extension of credit pursuant to the Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (d) none of its direct or indirect partners/members is a ten percent (10%) shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (e) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Administrative Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (A) if the information provided on this certificate changes, the undersigned shall promptly so inform the Administrative Borrower and the Administrative Agent, and (B) the undersigned shall have at all times furnished the Administrative Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

E-31

	
		
	[NAME OF LENDER]

	By:   

	 
	Name:

	 
	Title:  
Date: ________ __, 20[  ]

E-32Exhibit 4.1

 

FORM OF INDENTURE

between

BMW VEHICLE OWNER TRUST 2018-A,

 as Issuer,

and

U.S. BANK NATIONAL ASSOCIATION,

 as Indenture Trustee

Dated as of January 24, 2018

TABLE OF CONTENTS

Page

 

	
ARTICLE I.

 

	
DEFINITIONS AND INCORPORATION BY REFERENCE

 

	
2

	
SECTION 1.01.

 

	
Definitions.

 

	
2

	
SECTION 1.02.

 

	
Other Definitional Provisions.

 

	
11

	
SECTION 1.03.

 

	
Incorporation by Reference of Trust Indenture Act

 

	
12

	
ARTICLE II.

 

	
THE NOTES

 

	
12

	
SECTION 2.01.

 

	
Form

 

	
12

	
SECTION 2.02.

 

	
Execution, Authentication and Delivery

 

	
13

	
SECTION 2.03.

 

	
Temporary Notes

 

	
13

	
SECTION 2.04.

 

	
Registration; Registration of Transfer and Exchange

 

	
14

	
SECTION 2.05.

 

	
[Reserved].

 

	
17

	
SECTION 2.06.

 

	
Mutilated, Destroyed, Lost or Stolen Notes

 

	
17

	
SECTION 2.07.

 

	
Persons Deemed Owners

 

	
18

	
SECTION 2.08.

 

	
Payment of Principal and Interest; Defaulted Interest.

 

	
18

	
SECTION 2.09.

 

	
Cancellation

 

	
19

	
SECTION 2.10.

 

	
Book-Entry Notes

 

	
19

	
SECTION 2.11.

 

	
Notices to Clearing Agency

 

	
20

	
SECTION 2.12.

 

	
Definitive Notes

 

	
20

	
SECTION 2.13.

 

	
Authenticating Agents

 

	
20

	
SECTION 2.14.

 

	
Tax Treatment

 

	
21

	
ARTICLE III.

 

	
COVENANTS

 

	
21

	
SECTION 3.01.

 

	
Payment of Principal and Interest

 

	
21

	
SECTION 3.02.

 

	
Maintenance of Office or Agency

 

	
22

	
SECTION 3.03.

 

	
Money for Payments To Be Held in Trust

 

	
22

	
SECTION 3.04.

 

	
Existence

 

	
23

	
SECTION 3.05.

 

	
Protection of Trust Estate

 

	
24

	
SECTION 3.06.

 

	
Opinions as to Trust Estate.

 

	
24

	
SECTION 3.07.

 

	
Performance of Obligations; Servicing of Receivables.

 

	
25

	
SECTION 3.08.

 

	
Negative Covenants

 

	
26

	
SECTION 3.09.

 

	
Annual Statement and Assessment as to Compliance

 

	
27

	
SECTION 3.10.

 

	
Issuer May Consolidate, etc., Only on Certain Terms.

 

	
28

	
SECTION 3.11.

 

	
Successor or Transferee.

 

	
29

 

ii

	
SECTION 3.12.

 

	
No Other Business

 

	
30

	
SECTION 3.13.

 

	
No Borrowing

 

	
30

	
SECTION 3.14.

 

	
Servicer’s Obligations

 

	
30

	
SECTION 3.15.

 

	
Guarantees, Loans, Advances and Other Liabilities

 

	
30

	
SECTION 3.16.

 

	
Capital Expenditures

 

	
30

	
SECTION 3.17.

 

	
Removal of Administrator

 

	
30

	
SECTION 3.18.

 

	
Restricted Payments

 

	
30

	
SECTION 3.19.

 

	
Notice of Events of Default

 

	
31

	
SECTION 3.20.

 

	
Further Instruments and Acts

 

	
31

	
SECTION 3.21.

 

	
Perfection Representations.

 

	
31

	
ARTICLE IV.

 

	
SATISFACTION AND DISCHARGE

 

	
31

	
SECTION 4.01.

 

	
Satisfaction and Discharge of Indenture

 

	
31

	
SECTION 4.02.

 

	
Application of Trust Money

 

	
33

	
SECTION 4.03.

 

	
Repayment of Moneys Held by Paying Agent

 

	
33

	
SECTION 4.04.

 

	
Release of Collateral

 

	
33

	
ARTICLE V.

 

	
REMEDIES

 

	
33

	
SECTION 5.01.

 

	
Events of Default

 

	
33

	
SECTION 5.02.

 

	
Acceleration of Maturity; Rescission and Annulment.

 

	
35

	
SECTION 5.03.

 

	
Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

 

	
36

	
SECTION 5.04.

 

	
Remedies; Priorities.

 

	
38

	
SECTION 5.05.

 

	
Optional Preservation of the Receivables

 

	
40

	
SECTION 5.06.

 

	
Limitation of Suits

 

	
40

	
SECTION 5.07.

 

	
Unconditional Rights of Noteholders To Receive Principal and Interest

 

	
41

	
SECTION 5.08.

 

	
Restoration of Rights and Remedies

 

	
41

	
SECTION 5.09.

 

	
Rights and Remedies Cumulative

 

	
41

	
SECTION 5.10.

 

	
Delay or Omission Not a Waiver

 

	
42

	
SECTION 5.11.

 

	
Control by Noteholders

 

	
42

	
SECTION 5.12.

 

	
Waiver of Past Defaults

 

	
42

	
SECTION 5.13.

 

	
Undertaking for Costs

 

	
43

	
SECTION 5.14.

 

	
Waiver of Stay or Extension Laws

 

	
43

	
SECTION 5.15.

 

	
Action on Notes

 

	
43

 

iii

	
SECTION 5.16.

 

	
Performance and Enforcement of Certain Obligations.

 

	
43

	
ARTICLE VI.

 

	
THE INDENTURE TRUSTEE

 

	
44

	
SECTION 6.01.

 

	
Duties of Indenture Trustee.

 

	
44

	
SECTION 6.02.

 

	
Rights of Indenture Trustee.

 

	
46

	
SECTION 6.03.

 

	
Individual Rights of Indenture Trustee

 

	
48

	
SECTION 6.04.

 

	
Indenture Trustee’s Disclaimer

 

	
48

	
SECTION 6.05.

 

	
Notice of Defaults

 

	
48

	
SECTION 6.06.

 

	
Reports by Indenture Trustee to Holders

 

	
49

	
SECTION 6.07.

 

	
Compensation and Indemnity

 

	
49

	
SECTION 6.08.

 

	
Replacement of Indenture Trustee

 

	
50

	
SECTION 6.09.

 

	
Successor Indenture Trustee by Merger

 

	
51

	
SECTION 6.10.

 

	
Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

 

	
51

	
SECTION 6.11.

 

	
Eligibility; Disqualification

 

	
52

	
SECTION 6.12.

 

	
Preferential Collection of Claims Against Issuer

 

	
52

	
SECTION 6.13.

 

	
Waiver of Setoffs

 

	
53

	
SECTION 6.14.

 

	
Licenses

 

	
53

	
SECTION 6.15.

 

	
Additional Duties

 

	
53

	
ARTICLE VII.

 

	
NOTEHOLDERS’ LISTS AND REPORTS

 

	
53

	
SECTION 7.01.

 

	
Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders

 

	
53

	
SECTION 7.02.

 

	
Preservation of Information; Communications to Noteholders.

 

	
53

	
SECTION 7.03.

 

	
Reports by Issuer.

 

	
54

	
SECTION 7.04.

 

	
Reports by Indenture Trustee

 

	
55

	
ARTICLE VIII.

 

	
ACCOUNTS, DISBURSEMENTS AND RELEASES

 

	
55

	
SECTION 8.01.

 

	
Collection of Money

 

	
55

	
SECTION 8.02.

 

	
Trust Accounts.

 

	
55

	
SECTION 8.03.

 

	
General Provisions Regarding Accounts

 

	
57

	
SECTION 8.04.

 

	
Release of Trust Estate.

 

	
58

	
SECTION 8.05.

 

	
Opinion of Counsel

 

	
58

	
ARTICLE IX.

 

	
SUPPLEMENTAL INDENTURES

 

	
59

	
SECTION 9.01.

 

	
Supplemental Indentures Without Consent of Noteholders.

 

	
59

 

iv

	
SECTION 9.02.

 

	
Supplemental Indentures with Consent of Noteholders

 

	
60

	
SECTION 9.03.

 

	
Execution of Supplemental Indentures

 

	
61

	
SECTION 9.04.

 

	
Effect of Supplemental Indenture

 

	
62

	
SECTION 9.05.

 

	
Reference in Notes to Supplemental Indentures

 

	
62

	
SECTION 9.06.

 

	
Conformity with Trust Indenture Act

 

	
62

	
ARTICLE X.

 

	
REDEMPTION OF NOTES

 

	
62

	
SECTION 10.01.

 

	
Redemption

 

	
62

	
SECTION 10.02.

 

	
Form of Redemption Notice

 

	
62

	
SECTION 10.03.

 

	
Notes Payable on Redemption Date

 

	
63

	
ARTICLE XI.

 

	
MISCELLANEOUS

 

	
63

	
SECTION 11.01.

 

	
Compliance Certificates and Opinions, etc.

 

	
63

	
SECTION 11.02.

 

	
Form of Documents Delivered to Indenture Trustee

 

	
65

	
SECTION 11.03.

 

	
Acts of Noteholders.

 

	
66

	
SECTION 11.04.

 

	
Notices, etc., to Indenture Trustee, Issuer and Rating Agencies

 

	
66

	
SECTION 11.05.

 

	
Notices to Noteholders; Waiver

 

	
67

	
SECTION 11.06.

 

	
Effect of Headings and Table of Contents

 

	
67

	
SECTION 11.07.

 

	
Successors and Assigns

 

	
67

	
SECTION 11.08.

 

	
Separability

 

	
68

	
SECTION 11.09.

 

	
Benefits of Indenture

 

	
68

	
SECTION 11.10.

 

	
Legal Holidays

 

	
68

	
SECTION 11.11.

 

	
Governing Law

 

	
68

	
SECTION 11.12.

 

	
Counterparts

 

	
68

	
SECTION 11.13.

 

	
Recording of Indenture

 

	
68

	
SECTION 11.14.

 

	
Trust Obligation

 

	
68

	
SECTION 11.15.

 

	
No Petition

 

	
69

	
SECTION 11.16.

 

	
Inspection

 

	
69

	
SECTION 11.17.

 

	
Conflict with Trust Indenture Act

 

	
69

	
SECTION 11.18.

 

	
Limitation of Liability

 

	
70

	
SECTION 11.19.

 

	
Intent of the Parties; Reasonableness

 

	
70

	
SECTION 11.20.

 

	
Communications with Rating Agencies

 

	
70

	
ARTICLE XII.

 

	
COMPLIANCE WITH THE FDIC RULE

 

	
71

 

v

	
SECTION 12.01.

 

	
Purpose.

 

	
71

	
SECTION 12.02.

 

	
Requirements of the FDIC Rule

 

	
72

	
SECTION 12.03.

 

	
Performance

 

	
74

	
SECTION 12.04.

 

	
Effect of Section 941 Rules

 

	
74

	
SECTION 12.05.

 

	
Actions Upon Repudiation

 

	
74

	
SECTION 12.06.

 

	
Notice

 

	
76

	
SECTION 12.07.

 

	
Reservation of Rights

 

	
76

	
ARTICLE XIII.

 

	
ASSET REPRESENTATIONS REVIEW

 

	
77

	
SECTION 13.01.

 

	
Noteholder and Note Owner Requests for Vote on Asset Representations Review

 

	
77

	
SECTION 13.02.

 

	
Noteholder and Note Owner Vote on Asset Representations Review

 

	
77

	
SECTION 13.03.

 

	
Evaluation of Review Report.

 

	
78

	
SECTION 13.04.

 

	
Dispute Resolution

 

	
78

	 	 	 

 

SCHEDULES AND EXHIBITS

	
SCHEDULE A

	
Schedule of Receivables

	
SCHEDULE B

	
Perfection Representations, Warranties and Covenants

	
EXHIBIT A-1

	
Form of Class A-1 Note

	
EXHIBIT A-2

	
Form of Class A-2a Note

	
EXHIBIT A-3

	
Form of Class A-2b Note

	
EXHIBIT A-4

	
Form of Class A-3 Note

	
EXHIBIT A-5

	
Form of Class A-4 Note

	
EXHIBIT B

	
Servicing Criteria to be Addressed in Assessment of Compliance

vi

THIS INDENTURE, dated as of January 24, 2018, is between BMW VEHICLE OWNER TRUST 2018-A, a Delaware statutory trust (the “Issuer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee and not in its individual capacity (the “Indenture Trustee”).

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Issuer’s 1.65000% Asset Backed Notes, Class A-1 (the “Class A-1 Notes”), 2.09% Asset Backed Notes, Class A-2a (the “Class A-2a Notes”), LIBOR plus 0.07% Asset Backed Notes, Class A-2b (the “Class A-2b Notes”), 2.35% Asset Backed Notes, Class A-3 (the “Class A-3 Notes”) and 2.51% Asset Backed Notes, Class A-4 (the “Class A-4 Notes” and, collectively with the Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes and the Class A-3 Notes, the “Notes”):

GRANTING CLAUSE

The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of the Holders of the Notes, all of the Issuer’s right, title and interest in and to the following assets and property, whether now owned or existing or hereafter acquired or arising: (a) the Receivables and all moneys received thereon after the close of business on November 30, 2017; (b) the security interests in the Financed Vehicles and any accessions thereto granted by Obligors pursuant to the Receivables and any other interest of the Issuer in such Financed Vehicles; (c) any Liquidation Proceeds and Recoveries, and any other proceeds with respect to the Receivables from claims on any theft, physical damage, credit life or disability insurance policies covering Financed Vehicles or Obligors, including any vendor’s single interest or other collateral protection insurance policy; (d) all proceeds from any Receivables repurchased by a Dealer pursuant to a Dealer Agreement; (e) any property that shall have secured a Receivable and that shall have been acquired by or on behalf of a Seller, the Depositor, the Servicer, or the Issuer; (f) all documents and other items contained in the Receivable Files; (g) the Trust Accounts and all funds on deposit from time to time in the Trust Accounts and in all investments therein and proceeds thereof (including all Investment Earnings thereon); (h) the Issuer’s rights and benefits, but none of its obligations, under the Sale and Servicing Agreement (including the Issuer’s right to cause the Sellers or the Servicer, as the case may be, to repurchase Receivables from the Issuer under the circumstances described therein); (i) the Depositor’s and the Issuer’s rights and benefits under the Receivables Purchase Agreements, including the representations and warranties and the cure and repurchase obligations of the Sellers thereunder, and the Sale and Servicing Agreement; and (j) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property that at any time constitute all or part of or are included in the proceeds of any of the foregoing (collectively, the “Collateral”).

The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, equally and ratably without

1

prejudice, priority or distinction, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.

The Indenture Trustee, on behalf of the Holders of the Notes, acknowledges such Grant, accepts the trusts under this Indenture in accordance with the provisions of this Indenture and agrees to perform its duties required in this Indenture in accordance with the terms set forth herein.

ARTICLE I.

 DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01.      Definitions.

(a)            Definitions.  Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture.

“Act” has the meaning specified in Section 11.03(a).

“Administration Agreement” means the Owner Trust Administration Agreement, dated as of January 24, 2018, among the BMW FS, as owner trust administrator, the Issuer and the Indenture Trustee.

“Administrator” means BMW FS, or any successor owner trust administrator under the Administration Agreement.

“Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Asset Representations Review Agreement” means the Asset Representations Review Agreement, dated as of January 24, 2018, among the Asset Representations Reviewer, the Issuer and the Servicer.

“Asset Representations Reviewer” means Clayton Fixed Income Services LLC, or any successor Asset Representations Reviewer under the Asset Representations Review Agreement.

“Authenticating Agents” has the meaning specified in Section 2.13.

“Authorized Officer” means, with respect to the Issuer, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuer and, so long as the Administration Agreement is in effect, any Vice President or more senior officer of the Administrator who is authorized to act for the Administrator in matters relating to the Issuer

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and to be acted upon by the Administrator pursuant to the Administration Agreement and who is identified on the list of Authorized Officers delivered by the Administrator to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter).

“BMW Bank” means BMW Bank of North America and its successors and assigns.

“BMW FS” means BMW Financial Services NA, LLC, a Delaware limited liability company, and its successors and assigns.

“Book-Entry Notes” means a beneficial interest in the Notes, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.10.

“Business Day” shall have the meaning assigned thereto in the Sale and Servicing Agreement.

“Class A-1 Notes” means the 1.65000% Asset Backed Notes, Class A-1, substantially in the form of Exhibit A-1.

“Class A-1 Rate” means 1.65000% per annum (computed on the basis of the actual number of days elapsed in the related Interest Period and a 360-day year).

“Class A-2a Notes” means the 2.09% Asset Backed Notes, Class A-2a, substantially in the form of Exhibit A-2.

“Class A-2a Rate” means 2.09% per annum (computed on the basis of a 360-day year of twelve 30-day months).

“Class A-2b Notes” means the LIBOR plus 0.07% Asset Backed Notes, Class A-2b, substantially in the form of Exhibit A-3.

“Class A-2b Rate” means, with respect to any Interest Period, LIBOR plus 0.07% per annum (computed on the basis of the actual number of days elapsed in the related Interest Period and a 360-day year); provided that, if the sum of LIBOR plus 0.07% is less than 0.00% for any Interest Period, then the Class A-2b Rate for such Interest Period shall be deemed to be 0.00%.

“Class A-3 Notes” means the 2.35% Asset Backed Notes, Class A-3, substantially in the form of Exhibit A-4.

“Class A-3 Rate” means 2.35% per annum (computed on the basis of a 360-day year of twelve 30-day months).

“Class A-4 Notes” means the 2.51% Asset Backed Notes, Class A-4, substantially in the form of Exhibit A-5.

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“Class A-4 Rate” means 2.51% per annum (computed on the basis of a 360-day year of twelve 30-day months).

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

“Clearing Agency Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

“Closing Date” means January 24, 2018.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder.

“Collateral” has the meaning specified in the Granting Clause of this Indenture.

“Corporate Trust Office” means the office of the Indenture Trustee at which at any particular time the Indenture is administered, which office at the date of execution of this Indenture is located at (i) solely for the purposes of the transfer, surrender or exchange of Notes, U.S. Bank National Association, 111 Fillmore Avenue East, EP-MN-WS2N, St. Paul, Minnesota 55107, Attn: Bondholder Services/BMW Vehicle Owner Trust 2018-A, and (ii) for all other purposes, U. S. Bank National Association, 190 South LaSalle Street, 7th Floor, Chicago, Illinois 60603, Attn: BMW Vehicle Owner Trust 2018-A, or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders and the Issuer, or the principal corporate trust office of any successor Indenture Trustee at the address designated by such successor Indenture Trustee by notice to the Noteholders and the Issuer.

“Debt Opinion” means one or more written tax opinions to the effect that the Notes “will be debt” for U.S. federal income tax purposes from counsel which counsel shall be reasonably satisfactory to the Issuer, the Owner Trustee and the Indenture Trustee.

“Default” means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

“Definitive Notes” has the meaning specified in Section 2.10.

“Deposit Date” means the Business Day prior to each Payment Date.

“Depositor” means BMW FS Securities LLC and its successors and assigns.

“DOL Fiduciary Rule” has the meaning set forth in Section 2.04.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“Event of Default” has the meaning specified in Section 5.01.

4

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Executive Officer” means, with respect to any corporation, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, any Executive Vice President, any Senior Vice President, any Vice President, the Secretary, the Controller or the Treasurer of such corporation; and with respect to any partnership, any general partner thereof.

“FATCA Information” means any information sufficient to eliminate the imposition of, or determine the amount of, FATCA Withholding Tax.

“FATCA Withholding Tax” means any withholding or deduction pursuant to an agreement described in Section 1471(b) of the Code or otherwise imposed pursuant to Sections 1471 through 1474 of the Code and any regulations or agreements thereunder or official interpretations thereof.

“FDIC” means the Federal Deposit Insurance Corporation.

“FDIC Principal Amount” means, with respect to the applicable distribution date pursuant to Section 12.05, an amount equal to the sum of the First Priority Principal Distribution Amount and the Regular Principal Distribution Amount, if any; provided, that, if such distribution date occurs on a day that is not also a Payment Date, then for purposes of calculating the First Priority Principal Distribution Amount and the Regular Principal Distribution Amount (and the related Target Overcollateralization Amount, Adjusted Pool Balance, Pool Balance and Yield Supplement Overcollateralization Amount referenced in those defined terms), the “Payment Date” as of which such amounts are calculated will be the applicable distribution date under Section 12.05.

“FDIC Rule” means the FDIC’s rule regarding the treatment by the FDIC, as receiver or conservator of an insured depository institution, of financial assets transferred by the institution in connection with a securitization or participation (12 C.F.R. § 360.6).

“FDIC Rule Parties” means, collectively, BMW Financial Services NA, LLC, BMW FS Securities LLC, BMW Vehicle Owner Trust 2018-A and BMW Bank of North America.

“Final Scheduled Payment Date” means the Class A-1 Final Scheduled Payment Date, the Class A-2a Final Scheduled Payment Date, the Class A-2b Final Scheduled Payment Date, the Class A-3 Final Scheduled Payment Date or the Class A-4 Final Scheduled Payment Date, as applicable, as those terms are defined in the Sale and Servicing Agreement.

“Force Majeure” means any delay or failure in performance caused by acts beyond the applicable party’s reasonable control, including acts of God, war, vandalism, sabotage, accidents, fires, floods, strikes, labor disputes, mechanical breakdown, shortages or delays in obtaining suitable parts or equipment, material, labor, or transportation, acts of subcontractors, interruption of utility services, acts of any unit of government or governmental agency, or any similar or dissimilar cause.

5

“Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and grant a lien upon and a security interest in and a right of set-off against, deposit, set over and confirm pursuant to this Indenture.  A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.

“Hague Securities Convention” means The Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary (Concluded 5 July 2006), which became effective in the United States of America on April 1, 2017.

“Holder” or “Noteholder” means a Person in whose name a Note is registered on the Note Register.

“Indenture Trustee” means U.S. Bank National Association, a national banking association, not in its individual capacity, but as Indenture Trustee under this Indenture, or any successor Indenture Trustee under this Indenture.

“Indenture Trustee Fee” means an annual fee equal to $2,500, payable on the Payment Date occurring in August of each year, commencing in February 2019.

“Independent” means, when used with respect to any specified Person, that such Person (a) is in fact independent of the Issuer, any other obligor on the Notes, the Sellers and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Sellers or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Sellers or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

“Independent Certificate” means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01, made by an Independent appraiser or other expert appointed by an Issuer Order, and such opinion or certificate shall state that the signer has read the definition of “Independent” in this Indenture and that the signer is Independent within the meaning thereof.

“Interest Rate” means the Class A-1 Rate, the Class A-2a Rate, the Class A-2b Rate, the Class A-3 Rate or the Class A-4 Rate, as the context may require.

“Issuer” means BMW Vehicle Owner Trust 2018-A until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the Notes.

6

“Issuer Order” or “Issuer Request” means a written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee.

“Later Sold Note” has the meaning specified in Section 2.04.

“Note” means a Class A-1 Note, Class A-2a Note, Class A-2b Note, Class A-3 Note or Class A-4 Note, as the context may require.

“Note Depository Agreement” means the letter of representations relating to the Notes, dated January 24, 2018, executed by the Issuer and delivered to The Depository Trust Company, as the initial Clearing Agency.

“Note Owner” means, with respect to a Book-Entry Note, the Person who is the beneficial owner of such Book-Entry Note, as reflected on the books of the Clearing Agency or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency).

“Note Register” and “Note Registrar” have the respective meanings specified in Section 2.04.

“Noteholder Tax Identification Information” means properly completed and signed tax certifications (generally with respect to U.S. Federal Income Tax, IRS Form W-9 (or applicable successor form) in the case of a person that is a “United States Person” within the meaning of Section 7701(a)(30) of the Code or the appropriate IRS Form W-8 (or applicable successor form) in the case of a person that is not a “United States Person” within the meaning of Section 7701(a)(30) of the Code).

“Officer’s Certificate” means a certificate signed by any Authorized Officer of the Issuer, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01, and delivered to the Indenture Trustee.  Unless otherwise specified, any reference in this Indenture to an Officer’s Certificate shall be to an Officer’s Certificate of any Authorized Officer of the Issuer.

“Opinion of Counsel” means one or more written opinions of counsel who may, except as otherwise expressly provided in this Indenture, be an employee of or counsel to the Issuer or the Administrator and who shall be satisfactory to the Indenture Trustee, and which opinion or opinions shall be addressed to the Indenture Trustee, shall comply with any applicable requirements of Section 11.01 and shall be in form and substance satisfactory to the Indenture Trustee.

“Outstanding” means, as of any date of determination, all Notes theretofore authenticated and delivered under this Indenture except:

(i)            Notes theretofore cancelled by the Note Registrar or  delivered to the Note Registrar for cancellation;

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(ii)            Notes or portions thereof the payment for which money  in the necessary amount has been theretofore deposited with the  Indenture Trustee or any Paying Agent in trust for the Holders of  such Notes (provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this  Indenture or provision for such notice has been made, satisfactory to the Indenture Trustee); and

(iii)            Notes in exchange for or in lieu of which other  Notes have been authenticated and delivered pursuant to this  Indenture unless proof satisfactory to the Indenture Trustee is  presented that any such Notes are held by a bona fide purchaser;

provided, however, that in determining whether the Holders of the requisite Outstanding Amount of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Notes owned by the Issuer, the Depositor, the Sponsor, the Servicer (so long as BMW FS of one of its affiliates is the Servicer), the Sellers or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee actually knows to be so owned shall be so disregarded.  Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuer, the Depositor, the Servicer, the Sellers or any Affiliate of any of the foregoing Persons.

“Outstanding Amount” means, as of any date of determination and as to any Notes, the aggregate principal amount of such Notes Outstanding as of such date of determination.

“Owner Trustee” means Wilmington Trust, National Association, not in its individual capacity but solely as Owner Trustee under the Trust Agreement, or any successor Owner Trustee under the Trust Agreement.

“Paying Agent” means the Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 and is authorized by the Issuer to make payments to and distributions from the Collection Account, the Note Distribution Account and the Reserve Account, including payments of principal of or interest on the Notes on behalf of the Issuer.

“Payment Date” means the 25th day of each month, or if any such date is not a Business Day, the next succeeding Business Day, commencing in February 2018.

“Person” means any individual, corporation, estate, partnership, limited liability company, joint venture, association, joint stock company, trust or statutory trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof.

8

“Predecessor Note” means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.06 in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note.

“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.

“Receivables” means any contract listed on Schedule A (which Schedule may be in the form of microfiche).

“Receivables Purchase Agreement” means each of (i) the Receivables Purchase Agreement, dated as of January 24, 2018, between BMW FS, as Seller, and the Depositor and (ii) the Receivables Purchase Agreement, dated as of January 24, 2018, between BMW Bank, as Seller, and the Depositor.

“Record Date” means, as to any Payment Date or the Redemption Date (i) if the Notes are issued in book-entry form, the close of business on the Business Day immediately preceding such Payment Date or the Redemption Date and (ii) if the Notes are issued in definitive form, the last Business Day of the month preceding such Payment Date or the Redemption Date.

“Redemption Date” means, as the context requires, in the case of a redemption of the Notes pursuant to Section 10.01, the Payment Date specified by the Servicer or the Issuer pursuant to Section 10.01.

“Redemption Price” means in the case of a redemption of the Notes pursuant to Section 10.01, an amount equal to the unpaid principal amount of the Notes redeemed plus accrued and unpaid interest thereon at the Interest Rate for each Note being so redeemed on such Redemption Date.

“Registered Holder” means the Person in whose name a Note is registered on the Note Register on the applicable Record Date.

“Regulation AB” means Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1125, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting releases (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) and Asset-Backed Securities Disclosure and Registration, Securities Act Release No. 33-9638, 79 Fed. Reg. 57,184 (Sept. 24, 2014)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

“Regulation RR” means Regulation RR under the Exchange Act (17 C.F.R. §246.1, et seq.).

“Responsible Officer” means, with respect to the Indenture Trustee or Owner Trustee, as applicable, any officer within the Corporate Trust Office or successor group of the

9

Indenture Trustee or the Owner Trustee, respectively, including any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary or any other officer of the Indenture Trustee or the Owner Trustee, respectively, customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject, in each case having direct responsibility for the administration of the Basic Documents.

“Retained Notes” means the portion of the Notes retained by the Issuer or its affiliates on the Closing Date.

“Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of January 24, 2018, among the Issuer, the Depositor, BMW FS, as Sponsor, Servicer, Custodian and Administrator, and the Indenture Trustee.

“Schedule of Receivables” means the list of Receivables set forth in Schedule A (which Schedule may be in the form of microfiche).

“Securities Act” means the Securities Act of 1933, as amended.

“Seller” means each of (i) BMW FS and (ii) BMW Bank, each in its capacity as Seller under the applicable Receivables Purchase Agreement, and their respective successors in interest.

“Servicer” means BMW FS, in its capacity as servicer under the Sale and Servicing Agreement, and any Successor Servicer thereunder.

“Servicing Criteria” means the “servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time.

“Sponsor” means BMW FS, in its capacity as sponsor under the Sale and Servicing Agreement, and any successor Sponsor thereunder.

“State” means any one of the 50 states of the United States of America, or the District of Columbia.

“Successor Servicer” has the meaning specified in Section 3.07(f).

“Trust Agreement” means the Amended and Restated Trust Agreement, dated as of January 24, 2018, between the Depositor and Wilmington Trust, National Association, as Owner Trustee.

“Trust Estate” means all money, instruments, rights and other property that are subject or intended to be subject to the lien and security interest of this Indenture for the benefit of the Noteholders (including, without limitation, all property and interests Granted to the Indenture Trustee), including all proceeds thereof.

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“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as amended and as in force on the date hereof, unless otherwise specifically provided.

“UCC” means, unless the context otherwise requires, the Uniform Commercial Code as in effect in the relevant jurisdiction, as amended from time to time.

“Underwriter” means each of J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Mizuho Securities USA LLC, BNP Paribas Securities Corp. and Lloyds Securities Inc.

“Verified Note Owner” has the meaning specified in Section 13.01.

(b)            Except as otherwise specified herein or as the context may otherwise require, capitalized terms used herein but not otherwise defined shall have the meanings ascribed thereto in the Sale and Servicing Agreement.

SECTION 1.02.      Other Definitional Provisions.

(a)            All terms defined in this Indenture shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

(b)            As used in this Indenture and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Indenture or in any such certificate or other document, and accounting terms partly defined in this Indenture or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles.  To the extent that the definitions of accounting terms in this Indenture or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Indenture or in any such certificate or other document shall control.

(c)            The words “hereof,” “herein,” “hereunder” and words of similar import when used in this Indenture shall refer to this Indenture as a whole and not to any particular provision of this Indenture; Article, Section, Schedule and Exhibit references contained in this Indenture are references to Articles, Sections, Schedules and Exhibits in or to this Indenture unless otherwise specified; and the term “including” shall mean “including without limitation”.

(d)            The definitions contained in this Indenture are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

(e)            Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

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SECTION 1.03.      Incorporation by Reference of Trust Indenture Act.  Whenever this Indenture refers to a provision of the TIA, such provision is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

“Commission” means the Securities and Exchange Commission.

“indenture securities” means the Notes.

“indenture security holder” means a Noteholder.

“indenture to be qualified” means this Indenture.

“indenture trustee” or “institutional trustee” means the Indenture Trustee.

“obligor” on the indenture securities means the Issuer and any other obligor on the indenture securities.

All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule have the meaning assigned to them by such definitions.

ARTICLE II.

 THE NOTES

SECTION 2.01.      Form.  The Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes, the Class A-3 Notes and the Class A-4 Notes, in each case together with the Indenture Trustee’s certificate of authentication, shall be in substantially the form set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4 and Exhibit A-5, respectively, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistent herewith, be determined by the officers executing the Notes, as evidenced by their execution of the Notes.  Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of such Note.

The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the Authorized Officer executing such Notes, as evidenced by their execution of such Notes.

Each Note shall be dated the date of its authentication.  The terms of the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4 and Exhibit A-5 are part of the terms of this Indenture.

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SECTION 2.02.      Execution, Authentication and Delivery.  The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers.  The signature of any such Authorized Officer on the Notes may be manual or facsimile.

Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes.

The Indenture Trustee shall upon Issuer Order authenticate and deliver Class A-1 Notes for original issue in an aggregate principal amount of $250,000,000, Class A-2a Notes for original issue in an aggregate principal amount of $410,000,000, Class A-2b Notes for original issue in an aggregate principal amount of $80,000,000, Class A-3 Notes for original issue in an aggregate principal amount of $360,000,000 and Class A-4 Notes for original issue in an aggregate principal amount of $150,000,000.  The aggregate principal amount of Class A-1 Notes, Class A-2a Notes, Class A-2b Notes, Class A-3 Notes and Class A-4 Notes outstanding at any time may not exceed such respective amounts except as provided in Section 2.06.

The Notes shall be issuable as registered Notes in minimum denominations of $1,000 and in integral multiples of $1,000 in excess thereof (except for one Note of each class which may be issued in a denomination other than an integral multiple of $1,000).

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

SECTION 2.03.      Temporary Notes.  Pending the preparation of Definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture as the officers executing such Notes may determine, as evidenced by their execution of such Notes.

If temporary Notes are issued, the Issuer shall cause Definitive Notes to be prepared without unreasonable delay.  After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer to be maintained as provided in Section 3.02, without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute, and the Indenture Trustee shall authenticate and deliver in exchange therefor, a like principal amount of Definitive Notes of authorized denominations.  Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes.

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SECTION 2.04.      Registration; Registration of Transfer and Exchange.  The Issuer shall cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Note Registrar shall provide for the registration of Notes and the registration of all transfers of Notes.  The Indenture Trustee initially shall be the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Note Registrar.

If a Person other than the Indenture Trustee is appointed by the Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Indenture Trustee shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the right to conclusively rely upon a certificate executed on behalf of the Note Registrar by an Executive Officer thereof as to the names and addresses of the Holders of the Notes and the principal amounts and number of such Notes.

Upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be maintained as provided in Section 3.02, if the requirements of Section 8-401(a) of the UCC are met, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees, one or more new Notes of the same Class in any authorized denominations, of a like aggregate principal amount.

At the option of the Holder, Notes may be exchanged for other Notes of the same Class in any authorized denominations, of a like aggregate principal amount, upon surrender of the Notes to be exchanged at the office or agency of the Issuer maintained as provided in Section 3.02.  Whenever any Notes are so surrendered for exchange, if the requirements of Section 8-401(a) of the UCC are met, the Issuer shall execute, and the Indenture Trustee, without having to verify that the requirements of 8-401(a) have been met, shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes that the Noteholder making the exchange is entitled to receive.

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act.

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No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.03 or 9.05 not involving any transfer.

Each Noteholder or holder of an interest in a Note, by acceptance of such Note or such interest therein, agrees to provide to the Indenture Trustee, any Note Paying Agent or the Issuer, upon its request, the Noteholder Tax Identification Information and, to the extent FATCA Withholding Tax is applicable, the FATCA Information.  In addition, each Noteholder or holder of an interest in a Note, by acceptance of such Note or such interest therein, agrees that the Indenture Trustee has the right to withhold any amounts of interest (properly withholdable under law and without any corresponding gross-up) payable to a Noteholder or holder of an interest in a Note that fails to comply with the requirements of the preceding sentence.

The preceding provisions of this Section notwithstanding, the Issuer shall not be required to make and the Note Registrar need not register transfers or exchanges of Notes selected for redemption or of any Note for a period of fifteen (15) days preceding the due date for any payment with respect to the Note.

No Note, or any interest therein, may be transferred to an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a “plan” described in Section 4975(e)(1) of the Code, any entity that is deemed to hold “plan assets” of any of the foregoing by reason of an employee benefit plan’s or other plan’s investment in such entity, unless such transferee represents, warrants and covenants that its purchase and holding of such note will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code because it will satisfy the requirements of an applicable prohibited transaction exemption and will not cause a non-exempt violation of any applicable law that is substantially similar to ERISA or Section 4975 of the Code.  By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may rely conclusively on the same for purposes hereof.

In addition, each Note Owner that is subject to Title I of ERISA or Section 4975 of the Cods (“Plan”) and any fiduciary acting on behalf of such Plan (“Plan Fiduciary”), by accepting an interest or participation in a Note, is deemed to represent that:

(1) if any of the Issuer, the Depositor, any Underwriter or any of their respective affiliated entities (the “Transaction Parties”), has provided or will provide advice with respect to the acquisition of the Notes by the Plan, it has or will provide such advice only to the Plan Fiduciary which is independent of the Transaction Parties giving such advice, if any, and the Plan Fiduciary either:

(a) is a bank as defined in Section 202 of the Investment Advisers Act of 1940 (the “Advisers Act”), or similar institution that is regulated and supervised and subject to periodic examination by a State or Federal agency;

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(b) is an insurance carrier which is qualified under the laws of more than one state to perform the services of managing, acquiring or disposing of assets of a Plan;

(c) is an investment adviser registered under the Advisers Act, or, if not registered an as investment adviser under the Advisers Act by reason of paragraph (1) of Section 203A of the Advisers Act, is registered as an investment adviser under the laws of the state in which it maintains its principal office and place of business;

(d) is a broker-dealer registered under the Securities Exchange Act of 1934, as amended; or

(e) has, and at all times that the Plan is invested in the Notes will have, total assets of at least U.S. $50,000,000 under its management or control (provided that this clause (e) shall not be satisfied if the Plan Fiduciary is either (i) the owner or a relative of the owner of an investing IRA or (ii) a participant or beneficiary or a relative of such participant or beneficiary of the Plan investing in the Notes in such capacity);

(2) the Plan Fiduciary is capable of evaluating investment risks independently, both in general and with respect to particular transactions and investment strategies, including the acquisition by the Plan of the Notes;

(3) the Plan Fiduciary is a “fiduciary” with respect to the Plan within the meaning of Section 3(21) of ERISA, Section 4975 of the Code, or both, and is responsible for exercising independent judgment in evaluating the Plan’s acquisition of the Notes;

(4) none of the Transaction Parties has exercised any authority to cause the Plan to invest in the Notes or to negotiate the terms of the Plan’s investment in the offered notes; and

(5) the Plan Fiduciary has been informed by the Transaction Parties:

(a) that none of the Transaction Parties is undertaking to provide impartial investment advice or to give advice in a fiduciary capacity in connection with the Plan’s acquisition of the Notes; and

(b) of the existence and nature of the Transaction Parties financial interests in the Plan’s acquisition of the Notes as described in the prospectus dated January 17, 2018.

The above representations in this paragraph are intended to comply with the Department of Labor’s Reg. Sections 29 C.F.R. 2510.3-21(a) and (c)(1) as promulgated on April 8, 2016 (81 Fed. Reg. 20,997) (the “DOL Fiduciary Rule”).  If these regulations are revoked, repealed or no longer effective, these representations shall be deemed to not be in effect.

With respect to any Retained Notes that are sold or otherwise transferred after the Closing Date (a “Later-Sold Note”), such sale or transfer shall not be effective unless (A) the Issuer, the Owner Trustee and the Indenture Trustee receive a Debt Opinion with respect to such sale or transfer of such Later-Sold Note (which such opinion shall include the Class, principal amount and CUSIP number of such Later-Sold Note) and (B) either (i) such Later-Sold Note has

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a CUSIP number that is different than that of any other outstanding Note immediately prior to such sale or can otherwise be separately tracked for reporting of original issue discount or (ii) for U.S. federal income tax purposes, such Later-Sold Note has the same issue price and issue date as any outstanding Notes that have the same CUSIP number as such Later-Sold Note.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the transfer of Notes.

SECTION 2.05.      [Reserved].

SECTION 2.06.      Mutilated, Destroyed, Lost or Stolen Notes.  If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Note Registrar or a Responsible Officer of the Indenture Trustee that such Note has been acquired by a bona fide purchaser, and provided that the requirements of Section 8-405 of the UCC are met, the Issuer shall execute, and upon an Issuer Order the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of the same Class; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within fifteen (15) days shall be due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof.  If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.

Upon the issuance of any replacement Note under this Section, the Issuer or the Indenture Trustee may require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee or the Note Registrar) connected therewith.

Every replacement Note issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

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The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

SECTION 2.07.      Persons Deemed Owners.  Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the Indenture Trustee or any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

SECTION 2.08.      Payment of Principal and Interest; Defaulted Interest.

(a)            The Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes, the Class A-3 Notes and the Class A-4 Notes shall accrue interest at the Class A-1 Rate, the Class A-2a Rate, the Class A-2b Rate, the Class A-3 Rate and the Class A-4 Rate, respectively, as set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4 and Exhibit A-5, respectively, and such interest shall be payable on each Payment Date as specified therein, subject to Section 3.01.  Any installment of interest or principal payable on a Note that is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the Record Date by wire transfer as directed by such Holder provided such Holder has provided written wiring instructions to the Indenture Trustee and otherwise by check mailed first-class postage prepaid to such Person’s address as it appears on the Note Register on such Record Date, except that, unless Definitive Notes have been issued pursuant to Section 2.12, with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payment shall be made by wire transfer in immediately available funds to the account designated by such nominee; provided, however, that the final installment of principal payable with respect to such Note on a Payment Date or on the related Final Scheduled Payment Date (including the Redemption Price for any Note called for redemption pursuant to Section 10.01) shall be payable as provided in paragraph (b) below.  The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.03.

(b)            The principal of each Note shall be payable in installments on each Payment Date as provided in Section 3.01 and on any applicable distribution date pursuant to Section 12.05 and the forms of the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4 and Exhibit A-5.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes may be declared immediately due and payable, if not previously paid, in the manner provided in Section 5.02 on any date on which an Event of Default shall have occurred and be continuing by the Indenture Trustee or the Indenture Trustee acting at the direction of the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes.  All principal payments on each Class of Notes shall be made pro rata to the Noteholders of the related Class entitled thereto.  Upon written notice thereof, the Indenture Trustee shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Payment Date on which the Issuer expects the final installment of principal of and interest on such Note to be paid; provided, that such notice shall be not less than fifteen (15) days and not

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more than thirty (30) days prior to such date.  Such notice shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment.  Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.02.

(c)            If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) at the applicable Interest Rate in any lawful manner on the next Payment Date.

SECTION 2.09.      Cancellation.  All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled by the Indenture Trustee.  The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder that the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Indenture Trustee.  No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section, except as expressly permitted by this Indenture.  All cancelled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it; provided, that such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Trustee.

SECTION 2.10.      Book-Entry Notes.  The Notes, upon original issuance, will be issued in the form of typewritten Notes representing the Book-Entry Notes, to be delivered to the Indenture Trustee, as custodian for The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer.  The Book-Entry Notes shall be registered initially on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner thereof will receive a Definitive Note representing such Note Owner’s interest in such Note, except as provided in Section 2.12.  Unless and until definitive, fully registered Notes (the “Definitive Notes”) have been issued to such Note Owners pursuant to Section 2.12:

(i)            the provisions of this Section shall be in full force  and effect;

(ii)            the Note Registrar and the Indenture Trustee shall be entitled to deal with the Clearing Agency for all purposes of this Indenture (including the payment of principal of and interest on the Notes and the giving of instructions or directions hereunder) as the sole Holder of the Notes, and shall have no obligation to the Note Owners;

(iii)            to the extent that the provisions of this Section conflict with any other provisions of this Indenture, the provisions of this Section shall control;

(iv)            the rights of Note Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Note Owners and the Clearing Agency or the Clearing Agency Participants pursuant to the Note Depository Agreement.  Unless and until

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Definitive Notes are issued pursuant to Section 2.12, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments of principal of and interest on the Notes to such Clearing Agency Participants; and

(v)            whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Holders of Notes evidencing a specified percentage of the Outstanding Amount of the Notes, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes and has delivered such instructions to the Indenture Trustee.

SECTION 2.11.      Notices to Clearing Agency.  Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to such Note Owners pursuant to Section 2.12, the Indenture Trustee shall give all such notices and communications specified herein to be given to Holders of the Notes to the Clearing Agency, and shall have no obligation to such Note Owners.

SECTION 2.12.      Definitive Notes.  If (i) the Administrator advises the Indenture Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Book-Entry Notes and the Administrator is unable to locate a qualified successor, (ii) the Depositor or the Administrator, at its option, with the consent of the Clearing Agency participants, advises the Indenture Trustee in writing that it elects to terminate the book-entry system, or (iii) after the occurrence of an Event of Default, Note Owners of the Book-Entry Notes representing beneficial interests aggregating at least a majority of the Outstanding Amount of such Notes, acting together as a single class, advise the Indenture Trustee through the Clearing Agency in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of such Note Owners, then the Clearing Agency shall notify all Note Owners, the Administrator and the Indenture Trustee of the occurrence of any such event and of the availability of Definitive Notes to Note Owners requesting the same.  Upon surrender to the Indenture Trustee of the typewritten Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuer shall execute and the Indenture Trustee upon an Issuer Order shall authenticate the Definitive Notes in accordance with the written instructions of the Clearing Agency.  None of the Issuer, the Note Registrar, the Administrator or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions.  Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes as Noteholders.

The Indenture Trustee shall not be liable if a qualified successor Clearing Agency cannot be located.  The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of such methods (with or without steel engraved borders), all as determined by the officers executing the Notes, as evidenced by their execution of the Notes.

SECTION 2.13.      Authenticating Agents.  Upon the request of the Issuer, the Indenture Trustee shall, and if the Indenture Trustee so chooses the Indenture Trustee may,

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appoint one or more authenticating agents (“Authenticating Agents”) with power to act on its behalf and subject to its direction in the authentication of Notes in connection with issuance, transfers and exchanges under Sections 2.02, 2.04, 2.06 and 9.05, as fully to all intents and purposes as though each such Authenticating Agent had been expressly authorized by such Sections to authenticate such Notes.  For all purposes of this Indenture, the authentication of Notes by an Authenticating Agent pursuant to this Section shall be deemed to be the authentication of Notes by the Indenture Trustee.

Any corporation into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, without the execution or filing of any further act on the part of the parties hereto or such Authenticating Agent or such successor corporation.

Any Authenticating Agent may at any time resign by giving written notice of resignation to the Indenture Trustee and the Issuer.  The Indenture Trustee may at any time terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and the Issuer.  Upon receiving such notice of resignation or upon such termination, the Indenture Trustee shall promptly appoint a successor Authenticating Agent and shall give written notice of such appointment to the Issuer.

The Issuer agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services and reimbursement for its reasonable expenses relating thereto.  The provisions of Sections 2.09 and 6.04 shall be applicable to any Authenticating Agent.

SECTION 2.14.      Tax Treatment.  The Issuer has entered into this Indenture, and the Notes will be issued, with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes held by parties unrelated to the holders of the Certificates will qualify as indebtedness secured by the Trust Estate.  The Issuer, by entering into this Indenture, and each Noteholder, by its acceptance of a Note (and each Note Owner by its acceptance of a beneficial interest in the applicable Book-Entry Note), agree to treat the Notes for such purposes as indebtedness.

ARTICLE III.

 COVENANTS

SECTION 3.01.      Payment of Principal and Interest.  The Issuer will duly and punctually pay the principal of and interest, if any, on the Notes in accordance with the terms of the Notes and this Indenture.  Without limiting the foregoing, on each Payment Date and on any applicable distribution date pursuant to Section 12.05, the Issuer will cause to be distributed all amounts deposited pursuant to the Sale and Servicing Agreement or this Indenture, as applicable, into the Note Distribution Account in accordance with the priorities and amounts set forth herein and in the Sale and Servicing Agreement (i) for the benefit of the Class A-1 Notes, to the Class A-1 Noteholders, (ii) for the benefit of the Class A-2a Notes, to the Class A-2a Noteholders, (iii) for the benefit of the Class A-2b Notes, to the Class A-2b Noteholders, (iv) for the benefit of the

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Class A-3 Notes, to the Class A-3 Noteholders and (v) for the benefit of the Class A-4 Notes, to the Class A-4 Noteholders.  Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest or principal shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture.

SECTION 3.02.      Maintenance of Office or Agency.  The Note Registrar, on behalf of the Issuer, shall maintain at the Corporate Trust Office or such other location in Minnesota or Illinois chosen by the Note Registrar, acting for the Issuer, an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices to and demands upon the Issuer in respect of the Notes and this Indenture may be served.  The Issuer hereby initially appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands.  The Issuer shall give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of any such office or agency.  If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands.

SECTION 3.03.      Money for Payments To Be Held in Trust.  All payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Collection Account, the Note Distribution Account and the Reserve Account shall be made on behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from the Collection Account, the Note Distribution Account or the Reserve Account for payments of Notes shall be paid to the Issuer except as provided in this Section.

On or before each Payment Date and Redemption Date, the Issuer shall deposit or cause to be deposited in the Note Distribution Account an aggregate sum sufficient to pay the amounts then becoming due under the Notes, such sum to be held in trust for the benefit of the Persons entitled thereto, and (unless the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee of its action or failure so to act.

The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will:

(i)            hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

(ii)            give the Indenture Trustee notice of any default by the Issuer (or any other obligor on the Notes) of which it has actual knowledge in the making of any payment required to be made with respect to the Notes;

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(iii)            at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;

(iv)            immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment; and

(v)            comply with all requirements of the Code with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith.

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.

Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid upon Issuer Request to the Issuer; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense and direction of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than thirty (30) days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.  The Indenture Trustee shall also adopt and employ, at the expense and direction of the Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder).

SECTION 3.04.      Existence.  Except as otherwise permitted by the provisions of Section 3.10, the Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other State or of the United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do

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business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Collateral and each other instrument or agreement included in the Trust Estate.

SECTION 3.05.      Protection of Trust Estate.  The Issuer will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, all as prepared by the Administrator and delivered to the Issuer, and shall take such other action necessary or advisable to:

(i)            Grant more effectively all or any portion of the Trust Estate;

(ii)            maintain or preserve the lien and security interest (and the priority thereof) of this Indenture or carry out more effectively the purposes hereof;

(iii)            perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;

(iv)            enforce any of the Collateral;

(v)            preserve and defend title to the Trust Estate and the rights of the Indenture Trustee and the Noteholders in such Trust Estate against the claims of all Persons and parties; or

(vi)            pay all taxes or assessments levied or assessed upon the Trust Estate when due.

The Issuer hereby designates the Indenture Trustee, as its agent and attorney-in-fact, to execute upon an Issuer Order any financing statement, continuation statement or other instrument required to be executed pursuant to this Section 3.05.

SECTION 3.06.      Opinions as to Trust Estate.

(a)            On the Closing Date, the Issuer shall cause to be furnished to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording and filing of this Indenture, any indentures supplemental hereto, and any other requisite documents, and with respect to the execution and filing of any financing statements and continuation statements, as are necessary to perfect and make effective the lien and security interest of this Indenture and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and security interest effective.

(b)            On or before April 30, in each calendar year, beginning in 2019, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is necessary to maintain the lien and security interest created by this Indenture and

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reciting the details of such action, or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest.  Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture until April 30 of the following calendar year.

SECTION 3.07.      Performance of Obligations; Servicing of Receivables.

(a)            The Issuer will not take any action and will use its reasonable best efforts not to permit any action to be taken by others that would release any Person from any of such Person’s material covenants or obligations under any instrument or agreement included in the Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture, the Sale and Servicing Agreement or such other instrument or agreement.

(b)            The Issuer may contract with other Persons with notification to the Rating Agencies to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be deemed to be action taken by the Issuer.  Initially, the Issuer has contracted with the Servicer and the Administrator to assist the Issuer in performing its duties under this Indenture.

(c)            The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust Estate, including but not limited to filing or causing to be filed all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the Sale and Servicing Agreement in accordance with and within the time periods provided for herein and therein.  Except as otherwise expressly provided therein, the Issuer shall not waive, amend, modify, supplement or terminate any Basic Document or any provision thereof without the written consent of either the Indenture Trustee or the Holders of at least a majority of the Outstanding Amount of the Notes.

(d)            If the Issuer shall have knowledge of the occurrence of a Servicer Termination Event under the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall specify in such notice the action, if any, the Issuer is taking with respect to such default.

(e)         [Reserved.]

(f)            Upon any termination of the Servicer’s rights and powers pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee thereof.  As soon as a successor servicer (a “Successor Servicer”) is appointed, the Issuer shall notify the Indenture Trustee in writing of such appointment, specifying in such notice the name and address of such Successor Servicer.  To the extent the Indenture Trustee is appointed as Successor Servicer under Section 8.02 of the Sale and Servicing Agreement, none of the responsibilities,

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duties and liabilities of the Servicer will transfer to the Indenture Trustee as Successor Servicer until the Indenture Trustee has received all documentation and data necessary to effect the transfer of the Servicer’s obligations to the Indenture Trustee.

(g)            Without limitation of the absolute nature of the assignment granted to the Indenture Trustee under this Indenture or the rights of the Indenture Trustee hereunder, the Issuer agrees (i) except to the extent otherwise provided in any Basic Document, that it will not, without the prior written consent of the Indenture Trustee acting at the direction of the Holders of at least a majority in Outstanding Amount of the Notes, amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender of, the terms of any Collateral (except to the extent otherwise provided in the Sale and Servicing Agreement) or the Basic Documents, or waive timely performance or observance by the Servicer under the Sale and Servicing Agreement or a Seller under the related Receivables Purchase Agreement; and (ii) that any such amendment shall not (A) increase or reduce in any manner the amount of, or accelerate or delay the timing of, distributions that are required to be made for the benefit of the Noteholders or (B) reduce the aforesaid percentage of the Notes that is required to consent to any such amendment, without the consent of the Holders of all Outstanding Notes; provided, however, that the Indenture Trustee shall be entitled to an Opinion of Counsel that any such amendment, modification, supplement or waiver is authorized or permitted hereby and all conditions precedent thereto have been satisfied, and that the Indenture Trustee shall not be obligated to take any such action that affects the Indenture Trustee’s own rights, duties liabilities or immunities.  If the Indenture Trustee acting at the direction of such Holders agrees to any such amendment, modification, supplement or waiver, the Indenture Trustee agrees, promptly following a request by the Issuer to do so, to execute and deliver, at the Issuer’s own expense, such agreements, instruments, consents and other documents prepared by the Issuer as the Issuer may deem necessary or appropriate in the circumstances.

SECTION 3.08.      Negative Covenants.  So long as any Notes are Outstanding, the Issuer shall not:

(i)            except as expressly permitted by this Indenture, the Receivables Purchase Agreements or the Sale and Servicing Agreement, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Trust Estate;

(ii)            claim any credit on, or make any deduction from the principal or interest payable in respect of, the Notes (other than amounts properly withheld from such payments under the Code or applicable state law) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any part of the  Trust Estate;

(iii)            (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (B) permit any lien, charge, excise, claim,

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security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof (other than tax liens, mechanics’ liens and other liens that arise by operation of law, in each case on any of the Financed Vehicles and arising solely as a result of an action or omission of the related Obligor and the lien of this Indenture) or (C) permit the lien of this Indenture not to constitute a valid first priority (other than with respect to any such tax, mechanics’ or other lien) security interest in the Trust Estate;

(iv)            assume or incur any indebtedness other than indebtedness incurred in accordance with the Basic Documents; or

(v)            except as otherwise permitted by the Basic Documents, dissolve or liquidate in whole or in part.

SECTION 3.09.      Annual Statement and Assessment as to Compliance.

(a)            The Issuer will deliver to the Indenture Trustee, within ninety (90) days after the end of each fiscal year of the Issuer (commencing with fiscal year 2018), an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:

(i)            a review of the activities of the Issuer during such year and of its performance under this Indenture has been made under such Authorized Officer’s supervision; and

(ii)            to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such year or, if there has been a default in its compliance with any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

(b)            The Issuer shall supply to the Indenture Trustee such summaries of any information, documents and reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of Section 3.09(a) as may be required pursuant to rules and regulations prescribed from time to time by the Commission.

(c)            So long as the Issuer is required to file reports with the Commission pursuant to the Exchange Act, on or before March 15th of each calendar year, commencing in 2019, the Indenture Trustee shall:

(i)            deliver to the Issuer and the Administrator a report (in form and substance reasonably satisfactory to the Administrator, acting on behalf of the Issuer) regarding the Indenture Trustee’s assessment of compliance with the Servicing Criteria during the immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.  Such report shall be signed by an authorized officer of the Indenture Trustee, and shall address each of the Servicing Criteria specified on Exhibit B hereto; and

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(ii)            deliver to the Issuer and the Administrator a report of a registered public accounting firm that attests to, and reports on, the assessment of compliance made by the Indenture Trustee and delivered pursuant to the preceding paragraph.  Such attestation shall be in accordance with Rules 13a-18 and 15d-18 of the Securities Act and the Exchange Act and Item 1122 of Regulation AB.

SECTION 3.10.      Issuer May Consolidate, etc., Only on Certain Terms.

(a)            The Issuer shall not consolidate or merge with or into any other Person, unless:

(i)            the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America or any State and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the duty to make due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided  herein;

(ii)            immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

(iii)            each Rating Agency shall not have notified the Indenture Trustee, the Administrator or the Owner Trustee, within ten (10) days after receiving notice of a consolidation or merger, that such consolidation or merger will result in a reduction or withdrawal of its then current rating on any Class of Notes;

(iv)            the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse federal income tax consequences to the Issuer, any Noteholder or any Certificateholder;

(v)            any action that is necessary to maintain the lien and  security interest created by this Indenture shall have been taken; and

(vi)            the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act) in all material respects.

(b)            The Issuer shall not convey or transfer any of its properties or assets, including those included in the Trust Estate, to any Person other than pursuant to the terms of the Basic Documents, unless:

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(i)            the Person that acquires by conveyance or transfer the properties and assets of the Issuer the conveyance or transfer of which is hereby restricted (A) shall be a United States citizen or a Person organized and existing under the laws of the United States of America or any State, (B) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein, (C) expressly agrees by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Holders of the Notes, (D) unless otherwise provided in such supplemental indenture, expressly agrees to indemnify, defend and hold harmless the Issuer and the Indenture Trustee against and from any loss, liability or expense arising under or related to this Indenture and the Notes and (E) expressly agrees by means of such supplemental indenture that such Person (or, if a group of Persons, one specified Person) shall make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Notes;

(ii)            immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

(iii)            the Rating Agency Condition shall have been satisfied with respect to such transaction and each Rating Agency;

(iv)            the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse federal income tax consequences to the Issuer, any Noteholder or any Certificateholder;

(v)            any action that is necessary to maintain the lien and security interest created by this Indenture shall have been taken; and

(vi)            the Issuer shall have delivered to the Indenture  Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act) in all material respects.

SECTION 3.11.      Successor or Transferee.

(a)            Upon any consolidation or merger of the Issuer in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

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(b)            Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.10(b), BMW Vehicle Owner Trust 2018-A will be released from every covenant and agreement of this Indenture to be observed by or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of documents and Opinions of Counsel set forth in Section 3.10 and a written notice to the Indenture Trustee stating that BMW Vehicle Owner Trust 2018-A is to be so released.

SECTION 3.12.      No Other Business.  The Issuer shall not engage in any business other than financing, purchasing, owning, selling and managing the Receivables in the manner contemplated by this Indenture and the Basic Documents and any activities incidental thereto.

SECTION 3.13.      No Borrowing.  The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Notes.

SECTION 3.14.      Servicer’s Obligations.  The Issuer shall cause the Servicer to comply with the Sale and Servicing Agreement, including Sections 4.09, 4.10 and 4.11 and Article VII thereof.

SECTION 3.15.      Guarantees, Loans, Advances and Other Liabilities.  Except as contemplated by the Trust Agreement, the Sale and Servicing Agreement or this Indenture, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any Person.

SECTION 3.16.      Capital Expenditures.  The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personality).

SECTION 3.17.      Removal of Administrator.  So long as any Notes are Outstanding, the Issuer shall not remove the Administrator unless the Rating Agency Condition shall have been satisfied with respect to each Rating Agency in connection with such removal and the Indenture Trustee receives written notice of the foregoing and consents thereto.

SECTION 3.18.      Restricted Payments.  Except with respect to the proceeds from issuance of the Notes, the Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, distributions as contemplated by, and to the extent funds are available for such purpose under, the Sale and

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Servicing Agreement, this Indenture or the Trust Agreement.  The Issuer will not, directly or indirectly, make payments to or distributions from the Note Distribution Account, the Collection Account or the Reserve Account except in accordance with this Indenture and the other Basic Documents.

SECTION 3.19.      Notice of Events of Default.  The Issuer shall give the Indenture Trustee and the Rating Agencies prompt written notice of each Event of Default hereunder, and of each default on the part of (i) the Servicer of its obligations under the Sale and Servicing Agreement and (ii) the Sellers under the Receivables Purchase Agreements.

SECTION 3.20.      Further Instruments and Acts.  Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

SECTION 3.21.      Perfection Representations.

(a)            The representations, warranties and covenants set forth in Schedule B hereto shall be a part of this Indenture for all purposes.

(b)            Notwithstanding any other provision of this Indenture or any other Basic Document, the perfection representations contained in Schedule B hereto shall be continuing, and remain in full force and effect until such time as all obligations under this Indenture have been finally and fully paid and performed.

(c)            The parties to this Indenture: (i) shall not waive any of the perfection representations contained in Schedule B hereto; (ii) shall provide the Administrator with prompt written notice of any breach of the perfection representations contained in Schedule B hereto; and (iii) shall not waive a breach of any of the perfection representations contained in Schedule B hereto.

ARTICLE IV.

 SATISFACTION AND DISCHARGE

SECTION 4.01.      Satisfaction and Discharge of Indenture.  This Indenture shall cease to be of further effect with respect to the Notes except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16 and 3.18, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when

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(A)            either:

(1)            all Notes theretofore authenticated and delivered (other than (i) Notes that have been mutilated, destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.06 and (ii) Notes for the payment of which money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter paid to the Persons entitled thereto or discharged from such trust, as provided in Section 3.03) have been delivered to the Indenture Trustee for cancellation; or

(2)            all Notes not theretofore delivered to the Indenture Trustee for cancellation:

a.  have become due and payable,

b.  will become due and payable at the Class A-4 Final Scheduled Payment Date within one year, or

c.  are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuer;

and the Issuer, in the case of a, b, or c above, has irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the United States of America (that will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes (including interest and any fees due and payable to the Servicer, the Owner Trustee, the Indenture Trustee or the Asset Representations Reviewer) not theretofore delivered to the Indenture Trustee for cancellation when due to the applicable Final Scheduled Payment Date or Redemption Date (if Notes shall have been called for redemption pursuant to Section 10.01), as the case may be;

		(B)	
the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer including, but not limited to, fees and expenses due to the Indenture Trustee; and

		(C)	
the Issuer has delivered to the Indenture Trustee an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA or the Indenture Trustee) an Independent Certificate from a firm of certified public accountants, each meeting the applicable requirements of Section 11.01(a) and, subject to Section 11.02, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this  Indenture have been complied with (and, in the case of an Officer’s Certificate, stating that the Rating Agency Condition has been satisfied with respect to each Rating Agency).

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SECTION 4.02.      Application of Trust Money.  All moneys deposited with the Indenture Trustee pursuant to Section 4.01 shall be held in trust and applied by it in accordance with the provisions of the Notes and this Indenture to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Holders of the particular Notes for the payment or redemption of which such moneys have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal and interest.

SECTION 4.03.      Repayment of Moneys Held by Paying Agent.  In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all moneys then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect to such Notes shall, upon written demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.03; and thereupon, such Paying Agent shall be released from all further liability with respect to such moneys.

SECTION 4.04.      Release of Collateral.  Subject to Section 11.01 and the terms of the Basic Documents, the Indenture Trustee shall release property from the lien of this Indenture only upon receipt by it of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and Independent Certificates in accordance with TIA § 314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificates.

ARTICLE V.

 REMEDIES

SECTION 5.01.      Events of Default.  “Event of Default”, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

(i)            default in the payment of any interest on any Note when the same becomes due and payable, and such default shall continue for a period of five (5) days;

(ii)            default in the payment of the principal of any Note on the related Final Scheduled Payment Date or Redemption Date;

(iii)            default in the observance or performance of any representation, warranty, covenant or agreement of the Issuer made in this Indenture (other than (x) a covenant or agreement, a default in the observance or performance of which is elsewhere in this Section specifically dealt with or (y) a covenant or agreement set forth in Section 12.02) or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated

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or otherwise cured, for a period of thirty (30) days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 25% of the Outstanding Amount of the Notes, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of Default hereunder;

(iv)            the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Trust Estate in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or the ordering of the winding-up or liquidation of the  Issuer’s affairs, and such decree or order shall remain unstayed and  in effect for a period of sixty (60) consecutive days; or

(v)            the commencement by the Issuer of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer  to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the appointment of or taking of possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure  by the Issuer generally to pay its debts as such debts become due, or  the taking of any action by the Issuer in furtherance of any of the  foregoing.

Notwithstanding the foregoing, a delay in or failure of performance referred to under clause (i) for a period of forty-five (45) days or less, under clause (ii) for a period of sixty (60) days or less or under clause (iii) for a period of one hundred twenty (120) days or less, will not constitute an Event of Default if that failure or delay was caused by Force Majeure or other similar occurrence.

The Issuer shall promptly deliver to the Indenture Trustee written notice in the form of an Officer’s Certificate of any event that with the giving of notice and the lapse of time would become an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.

Subject to the provisions herein relating to the duties of the Indenture Trustee, if an Event of Default occurs and is continuing, the Indenture Trustee shall be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any Noteholders or Verified Note Owners, other than requests, demands or directions required to be honored by the Indenture Trustee by Sections 13.01, 13.02 or 13.03(a) of this Indenture, Section 11.01 of the Sale and Servicing Agreement or Section 23 of the Administration Agreement, if the Indenture Trustee reasonably believes that it will not be adequately indemnified against the costs, expenses and liabilities that might be incurred by it in complying with such request.  Subject to

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such provisions for indemnification and certain limitations contained herein, Noteholders holding not less than a majority of the Outstanding Amount shall have the right to direct the time, method and place of conducting any proceeding or any remedy available to the Indenture Trustee or exercising any trust power conferred on the Indenture Trustee, and Noteholders holding not less than a majority of the Outstanding Amount may, in certain cases, waive any default with respect thereto, except a default in the payment of principal or interest or a default in respect of a covenant or provision of the Indenture that cannot be modified without the waiver or consent of all of the Holders of the Outstanding Notes.

SECTION 5.02.      Acceleration of Maturity; Rescission and Annulment.

(a)            If an Event of Default shall occur and be continuing, then and in every such case the Indenture Trustee may, or the Indenture Trustee as directed in writing by the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes shall, declare all the Notes to be then immediately due and payable, by a notice in writing to the Issuer, and upon any such declaration the Outstanding Amount of such Notes, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable as provided in the Notes.  Notwithstanding anything to the contrary in this paragraph (a), if an Event of Default specified in clauses (iv) or (v) of Section 5.01 shall have occurred and be continuing the Notes shall become immediately due and payable at par, together with accrued interest thereon.

		(b)	
[Reserved.]

(c)            At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter provided in this Article V, the Holders of Notes representing at least a majority of the Outstanding Amount of the Notes, by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

(i)            the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:

A.  all payments of principal of and interest on the Notes and all other amounts that would then be due hereunder or upon such Notes if the Event of Default giving rise to such acceleration had not occurred; and

B.  all sums paid by the Indenture Trustee hereunder and the reasonable compensation, expenses and disbursements of the Indenture Trustee and its agents and counsel and the reasonable compensation, expenses and disbursements of the Owner Trustee and its agents and counsel; and

(ii)            all Events of Default, other than the nonpayment of  the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12.

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No such rescission shall affect any subsequent default or impair any right consequent thereto.

SECTION 5.03.      Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

(a)            The Issuer covenants that if (i) a default is made in the payment of any interest on any Note when the same becomes due and payable, and such default continues for a period of five (5) days, or (ii) a default is made in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable, the Issuer will, upon demand of the Indenture Trustee, pay to it, for the benefit of the Holders of the Notes, the entire amount then due and payable on such Notes in respect of principal and interest, with interest on the overdue principal and, to the extent payment at such rate of interest shall be legally enforceable, on overdue installments of interest at the related Interest Rate and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses and disbursements of the Indenture Trustee and its agents and counsel.

(b)            In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or other obligor on such Notes and collect in the manner provided by law out of the Trust Estate or the property of any other obligor on such Notes, wherever situated, the moneys adjudged or decreed to be payable.

(c)            If an Event of Default occurs, the Indenture Trustee may, or shall at the direction of the Holders of at least a majority of the Outstanding Amount of the Notes, proceed to protect and enforce its rights and the rights of the Noteholders, by such appropriate Proceedings as the Indenture Trustee or the Indenture Trustee at the direction of the Holders of at least a majority of the Outstanding Amount of the Notes shall reasonably deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

(d)            In case there shall be pending, relative to the Issuer or any other obligor on the Notes or any Person having or claiming an ownership interest in the Trust Estate, Proceedings under Title 11 of the United States Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, or liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable Proceedings relative to the Issuer or other obligor on the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such Proceedings or otherwise:

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(i)            to file and prove a claim or claims for the entire amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of reasonable out-of-pocket expenses and liabilities incurred, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith) and of the Noteholders allowed in such Proceedings;

(ii)            unless prohibited by applicable law or regulation, to vote on behalf of the Holders of Notes in any election of a trustee, a standby trustee or a Person performing similar functions in any such Proceedings;

(iii)            to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders and of  the Indenture Trustee on their behalf; and

(iv)            to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Holders of Notes allowed in any Proceedings relative to the Issuer, its creditors or its  property;

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Noteholders to make payments to the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith, and any other amounts due the Indenture Trustee under Section 6.07.

(e)            Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

(f)            All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any Proceedings relative thereto, and any such Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Notes.

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(g)            In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Noteholder a party to any such Proceedings.

SECTION 5.04.      Remedies; Priorities.

(a)            If an Event of Default shall have occurred and be continuing, the Indenture Trustee may do one or more of the following (subject to Section 5.05):

(i)            institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained and collect from the Issuer and any other obligor on such Notes moneys adjudged due;

(ii)            institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate;

(iii)            exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Notes; and

(iv)            after an acceleration of the maturity of the Notes pursuant to Section 5.02, sell the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law;

provided that the Indenture Trustee may not sell or otherwise liquidate the Trust Estate following an Event of Default pursuant to clause (iv) above unless:

		(A)	
the Event of Default is of the type described in Section 5.01(i) or (ii); or

		(B)	
with respect to an Event of Default described in Section 5.01(iii):

(i)            the Noteholders of all Outstanding Notes consent thereto; or

(ii)            the proceeds of such sale or liquidation are sufficient to pay in full the principal of and accrued interest on the Outstanding Notes at the date of sale; or

		(C)	
with respect to any Event of Default described in Section 5.01(iv) and (v):

(i)            the Noteholders of all Outstanding Notes consent thereto; or

(ii)            the proceeds of such sale or liquidation are sufficient to pay in full the principal of and the accrued interest on the Outstanding Notes; or

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(iii)            the Indenture Trustee:

(x)  determines (but shall have no obligation to make such determination) that the Trust Estate will not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if the Notes had not been declared due  and payable; and

(y)  the Indenture Trustee obtains the consent of Noteholders of Notes evidencing not less than 66 2/3% of the Outstanding Amount of the Notes.

In determining such sufficiency or insufficiency with respect to clause (B)(ii) and (C)(ii) or (C)(iii)(x), Indenture Trustee may, but need not, obtain at the Issuer’s expense, and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

(b)            (i)            Notwithstanding the provisions of Section 8.02, following the occurrence and during the continuation of an Event of Default specified in Section 5.01 that has resulted in an acceleration of the Notes, if Indenture Trustee collects any money or property, it shall pay out such money or property (and other amounts including amounts held on deposit in the Reserve Account) held as Collateral for the benefit of the Noteholders, in the following order:

FIRST: to the Indenture Trustee, the Owner Trustee and the Asset Representations Reviewer, pro rata, based on amounts due to each such party, for payment of any Trustee and Reviewer Fees and other amounts required to be paid to such party pursuant to the terms of the Indenture, the Trust Agreement or the Asset Representations Review Agreement, respectively (including, without limitation, expenses and indemnification amounts);

SECOND: to the Servicer for due and unpaid Servicing Fees and unreimbursed Advances;

THIRD: to the Noteholders for amounts due and unpaid on the Notes in respect of interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes in respect of interest;

FOURTH: to Holders of the Class A-1 Notes for amounts due  and unpaid on the Class A-1 Notes in respect of principal, ratably, without preference or priority of any kind, according to the amounts due and payable on the Class A-1 Notes in respect of principal, until the Outstanding Amount of the Class A-1 Notes is reduced to zero;

FIFTH: to Holders of the Class A-2a Notes, Class A-2b Notes, Class A-3 Notes and Class A-4 Notes for amounts due and unpaid on the Class A-2a Notes, Class A-2b Notes, Class A-3 Notes and Class A-4 Notes in respect of principal, ratably,

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without preference or priority of any kind, according to the amounts due and payable on the Class A-2a Notes, Class A-2b Notes, Class A-3 Notes and Class A-4 Notes in respect of principal, until the Outstanding Amounts of the  Class A-2a Notes, Class A-2b Notes, Class A-3 Notes and Class A-4 Notes are reduced to zero; and

SIXTH: to the Certificate Distribution Account, for distribution to the Certificateholders.

The Indenture Trustee may fix a Record Date and Payment Date for any payment to Noteholders pursuant to this Section.  At least fifteen (15) days before such Record Date, the Issuer shall mail to each Noteholder and the Indenture Trustee a notice that states the Record Date, the Payment Date and the amount to be paid.

(ii)            Except as provided in Section 5.04(b)(i), the Indenture Trustee shall make all payments and distributions of the Trust Estate in accordance with Section 8.02.

SECTION 5.05.      Optional Preservation of the Receivables.  If the Notes have been declared to be due and payable under Section 5.02 following an Event of Default, and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of the Trust Estate and continue to apply collections as provided herein.  It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Trust Estate.  In determining whether or not to maintain possession of the Trust Estate, the Indenture Trustee may, at the expense of the Issuer and paid in the priority set forth in Section 5.06(b) of the Sale and Servicing Agreement, but need not, obtain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.

SECTION 5.06.      Limitation of Suits.  No Holder of any Note shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(i)            such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

(ii)            the Holders of not less than 25% of the Outstanding Amount of the Notes have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;

(iii)            such Holder or Holders have offered to the Indenture Trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities that may be incurred in complying with such request;

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(iv)            the Indenture Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceedings; and

(v)            no direction inconsistent with such written request has been given to the Indenture Trustee during such sixty (60) day period by the Holders of a majority of the Outstanding Amount of the Notes.

It is understood and intended that no one or more Holders of Notes shall have any right in any manner whatsoever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided.

In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Notes pursuant to this Section, each representing less than a majority of the Outstanding Amount of the Notes, the Indenture Trustee shall act at the direction of the group representing the greater percentage of the Outstanding Amount of Notes and if there is no such group then in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

SECTION 5.07.      Unconditional Rights of Noteholders To Receive Principal and Interest.  Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

SECTION 5.08.      Restoration of Rights and Remedies.  If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case the Issuer, the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.

SECTION 5.09.      Rights and Remedies Cumulative.  No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

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SECTION 5.10.      Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee, or any Holder of any Note to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein.  Every right and remedy given by this Article V or by operation of law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or the Noteholders, as the case may be.

SECTION 5.11.      Control by Noteholders.  Subject to the provisions of Sections 5.06, 6.02(f) and 6.02(g), Noteholders holding not less than a majority of the Outstanding Amount of the Notes shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided that:

(i)            such direction shall not be in conflict with any rule of law or with this Indenture;

(ii)            subject to the express terms of Section 5.04, any direction to the Indenture Trustee to sell or liquidate the Trust Estate shall be by Holders of Notes representing not less than 100% of the Outstanding Amount of the Notes;

(iii)            if the conditions set forth in Section 5.05 have been satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant to such Section, then any written direction to the Indenture Trustee by Holders of Notes representing less than 100% of the Outstanding Amount of the Notes to sell or liquidate the Trust Estate shall be of no force and effect; and

(iv)            the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction.

Notwithstanding the rights of Noteholders set forth in this Section, subject to Section 6.01, the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Noteholders not consenting to such action, or is contrary to law.

SECTION 5.12.      Waiver of Past Defaults.  Prior to the declaration of the acceleration of the maturity of the Notes as provided in Section 5.02, the Holders of Notes of not less than a majority of the Outstanding Amount of the Notes may waive any past Default or Event of Default and its consequences except a Default (a) in the deposit of collections or other required amounts, or any required payment from amounts held in any trust account in respect of amounts due on the Notes, (b) in payment of principal of, or interest or amounts due on any of the Notes or (c) in respect of a covenant or provision hereof that cannot be modified or amended without the consent of the Holder of each Note.  In the case of any such waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

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Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

SECTION 5.13.      Undertaking for Costs.  All parties to this Indenture agree, and each Holder of a Note by such Holder’s acceptance of a Note shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders, in each case holding in the aggregate more than 10% of the Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date).

SECTION 5.14.      Waiver of Stay or Extension Laws.  The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

SECTION 5.15.      Action on Notes.  The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture.  Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer.  Any money or property collected by the Indenture Trustee as a recovery of any judgment on the Notes or under this Indenture shall be applied in accordance with Section 5.04(b) as provided therein, and otherwise in accordance with Section 8.02.

SECTION 5.16.      Performance and Enforcement of Certain Obligations.

(a)            Promptly following a request from the Indenture Trustee to do so and at the Administrator’s expense, the Issuer shall take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by a Seller, the Servicer or the Asset Representations Reviewer, as applicable, of each of their obligations under or in connection with the Sale and Servicing Agreement, the Receivables Purchase Agreements and

43

the Asset Representations Review Agreement, as applicable, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale and Servicing Agreement, the Receivables Purchase Agreements and the Asset Representations Review Agreement to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of default on the part of any of the Sellers, the Servicer or the Asset Representations Reviewer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by a Seller, the Servicer or the Asset Representations Reviewer, as applicable, of each of their obligations under the Sale and Servicing Agreement, the Receivables Purchase Agreements and the Asset Representations Review Agreement; provided, however, nothing herein shall in any way impose on the Indenture Trustee the duty to monitor the performance of the Sellers, the Servicer or the Asset Representations Reviewer of any of their liabilities, duties or obligations under any Basic Document.

(b)            If an Event of Default has occurred, the Indenture Trustee may, and at the direction (which direction shall be in writing) of the Holders of not less than a majority of the Outstanding Amount of the Notes shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Sellers, the Servicer and the Asset Representations Reviewer under or in connection with the Sale and Servicing Agreement, the Receivables Purchase Agreements and the Asset Representations Reviewer, including the right or power to take any action to compel or secure performance or observance by a Seller, the Servicer or the Asset Representations Reviewer, as the case may be, of each of their obligations thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale and Servicing Agreement, the Receivables Purchase Agreements and the Asset Representations Review Agreement, as the case may be, and any right of the Issuer to take such action shall be suspended.

ARTICLE VI.

 THE INDENTURE TRUSTEE

SECTION 6.01.      Duties of Indenture Trustee.

(a)            If a Responsible Officer of the Indenture Trustee has actual knowledge that an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

		(b)	
Except during the continuance of an Event of Default:

(i)            the Indenture Trustee undertakes to perform such  duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and

(ii)            in the absence of bad faith or negligence on its part, the Indenture Trustee may conclusively rely, as to the truth of  the statements and the

44

correctness of the opinions expressed therein, upon the face value of the certificates, reports, resolutions, documents, orders, opinions or other instruments furnished to the Indenture Trustee and conforming to the requirements of this Indenture; provided, however, that the Indenture Trustee shall not be responsible for the accuracy or content of any such resolution, certificate, statement, opinion, report, document, order or other instrument; provided, further, however, the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.  If any such instrument is found not to conform in any material respect to the  requirements of this Indenture, the Indenture Trustee shall notify the Noteholders of such instrument in the event that the Indenture Trustee, after so requesting, does not receive a satisfactorily corrected instrument.

(c)            The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct or bad faith, except that:

(i)            this paragraph does not limit the effect of paragraph (b) of this Section;

(ii)            the Indenture Trustee shall not be liable for any error of judgment made in good faith by the Indenture Trustee unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and

(iii)            the Indenture Trustee shall not be liable with  respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to the terms of this Indenture or any other Basic Documents.

(d)            Notwithstanding anything to the contrary contained herein, in no event shall the Indenture Trustee be liable for special, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Indenture Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(e)            The Indenture Trustee shall not be liable for indebtedness evidenced by or arising under any of the Basic Documents, including principal of or interest on the Notes, or interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.

		(f)	
[Reserved.]

(g)            No provision of this Indenture shall require the Indenture Trustee to advance, expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

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(h)            Every provision of this Indenture that in any way relates to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section and to the provisions of the TIA.

(i)            Except as otherwise specifically set forth in the Sale and Servicing Agreement, in no event shall the Indenture Trustee be required to perform, or be responsible for the manner of performance of, any of the obligations of the Servicer or any other party under the Sale and Servicing Agreement.

(j)            The Indenture Trustee shall have no duty (A) to see to any recording, filing, or depositing of this Indenture or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing of any thereof, (B) to see to any insurance, or (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust Estate.

(k)            The Indenture Trustee shall determine LIBOR as of each LIBOR Determination Date for so long as the Class A-2b Notes are Outstanding.  All determinations of LIBOR by the Indenture Trustee, in absence of manifest error, shall be conclusive for all purposes and binding on the Noteholders.

(l)            The Indenture Trustee shall not be deemed to have knowledge of any Event of Default, Default, Servicer Termination Event, breach of representation or warranty or other event unless a Responsible Officer has actual knowledge thereof or has received written notice thereof in accordance with the provisions of this Indenture or the other Basic Documents.  For the avoidance of doubt, receipt by the Indenture Trustee of a Review Report under the Asset Representations Review Agreement shall not constitute knowledge of any such breach.

SECTION 6.02.      Rights of Indenture Trustee.

(a)            The Indenture Trustee may conclusively rely and shall be protected in acting upon or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, note, direction, demand, election or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper person.  The Indenture Trustee need not investigate any fact or matter stated in the document.

(b)            Before the Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel from the appropriate party.  The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer’s Certificate or Opinion of Counsel from the appropriate party.  The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture or in any Basic Document shall not be construed as a duty of the Indenture Trustee and the Indenture Trustee shall not be answerable for other than its negligence, bad faith or willful misconduct in the performance of such discretionary act.

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(c)            The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee and the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, the Administrator, any co-trustee or separate trustee appointed in accordance with the provisions of Section 6.10 or any other such agent, attorney, custodian or nominee appointed with due care by it hereunder.

(d)            The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers; provided, that the Indenture Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.

(e)            The Indenture Trustee may consult with counsel, at the Issuer’s expense and paid in the priority set forth in Section 5.06(b) of the Sale and Servicing Agreement, and the written advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f)            The Indenture Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture or to institute, conduct or defend any litigation under this Indenture or in relation to this Indenture or to honor the requests, demands or direction of any Noteholders or Verified Note Owners pursuant to this Indenture, other than requests, demands or directions required to be honored by the Indenture Trustee pursuant to Sections 13.01, 13.02 or 13.03(a) of this Indenture, Section 11.01 of the Sale and Servicing Agreement or Section 23 of the Administration Agreement, unless such Noteholders or Verified Note Owners, as applicable, shall have offered to the Indenture Trustee security or indemnity satisfactory to it against the reasonable costs, expenses, disbursements, advances and liabilities that might be incurred by it, its agents and its counsel in compliance with such request, demand or direction.

(g)            The Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by Noteholders evidencing not less than 50% of the Outstanding Amount; provided, however, that if the payment within a reasonable time to the Indenture Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Indenture Trustee, not reasonably assured to the Indenture Trustee by the security afforded to it by the terms of this Indenture, the Indenture Trustee may require indemnity satisfactory to it against such cost, expense or liability as a condition to so proceeding.  The reasonable expense of each such investigation shall be paid by the Person making such request, or, if paid by the Indenture Trustee, shall be reimbursed by the Person making such request upon demand.

(h)            Any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request.

(i)            In the event that the Indenture Trustee is also acting as Paying Agent, Note Registrar, Certificate Registrar, authenticating agent (under the Trust Agreement), Paying Agent

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(under the Trust Agreement) or collateral agent, the rights and protections afforded to the Indenture Trustee pursuant to this Article VI shall be afforded to it in such capacities.

(j)            The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture shall not be construed as a duty, and the Indenture Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such act.

(k)            The Indenture Trustee shall not be required to give any bond or surety in respect of the powers granted hereunder.

(l)              The Indenture Trustee will not be responsible or liable for a failure or delay in the performance of its obligations under this Indenture from or caused by, directly or indirectly, forces beyond its control, including strikes, work stoppages, acts of war, terrorism, civil or military disturbances, nuclear catastrophes, fires, floods, earthquakes, storms, hurricanes or other natural catastrophes and interruptions, unforeseeable loss or failures of mechanical, electronic or communication systems.  The Indenture Trustee will use reasonable efforts consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

(m)            For the avoidance of doubt, the Indenture Trustee shall not have any duty or obligation to monitor or enforce the Sponsor’s compliance with any applicable risk retention rules or regulations. The Indenture Trustee shall not be charged with knowledge of any such rules or regulations, and it shall not be liable to any Noteholder or any other Person for any violation of any such rules or regulations.

(n)            In no event shall the Indenture Trustee be liable for failure to perform its duties under this Indenture if (i) such failure is a direct or proximate result of another party’s failure to perform its obligations under this Indenture, (ii) such other party’s failure was not a direct or proximate result of the Indenture Trustee’s willful misconduct, bad faith or negligence and (iii) such failure by the Indenture Trustee does not constitute willful misconduct, negligence or bad faith.

SECTION 6.03.      Individual Rights of Indenture Trustee.  The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee.  Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights.  However, the Indenture Trustee must comply with Sections 6.11 and 6.13.

SECTION 6.04.      Indenture Trustee’s Disclaimer.  The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Trust Estate or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer in the Indenture, any Basic Document, any document issued in connection with the sale of the Notes or the Notes other than the Indenture Trustee’s certificate of authentication.

SECTION 6.05.      Notice of Defaults.  If a Default occurs and is continuing and a Responsible Officer of the Indenture Trustee has actual knowledge thereof, the Indenture

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Trustee shall mail to each Noteholder notice of the Default within thirty (30) days after it occurs.  Except in the case of a Default in payment of principal of or interest on any Note (including payments pursuant to the mandatory redemption provisions of such Note), the Indenture Trustee may withhold the notice to Noteholders if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the best interests of Noteholders.

SECTION 6.06.      Reports by Indenture Trustee to Holders.  The Indenture Trustee, upon written request, shall deliver to each Noteholder such information as may be required to enable such holder to prepare its federal and state income tax returns.

SECTION 6.07.      Compensation and Indemnity.  The Indenture Trustee shall be entitled to the Indenture Trustee Fee as compensation for its services hereunder.  The Issuer shall pay the Indenture Trustee Fee and reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services.  Such expenses shall include the reasonable out-of-pocket compensation and expenses, (including extraordinary expenses) disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts.  The Issuer shall indemnify the Indenture Trustee and any of its directors, officers, employees and agents (each, an “Indemnified Party”) for, and hold it harmless against, any and all loss, liability or expense (including extraordinary expenses) (including reasonable attorneys’ fees and expenses, including those fees and expenses incurred by an Indemnified Party in defending against any claim relating to the actions or inactions of the Indemnified Party or in connection with the enforcement of any indemnification or other obligation of the Issuer, as well as fees and expenses of experts and agents and extraordinary out-of-pocket expenses) incurred by it in connection with the administration of this trust and the performance of the Indenture Trustee’s duties hereunder or under the Sale and Servicing Agreement or under any other Basic Document.  The fees, expenses and indemnities described in this Section 6.07 shall be paid and/or reimbursed by the Issuer pursuant to the terms of Section 5.06(b) of the Sale and Servicing Agreement and Section 5.04(b) of this Indenture, as applicable.  The Indenture Trustee shall notify the Issuer and the Administrator promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee to so notify the Issuer and the Administrator shall not relieve the Issuer of its obligations hereunder if no prejudice to the Issuer shall have resulted from such failure.  The Issuer shall, or shall cause the Administrator to, defend any such claim, and the Indenture Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel.  The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith, except that the Indenture Trustee shall not be liable (i) for any error of judgment made by it in good faith unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts, (ii) with respect to any action it takes or omits to take in good faith in accordance with a direction received by it from the Noteholders in accordance with the terms of this Indenture and (iii) for interest on any money received by it except as the Indenture Trustee and the Issuer may agree in writing.  The Indenture Trustee shall not be deemed to have knowledge of any event unless a Responsible Officer of the Indenture Trustee has actual knowledge thereof or has received written notice thereof.

The Issuer’s payment obligations and indemnities to the Indenture Trustee pursuant to this Section shall survive the discharge of this Indenture or the earlier resignation or

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removal of the Indenture Trustee.  When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.01(iv) or (v) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Bankruptcy Code or any other applicable federal or State bankruptcy, insolvency or similar law.

SECTION 6.08.      Replacement of Indenture Trustee.  No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section.  The Indenture Trustee may resign with thirty (30) days’ prior written notice to the Issuer, the Servicer and the Administrator (and the Administrator shall make such notice available to each Rating Agency).  The Holders of a majority of the Outstanding Amount of the Notes may remove the Indenture Trustee, with thirty (30) days’ prior written notice, if:

(i)            the Indenture Trustee fails to comply with Section 6.11;

(ii)            the Indenture Trustee is adjudged a bankrupt or insolvent;

(iii)            a receiver or other public officer takes charge of the Indenture Trustee or its property; or

(iv)            the Indenture Trustee otherwise becomes incapable of acting.

If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee.

A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee and to the Issuer.  Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture.  The retiring Indenture Trustee shall be paid all amounts owed to it upon its resignation or removal.

The successor Indenture Trustee shall mail a notice of its succession to Noteholders.  The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.  The retiring Indenture Trustee shall not be liable for the acts or omissions of any successor Indenture Trustee.

If a successor Indenture Trustee does not take office within sixty (60) days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Holders of a majority of the  Outstanding Amount of the Notes may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.

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Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer’s and the Administrator’s obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee. Any costs associated with the resignation or removal of the Indenture Trustee shall be paid by the Administrator.

SECTION 6.09.      Successor Indenture Trustee by Merger.  If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Indenture Trustee; provided, that such corporation or banking association shall be qualified and eligible under Section 6.11.  The Indenture Trustee shall provide the Administrator notice of any such transaction.

If at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Notes so authenticated; and if at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates authenticated by the successor Indenture Trustee shall have the full force and effect for purposes of this Indenture and the Notes as any certificate of authentication executed and delivered by the predecessor Indenture Trustee.

SECTION 6.10.      Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

(a)            Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders, such title to the Trust Estate, or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable.  No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to Noteholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.08.

(b)            Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

(i)            all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent

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that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any  such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;

(ii)            no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

(iii)            the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

(c)            Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them.  Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article VI.  Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee.  Every such instrument shall be filed with the Indenture Trustee.

(d)            Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name.  If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

SECTION 6.11.      Eligibility; Disqualification.  The Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a) and shall in addition have a combined capital and surplus of at least $50,000,000 (as set forth in its most recent published annual report of condition) and a long-term debt rating of “A” or better by, or be otherwise acceptable to, each Rating Agency.  The Indenture Trustee shall comply with TIA § 310(b), including the optional provision permitted by the second sentence of TIA § 310(b)(9); provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.

SECTION 6.12.      Preferential Collection of Claims Against Issuer.  The Indenture Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).      An Indenture Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

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SECTION 6.13.      Waiver of Setoffs.  The Indenture Trustee hereby expressly waives any and all rights of setoff that the Indenture Trustee may otherwise at any time have under applicable law with respect to any Trust Account and agrees that amounts in the Trust Accounts shall at all times be held and applied solely in accordance with the provisions hereof and of the other Basic Documents.

SECTION 6.14.      Licenses.  The Issuer shall take such action as, in its reasonable judgment, shall be necessary to maintain the effectiveness of all sales finance company licenses required under the Maryland Code Financial Institutions, Title 11, Subtitle 4 and all licenses required under the Pennsylvania Motor Vehicle Sales Finance Act, in connection with this Indenture and the transactions contemplated hereby until the lien and security interest of this Indenture shall no longer be in effect in accordance with the terms hereof.

SECTION 6.15.      Additional Duties.  U.S. Bank National Association agrees to perform the duties of Certificate Registrar, authenticating agent and Paying Agent as set forth under and pursuant to the Trust Agreement including, without limitation, those specified in Sections 3.07, 3.08, 3.09, and 5.01 of the Trust Agreement, and shall be entitled to all of the rights and indemnities of the Indenture Trustee in the performance of such duties.

ARTICLE VII.

 NOTEHOLDERS’ LISTS AND REPORTS

SECTION 7.01.      Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders.  The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five (5) days after the earlier of (i) each Record Date and (ii) three months after the last Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Holders of Notes as of such Record Date, and (b) at such other times as the Indenture Trustee may request in writing, within thirty (30) days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than ten (10) days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished.

SECTION 7.02.      Preservation of Information; Communications to Noteholders.

(a)            The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar.  The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.  The Indenture Trustee shall make such list available to the Owner Trustee on written request, and to the Noteholders upon written request of three or more Noteholders or one or more Noteholders evidencing not less than 25% of the Outstanding Amount of the Notes.  Upon receipt by the Indenture Trustee of any request by a Noteholder to receive a copy of the current list of Noteholders, the Indenture Trustee shall promptly notify the

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Administrator thereof by providing to the Administrator a copy of such request and a copy of the list of Noteholders in response thereto.

(b)            Noteholders may communicate pursuant to TIA § 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes.

(c)            The Issuer, the Indenture Trustee and the Note Registrar shall have the protection of TIA § 312(c).

(d)            Not later than the fifth business day of each calendar month (or, if such day is not a Business Day, the immediately following Business Day), beginning in February 2018, the Indenture Trustee shall provide to BMW FS and the Depositor a notice with respect to any written requests received by a Responsible Officer of the Indenture Trustee from a Noteholder during the immediately preceding calendar month (or, in the case of the initial notice, since the Closing Date) that any Receivable or Financed Vehicle be repurchased.  Such notices shall be provided (i) to BMW FS at: BMW Financial Services NA, LLC at 300 Chestnut Ridge Road, Woodcliff Lake, NJ 07677, (telecopier no. (201) 307‐9286), Attention: General Counsel, E-mail: ABS.Operations@bmwfs.com, or at such other address or by such other means of communication as may be specified by BMW FS to the Indenture Trustee from time to time; and (ii) to the Depositor at: BMW FS Securities LLC, 300 Chestnut Ridge Road, Woodcliff Lake, NJ 07677, Attention: General Counsel, E-mail: ABS.Operations@bmwfs.com, or at such other address or by such other means of communication as may be specified by the Depositor to the Indenture Trustee from time to time.  The Indenture Trustee and the Issuer acknowledge and agree that the purpose of this subsection is to facilitate compliance by BMW FS and the Depositor with Rule 15Ga-1 under the Exchange Act. The Indenture Trustee agrees to comply with reasonable requests made by BMW FS and the Depositor in good faith for delivery of information under these provisions on the basis of evolving interpretations of such rule. The Indenture Trustee shall cooperate fully with all reasonable requests of BMW FS and the Depositor to deliver any and all records and any other information, in each case in its possession, necessary to permit BMW FS and the Depositor to comply with the provisions of such rule.

SECTION 7.03.      Reports by Issuer.

		(a)	
The Issuer shall:

(i)            make available to the Indenture Trustee, within fifteen (15) days after the Issuer is required (if at all) to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the  foregoing as the Commission may from time to time by rules and regulations prescribe) that the Issuer may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act;

(ii)            make available to the Indenture Trustee and the Commission in accordance with rules and regulations prescribed from time to time by the Commission such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

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(iii)            supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to all Noteholders described in TIA § 313(c)) such summaries of any information, documents and reports  required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations prescribed from time to time by the Commission.

(b)            Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year.

SECTION 7.04.      Reports by Indenture Trustee.  If required by TIA § 313(a), within sixty (60) days after each December 31 beginning with December 31, 2018, the Indenture Trustee shall mail to each Noteholder as required by TIA § 313(c) a brief report dated as of such date that complies with TIA § 313(a).  The Indenture Trustee also shall comply with TIA § 313(b).

A copy of each report at the time of its mailing to Noteholders shall be filed by the Indenture Trustee with the Commission and each stock exchange, if any, on which the Notes are listed.  The Issuer shall notify the Indenture Trustee if and when the Notes are listed on any stock exchange.

ARTICLE VIII.

 ACCOUNTS, DISBURSEMENTS AND RELEASES

SECTION 8.01.      Collection of Money.  Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture.  The Indenture Trustee shall apply all such money received by it as provided in this Indenture.  Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings.  Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.

SECTION 8.02.      Trust Accounts.

(a)            On or prior to the Closing Date, the Issuer shall cause the Indenture Trustee to establish and maintain, in the name of the Indenture Trustee, for the benefit of the Noteholders and, in the case of the Collection Account and the Reserve Account, the Certificateholders, the Trust Accounts as provided in Section 5.01 of the Sale and Servicing Agreement.

(b)            On or before each Deposit Date, the Issuer shall cause the Servicer to deposit all Available Amounts with respect to the Collection Period preceding such Payment Date in the Collection Account as provided in Section 5.01(e), 5.02, 5.04 and 5.11 of the Sale and Servicing Agreement.  On or before each Deposit Date, all amounts required to be

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withdrawn from the Reserve Account and deposited in the Collection Account pursuant to Section 5.07 of the Sale and Servicing Agreement shall be withdrawn by the Indenture Trustee from the Reserve Account and deposited to the Collection Account as provided therein, as to which Issuer shall cause Servicer to timely provide the related instructions.

(c)            On each Payment Date, the Indenture Trustee (based on the information contained in the Servicer’s Certificate delivered on or before the related Determination Date pursuant to Section 4.09 of the Sale and Servicing Agreement) shall make the withdrawals from the Collection Account and make deposits, distributions and payments, to the extent of funds on deposit in the Collection Account with respect to the Collection Period preceding such Payment Date (including funds, if any, deposited therein from the Reserve Account), in accordance with the provisions of Section 5.06(b) of the Sale and Servicing Agreement or Section 5.04(b), as applicable.

(d)            On each Payment Date, the Indenture Trustee (based on the information contained in the Servicer’s Certificate delivered on or before the related Determination Date pursuant to Section 4.09 of the Sale and Servicing Agreement) shall withdraw the funds on deposit in the Interest Distribution Account with respect to the Collection Period preceding such Payment Date and make distributions and payments to the Noteholders, in an amount equal to the accrued and unpaid interest on the Notes; provided that if there are not sufficient funds available to pay the entire amount of the accrued and unpaid interest on the Notes, the amounts available shall be applied to the payment of such interest on the Notes on a pro rata basis based upon the amount of interest due on each Class of Notes.

(e)            On each Payment Date, the Indenture Trustee (based on the information contained in the Servicer’s Certificate delivered on or before the related Determination Date pursuant to Section 4.09 of the Sale and Servicing Agreement) shall withdraw the funds on deposit in the Principal Distribution Account with respect to the Collection Period preceding such Payment Date (including, if applicable, any amount deposited by the Indenture Trustee in respect of damages received from the FDIC pursuant to Section 12.05(e)) and, so long as the maturity of the Notes has not been accelerated pursuant to Section 5.02, make distributions and payments in the following order of priority:

(i)            first, to the Noteholders of the Class A-1 Notes in reduction of principal until the Outstanding Amount of the Class A-1 Notes has been paid in full; provided that if there are not sufficient funds available to pay the Outstanding Amount of the Class A-1 Notes in full, the amounts available shall be applied to the payment of principal on the Class A-1 Notes on a pro rata basis;

(ii)            second, to the Noteholders of the Class A-2a Notes and Class A-2b Notes, pro rata, based on their respective Outstanding Amounts, in reduction of principal until the Outstanding Amounts of the Class A-2a Notes and Class A-2b Notes have been paid in full; provided that if there are not sufficient funds available to pay the Outstanding Amounts of the Class A-2a Notes and Class A-2b Notes in full, the amounts available shall be applied to the payment of principal on the Class A-2a Notes and Class A-2b Notes on a pro rata basis;

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(iii)            third, to the Noteholders of the Class A-3 Notes in reduction of principal until the Outstanding Amount of the Class A-3 Notes has been paid in full; provided that if there are not sufficient funds available to pay the  Outstanding Amount of the Class A-3 Notes in full, the amounts available shall be applied to the payment of principal on the Class A-3 Notes on a pro rata basis;

(iv)            fourth, to the Noteholders of the Class A-4 Notes in reduction of principal until the Outstanding Amount of the Class A-4 Notes has been paid in full; provided that if there are not sufficient funds available to pay the  Outstanding Amount of the Class A-4 Notes in full, the amounts available shall be applied to the payment of principal on the Class A-4 Notes on a pro rata basis; and

(v)            fifth, any remaining amounts, to the Certificate Distribution Account, for distribution to the Certificateholders;

provided, however, that following the acceleration of the Notes pursuant to Section 5.02, distributions shall be made as provided in clauses FOURTH and FIFTH of Section 5.04(b)(i).

SECTION 8.03.      General Provisions Regarding Accounts.  The Indenture Trustee shall not in any way be held liable by reason of any insufficiency in any of the Trust Accounts resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Trustee’s failure to make payments on such Eligible Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms. If (i) the Servicer shall have failed to give investment directions for any funds on deposit in the Reserve Account to the Indenture Trustee by 11:00 a.m., New York City time (or such other time as may be agreed by the Administrator and Indenture Trustee), on any Business Day or (ii) a Default or Event of Default of which a Responsible Officer of the Indenture Trustee shall have actual knowledge shall have occurred and be continuing with respect to the Notes but the Notes shall not have been declared due and payable pursuant to Section 5.02 or (iii) if the Notes shall have been declared due and payable following an Event of Default and amounts collected or receivable from the Trust Estate are being applied in accordance with Section 5.05 as if there had not been such a declaration, then the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in investments that are Eligible Investments in accordance with standing instructions most recently given in writing by the Servicer.  Any Eligible Investments evidenced by an instrument or a certificated security shall be held by the Indenture Trustee in the State of New York or the State of Minnesota.

Except as otherwise provided hereunder or agreed in writing among the parties hereto, the Servicer shall retain the authority to institute, participate and join in any plan of reorganization, readjustment, merger or consolidation with respect to the issuer of any securities held hereunder in the Trust Accounts, and, in general, to exercise each and every other power or right with respect to each such asset or investment as individuals generally have and enjoy with respect to their own assets and investment, including power to vote on any securities.

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The Indenture Trustee is authorized to deposit uninvested funds in non-interest bearing, unsecured demand deposit accounts at affiliated banks, purchase and sell investment securities through or from affiliated banks and broker-dealers, invest funds in registered investment companies that receive investment management and custodial services from the Indenture Trustee or its affiliates, subject to the limitations set forth herein.

The Issuer acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Issuer the right or option to receive individual confirmations of security transactions at no additional cost, as they occur, the Issuer specifically waives the option to receive such confirmation to the extent permitted by law.  The Indenture Trustee will furnish the Issuer periodic cash transaction statements that include detail for all investment transactions made by the Indenture Trustee hereunder.

SECTION 8.04.      Release of Trust Estate.

(a)            Subject to the payment of its fees and expenses pursuant to Section 6.07, the Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture.  No party relying upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.

(b)            The Indenture Trustee shall, at such time as there are no Notes Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have been paid in full, release any remaining portion of the Trust Estate that secured the Notes from the lien of this Indenture and release to the Issuer or any other Person entitled thereto any funds then on deposit in the Trust Accounts.  The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Section 8.04(b) only upon receipt by it of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA) Independent Certificates in accordance with TIA §§ 314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01.

(c)            The Issuer agrees, upon request by the Servicer and representation by the Servicer that it has complied with the procedure in Section 9.01 of the Sale and Servicing Agreement, to render the Issuer Request to the Indenture Trustee in accordance with Section 4.04, and take such other actions as are required in that Section.

SECTION 8.05.      Opinion of Counsel.  The Indenture Trustee shall receive at least seven (7) days’ prior written notice when requested by the Issuer to take any action pursuant to Section 8.04(b), accompanied by copies of any instruments involved, and the Indenture Trustee shall also require, as a condition to such action, an Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the Noteholders in

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contravention of the provisions of this Indenture; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Trust Estate.  Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action.

ARTICLE IX.

 SUPPLEMENTAL INDENTURES

SECTION 9.01.      Supplemental Indentures Without Consent of Noteholders.

(a)            Without the consent of the Holders of any Notes, but with prior written notice made available to the Rating Agencies by the Administrator (with copy to the Indenture Trustee), the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more supplemental indentures hereto (which shall conform to the provisions of the Trust Indenture Act as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:

(i)            to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;

(ii)            to evidence the succession, in compliance with the applicable provisions hereof, of another person to the Issuer, and the assumption by any such successor of the covenants of the Issuer contained herein and in the Notes;

(iii)            to add to the covenants of the Issuer, for the benefit of the Holders of the Notes, or to surrender any right or power herein conferred upon the Issuer;

(iv)            to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee;

(v)            to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture or to add any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, that such action shall not adversely affect the interests of the Holders of the Notes, as evidenced by an Officer’s Certificate of the Issuer;

(vi)            to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Notes and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI; or

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(vii)            to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA.

The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

(b)            The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Notes but with prior notice made available to the Rating Agencies by the Administrator, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that such action shall not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests of any Noteholder; provided, further, that such action shall be deemed not to adversely affect in any material respect the interests of any Noteholder and no Opinion of Counsel to that effect shall be required if the Rating Agency Condition is satisfied with respect to each Rating Agency.

SECTION 9.02.      Supplemental Indentures with Consent of Noteholders.  The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may, with prior notice made available to the Rating Agencies by the Administrator and with the consent of the Holders of not less than a majority of the Outstanding Amount of the Notes, by Act of such Holders delivered to the Issuer and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby:

(i)            change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the interest rate thereon or the Redemption Price with respect thereto, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Notes on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);

(ii)            reduce the percentage of the Outstanding Amount of the Notes, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

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(iii)            modify or alter the provisions of the proviso to the definition of “Outstanding”;

(iv)            reduce the percentage of the Outstanding Amount of the Notes, required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04;

(v)            modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby;

(vi)            modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including the calculation of any of the individual components of such calculation) or to affect the rights of the Holders of Notes to the benefit of any provisions for the mandatory redemption of the Notes contained herein; or

(vii)            permit the creation of any lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated herein, terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security provided by the lien of this Indenture.

It shall not be necessary for any Act of Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall mail to the Holders of the Notes to which such amendment or supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture.  Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

SECTION 9.03.      Execution of Supplemental Indentures.  In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture, and that all conditions precedent thereto have been met.  The Indenture Trustee and the Owner Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s or the Owner Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.  Any supplemental indenture affecting the rights, duties, immunities or liabilities of the Owner Trustee shall require

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the Owner Trustee’s written consent.  The Administrator shall provide a fully executed copy of any supplemental indentures to this Indenture to each Rating Agency.

SECTION 9.04.      Effect of Supplemental Indenture.  Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and shall be deemed to be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

SECTION 9.05.      Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if requested by the Issuer shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture.  If the Issuer shall so determine, new Notes so modified as to conform, in the opinion of the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

SECTION 9.06.      Conformity with Trust Indenture Act.  Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act as then in effect so long as this Indenture shall then be qualified under the Trust Indenture Act.

ARTICLE X.

 REDEMPTION OF NOTES

SECTION 10.01.      Redemption.  The Notes are subject to redemption in whole, but not in part, at the direction of the Servicer pursuant to Section 9.01 of the Sale and Servicing Agreement, on any Payment Date on which the Servicer exercises its option to purchase the Trust Estate pursuant to said Section 9.01, for a purchase price equal to the Redemption Price; provided, that the Issuer has available funds sufficient to pay the Redemption Price.  The Servicer or the Issuer shall furnish the Rating Agencies and the Indenture Trustee notice of such redemption.  If the Notes are to be redeemed pursuant to this Section 10.01, the Servicer shall furnish notice of such election to the Indenture Trustee not later than twenty (20) days prior to the Redemption Date and shall deposit on the Business Day prior to the Redemption Date with the Indenture Trustee in the Note Distribution Account the Redemption Price of the Notes to be redeemed, whereupon all such Notes shall be due and payable on the Redemption Date upon the furnishing of a notice complying with Section 10.02 to each Holder of the Notes.  For the avoidance of doubt, the Trust Accounts need not be closed until thirty (30) days after the receipt of such notice.

SECTION 10.02.      Form of Redemption Notice.  Notice of redemption under Section 10.01 shall be given by the Indenture Trustee by first-class mail, postage prepaid, or by

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facsimile mailed or transmitted not later than ten (10) days prior to the applicable Redemption Date to each Noteholder of record, as of the close of business on the Business Day immediately preceding the date of such notice at such Holder’s address or facsimile number appearing in the Note Register.

All notices of redemption shall state:

(i)            the Redemption Date;

(ii)            the Redemption Price;

(iii)            the place where such Notes are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided in Section 3.02); and

(iv)            that interest on the Notes shall cease to accrue on the Redemption Date.

Notice of redemption of the Notes shall be given by the Indenture Trustee in the name and at the expense of the Issuer.  Failure to give notice of redemption, or any defect therein, to any Holder of any Note shall not impair or affect the validity of the redemption of any other Note.

SECTION 10.03.      Notes Payable on Redemption Date.  The Notes or portions thereof to be redeemed shall, following notice of redemption as required by Section 10.02 (in the case of redemption pursuant to Section 10.01), on the Redemption Date become due and payable at the Redemption Price and (unless the Issuer shall default in the payment of the Redemption Price) no interest shall accrue on the Redemption Price for any period after the date to which accrued interest is calculated for purposes of calculating the Redemption Price.

ARTICLE XI.

 MISCELLANEOUS

SECTION 11.01.      Compliance Certificates and Opinions, etc.

(a)            Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) (if required by the TIA) an Independent Certificate from a firm of certified public accountants meeting the applicable requirements of this Section, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

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(i)            a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

(ii)            a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii)            a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(iv)            a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with.

(b)            i) Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within ninety (90) days of such deposit) to the Issuer of the Collateral or other property or securities to be so deposited.

(ii)            Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signatory thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate as to the same matters, if the fair value to the Issuer of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or  release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10% or more of the Outstanding Amount of the Notes, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof to the Issuer as set forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the Outstanding Amount of the Notes.

(iii)            Whenever any property or securities are to be released from the lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within ninety (90) days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

(iv)            Other than with respect to the release of any Purchased Receivable, the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate

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certifying or stating the opinion of any signer thereof as to the matters described in clause (iii) above and the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property, other than property as contemplated by clause (v) below, or securities released from the lien of this Indenture since the commencement of the then-current calendar year, as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10% or more of the Outstanding Amount of the Notes, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the then Outstanding Amount of the Notes.

(v)            Notwithstanding Section 4.04 or any other provision of this Section, the Issuer may, without compliance with the requirements of the other provisions of this Section, (A) collect, liquidate, sell or otherwise dispose of Receivables and Financed Vehicles as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of the Trust Accounts as and to the extent permitted or required by the Basic Documents.

SECTION 11.02.      Form of Documents Delivered to Indenture Trustee.  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such officer’s certificate or opinion is based are erroneous.  Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer, a Seller, the Issuer or the Administrator, stating that the information with respect to such factual matters is in the possession of the Servicer, a Seller, the Issuer or the Administrator, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such

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application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report.  The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.

SECTION 11.03.      Acts of Noteholders.

(a)            Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section.

(b)            The fact and date of the execution by any person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.

(c)            The ownership of Notes shall be proved by the Note Register.

(d)            Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

SECTION 11.04.      Notices, etc., to Indenture Trustee, Issuer and Rating Agencies.  Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture shall be in writing and, if such request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders is to be made upon, given or furnished to or filed with:

(i)            the Indenture Trustee by any Noteholder or by the Issuer, shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Indenture Trustee at its Corporate Trust Office; or

(ii)            the Issuer by the Indenture Trustee or by any Noteholder, shall be sufficient for every purpose hereunder if in writing and mailed first-class, postage prepaid to the Issuer, addressed to: BMW Vehicle Owner Trust 2018-A, in care of Wilmington Trust, National Association, as Owner Trustee, 1100 North Market Street, Wilmington, Delaware 19890, or at any other address previously furnished in writing to the Indenture Trustee by the Issuer or the Administrator.  The Issuer

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shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee.

Notices required to be given to the Rating Agencies shall be in writing, personally delivered or mailed by certified mail, return receipt requested, to (i) in the case of Moody’s, at the following address: Moody’s Investors Service, Inc., ABS/RMBS Monitoring Department, 7 World Trade Center, 250 Greenwich Street, 25th Floor, New York, New York 10007; (ii) in the case of Fitch, at the following address: Fitch Ratings, Inc., 33 Whitehall Street, New York, New York 10004, Attention: Asset Backed Surveillance; or as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

SECTION 11.05.      Notices to Noteholders; Waiver.  Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at such Holder’s address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.  In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given.

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute a Default or Event of Default.

SECTION 11.06.      Effect of Headings and Table of Contents.  The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

SECTION 11.07.      Successors and Assigns.  All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not.  All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents.

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SECTION 11.08.      Separability.  In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 11.09.      Benefits of Indenture.  Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Noteholders, the Owner Trustee, any other party secured hereunder, and any other Person with an ownership interest in any part of the Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture.

SECTION 11.10.      Legal Holidays.  In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date, except in the case of the Class A-1 Notes and the Class A-2b Notes.

SECTION 11.11.      Governing Law.  THIS INDENTURE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. REGARDLESS OF ANY PROVISION IN ANY OTHER AGREEMENT, FOR PURPOSES OF THE UCC, NEW YORK SHALL BE DEEMED TO BE THE SECURITIES INTERMEDIARY’S JURISDICTION, AND THE LAW OF THE STATE OF NEW YORK SHALL GOVERN ALL ISSUES SPECIFIED IN ARTICLE 2(1) OF THE HAGUE SECURITIES CONVENTION.

SECTION 11.12.      Counterparts.  This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 11.13.      Recording of Indenture.  If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at the expense of the Servicer accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

SECTION 11.14.      Trust Obligation.  No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner

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Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity) except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.  For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

SECTION 11.15.      No Petition.  The Indenture Trustee, by entering into this Indenture, each Noteholder, by accepting a Note, and each Note Owner, by accepting a beneficial interest in a Note, hereby covenant and agree that they will not, at any time, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

SECTION 11.16.      Inspection.  The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuer’s normal business hours, to examine all the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested; provided, however, that the Indenture Trustee may only cause the books of the Issuer to be audited on an annual basis, unless there occurs an Event of Default hereunder.  The Indenture Trustee shall, and shall cause its representatives to, hold in confidence all such information except to the extent such information is publicly available or such disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine with the advice of counsel and after consultation with the Issuer that such disclosure is consistent with its obligations hereunder.

SECTION 11.17.      Conflict with Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

The provisions of TIA §§ 310 through 317 that impose duties on any person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

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SECTION 11.18.      Limitation of Liability.  It is expressly understood and agreed by the parties hereto that (a) this Indenture is executed and delivered by Wilmington Trust, National Association, not individually or personally but solely as Owner Trustee of BMW Vehicle Owner Trust 2018-A, in the exercise of the powers and authority conferred and vested in it, (b) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by Wilmington Trust, National Association but is made and intended for the purpose for binding only the Issuer, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust, National Association, individually or personally, to perform any covenant either expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under no circumstances shall Wilmington Trust, National Association be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Indenture or any other related documents.  Wilmington Trust, National Association has made no independent investigations as to the accuracy or completeness of any of the representations or warranties hereunder.

SECTION 11.19.      Intent of the Parties; Reasonableness.

The Indenture Trustee and Issuer acknowledge and agree that the purpose of Section 3.09 and this Section 11.19 is to facilitate compliance by the Issuer and the Depositor with the provisions of Regulation AB and related rules and regulations of the Commission.

Neither the Issuer nor the Administrator (acting on behalf of the Issuer) shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder (or the provision in a private offering of disclosure comparable to that required under the Securities Act).  Each of the parties agrees that (a) the obligations of the parties hereunder shall be interpreted in such a manner as to accomplish compliance with Regulation AB and (b) the parties’ obligations hereunder will be supplemented and modified as necessary to be consistent with any such amendments, interpretive guidance provided by the Commission or its staff, or consensus among participants in the asset-backed securities markets, in respect of the requirements of Regulation AB, and the parties shall comply with reasonable requests made by the Issuer, the Administrator or the Indenture Trustee in good faith for delivery of additional or different information to the extent such information is freely available and deliverable (provided that, in the good faith determination of the Issuer, the Administrator or the Indenture Trustee, such additional or different information is required to comply with the provisions of Regulation AB).

The Issuer (or the Administrator, acting on behalf of the Issuer) shall cooperate with the Indenture Trustee by providing timely notice of requests for information under these provisions and by reasonably limiting such requests to information required, in the reasonable judgment or the Issuer to comply with Regulation AB.

SECTION 11.20.      Communications with Rating Agencies. If the Indenture Trustee shall receive any written or oral communication from any Rating Agency (or any of their

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respective officers, directors or employees) with respect to the transactions contemplated hereby or under the Basic Documents or in any way relating to the Notes, the Indenture Trustee agrees to refrain from communicating with such Rating Agency and to promptly (and, in any event, within one (1) Business Day) notify the Administrator of such communication.  The Indenture Trustee agrees to act at the direction of the Administrator with respect to any communication to a Rating Agency and further agrees that in no event shall the Indenture Trustee engage in any oral communication with respect to the transactions contemplated hereby or under the Basic Documents or in any way relating to the Notes with any Rating Agency (or any of their respective officers, directors or employees) without the participation of the Administrator.

ARTICLE XII.

 COMPLIANCE WITH THE FDIC RULE

SECTION 12.01.      Purpose.

(a)            Each of the Noteholders, by its acceptance of the Notes or a beneficial interest therein, each of the Certificateholders, by its acceptance of the Certificates, the FDIC Rule Parties and the Indenture Trustee acknowledges and agrees that the purpose of this Article XII is to facilitate compliance by the FDIC Rule Parties with the provisions of the FDIC Rule.  Each of the Noteholders, the Certificateholders, the FDIC Rule Parties and the Indenture Trustee acknowledges that the interpretations of the requirements of the FDIC Rule may change over time, whether due to interpretive guidance provided by the FDIC or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees that the provisions set forth in this Article XII shall have the effect and meanings that are appropriate under the FDIC Rule as such effect and meanings change over time on the basis of evolving interpretations of the FDIC Rule.

(b)            If any provision of the FDIC Rule is amended, or any interpretive guidance regarding the FDIC Rule is provided by the FDIC or its staff, as a result of which the Issuer determines that an amendment to this Article XII is necessary or desirable, then the Issuer and the Indenture Trustee shall be authorized and entitled to amend this Article XII in accordance with such FDIC Rule amendment or guidance notwithstanding the requirements set forth in Sections 9.01 and 9.02, provided that the Issuer delivers to the Indenture Trustee an Opinion of Counsel to the effect that such amendment is required in order to remain in compliance with the FDIC Rule.  Nothing in this Section 12.01(b) shall limit the rights of the Indenture Trustee or the Owner Trustee pursuant to Section 9.03, and the Indenture Trustee and the Owner Trustee shall have no duty to monitor or enforce the ongoing compliance by the FDIC Rule Parties with the FDIC Rule or this Article XII.

(c)            As used in this Article XII, but subject to the rules of interpretation specified in Section 12.01(a) and Section 12.01(b), references to (i) the “sponsor” shall mean BMW Bank, (ii) the “issuing entity” shall mean, collectively, the Depositor, BMW FS and the Issuer (except in Section 12.02(e), where such term shall have the meaning assigned thereto in the FDIC Rule), (iii) the “servicer” shall mean the Servicer or the Administrator, as applicable, (iv) “obligations” or “securitization obligations” shall be deemed to refer to the Notes, but only to the extent secured by the Receivables sold by BMW Bank to the Depositor under the related

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Receivables Purchase Agreement, and (v) “financial assets” shall mean the Receivables transferred to the Depositor by BMW Bank (except in Section 12.02(e), where such term shall have the meaning assigned thereto in the FDIC Rule).  As a practical matter, and subject to certain limited exceptions, the transactions contemplated by the Basic Documents do not distinguish between Receivables sold by BMW Bank to the Depositor and Receivables sold by BMW FS to the Depositor, and the provisions of Section 12.02(a) and Section 12.02(b) are true for all of the Receivables and all of the Notes for so long as any Receivables sold by BMW Bank to the Depositor are owned by the Issuer.

(d)              Each of the FDIC Rule Parties believes that the transactions and actions contemplated by the Basic Documents and the related prospectus comply with the requirements of Section 12.02.

SECTION 12.02.      Requirements of the FDIC Rule.  As required by the FDIC Rule:

(a)            Payment of principal and interest on the securitization obligations must be primarily based on the performance of financial assets that are transferred to the Issuer and, except for interest rate or currency mismatches between the financial assets and the obligations, shall not be contingent on market or credit events that are independent of such financial assets.

(b)              The sponsor, issuing entity, and/or servicer, as appropriate, shall make available to investors, information describing the financial assets, obligations, capital structure, compensation of relevant parties, and relevant historical performance data set forth below:

(i)            On or prior to issuance of obligations and at the time of delivery of any periodic distribution report and, in any event, at least once per calendar quarter, while obligations are outstanding, information about the obligations and the financial assets shall be disclosed to all potential investors at the financial asset or pool level, as appropriate for the financial assets, and security-level to enable evaluation and analysis of the credit risk and performance of the obligations and financial assets. Such information and its disclosure, at a minimum, shall comply with the requirements of Regulation AB or any successor disclosure requirements for public issuances, even if the obligations are issued in a private placement or are not otherwise required to be registered; provided that information that is unknown or not available to the sponsor or the issuing entity after reasonable investigation may be omitted if the issuing entity includes a statement in the offering documents disclosing that the specific information is otherwise unavailable;

(ii)            On or prior to issuance of obligations, the structure of the securitization and the credit and payment performance of the obligations shall be disclosed, including the capital or tranche structure, the priority of payments and specific subordination features; representations and warranties made with respect to the financial assets, the remedies for and the time permitted for cure of any breach of representations and warranties, including the repurchase of financial assets, if applicable; liquidity facilities and any credit enhancements permitted by

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the FDIC Rule, any waterfall triggers or priority of payment reversal features; and policies governing delinquencies, servicer advances, loss mitigation, and write-offs of financial assets;

(iii)            While obligations are outstanding, the issuing entity shall provide to investors information with respect to the credit performance of the obligations and the financial assets, including periodic and cumulative financial asset performance data, delinquency and modification data for the financial assets, substitutions and removal of financial assets, servicer advances, as well as losses that were allocated to such tranche and the remaining balance of financial assets supporting such tranche, if applicable, and the percentage of each tranche in relation to the securitization as a whole; and

(iv)            In connection with the issuance of the obligations, the nature and amount of compensation paid to the originator, sponsor, rating agency or third-party advisor, any mortgage or other broker, and the servicer(s), and the extent to which any risk of loss on the underlying assets is retained by any of them for such securitization shall be disclosed. The issuing entity shall provide to investors while any obligations are outstanding any changes to such information and the amount and nature of payments of any deferred compensation or similar arrangements to any of the parties.

(c)              [Reserved].

(d)              The obligations shall not be predominantly sold to an affiliate (other than a wholly-owned subsidiary consolidated for accounting and capital purposes with the sponsor) or an affiliated broker-dealer who purchases such obligations with a view to promptly reselling such obligations to persons or entities that are neither affiliates (other than wholly-owned subsidiaries of the sponsor consolidated for accounting and capital purposes with the sponsor) nor insiders of the sponsor in the ordinary course of such broker-dealer’s business pursuant to an underwriting or similar agreement entered into in the ordinary course of business; provided that (i) at the time the obligations are sold to the affiliated broker-dealer, such broker-dealer sells not less than 51% of the principal amount of the obligations to persons and entities that are not affiliates (other than wholly-owned subsidiaries of the sponsor consolidated for accounting and capital purposes with the sponsor) or insiders of the sponsor; (ii) at all times after such obligations are sold to the affiliated broker-dealer, such broker-dealer holds the unsold portion of the obligations with the intent to sell such unsold portion to persons or entities that are not affiliates (other than wholly-owned subsidiaries of the sponsor consolidated for accounting and capital purposes with the sponsor) or insiders of the sponsor and (iii) the other requirements of the FDIC Rule, including, without limitation, the requirements of Sections 360.6(c)(3) and (4) of the FDIC Rule, are satisfied.

(e)              The sponsor shall separately identify in its financial asset databases the financial assets transferred into any securitization and shall maintain an electronic or paper copy of the closing documents for such securitization in a readily accessible form, and a current list of all of its outstanding securitizations and issuers, and the most recent Form 10-K, if applicable, or

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other periodic financial report for each securitization and issuer. The sponsor shall make these records readily available for review by the FDIC promptly upon written request.

(f)              To the extent serving as servicer, custodian or paying agent for the securitization, the sponsor shall not commingle amounts received with respect to the financial assets with its own assets except for the time, not to exceed two (2) Business Days, necessary to clear any payments received.

SECTION 12.03.      Performance.  The Issuer agrees to perform the obligations set forth in Section 12.02, except to the extent any such obligation is specifically imposed exclusively upon the servicer or the sponsor, and to the extent the performance of such obligations is necessary to facilitate compliance with this Article XII by all FDIC Rule Parties.

SECTION 12.04.      Effect of Section 941 Rules.  Section 12.02(c) hereof shall not be construed to require the sponsor to retain any greater economic interest in the credit risk of the financial assets than is required to comply with the FDIC Rule and other applicable law. Accordingly, upon the effective date of regulations promulgated under Section 15G of the Securities Exchange Act, 15 U.S.C. 78a et seq., added by Section 941(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (such regulations, the “Section 941 Rules” and such date, the “Section 941 Effective Date”) and thereafter, the sponsor shall have the option to adjust the amount of credit risk that it retains for purposes of the FDIC Rule, or the terms under which such credit risk is retained for purposes of the FDIC Rule, the method by which such credit risk is retained or the restrictions applicable to the credit risk retained for purposes of the FDIC Rule, to the greatest extent elected by the sponsor, so long as the sponsor’s retention shall be in compliance with the Section 941 Rules.  Within a reasonable time after the sponsor has so adjusted the amount or terms of the credit risk it retains, the sponsor shall give notice thereof to the Noteholders and the Certificateholders, and each of the Indenture Trustee and the FDIC Rule Parties is authorized and entitled to amend Section 12.02(c), in accordance with and to the extent the Issuer determines necessary or appropriate, to reflect the requirements of the Section 941 Rules.

SECTION 12.05.      Actions Upon Repudiation.

(a)            In the event that the sponsor becomes the subject of an insolvency proceeding and the FDIC, as receiver or conservator for the sponsor, exercises its right of repudiation as contemplated by paragraph (d)(4)(ii) of the FDIC Rule, the Servicer shall ascertain whether the FDIC in such capacity will pay damages as provided in such paragraph (d)(4)(ii). Upon making such determination, the Servicer shall promptly, and in any event no more than one (1) Business Day thereafter (or, if the Servicer fails to act, the Noteholders representing not less than a majority of the Outstanding Amount of the Notes or the Certificateholders representing a majority of the Certificate Percentage Interests may), notify the Indenture Trustee and the Owner Trustee.

(b)            Upon receipt of the notice specified in Section 12.05(a) indicating that a payment will be made, the Indenture Trustee shall determine the date (the “applicable distribution date”) for making a distribution to Noteholders and, if applicable, Certificateholders of such damages, which date shall be the earlier of (i) the next Payment Date on which such

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damages could be distributed and (ii) the earliest practicable date by which the Indenture Trustee could declare a special distribution date, in each case subject to all applicable provisions of this Indenture, applicable law and the procedures of any applicable Clearing Agency.

(c)              When the applicable distribution date is determined, the Indenture Trustee shall cause the Servicer to promptly compute the amount of interest to be paid on each Class of Notes on the applicable distribution date, which interest shall be the amount accruing up to the applicable distribution date and which (unless such applicable distribution date is a Payment Date) shall be computed by pro rating the amount that would otherwise be payable on the next succeeding Payment Date following the applicable distribution date on the basis of (x) the number (in the case of Notes other than the Class A-1 Notes, not to exceed 30) of days elapsed from and including the preceding Payment Date to such applicable distribution date divided by (y) 30.

(d)              If the applicable distribution date is a special distribution date, the Indenture Trustee shall (i) declare such special distribution date (the record date for which shall be the close of business on the day immediately preceding such special distribution date), (ii) declare a special distribution to Noteholders and (iii) deliver notice to the Noteholders and the Owner Trustee of such special distribution date and the amount to be distributed on such date.

(e)              Following payment by the FDIC of damages as provided in paragraph (d)(4)(ii) of the FDIC Rule, the Indenture Trustee shall cause the amount of such damages to be deposited in the Note Distribution Account.  If, as of the applicable distribution date, (x) the maturity of the Notes has been accelerated pursuant to Section 5.02, such damages shall be distributed on such distribution date in the order and priority set forth in clauses THIRD, FOURTH and FIFTH of Section 5.04(b)(i) or (y) the maturity of the Notes has not been accelerated pursuant to Section 5.02, such damages shall be distributed on such distribution date in accordance with the following order of priority:

(i)            first, to the Holders of the Notes, ratably, interest on the Notes in the amount computed by the Servicer pursuant to Section 12.05(c); provided that if there are not sufficient funds available to pay the entire amount of the accrued and unpaid interest on the Notes, the amounts available shall be applied to the payment of such interest on the Notes on a pro rata basis based upon the amount of interest due on each Class of Notes;

(ii)            second, to the Holders of the applicable Notes in the order and priority set forth in Section 8.02(e)(i)-(iv), in an amount equal to the FDIC Principal Amount for such distribution date;

(iii)            third, to the Reserve Account, the amount, if any, necessary to cause the amount on deposit in the Reserve Account to equal the Reserve Account Required Amount (calculated as if such distribution date is a Payment Date); and

(iv)            fourth, any remaining amounts, to the Certificate Distribution Account, for distribution to the Certificateholders.

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(f)            Notwithstanding anything in this Indenture or the other Basic Documents to the contrary, if any applicable distribution date is not a Payment Date, for purposes of calculating (i) the First Priority Principal Distribution Amount and the Regular Principal Distribution Amount for the Payment Date immediately following the applicable distribution date, the phrase “preceding Payment Date” shall be deemed to refer to such applicable distribution date, (ii) the Servicing Fee for the Payment Date immediately following the applicable distribution date, such fee shall be adjusted, as applicable, for any period of time in the related Collection Period in respect of which the Servicer was not servicing any related Receivables on behalf of the Issuer, and (iii) interest payable on the Notes pursuant to Section 5.06(b) of the Sale and Servicing Agreement for the Payment Date immediately following the applicable distribution date, the phrase “preceding Payment Date” shall be deemed to refer to such applicable distribution date and the phrase “prior Payment Dates” shall be deemed to include such applicable distribution date.

SECTION 12.06.      Notice.

(a)            In the event that BMW Bank becomes the subject of an insolvency proceeding and the FDIC, as receiver or conservator, provides a written notice of repudiation as contemplated by paragraph (d)(4)(ii) of the FDIC Rule, the party receiving such notice shall promptly deliver such notice to each of the FDIC Rule Parties, the Indenture Trustee and the Owner Trustee.

(b)              If the FDIC (i) is appointed as a conservator or receiver of BMW Bank and (ii) is in default due to its failure to pay principal or interest when due following the expiration of any cure period hereunder or under the other Basic Documents, the Indenture Trustee at the direction of the Noteholders representing not less than a majority of the Outstanding Amount of the Notes, the Servicer or the Certificateholders representing not less than a majority of the Certificate Percentage Interests shall be entitled to deliver written notice to the FDIC requesting the exercise of contractual rights hereunder and under the other Basic Documents. Upon delivery of such notice, the Indenture Trustee may exercise any contractual rights it may have in accordance with the Basic Documents and the FDIC Rule. The Indenture Trustee shall, at the written direction of the Noteholders representing not less than a majority of the Outstanding Amount of the Notes, or the Owner Trustee shall, at the written direction of the Certificateholders representing not less than a majority of the Certificate Percentage Interests, exercise such contractual rights.

SECTION 12.07.      Reservation of Rights.  Neither the inclusion of this Article XII in this Indenture nor the compliance by any Person with, or the acknowledgment by any Person of, this Article’s provisions constitutes an agreement or acknowledgment by any Person that, in the case of an insolvency proceeding with respect to BMW Bank, a receiver or conservator will have any rights with respect to the Trust Estate.

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ARTICLE XIII.

 ASSET REPRESENTATIONS REVIEW

SECTION 13.01.      Noteholder and Note Owner Requests for Vote on Asset Representations Review.  If the Indenture Trustee receives a notice from the Servicer pursuant to Section 11.01 of the Sale and Servicing Agreement regarding the occurrence of a Delinquency Trigger, then the Indenture Trustee shall promptly provide directions to the Administrator regarding the method by which Noteholders and Note Owners may contact the Indenture Trustee in order to request a vote whether to cause the ARR Receivables to be reviewed by the Asset Representations Reviewer pursuant to the terms of the Asset Representations Review Agreement.  The Indenture Trustee shall promptly notify the Servicer and the Administrator upon the receipt of any request by Noteholders and Note Owners regarding a vote on whether to cause the ARR Receivables to be reviewed by the Asset Representations Reviewer pursuant to the terms of the Asset Representations Review Agreement.  Noteholders and Note Owners may request a vote not later than ninety (90) days after the date on which the Form 10-D describing the occurrence of such Delinquency Trigger shall have been filed by the Administrator pursuant to the terms of Section 1.1(AA) of the Administration Agreement; provided that, if the requesting party is a Note Owner and not a Noteholder, the Note Owner must include with its request a written certification that the requesting party is a Note Owner, together with one of the following additional forms of documentation of the requesting party’s status as a Note Owner: (A) a trade confirmation; (B) an account statement; (C) a letter from a broker-dealer that is acceptable to the Indenture Trustee or Administrator, as applicable; or (D) any other form of documentation that is acceptable to the Indenture Trustee or Administrator, as applicable (any such Note Owner who provides the required certification and documentation, a “Verified Note Owner”).  The Indenture Trustee shall promptly notify the Servicer and the Administrator if Noteholders and Verified Note Owners representing at least 5% of the outstanding aggregate principal amount of all Outstanding Notes (such requesting Noteholders and Verified Note Owners, collectively, the “Requesting Noteholders”) properly and timely request a vote to cause the ARR Receivables to be reviewed by the Asset Representations Reviewer pursuant to the terms of the Asset Representations Review Agreement.

SECTION 13.02.      Noteholder and Note Owner Vote on Asset Representations Review.  Beginning promptly after receipt from the Administrator of a copy of a notice sent to Noteholders and Note Owners pursuant to Section 23 of the Administration Agreement, the Indenture Trustee shall cause the initiation of a review of ARR Receivables to be submitted to a yes or no vote of the Noteholders (with respect to Book-Entry Notes, as directed by the related Note Owners via the applicable Clearing Agency pursuant to its procedures for such votes) of record as of the most recent Record Date.  If, by no earlier than the deadline specified by the Administrator pursuant to Section 23 of the Administration Agreement, a majority of the Noteholders of Outstanding Notes casting a vote so direct (provided that such affirmative votes represent votes by Noteholders holding at least 5% of the aggregate outstanding principal amount of all Outstanding Notes), the Indenture Trustee will promptly notify the Servicer, the Sellers, the Administrator and the Asset Representations Reviewer to the notice addresses set forth in Section 9.02 of the Asset Representations Review Agreement that the requisite Noteholders have directed the Asset Representations Reviewer to perform a review of the ARR Receivables for the purpose of determining whether such ARR Receivables were in compliance

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with the representations and warranties made by the Sellers pursuant to Section 3.02(b) of the applicable Receivables Purchase Agreement.

SECTION 13.03.      Evaluation of Review Report.

(a)            If a Noteholder or a Verified Note Owner notifies the Indenture Trustee in writing that it considers any non-compliance of any representation with respect to any ARR Receivable to be a breach of the applicable Basic Document, or requests in writing that any Receivable (including any ARR Receivable) be repurchased (including, for the avoidance of doubt, as described in Section 11.02 of the Sale and Servicing Agreement), the Indenture Trustee will promptly forward that written notice to the related Seller, as applicable.

(b)            The Indenture Trustee shall have no obligation to pursue or otherwise be involved in resolving any repurchase request, including any such request that is the subject of a dispute resolution proceeding, unless it is directed to do so by Noteholders representing not less than a majority of the Outstanding Amount and such Noteholders shall have offered to the Indenture Trustee security or indemnity satisfactory to it against the reasonable costs, expenses, disbursements, advances and liabilities that might be incurred by it, its agents and its counsel in compliance with such direction. For the avoidance of doubt, if the Indenture Trustee does not agree to pursue or otherwise be involved in resolving any reallocation request, the related Noteholders may independently pursue dispute resolution in respect of such reallocation request in accordance with Section 11.02 of the Sale and Servicing Agreement.

(c)            The related Seller will have the sole ability to determine if there was non-compliance with any representation or warranty made by it in Section 3.02(b) of the applicable Receivables Purchase Agreement, respectively, that constitutes a breach that materially and adversely affects the interests of the Issuer, the Indenture Trustee, the Owner Trustee, the Certificateholders or the Noteholders in any Receivable, and whether to repurchase the related ARR Receivable from the Issuer in accordance with the terms of Section 6.02 of the related Receivables Purchase Agreement.

SECTION 13.04.      Dispute Resolution.  Any Noteholder or Note Owner may pursue dispute resolution procedures as set forth in Section 11.02 of the Sale and Servicing Agreement.  With respect to any dispute resolution, if so directed by the Servicer, the Indenture Trustee will notify the Requesting Party of the date when the 180-day period related to such dispute resolution proceeding ends without resolution by the appropriate party and that the Requesting Party has thirty (30) days to notify the related Seller and the Servicer if it wishes to pursue dispute resolution.  For the avoidance of doubt, the Indenture Trustee shall be under no obligation to monitor repurchase activity or to independently determine whether a repurchase request remains unresolved at the end of the related 180-day period.

* * * * *

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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Indenture to be duly executed by their respective officers, thereunto duly authorized and duly attested, all as of the day and year first above written.

BMW VEHICLE OWNER TRUST 2018-A

By:  WILMINGTON TRUST, NATIONAL ASSOCIATION, 

 not in its individual capacity but solely as Owner Trustee

By: ______________________________

Name:

 Title:

U.S. BANK NATIONAL ASSOCIATION,

 not in its individual capacity but solely as Indenture Trustee

By:______________________________ 

          Name:

           Title:

 

STATE OF DELAWARE                                                                      }

                                                                                                                                      }            ss.:

COUNTY OF NEW CASTLE                                                             }

BEFORE ME, the undersigned authority, a Notary Public in and for said county and state, on this day personally appeared ________________, a _____________ of WILMINGTON TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee of BMW Vehicle Owner Trust 2018-A, a Delaware statutory trust (the “Trust”) known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said Trust, and that s/he executed the same as the act of said Trust for the purpose and consideration therein expressed, and in the capacities therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ___ day of January, 2018.

_____________________________________

 Notary Public in and for the State of Delaware

My commission expires:

STATE OF ______________               }

                                                                                          }            ss.:

COUNTY OF ______________         }

BEFORE ME, the undersigned authority, a Notary Public in and for said county and state, on this day personally appeared _____________, known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of U.S. BANK NATIONAL ASSOCIATION, a national banking association, and that s/he executed the same as the act of said corporation for the purpose and consideration therein stated.

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ___ day of January, 2018.

_______________________________________

 Notary Public in and for the State of ______________

My commission expires:

SCHEDULE A

Schedule of Receivables

 [Delivered to the Owner Trustee on the Closing Date.]

Sch. A-1

SCHEDULE B

PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS

          In addition to the representations, warranties and covenants contained in the Indenture, the Issuer hereby represents, warrants and covenants to the Indenture Trustee as follows on the Closing Date:

1.            The Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables and the other Collateral in favor of the Indenture Trustee, which security interest is prior to all other Liens, and is enforceable as such against creditors of and purchasers from the Issuer.

2.            The Receivables constitute “chattel paper” (including “tangible chattel paper” and “electronic chattel paper”) within the meaning of the applicable UCC.

3.            Each Trust Account constitutes either a “deposit account” or a “securities account” within the meaning of the UCC.

4.            The Issuer owns and has good and marketable title to each Receivable free and clear of all Liens and rights of others (other than pursuant to the Basic Documents).

5.            The Issuer has caused or will have caused, within ten (10) days after the Closing Date, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Receivables granted to the Indenture Trustee hereunder.  All financing statements referred to in this paragraph 5 contain a statement that: “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Secured Party.”

6.            With respect to Receivables that constitute tangible chattel paper, such tangible chattel paper is in the possession of the Servicer, and the Servicer (in its capacity as custodian) is holding such tangible chattel paper solely on behalf and for the benefit of the Issuer and the Indenture Trustee, as pledgee of the Issuer.  With respect to Receivables that constitute electronic chattel paper, the Servicer has “control” of such electronic chattel paper within the meaning of Section 9-105 of the applicable UCC and the Servicer (in its capacity as custodian) is maintaining control of such electronic chattel paper solely on behalf and for the benefit of the Issuer and the Indenture Trustee, as pledgee of the Issuer.  No person other than the Servicer has “control” of any Receivable that is evidenced by electronic chattel paper.

7.            The Servicer, in its capacity as custodian, has in its possession (i) the original copy of each Receivable that constitutes tangible chattel paper, (ii) the “authoritative copy” of each Receivable that constitutes electronic chattel paper and (iii) all financing statements referred to in paragraph 5.  With respect to any Receivable constituting electronic chattel paper, there is only one “authoritative copy” of the Receivable and with respect to any Receivable constituting tangible chattel paper, there is no more than one original executed copy of such Receivable.

Sch. B-1

8.            Neither the Issuer nor a custodian or vaulting agent thereof holding any Receivable that is electronic chattel paper has communicated an “authoritative copy” (as such term is used in Section 9-105 of the UCC) of any loan agreement that constitutes or evidences such Receivable to any Person other than the Servicer.

9.            With respect to the Trust Accounts that constitute deposit accounts, either:

(i)            the Issuer has delivered to the Indenture Trustee a fully executed agreement pursuant to which the bank maintaining the deposit accounts has agreed to comply with all instructions originated by the Indenture Trustee directing disposition of the funds in such Trust Accounts without further consent by the Issuer; or

(ii)            the Issuer has taken all steps necessary to cause the Indenture Trustee to become the account holder of such Trust Accounts.

10.            With respect to the Trust Accounts that constitute securities accounts or securities entitlements, either:

(i)            the Issuer has delivered to the Indenture Trustee a fully executed agreement (1) that provides that the agreement is governed solely by the law of New York and that the law of the State of New York shall govern all issues specified in Article 2(1) of the Hague Securities Convention, (2) pursuant to which the securities intermediary has agreed to comply with all instructions originated by the Indenture Trustee relating to such Trust Accounts without further consent by the Issuer, and (3) with a securities intermediary that has and has had at all relevant times one or more offices (within the meaning of the Hague Securities Convention) in the United States of America which satisfies the criteria provided in Article 4(1)(a) or (b) of the Hague Securities Convention; or

(ii)            the Issuer has taken all steps necessary to cause the securities intermediary to identify in its records the Indenture Trustee as the Person having a security entitlement against the securities intermediary in each of such Trust Accounts so long as (1) the agreement governing the securities account satisfies the requirements of sub-clause (1) of the preceding clause (i), and (2) the securities intermediary satisfies the requirements of sub-clause (3) of the preceding clause (i).

11.            Other than the security interest granted to the Indenture Trustee under the Indenture, the Issuer has not pledged, assigned, sold or granted a security interest in, or otherwise conveyed any of the Receivables.

12.            The Issuer has not authorized the filing of, and is not aware of any financing statements against the Issuer that include a description of collateral covering the Receivables other than any financing statement (i) relating to the conveyance of the Receivables by the Sellers to the Depositor under the Receivables Purchase Agreements, (ii) relating to the conveyance of the Receivables by the Depositor to the Issuer under the Sale and Servicing Agreement, (iii) relating to the security interest granted to the Indenture Trustee under the

Sch. B-2

Indenture or (iv) that has been terminated.  The Issuer is not aware of any material judgment, ERISA or tax lien filings against the Issuer.

13.            The tangible chattel paper or electronic chattel paper that constitute or evidence the Receivables do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Depositor, the Issuer or the Indenture Trustee.

14.            No Trust Account that constitutes a securities account or securities entitlement is in the name of any Person other than the Issuer or the Indenture Trustee. The Issuer has not consented to the securities intermediary of any such Trust Account to comply with entitlement orders of any Person other than the Indenture Trustee.

15.            No Trust Account that constitutes a deposit account is in the name of any Person other than the Issuer or the Indenture Trustee. The Issuer has not consented to the bank maintaining such Trust Account to comply with instructions of any Person other than the Indenture Trustee.

16.            Notwithstanding any other provision of the Indenture or any other Basic Document, the perfection representations, warranties and covenants contained in this Schedule B shall be continuing, and remain in full force and effect until such time as all obligations under the Indenture have been finally and fully paid and performed.

17.            The parties to this Indenture shall provide the Administrator with prompt written notice of any material breach of the perfection representations, warranties and covenants contained in this Schedule B, and shall not, without satisfying the Rating Agency Condition, waive a breach of any of such perfection representations, warranties or covenants.

18.            The Issuer covenants that, in order to evidence the interests of the Indenture Trustee under this Indenture, the Issuer shall take such action, or execute and deliver such instruments as may be necessary or advisable to maintain and perfect, as a first priority interest, the Indenture Trustee’s security interest in the Receivables. The Issuer shall, from time to time and within the time limits established by law, prepare and file, all financing statements, amendments, continuations, initial financing statements in lieu of a continuation statement, terminations, partial terminations, releases or partial releases, or any other filings necessary or advisable to continue, maintain and perfect the Indenture Trustee’s security interest in the Receivables as a first-priority interest.

Sch. B-3

EXHIBIT A-1

[FORM OF CLASS A-1 NOTE]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.  OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

BY ACCEPTING THIS NOTE, EACH NOTEHOLDER AGREES TO PROVIDE THE ISSUER, THE INDENTURE TRUSTEE AND THE NOTE PAYING AGENT, UPON ITS REQUEST, WITH THE APPLICABLE FEDERAL INCOME TAX CERTIFICATIONS (GENERALLY, AN INTERNAL REVENUE SERVICE FORM W-9 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE, OR AN APPROPRIATE INTERNAL REVENUE SERVICE FORM W-8 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE). THE FAILURE TO PROVIDE THE ISSUER, THE INDENTURE TRUSTEE AND THE NOTE PAYING AGENT WITH THE APPLICABLE FEDERAL INCOME TAX CERTIFICATIONS MAY RESULT IN THE IMPOSITION OF FEDERAL WITHHOLDING UPON PAYMENTS TO THE HOLDER IN RESPECT OF THIS NOTE.

A-1-1

	
REGISTERED

No.  R-1

	
$250,000,000(1)

	
CUSIP NO. 09659QAA5

                                                              

 

BMW VEHICLE OWNER TRUST 2018-A

1.65000% ASSET BACKED NOTE, CLASS A-1

BMW VEHICLE OWNER TRUST 2018-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of TWO HUNDRED FIFTY MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-1 Notes pursuant to Section 3.01 of the Indenture dated as of January 24, 2018 (the “Indenture”), between the Issuer and U.S. Bank National Association, a national banking association, as Indenture Trustee (the “Indenture Trustee”); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of January 25, 2019 (the “Class A-1 Final Scheduled Payment Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture. Capitalized terms used but not defined herein are defined in or pursuant to the Indenture, which also contains rules as to construction that shall be applicable herein.

The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date after giving effect to all payments of principal made on the preceding Payment Date, (or on the initial principal balance of this Note from and including the Closing Date in the case of the first Payment Date), subject to certain limitations contained in the last sentence of Section 3.01 of the Indenture.  Interest on this Note will accrue for each Payment Date from and including the prior Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding such Payment Date.  Interest will be computed on the basis of the actual number of days elapsed in the related Interest Period and a 360-day year.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

________________

(1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

A-1-2

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

	
Date:

	
BMW VEHICLE OWNER TRUST 2018-A

 

By: WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement

 

By: _____________________________

Authorized Signatory

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

	
Date:

	
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee

 

By:_______________________________

Authorized Officer

 

A-1-3

REVERSE OF CLASS A-1 NOTE

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 1.65000% Asset Backed Notes, Class A-1 (herein called the “Class A-1 Notes”), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-1 Notes are subject to all terms of the Indenture.

The Class A-1 Notes, Class A-2a Notes, Class A-2b Notes, Class A-3 Notes and Class A-4 Notes (collectively, the “Notes”) are and will be secured by the collateral pledged as security therefor as provided in the Indenture.

Principal of the Class A-1 Notes will be payable on each Payment Date in an amount described on the face hereof.  “Payment Date” means the 25th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing in February 2018.

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-1 Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.  Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee may, or at the direction of Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes shall, declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  All principal payments on the Class A-1 Notes shall be made pro rata to the Class A-1 Noteholders entitled thereto.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by wire transfer as directed by such Holder provided such Holder has provided written wiring instructions to the Indenture Trustee and otherwise by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and

A-1-4

surrender of this Note at the applicable Corporate Trust Office of the Indenture Trustee or such other address as is selected by the Indenture Trustee pursuant to the terms of the Indenture.

The Issuer shall pay interest on overdue installments of interest at the Class A-1 Rate to the extent lawful.

As provided in the Indenture, the Notes may be redeemed in whole, but not in part, at the option of the Servicer, on any Payment Date, following the last day of the Collection Period as of which the Pool Balance is equal to or less than 5% of the Initial Pool Balance.

As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture.

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in their respective individual capacities, (ii) any owner of a beneficial interest in the Issuer, including the Sellers, or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Sellers, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not, at any time, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor

A-1-5

under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes held by parties unrelated to the holders of the Certificates will qualify as indebtedness secured by the Trust Estate.  Each Noteholder, by acceptance of this Note (and each Note Owner by acceptance of a beneficial interest in this Note), agrees to treat this Note for such purposes as indebtedness.

This Note, or any interest herein, may not be transferred to an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a “plan” described in Section 4975(e)(1) of the Code, any entity that is deemed to hold “plan assets” of any of the foregoing by reason of an employee benefit plan’s or other plan’s investment in such entity, unless such transferee represents, warrants and covenants that its purchase and holding of such note will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code because it will satisfy the requirements of an applicable prohibited transaction exemption and will satisfy any additional DOL Fiduciary Rule requirements set forth in Section 2.04 of the Indenture, if applicable, and will not cause a non-exempt violation of any applicable law that is substantially similar to ERISA or Section 4975 of the Code.  By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing at least a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

A-1-6

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

This Note is issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed.

Each Noteholder, by acceptance of this Note or a beneficial interest herein, acknowledges and agrees that the purpose of Article XII of the Indenture is to facilitate compliance by the FDIC Rule Parties with the provisions of the FDIC Rule and that the interpretations of the requirements of the FDIC Rule may change over time, whether due to interpretive guidance provided by the FDIC or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees that the provisions set forth in Article XII of the Indenture shall have the effect and meanings that are appropriate under the FDIC Rule as such effect and meanings change over time on the basis of evolving interpretations of the FDIC Rule.

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust, National Association, in its individual capacity, U.S. Bank National Association, in its individual capacity, any owner of a beneficial interest in the Issuer, the Sellers, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

A-1-7

ASSIGNMENT

Social Security or taxpayer I.D.  or other identifying number of assignee:

__________________________________________________

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

_______________________________________________________________________

                                                       (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints

____________________________________________, attorney, to transfer said Note on the 

 books kept for registration thereof, with full power of substitution in the premises.

Dated:                                                                                                                              */

                                                                                                Signature Guaranteed:

                                                                                                                                                                                */

_________________

	*/	
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

A-1-8

EXHIBIT A-2

[FORM OF CLASS A-2a NOTE]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.  OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

BY ACCEPTING THIS NOTE, EACH NOTEHOLDER AGREES TO PROVIDE THE ISSUER, THE INDENTURE TRUSTEE AND THE NOTE PAYING AGENT, UPON ITS REQUEST, WITH THE APPLICABLE FEDERAL INCOME TAX CERTIFICATIONS (GENERALLY, AN INTERNAL REVENUE SERVICE FORM W-9 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE, OR AN APPROPRIATE INTERNAL REVENUE SERVICE FORM W-8 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE). THE FAILURE TO PROVIDE THE ISSUER, THE INDENTURE TRUSTEE AND THE NOTE PAYING AGENT WITH THE APPLICABLE FEDERAL INCOME TAX CERTIFICATIONS MAY RESULT IN THE IMPOSITION OF FEDERAL WITHHOLDING UPON PAYMENTS TO THE HOLDER IN RESPECT OF THIS NOTE.

A-2-1

	
REGISTERED

No.  R-1

	
$410,000,000(1)

	
CUSIP NO. 09659QAB3

                                                              

 

BMW VEHICLE OWNER TRUST 2018-A

2.09% ASSET BACKED NOTE, CLASS A-2a

BMW VEHICLE OWNER TRUST 2018-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of FOUR HUNDRED TEN MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-2a Notes pursuant to Section 3.01 of the Indenture dated as of January 24, 2018 (the “Indenture”), between the Issuer and U.S. Bank National Association, a national banking association, as Indenture Trustee (the “Indenture Trustee”); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of November 25, 2020 (the “Class A-2a Final Scheduled Payment Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture. Except as otherwise provided in the Indenture, no payments of principal of the Class A-2a Notes shall be made until the Class A-1 Notes have been paid in full.  Capitalized terms used but not defined herein are defined in or pursuant to the Indenture, which also contains rules as to construction that shall be applicable herein.

The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date after giving effect to all payments of principal made on the preceding Payment Date (or, on the initial principal balance of this Note from and including the Closing Date in the case of the first Payment Date), subject to certain limitations contained in the last sentence of Section 3.01 of the Indenture.  Interest on this Note will accrue for each Payment Date from and including the 25th day of the calendar month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 25th day of the calendar month of such Payment Date.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

_______________

 (1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

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Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

	
Date:

	
BMW VEHICLE OWNER TRUST 2018-A

 

By: WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement

 

By: _____________________________

Authorized Signatory

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

	
Date:

	
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee

 

By:_______________________________

Authorized Officer

 

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REVERSE OF CLASS A-2a NOTE

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 2.09% Asset Backed Notes, Class A-2a (herein called the “Class A-2a Notes”), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-2a Notes are subject to all terms of the Indenture.

The Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes, the Class A-3 Notes and the Class A-4 Notes (collectively, the “Notes”) are and will be secured by the collateral pledged as security therefor as provided in the Indenture.

Principal of the Class A-2a Notes will be payable on each Payment Date in an amount described on the face hereof only after the Class A-1 Notes are paid in full and have no Outstanding Amount.  “Payment Date” means the 25th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing in February 2018.

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-2a Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.  Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee may, or at the direction of the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes shall, declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  All principal payments on the Class A-2a Notes shall be made pro rata to the Class A-2a Noteholders entitled thereto.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by wire transfer as directed by such Holder provided such Holder has provided written wiring instructions to the Indenture Trustee and otherwise by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and

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surrender of this Note at the applicable Corporate Trust Office of the Indenture Trustee or such other address as is selected by the Indenture Trustee pursuant to the terms of the Indenture.

The Issuer shall pay interest on overdue installments of interest at the Class A-2a Rate to the extent lawful.

As provided in the Indenture, the Notes may be redeemed in whole, but not in part, at the option of the Servicer on any Payment Date following the last day of the Collection Period as of which the Pool Balance is equal to or less than 5% of the Initial Pool Balance.

As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture.

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in their respective individual capacities, (ii) any owner of a beneficial interest in the Issuer, including the Sellers, or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Sellers, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not, at any time, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor

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under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes held by parties unrelated to the holders of the Certificates will qualify as indebtedness secured by the Trust Estate.  Each Noteholder, by acceptance of this Note (and each Note Owner by acceptance of a beneficial interest in this Note), agrees to treat this Note for such purposes as indebtedness.

This Note, or any interest herein, may not be transferred to an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a “plan” described in Section 4975(e)(1) of the Code, any entity that is deemed to hold “plan assets” of any of the foregoing by reason of an employee benefit plan’s or other plan’s investment in such entity, unless such transferee represents, warrants and covenants that its purchase and holding of such note will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code because it will satisfy the requirements of an applicable prohibited transaction exemption and will satisfy any additional DOL Fiduciary Rule requirements set forth in Section 2.04 of the Indenture, if applicable, and will not cause a non-exempt violation of any applicable law that is substantially similar to ERISA or Section 4975 of the Code.  By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing at least a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

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The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

This Note is issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed.

Each Noteholder, by acceptance of this Note or a beneficial interest herein, acknowledges and agrees that the purpose of Article XII of the Indenture is to facilitate compliance by the FDIC Rule Parties with the provisions of the FDIC Rule and that the interpretations of the requirements of the FDIC Rule may change over time, whether due to interpretive guidance provided by the FDIC or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees that the provisions set forth in Article XII of the Indenture shall have the effect and meanings that are appropriate under the FDIC Rule as such effect and meanings change over time on the basis of evolving interpretations of the FDIC Rule.

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust, National Association, in its individual capacity, U.S. Bank National Association, in its individual capacity, any owner of a beneficial interest in the Issuer, the Sellers, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

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ASSIGNMENT

Social Security or taxpayer I.D.  or other identifying number of assignee:

__________________________________________________

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

_______________________________________________________________________

                                                       (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints

____________________________________________, attorney, to transfer said Note on the 

 books kept for registration thereof, with full power of substitution in the premises.

Dated:                                                                                                                              */

                                                                                                Signature Guaranteed:

                                                                                                                                                                                */

_________________

	*/	
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

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EXHIBIT A-3

[FORM OF CLASS A-2b NOTE]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.  OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

BY ACCEPTING THIS NOTE, EACH NOTEHOLDER AGREES TO PROVIDE THE ISSUER, THE INDENTURE TRUSTEE AND THE NOTE PAYING AGENT, UPON ITS REQUEST, WITH THE APPLICABLE FEDERAL INCOME TAX CERTIFICATIONS (GENERALLY, AN INTERNAL REVENUE SERVICE FORM W-9 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE, OR AN APPROPRIATE INTERNAL REVENUE SERVICE FORM W-8 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE). THE FAILURE TO PROVIDE THE ISSUER, THE INDENTURE TRUSTEE AND THE NOTE PAYING AGENT WITH THE APPLICABLE FEDERAL INCOME TAX CERTIFICATIONS MAY RESULT IN THE IMPOSITION OF FEDERAL WITHHOLDING UPON PAYMENTS TO THE HOLDER IN RESPECT OF THIS NOTE.

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REGISTERED

No.  R-1

	
$80,000,000 (1)

	
CUSIP NO. 09659QAC1

                                                              

 

BMW VEHICLE OWNER TRUST 2018-A

LIBOR plus 0.07% ASSET BACKED NOTE, CLASS A-2b

BMW VEHICLE OWNER TRUST 2018-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of EIGHTY MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-2b Notes pursuant to Section 3.01 of the Indenture dated as of January 24, 2018 (the “Indenture”), between the Issuer and U.S. Bank National Association, a national banking association, as Indenture Trustee (the “Indenture Trustee”); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of November 25, 2020 (the “Class A-2b Final Scheduled Payment Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture. Except as otherwise provided in the Indenture, no payments of principal of the Class A-2b Notes shall be made until the Class A-1 Notes have been paid in full.  Capitalized terms used but not defined herein are defined in or pursuant to the Indenture, which also contains rules as to construction that shall be applicable herein.

The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date after giving effect to all payments of principal made on the preceding Payment Date, (or on the initial principal balance of this Note from and including the Closing Date in the case of the first Payment Date), subject to certain limitations contained in the last sentence of Section 3.01 of the Indenture, and provided that, if the sum of LIBOR plus 0.07% is less than 0.00% for any Interest Period, then the per annum rate at which interest will accrue on this Note for such Interest Period will be 0.00%.  Interest on this Note will accrue for each Payment Date from and including the prior Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding such Payment Date.  Interest will be computed on the basis of the actual number of days elapsed in the related Interest Period and a 360-day year.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

_______________

 (1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

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Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

	
Date:

	
BMW VEHICLE OWNER TRUST 2018-A

 

By: WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement

 

By: _____________________________

Authorized Signatory

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

	
Date:

	
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee

 

By:_______________________________

Authorized Officer

 

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REVERSE OF CLASS A-2b NOTE

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its LIBOR plus 0.07% Asset Backed Notes, Class A-2b (herein called the “Class A-2b Notes”), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-2b Notes are subject to all terms of the Indenture.

The Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes, the Class A-3 Notes and the Class A-4 Notes (collectively, the “Notes”) are and will be secured by the collateral pledged as security therefor as provided in the Indenture.

Principal of the Class A-2b Notes will be payable on each Payment Date in an amount described on the face hereof only after the Class A-1 Notes are paid in full and have no Outstanding Amount.  “Payment Date” means the 25th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing in February 2018

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-2b Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.  Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee may, or at the direction of the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes shall, declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  All principal payments on the Class A-2b Notes shall be made pro rata to the Class A-2b Noteholders entitled thereto.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by wire transfer as directed by such Holder provided such Holder has provided written wiring instructions to the Indenture Trustee and otherwise by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and

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surrender of this Note at the applicable Corporate Trust Office of the Indenture Trustee or such other address as is selected by the Indenture Trustee pursuant to the terms of the Indenture.

The Issuer shall pay interest on overdue installments of interest at the Class A-2b Rate to the extent lawful.

As provided in the Indenture, the Notes may be redeemed in whole, but not in part, at the option of the Servicer on any Payment Date following the last day of the Collection Period as of which the Pool Balance is equal to or less than 5% of the Initial Pool Balance.

As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture.

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in their respective individual capacities, (ii) any owner of a beneficial interest in the Issuer, including the Sellers, or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Sellers, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not, at any time, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor

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under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes held by parties unrelated to the holders of the Certificates will qualify as indebtedness secured by the Trust Estate.  Each Noteholder, by acceptance of this Note (and each Note Owner by acceptance of a beneficial interest in this Note), agrees to treat this Note for such purposes as indebtedness.

This Note, or any interest herein, may not be transferred to an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a “plan” described in Section 4975(e)(1) of the Code, any entity that is deemed to hold “plan assets” of any of the foregoing by reason of an employee benefit plan’s or other plan’s investment in such entity, unless such transferee represents, warrants and covenants that its purchase and holding of such note will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code because it will satisfy the requirements of an applicable prohibited transaction exemption and will satisfy any additional DOL Fiduciary Rule requirements set forth in Section 2.04 of the Indenture, if applicable, and will not cause a non-exempt violation of any applicable law that is substantially similar to ERISA or Section 4975 of the Code.  By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing at least a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

A-3-7

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

This Note is issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed.

Each Noteholder, by acceptance of this Note or a beneficial interest herein, acknowledges and agrees that the purpose of Article XII of the Indenture is to facilitate compliance by the FDIC Rule Parties with the provisions of the FDIC Rule and that the interpretations of the requirements of the FDIC Rule may change over time, whether due to interpretive guidance provided by the FDIC or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees that the provisions set forth in Article XII of the Indenture shall have the effect and meanings that are appropriate under the FDIC Rule as such effect and meanings change over time on the basis of evolving interpretations of the FDIC Rule.

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust, National Association, in its individual capacity, U.S. Bank National Association, in its individual capacity, any owner of a beneficial interest in the Issuer, the Sellers, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

A-3-8

ASSIGNMENT

Social Security or taxpayer I.D.  or other identifying number of assignee:

__________________________________________________

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

_______________________________________________________________________

                                                       (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints

____________________________________________, attorney, to transfer said Note on the 

 books kept for registration thereof, with full power of substitution in the premises.

Dated:                                                                                                                              */

                                                                                                Signature Guaranteed:

                                                                                                                                                                                */

_________________

	*/	
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

A-3-9

EXHIBIT A-4

[FORM OF CLASS A-3 NOTE]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.  OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

BY ACCEPTING THIS NOTE, EACH NOTEHOLDER AGREES TO PROVIDE THE ISSUER, THE INDENTURE TRUSTEE AND THE NOTE PAYING AGENT, UPON ITS REQUEST, WITH THE APPLICABLE FEDERAL INCOME TAX CERTIFICATIONS (GENERALLY, AN INTERNAL REVENUE SERVICE FORM W-9 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE, OR AN APPROPRIATE INTERNAL REVENUE SERVICE FORM W-8 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE). THE FAILURE TO PROVIDE THE ISSUER, THE INDENTURE TRUSTEE AND THE NOTE PAYING AGENT WITH THE APPLICABLE FEDERAL INCOME TAX CERTIFICATIONS MAY RESULT IN THE IMPOSITION OF FEDERAL WITHHOLDING UPON PAYMENTS TO THE HOLDER IN RESPECT OF THIS NOTE.

A-4-1

	
REGISTERED

No.  R-1

	
$360,000,000 (1)

	
CUSIP NO. 09659QAD9

                                                              

BMW VEHICLE OWNER TRUST 2018-A

2.35% ASSET BACKED NOTE, CLASS A-3

BMW VEHICLE OWNER TRUST 2018-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of THREE HUNDRED SIXTY MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-3 Notes pursuant to Section 3.01 of the Indenture dated as of January 24, 2018 (the “Indenture”), between the Issuer and U.S. Bank National Association, a national banking association, as Indenture Trustee (the “Indenture Trustee”); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of April 25, 2022 (the “Class A-3 Final Scheduled Payment Date”) and the Redemption Date, if any pursuant to Section 10.01 of the Indenture. Except as otherwise provided in the Indenture, no payments of principal of the Class A-3 Notes shall be made until the Class A-1 Notes, the Class A-2a Notes and the Class A-2b Notes have been paid in full. Capitalized terms used but not defined herein are defined in or pursuant to the Indenture, which also contains rules as to construction that shall be applicable herein.

The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date after giving effect to all payments of principal made on the preceding Payment Date (or, on the initial principal balance of this Note from and including the Closing Date in the case of the first Payment Date), subject to certain limitations contained in the last sentence of Section 3.01 of the Indenture.  Interest on this Note will accrue for each Payment Date from and including the 25th day of the calendar month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 25th day of the calendar month of such Payment Date.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

______________________

 (1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

A-4-2

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

A-4-3

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

	
Date:

	
BMW VEHICLE OWNER TRUST 2018-A

 

By: WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement

 

By: _____________________________

Authorized Signatory

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

	
Date:

	
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee

 

By:_______________________________

Authorized Officer

 

A-4-4

REVERSE OF CLASS A-3 NOTE

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 2.35% Asset Backed Notes, Class A-3 (herein called the “Class A-3 Notes”), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-3 Notes are subject to all terms of the Indenture.

The Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes, the Class A-3 Notes and the Class A-4 Notes (collectively, the “Notes”) are and will be secured by the collateral pledged as security therefor as provided in the Indenture.

Principal of the Class A-3 Notes will be payable on each Payment Date in an amount described on the face hereof only after the Class A-1 Notes, the Class A-2a Notes and the Class A-2b Notes are paid in full and have no Outstanding Amount.  “Payment Date” means the 25th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing in February 2018.

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-3 Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.  Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee may, or at the direction of the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes shall, declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  All principal payments on the Class A-3 Notes shall be made pro rata to the Class A-3 Noteholders entitled thereto.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by wire transfer as directed by such Holder provided such Holder has provided written wiring instructions to the Indenture Trustee and otherwise by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment

A-4-5

Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the applicable Corporate Trust Office of the Indenture Trustee or such other address as is selected by the Indenture Trustee pursuant to the terms of the Indenture.

The Issuer shall pay interest on overdue installments of interest at the Class A-3 Rate to the extent lawful.

As provided in the Indenture, the Notes may be redeemed in whole, but not in part, at the option of the Servicer on any Payment Date following the last day of the Collection Period as of which the Pool Balance is equal to or less than 5% of the Initial Pool Balance.

As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture.

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in their respective individual capacities, (ii) any owner of a beneficial interest in the Issuer, including the Sellers, or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Sellers, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not, at any time, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or government

A-4-6

authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes held by parties unrelated to the holders of the Certificates will qualify as indebtedness secured by the Trust Estate.  Each Noteholder, by acceptance of this Note (and each Note Owner by acceptance of a beneficial interest in this Note), agrees to treat this Note for such purposes as indebtedness.

This Note, or any interest herein, may not be transferred to an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a “plan” described in Section 4975(e)(1) of the Code, any entity that is deemed to hold “plan assets” of any of the foregoing by reason of an employee benefit plan’s or other plan’s investment in such entity, unless such transferee represents, warrants and covenants that its purchase and holding of such note will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code because it will satisfy the requirements of an applicable prohibited transaction exemption and will satisfy any additional DOL Fiduciary Rule requirements set forth in Section 2.04 of the Indenture, if applicable, and will not cause a non-exempt violation of any applicable law that is substantially similar to ERISA or Section 4975 of the Code.  By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing at least a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also

A-4-7

permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

This Note is issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed.

Each Noteholder, by acceptance of this Note or a beneficial interest herein, acknowledges and agrees that the purpose of Article XII of the Indenture is to facilitate compliance by the FDIC Rule Parties with the provisions of the FDIC Rule and that the interpretations of the requirements of the FDIC Rule may change over time, whether due to interpretive guidance provided by the FDIC or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees that the provisions set forth in Article XII of the Indenture shall have the effect and meanings that are appropriate under the FDIC Rule as such effect and meanings change over time on the basis of evolving interpretations of the FDIC Rule.

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust, National Association, in its individual capacity, U.S. Bank National Association, in its individual capacity, any owner of a beneficial interest in the Issuer, the Sellers, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

A-4-8

ASSIGNMENT

Social Security or taxpayer I.D.  or other identifying number of assignee:

__________________________________________________

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

_______________________________________________________________________

                                                       (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints

____________________________________________, attorney, to transfer said Note on the 

 books kept for registration thereof, with full power of substitution in the premises.

Dated:                                                                                                                              */

                                                                                                Signature Guaranteed:

                                                                                                                                                                                */

_________________

	*/	
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

A-4-9

EXHIBIT A-5

[FORM OF CLASS A-4 NOTE]

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.  OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

BY ACCEPTING THIS NOTE, EACH NOTEHOLDER AGREES TO PROVIDE THE ISSUER, THE INDENTURE TRUSTEE AND THE NOTE PAYING AGENT, UPON ITS REQUEST, WITH THE APPLICABLE FEDERAL INCOME TAX CERTIFICATIONS (GENERALLY, AN INTERNAL REVENUE SERVICE FORM W-9 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE, OR AN APPROPRIATE INTERNAL REVENUE SERVICE FORM W-8 (OR SUCCESSOR APPLICABLE FORM) IN THE CASE OF A PERSON THAT IS NOT A “UNITED STATES PERSON” WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE). THE FAILURE TO PROVIDE THE ISSUER, THE INDENTURE TRUSTEE AND THE NOTE PAYING AGENT WITH THE APPLICABLE FEDERAL INCOME TAX CERTIFICATIONS MAY RESULT IN THE IMPOSITION OF FEDERAL WITHHOLDING UPON PAYMENTS TO THE HOLDER IN RESPECT OF THIS NOTE.

A-5-1

	
REGISTERED

No.  R-1

	
$150,000,000(1)

	
CUSIP NO. 09659QAE7

                                                              

 

BMW VEHICLE OWNER TRUST 2018-A

2.51% ASSET BACKED NOTE, CLASS A-4

BMW VEHICLE OWNER TRUST 2018-A, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of ONE HUNDRED FIFTY MILLION DOLLARS, payable on each Payment Date in an amount equal to the aggregate amount, if any, payable from the Note Distribution Account in respect of principal on the Class A-4 Notes pursuant to Section 3.01 of the Indenture dated as of January 24, 2018 (the “Indenture”), between the Issuer and U.S. Bank National Association, a national banking association, as Indenture Trustee (the “Indenture Trustee”); provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of June 25, 2024 (the “Class A-4 Final Scheduled Payment Date”) and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.  Except as otherwise provided in the Indenture, no payments of principal of the Class A-4 Notes shall be made until the Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes and the Class A-3 Notes have been paid in full.  Capitalized terms used but not defined herein are defined in the Indenture, which also contains rules as to construction that shall be applicable herein.

The Issuer will pay interest on this Note at the rate per annum set forth above, on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date after giving effect to all payments of principal made on the preceding Payment Date (or on the initial principal balance of this Note from and including the Closing Date in the case of the first Payment Date), subject to certain limitations contained in the last sentence of Section 3.01 of the Indenture.  Interest on this Note will accrue for each Payment Date from and including the 25th day of the calendar month preceding the month of such Payment Date (or, in the case of the first Payment Date, from the Closing Date) to but excluding the 25th day of the calendar month of such Payment Date.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.  Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

___________________

 (1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.

A-5-2

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.

A-5-3

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

	
Date:

	
BMW VEHICLE OWNER TRUST 2018-A

 

By: WILMINGTON TRUST, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement

 

By: _____________________________

Authorized Signatory

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

	
Date:

	
U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee

 

By:_______________________________

Authorized Officer

 

A-5-4

REVERSE OF CLASS A-4 NOTE

This Note is one of a duly authorized issue of Notes of the Issuer, designated as its 2.51% Asset Backed Notes, Class A-4 (herein called the “Class A-4 Notes”), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes.  The Class A-4 Notes are subject to all terms of the Indenture.

The Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes, the Class A-3 Notes and the Class A-4 Notes (collectively, the “Notes”) are and will be secured by the collateral pledged as security therefor as provided in the Indenture.

Principal of the Class A-4 Notes will be payable on each Payment Date in an amount described on the face hereof only after the Class A-1 Notes, the Class A-2a Notes, the Class A-2b Notes and the Class A-3 Notes are paid in full and have no Outstanding Amount.  “Payment Date” means the 25th day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing in February 2018.

As described above, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the Class A-4 Final Scheduled Payment Date and the Redemption Date, if any, pursuant to Section 10.01 of the Indenture.  Notwithstanding the foregoing, if an Event of Default occurs, the Indenture Trustee may, or at the direction of the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes shall, declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the Indenture.  All principal payments on the Class A-4 Notes shall be made pro rata to the Class A-4 Noteholders entitled thereto.

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by wire transfer as directed by such Holder provided such Holder has provided written wiring instructions to the Indenture Trustee and otherwise by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will be made by wire transfer in immediately available funds to the account designated by such nominee.  Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment.  Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon.  If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment

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Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the applicable Corporate Trust Office of the Indenture Trustee or such other address as is selected by the Indenture Trustee pursuant to the terms of the Indenture.

The Issuer shall pay interest on overdue installments of interest at the Class A-4 Rate to the extent lawful.

As provided in the Indenture, the Notes may be redeemed in whole, but not in part, at the option of the Servicer on any Payment Date following the last day of the Collection Period as of which the Pool Balance is equal to or less than 5% of the Initial Pool Balance.

As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange subject to certain exceptions set forth in the Indenture.

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in their respective individual capacities, (ii) any owner of a beneficial interest in the Issuer, including the Sellers, or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Sellers, the Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Sellers, the Servicer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

Each Noteholder or Note Owner, by acceptance of this Note or, in the case of a Note Owner, a beneficial interest in this Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not, at any time, petition or otherwise invoke or cause the Issuer or the Depositor to invoke the process of any court or government

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authority for the purpose of commencing or sustaining a case against the Issuer or the Depositor under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer or the Depositor.

The Issuer has entered into the Indenture and this Note is issued with the intention that, for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income, the Notes held by parties unrelated to the holders of the Certificates will qualify as indebtedness secured by the Trust Estate.  Each Noteholder, by acceptance of this Note (and each Note Owner by acceptance of a beneficial interest in this Note), agrees to treat this Note for such purposes as indebtedness.

This Note, or any interest herein, may not be transferred to an “employee benefit plan” within the meaning of Section 3(3) of ERISA, a “plan” described in Section 4975(e)(1) of the Code, any entity that is deemed to hold “plan assets” of any of the foregoing by reason of an employee benefit plan’s or other plan’s investment in such entity, unless such transferee represents, warrants and covenants that its purchase and holding of such note will not result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code because it will satisfy the requirements of an applicable prohibited transaction exemption and will satisfy any additional DOL Fiduciary Rule requirements set forth in Section 2.04 of the Indenture, if applicable, and will not cause a non-exempt violation of any applicable law that is substantially similar to ERISA or Section 4975 of the Code.  By its acquisition of a Note in book-entry form or any interest therein, each transferee will be deemed to have represented, warranted and covenanted that it satisfies the foregoing requirements and the Indenture Trustee may relay conclusively on the same for purposes hereof.

Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing at least a majority of the Outstanding Amount of all Notes at the time Outstanding.  The Indenture also contains provisions permitting Holders of Notes representing specified percentages of the Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note.  The Indenture also

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permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

The term “Issuer” as used in this Note includes any successor to the Issuer under the Indenture.

This Note is issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

This Note and the Indenture shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions other than Sections 5-1401 and 5-1402 of the New York General Obligations Law, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed.

Each Noteholder, by acceptance of this Note or a beneficial interest herein, acknowledges and agrees that the purpose of Article XII of the Indenture is to facilitate compliance by the FDIC Rule Parties with the provisions of the FDIC Rule and that the interpretations of the requirements of the FDIC Rule may change over time, whether due to interpretive guidance provided by the FDIC or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees that the provisions set forth in Article XII of the Indenture shall have the effect and meanings that are appropriate under the FDIC Rule as such effect and meanings change over time on the basis of evolving interpretations of the FDIC Rule.

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of Wilmington Trust, National Association, in its individual capacity, U.S. Bank National Association, in its individual capacity, any owner of a beneficial interest in the Issuer, the Sellers, the Servicer, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

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ASSIGNMENT

Social Security or taxpayer I.D.  or other identifying number of assignee:

__________________________________________________

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

_______________________________________________________________________

                                                       (name and address of assignee)

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints

____________________________________________, attorney, to transfer said Note on the 

 books kept for registration thereof, with full power of substitution in the premises.

Dated:                                                                                                                              */

                                                                                                Signature Guaranteed:

                                                                                                                                                                                */

_________________

	*/	
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration, enlargement or any change whatsoever.  Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

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EXHIBIT B

SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE

The assessment of compliance to be delivered by the Indenture Trustee, shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”:

	
Reference

	
Criteria

	 
	
 

	
 

General Servicing Considerations

 

	 
	
1122(d)(1)(i)

	
Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.

	 
	
1122(d)(1)(ii)

	
If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.

	 
	
1122(d)(1)(iii)

	
Any requirements in the transaction agreements to maintain a back-up servicer for the receivables are maintained.

	 
	
1122(d)(1)(iv)

	
A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.

	 
	
1122(d)(1)(v)

	
Aggregation of information, as applicable, is mathematically accurate and the information conveyed accurately reflects the information.

	 
	
 

	
 

Cash Collection and Administration

 

	 
	
1122(d)(2)(i)

	
Payments on receivables are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the transaction agreements.

	 
	
1122(d)(2)(ii)

	
Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.

	
x

	
1122(d)(2)(iii)

	
Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.

	 
	
1122(d)(2)(iv)

	
The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.

	 
	
1122(d)(2)(v)

	
Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.

	 
	
1122(d)(2)(vi)

	
Unissued checks are safeguarded so as to prevent unauthorized access.

	 
	
1122(d)(2)(vii)

	
 Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.

	 

 

 

B-1

 

	
Reference

	
Criteria

	 

	
 

	
 

Investor Remittances and Reporting

 

	 
	
1122(d)(3)(i)

	
Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of receivables serviced by the Servicer.

	 
	
1122(d)(3)(ii)

	
Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.

	
x

	
1122(d)(3)(iii)

	
Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.

	
x

	
1122(d)(3)(iv)

	
Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.

	
x

	
 

	
 

Pool Asset Administration

 

	 
	
1122(d)(4)(i)

	
Collateral or security on receivables is maintained as required by the transaction agreements or related receivables documents.

	 
	
1122(d)(4)(ii)

	
Receivables and related documents are safeguarded as required by the transaction agreements

	 
	
1122(d)(4)(iii)

	
Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.

	 
	
1122(d)(4)(iv)

	
Payments on receivables, including any payoffs, made in accordance with the related receivables documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related receivables documents.

	 
	
1122(d)(4)(v)

	
The Servicer’s records regarding the receivables agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.

	 
	
1122(d)(4)(vi)

	
Changes with respect to the terms or status of an obligor’s receivables (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with usual customary procedures.

	 
	
1122(d)(4)(vii)

	
Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with usual customary procedures.

	 
	
1122(d)(4)(viii)

	
Records documenting collection efforts are maintained during the period a receivable is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent receivables including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).

	 
	
1122(d)(4)(ix)

	
Adjustments to interest rates or rates of return for receivables with variable rates are computed based on the related receivables documents.

	 

 

B-2

 

	
Reference

	
Criteria

	 

	
1122(d)(4)(x)

	
Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s receivables documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable receivables documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related receivables, or such other number of days specified in the transaction agreements.

	 
	
1122(d)(4)(xi)

	
Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.

	 
	
1122(d)(4)(xii)

	
Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.

	 
	
1122(d)(4)(xiii)

	
Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.

	 
	
1122(d)(4)(xiv)

	
 Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the transaction agreements.

	 
	
1122(d)(4)(xv)

	
Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the transaction agreements.

	 

By:  _______________________________

Name:

Title:

B-3

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