Document:

EX-10.2

 Exhibit 10.2 

RESTRICTED STOCK AGREEMENT 

PARK HOTELS & RESORTS INC. 

2017 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS 

(As Amended and Restated as of April 30, 2021) 

This Restricted Stock Agreement (this “Agreement”), effective as of
                     (the “Grant Date”), is between Park Hotels & Resorts Inc., a Delaware corporation (the
“Company”), and                     (the “Participant”). 

1.     Grant of Restricted Stock. Effective as of the Grant Date, the Company hereby issues and grants
                     shares of Restricted Stock (the “Shares”) to the Participant, subject to and in accordance with the terms,
conditions and restrictions set forth in the Park Hotels & Resorts Inc. 2017 Stock Plan for Non-Employee Directors, as amended and restated as of April 30, 2021 (as it may be amended, amended and
restated or otherwise modified in accordance with the terms thereof, the “Plan”), and this Agreement. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan. 

2.     Vesting. The Shares shall become vested, and the restrictions on such Shares shall lapse, on
                     (or, if earlier, the date on which the Company’s
                     annual meeting of stockholders is held) (the “Vesting Date”), subject to the Participant’s continued
service as a member of the Board through the Vesting Date. 
 3.     Termination of Service. In the event that
the Participant’s service as a member of the Board terminates for any reason (other than death or Disability), any Shares that are not vested as of the effective date of termination (the “Termination Date”) shall be forfeited
and all of the Participant’s rights hereunder with respect to such unvested Shares shall cease as of the Termination Date (unless otherwise provided for by the Committee in accordance with the Plan). In the event that the Participant’s
service as a member of the Board terminates as a result of the Participant’s death or Disability, any Shares that are not vested as of the Termination Date shall fully vest and be delivered to the Participant or his or her estate. 

4.     Dividends; Rights as a Stockholder. The Participant shall be the record owner of the Shares until or unless
such Shares are forfeited pursuant to the terms of this Agreement or the Plan, and as a record owner shall be entitled to all rights of a common stockholder of the Company, including, without limitation, voting rights with respect to the Shares and
the right to receive all dividends or other distributions paid with respect to the Common Stock. 
 5.    
Restrictions on Transfer. Prior to the vesting of any Shares, the Participant may not assign, alienate, pledge, attach, sell or otherwise transfer or encumber a Share or the Participant’s right under the Shares, except other than by
will or by the laws of descent and distribution and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliates; provided that the designation of
a beneficiary (if permitted by the Committee) shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. 

6.     No Right to Continued Service. Neither the Plan, this Agreement nor the Participant’s receipt of the
Shares hereunder shall impose any obligation on the Company or any Affiliates to continue the engagement of the Participant as a member of the Board. 

7.     Tax Withholding. The Participant agrees that upon the vesting of, and lapsing of restrictions on, any
Shares, or at any such time as required under applicable law, a number of Shares having a fair market value equal to the minimum applicable amount necessary to satisfy the statutorily required withholding liability in respect of the Shares, if any
(“Withholding Taxes”), shall be automatically delivered to the Company in satisfaction of such Withholding Taxes, except to the extent that the Participant shall have elected to pay such Withholding Taxes to the Company in cash (by
check or wire transfer). The number of Shares to be used for payment shall be calculated using the closing price per share of Common Stock on the 

 
New York Stock Exchange (or other principal exchange on which the Common Stock then trades) on the trading day immediately prior to the date of delivery of the Shares to the Company, and shall be
rounded up to the nearest whole Share. 
 8.     Section 83(b) Election. The Participant may make an
election under Code Section 83(b) (a “Section 83(b) Election”) with respect to the Shares. Any such election must be made within thirty (30) days after the Grant Date. If the Participant elects to make a
Section 83(b) Election, the Participant shall provide the Company with a copy of an executed version and satisfactory evidence of the filing of the executed Section 83(b) Election with the US Internal Revenue Service within ten
(10) days of such filing. The Participant agrees to assume full responsibility for ensuring that the Section 83(b) Election is actually and timely filed with the US Internal Revenue Service and for all tax consequences resulting from the
Section 83(b) Election. 
 9.     Award Subject to Plan. By entering into this Agreement, the
Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. The Shares granted hereunder are subject to the Plan. The terms and provisions of the Plan, as it may be amended from time to time, are hereby
incorporated herein by reference. 
 10.     Severability. Should any provision of this Agreement be held
by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms. 

11.     Governing Law. This Agreement shall be governed by and construed in accordance with the internal
laws of the State of Delaware applicable to contracts made and performed wholly within the State of Delaware, without giving effect to the conflict of laws provisions thereof. 

12.     Successors in Interest. Any successor to the Company shall have the benefits of the Company under,
and be entitled to enforce, this Agreement. Likewise, the Participant’s legal representative shall have the benefits of the Participant under, and be entitled to enforce, this Agreement. All obligations imposed upon the Participant and all
rights granted to the Company under this Agreement shall be final, binding and conclusive upon the Participant’s heirs, executors, administrators and successors. 

13.    Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any
documents related to current or future participation in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an
on-line or electronic system established and maintained by the Company or a third party designated by the Company. 

14.    Acceptance and Agreement by the Participant. By accepting the Shares (including through electronic
means), the Participant agrees to be bound by the terms, conditions, and restrictions set forth in the Plan, this Agreement, and the Company’s policies, as in effect from time to time, relating to the Plan. 

15.    Waiver. The Participant acknowledges that a waiver by the Company of breach of any provision of this
Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the Participant or any other participant in the Plan. 

16.    Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be
an original and all of which taken together constitute one in the same agreement. 

  
 2 

 
			
	PARK HOTELS & RESORTS INC.
	By:	 	  

		 	Name:
		 	Title:

 Acknowledged and Agreed 

as of the date first written above: 
  

	
	  

	Participant Signature

  
 3lad-fourtharloanagreemen

EXHIBIT 10.1    CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT,  MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL  AND (II) THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE  OR CONFIDENTIAL.      Deal CUSIP 53679VAB62   New Vehicle Floorplan Facility CUSIP 53679VAD2  Used Vehicle Floorplan Facility CUSIP 53679VAC4           Service Loaner Vehicle Floorplan Facility CUSIP 53679VAE0  Revolving Line of Credit Facility CUSIP 53679VAB6    FOURTH AMENDED  AND RESTATED LOAN  AGREEMENT  Among  LITHIA MOTORS, INC.,  CERTAIN OF ITS SUBSIDIARIES,  THE LENDERS PARTY HERETO FROM TIME TO TIME,  and   U.S. BANK NATIONAL ASSOCIATION,   as Administrative Agent and Agent   and     JPMorgan Chase Bank, N.A.,  Toyota Motor Credit Corporation,   Mercedes-Benz Financial Services USA LLC, and   Bank of America, N.A,  as Co-Syndication Agents  U.S. Bank National Association, J.P. Morgan Securities LLC and Toyota Motor Credit  Corporation,   As Co-Lead Arrangers and Joint Bookrunners  American Honda Finance Corporation and TD Bank, N.A.,   as Co-Documentation Agents  Dated as of April 29, 2021 

 

    TABLE OF CONTENTS  ARTICLE 1 DEFINITIONS AND INTERPRETIVE PROVISIONS ............................................1  1.1 Defined Terms ...............................................................................................................1  1.2 Divisions. .....................................................................................................................44  1.3 Other Interpretive Provisions. ......................................................................................44  1.4 LIBOR Notification. ....................................................................................................46  1.5 Limited Condition Acquisition. ...................................................................................46  ARTICLE 2 NEW VEHICLE FLOORPLAN LINE OF CREDIT ...............................................47  2.1 New Vehicle Floorplan Loans. ....................................................................................47  2.2 New Vehicle Swing Line Loans. .................................................................................50  2.3 Terms Applicable to New Vehicle Floorplan Loans and New Vehicle Swing  Line Loans. ..................................................................................................................54  2.4 New Vehicle Floorplan Borrowers. .............................................................................56  2.5 Addition of New Vehicle Floorplan Dealerships.........................................................61  ARTICLE 3 USED VEHICLE FLOORPLAN AND SERVICE LOANER VEHICLE  FLOORPLAN LINE OF CREDIT ..........................................................................................64  3.1 Used Vehicle Floorplan Loans. ....................................................................................64  3.2 Used Vehicle Swing Line Loans..................................................................................67  3.3 Service Loaner Vehicle Floorplan Loans. ...................................................................70  3.4 Service Loaner Vehicle Swing Line Loans. ................................................................73  ARTICLE 4 REVOLVING LINE OF CREDIT ............................................................................77  4.1 Revolving Loans. .........................................................................................................77  4.2 Revolving Swing Line Loans.......................................................................................80  ARTICLE 5 LETTERS OF CREDIT ............................................................................................83  5.1 Letter of Credit Commitment.......................................................................................83  5.2 Existing Letters of Credit .............................................................................................83  5.3 LC Agreements ............................................................................................................83  5.4 Expiry Date ..................................................................................................................84  5.5 Requests for Letters of Credit ......................................................................................84  5.6 Participation in Letters of Credit ..................................................................................84  5.7 Payments ......................................................................................................................85  5.8 Terms Satisfactory to LC Issuer ..................................................................................85  5.9 Obligations Absolute ...................................................................................................85  5.10 Letter of Credit Fees. ...................................................................................................86  5.11 LC Collateral Account .................................................................................................86  5.12 Borrower Indemnification ............................................................................................87  5.13 Lenders’ Indemnification .............................................................................................87  ARTICLE 6 CERTAIN ADDITIONAL PROVISIONS ...............................................................88  6.1 Interest..........................................................................................................................88  6.2 Evidence of Debt..........................................................................................................88  6.3 Borrowing Procedure. ..................................................................................................89  6.4 Obligations Several ......................................................................................................89  6.5 Non-Receipt of Funds by the Agent ............................................................................89  

 

  ii  6.6 Authorization ...............................................................................................................90  6.7 Interest and Fee Basis ..................................................................................................90  6.8 Method of Payment ......................................................................................................91  6.9 Payment by Automatic Debit .......................................................................................91  6.10 Late Charges ................................................................................................................91  6.11 Limitation of Interest ...................................................................................................91  6.12 Increase Option. ...........................................................................................................92  6.13 Authorization ...............................................................................................................93  6.14 Defaulting Lenders.......................................................................................................93  6.15 Replacement of Lender ................................................................................................97  6.16 Per Annum Fee ............................................................................................................97  6.17 Reallocation of Commitments. ....................................................................................97  6.18 Extension of Commitments..........................................................................................99  6.19 Designation of Dual Subsidiaries...............................................................................100  6.20 Erroneous Payments...................................................................................................102  ARTICLE 7 YIELD PROTECTION; TAXES ............................................................................103  7.1 Yield Protection .........................................................................................................103  7.2 Changes in Capital Adequacy Regulations ................................................................104  7.3 Availability of Types of Advances; Adequacy of Interest Rate ................................105  7.4 Taxes. .........................................................................................................................107  7.5 Selection of Lending Installation; Mitigation Obligations; Lender Statements;  Survival of Indemnity ................................................................................................111  ARTICLE 8 SECURITY AND GUARANTIES .........................................................................111  8.1 Security. .....................................................................................................................111  8.2 Guaranties ..................................................................................................................113  ARTICLE 9 CONDITIONS PRECEDENT ................................................................................113  9.1 Initial Conditions Precedent .......................................................................................113  9.2 Conditions Precedent to Each Credit Extension ........................................................115  9.3 Conditions Precedent to Initial Advance to any New Vehicle Floorplan  Borrower ....................................................................................................................116  9.4 Real Property Conditions ...........................................................................................117  ARTICLE 10 REPRESENTATIONS AND WARRANTIES .....................................................118  10.1 Existence and Standing ..............................................................................................118  10.2 Authorization and Validity ........................................................................................118  10.3 Conflict; Government Consent ..................................................................................119  10.4 Financial Statements ..................................................................................................119  10.5 Material Adverse Effect .............................................................................................119  10.6 Taxes ..........................................................................................................................119  10.7 Litigation ....................................................................................................................119  10.8 Subsidiaries and Affiliates .........................................................................................120  10.9 ERISA ........................................................................................................................120  10.10 Accuracy of Information ............................................................................................120  10.11 Regulation U ..............................................................................................................120  10.12 Material Agreements ..................................................................................................120  10.13 Compliance with Laws ..............................................................................................121  

 

  iii  10.14 Ownership of Properties ............................................................................................121  10.15 Plan Assets; Prohibited Transactions .........................................................................121  10.16 Trademarks; Patents, Etc. ..........................................................................................121  10.17 Burdensome Restrictions ...........................................................................................121  10.18 [Reserved] ..................................................................................................................121  10.19 Investment Company Act, Etc. ..................................................................................121  10.20 Solvency .....................................................................................................................121  10.21 Franchise Agreements; Material Business Relationships ..........................................122  10.22 Security Interests ........................................................................................................122  10.23 Continuing Representations and Warranties ..............................................................122  10.24 Anti-Corruption Laws; Sanctions ..............................................................................122  10.25 EEA Financial Institution ..........................................................................................122  ARTICLE 11 FINANCIAL COVENANTS AND INFORMATION .........................................123  11.1 Financial Covenants. ..................................................................................................123  11.2 Financial Information.................................................................................................124  ARTICLE 12 AFFIRMATIVE COVENANTS...........................................................................126  12.1 Maintenance of Existence and Permits ......................................................................127  12.2 ERISA ........................................................................................................................127  12.3 Inspection ...................................................................................................................127  12.4 Collateral Audits ........................................................................................................127  12.5 Books and Records ....................................................................................................128  12.6 Maintenance of Properties .........................................................................................128  12.7 Taxes and Other Obligations .....................................................................................128  12.8 Insurance. ...................................................................................................................128  12.9 Compliance with Laws ..............................................................................................129  12.10 Agreements with Sellers ............................................................................................129  12.11 Repurchase Agreements.............................................................................................129  12.12 [Reserved]. .................................................................................................................129  12.13 Landlord’s Consents ..................................................................................................129  12.14 Notification ................................................................................................................130  12.15 Further Assurances.....................................................................................................131  12.16 Deposit Accounts .......................................................................................................131  12.17 Joinder of New Subsidiaries ......................................................................................132  12.18 Use of Proceeds..........................................................................................................132  12.19 Anti-Money Laundering Compliance ........................................................................132  12.20 Joinder of Additional Dual Subsidiary Lenders.........................................................132  ARTICLE 13 NEGATIVE COVENANTS .................................................................................133  13.1 Mergers, Etc. ..............................................................................................................133  13.2 [Reserved]. .................................................................................................................134  13.3 Liens ...........................................................................................................................134  13.4 Restricted Payments ...................................................................................................137  13.5 Subordinated Debt .....................................................................................................137  13.6 Loans and Investments ...............................................................................................138  13.7 Transactions with Affiliates .......................................................................................140  13.8 Type of Business ........................................................................................................140  

 

  iv  13.9 Structure .....................................................................................................................140  13.10 Indebtedness ...............................................................................................................140  13.11 Margin Stock; Speculation .........................................................................................142  13.12 Restrictive Agreements ..............................................................................................142  13.13 Permitted Acquisitions ...............................................................................................143  13.14 Accounting Changes; Fiscal Year ..............................................................................145  13.15 Excluded Tax Credit Investment Subsidiaries ...........................................................145  13.16 Dual Subsidiaries .......................................................................................................145  13.17 Additional Credit Support Documentation. ...............................................................146  ARTICLE 14 DEFAULT AND REMEDIES ..............................................................................146  14.1 Events of Default .......................................................................................................146  14.2 Consequences of Default; Rights and Remedies.  Time is of the essence of this  Agreement. .................................................................................................................149  14.3 Application of Payments ............................................................................................150  ARTICLE 15 HAZARDOUS SUBSTANCES ...........................................................................150  15.1 Representations and Warranties .................................................................................151  15.2 Activities ....................................................................................................................151  15.3 Inspections .................................................................................................................151  15.4 Release and Indemnity ...............................................................................................151  15.5 Survival ......................................................................................................................151  ARTICLE 16 THE AGENT ........................................................................................................151  16.1 Appointment; Nature of Relationship ........................................................................151  16.2 Powers ........................................................................................................................152  16.3 General Immunity ......................................................................................................152  16.4 No Responsibility for Loans, Recitals, Etc. ...............................................................152  16.5 Action on Instructions of Lenders..............................................................................152  16.6 Employment of the Agents and Counsel ...................................................................153  16.7 Reliance on Documents; Counsel ..............................................................................153  16.8 Reimbursement and Indemnification .........................................................................153  16.9 Notice of Event of Default .........................................................................................154  16.10 Rights as a Lender ......................................................................................................154  16.11 Lender Credit Decision, Legal Representation. .........................................................154  16.12 Successor Agent .........................................................................................................154  16.13 Agent’s Fees...............................................................................................................155  16.14 Delegation to Affiliates ..............................................................................................155  16.15 Execution of Collateral Documents ...........................................................................155  16.16 Collateral Releases .....................................................................................................155  16.17 No Advisory or Fiduciary Responsibility ..................................................................156  16.18 Co-Documentation Agents, Syndication Agent, etc. .................................................156  16.19 Certain ERISA Matters. .............................................................................................156  ARTICLE 17 MISCELLANEOUS .............................................................................................157  17.1 Expenses; Indemnification .........................................................................................157  17.2 Successors and Assigns..............................................................................................159  17.3 Participations..............................................................................................................159  17.4 Assignments. ..............................................................................................................160  

 

  v  17.5 Register ......................................................................................................................162  17.6 Dissemination of Information ....................................................................................162  17.7 Ratable Payments .......................................................................................................162  17.8 Setoff ..........................................................................................................................162  17.9 Amendments and Waivers. ........................................................................................163  17.10 Waiver; Cumulative Remedies ..................................................................................164  17.11 Notices. ......................................................................................................................164  17.12 Integration; Conflicting Terms ..................................................................................165  17.13 Governing Law ..........................................................................................................166  17.14 Consent To Jurisdiction .............................................................................................166  17.15 Documents Satisfactory to the Agent and Required Lenders ....................................166  17.16 Exhibits ......................................................................................................................166  17.17 Headings ....................................................................................................................166  17.18 Nonliability of Lenders ..............................................................................................167  17.19 Survival of Representations .......................................................................................167  17.20 Governmental Regulation ..........................................................................................167  17.21 Counterparts ...............................................................................................................167  17.22 Severability ................................................................................................................167  17.23 Construction ...............................................................................................................167  17.24 USA Patriot Act Notification .....................................................................................168  17.25 Nonreliance ................................................................................................................168  17.26 Confidentiality ...........................................................................................................168  17.27 Ford Letter Agreement ...............................................................................................169  17.28 Waiver of Jury Trial ...................................................................................................169  17.29 Disclosure ..................................................................................................................169  17.30 Acknowledgement and Consent to Bail-In of EEA Financial Institutions ................169  17.31 Amendment and Restatement ....................................................................................170  17.32 Acknowledgement Regarding any Supported QFCs. ................................................170      SCHEDULE 1 – COMMITMENTS  SCHEDULE 2 – DUAL SUBSIDIARIES   PRICING SCHEDULE  DISCLOSURE SCHEDULE  EXHIBIT A – COMPLIANCE CERTIFICATE  EXHIBIT B-1 – USED VEHICLE BORROWING BASE CERTIFICATE  EXHIBIT B-2 – SERVICE LOANER VEHICLE BORROWING BASE CERTIFICATE  EXHIBIT C – REVOLVING LOAN BORROWING BASE CERTIFICATE  EXHIBIT D – ASSIGNMENT AGREEMENT  EXHIBIT E –  PLEDGE AGREEMENT  EXHIBIT F –  SECURITY AGREEMENT  EXHIBIT G – COMMERCIAL GUARANTY  EXHIBIT H-1 – LOAN PARTY TERMINATION AGREEMENT  EXHIBIT H-2 – SILO SUBSIDIARY TERMINATION AGREEMENT  EXHIBIT I –   BORROWER JOINDER AGREEMENT  EXHIBIT J –   GUARANTOR JOINDER AGREEMENT  

 

  vi  EXHIBIT K –  EXISTING SUBSIDIARY JOINDER AGREEMENT  EXHIBIT L –  BORROWER TERMINATION AGREEMENT  EXHIBIT M – ADDITIONAL LENDER AGREEMENT  EXHIBIT N –  INCREASING LENDER AGREEMENT  EXHIBIT O –  REALLOCATION REQUEST      

 

   1  FOURTH AMENDED AND RESTATED LOAN AGREEMENT  This Fourth Amended and Restated Loan Agreement (“Agreement”) is entered into as of  April 29, 2021, among Lithia Motors, Inc., an Oregon corporation (the “Company”), each of the  Subsidiaries of the Company listed on the signature pages of this Agreement or which hereafter  becomes a Borrower hereunder, each financial institution listed on the signature pages of this  Agreement or which hereafter becomes a party hereto (each a “Lender” and any two or more,  “Lenders”); and U.S. Bank National Association (“U.S. Bank”), as the Agent for the Lenders.  RECITALS  A. The Company, certain of its Subsidiaries, the lenders from time to time parties thereto, and  the Agent, are party to that certain Third Amended and Restated Loan Agreement dated as of  December 9, 2019 (as amended, restated, supplemented or otherwise modified prior to the date  hereof, the “Existing Loan Agreement”), pursuant to which such lenders under the Existing Loan  Agreement extended a revolving credit facility to the Company and certain of its Subsidiaries,  such lenders extended a new vehicle floorplan line of credit to the New Vehicle Floorplan  Borrowers, such lenders extended a used vehicle floorplan line of credit to the Company, and such  lenders extended a service loaner vehicle floorplan line of credit to the Company.  B. The Company and the other Borrowers have asked the Lenders and the Agent to further  amend and restate the Existing Loan Agreement to (a) increase the “Aggregate Commitment”  specified in the Existing Loan Agreement from $2,800,000,000 to $3,750,000,000, and (b) make  such additional amendments and modifications to the terms and conditions of the Existing Loan  Agreement as are more specifically set forth herein.  In consideration of the mutual covenants and agreements set forth herein and for other valuable  consideration, the parties hereto agree that the Existing Loan Agreement is amended and restated  in its entirety as follows:  ARTICLE 1   DEFINITIONS AND INTERPRETIVE PROVISIONS  1.1 Defined Terms.  As used in this Agreement, the following terms shall have the  following meanings:  “Access Laws” means the Americans With Disabilities Act of 1990; the Fair Housing  Amendments Act of 1988; all other federal, state and local laws or ordinances related to disabled  access; and all statutes, rules, regulations, ordinances, orders of governmental bodies and  regulatory agencies and orders and decrees of any court adopted, enacted or issued with respect  thereto; all as now existing or hereafter amended or adopted.  “Acquisition” has the meaning set forth in Section 13.13.  “Acquisition Subsidiary” means any Subsidiary to be acquired in an Acquisition.  “Additional Commitment Lender” has the meaning set forth in Section 6.18.4.  

 

   2  “Additional Lender” has the meaning set forth in Section 6.12.2.  “Advance” means a New Vehicle Floorplan Advance, Used Vehicle Floorplan Advance,  Service Loaner Vehicle Floorplan Advance, Revolving Loan Advance, or (unless otherwise  expressly provided), a Swing Line Loan.  “Affected Lender” has the meaning set forth in Section 6.15.   “Affiliate” means with respect to any Person (a) each other Person that, directly or  indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, five  percent (5%) or more of the stock or other ownership interests having ordinary voting power of  such Person; (b) each Person that Controls, is Controlled by or is under common Control with such  Person or any Affiliate of such Person; and (c) each of such Person’s executive officers, directors,  joint venturers, members and general partners.  “Agent” or “Administrative Agent” means U.S. Bank in its capacity as contractual  representative of the Lenders pursuant to Article 16, and not in its individual capacity as a Lender,  and any successor Agent appointed pursuant to Article 16.  “Aggregate Commitment” means, at any time, the sum of the Aggregate New Vehicle  Floorplan Commitment, plus the Aggregate Used Vehicle Floorplan Commitment, plus the  Aggregate Service Loaner Vehicle Floorplan Commitment, plus the Aggregate Revolving Loan  Commitment, as adjusted from time to time pursuant to the terms hereof, provided that, except as  provided in Section 6.12, the Aggregate Commitment shall not be more than $3,750,000,000.00.  “Aggregate Lender Commitment” means, for any Lender, the sum of such Lender’s New  Vehicle Floorplan Commitment, Used Vehicle Floorplan Commitment, Service Loaner Vehicle  Floorplan Commitment, and Revolving Loan Commitment.  “Aggregate New Vehicle Floorplan Commitment” means, at any time, the aggregate of  the New Vehicle Floorplan Commitments of all Lenders at such time.  “Aggregate Outstanding Credit Exposure” means, at any time, the aggregate of the  Outstanding Credit Exposure of all Lenders at such time.  “Aggregate Outstanding New Vehicle Floorplan Exposure” means, at any time, the  aggregate of the Outstanding New Vehicle Floorplan Exposure of all Lenders at such time.  “Aggregate Outstanding Revolving Loan Exposure” means, at any time, the aggregate  of the Outstanding Revolving Loan Exposure of all Lenders at such time.  “Aggregate Outstanding Service Loaner Vehicle Floorplan Exposure” means, at any  time, the aggregate of the Outstanding Service Loaner Vehicle Floorplan Exposure of all Lenders  at such time.  “Aggregate Outstanding Used Vehicle Floorplan Exposure” means, at any time, the  aggregate of the Outstanding Used Vehicle Floorplan Exposure of all Lenders at such time.  

 

   3  “Aggregate Revolving Loan Commitment” means, at any time, the aggregate of the  Revolving Loan Commitments of all Lenders at such time; provided that the Aggregate Revolving  Loan Commitment shall not at any time be more than 20.00% of the amount of the Aggregate  Commitment at such time.  “Aggregate Service Loaner Vehicle Floorplan Commitment” means, at any time, the  aggregate of the Service Loaner Vehicle Floorplan Commitments of all Lenders at such time;  provided that the Aggregate Service Loaner Vehicle Floorplan Commitment shall not at any time  be more than 3.0% of the amount of the Aggregate Commitment at such time.   “Aggregate Used Vehicle Floorplan Commitment” means, at any time, the aggregate of  the Used Vehicle Floorplan Commitments of all Lenders at such time; provided that the Aggregate  Used Vehicle Floorplan Commitment shall not at any time be more than 20.00% of the amount of  the Aggregate Commitment at such time.    “Agreement” has the meaning set forth in the introductory paragraph.  “Alternate Base Rate” means, for any day, a rate of interest per annum equal to the highest  of (a) the Prime Rate for such day, (b) the sum of the Federal Funds Effective Rate for such day  plus .50% per annum and (c) the Eurocurrency Rate in effect for such day plus 1.50%, provided  that, for the avoidance of doubt, the Eurocurrency Rate for any day shall be based on the rate  reported by the applicable financial information service at approximately 11:00 a.m. London time  on such day.  “Alternate Base Rate Margin (New Vehicle)” has the meaning set forth in the Pricing  Schedule.  “Alternate Base Rate Margin (Revolving)” has the meaning set forth in the Pricing  Schedule.  “Alternate Base Rate Margin (Service Loaner Vehicle)” has the meaning set forth in the  Pricing Schedule.  “Alternate Base Rate Margin (Used Vehicle)” has the meaning set forth in the Pricing  Schedule.  “Anniversary Date” means each anniversary of the Closing Date.  “Anti-Corruption Laws” means the Foreign Corrupt Practices Act of 1977, as amended,  and the rules and regulations thereunder, and any other anti-corruption law applicable to any  Borrower and its Subsidiaries.  “Applicable Law” means all applicable provisions and requirements of (a) all  constitutions, statutes, ordinances, rules, regulations, standards, orders, and directives of any  Governmental Bodies, (b) Governmental Approvals, and (c) orders, decisions, decrees, judgments,  injunctions, and writs of all courts and arbitrators, whether such Applicable Laws presently exist,  or are modified, promulgated, or implemented after the date hereof.  

 

   4  “Appraisal” means an appraisal of real property which is (a) ordered by the Agent, (b)  prepared by an appraiser satisfactory to the Agent, (c) in compliance with all federal and state  standards for appraisals and all regulatory requirements, (d) reviewed by the Agent, and (e) in form  and substance satisfactory to the Agent in its sole and absolute discretion.  “Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b)  an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a  Lender.  “Assignee” has the meaning set forth in Section 17.4.  “Assignment Agreement” means an agreement substantially in the form attached as  Exhibit D.  “Attorney Costs” means and includes all reasonable fees and disbursements of any law  firm or retained counsel and of any in-house or internal counsel whether or not litigation or  arbitration is commenced, and if litigation or arbitration is commenced shall include fees and  disbursements incurred at trial, in any appellate proceeding, bankruptcy proceeding (including  efforts to modify or vacate any automatic stay or injunction) or receivership, and post-judgment  attorney fees incurred in enforcing any judgment.  “Available Tenor” means, as of any date of determination and with respect to the then- current Benchmark, as applicable, any tenor for such Benchmark or payment period for interest  calculated with reference to such Benchmark, as applicable, that is or may be used for determining  the length of an Interest Period pursuant to this Agreement as of such date and not including, for  the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of  “Interest Period” pursuant to clause (v) of Section 7.3.1(b).  “Bail-In Action” means 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.  “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 which is described  in the EU Bail-In Legislation Schedule.  “Benchmark” means, initially, the Eurocurrency Base Rate; provided that if a Benchmark  Transition Event, a Term SOFR Transition Event, or an Early Opt-in Election, as applicable, and its  related Benchmark Replacement Date have occurred with respect to the Eurocurrency Base Rate or  the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to  the extent that such Benchmark Replacement has become effective pursuant to Section 7.3.1(b).    “Benchmark Replacement” means, for any Available Tenor, the first alternative set forth  in the order below that can be determined by, and is administratively feasible for, the Agent for  the applicable Benchmark Replacement Date:  (1) the sum of: (a) Term SOFR and (b) the related Benchmark  

 

   5  Replacement Adjustment;  (2) the sum of: (a) Daily Simple SOFR and (b) the related Benchmark  Replacement Adjustment;  (3) the sum of: (a) the alternate benchmark rate that has been selected  by the Agent and the Company as the replacement for the then-current Benchmark  for the applicable Corresponding Tenor giving due consideration to (i) any selection  or recommendation of a replacement benchmark rate or the mechanism for  determining such a rate by the Relevant Governmental Body or (ii) any evolving or  then-prevailing market convention for determining a benchmark rate as a  replacement for the then-current Benchmark for U.S. dollar-denominated  syndicated credit facilities at such time and (b) the related Benchmark Replacement  Adjustment;  provided that, in the case of clause (1), such Unadjusted Benchmark Replacement  is displayed on a screen or other information service that publishes such rate from time to  time as selected by the Agent in its reasonable discretion; provided further that,  notwithstanding anything to the contrary in this Agreement or in any other Loan Document,  upon the occurrence of a Term SOFR Transition Event, and the delivery of a Term SOFR  Notice, on the applicable Benchmark Replacement Date the “Benchmark Replacement”  shall revert to and shall be deemed to be the sum of (a) Term SOFR and (b) the related  Benchmark Replacement Adjustment, as set forth in clause (1) of this definition (subject  to the first proviso above). If the Benchmark Replacement as determined pursuant to clause  (1), (2) or (3) above would be less than the Floor, the Benchmark Replacement will be  deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.  “Benchmark Replacement Adjustment” means, with respect to any replacement of the  then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest  Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:  (1) for purposes of clauses (1) and (2) of the definition of “Benchmark  Replacement,” the first alternative set forth in the order below that can be  determined by the Agent:  (a)  the spread adjustment, or method for calculating or  determining such spread adjustment, (which may be a positive or negative  value or zero) as of the Reference Time such Benchmark Replacement is  first set for such Interest Period that has been selected or recommended by  the Relevant Governmental Body for the replacement of such Benchmark  with the applicable Unadjusted Benchmark Replacement for the applicable  Corresponding Tenor;  (b) the spread adjustment (which may be a positive or negative  value or zero) as of the Reference Time such Benchmark Replacement is  first set for such Interest Period that would apply to the fallback rate for a  derivative transaction referencing the ISDA Definitions to be effective upon  an index cessation event with respect to such Benchmark for the applicable  Corresponding Tenor; and  

 

   6  (2) for purposes of clause (3) of the definition of “Benchmark  Replacement,” the spread adjustment, or method for calculating or determining such  spread adjustment, (which may be a positive or negative value or zero) that has been  selected by the Agent and the Company for the applicable Corresponding Tenor  giving due consideration to (i) any selection or recommendation of a spread  adjustment, or method for calculating or determining such spread adjustment, for  the replacement of such Benchmark with the applicable Unadjusted Benchmark  Replacement by the Relevant Governmental Body on the applicable Benchmark  Replacement Date or (ii) any evolving or then-prevailing market convention for  determining a spread adjustment, or method for calculating or determining such  spread adjustment, for the replacement of such Benchmark with the applicable  Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit  facilities;  provided that, in the case of clause (1) above, such adjustment is displayed on a  screen or other information service that publishes such Benchmark Replacement  Adjustment from time to time as selected by the Agent in its reasonable discretion.  “Benchmark Replacement Conforming Changes” means, with respect to any  Benchmark Replacement, any technical, administrative or operational changes (including changes  to the definition of “Advance” and “Eurocurrency Loans,” the definition of “Alternate Base Rate,”  the definition of “Business Day,” the definition of “Interest Period,” timing and frequency of  determining rates and making payments of interest, timing of borrowing requests or prepayment,  conversion or continuation notices, length of lookback periods, the applicability of breakage  provisions, and other technical, administrative or operational matters) that the Agent decides may  be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to  permit the administration thereof by the Agent in a manner substantially consistent with market  practice (or, if the Agent decides that adoption of any portion of such market practice is not  administratively feasible or if the Agent determines that no market practice for the administration  of such Benchmark Replacement exists, in such other manner of administration as the Agent  decides is reasonably necessary in connection with the administration of this Agreement and the  other Loan Documents).  “Benchmark Replacement Date” means the earliest to occur of the following events with  respect to the then-current Benchmark:  (1) in the case of clause (1) or (2) of the definition of “Benchmark  Transition Event,” the later of (a) the date of the public statement or publication of  information referenced therein and (b) the date on which the administrator of such  Benchmark (or the published component used in the calculation thereof)  permanently or indefinitely ceases to provide all Available Tenors of such  Benchmark (or such component thereof);  (2) in the case of clause (3) of the definition of “Benchmark Transition  Event,” the date of the public statement or publication of information referenced  therein;  (3) in the case of a Term SOFR Transition Event, the date that is 30  

 

   7  days after the date a Term SOFR Notice is provided to the Lenders and the  Company so long as the Agent has not received, by such time, written notice of  objection to such Term SOFR Notice from the Borrower; or  (4) in the case of an Early Opt-in Election, the sixth Business Day after  the date notice of such Early Opt-in Election is provided to the Lenders, so long as  the Agent has not received, by 5:00 p.m. (New York City time) on the fifth Business  Day after the date notice of such Early Opt-in Election is provided to the Lenders,  written notice of objection to such Early Opt-in Election from Lenders comprising  the Required Lenders.  For the avoidance of doubt, (i) if the event giving rise to the Benchmark  Replacement Date occurs on the same day as, but earlier than, the Reference Time in  respect of any determination, the Benchmark Replacement Date will be deemed to have  occurred prior to the Reference Time for such determination and (ii) the “Benchmark  Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with  respect to any Benchmark upon the occurrence of the applicable event or events set forth  therein with respect to all then-current Available Tenors of such Benchmark (or the  published component used in the calculation thereof).  “Benchmark Transition Event” means the occurrence of one or more of the following  events with respect to the then-current Benchmark:  (1) a public statement or publication of information by or on behalf of  the administrator of such Benchmark (or the published component used in the  calculation thereof) announcing that such administrator has ceased or will cease to  provide all Available Tenors of such Benchmark (or such component thereof),  permanently or indefinitely, provided that, at the time of such statement or  publication, there is no successor administrator that will continue to provide any  Available Tenor of such Benchmark (or such component thereof);  (2) a public statement or publication of information by the regulatory  supervisor for the administrator of such Benchmark (or the published component  used in the calculation thereof), the Board of Governors of the Federal Reserve  System, the Federal Reserve Bank of New York, an insolvency official with  jurisdiction over the administrator for such Benchmark (or such component), a  resolution authority with jurisdiction over the administrator for such Benchmark (or  such component) or a court or an entity with similar insolvency or resolution  authority over the administrator for such Benchmark (or such component), which  states that the administrator of such Benchmark (or such component) has ceased or  will cease to provide all Available Tenors of such Benchmark (or such component  thereof) permanently or indefinitely, provided that, at the time of such statement or  publication, there is no successor administrator that will continue to provide any  Available Tenor of such Benchmark (or such component thereof); or  (3) a public statement or publication of information by the regulatory  supervisor for the administrator of such Benchmark (or the published component  used in the calculation thereof) announcing that all Available Tenors of such  

 

   8  Benchmark (or such component thereof) are no longer representative.  For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to  have occurred with respect to any Benchmark if a public statement or publication of  information set forth above has occurred with respect to each then-current Available Tenor  of such Benchmark (or the published component used in the calculation thereof).  “Benchmark Unavailability Period” means the period (if any) (x) beginning at the time  that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred  if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all  purposes hereunder and under any Loan Document in accordance with Section 7.3.1 and (y) ending  at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes  hereunder and under any Loan Document in accordance with Section 7.3.1.   “Beneficial Ownership Certification” means a certification regarding beneficial  ownership as required by the Beneficial Ownership Regulation.    “Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.  “Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is  subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or  (c) any person whose assets include (for purposes of ERISA Section 3(42) or otherwise for  purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit  plan” or “plan.”  “Borrower” means a New Vehicle Floorplan Borrower, the Used Vehicle Floorplan  Borrower, the Service Loaner Vehicle Floorplan Borrower or the Revolving Loan Borrower and  “Borrowers” means any two or more of them.  “Borrower Joinder Agreement” means an agreement substantially in the form attached  hereto as Exhibit I.  “Borrower Termination Agreement” means an agreement substantially in the form  attached hereto as Exhibit L.  “Business Day” means (a) with respect to any borrowing, payment or rate determination,  a day (other than a Saturday or Sunday) on which banks generally are open in New York City,  New York or Seattle, Washington for the conduct of substantially all of their commercial lending  activities, interbank wire transfers can be made on the Fedwire system and dealings in Dollars are  carried on in the London interbank market and (b) for all other purposes, a day (other than a  Saturday or Sunday) on which banks generally are open in New York City, New York for the  conduct of substantially all of their commercial lending activities and interbank wire transfers can  be made on the Fedwire system.  “Canadian Dealership” means a Dealership whose primary business is the retail sales or  retail sale and lease of new and/or used automobiles and trucks in Canada.  

 

   9  “Canadian Subsidiary” means any Subsidiary of the Company organized under the laws  of Canada or any province in Canada.  “Capitalized Lease” of a Person means any lease of property by such Person as lessee  which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP.  “Capitalized Lease Obligations” of a Person means the amount of the obligations of such  Person under Capitalized Leases which would be shown as a liability on a balance sheet of such  Person prepared in accordance with GAAP.  “Cash Collateralize” means to deposit in the LC Collateral Account or to pledge and  deposit with or deliver to the Agent, for the benefit of one or more of the LC Issuer or Lenders, as  collateral for the LC Obligations or obligations of Lenders to fund participations in respect of LC  Obligations, cash or deposit account balances or, if the Agent and the LC Issuer shall agree in their  sole discretion, other credit support, in each case pursuant to documentation in form and substance  satisfactory to the Agent and the LC Issuer.   “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the  proceeds of such cash collateral and other credit support.  “Cash Equivalent Investments” means (i) short-term obligations of, or fully guaranteed  by, the United States of America, (ii) commercial paper rated A-1 or better by S&P or P-1 or better  by Moody’s, (iii) demand deposit accounts maintained in the ordinary course of business, and (iv)  certificates of deposit issued by and time deposits with commercial banks (whether domestic or  foreign) having capital and surplus in excess of $500,000,000; provided in each case that the same  provides for payment of both principal and interest (and not principal alone or interest alone) and  is not subject to any contingency regarding the payment of principal or interest, (v) shares of  money market mutual funds that are rated at least “AAAm” or “AAAG” by S&P or “P-1” or better  by Moody’s, and (vi) other cash equivalent investments approved in writing by the Agent.  “Change in Control” means: (i) the acquisition by any Person, or two or more Persons  acting in concert, in either case other than Lithia Holding Company, L.L.C. and the Principal, of  beneficial ownership (within the meaning of Rule 13d-3 of the U.S. Securities and Exchange  Commission under the Securities Exchange Act of 1934) of 35% or more of the outstanding shares  of voting stock of the Company on a fully diluted basis; (ii) within any twelve-month period,  occupation of a majority of the seats (other than vacant seats) on the board of directors of the  Company by Persons who were neither (x) nominated by the board of directors of the Company  nor (y) appointed or approved by directors so nominated; (iii) the Company consolidates with or  merges into another Person or conveys, transfers or leases all or substantially all of its property to  any Person, or any Person consolidates with or merges into the Company, in either event pursuant  to a transaction in which the outstanding capital stock of the Company is reclassified or changed  into or exchanged for (A) cash or Cash Equivalent Investments or (B) securities, and the holders  of the capital stock in the Company immediately prior to such transaction do not, as a result of  such transaction, own, directly or indirectly, more than 51% of the combined voting power of the  Company’s capital stock or the capital stock of its successor entity in such transaction or (iv) a  “change of control” or “change of ownership” (or any term substantially equivalent to any of the  foregoing phrases in this clause (iv)) occurs, in each case, as such term or phrase is defined in any  

 

   10  indenture evidencing or relating to any debt securities of the Company or any Subsidiary thereof  (other than a Canadian Subsidiary or an Excluded Subsidiary) issued in a transaction registered  with the SEC or issued to qualified institutional buyers for resale pursuant to Rule 144A of the  Securities Act.  “Change in Law” has the meaning set forth in Section 7.1.  “Claims” has the meaning set forth in Section 5.12.  “Closing Date” means April 29, 2021, the date on which all conditions precedent in  Section 9.1 are satisfied.  “Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise  modified from time to time or any successor federal income tax statute or code and the regulations  and published interpretations promulgated thereunder.  “Collateral” has the meaning set forth in Section 8.1.1.  “Collateral Documents” means and includes the Security Agreement, the Pledge  Agreement, and all deeds of trust, assignments, mortgages, security agreements, bank account  control agreements, and other documents executed or delivered to the Agent by any Person at any  time to evidence and/or perfect security interests in the Collateral.  “Commitment” means, as to any Lender, such Lender’s Revolving Loan Commitment,  New Vehicle Floorplan Commitment, Used Vehicle Floorplan Commitment, Service Loaner  Vehicle Floorplan Commitment, Letter of Credit Commitment, Revolving Swing Line  Commitment, New Vehicle Swing Line Commitment, Used Vehicle Swing Line Commitment, or  Service Loaner Vehicle Floorplan Swing Line Commitment.  “Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. Section 1 et  seq.), as amended from time to time, and any successor statute.  “Company” means Lithia Motors, Inc., an Oregon corporation.  “Compliance Certificate” means a certificate substantially in the form attached as Exhibit  A, or in such other form as is acceptable to the Agent.  “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.  “Contingent Obligation” means any guarantee of Indebtedness of any other Person or any  agreement to maintain the net worth, working capital or other financial condition of any other  Person in respect of such other Person’s Indebtedness, whether direct, indirect or contingent,  including, without limitation, any purchase or repurchase agreement, comfort letter, or keep-well,  take-or-pay, through-put or other arrangement of whatever nature having the effect of assuring or  holding harmless any Person against loss with respect to any Indebtedness of such other Person;  provided, however, that the term “Contingent Obligation” shall not include endorsements of  

 

   11  instruments for deposit or collection in the ordinary course of business.  The amount of any  Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount  of the primary obligation in respect of which such Contingent Obligation is made or, if not stated  or determinable, the maximum reasonably anticipated liability in respect thereof as determined in  good faith by the Person subject to such obligation.  “Control” means the possession, directly or indirectly, of the power to direct or cause the  direction of the management and policies of a Person, whether through the ownership of voting  securities, by contract or otherwise and “Controlled by” shall have the concomitant meaning.  For  purposes of determining whether a Minority Dealer is a Minority Dealer Affiliate or a Minority  Dealer Subsidiary, “Control” shall be established when (i) a Loan Party is the manager of the  Minority Dealer or (ii) the manager of the Minority Dealer has delegated to a Loan Party all or a  substantial portion of such manager’s power and authority under the Minority Dealer’s operating  agreement, bylaws, limited liability company agreement or other applicable organizational  documents, and, in the case of clause (i) or (ii), such Minority Dealer is reflected in the audited,  consolidated financial statements of the Company.   “Controlled Group” means all members of a controlled group of corporations or other  business entities and all trades or businesses (whether or not incorporated) under common control  which, together with any Loan Party or any of its Subsidiaries, are treated as a single employer  under Section 414 of the Code.  “Corresponding Tenor” with respect to any Available Tenor means, as applicable, either  a tenor (including overnight) or an interest payment period having approximately the same length  (disregarding business day adjustment) as such Available Tenor.  “Credit Extension” means the making of an Advance or the issuance of a Letter of Credit  hereunder.  “Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which  will include a lookback) being established by the Agent in accordance with the conventions for this  rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple  SOFR” for syndicated business loans; provided, that if the Agent decides that any such convention  is not administratively feasible for the Agent, then the Agent may establish another convention in its  reasonable discretion.  “DFC” means Driveway Finance Corporation, an Oregon corporation.  “DFC Indebtedness” has the meaning set forth in Section 13.10(r).  “DFC Subsidiary” means any of (a) DFC and (b) each Subsidiary of DFC.  “Dealership” means a Subsidiary of the Company whose primary business is the retail  sales or retail sale and lease of new and/or used automobiles and trucks in the United States of  America or in Canada.  “Dealership Loan Limit” has the meaning set forth in Section 2.3.1(b).   

 

   12  “Dealership Sublimit” has the meaning set forth in Section 2.3.1(b).  “Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and  all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors,  moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws  of the United States or other applicable jurisdictions from time to time in effect.  “Deemed Sale” has the meaning set forth in Section 2.3.3(c).  “Default” means any Event of Default or any event which with the giving of notice or the  passage of time, or both, would constitute an Event of Default.  “Defaulting Lender” means, subject to 6.14.2, any Lender that (a) has failed to (i) fund  all or any portion of its Loans within two (2) Business Days after the date such Loans were required  to be funded hereunder unless such Lender notifies the Agent and Company 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 waived, or (ii) pay to the Agent,  the LC Issuer, 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 Line Loans)  within two (2) Business Days after the date when due, (b) has notified any Borrower, the Agent,  the LC Issuer or the Swing Line Lender in writing that it does not intend to comply with its funding  obligations hereunder, 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 applicable default, shall be specifically identified in such writing or  public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written  request by the Agent or the Company, to confirm in writing to the Agent and the Company that it  will comply with its prospective funding obligations hereunder (provided that such Lender shall  cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written  confirmation by the Agent and the Company), 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 (other than an  Undisclosed Administration), 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 Agent that a Lender is a Defaulting  Lender under any one or more of clauses (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 6.14.2) upon delivery of written notice of such determination to the Company, the LC  Issuer, the Swing Line Lender and each Lender.  

 

   13  “Default Rate” has the meaning set forth in Section 6.1.2.  “Demo” means any New Vehicle (except that any mileage limitations included in the  definition for a particular type of Vehicle shall not be applicable to Demos) that is used by a  Dealership as a demonstration unit.  “Disclosure Schedule” means the Disclosure Schedule attached hereto.   “Dollar” or “$” means lawful money of the United States of America.   “Dual Subsidiary” means a Subsidiary which has entered into separate floorplan financing  arrangements with at least one Dual Subsidiary Lender. The Dual Subsidiaries as of the Closing  Date are set forth on Schedule 2. The Company may designate Subsidiaries as Dual Subsidiaries  from time to time in accordance with Sections 6.19 and 13.16.  “Dual Subsidiary Financing Commencement Date” means, with respect to any Dual  Subsidiary, the date that such Dual Subsidiary begins to finance new Vehicles of any Removed  Franchise or used Vehicles through Permitted Dual Subsidiary Indebtedness as permitted by  Sections 6.19 and 13.16.  “Dual Subsidiary Lender” has the meaning set forth in the definition of “Permitted Dual  Subsidiary Indebtedness”.  “Early Opt-in Election” means, if the then-current Benchmark is the Eurocurrency Base  Rate, the occurrence of:  (1) a notification by the Agent to each of the other parties hereto that at least five  currently outstanding U.S. dollar-denominated syndicated credit facilities at such time  contain (as a result of amendment or as originally executed) a SOFR-based rate (including  SOFR, a term SOFR or any other rate based upon SOFR) as the then-current benchmark  rate (and such syndicated credit facilities are identified in such notice and are publicly  available for review), and   (2) the joint election by the Agent and the Company to trigger a fallback from the  Eurocurrency Base Rate and the provision by the Agent of written notice of such election to  the Lenders.     “EBITDAR” has the meaning set forth in Section 11.1.2.  “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 clause (a) of this definition, or (c) any financial institution established in an EEA  Member Country which is a subsidiary of an institution described in clauses (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.  

 

   14  “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 Account” means amounts owed by a customer to a Dealership for parts or  accessories sold to such customer or for services performed for such customer, in which the Agent  has a perfected first priority security interest, which is due and payable in full not more than 90  days after date of sale or invoice, and which is not more than 60 days past due.  “Eligible Assignee” means (a) a Lender; (b) an Approved Fund; (c) a commercial bank  organized under the laws of the United States, or any state thereof, and having total assets in excess  of $3,000,000,000, calculated in accordance with the accounting principles prescribed by the  regulatory authority applicable to such bank in its jurisdiction of organization; (d) a commercial  bank organized under the laws of any other country that is a member of the OECD, or a political  subdivision of any such country, and having total assets in excess of $3,000,000,000, calculated in  accordance with the accounting principles prescribed by the regulatory authority applicable to such  bank in its jurisdiction of organization, so long as such bank is acting through a branch or agency  located in the country in which it is organized or another country that is described in this clause  (d); or (e) the central bank of any country that is a member of the OECD; provided, however, that  neither the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.  “Eligible New Vehicle” means a New Vehicle owned by a New Vehicle Floorplan  Dealership which is an Eligible Vehicle and in which the Agent has a perfected first priority  security interest.  “Eligible Real Property” means Real Property owned by any Real Estate Subsidiary and  which satisfies all requirements set forth in Section 9.4 and which is included in the Revolving  Loan Borrowing Base.  “Eligible Receivables” means amounts owing to the Company or a Subsidiary in which  the Agent has a perfected first priority security interest, which are (a) Eligible Accounts; (b)  commissions owed to the Dealerships by financial institutions or finance companies which are not  Affiliates of any Loan Party in connection with the purchase by such institutions of retail  installment contracts and leases arising from the sale or lease of New Vehicles and Used Vehicles  (finance receivables), which have not remained unpaid for more than 90 days, or (c) amounts owed  to the Company or a Dealership by a manufacturer of Vehicles as incentive payments, rebates,  factory credits and the like, but excluding factory holdbacks (factory receivables), which have not  remained unpaid for more than 90 days, subject to the exclusion by the Agent of such amounts  which are owed to the Company or a Dealership by a manufacturer which has commenced or had  commenced against it, any proceeding under any present or future bankruptcy law.  “Eligible Service Loaner Vehicle” means a Service Loaner Vehicle  which: (a) is owned  by a Dealership (other than a Silo Subsidiary), (b) is free of any Liens other than in favor of the  Agent, except as otherwise agreed by the Agent in writing and (c) as of any date of determination,  was not included in the Service Loaner Vehicle Borrowing Base on any date more than fifteen (15)  months prior to such date of determination.  

 

   15   “Eligible Vehicle” means an automobile or truck with a gross vehicle weight of no more  than 16,000 pounds, which satisfies the following requirements:  (a) The vehicle is owned by a Dealership, subject to a perfected security interest in  favor of the Agent, and free of any title defects, liens, security interests, leases, bailments,  consignments or other interests of any Person other than Agent, except as agreed by the Agent in  writing.  (b) Unless the vehicle is a Demo, or is in transit from the seller, it is located at locations  which the Dealerships disclosed to the Agent and which are acceptable to the Agent.  If the vehicle  is in transit from a seller, then upon receipt by a Dealership it will be located at one of such  locations.  (c) The vehicle is held for sale or lease in the ordinary course of a Dealership’s  business.  (d) The vehicle is undamaged and of good and merchantable quality.  (e) The vehicle is otherwise acceptable to the Agent.  “Environmental Laws” means any and all federal, state, local and foreign statutes, laws,  judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions,  permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions  relating to (a) Hazardous Substances, (b) the protection of the environment, (c) personal injury or  property damage relating to the release or discharge of Hazardous Materials, (d) emissions,  discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface  water, ground water or land, or (e) the manufacture, processing, distribution, use, treatment,  storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or  wastes or the clean-up or other remediation thereof, all as now existing or hereafter amended or  adopted.  “Environmental Reports” has the meaning set forth in Section 9.4.2.  “Equity Interests” means shares of capital stock, partnership interests, membership  interests in a limited liability company, beneficial interests in a trust or other equity ownership  interests in a Person, and any warrants, options or other rights entitling the holder thereof to  purchase or acquire any such equity interest.  “ERISA” means the Employee Retirement Income Security Act of 1974.  “ERISA Affiliate” means, as applied to a Loan Party, any trade or business (whether or  not incorporated) that, together with such Loan Party, is treated as a single employer under Section  414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the  Code, is treated as a single employer under Section 414 of the Code.  “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA  or the regulations issued thereunder with respect to a Plan (other than an event for which the 30- day notice period is waived); (b) the failure with respect to any Plan to satisfy the “minimum  

 

   16  funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or  not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an  application for a waiver of the minimum funding standard with respect to any Plan; (d) the  incurrence by any Loan Party or any of its ERISA Affiliates of any liability under Title IV of  ERISA with respect to any Plan (other than premiums due and not delinquent under Section 4007  of ERISA); (e) the receipt by any Loan Party or any ERISA Affiliate from the PBGC or a plan  administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a  trustee to administer any Plan; (f) the incurrence by any Loan Party or any of its ERISA Affiliates  of any liability with respect to the withdrawal or partial withdrawal of any Loan Party or any of its  ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by any Loan Party or  any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Loan Party  or any ERISA Affiliate of any notice, concerning the imposition upon any Loan Party or any of its  ERISA Affiliates of withdrawal liability under Section 4201 of ERISA or a determination that a  Multiemployer Plan is, or is expected to be, insolvent, within the meaning of Title IV of ERISA.  “Erroneous Payment” has the meaning set forth in Section 6.20(a).  “EU” means the European Union.    “EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published  by the Loan Market Association (or any successor person), as in effect from time to time.  “Eurocurrency Base Rate” means the greater of (a) zero percent (0.0%) and (b) the  applicable interest settlement rate for Dollar LIBOR for one month appearing on the applicable  Reuters Screen LIBOR01 as of 11:00 a.m. (London time) on the Business Day which is two (2)  Business Days prior to the Reprice Date, provided that, if the applicable Reuters Screen LIBOR01  (or any successor or substitute page on such screen) for Dollar LIBOR (or any successor or  substitute page) is not available to the Agent for any reason, the applicable Eurocurrency Base  Rate for one month shall instead be the applicable interest settlement rate for deposits in Dollar  LIBOR for one month as reported by any other generally recognized financial information service  selected by the Agent, as of 11:00 a.m. (London time) on the applicable Business Day, provided  that, if no such interest settlement rate is available to the Agent, the applicable Eurocurrency Base  Rate for one month shall instead be the rate determined by the Agent to be the rate at which the  Agent or one of its Affiliate banks offers to place deposits in Dollars with first-class banks in the  interbank market at approximately 11:00 a.m. (London time) on the applicable Business Day in  the approximate amount of the relevant Revolving Loan Advance, New Vehicle Floorplan  Advance, Used Vehicle Floorplan Advance, Service Loaner Vehicle Floorplan Advance, or Swing  Line Loan and having a maturity equal to one month.  For purposes of determining any interest  rate hereunder or under any other Loan Document which is based on the Eurocurrency Base Rate,  such interest rate shall change monthly on each Reprice Date.  “Eurocurrency Loans” has the meaning set forth in Section 7.1(b).    “Eurocurrency Rate” means the quotient of (a) the Eurocurrency Base Rate divided by  (b) one minus the applicable Reserve Percentage (expressed as a decimal).  “Event of Default” means the occurrence of any event described in Section 14.1.   

 

   17  “Excluded Funded Debt” has the meaning set forth in Section 13.10(l).   “Excluded Items” has the meaning set forth in Section 11.1.2.  “Excluded Property” means any of (a) any Equity Interests in any Dealership and, to the  extent prohibited by any manufacturer of Vehicles, any Subsidiary of the Company that is the  holder of five percent (5%) or more of the Equity Interests in any Dealership; (b) any real estate  or interest in real estate, including a lease or rents thereunder, and any improvements and fixtures,  unless any of the foregoing constitute Eligible Real Property; (c) any voting stock of any direct  Subsidiary of any Loan Party that is a controlled foreign corporation (as defined in Section 957 of  the Internal Revenue Code (a “CFC”)) in excess of 65% of the total combined voting power of all  classes of stock of such CFC that are entitled to vote (within the meaning of Section 1.956-2(c)(2)  of the Treasury Regulations), to the extent the pledge of a greater percentage would reasonably be  expected to result in material adverse tax consequences to any Borrower, as reasonably determined  in good faith by the Borrowers; (d) any lease, license or other agreement or contract or any property  subject to a purchase money security interest, Lien securing a Capitalized Lease Obligation or  similar arrangement, in each case permitted to be incurred under this Agreement, to the extent that  a grant of a security interest therein would require a consent not obtained or violate or invalidate  such lease, license, agreement or contract or purchase money arrangement, Capitalized Lease  Obligation or similar arrangement or create a right of termination in favor of any other party thereto  (other than the Company or an Affiliate of the Company), in each case after giving effect to the  applicable anti-assignment provisions of the Uniform Commercial Code (“UCC”) and other  Applicable Law and other than proceeds and receivables thereof; (e) any United States intent-to- use Trademark applications to the extent that, and solely during the period in which, the grant,  attachment or enforcement of a security interest therein would, under applicable federal law,  impair the registrability of such applications or the validity or enforceability of registrations issuing  from such applications; (f) any asset or property to the extent that the grant of a security interest is  prohibited by Applicable Law or requires a consent not obtained of any Governmental Authority  pursuant to such applicable law, rule or regulation, in each case after giving effect to the applicable  anti-assignment provisions of the UCC and other Applicable Law and other than proceeds and  receivables thereof; provided, however, that “Excluded Property” shall not include any proceeds,  products, substitutions or replacements of any Excluded Property (unless such proceeds, products,  substitutions or replacements would constitute Excluded Property).  “Excluded Subsidiary” means any of (a) each Excluded Tax Credit Investment  Subsidiary; and (b) each DFC Subsidiary.  “Excluded Swap Obligation” means, any Swap Obligation with respect to a Lender- Provided Swap if, and only to the extent that, all or a portion of the guarantee of such Guarantor  of, or the grant by such Guarantor 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), including by virtue of such Guarantor’s failure for any reason to  constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the  regulations thereunder at the time the guarantee of such Guarantor or the grant of such security  interest becomes 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  

 

   18  of such Swap Obligation that is attributable to Swaps for which such guarantee or security interest  is or becomes illegal.  “Excluded Tax Credit Investment Subsidiary” means any of (a) LCDC and (b) any  present or future Subsidiary of the Company that is formed for the sole purpose of making  Investments permitted under Section 13.6(p).  “Excluded Taxes” means, in the case of each Lender or applicable Lending Installation,  the LC Issuer, and the Agent, (a) Taxes imposed on its overall net income, franchise Taxes, or  branch profits Taxes, in each case, (i) imposed on it, by the respective jurisdiction under the laws  of which such Lender, the LC Issuer or the Agent is incorporated or is organized or in which its  principal executive office is located or, in the case of a Lender, in which such Lender’s applicable  Lending Installation is located, or (ii) that are Other Connection Taxes, (b) in the case of a Lender,  any U.S. federal withholding tax that is imposed on amounts payable to such Lender pursuant to  the laws in effect at the time such Lender becomes a party to this Agreement or designates a new  Lending Installation, except in each case to the extent that, pursuant to Section 7.4.1, 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  Installation, (c) Taxes attributable to a Lender’s, the LC Issuer’s or the Agent’s failure to comply  with Section 7.4.6, and (d) any U.S. federal withholding taxes imposed by FATCA.  “Existing Letters of Credit” has the meaning set forth in Section 5.2.   “Existing Loan Agreement” has the meaning set forth in Recital A.  “Existing Subsidiary Joinder Agreement” means an agreement substantially in the form  attached hereto as Exhibit K.  “Extending Lender” has the meaning set forth in Section 6.18.5.   “FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement  (or any amended or successor version that is substantively comparable and not materially more  onerous to comply with), any current or future regulations or official interpretations thereof, any  agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory  legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or  convention among Governmental Authorities entered into in connection with the implementation  of the foregoing.   “Federal Funds Effective Rate” means, for any day, an interest rate per annum equal to  the weighted average of the rates on overnight Federal funds transactions with members of the  Federal Reserve System arranged by Federal funds brokers on such day, as published for such day  (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal  Reserve Bank of New York, or, if such rate is not so published for any day which is a Business  Day, the average of the quotations at approximately 10:00 a.m. (Pacific time) on such day on such  transactions received by the Agent from three Federal funds brokers of recognized standing  selected by the Agent in its sole discretion.  

 

   19  “Fiscal Year” means the fiscal year of the Company and its Subsidiaries, the last day of  which is December 31.  “Fixed Charge Coverage Ratio” has the meaning set forth in Section 11.1.2.  “Fleet Sale Contract” means an agreement or series of agreements by a Dealership to sell  more than five New Vehicles to a purchaser if at any time there will be more than five Vehicles  for which such Dealership has not been paid in full, and shall include all documents evidencing  such sale, including the contract or contracts between such Dealership and the purchaser, delivery  agreements and purchase orders.  “Fleet Vehicle” means a New Vehicle that is to be sold by a Dealership pursuant to a Fleet  Sale Contract.  “Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of  the execution of this Agreement, the modification, amendment or renewal of this Agreement or  otherwise) with respect to the Eurocurrency Rate.  “FLSA” means the Fair Labor Standards Act of 1938, as amended from time to time, and  the regulations promulgated thereunder.  “Former Lender” has the meaning set forth in Section 9.3.1.  “Former Lender Loan” means a loan made by a Former Lender to finance a New Vehicle  Floorplan Dealership’s New Vehicles.  “Franchise Agreement” has the meaning set forth in Section 10.21.  “Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to  the LC Issuer, such Defaulting Lender’s ratable share of the LC Obligations with respect to Letters  of Credit issued by the LC Issuer other than LC Obligations 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  ratable share of outstanding Swing Line Loans made by the Swing Line Lender other than Swing  Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to  other Lenders.  “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 and similar extensions of  credit in the ordinary course of its business.  “Funded Debt” means (i) Indebtedness of the type described in clauses (a), (b), (c) and (f)  of the definition of Indebtedness, and (ii) all Contingent Obligations in respect of Indebtedness of  the type described in clauses (a), (b), (c), and (f) of the definition of Indebtedness; provided,  however, that Funded Debt shall not include unsecured trade accounts payable incurred in the  ordinary course of business.  

 

   20  “GAAP” means generally accepted accounting principles set forth from time to time in the  opinions and pronouncements of the Accounting Principles Board of the American Institute of  Certified Public Accountants and statements and pronouncements of the Financial Accounting  Standards Board (or agencies with similar functions of comparable stature and authority within the  U.S. accounting profession) which are applicable to the circumstances as of the date of application.  “Governmental Approval” means any authorization, order, consent, adjudication,  approval, certificate of compliance, license, permit, validation, or exemption from, contract with,  registration or filing with, or report or notice to, any Governmental Body required or permitted by  Applicable Law.  “Governmental Authority” means the government of the United States of America or any  other nation, or of any political subdivision thereof, whether state or local, and any agency,  authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,  legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to  government (including, without limitation, any supra-national bodies such as the European Union  or the European Central Bank) and any group or body charged with setting financial accounting  or regulatory capital rules or standards (including, without limitation, the Financial Accounting  Standards Board, the Bank for International Settlements or the Basel Committee on Banking  Supervisory Practices or any successor or similar authority to any of the foregoing).  “Governmental Body” means (a) any foreign or domestic federal, state or local  government or municipality or political subdivision of any government or municipality, (b) any  assessment, improvement, community facilities or other special taxing district, (c) any  governmental or quasi-governmental body, authority, board, bureau, commission, corporation,  department, instrumentality or public body, (d) any court, administrative tribunal, arbitrator, public  utility or regulatory body, or (e) any central bank or comparable authority.  “Guarantor” means each Subsidiary which at any time executes a Guaranty of the  Revolving Loan Obligations, Service Loaner Vehicle Floorplan Obligations and Used Vehicle  Floorplan Obligations for the benefit of the Agent and the Lenders, it being understood that (a) a  Subsidiary shall cease to be a Guarantor from and after the time (if ever) the Loan Documents  permit the release of such Guaranty and such Subsidiary and the Agent execute and deliver a Loan  Party Termination Agreement and (b) each present and future Subsidiary of the Company, other  than Excluded Subsidiaries, shall be or become a Guarantor.  “Guarantor Joinder Agreement” means an agreement substantially in the form attached  hereto as Exhibit J.  “Guarantor Obligations” means all present and future indebtedness, obligations,  liabilities, reimbursements, indemnities, covenants, warranties and duties of each present and  future Guarantor of the Used Vehicle Floorplan Obligations, Service Loaner Vehicle Floorplan  Obligations and Revolving Loan Obligations to the Agent and the Lenders pursuant to any  Guaranty of the Used Vehicle Floorplan Obligations, Service Loaner Vehicle Floorplan  Obligations and Revolving Loan Obligations at any time executed by such Guarantor; provided  that the Guarantor Obligations shall exclude all Excluded Swap Obligations.  

 

   21  “Guaranty” means each guaranty of the Revolving Loan Obligations, Service Loaner  Vehicle Floorplan Obligations and Used Vehicle Floorplan Obligations heretofore,  contemporaneously herewith or hereafter executed by any Person, substantially in the form  attached hereto as Exhibit G.  “Hazardous Substance” means (a) any substance or material now or hereafter defined or  designated as a hazardous, toxic or radioactive material, waste or substance, or as a pollutant or  contaminant (or designated by any other similar term), by any Environmental Law now or hereafter  in effect; (b) asbestos and any substance or compound containing asbestos; (c) petroleum, natural  gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural  gas and such synthetic gas) and ash produced by a resource recovery facility utilizing a municipal  solid waste stream, and drilling fluids, produced waters and other wastes associated with the  exploration, development or production of crude oil, natural gas, or geothermal resources; (d) urea  formaldehyde foam insulation; (e) polychlorinated biphenyls (PCBs); (f) radon; and (g) any other  chemical, material, or substance, exposure to which (because of its quantity, concentration, or  physical or chemical characteristics) is limited or regulated for health and safety reasons by any  Governmental Authority, or which poses a significant present or potential hazard to human health  and safety or to the environment if released into the workplace or the environment.  “Highest Lawful Rate” means, on any day, the maximum non-usurious rate of interest  permitted for that day by applicable federal or state law, stated as a rate per annum.  “Increasing Lender” has the meaning set forth in Section 6.12.2.  “Indebtedness” means, without duplication, with respect to any Person, (a) all  indebtedness of such Person for borrowed money or for the deferred purchase price of property or  services, (b) all obligations evidenced by bonds, notes, debentures, convertible debentures or other  similar instruments, (c) all indebtedness created or arising under any conditional sale or other title  retention agreement with respect to property acquired (even though the rights and remedies of the  seller or lender under such agreement in the event of default, acceleration, or termination are  limited to repossession or sale of such property), (d) all obligations under letters of credit, bankers’  and trade acceptances, surety bonds and similar instruments, (e) all obligations under Swaps, (f)  all Capitalized Lease Obligations and all obligations as lessee under Synthetic Leases, (g) all  indebtedness that is required in accordance with GAAP to be included as a liability on such  Person’s balance sheet, (h) all Contingent Obligations, and (i) all Indebtedness referred to in clause  (a), (b), (c), (d), (e), (f), (g), and (h) above secured by any lien, security interest or other charge or  encumbrance upon or in property (including, without limitation, accounts and contract rights)  owned by such Person, even though such Person has not assumed or become liable for the payment  of such Indebtedness, and (j) if any Event of Default described in Section 14.1.12 has occurred,  the liability, if any, related thereto.  For purposes of this definition, the Indebtedness of any Person  shall include the indebtedness of any partnership in which such Person is a general partner, unless  such Indebtedness is expressly made non-recourse to such Person. In respect of Indebtedness  described in clause (i) of the foregoing definition, the amount of such Indebtedness as of any date  of determination will be the lesser of (x) the fair market value of the subject property as of such  date and (y) the amount of such Indebtedness as of such date.  “Indemnified Persons” has the meaning set forth in Section 5.12.  

 

   22  “Indemnified Taxes” means Taxes imposed on or with respect to any payment made by  or on account of any obligation of any Loan Party under any Loan Document, other than Excluded  Taxes and Other Taxes.  “Initial Condition” has the meaning set forth in Section 9.1.   “Intercreditor Agreement” means an intercreditor agreement to be entered into by and  among the Agent, one or more Floorplan Administrative Agents (to be defined therein) and/or  Floorplan Lenders (to be defined therein) required to be party thereto pursuant to this Agreement  and each Dual Subsidiary Lender required to be party thereto pursuant to this Agreement and  acknowledged by the Company on behalf of itself and its Subsidiaries, which shall be in form and  substance satisfactory to the Agent.  “Interest Period” means, with respect to a Eurocurrency Loan, a period of one month  commencing on a Business Day selected by the applicable Borrower pursuant to this Agreement  and ending on the day that corresponds numerically to such date one month thereafter; provided  that   (a) any Interest Period that would otherwise end on a day that is not a Business  Day shall be extended to the next succeeding Business Day unless such succeeding  Business Day falls in a new calendar month, in which case such Interest Period shall end  on the immediately preceding Business Day;  (b) any Interest Period that commences on the last Business Day of a calendar  month (or on a day for which there is no numerically corresponding day in the calendar  month at the end of such Interest Period) shall end on the last Business Day of the calendar  month at the end of such Interest Period; and  (c) no Interest Period shall extend beyond the Termination Date.    “Investments” has the meaning set forth in Section 13.6.  “ISDA Definitions” means the 2006 ISDA Definitions published by the International  Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented  from time to time, or any successor definitional booklet for interest rate derivatives published from  time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.  “Landlord’s Consent” has the meaning set forth in Section 12.13.   “LC Agreement” has the meaning set forth in Section 5.3.  “LC Application” has the meaning set forth in Section 5.3.  “LC Collateral Account” has the meaning set forth in Section 5.11.  “LCDC” means Lithia Community Development Company, Inc., an Oregon corporation.  “LC Fee” has the meaning set forth in Section 5.10.1.  

 

   23  “LC Fee Percentage” has the meaning set forth in the Pricing Schedule.  “LC Issuer” means U.S. Bank (or any subsidiary or affiliate of U.S. Bank designated by  U.S. Bank) in its capacity as issuer of Letters of Credit hereunder.  “LC Obligations” means, as of any date of determination, the sum, without duplication,  of (a) the aggregate undrawn stated amount under Letters of Credit outstanding at such time, plus  (b) the aggregate unpaid amount at such time of all Reimbursement Obligations.  “LCA Test Date” has the meaning set forth in Section 1.5.    “Lender” has the meaning set forth in the introductory paragraph and includes, as the  context requires, the LC Issuer and Swing Line Lender.  “Lender Party” has the meaning set forth in Section 6.20(a).  “Lender-Provided Swap” means a Swap which is provided to the Company or any  Subsidiary by the Agent, the LC Issuer, any other Lender or any Affiliate thereof (at the time such  Swap is entered into).  “Lending Installation” means, with respect to a Lender or the Agent, the office, branch,  subsidiary or affiliate of such Lender or the Agent listed on the signature pages hereof (in the case  of the Agent) or on its Questionnaire (in the case of a Lender) or otherwise selected by such Lender  or the Agent pursuant to Section 6.3.2.  “Letter of Credit” means any of the Existing Letters of Credit and any letter of credit  issued pursuant to Article 5.  “Letter of Credit Commitment” (which is a sublimit of the Revolving Loan  Commitment) means an amount equal to $50,000,000.00.  “Leverage Ratio” has the meaning set forth in Section 11.1.3.  “LIBOR” means the London interbank offered rate.   “Lien” means any mortgage, deed of trust, pledge, security interest, hypothecation,  assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority,  or other security agreement or preferential arrangement, charge, or encumbrance of any kind or  nature whatsoever (including, without limitation, any conditional sale or other title retention  agreement, any financing lease having substantially the same economic effect as any of the  foregoing, the interest of a lessor under a Capital Lease or Synthetic Lease and the filing of any  financing statement under the Uniform Commercial Code or comparable law of any jurisdiction  to evidence of any of the foregoing).  “Limited Condition Acquisition” means any Acquisition that is not conditioned on the  availability of, or on obtaining, third-party financing.  

 

   24  “Loan” or “Loans” means any one or more of the New Vehicle Floorplan Loans, Used  Vehicle Floorplan Loans, Service Loaner Vehicle Floorplan Loans, Revolving Loans and Swing  Line Loans.  “Loan Documents” means this Agreement, the LC Agreements, the Letters of Credit, the  LC Applications, the Collateral Documents, each Intercreditor Agreement, the promissory notes  evidencing the Obligations, the Guaranties, and all other documents and instruments attached  hereto, referred to herein, heretofore or contemporaneously herewith or hereafter executed or  delivered to the Agent and the Lenders by any Loan Party in connection with the Obligations.  “Loan Party” means any Borrower or Guarantor.  “Loan Party Termination Agreement” means with respect to any Loan Party (other than  a Silo Subsidiary) that shall cease to be a Borrower or a Guarantor hereunder, an agreement  substantially in the form attached as Exhibit H-1.  “Loan Year” means each 12 month period commencing on (and including) the Closing  Date (or an Anniversary Date) and ending on (but excluding) the next succeeding Anniversary  Date.  “LRE” means Lithia Real Estate, Inc., an Oregon corporation.  “Material Adverse Effect” means a (a) material adverse change in or material adverse  effect upon the business, management, properties, condition (financial or otherwise), assets or  operations of the Company and its Subsidiaries taken as a whole; or (b) a material adverse effect  upon or material impairment in (i) the attachment, perfection, or priority of the security interests  of the Agent and the Lenders in the Collateral or in the value of any material part of the Collateral;  (ii) the ability of the Company and its Subsidiaries taken as a whole to perform their obligations  under this Agreement or any other Loan Document; or (iii) the legality, validity, binding effect or  enforceability of or the rights and remedies available to the Agent and the Lenders under this  Agreement or any other Loan Document.  “Maximum Revolving Loan Amount” means, as of any date of determination, the lesser  of (a) the Aggregate Revolving Loan Commitment minus any Reserve Amount; and (b) the  Revolving Loan Borrowing Base at such time minus any Reserve Amount.  “Maximum Service Loaner Vehicle Floorplan Amount” means, as of any date of  determination, the lesser of (a) the Aggregate Service Loaner Vehicle Floorplan Commitment; and  (b) the Service Loaner Vehicle Borrowing Base.  “Maximum Used Vehicle Floorplan Amount” means, as of any date of determination,  the lesser of (a) the Aggregate Used Vehicle Floorplan Commitment; and (b) the Used Vehicle  Borrowing Base.  “Measurement Period” has the meaning set forth in Section 11.1.2.  “Minimum Collateral Amount” means, with respect to a Defaulting Lender, at any time,  (a) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal  

 

   25  to 105% of the Fronting Exposure of the LC Issuer with respect to such Defaulting Lender for all  Letters of Credit issued and outstanding at any such time and (b) otherwise, an amount determined  by the Agent and the LC Issuer in their sole discretion.  “Minority Dealer” means a Minority Dealer Affiliate or a Minority Dealer Subsidiary;  provided, that the Company shall not designate more than a total of seven Minority Dealers at any  one time, in addition to the designation of DCH CA, LLC as a Minority Dealer.  “Minority Dealer Affiliate” means a Person, designated in writing by the Company to the  Agent from time to time, (a) in which one or more Minority Dealer Partners, and one or more Loan  Parties, has an equity ownership interest and (b) which is not otherwise a Subsidiary of the  Company.  “Minority Dealer Partner” means an individual of ethnic minority descent, designated in  writing by the Company to the Agent from time to time, who owns any equity ownership interests  in a Minority Dealer, and any Affiliate of such individual through which the individual holds his  or her equity ownership interests in a Minority Dealer.  “Minority Dealer Subsidiary” means a Subsidiary of the Company, designated in writing  by the Company to the Agent from time to time, in which one or more Minority Dealer Partners  owns, directly or indirectly, equity ownership interests of such Subsidiary or has the right to  acquire, directly or indirectly, equity ownership interests of such Subsidiary.  “Modify” and “Modification” has the meaning set forth in Section 5.1.   “Moody’s” means Moody’s Investors Service, Inc.  “Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining  agreement or any other arrangement to which any Loan Party or any ERISA Affiliate is, or in the  immediately preceding six years was, a party to which more than one employer is obligated to  make contributions.  “Net Mark-to-Market Exposure” of a Person means, as of any date of determination,  with respect to any Swap, the excess (if any) of all unrealized losses over all unrealized profits of  such Person arising from such Swap.  “Unrealized losses” means the fair market value of the cost  to such Person of replacing such Swap as of the date of determination (assuming the Swap were  to be terminated as of that date), and “unrealized profits” means the fair market value of the gain  to such Person of replacing such Swap as of the date of determination (assuming such Swap were  to be terminated as of that date).  “New Loan Party” means an Acquisition Subsidiary that, pursuant to Section 12.17, is  required to execute a Guarantor Joinder Agreement or Borrower Joinder Agreement.  “New Vehicle” means a Vehicle that has never been owned except by a manufacturer,  distributor or dealer (including a vehicle acquired by trade with another dealer); has never been  registered or titled; is of the current or immediately preceding model year; and, except for a Demo,  has not been driven more than 500 total miles.  

 

   26  “New Vehicle Floorplan Advance” means a borrowing consisting of the New Vehicle  Floorplan Loans to be made by the Lenders on any date.  “New Vehicle Floorplan Borrower” means the Company, any Dealership executing this  Agreement as a New Vehicle Floorplan Borrower and any Dealership which hereafter becomes a  New Vehicle Floorplan Borrower in accordance with the requirements of this Agreement, in its  capacity as a borrower under the credit facilities described in Article 2 of this Agreement.  “New Vehicle Floorplan Borrowing Rate” means the sum of (a) the Eurocurrency Rate  plus (b) the New Vehicle Floorplan Margin.  “New Vehicle Floorplan Commitment” means for each Lender, the obligation of such  Lender to make New Vehicle Floorplan Loans to the New Vehicle Floorplan Borrowers and to  participate in New Vehicle Swing Line Loans, in an aggregate amount not exceeding the amount  set forth for such Lender on Schedule 1, as such amount may be modified as the result of any  assignment or as otherwise modified from time to time pursuant to Section 6.17 or the other  provisions hereof.  “New Vehicle Floorplan Commitment Fee” has the meaning set forth in Section 2.1.7.  “New Vehicle Floorplan Commitment Fee Rate” has the meaning set forth in the Pricing  Schedule.  “New Vehicle Floorplan Dealership” means each New Vehicle Floorplan Borrower  except the Company.  “New Vehicle Floorplan Loan” has the meaning set forth in Section 2.1.1.  “New Vehicle Floorplan Margin” has the meaning set forth in the Pricing Schedule.   “New Vehicle Floorplan Obligations” means all present and future New Vehicle  Floorplan Loans, New Vehicle Swing Line Loans, and other debts, liabilities, obligations,  reimbursements, indemnities, covenants, warranties, duties and obligations relating thereto of each  New Vehicle Floorplan Borrower to the Agent and the Lenders under this Agreement, and the  other Loan Documents, whether now or hereafter existing or incurred, whether liquidated or  unliquidated, whether absolute or contingent, and including without limitation principal, interest,  fees, Attorney Costs, expenses and charges relating to any of the foregoing.  “New Vehicle Loan” means a New Vehicle Floorplan Loan or New Vehicle Swing Line  Loan.  “New Vehicle Loan Advance” means any New Vehicle Floorplan Advance or any New  Vehicle Swing Line Loan made to finance Eligible New Vehicles.  “New Vehicle Loan Advance Date” means (a) with respect to any New Vehicle (other  than a New Vehicle previously financed with a Former Lender Loan or an advance under the  Existing Loan Agreement), the date the New Vehicle Loan Advance was made to finance such  Vehicle; (b) with respect to any New Vehicle previously financed by a Former Lender and  

 

   27  refinanced with a New Vehicle Loan Advance, the date the advance was made by the Former  Lender to finance the applicable Vehicle; and (c) with respect to any New Vehicle previously  financed under the Existing Loan Agreement, the date the advance was made under the Existing  Loan Agreement to finance the applicable Vehicle.  “New Vehicle Monthly Payment Date” means the tenth day of each month, or if such day  is not a Business Day, the next Business Day.  “New Vehicle Swing Line Commitment” (which is a sublimit of the Aggregate New  Vehicle Floorplan Commitment) means an amount equal to $60,000,000.00 plus the aggregate  balance in all PR Accounts.   “New Vehicle Swing Line Loan” has the meaning set forth in Section 2.2.1.  “Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender  at such time.  “Non-Extending Lender” has the meaning set forth in Section 6.18.2.  “Non-U.S. Lender” means a Lender that is not a United States person as defined in Section  7701(a)(30) of the Code.  “Notice Date” has the meaning set forth in Section 6.18.2.  “Obligations” means all present and future Loans, New Vehicle Floorplan Obligations,  Used Vehicle Floorplan Obligations, Service Loaner Vehicle Floorplan Obligations, Revolving  Loan Obligations, LC Obligations, and other debts, liabilities, obligations, reimbursements,  indemnities, covenants, warranties, duties and obligations of any one or more of the Borrowers to  the Agent and the Lenders under the LC Agreements, LC Applications, the Letters of Credit, this  Agreement, and the other Loan Documents, whether now or hereafter existing or incurred, whether  liquidated or unliquidated, whether absolute or contingent, and including without limitation  principal, interest, fees, Attorney Costs, expenses and charges relating to any of the foregoing;  provided, however, that the Obligations shall exclude all Excluded Swap Obligations.  “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control,  and any successor thereto.  “Original Equipment Manufacturer” means the original manufacturer of a Vehicle.   “Other Connection Taxes” means, in the case of each Lender or applicable Lending  Installation, the LC Issuer, and the Agent, Taxes imposed as a result of a present or former  connection between such Person and the jurisdiction imposing such Tax (other than connections  arising from such Person having executed, delivered, become a party to, performed its obligations  under, received payments under, received or perfected a security interest under, engaged in any  other transaction pursuant to or enforced any Loan Document or sold or assigned an interest in any  Loan or Loan Document).  

 

   28  “Other New Subsidiary” means a Subsidiary, (a) 100% of the Equity Interests of which  are owned, directly or indirectly by the Company, (b) which is not in the business of selling,  servicing or leasing motor vehicles or owning real property and (c) with respect to which the Loan  Parties have complied with the requirements of Section 12.17.  “Other Service Loaner Floorplan Financing” means extensions of credit to a Dealership  by an Other Service Loaner Floorplan Lender (other than extensions of credit under this  Agreement), all proceeds of which are used to purchase or finance Service Loaner Vehicles.  “Other Service Loaner Floorplan Lender” means a motor vehicle manufacturer or  distributor or a financial institution or commercial finance company acceptable to the Agent which  is affiliated with a motor vehicle manufacturer or distributor and which provides financing for  Service Loaner Vehicles to a Dealership.  “Other Taxes” means all present or future stamp, court or documentary, intangible,  recording, filing or similar Taxes that arise from any payment made under, from the execution,  delivery, performance, enforcement or registration of, from the receipt or perfection of a security  interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are  Other Connection Taxes imposed with respect to an assignment (other than an assignment made  pursuant to Sections 6.15 and 7.5).  “Out of Balance Condition” means, with respect to (i) a New Vehicle Floorplan Loan,  the outstanding balance thereof has not been paid in accordance with Sections 2.3.3 or 2.3.4, (ii) a  Used Vehicle Floorplan Loan, the outstanding balance thereof has not been paid in accordance  with Section 3.1.8 or and (iii) a Service Loaner Vehicle Floorplan Loan, the outstanding balance  thereof has not been paid in accordance with Section 3.3.8.  “Outstanding Credit Exposure” means, as to any Lender at any time, the sum of (a) the  then outstanding principal amount of its New Vehicle Floorplan Loans, Used Vehicle Floorplan  Loans, Service Loaner Vehicle Floorplan Loans and Revolving Loans, plus (b) an amount equal  to its ratable share of the aggregate principal amount of Swing Line Loans outstanding at such  time, plus (c) an amount equal to its ratable share of the LC Obligations at such time.  “Outstanding New Vehicle Floorplan Exposure” means, as to any Lender at any time,  the sum of (a) the then outstanding principal amount of its New Vehicle Floorplan Loans, plus (b)  an amount equal to its ratable share of the aggregate principal amount of New Vehicle Swing Line  Loans outstanding at such time.  “Outstanding Revolving Loan Exposure” means, as to any Lender at any time, the sum  of (a) the then outstanding principal amount of its Revolving Loans, plus (b) an amount equal to  its ratable share of the aggregate principal amount of Revolving Swing Line Loans outstanding at  such time, plus (c) an amount equal to its ratable share of the LC Obligations at such time.  “Outstanding Service Loaner Vehicle Floorplan Exposure” means, as to any Lender at  any time, the sum of (a) the then outstanding principal amount of its Service Loaner Vehicle  Floorplan Loans, plus (b) an amount equal to its ratable share of the aggregate principal amount  of Service Loaner Vehicle Swing Line Loans outstanding at such time.  

 

   29  “Outstanding Used Vehicle Floorplan Exposure” means, as to any Lender at any time,  the sum of (a) the then outstanding principal amount of its Used Vehicle Floorplan Loans, plus (b)  an amount equal to its ratable share of the aggregate principal amount of Used Vehicle Swing Line  Loans outstanding at such time.  “Pari Passu Funded Debt” means Funded Debt incurred by the Company and the other  Loan Parties provided that each of the following conditions are satisfied: (a) such Funded Debt is  permitted under subsection (l) of Section 13.10; (b) the Company has delivered to the Agent a  Revolving Loan Borrowing Base Certificate certifying that, on the date of incurrence of such  Funded Debt and after giving effect to such issuance as Pari Passu Funded Debt, the Revolving  Loan Availability is not less than $1.00; (c) the proceeds of such Funded Debt are used by the  Company to repay Revolving Loans (to the extent outstanding); (d) the stated final maturity and  any required principal amortization of such Funded Debt is not earlier than 91 days following the  Termination Date as in effect on the date of incurrence of such Funded Debt; (e) such Funded Debt  is incurred or guaranteed by the Company and all other Loan Parties and no Subsidiaries of the  Company that are not Loan Parties shall have any obligations in respect of such Funded Debt; (f)  such Funded Debt is secured by the Collateral, and no property or assets of the Company or any  of its Subsidiaries, other than the Collateral, secures such Funded Debt; (g) the terms and  conditions (other than pricing, rate floors, discounts and fees) governing such Funded Debt are not  materially less favorable to the Company or any other Loan Party than the terms and conditions of  the Loan Documents; and (h) the Persons to whom such Funded Debt is owed, or their agent,  collateral agent or other representative, have entered into an intercreditor agreement with the Agent  that (A) shall provide that the Agent is the collateral agent (on behalf of the Persons to whom the  Pari Passu Funded Debt is owed) for all liens on Collateral securing any Pari Passu Funded Debt,  all actions with respect to any Collateral must be taken through the Agent, and any proceeds of  Collateral resulting from enforcement of rights and remedies must be applied as follows: first, to  reasonable costs and expenses of the Agent in connection with enforcement of rights and remedies,  including foreclosure, sale and collection of the Collateral, and second, ratably, to the Pari Passu  Funded Debt and the Obligations (and certain designated Indebtedness that refinances the  Obligations or the Aggregate Commitments), and (B) shall otherwise be in form and content  satisfactory to the Agent and the Required Lenders.   “Participant” has the meaning set forth in Section 17.3.1.   “Participant Register” has the meaning set forth in Section 17.3.3.  “PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into  law October 26, 2001)), as amended from time to time, and any successor statute.  “Payment Commitment” means a commitment entered into between Agent and a  manufacturer or distributor, providing for payment of funds directly to such manufacturer or  distributor in payment for a New Vehicle Floorplan Borrower’s purchase of New Vehicles from  such manufacturer or distributor.  “Payment Commitment Collateral Account” has the meaning set forth in Section 2.3.5.  “Payment Recipient” has the meaning set forth in Section 6.20(a).  

 

   30  “PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any  or all of its functions under ERISA.  “Per Annum Fee” has the meaning set forth in Section 6.16.  “Permitted Acquisition” means an Acquisition which is permitted by Section 13.13.  “Permitted Dual Subsidiary Guaranty” means, with respect to any Permitted Dual  Subsidiary Indebtedness provided by any Dual Subsidiary Lender, the guaranty of such  Indebtedness by (a) the Company or (b) any Dual Subsidiary that operates one or more dealerships  at which new Vehicle or used Vehicle floorplan financing is provided by such Dual Subsidiary  Lender.  “Permitted Dual Subsidiary Indebtedness” means Indebtedness (including Permitted  Dual Subsidiary Guaranties but excluding Indebtedness provided pursuant to this Agreement)  incurred from time to time by any Dual Subsidiary consisting of floorplan financing for new  Vehicles or used Vehicles provided by financial institutions or manufacturer-affiliated finance  companies (“Dual Subsidiary Lenders”) to such Dual Subsidiaries, provided that each Required  Intercreditor Counterparty with respect to such Indebtedness is a party to and bound by an  Intercreditor Agreement.  “Permitted Liens” means Liens permitted by Section 13.3.  “Permitted New Dealership” means a Dealership (a)(i) 100% (or if the Company is not  permitted to hold 100% of such Equity Interests because of limitations imposed by the relevant  manufacturer's franchise agreement, at least 80%) of the Equity Interests of which are owned,  directly or indirectly by the Company or (ii) that is a Minority Dealer Subsidiary, (b) which is  organized to own and operate a newly established automobile dealership point, and (c) with respect  to which the Loan Parties have complied with the requirements of Section 12.17.  “Permitted Restrictions” means restrictions on the ability of any Subsidiary to declare or  pay any dividend or make other distributions, or to advance or loan funds or transfer assets, to the  Company or any other Subsidiary, to borrow money from the Company or any other Subsidiary,  to grant Liens on the assets of such Subsidiary, to secure the Obligations or the Guarantor  Obligations or to guaranty the Obligations: (a) as set forth on the Disclosure Schedule on the  Closing Date, including restrictions imposed by existing Other Service Loaner Floorplan  Financing arrangements; (b) pursuant to modifications to Other Service Loaner Floorplan  Financing arrangements in effect on the Closing Date, provided that such modifications are not  materially more restrictive; (c) pursuant to Other Service Loaner Floorplan Financing  arrangements with any Other Service Loaner Floorplan Lender other than a Person which is an  Other Service Loaner Floorplan Lender on the Closing Date; (d) applicable to a Person at the time  such Person becomes a Subsidiary and not created in contemplation of such an event; (e) resulting  from manufacturer-imposed modifications to any Franchise Agreement; (f) imposed by Applicable  Law; (g) as set forth in the organizational documents of a Loan Party and consisting of  requirements for director, manager, shareholder or member approval; (h) as set forth in any  document relating to Funded Debt permitted under Section 13.10(o), but only to the extent  applicable to Silo Subsidiaries and to the extent such restriction does not directly or indirectly  

 

   31  prohibit any Silo Subsidiary from guarantying, or impose any restriction on the ability of any Silo  Subsidiary to guaranty, the Obligations; (i) as set forth in any document relating to Additional  Funded Debt permitted under Section 13.10(l) or Funded Debt of Canadian Dealerships permitted  under Section 13.10(p); (j) as set forth in any document relating to Indebtedness permitted under  Section 13.10(d); or (k) on or with respect to any Excluded Subsidiary.  “Permitted Swap Obligations” means Swap Obligations of the Company under Swaps  which are entered into or maintained by the Company with a Lender, which are entered into in the  ordinary course of business for risk management purposes and not for speculative purposes.  “Person” means any natural person, corporation, general or limited partnership, joint  venture, limited liability company, firm, trust, association, unincorporated organization,  government, political subdivision or any agency, department, or instrumentality thereof, or any  other entity or organization, whether acting in an individual, fiduciary or other capacity.  “Plan” means an employee pension benefit plan which is covered by Title IV of ERISA or  subject to the minimum funding standards under Section 412 of the Code as to which any Loan  Party or any ERISA Affiliate may have any liability.  “Pledge Agreement” means an amended and restated pledge agreement substantially in  the form attached hereto as Exhibit E.  “PR Account” has the meaning set forth in Section 2.6.  “PR Account Advance” has the meaning set forth in Section 2.6.2.  “PR Account Borrower” has the meaning set forth in Section 2.6.  “PR Account Payment” has the meaning set forth in Section 2.6.1.  “Pricing Schedule” means the Schedule attached hereto which is identified as such.  “Prime Rate” means a rate per annum equal to the prime rate of interest announced from  time to time by the Agent or its parent (which is not necessarily the lowest rate charged to any  customer), changing when and as said prime rate changes.  “Principal” means Sidney D. DeBoer, Bryan DeBoer or another successor, or successors,  reasonably acceptable to the Agent and the Required Lenders.  “Pro Forma” means, with respect to any transaction, that such transaction shall be deemed  to have occurred as of the first day of the Measurement Period ending as of the most recent quarter  end preceding the date of such transaction for which financial statement information is available.   Each of the terms “Pro Forma Basis” and “Pro Forma Effect” shall have an analogous meaning.    “Prohibited Transaction” means any prohibited transaction within the meaning of  Section 406 of ERISA or Section 4975 of the Code.  “Properties” has the meaning set forth in Section 12.6.  

 

   32  “Pro Rata Share” means, as the context requires (a) with respect to the Aggregate Lender  Commitment or Outstanding Credit Exposure of any Lender, (i) the percentage obtained by  dividing such Lender’s Aggregate Lender Commitment by the Aggregate Commitment, or (ii) if  all of the Commitments have been terminated or have expired, the percentage obtained by dividing  such Lender’s Outstanding Credit Exposure at such time by the Aggregate Outstanding Credit  Exposure at such time;   (b) with respect to the New Vehicle Floorplan Commitment or Outstanding New Vehicle  Floorplan Exposure of any Lender (i) the percentage obtained by dividing such Lender’s New  Vehicle Floorplan Commitment by the Aggregate New Vehicle Floorplan Commitment, or (ii) if  all New Vehicle Floorplan Commitments have been terminated or expired, the percentage obtained  by dividing such Lender’s Outstanding New Vehicle Floorplan Exposure by the Aggregate  Outstanding New Vehicle Floorplan Exposure;  (c) with respect to the Used Vehicle Floorplan Commitment or Outstanding Used Vehicle  Floorplan Exposure of any Lender (i) the percentage obtained by dividing such Lender’s Used  Vehicle Floorplan Commitment by the Aggregate Used Vehicle Floorplan Commitment, or (ii) if  all Used Vehicle Floorplan Commitments have been terminated or expired, the percentage  obtained by dividing such Lender’s Outstanding Used Vehicle Floorplan Exposure by the  Aggregate Outstanding Used Vehicle Floorplan Exposure;   (d) with respect to the Service Loaner Vehicle Floorplan Commitment or Outstanding  Service Loaner Vehicle Floorplan Exposure of any Lender (i) the percentage obtained by dividing  such Lender’s Service Loaner Vehicle Floorplan Commitment by the Aggregate Service Loaner  Vehicle Floorplan Commitment, or (ii) if all Service Loaner Vehicle Floorplan Commitments have  been terminated or expired, the percentage obtained by dividing such Lender’s Outstanding  Service Loaner Vehicle Floorplan Exposure by the Aggregate Outstanding Service Loaner Vehicle  Floorplan Exposure; or  (e) with respect to the Revolving Loan Commitment or Outstanding Revolving Loan  Exposure of any Lender, (i) the percentage obtained by dividing such Lender’s Revolving Loan  Commitment by the Aggregate Revolving Loan Commitment, or (ii) if all Revolving Loan  Commitments have been terminated or expired the percentage obtained by dividing such Lender’s  Outstanding Revolving Loan Exposure by the Aggregate Outstanding Revolving Loan Exposure;  provided, however that when a Defaulting Lender shall exist, the Commitments, Outstanding  Credit Exposure, Outstanding New Vehicle Floorplan Exposure, Outstanding Used Vehicle  Floorplan Exposure, Outstanding Service Loaner Vehicle Floorplan Exposure and Outstanding  Revolving Loan Exposure of the Defaulting Lender shall be disregarded in determining the  Aggregate Commitment (or Aggregate Outstanding Credit Exposure), Aggregate New Vehicle  Floorplan Commitment (or Aggregate Outstanding New Vehicle Floorplan Exposure), Aggregate  Used Vehicle Floorplan Commitment (or Aggregate Outstanding Used Vehicle Floorplan  Exposure), Aggregate Service Loaner Vehicle Floorplan Commitment (or Aggregate Outstanding  Service Loaner Vehicle Floorplan Exposure) or Aggregate Revolving Loan Commitment (or  Aggregate Outstanding Revolving Loan Exposure).  

 

   33  “Quarterly Payment Date” means the tenth day of each January, April, July and October  or, if such day is not a Business Day, the next succeeding Business Day.  “Real Estate Subsidiary” means any Subsidiary that does not own any assets other than  real estate, cash, and assets incidental to the operation of specific real estate.   “Real Property” means real property acceptable to the Agent which is owned by any Real  Estate Subsidiary occupied by a Dealership as a motor vehicle sales facility.  “Reallocation” has the meaning set forth in Section 6.17.1.  “Reallocation Request” has the meaning set forth in Section 6.17.2.  “Reference Time” with respect to any setting of the then-current Benchmark means (1) if  such Benchmark is the Eurocurrency Base Rate, 11:00 a.m. (London time) on the day that is two  London banking days preceding the date of such setting, and (2) if such Benchmark is not the  Eurocurrency Base Rate, the time determined by the Agent in its reasonable discretion.  “Refunding New Vehicle Floorplan Loan” has the meaning set forth in Section 2.2.6(a).  “Refunding Revolving Loan” has the meaning set forth in Section 4.2.6(a)(i).  “Refunding Service Loaner Vehicle Floorplan Loan” has the meaning set forth in  Section 3.4.6(a)(i).  “Refunding Used Vehicle Floorplan Loan” has the meaning set forth in Section  3.2.6(a)(i).  “Register” has the meaning set forth in Section 17.5.  “Regulation D” means Regulation D of the Board of Governors of the Federal Reserve  System as from time to time in effect and any successor thereto or other regulation or official  interpretation of said Board of Governors relating to reserve requirements applicable to member  banks of the Federal Reserve System.  “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve  System as from time to time in effect and any successor or other regulation or official interpretation  of said Board of Governors relating to the extension of credit by banks for the purpose of  purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System.  “Reimbursement Obligations” means, at any time, the aggregate of all obligations of the  Revolving Loan Borrower then outstanding to reimburse the LC Issuer for amounts paid by the  LC Issuer in respect of any one or more drawings under Letters of Credit.  “Related Principal Portion” means, with respect to each New Vehicle financed with a  New Vehicle Loan Advance, the principal amount advanced under this Agreement to finance that  Vehicle.  

 

   34  “Relevant Governmental Body” means the Board of Governors of the Federal Reserve  System or the Federal Reserve Bank of New York, or a committee officially endorsed or convened  by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New  York, or any successor thereto.  “Removed Franchise” has the meaning set forth in Section 6.19.  “Reportable Event” means a reportable event as defined in Section 4043 of ERISA and  the regulations issued under such section, with respect to a Plan, excluding, however, such events  as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that  it be notified within 30 days of the occurrence of such event, provided, however, that a failure to  meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall  be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in  accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.  “Reprice Date” means the first day of each month.  “Repurchase Agreement” means an agreement by a manufacturer or distributor of New  Vehicles (which may be a separate agreement or may be included in a Seller Agreement or  Payment Commitment), in which such manufacturer agrees to repurchase New Vehicles originally  purchased by a New Vehicle Floorplan Dealership from such manufacturer, all in form and  substance reasonably acceptable to the Agent.  “Required Intercreditor Counterparty” means, with respect to an Intercreditor  Agreement relating to Permitted Dual Subsidiary Indebtedness: (a) each Dual Subsidiary Lender  providing such Permitted Dual Subsidiary Indebtedness, or an agent authorized to act on behalf of  each Dual Subsidiary Lender with respect to such Indebtedness, and (b) the Company (on behalf  of itself and its Subsidiaries).  “Required Lenders” means Lenders holding in the aggregate more than 50% of the  Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders holding  in the aggregate more than 50% of the Aggregate Outstanding Credit Exposure provided that,  Required Lenders shall at no time be less than two unaffiliated Lenders.  The Commitments and  Outstanding Credit Exposure of any Defaulting Lender shall be disregarded in determining  Required Lenders.  “Required Repayment Date” has the meaning set forth in Section 2.3.3(b).   “Reserve Amount” has the meaning set forth in Section 4.1.9.   “Reserve Percentage” means, the reserve percentage in effect on such day, whether or not  applicable to any Lender, under regulations issued from time to time by the Federal Reserve Board  for determining the maximum reserve requirement (including any emergency, special,  supplemental or other marginal reserve requirement) with respect to eurocurrency funding  (currently referred to as “Eurocurrency liabilities” in Regulation D).  The Eurocurrency Rate for  each outstanding Eurocurrency Loan shall be adjusted automatically as of the effective date of any  change in the Reserve Percentage.  

 

   35  “Restricted Payment” means any dividend or other distribution (whether in cash,  securities or other property) with respect to any Equity Interests in any Loan Party or any  Subsidiary, or any payment (whether in cash, securities or other property), including any sinking  fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,  cancellation or termination of any such Equity Interests in any Loan Party or any option, warrant  or other right to acquire any such Equity Interests in any Loan Party.  “Revolving Loan” has the meaning set forth in Section 4.1.1.  “Revolving Loan Advance” means a borrowing consisting of the Revolving Loans to be  made by the Lenders on any date.  “Revolving Loan Availability” means, as of any date of determination, an amount equal  to (a) the Maximum Revolving Loan Amount at such time minus (b) the sum of the then  outstanding principal balance of the Revolving Loans, Revolving Swing Line Loans and LC  Obligations.  “Revolving Loan Borrower” means the Company, in its capacity as an obligor on the  Revolving Loan Obligations and LC Obligations which relate to the credit facilities described in  Article 4.  “Revolving Loan Borrowing Base” means, as of any date of determination:  (a) an amount equal to the sum, without duplication, on such date of:  (i) 100% of the amounts (excluding commissions included in  clause (b) of the definition of Eligible Receivables) owing to the Dealerships in which the Agent  has a perfected first priority security interest, which are owed to the Dealerships by financial  institutions or finance companies which are not Affiliates of any Loan Party for the purchase by  such institutions of retail installment contracts and leases arising from the sale or lease of New  Vehicles and Used Vehicles (contracts in transit), which have not remained unpaid for more than  15 days.  (ii) 80% of the amount of Eligible Receivables.  (iii) 100% of the sum of the manufacturer’s or distributor’s  invoices (including freight, advertising and holdbacks) for Eligible New Vehicles.  (iv) 100% of the amount of the Used Vehicle Borrowing Base.  (v) 75% of the Value of Eligible Real Property; provided, that  this component of the Revolving Loan Borrowing Base shall not at any time exceed 25% of the  lesser of (x) the Revolving Loan Borrowing Base and (y) the Aggregate Revolving Loan  Commitment.  (vi) 65% of (A) the net book value of the inventory of the  Company and its Subsidiaries consisting of new parts and accessories in which the Agent has a  

 

   36  perfected first priority security interest; minus (B) the unpaid acquisition cost owed to sellers or  financers of such inventory.  (vii) 40% of (A) the net book value of equipment (excluding  fixtures, aircraft, and Service Loaner Vehicles) of the Company and its Subsidiaries in which the  Agent has a perfected first priority security interest, minus (B) the principal amount of  indebtedness or obligations to any Person (other than the Obligations) which is secured by such  equipment.  (b) Minus, the sum of the then outstanding aggregate principal balance  of (i) New Vehicle Floorplan Loans less the sum of the aggregate amount held in the PR Accounts,  in an amount up to $200,000,000, (ii) New Vehicle Swing Line Loans, (iii) Used Vehicle Floorplan  Loans, (iv) Used Vehicle Swing Line Loans and (v) Pari Passu Funded Debt.  Notwithstanding anything to the contrary in this Agreement, the amounts set forth in clauses (a)(i)  through (a)(vii) above shall exclude all receivables, Vehicles, real property, inventory, equipment  and other property and assets of any Silo Subsidiary.    “Revolving Loan Borrowing Base Certificate” means a certificate substantially in the  form attached as Exhibit C, or in such other form as is acceptable to the Agent.  “Revolving Loan Borrowing Rate” means the sum of (a) the Eurocurrency Rate, plus (b)  the Revolving Loan Margin.  “Revolving Loan Commitment” means, for each Lender, the obligation of such Lender  to make Revolving Loans to the Revolving Loan Borrower, and participate in Revolving Swing  Line Loans and Letters of Credit in an aggregate amount not exceeding the amount set forth on  Schedule 1, as such amount may be modified as a result of any assignment or as otherwise modified  from time to time pursuant to Section 6.17 or the other provisions hereof.  “Revolving Loan Commitment Fee” has the meaning set forth in Section 4.1.7.  “Revolving Loan Commitment Fee Rate” has the meaning set forth in the Pricing  Schedule.  “Revolving Loan Margin” has the meaning set forth in the Pricing Schedule.  “Revolving Loan Obligations” means all present and future Revolving Loans, Revolving  Swing Line Loans, LC Obligations, and other debts, liabilities, obligations, reimbursements,  indemnities, covenants, warranties, duties and obligations relating thereto of the Revolving Loan  Borrower to the Agent and the Lenders under the LC Agreements, LC Applications, the Letters of  Credit, this Agreement, and the other Loan Documents, whether now or hereafter existing or  incurred, whether liquidated or unliquidated, whether absolute or contingent, and including  without limitation principal, interest, fees, Attorney Costs, expenses and charges relating to any of  the foregoing.   “Revolving Swing Line Commitment” (which is a sublimit of the Aggregate Revolving  Loan Commitment) means an amount equal to $40,000,000.00.  

 

   37  “Revolving Swing Line Loan” has the meaning set forth in Section 4.2.1.  “Risk-Based Capital Guidelines” means (a) the risk-based capital guidelines in effect in  the United States on the date of this Agreement, including transition rules, and (b) the  corresponding capital regulations promulgated by regulatory authorities outside the United States,  including transition rules, and, in each case, any amendments to such regulations.  “S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services  LLC business.  “Sanctions” means sanctions administered or enforced from time to time by the U.S.  government, including those administered by OFAC, the U.S. Department of State, the United  Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions  authority.  “Security Agreement” means an amended and restated security agreement substantially  in the form attached hereto as Exhibit F.  “Seller Agreement” means any material agreement between the Company or any of its  Subsidiaries and a manufacturer, distributor or other seller of New Vehicles (including without  limitation Franchise Agreements, distribution agreements, framework agreements, and the like).  “Seller Notes” has the meaning set forth in Section 13.6(m).  “Service Loaner Vehicle” means a Vehicle that is obtained by a Dealership directly from  a manufacturer or distributor and which is used for short-term rental in the ordinary course of  business or as a service loaner.  “Service Loaner Vehicle Borrowing Base” means, as of any date of determination, an  amount equal to the sum, without duplication, on such date of 85% of the net book value of Eligible  Service Loaner Vehicles.  “Service Loaner Vehicle Borrowing Base Certificate” means a certificate substantially  in the form attached as Exhibit B-2, or in such other form as is acceptable to the Agent.   “Service Loaner Vehicle Floorplan Advance” means a borrowing consisting of the  Service Loaner Vehicle Floorplan Loans to be made by the Lenders on any date.  “Service Loaner Vehicle Floorplan Borrower” means the Company, in its capacity as an  obligor on the Service Loaner Vehicle Floorplan Obligations which relate to the credit facilities  described in Sections 3.3 and 3.4.  “Service Loaner Vehicle Floorplan Borrowing Rate” means the sum of (a) the  Eurocurrency Rate plus (b) the Service Loaner Vehicle Floorplan Margin.  “Service Loaner Vehicle Floorplan Commitment” means for each Lender, the obligation  of such Lender to make Service Loaner Vehicle Floorplan Loans to the Service Loaner Vehicle  Floorplan Borrower and to participate in Service Loaner Vehicle Swing Line Loans, in an  

 

   38  aggregate amount not exceeding the amount set forth on Schedule 1, as such amount may be  modified as a result of any assignment or as otherwise modified from time to time pursuant to the  provisions hereof.   “Service Loaner Vehicle Floorplan Commitment Fee” has the meaning set forth in  Section 3.3.7.  “Service Loaner Vehicle Floorplan Commitment Fee Rate” has the meaning set forth  in the Pricing Schedule.  “Service Loaner Vehicle Floorplan DDA” has the meaning set forth in Section 3.4.7(b).  “Service Loaner Vehicle Floorplan Loan” has the meaning set forth in Section 3.3.1.  “Service Loaner Vehicle Floorplan Margin” has the meaning set forth in the Pricing  Schedule.   “Service Loaner Vehicle Floorplan Obligations” means all present and future Service  Loaner Vehicle Floorplan Loans, Service Loaner Vehicle Swing Line Loans, and other debts,  liabilities, obligations, reimbursements, indemnities, covenants, warranties, duties and obligations  relating thereto of the Service Loaner Vehicle Floorplan Borrower to the Agent and the Lenders  under this Agreement, and the other Loan Documents, whether now or hereafter existing or  incurred, whether liquidated or unliquidated, whether absolute or contingent, and including  without limitation principal, interest, fees, Attorney Costs, expenses and charges relating to any of  the foregoing.  “Service Loaner Vehicle Sweep Advance” has the meaning set forth in Section 3.4.7(a).   “Service Loaner Vehicle Swing Line Commitment” (which is a sublimit of the  Aggregate Service Loaner Vehicle Floorplan Loan Commitment) means an amount equal to  $10,000,000.00.  “Service Loaner Vehicle Swing Line Loan” has the meaning set forth in Section 3.4.1.  “Shift” means Shift Technologies, Inc., a Delaware corporation.  “Shift Facility” means a floor plan credit facility or debt financing provided by one or  more lenders to Shift (and/or one or more of its subsidiaries) in an aggregate principal amount not  to exceed $50,000,000 at any time outstanding, guaranteed in whole or in part by one or more  Loan Parties.  “Shift Investments” has the meaning set forth in Section 13.6(q).   “Silo Subsidiary” means a Subsidiary designated as a “Silo Subsidiary” in writing by the  Company to the Agent for the purpose of incurring Funded Debt permitted under subsection (o)  of Section 13.10, provided that if, at the time of such designation, such Subsidiary is a Loan Party:  

 

   39  (i)  such Subsidiary shall have executed and delivered to the Agent a Silo  Subsidiary Termination Agreement solely with respect to its status as a party to the Security  Agreement, the Pledge Agreement and any other Collateral Documents and as a Grantor  (as defined in the Security Agreement and the Pledge Agreement) and its status as a New  Vehicle Floorplan Borrower (it being understood that such Silo Subsidiary Termination  Agreement shall not terminate such Subsidiary’s obligations under its Guaranty, which  shall remain in full force and effect),  (ii) the Company shall have provided to the Agent a Revolving Loan Borrowing Base  Certificate as of the date of and after giving effect to such designation of such Subsidiary  as a Silo Subsidiary and certifying that after giving effect to such designation the Revolving  Loan Availability is not less than $1.00,  (iii)  the Company shall have provided to the Agent a Used Vehicle Loan Borrowing  Base Certificate as of the date of and after giving effect to such designation of such  Subsidiary as a Silo Subsidiary and deduction of all Used Vehicles of such Silo Subsidiary  from the Used Vehicle Borrowing Base,  (iv)   the Company shall have provided to the Agent a Service Loaner Vehicle Loan  Borrowing Base Certificate as of the date of and after giving effect to such designation of  such Subsidiary as a Silo Subsidiary and deduction of all Service Loaner Vehicles of such  Silo Subsidiary from the Service Loaner Vehicle Borrowing Base,  (v)  the Company or such Subsidiary shall have repaid in full the Related Principal  Portion, together with accrued and unpaid interest thereon, with respect to each New  Vehicle of such Subsidiary financed with a New Vehicle Loan Advance,   (vi)  the Company shall have repaid Used Vehicle Floorplan Loans and Used Vehicle  Swing Line Loans to the extent necessary such that, after giving effect to such repayment  and the designation of such Subsidiary as a Silo Subsidiary and deduction of all Used  Vehicles of such Silo Subsidiary from the Used Vehicle Borrowing Base, (1) the  outstanding principal balance of all Used Vehicle Floorplan Loans does not exceed, in the  aggregate, as to all Lenders, the Maximum Used Vehicle Floorplan Amount, and (2) the  outstanding principal balance of all Used Vehicle Floorplan Loans, plus the outstanding  principal balance of all Used Vehicle Swing Line Loans, does not exceed, in the aggregate,  as to all Lenders, the Maximum Used Vehicle Floorplan Amount, and  (vii) the Company shall have repaid Service Loaner Vehicle Floorplan Loans and  Service Loaner Vehicle Swing Line Loans to the extent necessary such that, after giving  effect to such repayment and the designation of such Subsidiary as a Silo Subsidiary and  deduction of all Service Loaner Vehicles of such Silo Subsidiary from the Service Loaner  Vehicle Borrowing Base, (1) the outstanding principal balance of all Service Loaner  Vehicle Floorplan Loans does not exceed, in the aggregate, as to all Lenders, the Maximum  Service Loaner Vehicle Floorplan Amount, and (2) the outstanding principal balance of all  Service Loaner Vehicle Floorplan Loans, plus the outstanding principal balance of all  Service Loaner Vehicle Swing Line Loans, does not exceed, in the aggregate, as to all  Lenders, the Maximum Service Loaner Vehicle Floorplan Amount.  

 

   40  Effective upon any such designation and satisfaction of the conditions set forth in clauses (i), (ii),  (iii), (iv), (v), (vi) and (vii) above, any Subsidiary so designated shall cease to be a New Vehicle  Floorplan Borrower under this Agreement and the other Loan Documents, and the Dealership Loan  Limit (if any) for such Subsidiary shall be deleted.  “Silo Subsidiary Termination Agreement” with respect to a Silo Subsidiary, an  agreement substantially in the form attached as Exhibit H-2.  “SOFR” means, with respect to any Business Day, a rate per annum equal to the secured  overnight financing rate for such Business Day published by the SOFR Administrator on the SOFR  Administrator’s Website at approximately 8:00 a.m. (New York City time), or in the case of an  update to such rate by the SOFR Administrator, at approximately 2:30 p.m. (New York City time)  on the immediately succeeding Business Day.  “SOFR Administrator” means the Federal Reserve Bank of New York (or a successor  administrator of the secured overnight financing rate).  “SOFR Administrator’s Website” means the website of the Federal Reserve Bank of  New York, currently at http://www.newyorkfed.org, or any successor source for the secured  overnight financing rate identified as such by the SOFR Administrator from time to time.   “Solvent” means, with respect to any Person on any date, that on such date (a) the fair  value of the assets of such Person, at a fair valuation is greater than the debts and liabilities,  subordinated, contingent or otherwise, of such Person; (b) the present fair saleable value of the  assets of such Person is greater than the amount that will be required to pay the probable liability  of such Person on its debts and other liabilities, subordinated, contingent or otherwise, as such  debts and other liabilities become absolute and matured; (c) such Person will be able to pay its  debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become  absolute and matured; (d) such Person does not have unreasonably small capital with which to  conduct the businesses in which it is engaged as such businesses are now conducted; and (e) such  Person does not intend to, and does not believe that it will incur debts or liabilities beyond its  ability to pay such debts and liabilities as they mature, taking into account the timing of and  amounts of cash to be received by it and the timing of the amounts of cash to be payable on or in  respect of its indebtedness.  “Specified Representations” means the representations and warranties set forth in Section  10.1 (solely with respect to the Company), Section 10.2 (solely with respect to the Company),  Section 10.11, Section 10.19, Section 10.20 (solely with respect to the Company), Section 10.24,  and Section 10.25.  “Stated Rate” has the meaning set forth in Section 6.11.  “Subordinated Debt” means unsecured indebtedness of a Borrower which is subordinated  to the payment of the Obligations by an agreement acceptable to the Agent and Required Lenders  and that has subordination terms, covenants, pricing and other terms that have been approved in  writing by the Required Lenders.  

 

   41  “Subsidiary” of a Person means (i) any corporation Controlled by such Person or more  than 50% of the outstanding securities having ordinary voting power of which shall at the time be  owned, directly or indirectly, by such Person or by one or more of such Person’s Subsidiaries or  by such Person and one or more of its Subsidiaries and (ii) any partnership, limited liability  company, association, joint venture or other business organization Controlled by such Person or  more than 50% of the ownership interests having ordinary voting power of which shall at the time  be so owned.  Unless otherwise expressly provided, all references herein to a “Subsidiary” shall  mean a Subsidiary of the Company.  “Swap” means (a) any and all rate swap transactions, basis swaps, credit derivative  transactions, forward rate transactions, commodity swaps, commodity options, forward  commodity contracts, equity or equity index swaps or options, bond or bond price or bond index  swaps or options or forward bond or forward bond price or forward bond index transactions,  interest rate options, forward foreign exchange transactions, cap transactions, floor transactions,  collar transactions, currency swap transactions, cross-currency rate swap transactions, currency  options, fixed-price physical delivery contracts, whether or not exchange traded, or any other  similar transactions or any combination of any of the foregoing (including any options to enter into  any of the foregoing), whether or not any such transaction is governed by or subject to any master  agreement, including any agreement, contract or transaction that constitutes a “swap” within the  meaning of section 1a(47) of the Commodity Exchange Act, and (b) any and all transactions of  any kind, and the related confirmations, which are subject to the terms and conditions of, or  governed by, any form of master agreement published by the International Swaps and Derivatives  Association, Inc., any International Foreign Exchange Master Agreement or any other master  agreement, including any such obligations or liabilities under any such master agreement.  “Swap Obligation” means, with respect to any Person, any and all obligations, whether  absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired  (including all renewals, extensions and modifications thereof and substitutions therefor), under (i)  any and all Swaps, and (ii) any and all cancellations, buy backs, reversals, terminations or  assignments of any Swap.  “Swap Termination Value” means in respect of any one or more Swaps, after taking into  account the effect of any legally enforceable netting agreement relating to such Swaps, (a) for any  date after the date such Swaps have been closed out and termination value(s) determined in  accordance therewith, such termination value(s), and (b) prior to such date the Net Mark-to-Market  Exposure with respect thereto.  “Swing Line Lender” means U.S. Bank.  “Swing Line Loan” means a New Vehicle Swing Line Loan, Used Vehicle Swing Line  Loan, Service Loaner Vehicle Swing Line Loan or Revolving Swing Line Loan.  “Synthetic Lease” means any lease of goods or other property, whether real or personal,  which is treated as an operating lease under GAAP and as a loan or financing for U.S. income tax  purposes.  

 

   42  “Tangible Net Worth” means, as of any date, an amount equal to (x) the amount of  shareholders’ equity, minus (y) the amount of goodwill and other intangible assets, of Company  and its Subsidiaries, in each case determined as of such date on a consolidated basis in accordance  with GAAP consistently applied.  “Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, fees,  assessments, charges or withholdings, and any and all liabilities with respect to the foregoing,  including interest, additions to tax and penalties applicable thereto.  “Term SOFR” means, for the applicable Corresponding Tenor as of the applicable  Reference Time, the forward-looking term rate based on SOFR that has been selected or  recommended by the Relevant Governmental Body.  “Term SOFR Notice” means a notification by the Agent to the Lenders and the Company  of the occurrence of a Term SOFR Transition Event.   “Term SOFR Transition Event” means the determination by the Agent at any time, in its  sole discretion, that (a) Term SOFR has been recommended for use by the Relevant Governmental  Body, (b) the administration of Term SOFR is administratively feasible for the Agent, and (c) a  Benchmark Transition Event or an Early Opt-in Election, as applicable, has previously occurred  resulting in a Benchmark Replacement in accordance with Section 7.3.1 that is not Term SOFR.  “Terminating Borrower” has the meaning set forth in Section 13.1.1(b).  “Termination Date” means (a) April 29, 2026, (b) if maturity is extended pursuant to  Section 6.18, such extended termination date as determined pursuant to such Section, provided  that the “Termination Date” with respect to any Non-Extending Lender (including with respect to  the payment of Obligations owing to such Lender) shall be the latest date that such Lender has  consented to as its Termination Date pursuant to Section 6.18 (or, if such Lender has not consented  to any such extension, the original Termination Date as in effect on the Closing Date); provided  further, however, that, in each case, if such date is not a Business Day, the respective Termination  Date shall be the next preceding Business Day, or (c) any earlier date on which the Aggregate  Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.   “Title Documents” means all manufacturer’s certificates of origin, manufacturers’  statements of origin, certificates of title, certificates of ownership and any other documents  evidencing ownership of a motor vehicle or the transfer of ownership of a motor vehicle from a  manufacturer or another dealer to a Dealership, and all warehouse receipts, bills of lading and other  negotiable documents of title.  “Title Report” has the meaning set forth in Section 9.4.2.  “U.S. Bank” means U.S. Bank National Association, a national banking association, in its  individual capacity, and its successors.  “Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement  excluding the related Benchmark Replacement Adjustment.  

 

   43  “Undisclosed Administration” means in relation to a Lender the appointment of an  administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar  official by a supervisory authority or regulator under or based on the law in the country where such  Lender is subject to home jurisdiction supervision if Applicable Law requires that such  appointment is not to be publicly disclosed.  “Used Vehicle” means a Vehicle which is held by a Dealership for sale in the ordinary  course of business and which is not a New Vehicle or Service Loaner Vehicle.  “Used Vehicle Borrowing Base” means, as of any date of determination, an amount equal  to the sum, without duplication, on such date of: 85% of (a) the net book value of Used Vehicles  of the Dealerships which are Eligible Vehicles in which the Agent has a perfected first priority  security interest; minus (b) the aggregate outstanding principal amount of any indebtedness or  obligation to any Person (other than the Obligations) which is secured by such Used Vehicles,  including but not limited to amounts owing to holders of any lien or security interest in a Used  Vehicle at the time it is traded in, sold to, or otherwise acquired by any Dealership.  “Used Vehicle Borrowing Base Certificate” means a certificate substantially in the form  attached as Exhibit B-1, or in such other form as is acceptable to the Agent.   “Used Vehicle Floorplan Advance” means a borrowing consisting of the Used Vehicle  Floorplan Loans to be made by the Lenders on any date.  “Used Vehicle Floorplan Borrower” means the Company, in its capacity as an obligor on  the Used Vehicle Floorplan Obligations which relate to the credit facilities described in Sections  3.1 and 3.2.  “Used Vehicle Floorplan Borrowing Rate” means the sum of (a) the Eurocurrency Rate  plus (b) the Used Vehicle Floorplan Margin.  “Used Vehicle Floorplan Commitment” means for each Lender, the obligation of such  Lender to make Used Vehicle Floorplan Loans to the Used Vehicle Floorplan Borrower and to  participate in Used Vehicle Swing Line Loans in an aggregate amount not exceeding the amount  set forth on Schedule 1, as such amount may be modified as a result of any assignment or as  otherwise modified from time to time pursuant to Section 6.17 or the other provisions hereof.   “Used Vehicle Floorplan Commitment Fee” has the meaning set forth in Section 3.1.7.  “Used Vehicle Floorplan Commitment Fee Rate” has the meaning set forth in the Pricing  Schedule.  “Used Vehicle Floorplan DDA” has the meaning set forth in Section 3.2.7(b).  “Used Vehicle Floorplan Loan” has the meaning set forth in Section 3.1.1.  “Used Vehicle Floorplan Margin” has the meaning set forth in the Pricing Schedule.  

 

   44   “Used Vehicle Floorplan Obligations” means all present and future Used Vehicle  Floorplan Loans, Used Vehicle Swing Line Loans, and other debts, liabilities, obligations,  reimbursements, indemnities, covenants, warranties, duties and obligations relating thereto of the  Used Vehicle Floorplan Borrower to the Agent and the Lenders under this Agreement, and the  other Loan Documents, whether now or hereafter existing or incurred, whether liquidated or  unliquidated, whether absolute or contingent, and including without limitation principal, interest,  fees, Attorney Costs, expenses and charges relating to any of the foregoing.  “Used Vehicle Sweep Advance” has the meaning set forth in Section 3.2.7(a).  “Used Vehicle Swing Line Commitment” (which is a sublimit of the Aggregate Used  Vehicle Floorplan Loan Commitment) means an amount equal to $40,000,000.00.  “Used Vehicle Swing Line Loan” has the meaning set forth in Section 3.2.1.  “Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date” means the  twentieth day of each month, or if such day is not a Business Day, the next Business Day.  “Value” means, with respect to any Real Property, the fair market value of the applicable  real property as determined by the Agent based upon appraisals or other evaluations acceptable to  the Agent and in compliance with all regulatory requirements.  “Vehicle” means an automobile, truck, van, or other motor vehicle.  “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.  1.2 Divisions. For all purposes under the Loan Documents, in connection with any  division or plan of division under Delaware law (or any comparable event under a different  jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset,  right, obligation or liability of a different Person, then it shall be deemed to have been transferred  from the original Person to the subsequent Person, and (b) if any new Person comes into existence,  such new Person shall be deemed to have been organized on the first date of its existence by the  holders of its Equity Interests at such time.  1.3 Other Interpretive Provisions.  1.3.1 Unless otherwise specified, the words “herein,” “hereof,” “hereto,”  “hereunder” and similar terms refer to this Agreement as a whole and not to any particular  provision of this Agreement and subsection, Section, and exhibit references are to this Agreement.  1.3.2 The word “or” shall not be exclusive; the singular includes the plural and  the plural includes the singular; the masculine, the feminine and neuter gender, each include the  masculine, feminine and neuter gender; and the word “including” is not limiting and means  “including without limitation.”  

 

   45  1.3.3 References to any Loan Document shall mean such Loan Document as  amended, modified, supplemented or extended from time to time and any number of substitutions,  renewals, restatements, consolidations, and replacements thereof or therefor.  1.3.4 References to governmental laws, statutes, ordinances, rules and regulations  shall be construed as including all amendments, consolidations and replacements thereof or  therefor.  1.3.5 Headings in this Agreement and each of the other Loan Documents are for  convenience of reference only and are not part of the substance hereof or thereof.  1.3.6 Terms used herein without definition which are defined in the Uniform  Commercial Code shall have the meanings given to them in such Uniform Commercial Code.  1.3.7 Except as provided to the contrary in this Agreement or any other Loan  Documents, all accounting terms used in this Agreement and the other Loan Documents shall be  interpreted and all accounting determinations shall be made in accordance with GAAP, in a manner  consistent with that used in preparing the financial statements referred to in Section 11.2, except  that any calculation or determination which is to be made on a consolidated basis shall be made  for the Company and all of its Subsidiaries (including, for the avoidance of doubt, all Minority  Dealer Subsidiaries), including those Subsidiaries, if any, which are unconsolidated on the  Company’s audited financial statements; provided, however that, notwithstanding any other  provision contained herein, all terms of an accounting or financial nature used herein shall be  construed, and all computations of amounts and ratios referred to herein shall be made, without  giving effect to (a) any election under Accounting Standards Codification Section 825-10-25 (or  any other Accounting Standards Codification or Financial Accounting Standard having a similar  result or effect) to value any indebtedness or other liabilities of the Company or any of its  Subsidiaries at “fair value,” as defined therein, or (b) any treatment of Indebtedness in respect of  convertible debt instruments under Financial Accounting Standards Codification Subtopic 470-20  (or any other Accounting Standards Codification or Financial Accounting Standard having a  similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as  described therein, and such Indebtedness shall at all times be valued at the full stated principal  amount thereof.  If at any time any change in GAAP would affect the computation of any financial  covenant or requirement set forth in any Loan Document, and the Company, the Agent or the  Required Lenders shall so request, the Agent, the Lenders and the Borrowers shall negotiate in  good faith to amend such ratio or requirement to preserve the original intent thereof in light of  such change in GAAP (subject to the approval of the Required Lenders); provided that, until so  amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP  prior to such change therein and (ii) the Borrowers shall provide to the Agent and the Lenders  reconciliation statements showing the difference in such calculation, together with the delivery of  the financial statements and other documents required under this Agreement or as reasonably  requested by the Agent. Notwithstanding the foregoing, for purposes of determining compliance  with any covenant (including the computation of any financial covenant) contained herein, the  determination of whether a lease is to be treated an operating lease or a capital lease shall be made  without giving effect to any change in accounting for leases pursuant to GAAP resulting from the  implementation of FASB ASC 842 (Leases).  

 

   46  1.4 LIBOR Notification. The interest rate on Eurocurrency Loans is determined by  reference to the Eurocurrency Base Rate, which is derived from LIBOR. Section 7.3.1(b) provides  a mechanism for (a) determining an alternative rate of interest if LIBOR is no longer available or  in the other circumstances set forth in Section 7.3.1(b), and (b) modifying this Agreement to give  effect to such alternative rate of interest. The Agent does not warrant or accept any responsibility  for, and shall not have any liability with respect to, the administration, submission or any other  matter related to LIBOR or other rates in the definition of Eurocurrency Base Rate or with respect  to any alternative or successor rate thereto, or replacement rate thereof, including without  limitation, whether any such alternative, successor or replacement reference rate, as it may or may  not be adjusted pursuant to Section 7.3.1(b), will have the same value as, or be economically  equivalent to, the Eurocurrency Base Rate.  1.5 Limited Condition Acquisition.   In the event that the Company notifies the Agent in writing that any proposed Acquisition  is a Limited Condition Acquisition and that the Company wishes to test the conditions to such  Acquisition and the Indebtedness that is to be used to finance such Acquisition in accordance with  this Section 1.5, then, so long as agreed to by the Agent and the lenders providing such  Indebtedness, the following provisions shall apply:  (a) any condition to such Limited Condition Acquisition or such Indebtedness that  requires that no Default or Event of Default shall have occurred and be continuing at the time of  such Limited Condition Acquisition or the incurrence of such Indebtedness, shall be satisfied if (i)  no Default or Event of Default shall have occurred and be continuing at the time of the execution  of the definitive purchase agreement, merger agreement or other acquisition agreement governing  such Limited Condition Acquisition (the “LCA Test Date”) and (ii) no Event of Default under  any of Section 14.1.1, 14.1.8 or 14.1.9 shall have occurred and be continuing both immediately  before and immediately after giving effect to such Limited Condition Acquisition and any  Indebtedness incurred in connection therewith (including any such additional Indebtedness);  (b) any condition to such Limited Condition Acquisition or such Indebtedness that the  representations and warranties in this Agreement and the other Loan Documents shall be true and  correct at the time of consummation of such Limited Condition Acquisition or the incurrence of  such Indebtedness shall be deemed satisfied if (i) all representations and warranties in this  Agreement and the other Loan Documents are true and correct in all material respects (except for  any representation and warranty that is qualified by materiality or reference to Material Adverse  Effect, which such representation and warranty shall be true and correct in all respects) as of the  LCA Test Date, or if such representation speaks as of an earlier date, as of such earlier date and  (ii)  as of the date of consummation of such Limited Condition Acquisition, (A) the representations  and warranties under the relevant definitive agreement governing such Limited Condition  Acquisition as are material to the lenders providing such Indebtedness shall be true and correct,  but only to the extent that the Company or its applicable Subsidiary has the right to terminate its  obligations under such agreement or otherwise decline to close such Limited Condition  Acquisition as a result of a breach of such representations and warranties or the failure of those  representations and warranties to be true and correct and (B) the Specified Representations shall  be true and correct in all material respects (except for any representation and warranty that is  

 

   47  qualified by materiality or reference to Material Adverse Effect, which such representation and  warranty shall be true and correct in all respects);  (c) any financial ratio test or condition to be tested in connection with such Limited  Condition Acquisition and the availability of such Indebtedness will be tested as of the LCA Test  Date, in each case, after giving effect to the relevant Limited Condition Acquisition and related  incurrence of Indebtedness, on a Pro Forma Basis where applicable, and, for the avoidance of  doubt, (i) such ratios and baskets shall not be tested at the time of consummation of such Limited  Condition Acquisition and (ii) if any of such ratios are exceeded or conditions are not met  following the LCA Test Date, but prior to the closing of such Limited Condition Acquisition, as a  result of fluctuations in such ratio or amount (including due to fluctuations in EBITDAR of the  Company or the Person subject to such Limited Condition Acquisition), at or prior to the  consummation of the relevant transaction or action, such ratios will not be deemed to have been  exceeded and such conditions will not be deemed unmet as a result of such fluctuations solely for  purposes of determining whether the relevant transaction or action is permitted to be consummated  or taken;  (d) except as provided in the next sentence, in connection with any subsequent  calculation of any ratio or basket on or following the relevant LCA Test Date and prior to the  earlier of the date on which such Limited Condition Acquisition is consummated and the date that  the definitive agreement for such Limited Condition Acquisition is terminated or expires without  consummation of such Limited Condition Acquisition, any such ratio or basket shall be calculated  assuming such Limited Condition Acquisition and other transactions in connection therewith  (including the incurrence or assumption of Indebtedness) have not been consummated.   Notwithstanding the foregoing, any calculation of a ratio in connection with determining the  Applicable Margin and determining whether or not the Company is in compliance with the  financial covenants set forth in Section 11.1 shall, in each case be calculated assuming such  Limited Condition Acquisition and other transactions in connection therewith (including the  incurrence or assumption of Indebtedness) have not been consummated.  The foregoing provisions shall apply with similar effect during the pendency of multiple  Limited Condition Acquisitions such that each of the possible scenarios is separately tested.    ARTICLE 2   NEW VEHICLE FLOORPLAN LINE OF CREDIT  2.1 New Vehicle Floorplan Loans.  2.1.1 New Vehicle Floorplan Loan Commitment.  Subject to the terms and  conditions of this Agreement, each Lender severally and not jointly agrees to make loans (each a  “New Vehicle Floorplan Loan” and collectively, the “New Vehicle Floorplan Loans”) to the  New Vehicle Floorplan Borrowers on a revolving credit basis during the period from the Closing  Date to but not including the Termination Date; provided that (a) the aggregate outstanding  principal balance of the New Vehicle Floorplan Loans made by each Lender, plus the outstanding  principal balance of such Lender’s participating interest in the New Vehicle Swing Line Loans,  shall not at any time exceed an amount equal to such Lender’s New Vehicle Floorplan  Commitment; (b) the outstanding principal balance of all New Vehicle Floorplan Loans shall not  

 

   48  at any time exceed, in the aggregate, as to all Lenders, the Aggregate New Vehicle Floorplan  Commitment, and (c) except as set forth in Section 2.2.7(b), the outstanding principal balance of  all New Vehicle Floorplan Loans, plus the outstanding principal balance of all New Vehicle Swing  Line Loans, shall not at any time exceed, in the aggregate, as to all Lenders, the Aggregate New  Vehicle Floorplan Commitment.  Subject to the terms and conditions hereof, the New Vehicle  Floorplan Borrowers may borrow, prepay and reborrow New Vehicle Floorplan Loans.  2.1.2 Purpose of New Vehicle Floorplan Loans.  The New Vehicle Floorplan  Borrowers shall use the proceeds of the New Vehicle Floorplan Loans to finance Eligible New  Vehicles owned by the New Vehicle Floorplan Dealerships (including to refinance Former Lender  Loans) and to refinance New Vehicle Swing Line Loans.  2.1.3 Requests for New Vehicle Floorplan Loans.  Subject to Section 2.2.6,  whenever the New Vehicle Floorplan Borrowers wish to obtain a New Vehicle Floorplan Loan  Advance, the Company shall give Agent irrevocable notice thereof no later than 11:00 a.m. (Pacific  Time) at least one Business Day prior to the date of the requested borrowing.  Such notice shall  specify the requested borrowing date (which must be a Business Day), the amount of the New  Vehicle Floorplan Loan Advance, and include any other information and documentation  reasonably requested by the Agent, including, but not limited to, the make, model and vehicle  identification number of each New Vehicle to be financed thereby.  The Agent will promptly notify  each Lender of its receipt of any request for a New Vehicle Floorplan Loan Advance and of the  amount of its Pro Rata Share of such New Vehicle Floorplan Loan Advance.  2.1.4 Funding of New Vehicle Floorplan Loans.  If the Agent notifies the  Lenders of a request for a New Vehicle Floorplan Loan Advance by 1:00 p.m. (Pacific Time) on  any Business Day, each Lender will deliver its Pro Rata Share of such New Vehicle Floorplan Loan  Advance to the Agent by 11:00 a.m. (Pacific Time) on the Business Day after such notification.  2.1.5 New Vehicle Floorplan Payments.  (a) Interest Payments.  Interest on the unpaid principal balance of the  New Vehicle Floorplan Loans shall be paid monthly by the New Vehicle Floorplan Borrowers in  an amount equal to all interest accrued during the prior calendar month.  Such interest payments  shall be made on each New Vehicle Monthly Payment Date commencing with the first such date  to occur following the Closing Date and continuing thereafter.  All accrued interest outstanding on  the Termination Date shall be due and payable in full on the Termination Date.  (b) Voluntary Principal Payments.  The New Vehicle Floorplan  Borrowers may make voluntary repayments of all or a portion of the outstanding principal balance  of the New Vehicle Floorplan Loans if the Company gives Agent written or telephonic notice of  such voluntary repayment no later than 11:00 a.m. (Pacific Time) at least one Business Day prior  to the date of such repayment; provided that each such voluntary principal repayment shall be in a  minimum amount of $1,000,000.00 and in multiples of $100,000.00 above such amount unless the  New Vehicle Floorplan Loans are being repaid in full.  Such notice shall specify the anticipated  date of the voluntary repayment and the principal amount of the New Vehicle Floorplan Loans that  will be repaid on such date.  Any voluntary repayment of the New Vehicle Floorplan Loans that is  received by the Agent without such notice shall be deemed to have been received by the Agent on  

 

   49  the Business Day after such payment is actually received by the Agent and interest shall accrue on  the amounts so repaid through the date of such deemed receipt.  (c) Principal Payment at Maturity.  The entire outstanding principal  balance of the New Vehicle Floorplan Loans plus all interest accrued thereon shall be due and  payable in full by the Floorplan Borrowers on the Termination Date.  (d) Principal Payment Upon Dual Subsidiary Financing  Commencement Date. If the Company terminates the designation of a Subsidiary as a “New  Vehicle Floorplan Borrower” with respect to any Removed Franchise in accordance with Section  6.19, then the New Vehicle Floorplan Borrowers (jointly and severally) shall repay each New  Vehicle Floorplan Loan and each New Vehicle Swing Line Loan with respect to any New Vehicle  that is subsequently financed by Permitted Dual Subsidiary Indebtedness at such Removed  Franchise immediately upon the Dual Subsidiary Financing Commencement Date.  2.1.6 Voluntary Reduction or Termination of Commitment.  The New Vehicle  Floorplan Borrowers may from time to time on at least ten (10) Business Day’s prior written notice  by the Company to the Agent (which shall promptly advise each Lender thereof) permanently  reduce the Aggregate New Vehicle Floorplan Commitment to an amount not less than the then  outstanding principal balance of the New Vehicle Floorplan Loans and New Vehicle Swing Line  Loans (which, for purposes of this determination, shall not be deemed to be reduced by amounts  in PR Accounts).  Concurrently with any reduction of the Aggregate New Vehicle Floorplan  Commitment to zero, (a) no further New Vehicle Floorplan Loans or New Vehicle Swing Line  Loans will be made, (b) New Vehicle Floorplan Borrowers shall pay all principal and interest on  the New Vehicle Floorplan Loans and New Vehicle Swing Line Loans and all fees and other  amounts owing to the Agent and the Lenders, and (c) the New Vehicle Floorplan Borrowers shall  deliver to the Agent funds in an amount which the Agent estimates it or the Swing Line Lender  may be required to pay pursuant to Payment Commitments which may be presented after the  Termination Date, such collateral to be held in the Payment Commitment Collateral Account.  All  reductions of the Aggregate New Vehicle Floorplan Commitment shall reduce the New Vehicle  Floorplan Commitments pro rata among the Lenders according to their respective Pro Rata Shares;  and except as otherwise set forth in the proviso to this Section 2.1.6, shall reduce the New Vehicle  Swing Line Commitment in proportion to the reduction of the Aggregate New Vehicle Floorplan  Commitment; provided, however, that (unless the Aggregate New Vehicle Floorplan Commitment  is reduced to less than such amount), the New Vehicle Swing Line Commitment shall not be  reduced.  2.1.7 New Vehicle Floorplan Commitment Fee.  The New Vehicle Floorplan  Borrowers agree to pay to the Agent, for the account of the Lenders, a commitment fee (the “New  Vehicle Floorplan Commitment Fee”) calculated at a per annum rate equal to the New Vehicle  Floorplan Commitment Fee Rate on the average daily amount by which the Aggregate New  Vehicle Floorplan Commitment exceeds the sum of (a) the actual aggregate outstanding principal  balance of the New Vehicle Swing Line Loans on each day (it being understood that any portion  of the outstanding principal balance of the New Vehicle Swing Line Loans ceases to be outstanding  under the New Vehicle Swing Line Loans and commences being a portion of the outstanding  principal balance under the New Vehicle Floorplan Loans on the date that the New Vehicle  Floorplan Loans are funded to repay such portion of the outstanding principal balance of the New  

 

   50  Vehicle Swing Line Loans); plus (b) the actual aggregate outstanding principal balance of the New  Vehicle Floorplan Loans on each day; provided that, if the aggregate amount of the New Vehicle  Floorplan Commitment Fee payable for any period to the Lenders other than the Swing Line  Lender (as set forth in the third sentence of this paragraph) exceeds the amount calculated under  this sentence, then the New Vehicle Floorplan Borrowers agree to pay to the Agent, for the account  of such Lenders, such additional amounts so that each Lender other than the Swing Line Lender  receives the full amount of New Vehicle Floorplan Commitment Fee described in the third sentence  of this paragraph.  The accrued New Vehicle Floorplan Commitment Fee shall be due and payable  in arrears on each Quarterly Payment Date hereafter and on the Termination Date for the three  month period or other time period ending on the last day of the preceding fiscal quarter or on the  Termination Date.  The New Vehicle Floorplan Commitment Fee payable to each Lender other  than the Swing Line Lender shall be based upon the amount determined by multiplying such  Lender’s Pro Rata Share by the average daily amount by which the Aggregate New Vehicle  Floorplan Commitment exceeds the actual aggregate outstanding principal balance of the New  Vehicle Floorplan Loans on each day.  The New Vehicle Floorplan Commitment Fee payable to  the Lender which is the Swing Line Lender shall be based upon the amount determined by  multiplying such Lender’s Pro Rata Share by the average daily amount by which the Aggregate  New Vehicle Floorplan Commitment exceeds the actual aggregate outstanding principal balance  of the New Vehicle Floorplan Loans on each day and subtracting from that amount the average  daily outstanding principal balance of the New Vehicle Swing Line Loans; provided, however, that  notwithstanding any contrary provision of Section 2.6, solely for purposes of calculating the  amount payable to Swing Line Lender, the principal balance of the New Vehicle Swing Line Loans  shall be deemed to be reduced by the aggregate balance in the PR Accounts, but in no event shall  be reduced to less than zero.  2.2 New Vehicle Swing Line Loans.  2.2.1 New Vehicle Swing Line Commitment.  Subject to the terms and  conditions of this Agreement, the Swing Line Lender shall make loans (each, a “New Vehicle  Swing Line Loan”) to the New Vehicle Floorplan Borrowers on a revolving credit basis during  the period from the Closing Date to but not including the Termination Date; provided that, except  as set forth in Section 2.2.7(b), (a) the aggregate outstanding principal balance of the New Vehicle  Swing Line Loans shall not at any time exceed the New Vehicle Swing Line Commitment; and (b)  the outstanding principal balance of all New Vehicle Floorplan Loans made by all Lenders plus  the outstanding principal balance of all New Vehicle Swing Line Loans, shall not at any time  exceed the Aggregate New Vehicle Floorplan Commitment.  Subject to the terms and conditions  hereof, the New Vehicle Floorplan Borrowers may borrow, prepay and reborrow New Vehicle  Swing Line Loans.  2.2.2 Purpose of New Vehicle Swing Line Loans.  The New Vehicle Floorplan  Borrowers shall use the proceeds of the New Vehicle Swing Line Loans to finance Eligible New  Vehicles (including to refinance Former Lender Loans).  2.2.3 Requests for New Vehicle Swing Line Loans.  Subject to Sections 2.2.7  and 2.6.2, whenever the New Vehicle Floorplan Borrowers wish to obtain a New Vehicle Swing  Line Loan, the Company shall give Agent irrevocable notice thereof no later than 1:00 p.m.  (Pacific Time) on the requested date of such New Vehicle Swing Line Loan unless Swing Line  

 

   51  Lender agrees in each instance, in its sole discretion, to a shorter time period.  Such notice shall  specify the requested borrowing date (which must be a Business Day) and the amount of the New  Vehicle Swing Line Loan, and include any other information and documentation reasonably  requested by the Agent, including, but not limited to, the make, model and vehicle identification  number of each New Vehicle to be financed thereby.  2.2.4 New Vehicle Swing Line Loan Payments.  (a) Interest Payments.  Interest on the unpaid principal balance of the  New Vehicle Swing Line Loans shall be paid monthly by the New Vehicle Floorplan Borrowers in  an amount equal to all interest accrued during the prior calendar month.  Such interest payments  shall be made on each New Vehicle Monthly Payment Date commencing with the first such date  to occur following the Closing Date and continuing thereafter.  All accrued interest outstanding on  the Termination Date shall be due and payable in full on the Termination Date.  (b) Principal Payments.  The entire outstanding principal balance of  the New Vehicle Swing Line Loans plus all interest accrued thereon shall be due and payable in  full by the New Vehicle Floorplan Borrowers on the Termination Date.  In addition, the principal  balance of the New Vehicle Swing Line Loans shall be due and payable as required by Section  2.2.6.  2.2.5 Participation in New Vehicle Swing Line Loans.  Immediately upon the  making of a New Vehicle Swing Line Loan by the Swing Line Lender, the Swing Line Lender  shall be deemed to have sold and transferred to each Lender and each Lender shall be deemed to  have purchased and received from the Swing Line Lender, without any further action by any party,  an undivided participating interest in each New Vehicle Swing Line Loan in an amount equal to  such Lender’s Pro Rata Share; provided, however, that (a) no Lender shall be required to fund its  participation in any New Vehicle Swing Line Loan except as set forth in Section 2.2.6(b), and (b)  no Lender shall be entitled to share in any payments of principal or interest in respect of its  participation except, with respect to any participation funded by such Lender, as set forth herein.   Such participation shall be subject to the terms and conditions of this Agreement.  2.2.6 Settlement of New Vehicle Swing Line Loans.  (a) Refunding of Loans.  (i) Upon the request of the Swing Line Lender, the Agent from  time to time shall, on behalf of the New Vehicle Floorplan Borrowers (and each New Vehicle  Floorplan Borrower hereby irrevocably authorizes the Agent to so act on its behalf) request each  Lender (including Swing Line Lender in its capacity as a Lender) to make a New Vehicle Floorplan  Loan Advance to the New Vehicle Floorplan Borrowers, in accordance with the provisions of this  Section 2.2.6(a), which shall be applied to repay all or a portion of the outstanding principal  balance of the New Vehicle Swing Line Loans (each such New Vehicle Floorplan Loan, a  “Refunding New Vehicle Floorplan Loan”), in an amount equal to that Lender’s Pro Rata Share  of all or a portion of the then outstanding principal balance of the New Vehicle Swing Line Loans.  (ii) Without limiting the foregoing, each Lender agrees that the  Agent may request the Lenders to make Refunding New Vehicle Floorplan Loans at any time if  

 

   52  (A) a Default has occurred and is continuing, or (B) in the judgment of Swing Line Lender, taking  into account the outstanding principal balance of the New Vehicle Swing Line Loans, the  anticipated usage of the New Vehicle Swing Line Loans, such Refunding New Vehicle Floorplan  Loans are reasonably necessary to ensure that the outstanding principal balance of the New Vehicle  Swing Line Loans will not at any time exceed the New Vehicle Swing Line Commitment (it being  understood that in order to attain such objective, Swing Line Lender may request refunding of the  New Vehicle Swing Line Loans even though the principal balance of the New Vehicle Swing Line  Loans at the time of such request is less than the New Vehicle Swing Line Commitment).  (iii) If the Agent makes a request for funding under this Section  2.2.6(a) by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver the required  amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.   The proceeds of all Refunding New Vehicle Floorplan Loans shall be paid by the Agent to the  Swing Line Lender in repayment of the outstanding principal balance of the applicable New  Vehicle Swing Line Loans.  (b) Funding of Participations.  In addition to the right of the Swing  Line Lender to request refunding of the New Vehicle Swing Line Loans pursuant to Section  2.2.6(a), upon the request of the Swing Line Lender, the Agent may request each Lender (including  Swing Line Lender in its capacity as a Lender) to fund its participation in the New Vehicle Swing  Line Loans by paying to the Agent, for the account of the Swing Line Lender, its Pro Rata Share  of the principal amount of the New Vehicle Swing Line Loans.  If the Agent makes such request  by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver such amount to the  Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.  All  participations funded by the Lenders under this Section 2.2.6(b) shall be treated as the funding of  New Vehicle Floorplan Loans for purposes of the calculation of the New Vehicle Floorplan  Commitment Fee.  If any payment paid to any Lender with respect to its participating interest in  any New Vehicle Swing Line Loan is thereafter recovered from or must be returned or paid over  by Swing Line Lender for any reason, such Lender will pay to the Agent for the account of the  Swing Line Lender, such Lender’s Pro Rata Share of such amount and of any interest and other  amounts paid or payable by the Swing Line Lender with respect to such amount.  The Agent agrees  not to request any funding of the Lender’s participations in the New Vehicle Swing Line Loans  under this Section 2.2.6(b) at any time that such participations may be legally repaid using  advances of the New Vehicle Floorplan Loans under Section 2.2.6(a).  (c) Payment to Swing Line Lender.  Notwithstanding any contrary  provision of this Agreement (i) except as set forth in clause (ii) of this Section 2.2.6(c) all payments  of principal and interest on the New Vehicle Swing Line Loans shall be paid by the Agent solely  to the Swing Line Lender; and (ii) with respect to each participation in New Vehicle Swing Line  Loans which is funded by any Lender, such Lender (including Swing Line Lender in its capacity  as Lender) shall be entitled to receive its Pro Rata Share of payments of (A) principal on such New  Vehicle Swing Line Loans and (B) interest on such New Vehicle Swing Line Loans only for the  period following the date such participation is funded.  (d) Obligations Unconditional.  The obligation of each Lender to make  New Vehicle Floorplan Loans to repay New Vehicle Swing Line Loans pursuant to Section 2.2.6(a)  or to fund its participation interests in New Vehicle Swing Line Loans pursuant to Section 2.2.6(b)  

 

   53  shall be absolute and unconditional and shall not be affected by the occurrence of a Default or  Event of Default, the fact that any one or more of the conditions in Article 9 is not satisfied, the  termination of the availability of Loans, the fact that such New Vehicle Floorplan Loan is made  after the Termination Date in compliance with the terms of a Payment Commitment or to refinance  New Vehicle Swing Line Loans made prior to the Termination Date, any defense, setoff,  counterclaim or claim for recoupment of any Lender against Agent or Swing Line Lender or any  other circumstance, whether or not similar to the foregoing.  Notwithstanding the foregoing, the  Lenders shall not be required to refinance New Vehicle Swing Line Loans pursuant to Section  2.2.6(a) or to fund their participation interests in Swing Line Loans pursuant to Section 2.2.6(b)  (i) if after giving effect thereto, the outstanding principal balance of such Lender’s New Vehicle  Floorplan Loans would exceed its New Vehicle Floorplan Commitment, or (ii) with respect to any  portions of the outstanding principal balance of the New Vehicle Swing Line Loans that are funded  by Swing Line Lender after Agent is deemed to have knowledge or notice of the occurrence of a  Default or after the Termination Date.  2.2.7 Advances Pursuant to Payment Commitment.  (a) In addition to New Vehicle Swing Line Loans made pursuant to  Section 2.2.3, each New Vehicle Floorplan Borrower authorizes Agent and Swing Line Lender to  make payment directly to manufacturers or distributors of Vehicles in payment for New Vehicles  purchased by any New Vehicle Floorplan Borrower, in accordance with the terms and conditions  of the applicable Payment Commitment.  Each payment pursuant to a Payment Commitment shall  constitute a New Vehicle Swing Line Loan hereunder in the amount of such payment.  The Agent,  in its sole discretion, (i) may revise a Payment Commitment at any time, whether or not a Default  has occurred, by giving written notice to the applicable manufacturer or distributor and the  Company, and (ii) may terminate or suspend a Payment Commitment at any time, whether or not  a Default has occurred, by giving written notice to the applicable manufacturer or distributor, and  if no Default has occurred and is continuing, to the Company.  Each New Vehicle Floorplan  Borrower shall be and remain jointly and severally liable to Swing Line Lender for all payments  made to a manufacturer or distributor pursuant to a Payment Commitment.  The Agent and the  Lenders do not assume any responsibility for (and each New Vehicle Floorplan Borrower’s  obligation to repay any Advance hereunder will not be affected or impaired in any way by) the  correctness, validity, genuineness or sufficiency of any request for payment by a manufacturer or  distributor under a Payment Commitment, any documents pertaining thereto or the existence,  character, quantity, quality, condition, weight, value or delivery of any Vehicles purchased with  the proceeds of any Advance.  In this regard, the Agent may conclusively presume and rely upon  the validity and the appropriateness of any payment request by a manufacturer or distributor under  a Payment Commitment and any and all documents or information related thereto.   Notwithstanding any contrary provision hereof, the Agent may take such action as is necessary to  terminate any Payment Commitments up to ten (10) days prior to the Termination Date, so that no  Payment Commitments shall become payable later than the Termination Date or, at the Agent’s  discretion, up to ten (10) days prior thereto.  (b) The parties acknowledge that, due to Payment Commitments with  Vehicle manufacturers and distributors, New Vehicle Floorplan Dealerships may be required to  purchase New Vehicles which may cause the outstanding principal balance of the New Vehicle  Floorplan Loans and New Vehicle Swing Line Loans to exceed the Aggregate New Vehicle  

 

   54  Floorplan Commitment and/or the outstanding principal balance of the New Vehicle Swing Line  Loans to exceed the New Vehicle Swing Line Commitment.  The Swing Line Lender may, at its  option, but without any obligation to do so, make a New Vehicle Swing Line Loan to fund the  amount due under any Payment Commitment even if such New Vehicle Swing Line Loan would  cause the outstanding principal balance of the New Vehicle Floorplan Loans and New Vehicle  Swing Line Loans to exceed the Aggregate New Vehicle Floorplan Commitment and/or the  outstanding principal balance of the New Vehicle Swing Line Loans to exceed the New Vehicle  Swing Line Commitment.  The New Vehicle Floorplan Borrowers shall pay the amount of such  excess to the Agent upon demand as set forth in Section 2.3.4.  2.3 Terms Applicable to New Vehicle Floorplan Loans and New Vehicle Swing  Line Loans.  2.3.1 New Vehicle Loan Limits.  (a) The aggregate outstanding principal balance of New Vehicle  Floorplan Loans and New Vehicle Swing Line Loans shall not at any time exceed the Aggregate  New Vehicle Floorplan Commitment.  (b) New Vehicle Loans shall only be made to finance Eligible New  Vehicles owned by a New Vehicle Floorplan Dealership.  The aggregate outstanding principal  balance of the New Vehicle Loans made to finance Eligible New Vehicles (including Fleet Vehicles  and Demos) owned by any New Vehicle Floorplan Dealership shall not at any time exceed the  limit (“Dealership Loan Limit”) for such New Vehicle Floorplan Dealership which is agreed to  between Agent and the Company from time to time or, if applicable, any manufacturer, distributor,  dealership location or other sublimit set forth within such limit (“Dealership Sublimit”).  (c) No more than 10 Demos owned by any New Vehicle Floorplan  Dealership or dealership location of a New Vehicle Floorplan Dealership may be financed at any  one time.  (d) No New Vehicle Loan Advance to finance Eligible New Vehicles  (including Fleet Vehicles and Demos) shall exceed an amount equal to 100% of the amount of the  manufacturer’s or distributor’s invoice (including freight, advertising and holdbacks) for such  Vehicles.  No New Vehicle Loan Advance to refinance Former Lender Loans shall exceed an  amount equal to the amount calculated in accordance with the preceding sentence.    2.3.2 Changes to New Vehicle Floorplan Limits and New Vehicle Floorplan  Dealerships.  The Agent and the Company may from time to time agree (without requiring the  consent of any Lender or any other Borrower) to (a) increase or decrease the Dealership Loan  Limit (or any Dealership Sublimit) for any New Vehicle Floorplan Dealership, (b) change the  permitted manufacturers, distributors or brands listed for any New Vehicle Floorplan Dealership;  and (c) add or delete New Vehicle Floorplan Dealerships and establish Dealership Loan Limits and  permitted manufacturers, distributors and brands for additional New Vehicle Floorplan  Dealerships.  2.3.3 Additional Required Payments.  In addition to payments required by  Sections 2.1.5(a), 2.1.5(c), 2.2.4(a), 2.2.4(b), 2.2.6, and the other provisions hereof, New Vehicle  

 

   55  Floorplan Borrowers shall also repay the New Vehicle Loans as follows (which payments do not  require prior notice to the Agent or Lenders):  (a) Sale of Vehicles.  (i) The New Vehicle Floorplan Borrowers shall  pay to the Agent the entire Related Principal Portion for each financed New Vehicle (except Fleet  Vehicles and Deemed Sales) within five Business Days following the date of sale or lease of such  New Vehicle; and (ii) New Vehicle Floorplan Borrowers shall pay to the Agent the entire Related  Principal Portion for each financed Fleet Vehicle by the earlier of (A) 3 Business Days following  any New Vehicle Floorplan Dealership’s receipt of proceeds from the sale of such Fleet Vehicle,  or (B) (1) 45 calendar days following the date of sale of any Fleet Vehicle sold to a governmental  agency, or (2) 30 calendar days following the date of sale of any other Fleet Vehicle.  (b) Unsold New Vehicles.  If any New Vehicle has not been previously  sold, the New Vehicle Floorplan Borrowers shall pay the entire Related Principal Portion for such  New Vehicle to the Agent on the first New Vehicle Monthly Payment Date which is at least one  year following the New Vehicle Loan Advance Date for such New Vehicle (“Required  Repayment Date”).  Notwithstanding the foregoing, the Related Principal Portion for unsold New  Vehicles representing up to 5% of the outstanding principal balance of the New Vehicle Loans may  remain unpaid following the Required Repayment Date; provided that the Related Principal  Portion for each unsold New Vehicle must be repaid no later than the third New Vehicle Monthly  Payment Date following the Required Repayment Date for such New Vehicle.  (c) Deemed Sales.  If a Deemed Sale of a New Vehicle financed by the  Lenders occurs, the New Vehicle Floorplan Borrowers shall pay to the Agent the Related Principal  Portion for such Vehicle no later than 6 Business Days following the date of any Deemed Sale.  A  “Deemed Sale” means any of the following:  (i) A New Vehicle Floorplan Dealership disposes of a New  Vehicle by trade with another dealer or other disposition, other than a sale in the ordinary course  of such New Vehicle Floorplan Dealership’s business, regardless of whether any payment is due  to be made by or to such New Vehicle Floorplan Dealership in respect of such trade or other  disposition.  (ii) The New Vehicle ceases to meet the criteria contained in the  definition of “Eligible New Vehicle” in this Agreement.  (iii) Agent reasonably determines that the fair market value of a  New Vehicle has significantly declined, regardless of the reason.  2.3.4 Additional Payments.  The Agent and the Lenders shall have no obligation  whatsoever, and they have no present intention, to make any New Vehicle Floorplan Loan or New  Vehicle Swing Line Loan after the Termination Date or which would cause the principal amount  outstanding under this Agreement to exceed any of the limitations stated in this Agreement.  The  New Vehicle Floorplan Borrowers are and shall be and remain unconditionally jointly and  severally liable to the Lenders for, and the New Vehicle Floorplan Borrowers hereby jointly and  severally promise to pay to the Agent for the account of the Lenders the amount of all New Vehicle  Floorplan Obligations hereunder, including without limitation New Vehicle Floorplan Loans and  

 

   56  New Vehicle Swing Line Loans in excess of the Swing Line Commitment and/or the Aggregate  New Vehicle Floorplan Commitment (whether funded pursuant to Payment Commitments or  otherwise) and New Vehicle Floorplan Loans and New Vehicle Swing Line Loans made after the  Termination Date.  The New Vehicle Floorplan Borrowers shall pay to the Agent: (a) upon demand,  or if earlier immediately upon becoming aware of the overadvance, the amount of any New Vehicle  Floorplan Loans and New Vehicle Swing Line Loans in excess of any limitation contained in this  Agreement; and (b) upon demand, the amount of any New Vehicle Floorplan Loans and New  Vehicle Swing Line Loans made after the Termination Date; together with interest on the principal  amount of such New Vehicle Floorplan Loans and New Vehicle Swing Line Loans, as set forth  herein.  2.3.5 Payment Commitment Collateral Account.  At any time after the  Termination Date or, if earlier, the date on which the availability of New Vehicle Floorplan Loans  and New Vehicle Swing Line Loans is terminated, the New Vehicle Floorplan Borrowers shall  deliver to the Agent funds in an amount equal to the amount which the Agent or Swing Line Lender  estimates it may be required to pay to manufacturers and distributors pursuant to Payment  Commitments which may be presented on or after such date.  Such funds shall be held in a non- interest bearing deposit account (“Payment Commitment Collateral Account”) as additional  Collateral for the indebtedness of the New Vehicle Floorplan Borrowers to the Lenders.  Each New  Vehicle Floorplan Borrower hereby grants to the Agent, for the benefit of the Lenders, a security  interest in such funds and such account to secure all New Vehicle Floorplan Obligations.  2.4 New Vehicle Floorplan Borrowers.  2.4.1 Joint and Several Liability.  Each New Vehicle Floorplan Borrower shall  be jointly and severally liable (each as a primary obligor and not merely as a surety or  accommodation maker) for repayment of the New Vehicle Floorplan Loans and New Vehicle  Swing Line Loans, and payment and performance of all Obligations of a New Vehicle Floorplan  Borrower and/or the New Vehicle Floorplan Borrowers to the Agent and the Lenders under this  Agreement and the other Loan Documents.  Without limiting the foregoing, each New Vehicle  Floorplan Borrower acknowledges and agrees that each of them is jointly and severally liable for  all New Vehicle Floorplan Obligations, even if an invoice, billing or other request for payment of  some or all of the New Vehicle Floorplan Obligations is addressed to, or stated to be payable by  one or more, but less than all of the New Vehicle Floorplan Borrowers.  Each New Vehicle  Floorplan Borrower jointly and severally promises to pay to the Agent, for the account of the  Lenders (including Swing Line Lender), in accordance with the terms of this Agreement, and the  other Loan Documents, the principal amount of the New Vehicle Floorplan Loans and New Vehicle  Swing Line Loans, plus interest thereon, plus all other New Vehicle Floorplan Obligations.  Each  New Vehicle Floorplan Borrower shall be jointly and severally liable and responsible for all New  Vehicle Floorplan Obligations and payment and performance of all terms, conditions, obligations  and agreements applicable to a New Vehicle Floorplan Borrower or New Vehicle Floorplan  Borrowers under the Loan Documents.  2.4.2 Maximum Liability.  Notwithstanding any contrary provision of this  Agreement or the other Loan Documents, the liability of each New Vehicle Floorplan Borrower  with respect to the New Vehicle Floorplan Obligations shall be limited to an aggregate amount  equal to the largest amount that would not render its obligations hereunder subject to avoidance as  

 

   57  a fraudulent transfer or fraudulent conveyance (or similar term) under any applicable federal or  state law (including Section 548 of the Bankruptcy Code of the United States or any successor  provision); provided, however that release or reduction of the liabilities of one New Vehicle  Floorplan Borrower shall not release or reduce the liability of any other New Vehicle Floorplan  Borrower for payment and performance of all New Vehicle Floorplan Obligations.  2.4.3 Appointment of Company.  Each Subsidiary that is or becomes a New  Vehicle Floorplan Borrower hereby irrevocably appoints the Company to act on its behalf in its  capacity as a New Vehicle Floorplan Borrower for all purposes relevant to this Agreement and the  other Loan Documents.  Without limiting the foregoing, each New Vehicle Floorplan Borrower  authorizes the Company, on its behalf, to give and receive notices, to request New Vehicle  Floorplan Loans and New Vehicle Swing Line Loans, to execute and deliver all documents,  instruments, agreements, reports, and certificates required hereunder (including without limitation  Borrower Joinder Agreements and Existing Subsidiary Joinder Agreements), to make any election  or decision which is required of the New Vehicle Floorplan Borrowers, and to receive and/or direct  the receipt of the proceeds of any New Vehicle Floorplan Loans or New Vehicle Swing Line Loans.   Any acknowledgement, consent, direction, certification, agreement or other action which might  otherwise be valid or effective only if given or taken by all New Vehicle Floorplan Borrowers, or  by any one or more of the New Vehicle Floorplan Borrowers, shall be valid and effective if given  or taken only by the Company, whether or not any other New Vehicle Floorplan Borrower also  joins therein.  Any notice, demand, consent, acknowledgment, direction, certification or other  communication delivered to the Company as a New Vehicle Floorplan Borrower in accordance  with the terms of this Agreement and the other Loan Documents shall be deemed to have been  delivered to the Company and each other New Vehicle Floorplan Borrower.  Each New Vehicle  Floorplan Borrower other than the Company agrees that each notice, election, representation and  warranty, covenant, agreement and undertaking made on its behalf by the Company shall be  deemed for all purposes to have been made by such New Vehicle Floorplan Borrower and shall be  binding upon and enforceable against such New Vehicle Floorplan Borrower to the same extent as  if the same had been made directly by such New Vehicle Floorplan Borrower.  Notwithstanding  the foregoing, the Agent and the Lenders may at any time and from time to time require any one  or more of the New Vehicle Floorplan Borrowers to join in or take any action which the Company  is authorized to take alone.  2.4.4 Waivers.  (a) Each New Vehicle Floorplan Borrower acknowledges that the New  Vehicle Floorplan Loans and New Vehicle Swing Line Loans herein will or may be made for the  benefit of the other New Vehicle Floorplan Borrowers as well as such New Vehicle Floorplan  Borrower and, in full recognition of that fact, each New Vehicle Floorplan Borrower consents and  agrees that the Agent and the Lenders may, at any time and from time to time, without notice or  demand, and without affecting the enforceability of this Agreement and the other Loan Documents,  or the liability of any New Vehicle Floorplan Borrower hereunder or thereunder: (i) supplement,  modify, amend, extend, renew, accelerate or otherwise change the time for payment or the terms  of the New Vehicle Floorplan Obligations or any part thereof, including any increase or decrease  of the rates of interest thereon; (ii) supplement, modify, amend or waive, or enter into or give any  agreement, approval or consent with respect to, the New Vehicle Floorplan Obligations or any part  thereof, or any of the Loan Documents or any additional security or guaranties, or any condition,  

 

   58  covenant, default, remedy, right, representation or term thereof or thereunder; (iii) accept new or  additional instruments, documents or agreements in exchange for or relative to any of the Loan  Documents or the New Vehicle Floorplan Obligations or any part thereof; (iv) accept partial  payments on the New Vehicle Floorplan Obligations; (v) receive and hold additional security or  guaranties for the New Vehicle Floorplan Obligations or any part thereof; (vi) release, reconvey,  terminate, waive, abandon, fail to perfect, subordinate, exchange, substitute, transfer and/or  enforce any security or guaranties, and apply any security and direct the order or manner of sale  thereof as the Agent in its sole and absolute discretion may determine; (vii) release any Person  from any personal liability with respect to the New Vehicle Floorplan Obligations or any part  thereof; (viii) settle, release on terms satisfactory to the Agent or by operation of Applicable Law  or otherwise liquidate or enforce any New Vehicle Floorplan Obligations and any security or  guaranty in any manner; (ix) consent to the transfer of any security and bid and purchase at any  sale; and/or (x) consent to the merger, change or any other restructuring or termination of the  corporate or other existence of any New Vehicle Floorplan Borrower or any other Person, and  correspondingly restructure the New Vehicle Floorplan Obligations, and any such merger, change,  restructuring or termination shall not affect the liability of any New Vehicle Floorplan Borrower  hereunder, or under any other Loan Document to which any New Vehicle Floorplan Borrower is a  party, or affect the enforceability hereof or thereof with respect to all or any part of the New Vehicle  Floorplan Obligations.  (b) The Agent may enforce this Agreement and the other Loan  Documents independently as to each New Vehicle Floorplan Borrower and independently of any  other remedy or security the Agent or any Lender at any time may have or hold in connection with  the New Vehicle Floorplan Obligations, and it shall not be necessary for the Agent to marshal  assets in favor of any New Vehicle Floorplan Borrower or any other Person or to proceed upon or  against and/or exhaust any other security or remedy before proceeding against any New Vehicle  Floorplan Borrower.  Each New Vehicle Floorplan Borrower expressly waives any right to require  the Agent to marshal assets in favor of any New Vehicle Floorplan Borrower or any other Person  or to proceed against any other New Vehicle Floorplan Borrower or any Collateral provided by  any other New Vehicle Floorplan Borrower, and agrees that the Agent may proceed against New  Vehicle Floorplan Borrowers and/or the Collateral in such order as it shall determine in its sole  and absolute discretion.  To the extent permitted by Applicable Law, the Agent and the Lenders  may file a separate action or actions against any New Vehicle Floorplan Borrower, whether action  is brought or prosecuted with respect against any other Person, or whether any other Person is  joined in any such action or actions.  Each New Vehicle Floorplan Borrower agrees that the Agent,  the Lenders and each New Vehicle Floorplan Borrower and Affiliate of any New Vehicle Floorplan  Borrower may deal with each other in connection with the New Vehicle Floorplan Obligations or  otherwise, or alter any contracts or agreements now or hereafter existing between any of them, in  any manner whatsoever, all without in any way altering or affecting the enforceability of this  Agreement and the other Loan Documents or the liability of any New Vehicle Floorplan Borrower.   Each New Vehicle Floorplan Borrower shall at all times remain liable for the full amount of the  New Vehicle Floorplan Obligations even though the New Vehicle Floorplan Obligations, including  any part thereof or any other security or guaranty therefor, may be or hereafter may become invalid  or otherwise unenforceable as against any other New Vehicle Floorplan Borrower, or any one or  more of them or any other Person and whether or not any other New Vehicle Floorplan Borrower  or any other Person shall have any personal liability with respect thereto.  To the fullest extent  permitted by Applicable Law, each New Vehicle Floorplan Borrower expressly waives any and all  

 

   59  defenses now or hereafter arising or asserted by reason of (i) any disability or other defense of any  other New Vehicle Floorplan Borrower or any other Person with respect to the New Vehicle  Floorplan Obligations, (ii) the unenforceability or invalidity of any security or guaranty for the  New Vehicle Floorplan Obligations or the lack of perfection or continuing perfection or failure of  priority of any security for the New Vehicle Floorplan Obligations, (iii) the cessation from any  cause whatsoever of the liability of any other New Vehicle Floorplan Borrower or any other Person  (other than by reason of the full payment and performance of all New Vehicle Floorplan  Obligations), (iv) any failure of the Agent to marshal assets in favor of any New Vehicle Floorplan  Borrower or any other Person, (v) except as otherwise provided in this Agreement, or in the other  Loan Documents, any failure of the Agent to give notice of sale or other disposition of Collateral  to any New Vehicle Floorplan Borrower or any other Person or any defect in any notice that may  be given in connection with any sale or disposition of Collateral, (vi) any act or omission of the  Agent or any Lender or others that directly or indirectly results in or aids the discharge or release  of any other New Vehicle Floorplan Borrower or any other Person or the New Vehicle Floorplan  Obligations or any security or guaranty therefor by operation of Applicable Law or otherwise, (vii)  any Applicable Law which provides that the obligation of a surety or guarantor must neither be  larger in amount nor in other respects more burdensome than that of the principal or which reduces  a surety’s or guarantor’s obligation in proportion to the principal obligation, (viii) any failure of  the Agent or any Lender to file or enforce a claim in any bankruptcy or other proceeding with  respect to any Person, (ix) any election made by the Agent or any Lender in any bankruptcy  proceeding of any Person, (x) any extension of credit or the grant of any security interest under  any provision of the United States Bankruptcy Code, (xi) any use of cash collateral under the  United States Bankruptcy Code, (xii) any agreement or stipulation with respect to the provision of  adequate protection in any bankruptcy proceeding of any Person, (xiii) the avoidance of any  security in favor of the Agent or the Lenders for any reason, (xiv) any bankruptcy, insolvency,  reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding  commenced by or against any Person, including any discharge of, or bar or stay against collecting,  all or any of the New Vehicle Floorplan Obligations (or any interest thereon) in or as a result of  any such proceeding, (xv) to the extent permitted, the benefits of any form of one-action rule under  any Applicable Law, or (xvi) any action taken by the Agent or any Lender that is authorized by  this Agreement or any provision of any other Loan Document.  Each New Vehicle Floorplan  Borrower expressly waives any right to enforce any remedy that the Agent or any Lender now has  or hereafter may have against any other Person and waives the benefit of, or any right to participate  in, any Collateral now or hereafter held by the Agent or any Lender.  Each New Vehicle Floorplan  Borrower waives all rights and defenses arising out of an election of remedies by the Agent or any  Lender, even though that election of remedies, such as a nonjudicial foreclosure with respect to  security for the New Vehicle Floorplan Obligations has destroyed such New Vehicle Floorplan  Borrower’s rights of subrogation and reimbursement against the principal.  2.4.5 Condition of the New Vehicle Floorplan Borrowers.  Each New Vehicle  Floorplan Borrower represents and warrants to the Agent and the Lenders that such New Vehicle  Floorplan Borrower has established adequate means of obtaining from the other New Vehicle  Floorplan Borrowers, on a continuing basis, financial and other information pertaining to the  businesses, operations and condition (financial and otherwise) of the New Vehicle Floorplan  Borrowers and their properties, and each New Vehicle Floorplan Borrower now is and hereafter  will be completely familiar with the businesses, operations and condition (financial and otherwise)  of the other New Vehicle Floorplan Borrowers and their properties.  Each New Vehicle Floorplan  

 

   60  Borrower hereby expressly waives and relinquishes any duty on the part of the Agent and the  Lenders (should any such duty exist) to disclose to such New Vehicle Floorplan Borrower any  matter, fact or thing related to the businesses, operations or condition (financial or otherwise) of  any other New Vehicle Floorplan Borrower or its properties, whether now known or hereafter  known by the Agent or any Lender during the life of this Agreement.  With respect to any of the  New Vehicle Floorplan Obligations, the Agent and the Lenders need not inquire into the powers  of any New Vehicle Floorplan Borrower or the officers or employees acting or purporting to act  on its behalf, and each New Vehicle Floorplan Borrower shall be liable for all New Vehicle  Floorplan Obligations made or created in good faith reliance upon the professed exercise of such  powers.  2.4.6 Liens on Real Property.  In the event that all or any part of the New Vehicle  Floorplan Obligations at any time are secured by any one or more deeds of trust or mortgages or  other instruments creating or granting Liens on any interests in real property, each New Vehicle  Floorplan Borrower authorizes the Agent, upon the occurrence of and during the continuance of  any Event of Default, at its sole option, without notice or demand and without affecting any New  Vehicle Floorplan Obligations of any New Vehicle Floorplan Borrower, the enforceability of this  Agreement, or the validity or enforceability of any security interests of the Agent on any  Collateral, to foreclose any or all of such deeds of trust or mortgages or other instruments by  judicial or nonjudicial sale.  Each New Vehicle Floorplan Borrower expressly waives any  defenses to the enforcement of any security interests created by any Collateral Documents or to  the recovery by the Agent or any Lender against any New Vehicle Floorplan Borrower or any  guarantor or any other Person liable therefor of any deficiency after a judicial or nonjudicial  foreclosure or sale, even though such a foreclosure or sale may impair the subrogation rights of  such New Vehicle Floorplan Borrower and may preclude such New Vehicle Floorplan Borrower  from obtaining reimbursement or contribution from any other Person.  Each New Vehicle  Floorplan Borrower expressly waives any right to receive notice of any judicial or nonjudicial  foreclosure or sale of any real property or interest therein which is owned by another New  Vehicle Floorplan Borrower or any other Person and is subject to any such deeds of trust or  mortgages or other instruments and any New Vehicle Floorplan Borrower’s failure to receive  any such notice shall not impair or affect such New Vehicle Floorplan Borrower’s obligations  hereunder or the enforceability of this Agreement and the other Loan Documents.  2.4.7 Waiver of Rights of Subrogation.  Notwithstanding anything to the  contrary elsewhere contained herein or in any other Loan Document to which any New Vehicle  Floorplan Borrower is a party, each New Vehicle Floorplan Borrower hereby waives with respect  to each other New Vehicle Floorplan Borrower and its successors and assigns (including any  surety), any and all rights at law or in equity to subrogation, to reimbursement, to indemnity, to  exoneration, to contribution, to setoff or to any other rights that could accrue to a surety against a  principal, to a guarantor against a maker or obligor, to an accommodation party against the party  accommodated, or to a holder or transferee against a maker which any New Vehicle Floorplan  Borrower may have or hereafter acquire against any other New Vehicle Floorplan Borrower in  connection with or as a result of such New Vehicle Floorplan Borrowers’ execution, delivery and/or  performance of this Agreement or any other Loan Document to which any New Vehicle Floorplan  Borrower is a party, in each case, until the full and final payment of the New Vehicle Floorplan  Obligations and termination of the Commitments under this Agreement.  Until the full and final  payment of the New Vehicle Floorplan Obligations and the termination of the Commitments under  

 

   61  this Agreement, each New Vehicle Floorplan Borrower agrees that it shall not have or assert any  such rights against any other New Vehicle Floorplan Borrower or its successors and assigns  (including any surety) which is directly or indirectly a creditor of any other New Vehicle Floorplan  Borrower or any surety for any other New Vehicle Floorplan Borrower, either directly or as an  attempted setoff to any action commenced against any New Vehicle Floorplan Borrower by any  other New Vehicle Floorplan Borrower (as a borrower or in any other capacity).  Each New Vehicle  Floorplan Borrower hereby acknowledges and agrees that this waiver is intended to benefit the  Agent and the Lenders and shall not limit or otherwise affect its liability hereunder, under any  other Loan Document to which any New Vehicle Floorplan Borrower is a party, or the  enforceability hereof or thereof.  2.4.8 Waiver of Discharge.  Without limiting the generality of the foregoing, to  the fullest extent permitted by Applicable Law, each New Vehicle Floorplan Borrower hereby  waives discharge based upon all defenses based on suretyship or impairment of collateral.  2.4.9 Understandings with Respect to Waivers and Consents.  Each New  Vehicle Floorplan Borrower warrants and agrees that each of the waivers and consents set forth  herein are made after consultation with legal counsel and with full knowledge of their significance  and consequences, with the understanding that events giving rise to any defense or right waived  may diminish, destroy or otherwise adversely affect rights which such New Vehicle Floorplan  Borrowers otherwise may have against the other New Vehicle Floorplan Borrowers, the Agent,  any Lender, or against Collateral, and that, under the circumstances, the waivers and consents  herein given are reasonable.  If any of the waivers or consents herein is determined to be contrary  to any Applicable Law or public policy, such waivers and consents shall be effective to the  maximum extent permitted by Applicable Law.  2.4.10 Mutual Benefit.  Each New Vehicle Floorplan Borrower agrees that the  credit accommodations to be extended by the Lenders under this Agreement and the other Loan  Documents are of benefit to each of them, that each New Vehicle Floorplan Borrower is a direct  and indirect beneficiary of the value given thereunder, and each extension of credit under this  Agreement, and the other Loan Documents will be of substantial benefit to each New Vehicle  Floorplan Borrower.  2.5 Addition of New Vehicle Floorplan Dealerships.   (a)  As of the Closing Date,  the New Vehicle Floorplan Dealerships shall be the Dealerships signing this Agreement, which  shall be all Dealerships existing as of the date of this Agreement (except for Silo Subsidiaries and  any Dealership which does not require financing for its New Vehicles).  Thereafter, if any new  Dealership (other than a Canadian Dealership) is established or any existing Dealership (other than  a Canadian Dealership) requires financing for its New Vehicles, the Company shall deliver to the  Agent a written notice specifying the name of the additional New Vehicle Floorplan Dealership,  the proposed Dealership Loan Limit for such Dealership, the applicable manufacturers to be  financed for such Dealership and any other information requested by the Agent.  Upon approval  by the Agent, establishment of a Dealership Loan Limit and, if applicable, Dealership Loan  Sublimit(s), and satisfaction of the requirements in Section 9.3, such Dealership shall become a  New Vehicle Floorplan Dealership and entitled to finance Eligible New Vehicles hereunder.  For  purposes of clarification, no Dealership (other than a Canadian Dealership or a Dealership that is  financing its New Vehicles with the proceeds of Indebtedness permitted under Section 13.10(o))  

 

   62  shall incur any indebtedness to finance New Vehicles, except for New Vehicle Floorplan Loans  under this Agreement, without the consent of the Agent and the Lenders.  (b) If any new Canadian Dealership is established or any existing Canadian Dealership  requires financing for its New Vehicles, the Company may deliver to the Agent a written notice  specifying the name of the additional New Vehicle Floorplan Dealership, the proposed Dealership  Loan Limit for such Dealership, the applicable manufacturers to be financed for such Dealership  and any other information requested by the Agent.  Upon approval by all Lenders, establishment  of a Dealership Loan Limit and, if applicable, Dealership Loan Sublimit(s), and satisfaction of the  requirements in Section 9.3, such Canadian Dealership shall become a New Vehicle Floorplan  Dealership and entitled to finance Eligible New Vehicles hereunder.  2.6. PR Account.  In addition to any payments otherwise required by this Agreement,  the New Vehicle Floorplan Borrowers may reduce the outstanding principal balance of the New  Vehicle Floorplan Loans by means of one or more flooring line principal reduction accounts (each,  a “PR Account”).  At the Company’s request, the Agent will establish a PR Account for a New  Vehicle Floorplan Borrower (each New Vehicle Floorplan Borrower having a PR Account, a “PR  Account Borrower”) for the sole purpose of recording voluntary reductions in principal.  A PR  Account is not a deposit account, and PR Account Borrowers shall have no right or interest in any  balance in such account, except as expressly provided in this Section 2.6.  Each PR Account is  subject to the following provisions.  2.6.1 PR Account Payments.  A PR Account Borrower, at its discretion, may  make payments to a PR Account (each, a “PR Account Payment”) at any time, subject to the  provisions of subsections 2.6.3 and 2.6.7 of this Section 2.6 and further subject to the following  conditions:  (a) All payments into a PR Account must be made as transfers of  collected funds from a deposit account of a PR Account Borrower with the Agent.  (b) Payments into a PR Account must be in amounts of at least  $1,000,000.00.  (c) The balance in a PR Account may not at any time exceed the  aggregate outstanding principal balance of the New Vehicle Floorplan Loans. If the amount in a  PR Account exceeds the maximum amount permitted hereunder, the Agent is authorized to make  a PR Account Advance (defined below) in the amount of any such excess and deposit such amount  in a deposit account of the applicable PR Account Borrower with the Agent.  Notwithstanding the foregoing, any PR Accounts in existence on or prior to the Closing  Date may be consolidated into a single PR Account in the name of the Company on behalf of each  PR Account Borrower.   2.6.2 PR Account Advances.  The New Vehicle Floorplan Borrowers may re- borrow any balance in a PR Account as a New Vehicle Floorplan Loan (a “PR Account  Advance”) at any time during the term of this Agreement, subject to the provisions of subsections  2.6.3 and 2.6.6 of this Section 2.6 and further subject to the following conditions:  

 

   63  (a) No Event of Default shall have occurred and be continuing under  this Agreement.  (b) PR Account Advances must be in amounts of at least $1,000,000.00,  except the Company (on behalf of a PR Account Borrower) may request a PR Account Advance  in the amount of the remaining balance in a PR Account if the remaining balance is less than  $1,000,000.00; provided, however, that PR Account Advances made by the Agent pursuant to  subsections 2.6.1 and 2.6.7 of this Section 2.6 shall not be so limited.  2.6.3 Requests for PR Account Payments and Advances.  Whenever a PR  Account Borrower wishes to make a PR Account Payment or obtain a PR Account Advance, the  Company shall give Agent irrevocable notice thereof no later than 11:00 a.m. (Pacific time) at  least one Business Day prior to the date of the requested PR Account Payment or PR Account  Advance.  Such notice shall specify the amount of, and requested date of, the requested PR  Account Payment or PR Account Advance and include any other information requested by the  Agent.  2.6.4 Limitation on Transactions in PR Account.  The total number of  payments to and advances from a PR Account shall not exceed 6 transactions per calendar month  in the aggregate.  2.6.5 Application of PR Account Balance.  The balance in all PR Accounts shall  be applied to reduce the outstanding principal balance of the New Vehicle Floorplan Loans for the  purpose of computation of interest only, and shall in no way limit or modify the principal payment  requirements set forth elsewhere in this Agreement.  Notwithstanding any other provision in this  Section 2.6, except as set forth in the last sentence of Section 2.1.7 with respect to the New Vehicle  Floorplan Commitment Fee payable to Swing Line Lender, the balance in a PR Account may not  be used to reduce any principal amount outstanding for purposes of determining any remaining  availability under the lines of credit established by Sections 2.1 or 2.2 of this Agreement or any of  the other limitations stated in this Agreement.  2.6.6 Record of PR Account.  All payments into a PR Account and all PR  Account Advances shall be recorded on the Agent’s books.  2.6.7 Termination of PR Accounts.  The Agent and the Company on behalf of  the New Vehicle Floorplan Borrowers, may mutually agree to terminate this Section 2.6 at such  time as is agreed upon between them.  In addition, the Agent may terminate this Section 2.6: (a)  without prior notice upon the occurrence (or at any time during the continuation) of an Event of  Default or (b) upon 30 days’ notice to the Company if the reason for the termination is that the  Agent has decided not to offer PR Accounts to its customers generally or that the Agent is  prohibited or restricted by law or regulation from offering PR Accounts.  Provided that no Event  of Default exists, upon termination of this Section 2.6, the Agent shall make a PR Account  Advance in an amount equal to the balance in each PR Account and deposit such amount in a  deposit account of the applicable New Vehicle Floorplan Borrower with the Agent.  If an Event of  Default has occurred and is continuing, then upon termination of this Section 2.6, PR Account  Borrowers shall have no further right to receive any PR Account Advances and the Agent may  

 

   64  apply the balance in any PR Account to the Obligations in accordance with the provisions of this  Agreement.  ARTICLE 3   USED VEHICLE FLOORPLAN AND SERVICE LOANER VEHICLE FLOORPLAN  LINE OF CREDIT  3.1 Used Vehicle Floorplan Loans.  3.1.1 Used Vehicle Floorplan Commitment.  Subject to the terms and  conditions of this Agreement, each Lender severally and not jointly agrees to make loans (each a  “Used Vehicle Floorplan Loan”) to the Used Vehicle Floorplan Borrower on a revolving credit  basis during the period from the Closing Date to but not including the Termination Date; provided  that (a) the aggregate outstanding principal balance of the Used Vehicle Floorplan Loans made by  each Lender, plus the outstanding principal balance of such Lender’s participating interest in the  Used Vehicle Swing Line Loans shall not at any time exceed an amount equal to such Lender’s  Used Vehicle Floorplan Commitment; (b) the outstanding principal balance of all Used Vehicle  Floorplan Loans shall not at any time exceed, in the aggregate, as to all Lenders, the Maximum  Used Vehicle Floorplan Amount, and (c) the outstanding principal balance of all Used Vehicle  Floorplan Loans, plus the outstanding principal balance of all Used Vehicle Swing Line Loans,  shall not at any time exceed, in the aggregate, as to all Lenders, the Maximum Used Vehicle  Floorplan Amount.  Subject to the terms and conditions hereof, Borrower may borrow, prepay and  reborrow Used Vehicle Floorplan Loans.  3.1.2 Purpose of Used Vehicle Floorplan Loans.  The Used Vehicle Floorplan  Borrower shall use the proceeds of the Used Vehicle Floorplan Loans to finance Used Vehicles  owned by a Dealership and to refinance Used Vehicle Swing Line Loans.  3.1.3 Requests for Used Vehicle Floorplan Loans.  Whenever the Used Vehicle  Floorplan Borrower wishes to obtain a Used Vehicle Floorplan Advance, it shall give Agent  irrevocable notice thereof no later than 11:00 a.m. (Pacific Time) at least one Business Day prior  to the date of the requested borrowing.  Such notice shall specify the requested borrowing date  (which must be a Business Day), the amount of the Used Vehicle Floorplan Loan Advance, and  include any other information and documentation reasonably requested by the Agent.  The Agent  will promptly notify each Lender of its receipt of any request for a Used Vehicle Floorplan Advance  and of the amount of its Pro Rata Share of such Used Vehicle Floorplan Advance.  Each Used  Vehicle Floorplan Advance shall be in a minimum amount of $1,000,000.00 and in multiples of  $100,000.00 above such amount.  3.1.4 Funding of Used Vehicle Floorplan Loans.  If the Agent notifies the  Lenders of a request for a Used Vehicle Floorplan Advance by 1:00 p.m. (Pacific Time) on any  Business Day, each Lender will deliver its Pro Rata Share of such Used Vehicle Floorplan Advance  to the Agent by 11:00 a.m. (Pacific Time) on the Business Day after such notification.  3.1.5 Used Vehicle Floorplan Payments.  (a) Interest Payments.  Interest on the unpaid principal balance of the  Used Vehicle Floorplan Loans shall be paid monthly by the Used Vehicle Floorplan Borrower in  

 

   65  an amount equal to all interest accrued during the prior calendar month.  Such interest payments  shall be made on each Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date  commencing with the first such date to occur following the Closing Date and continuing thereafter.   All accrued interest outstanding on the Termination Date shall be due and payable in full on the  Termination Date.  (b) Voluntary Principal Payments.  The Used Vehicle Floorplan  Borrower may make voluntary repayments of all or a portion of the outstanding principal balance  of the Used Vehicle Floorplan Loans if the Used Vehicle Floorplan Borrower gives Agent written  or telephonic notice of such voluntary repayment no later than 11:00 a.m. (Pacific Time) at least  one Business Day prior to the date of such repayment; provided that each such voluntary principal  repayment shall be in a minimum amount of $1,000,000.00 and in multiples of $100,000.00 above  such amount unless the Used Vehicle Floorplan Loans are being repaid in full.  Such notice shall  specify the anticipated date of the voluntary repayment and the principal amount of the Used  Vehicle Floorplan Loans that will be repaid on such date.  Any voluntary repayment of the Used  Vehicle Floorplan Loans that is received by the Agent without such notice shall be deemed to have  been received by the Agent on the Business Day after such payment is actually received by the  Agent and interest shall accrue on the amounts so repaid through the date of such deemed receipt.  (c) Principal Payment at Maturity.  The entire outstanding principal  balance of the Used Vehicle Floorplan Loans plus all interest accrued thereon shall be due and  payable in full by the Used Vehicle Floorplan Borrower on the Termination Date.  (d) Principal Payment Upon Dual Subsidiary Financing  Commencement Date. If the Company designates a Subsidiary as a Dual Subsidiary in  accordance with Section 6.19, then the Used Vehicle Floorplan Borrower shall repay each Used  Vehicle Floorplan Loan and each Used Vehicle Swing Line Loan with respect to any Used Vehicle  that is subsequently financed by Permitted Dual Subsidiary Indebtedness immediately upon the  Dual Subsidiary Financing Commencement Date.  3.1.6 Voluntary Reduction or Termination of Commitment.  The Used Vehicle  Floorplan Borrower may from time to time on at least ten (10) Business Day’s prior written notice  to the Agent (which shall promptly advise each Lender thereof) permanently reduce the Aggregate  Used Vehicle Floorplan Commitment to an amount not less than the then outstanding principal  balance of the Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans.  Concurrently  with any reduction of the Aggregate Used Vehicle Floorplan Commitment to zero, (a) no further  Used Vehicle Floorplan Loans or Used Vehicle Swing Line Loans will be made, and (b) the Used  Vehicle Floorplan Borrower shall pay all principal and interest on the Used Vehicle Floorplan  Loans and Used Vehicle Swing Line Loans and all fees and other amounts owing to the Agent and  the Lenders.  All reductions of the Aggregate Used Vehicle Floorplan Commitment shall reduce  the Used Vehicle Floorplan Commitments pro rata among the Lenders according to their  respective Pro Rata Shares; and except as otherwise set forth in the proviso to this Section 3.1.6,  shall reduce the Used Vehicle Swing Line Commitment in proportion to the reduction of the  Aggregate Used Vehicle Floorplan Commitment; provided, however, that (unless the Aggregate  Used Vehicle Floorplan Commitment is reduced to less than such amount), the Used Vehicle Swing  Line Commitment shall not be reduced.  

 

   66  3.1.7 Used Vehicle Floorplan Commitment Fee.  The Used Vehicle Floorplan  Borrower agrees to pay to the Agent, for the account of the Lenders, a commitment fee (the “Used  Vehicle Floorplan Commitment Fee”) calculated at a per annum rate equal to the Used Vehicle  Floorplan Commitment Fee Rate on the average daily amount by which the Aggregate Used  Vehicle Floorplan Commitment exceeds the sum of (a) the actual aggregate outstanding principal  balance of the Used Vehicle Swing Line Loans on each day (it being understood that any portion  of the outstanding principal balance of the Used Vehicle Swing Line Loans ceases to be  outstanding under the Used Vehicle Swing Line Loans and commences being a portion of the  outstanding principal balance under the Used Vehicle Floorplan Loans on the date that the Used  Vehicle Floorplan Loans are funded to repay such portion of the outstanding principal balance of  the Used Vehicle Swing Line Loans); plus (b) the actual aggregate outstanding principal balance  of the Used Vehicle Floorplan Loans on each day; provided that, if the aggregate amount of the  Used Vehicle Floorplan Commitment Fee payable for any period to the Lenders other than the  Swing Line Lender (as set forth in the third sentence of this paragraph) exceeds the amount  calculated under this sentence, then the Used Vehicle Floorplan Borrower agrees to pay to the  Agent, for the account of such Lenders, such additional amounts so that each Lender other than  the Swing Line Lender receives the full amount of Used Vehicle Floorplan Commitment Fee  described in the third sentence of this paragraph.  The accrued Used Vehicle Floorplan  Commitment Fee shall be due and payable in arrears on each Quarterly Payment Date hereafter  and on the Termination Date for the three month period or other time period ending on the last day  of the preceding fiscal quarter or on the Termination Date.  The Used Vehicle Floorplan  Commitment Fee payable to each Lender other than the Swing Line Lender shall be based upon  the amount determined by multiplying such Lender’s Pro Rata Share by the average daily amount  by which the Aggregate Used Vehicle Floorplan Commitment exceeds the actual aggregate  outstanding principal balance of the Used Vehicle Floorplan Loans on each day.  The Used Vehicle  Floorplan Commitment Fee payable to the Lender which is the Swing Line Lender shall be based  upon the amount determined by multiplying such Lender’s Pro Rata Share by the average daily  amount by which the Aggregate Used Vehicle Floorplan Commitment exceeds the actual aggregate  outstanding principal balance of the Used Vehicle Floorplan Loans on each day and subtracting  from that amount the average daily outstanding principal balance of the Used Vehicle Swing Line  Loans.  3.1.8 Additional Payments.  The Lenders shall have no obligation whatsoever,  and they have no present intention, to make any Used Vehicle Floorplan Loan or Used Vehicle  Swing Line Loan after the Termination Date or which would cause the principal amount  outstanding under this Agreement to exceed any of the limitations stated in this Agreement.   Notwithstanding the foregoing, the Used Vehicle Floorplan Borrower is and shall be and remain  unconditionally liable to the Lenders for, and the Used Vehicle Floorplan Borrower hereby  promises to pay to the Agent for the account of the Lenders the amount of all Used Vehicle  Floorplan Loans, Used Vehicle Swing Line Loans, and other Used Vehicle Floorplan Obligations  hereunder, including without limitation Loans in excess of the limitations set forth herein and Used  Vehicle Floorplan Loans and Used Vehicle Swing Line Loans made after the Termination Date.   The Used Vehicle Floorplan Borrower shall pay to the Agent: (a) upon demand, or if earlier  immediately upon becoming aware of the overadvance, the amount of any Used Vehicle Floorplan  Loans and Used Vehicle Swing Line Loans in excess of any limitation contained in this Agreement;  and (b) upon demand, the amount of any Used Vehicle Floorplan Loans and Used Vehicle Swing  

 

   67  Line Loans made after the Termination Date; together with interest on the principal amount of such  Used Vehicle Floorplan Loans and Used Vehicle Swing Line Loans, as set forth herein.  3.2 Used Vehicle Swing Line Loans.  3.2.1 Used Vehicle Swing Line Commitment.  Subject to the terms and  conditions of this Agreement, the Swing Line Lender shall make loans (each, a “Used Vehicle  Swing Line Loan”) to the Used Vehicle Floorplan Borrower on a revolving credit basis during the  period from the Closing Date to but not including the Termination Date; provided that (a) the  aggregate outstanding principal balance of the Used Vehicle Swing Line Loans shall not at any  time exceed the Used Vehicle Swing Line Commitment; and (b) the outstanding principal balance  of all Used Vehicle Floorplan Loans made by all Lenders plus the outstanding principal balance of  all Used Vehicle Swing Line Loans, shall not at any time exceed the Maximum Used Vehicle  Floorplan Amount.  Subject to the terms and conditions hereof, the Used Vehicle Floorplan  Borrower may borrow, prepay and reborrow Used Vehicle Swing Line Loans.  3.2.2 Purpose of Used Vehicle Swing Line Loans.  The Used Vehicle Floorplan  Borrower shall use the proceeds of Used Vehicle Swing Line Loans for purposes permitted by  Section 3.1.2 and to fund Used Vehicle Sweep Advances pursuant to Section 3.2.7.  3.2.3 Requests for Used Vehicle Swing Line Loans.  Except as set forth in  Section 3.2.7, whenever the Used Vehicle Floorplan Loan Borrower wishes to obtain a Used  Vehicle Swing Line Loan, the Used Vehicle Floorplan Borrower shall give Agent irrevocable  notice thereof no later than 1:00 p.m. (Pacific Time) on the requested date of such Used Vehicle  Swing Line Loan, unless Swing Line Lender agrees in each instance, in its sole discretion, to a  shorter time period.  Such notice shall specify the requested borrowing date (which must be a  Business Day) and the amount of the Used Vehicle Swing Line Loan and include any other  documentation and information reasonably requested by the Agent.  3.2.4 Used Vehicle Swing Line Loan Payments.  (a) Interest Payments.  Interest on the unpaid principal balance of the  Used Vehicle Swing Line Loans shall be paid monthly by the Used Vehicle Floorplan Borrower in  an amount equal to all interest accrued during the prior calendar month.  Such interest payments  shall be made on each Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date  commencing with the first such date to occur following the Closing Date and continuing thereafter.   All accrued interest outstanding on the Termination Date shall be due and payable in full on the  Termination Date.  (b) Principal Payments.  The entire outstanding principal balance of  the Used Vehicle Swing Line Loans plus all interest accrued thereon shall be due and payable in  full by the Used Vehicle Floorplan Borrower on the Termination Date.  In addition, the principal  balance of the Used Vehicle Swing Line Loans shall be due and payable as required by Section  3.2.6.  3.2.5 Participation in Used Vehicle Swing Line Loans.  Immediately upon the  making of a Used Vehicle Swing Line Loan by the Swing Line Lender, the Swing Line Lender  shall be deemed to have sold and transferred to each Lender and each Lender shall be deemed to  

 

   68  have purchased and received from the Swing Line Lender, without any further action by any party,  an undivided participating interest in each Used Vehicle Swing Line Loan in an amount equal to  such Lender’s Pro Rata Share; provided, however, that (a) no Lender shall be required to fund its  participation in any Used Vehicle Swing Line Loan except as set forth in Section 3.2.6(b), and (b)  no Lender shall be entitled to share in any payments of principal or interest in respect of its  participation except, with respect to any participation funded by such Lender, as set forth herein.   Such participation shall be subject to the terms and conditions of this Agreement.  3.2.6 Settlement of Used Vehicle Swing Line Loans.  (a) Refunding of Loans.  (i) Upon the request of the Swing Line Lender, the Agent from  time to time shall, on behalf of the Used Vehicle Floorplan Borrower (and the Used Vehicle  Floorplan Borrower hereby irrevocably authorizes the Agent to so act on its behalf) request each  Lender (including Swing Line Lender in its capacity as a Lender) to make a Used Vehicle Floorplan  Loan to the Used Vehicle Floorplan Borrower, in accordance with the provisions of this Section  3.2.6(a), which shall be applied to repay all or a portion of the outstanding principal balance of the  Used Vehicle Swing Line Loans (each such Used Vehicle Floorplan Loan, a “Refunding Used  Vehicle Floorplan Loan”), in an amount equal to that Lender’s Pro Rata Share of all or a portion  of the then outstanding principal balance of the Used Vehicle Swing Line Loans.  (ii) Without limiting the foregoing, each Lender agrees that the  Agent may request the Lenders to make Refunding Used Vehicle Floorplan Loans at any time if  (A) a Default has occurred and is continuing, or (B) in the judgment of Swing Line Lender, taking  into account the outstanding principal balance of the Used Vehicle Swing Line Loans and the  anticipated usage of the Used Vehicle Swing Line Loans, and the operation of the Credit Sweep  pursuant to Section 3.2.7, such Refunding Used Vehicle Floorplan Loans are reasonably necessary  to ensure that the outstanding principal balance of the Used Vehicle Swing Line Loans will not at  any time exceed the Used Vehicle Swing Line Commitment or such lesser amount as is permitted  to be outstanding on the Used Vehicle Swing Line Loans at such time (it being understood that in  order to attain such objective, Swing Line Lender may request refunding of the Used Vehicle  Swing Line Loans even though the principal balance of the Used Vehicle Swing Line Loans at the  time of such request is less than the Used Vehicle Swing Line Commitment or the amount  permitted to be outstanding on the Used Vehicle Swing Line Loans).  (iii) If the Agent makes a request for funding under this Section  3.2.7(a) by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver the required  amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.   The proceeds of all Refunding Used Vehicle Floorplan Loans shall be paid by the Agent to the  Swing Line Lender in repayment of the outstanding principal balance of the applicable Used  Vehicle Swing Line Loans.  (b) Funding of Participations.  In addition to the right of the Swing  Line Lender to request refunding of the Used Vehicle Swing Line Loans pursuant to Section  3.2.6(a), upon the request of the Swing Line Lender, the Agent may request each Lender (including  Swing Line Lender in its capacity as a Lender) to fund its participation in the Used Vehicle Swing  

 

   69  Line Loans by paying to the Agent, for the account of the Swing Line Lender, its Pro Rata Share  of the principal amount of the Used Vehicle Swing Line Loans.  If the Agent makes such request  by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver such amount to the  Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.  All  participations funded by the Lenders under this Section 3.2.6(b) shall be treated as the funding of  the Revolving Loans for purposes of the calculation of the Used Vehicle Floorplan Commitment  Fee.  If any payment paid to any Lender with respect to its participating interest in any Used Vehicle  Swing Line Loan is thereafter recovered from or must be returned or paid over by Swing Line  Lender for any reason, such Lender will pay to the Agent for the account of the Swing Line Lender,  such Lender’s Pro Rata Share of such amount and of any interest and other amounts paid or payable  by the Swing Line Lender with respect to such amount.  The Agent agrees not to request any  funding of the Lender’s participations in the Used Vehicle Swing Line Loans under this Section  3.2.6(b) at any time that such participations may be legally repaid using advances of Used Vehicle  Floorplan Loans under Section 3.2.6(a).  (c) Payment to Swing Line Lender.  Notwithstanding any contrary  provision of this Agreement (i) except as set forth in clause (ii) of this Section 3.2.6(c) all payments  of principal and interest on the Used Vehicle Swing Line Loans shall be paid by the Agent solely  to the Swing Line Lender; and (ii) with respect to each participation in Used Vehicle Swing Line  Loans which is funded by any Lender, such Lender (including Swing Line Lender in its capacity  as Lender) shall be entitled to receive its Pro Rata Share of payments of (A) principal on such Used  Vehicle Swing Line Loans and (B) interest on such Used Vehicle Swing Line Loans only for the  period following the date such participation is funded.  (d) Obligations Unconditional.  The obligation of each Lender to  make Used Vehicle Floorplan Loans to repay Used Vehicle Swing Line Loans pursuant to Section  3.2.6(a) or to fund its participation interests in Used Vehicle Swing Line Loans pursuant to Section  3.2.6(b) shall be absolute and unconditional and shall not be affected by the occurrence of a  Default or Event of Default, the fact that any one or more of the conditions in Article 9 is not  satisfied, the termination of the availability of Loans, the fact that such Used Vehicle Floorplan  Loan is made after the Termination Date to refinance Used Vehicle Swing Line Loans made prior  to the Termination Date, any defense, setoff, counterclaim or claim for recoupment of any Lender  against Agent or Swing Line Lender or any other circumstance, whether or not similar to the  foregoing.  Notwithstanding the foregoing, the Lenders shall not be required to repay Used  Vehicle Swing Line Loans pursuant to Section 3.2.6(a) or to fund their participation interests in  Used Vehicle Swing Line Loans pursuant to Section 3.2.6(b) with respect to any portions of the  outstanding principal balance of the Used Vehicle Swing Line Loans that are funded by Swing  Line Lender after Agent is deemed to have knowledge or notice of the occurrence of a Default or  after the Termination Date.  3.2.7 Credit Sweep.  (a) Notwithstanding the provisions of Section 3.2.3, in addition to Used  Vehicle Swing Line Loans requested pursuant to Section 3.2.3, the Used Vehicle Floorplan  Borrower may also obtain and repay Used Vehicle Swing Ling Loans in accordance with the  provisions of this Section 3.2.7 (each, a “Used Vehicle Sweep Advance”).  Used Vehicle Sweep  Advances shall be Used Vehicle Swing Line Loans.  

 

   70  (b) Funds may be transferred between one or more deposit accounts  maintained by the Used Vehicle Floorplan Borrower with the Agent (each, a “Used Vehicle  Floorplan DDA”) and the Swing Line Loans.  Collected funds in the Used Vehicle Floorplan DDA  may be transferred to the Used Vehicle Swing Line Loans to reduce the outstanding principal  balance thereof and Used Vehicle Sweep Advances may be made to maintain an agreed upon  collected balance in the Used Vehicle Floorplan DDA.  (c) All Used Vehicle Sweep Advances shall be deemed to have been  requested by the Used Vehicle Floorplan Borrower and shall be subject to the terms and conditions  of this Agreement and the other Loan Documents, and shall also be subject to the Agent’s deposit  account, treasury management and other agreements with the Used Vehicle Floorplan Borrower;  provided, however, that if there is any conflict between the terms of such agreements and the Loan  Documents, the terms of the Loan Documents shall control.  (d) The Used Vehicle Floorplan Borrower may terminate this service by  written notice executed by the Used Vehicle Floorplan Borrower and delivered to the Agent.  The  Agent may change the terms or discontinue this service at any time upon written notice to the Used  Vehicle Floorplan Borrower.  (e) The Used Vehicle Floorplan Borrower shall pay such fees for this  sweep service as may be disclosed to the Used Vehicle Floorplan Borrower by the Agent.  Such  fees shall be for the sole account of the Agent.  3.3 Service Loaner Vehicle Floorplan Loans.  3.3.1 Service Loaner Vehicle Floorplan Commitment.  Subject to the  terms and conditions of this Agreement, each Lender severally and not jointly agrees to make  loans (each a “Service Loaner Vehicle Floorplan Loan”) to the Service Loaner Vehicle  Floorplan Borrower on a revolving credit basis during the period from the Closing Date to but  not including the Termination Date; provided that (a) the aggregate outstanding principal  balance of the Service Loaner Vehicle Floorplan Loans made by each Lender, plus the  outstanding principal balance of such Lender’s participating interest in the Service Loaner  Vehicle Swing Line Loans shall not at any time exceed an amount equal to such Lender’s  Service Loaner Vehicle Floorplan Commitment; (b) the outstanding principal balance of all  Service Loaner Vehicle Floorplan Loans shall not at any time exceed, in the aggregate, as to  all Lenders, the Maximum Service Loaner Vehicle Floorplan Amount, and (c) the outstanding  principal balance of all Service Loaner Vehicle Floorplan Loans, plus the outstanding  principal balance of all Service Loaner Vehicle Swing Line Loans, shall not at any time  exceed, in the aggregate, as to all Lenders, the Maximum Service Loaner Vehicle Floorplan  Amount.  Subject to the terms and conditions hereof, Borrower may borrow, prepay and  reborrow Service Loaner Vehicle Floorplan Loans.  3.3.2 Purpose of Service Loaner Vehicle Floorplan Loans.  The Service Loaner  Vehicle Floorplan Borrower shall use the proceeds of the Service Loaner Vehicle Floorplan Loans  to finance Service Loaner Vehicles owned by a Dealership and to refinance Service Loaner Vehicle  Swing Line Loans.  

 

   71  3.3.3 Requests for Service Loaner Vehicle Floorplan Loans.  Whenever the  Service Loaner Vehicle Floorplan Borrower wishes to obtain a Service Loaner Vehicle Floorplan  Advance, it shall give Agent irrevocable notice thereof no later than 11:00 a.m. (Pacific Time) at  least one Business Day prior to the date of the requested borrowing.  Such notice shall specify the  requested borrowing date (which must be a Business Day), the amount of the Service Loaner  Vehicle Floorplan Loan Advance, and include any other information and documentation  reasonably requested by the Agent.  The Agent will promptly notify each Lender of its receipt of  any request for a Service Loaner Vehicle Floorplan Advance and of the amount of its Pro Rata  Share of such Service Loaner Vehicle Floorplan Advance.  Each Service Loaner Vehicle Floorplan  Advance shall be in a minimum amount of $1,000,000.00 and in multiples of $100,000.00 above  such amount.  3.3.4 Funding of Service Loaner Vehicle Floorplan Loans.  If the Agent  notifies the Lenders of a request for a Service Loaner Vehicle Floorplan Advance by 1:00 p.m.  (Pacific Time) on any Business Day, each Lender will deliver its Pro Rata Share of such Service  Loaner Vehicle Floorplan Advance to the Agent by 11:00 a.m. (Pacific Time) on the Business Day  after such notification.  3.3.5 Service Loaner Vehicle Floorplan Payments.  (a) Interest Payments.  Interest on the unpaid principal balance of the  Service Loaner Vehicle Floorplan Loans shall be paid monthly by the Service Loaner Vehicle  Floorplan Borrower in an amount equal to all interest accrued during the prior calendar month.   Such interest payments shall be made on each Used Vehicle/Revolving/Service Loaner Vehicle  Monthly Payment Date commencing with the first such date to occur following the Closing Date  and continuing thereafter.  All accrued interest outstanding on the Termination Date shall be due  and payable in full on the Termination Date.  (b) Voluntary Principal Payments.  The Service Loaner Vehicle  Floorplan Borrower may make voluntary repayments of all or a portion of the outstanding principal  balance of the Service Loaner Vehicle Floorplan Loans if the Service Loaner Vehicle Floorplan  Borrower gives Agent written or telephonic notice of such voluntary repayment no later than 11:00  a.m. (Pacific Time) at least one Business Day prior to the date of such repayment; provided that  each such voluntary principal repayment shall be in a minimum amount of $1,000,000.00 and in  multiples of $100,000.00 above such amount unless the Service Loaner Vehicle Floorplan Loans  are being repaid in full.  Such notice shall specify the anticipated date of the voluntary repayment  and the principal amount of the Service Loaner Vehicle Floorplan Loans that will be repaid on  such date.  Any voluntary repayment of the Service Loaner Vehicle Floorplan Loans that is  received by the Agent without such notice shall be deemed to have been received by the Agent on  the Business Day after such payment is actually received by the Agent and interest shall accrue on  the amounts so repaid through the date of such deemed receipt.  (c) Principal Payment at Maturity.  The entire outstanding principal  balance of the Service Loaner Vehicle Floorplan Loans plus all interest accrued thereon shall be  due and payable in full by the Service Loaner Vehicle Floorplan Borrower on the Termination  Date.  

 

   72  3.3.6 Voluntary Reduction or Termination of Commitment.  The Service  Loaner Vehicle Floorplan Borrower may from time to time on at least ten (10) Business Day’s  prior written notice to the Agent (which shall promptly advise each Lender thereof) permanently  reduce the Aggregate Service Loaner Vehicle Floorplan Commitment to an amount not less than  the then outstanding principal balance of the Service Loaner Vehicle Floorplan Loans and Service  Loaner Vehicle Swing Line Loans.  Concurrently with any reduction of the Aggregate Service  Loaner Vehicle Floorplan Commitment to zero, (a) no further Service Loaner Vehicle Floorplan  Loans or Service Loaner Vehicle Swing Line Loans will be made, and (b) the Service Loaner  Vehicle Floorplan Borrower shall pay all principal and interest on the Service Loaner Vehicle  Floorplan Loans and Service Loaner Vehicle Swing Line Loans and all fees and other amounts  owing to the Agent and the Lenders.  All reductions of the Aggregate Service Loaner Vehicle  Floorplan Commitment shall reduce the Service Loaner Vehicle Floorplan Commitments pro rata  among the Lenders according to their respective Pro Rata Shares; and except as otherwise set forth  in the proviso to this Section 3.3.6, shall reduce the Service Loaner Vehicle Swing Line  Commitment in proportion to the reduction of the Aggregate Service Loaner Vehicle Floorplan  Commitment; provided, however, that (unless the Aggregate Service Loaner Vehicle Floorplan  Commitment is reduced to less than such amount), the Service Loaner Vehicle Swing Line  Commitment shall not be reduced.  3.3.7 Service Loaner Vehicle Floorplan Commitment Fee.  The Service Loaner  Vehicle Floorplan Borrower agrees to pay to the Agent, for the account of the Lenders, a  commitment fee (the “Service Loaner Vehicle Floorplan Commitment Fee”) calculated at a per  annum rate equal to the Service Loaner Vehicle Floorplan Commitment Fee Rate on the average  daily amount by which the Aggregate Service Loaner Vehicle Floorplan Commitment exceeds the  sum of (a) the actual aggregate outstanding principal balance of the Service Loaner Vehicle Swing  Line Loans on each day (it being understood that any portion of the outstanding principal balance  of the Service Loaner Vehicle Swing Line Loans ceases to be outstanding under the Service Loaner  Vehicle Swing Line Loans and commences being a portion of the outstanding principal balance  under the Service Loaner Vehicle Floorplan Loans on the date that the Service Loaner Vehicle  Floorplan Loans are funded to repay such portion of the outstanding principal balance of the  Service Loaner Vehicle Swing Line Loans); plus (b) the actual aggregate outstanding principal  balance of the Service Loaner Vehicle Floorplan Loans on each day; provided that, if the aggregate  amount of the Service Loaner Vehicle Floorplan Commitment Fee payable for any period to the  Lenders other than the Swing Line Lender (as set forth in the third sentence of this paragraph)  exceeds the amount calculated under this sentence, then the Service Loaner Vehicle Floorplan  Borrower agrees to pay to the Agent, for the account of such Lenders, such additional amounts so  that each Lender other than the Swing Line Lender receives the full amount of the Service Loaner  Vehicle Floorplan Commitment Fee described in the third sentence of this paragraph.  The accrued  Service Loaner Vehicle Floorplan Commitment Fee shall be due and payable in arrears on each  Quarterly Payment Date hereafter and on the Termination Date for the three month period or other  time period ending on the last day of the preceding fiscal quarter or on the Termination Date.  The  Service Loaner Vehicle Floorplan Commitment Fee payable to each Lender other than the Swing  Line Lender shall be based upon the amount determined by multiplying such Lender’s Pro Rata  Share by the average daily amount by which the Aggregate Service Loaner Vehicle Floorplan  Commitment exceeds the actual aggregate outstanding principal balance of the Service Loaner  Vehicle Floorplan Loans on each day.  The Service Loaner Vehicle Floorplan Commitment Fee  payable to the Lender which is the Swing Line Lender shall be based upon the amount determined  

 

   73  by multiplying such Lender’s Pro Rata Share by the average daily amount by which the Aggregate  Service Loaner Vehicle Floorplan Commitment exceeds the actual aggregate outstanding principal  balance of the Service Loaner Vehicle Floorplan Loans on each day and subtracting from that  amount the average daily outstanding principal balance of the Service Loaner Vehicle Swing Line  Loans.  3.3.8 Additional Payments.  The Lenders shall have no obligation whatsoever,  and they have no present intention, to make any Service Loaner Vehicle Floorplan Loan or Service  Loaner Vehicle Swing Line Loan after the Termination Date or which would cause the principal  amount outstanding under this Agreement to exceed any of the limitations stated in this Agreement.   Notwithstanding the foregoing, the Service Loaner Vehicle Floorplan Borrower is and shall be and  remain unconditionally liable to the Lenders for, and the Service Loaner Vehicle Floorplan  Borrower hereby promises to pay to the Agent for the account of the Lenders the amount of all  Service Loaner Vehicle Floorplan Loans, Service Loaner Vehicle Swing Line Loans, and other  Service Loaner Vehicle Floorplan Obligations hereunder, including without limitation Loans in  excess of the limitations set forth herein and Service Loaner Vehicle Floorplan Loans and Service  Loaner Vehicle Swing Line Loans made after the Termination Date.  The Service Loaner Vehicle  Floorplan Borrower shall pay to the Agent: (a) upon demand, or if earlier immediately upon  becoming aware of the overadvance, the amount of any Service Loaner Vehicle Floorplan Loans  and Service Loaner Vehicle Swing Line Loans in excess of any limitation contained in this  Agreement; and (b) upon demand, the amount of any Service Loaner Vehicle Floorplan Loans and  Service Loaner Vehicle Swing Line Loans made after the Termination Date; together with interest  on the principal amount of such Service Loaner Vehicle Floorplan Loans and Service Loaner  Vehicle Swing Line Loans, as set forth herein.  3.4 Service Loaner Vehicle Swing Line Loans.   3.4.1 Service Loaner Vehicle Swing Line Commitment.  Subject to the  terms and conditions of this Agreement, the Swing Line Lender shall make loans (each, a  “Service Loaner Vehicle Swing Line Loan”) to the Service Loaner Vehicle Floorplan  Borrower on a revolving credit basis during the period from the Closing Date to but not  including the Termination Date; provided that (a) the aggregate outstanding principal balance  of the Service Loaner Vehicle Swing Line Loans shall not at any time exceed the Service  Loaner Vehicle Swing Line Commitment; and (b) the outstanding principal balance of all  Service Loaner Vehicle Floorplan Loans made by all Lenders plus the outstanding principal  balance of all Service Loaner Vehicle Swing Line Loans, shall not at any time exceed the  Maximum Service Loaner Vehicle Floorplan Amount.  Subject to the terms and conditions  hereof, the Service Loaner Vehicle Floorplan Borrower may borrow, prepay and reborrow  Service Loaner Vehicle Swing Line Loans.  3.4.2 Purpose of Service Loaner Vehicle Swing Line Loans.  The Service  Loaner Vehicle Floorplan Borrower shall use the proceeds of Service Loaner Vehicle Swing Line  Loans for purposes permitted by Section 3.3.2 and to fund Service Loaner Vehicle Sweep  Advances pursuant to Section 3.4.7.  3.4.3 Requests for Service Loaner Vehicle Swing Line Loans.  Except as set  forth in Section 3.4.7, whenever the Service Loaner Vehicle Floorplan Loan Borrower wishes to  

 

   74  obtain a Service Loaner Vehicle Swing Line Loan, the Service Loaner Vehicle Floorplan Borrower  shall give Agent irrevocable notice thereof no later than 1:00 p.m. (Pacific Time) on the requested  date of such Service Loaner Vehicle Swing Line Loan, unless Swing Line Lender agrees in each  instance, in its sole discretion, to a shorter time period.  Such notice shall specify the requested  borrowing date (which must be a Business Day) and the amount of the Service Loaner Vehicle  Swing Line Loan and include any other documentation and information reasonably requested by  the Agent.  3.4.4 Service Loaner Vehicle Swing Line Loan Payments.  (a) Interest Payments.  Interest on the unpaid principal balance of the  Service Loaner Vehicle Swing Line Loans shall be paid monthly by the Service Loaner Vehicle  Floorplan Borrower in an amount equal to all interest accrued during the prior calendar month.   Such interest payments shall be made on each Used Vehicle/Revolving/Service Loaner Vehicle  Monthly Payment Date commencing with the first such date to occur following the Closing Date  and continuing thereafter.  All accrued interest outstanding on the Termination Date shall be due  and payable in full on the Termination Date.  (b) Principal Payments.  The entire outstanding principal balance of  the Service Loaner Vehicle Swing Line Loans plus all interest accrued thereon shall be due and  payable in full by the Service Loaner Vehicle Floorplan Borrower on the Termination Date.  In  addition, the principal balance of the Service Loaner Vehicle Swing Line Loans shall be due and  payable as required by Section 3.4.6.  3.4.5 Participation in Service Loaner Vehicle Swing Line Loans.  Immediately  upon the making of a Service Loaner Vehicle Swing Line Loan by the Swing Line Lender, the  Swing Line Lender shall be deemed to have sold and transferred to each Lender and each Lender  shall be deemed to have purchased and received from the Swing Line Lender, without any further  action by any party, an undivided participating interest in each Service Loaner Vehicle Swing Line  Loan in an amount equal to such Lender’s Pro Rata Share; provided, however, that (a) no Lender  shall be required to fund its participation in any Service Loaner Vehicle Swing Line Loan except  as set forth in Section 3.4.6(b), and (b) no Lender shall be entitled to share in any payments of  principal or interest in respect of its participation except, with respect to any participation funded  by such Lender, as set forth herein.  Such participation shall be subject to the terms and conditions  of this Agreement.  3.4.6 Settlement of Service Loaner Vehicle Swing Line Loans.  (a) Refunding of Loans.  (i) Upon the request of the Swing Line Lender, the Agent from  time to time shall, on behalf of the Service Loaner Vehicle Floorplan Borrower (and the Service  Loaner Vehicle Floorplan Borrower hereby irrevocably authorizes the Agent to so act on its behalf)  request each Lender (including Swing Line Lender in its capacity as a Lender) to make a Service  Loaner Vehicle Floorplan Loan to the Service Loaner Vehicle Floorplan Borrower, in accordance  with the provisions of this Section 3.4.6(a), which shall be applied to repay all or a portion of the  outstanding principal balance of the Service Loaner Vehicle Swing Line Loans (each such Service  

 

   75  Loaner Vehicle Floorplan Loan, a “Refunding Service Loaner Vehicle Floorplan Loan”), in an  amount equal to that Lender’s Pro Rata Share of all or a portion of the then outstanding principal  balance of the Service Loaner Vehicle Swing Line Loans.  (ii) Without limiting the foregoing, each Lender agrees that the  Agent may request the Lenders to make Refunding Service Loaner Vehicle Floorplan Loans at any  time if (A) a Default has occurred and is continuing, or (B) in the judgment of Swing Line Lender,  taking into account the outstanding principal balance of the Service Loaner Vehicle Swing Line  Loans and the anticipated usage of the Service Loaner Vehicle Swing Line Loans, and the operation  of the Credit Sweep pursuant to Section 3.4.7, such Refunding Service Loaner Vehicle Floorplan  Loans are reasonably necessary to ensure that the outstanding principal balance of the Service  Loaner Vehicle Swing Line Loans will not at any time exceed the Service Loaner Vehicle Swing  Line Commitment or such lesser amount as is permitted to be outstanding on the Service Loaner  Vehicle Swing Line Loans at such time (it being understood that in order to attain such objective,  Swing Line Lender may request refunding of the Service Loaner Vehicle Swing Line Loans even  though the principal balance of the Service Loaner Vehicle Swing Line Loans at the time of such  request is less than the Service Loaner Vehicle Swing Line Commitment or the amount permitted  to be outstanding on the Service Loaner Vehicle Swing Line Loans).  (iii) If the Agent makes a request for funding under this Section  3.4.7(a) by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver the required  amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.   The proceeds of all Refunding Service Loaner Vehicle Floorplan Loans shall be paid by the Agent  to the Swing Line Lender in repayment of the outstanding principal balance of the applicable  Service Loaner Vehicle Swing Line Loans.  (b) Funding of Participations.  In addition to the right of the Swing  Line Lender to request refunding of the Service Loaner Vehicle Swing Line Loans pursuant to  Section 3.4.6(a), upon the request of the Swing Line Lender, the Agent may request each Lender  (including Swing Line Lender in its capacity as a Lender) to fund its participation in the Service  Loaner Vehicle Swing Line Loans by paying to the Agent, for the account of the Swing Line  Lender, its Pro Rata Share of the principal amount of the Service Loaner Vehicle Swing Line  Loans.  If the Agent makes such request by 1:00 p.m. (Pacific Time) on any Business Day, the  Lenders will deliver such amount to the Agent no later than 11:00 a.m. (Pacific Time) on the  Business Day after such request.  All participations funded by the Lenders under this Section  3.4.6(b) shall be treated as the funding of the Revolving Loans for purposes of the calculation of  the Service Loaner Vehicle Floorplan Commitment Fee.  If any payment paid to any Lender with  respect to its participating interest in any Service Loaner Vehicle Swing Line Loan is thereafter  recovered from or must be returned or paid over by Swing Line Lender for any reason, such Lender  will pay to the Agent for the account of the Swing Line Lender, such Lender’s Pro Rata Share of  such amount and of any interest and other amounts paid or payable by the Swing Line Lender with  respect to such amount.  The Agent agrees not to request any funding of the Lender’s participations  in the Service Loaner Vehicle Swing Line Loans under this Section 3.4.6(b) at any time that such  participations may be legally repaid using advances of Service Loaner Vehicle Floorplan Loans  under Section 3.4.6(a).  

 

   76  (c) Payment to Swing Line Lender.  Notwithstanding any contrary  provision of this Agreement (i) except as set forth in clause (ii) of this Section 3.4.6(c) all payments  of principal and interest on the Service Loaner Vehicle Swing Line Loans shall be paid by the  Agent solely to the Swing Line Lender; and (ii) with respect to each participation in Service Loaner  Vehicle Swing Line Loans which is funded by any Lender, such Lender (including Swing Line  Lender in its capacity as Lender) shall be entitled to receive its Pro Rata Share of payments of (A)  principal on such Service Loaner Vehicle Swing Line Loans and (B) interest on such Service  Loaner Vehicle Swing Line Loans only for the period following the date such participation is  funded.  (d) Obligations Unconditional.  The obligation of each Lender to  make Service Loaner Vehicle Floorplan Loans to repay Service Loaner Vehicle Swing Line Loans  pursuant to Section 3.4.6(a) or to fund its participation interests in Service Loaner Vehicle Swing  Line Loans pursuant to Section 3.4.6(b) shall be absolute and unconditional and shall not be  affected by the occurrence of a Default or Event of Default, the fact that any one or more of the  conditions in Article 9 is not satisfied, the termination of the availability of Loans, the fact that  such Service Loaner Vehicle Floorplan Loan is made after the Termination Date to refinance  Service Loaner Vehicle Swing Line Loans made prior to the Termination Date, any defense, setoff,  counterclaim or claim for recoupment of any Lender against Agent or Swing Line Lender or any  other circumstance, whether or not similar to the foregoing.  Notwithstanding the foregoing, the  Lenders shall not be required to repay Service Loaner Vehicle Swing Line Loans pursuant to  Section 3.4.6(a) or to fund their participation interests in Service Loaner Vehicle Swing Line  Loans pursuant to Section 3.4.6(b) with respect to any portions of the outstanding principal  balance of the Service Loaner Vehicle Swing Line Loans that are funded by Swing Line Lender  after Agent is deemed to have knowledge or notice of the occurrence of a Default or after the  Termination Date.  3.4.7 Credit Sweep.  (a) Notwithstanding the provisions of Section 3.4.3, in addition to  Service Loaner Vehicle Swing Line Loans requested pursuant to Section 3.4.3, the Service Loaner  Vehicle Floorplan Borrower may also obtain and repay Service Loaner Vehicle Swing Ling Loans  in accordance with the provisions of this Section 3.4.7 (each, a “Service Loaner Vehicle Sweep  Advance”).  Service Loaner Vehicle Sweep Advances shall be Service Loaner Vehicle Swing Line  Loans.  (b) Funds may be transferred between one or more deposit accounts  maintained by the Service Loaner Vehicle Floorplan Borrower with the Agent (each, a “Service  Loaner Vehicle Floorplan DDA”) and the Swing Line Loans.  Collected funds in the Service  Loaner Vehicle Floorplan DDA may be transferred to the Service Loaner Vehicle Swing Line  Loans to reduce the outstanding principal balance thereof and Service Loaner Vehicle Sweep  Advances may be made to maintain an agreed upon collected balance in the Service Loaner Vehicle  Floorplan DDA.  (c) All Service Loaner Vehicle Sweep Advances shall be deemed to  have been requested by the Service Loaner Vehicle Floorplan Borrower and shall be subject to the  terms and conditions of this Agreement and the other Loan Documents, and shall also be subject  

 

   77  to the Agent’s deposit account, treasury management and other agreements with the Service Loaner  Vehicle Floorplan Borrower; provided, however, that if there is any conflict between the terms of  such agreements and the Loan Documents, the terms of the Loan Documents shall control.  (d) The Service Loaner Vehicle Floorplan Borrower may terminate this  service by written notice executed by the Service Loaner Vehicle Floorplan Borrower and  delivered to the Agent.  The Agent may change the terms or discontinue this service at any time  upon written notice to the Service Loaner Vehicle Floorplan Borrower.  (e) The Service Loaner Vehicle Floorplan Borrower shall pay such fees  for this sweep service as may be disclosed to the Service Loaner Vehicle Floorplan Borrower by  the Agent.  Such fees shall be for the sole account of the Agent.    ARTICLE 4  REVOLVING LINE OF CREDIT  4.1 Revolving Loans.  4.1.1 Revolving Loan Commitment.  Subject to the terms and conditions of this  Agreement, each Lender severally and not jointly agrees to make loans (each a “Revolving Loan”)  to the Revolving Loan Borrower on a revolving credit basis during the period from the Closing  Date to but not including the Termination Date; provided that (a) the aggregate outstanding  principal balance of the Revolving Loans made by each Lender, plus the outstanding principal  balance of such Lender’s participating interest in the Revolving Swing Line Loans and Letters of  Credit shall not at any time exceed an amount equal to such Lender’s Revolving Loan  Commitment; (b) the outstanding principal balance of all Revolving Loans shall not at any time  exceed, in the aggregate, as to all Lenders, the Maximum Revolving Loan Amount, and (c) the  outstanding principal balance of all Revolving Loans, plus the outstanding principal balance of all  Revolving Swing Line Loans, plus the LC Obligations shall not at any time exceed, in the  aggregate, as to all Lenders, the Maximum Revolving Loan Amount.  Subject to the terms and  conditions hereof, Borrower may borrow, prepay and reborrow Revolving Loans.  4.1.2 Purpose of Revolving Loans.  The Revolving Loan Borrower shall use the  proceeds of the Revolving Loans, for Permitted Acquisitions, capital expenditures, its general  corporate purposes and to refinance Revolving Swing Line Loans.  4.1.3 Requests for Revolving Loans.  Whenever the Revolving Loan Borrower  wishes to obtain a Revolving Loan Advance, it shall give Agent irrevocable notice thereof no later  than 11:00 a.m. (Pacific Time) at least one Business Day prior to the date of the requested  borrowing.  Such notice shall specify the requested borrowing date (which must be a Business  Day), the amount of the Revolving Loan Advance, and include any other information and  documentation reasonably requested by the Agent.  The Agent will promptly notify each Lender  of its receipt of any request for a Revolving Loan Advance and of the amount of its Pro Rata Share  of such Revolving Loan Advance.  Each Revolving Loan Advance shall be in a minimum amount  of $1,000,000.00 and in multiples of $100,000.00 above such amount.  

 

   78  4.1.4 Funding of Revolving Loans.  If the Agent notifies the Lenders of a request  for a Revolving Loan Advance by 1:00 p.m. (Pacific Time) on any Business Day, each Lender will  deliver its Pro Rata Share of such Revolving Loan Advance to the Agent by 11:00 a.m. (Pacific  Time) on the Business Day after such notification.  4.1.5 Revolving Loan Payments.  (a) Interest Payments.  Interest on the unpaid principal balance of the  Revolving Loans shall be paid monthly by the Revolving Loan Borrower in an amount equal to  all interest accrued during the prior calendar month.  Such interest payments shall be made on each  Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date commencing with the  first such date to occur following the Closing Date and continuing thereafter.  All accrued interest  outstanding on the Termination Date shall be due and payable in full on the Termination Date.  (b) Voluntary Principal Payments.  The Revolving Loan Borrower  may make voluntary repayments of all or a portion of the outstanding principal balance of the  Revolving Loans if the Revolving Loan Borrower gives Agent written or telephonic notice of such  voluntary repayment no later than 11:00 a.m. (Pacific Time) at least one Business Day prior to the  date of such repayment; provided that each such voluntary principal repayment shall be in a  minimum amount of $1,000,000.00 and in multiples of $100,000.00 above such amount unless the  Revolving Loans are being repaid in full.  Such notice shall specify the anticipated date of the  voluntary repayment and the principal amount of the Revolving Loans that will be repaid on such  date.  Any voluntary repayment of the Revolving Loans that is received by the Agent without such  notice shall be deemed to have been received by the Agent on the Business Day after such payment  is actually received by the Agent and interest shall accrue on the amounts so repaid through the  date of such deemed receipt.  (c) Principal Payment at Maturity.  The entire outstanding principal  balance of the Revolving Loans plus all interest accrued thereon shall be due and payable in full  by the Revolving Loan Borrower on the Termination Date.  4.1.6 Voluntary Reduction or Termination of Commitment.  The Revolving  Loan Borrower may from time to time on at least ten (10) Business Day’s prior written notice to  the Agent (which shall promptly advise each Lender thereof) permanently reduce the Aggregate  Revolving Loan Commitment to an amount not less than the then outstanding principal balance of  the Revolving Loans and Revolving Swing Line Loans plus the LC Obligations.  Concurrently  with any reduction of the Aggregate Revolving Loan Commitment to zero, (a) no further  Revolving Loans or Revolving Swing Line Loans will be made and no further Letters of Credit  will be issued, (b) the Revolving Loan Borrower shall pay all principal and interest on the  Revolving Loans and Revolving Swing Line Loans and all fees and other amounts owing to the  Agent and the Lenders, and (c) the Revolving Loan Borrower shall grant to the Agent a security  interest in cash collateral to be held in the LC Collateral Account in an amount equal to the LC  Obligations at such time.  All reductions of the Aggregate Revolving Loan Commitment shall  reduce the Revolving Loan Commitments pro rata among the Lenders according to their  respective Pro Rata Shares; and except as otherwise set forth in the proviso to this Section 4.1.6,  shall reduce the Revolving Swing Line Commitment in proportion to the reduction of the  Aggregate Revolving Loan Commitment; provided, however, that (unless the Aggregate  

 

   79  Revolving Loan Commitment is reduced to less than such amount), the Revolving Swing Line  Commitment shall not be reduced.  4.1.7 Revolving Loan Commitment Fee.  The Revolving Loan Borrower agrees  to pay to the Agent, for the account of the Lenders, a commitment fee (the “Revolving Loan  Commitment Fee”) calculated at a per annum rate equal to the Revolving Loan Commitment Fee  Rate on the average daily amount by which the Aggregate Revolving Loan Commitment exceeds  the sum of (a) the actual aggregate outstanding principal balance of the Revolving Swing Line  Loans on each day (it being understood that any portion of the outstanding principal balance of the  Revolving Swing Line Loans ceases to be outstanding under the Revolving Swing Line Loans and  commences being a portion of the outstanding principal balance under the Revolving Loans on the  date that the Revolving Loans are funded to repay such portion of the outstanding principal balance  of the Revolving Swing Line Loans); plus (b) the actual aggregate outstanding principal balance  of the Revolving Loans plus the LC Obligations on each day; provided that, if the aggregate  amount of the Revolving Loan Commitment Fee payable for any period to the Lenders other than  the Swing Line Lender (as set forth in the third sentence of this paragraph) exceeds the amount  calculated under this sentence, then the Revolving Loan Borrower agrees to pay to the Agent, for  the account of such Lenders, such additional amounts so that each Lender other than the Swing  Line Lender receives the full amount of Revolving Loan Commitment Fee described in the third  sentence of this paragraph.  The accrued Revolving Loan Commitment Fee shall be due and  payable in arrears on each Quarterly Payment Date hereafter and on the Termination Date for the  three month period or other time period ending on the last day of the preceding fiscal quarter or on  the Termination Date.  The Revolving Loan Commitment Fee payable to each Lender other than  the Swing Line Lender shall be based upon the amount determined by multiplying such Lender’s  Pro Rata Share by the average daily amount by which the Aggregate Revolving Loan Commitment  exceeds the actual aggregate outstanding principal balance of the Revolving Loans plus the LC  Obligations on each day.  The Revolving Loan Commitment Fee payable to the Lender which is  the Swing Line Lender shall be based upon the amount determined by multiplying such Lender’s  Pro Rata Share by the average daily amount by which the Aggregate Revolving Loan Commitment  exceeds the actual aggregate outstanding principal balance of the Revolving Loans plus the LC  Obligations on each day and subtracting from that amount the average daily outstanding principal  balance of the Revolving Swing Line Loans.  4.1.8 Additional Payments.  The Lenders shall have no obligation whatsoever,  and they have no present intention, to make any Revolving Loan or Revolving Swing Line Loan  after the Termination Date or which would cause the principal amount outstanding under this  Agreement to exceed any of the limitations stated in this Agreement.  Notwithstanding the  foregoing, the Revolving Loan Borrower is and shall be and remain unconditionally liable to the  Lenders for, and the Revolving Loan Borrower hereby promises to pay to the Agent for the account  of the Lenders the amount of all Revolving Loans, Revolving Swing Line Loans, LC Obligations  and other Revolving Loan Obligations hereunder, including without limitation Loans in excess of  the limitations set forth herein and Revolving Loans and Revolving Swing Line Loans made after  the Termination Date.  The Revolving Loan Borrower shall pay to the Agent: (a) upon demand, or  if earlier immediately upon becoming aware of the overadvance, the amount of any Revolving  Loans and Revolving Swing Line Loans and LC Obligations in excess of any limitation contained  in this Agreement; and (b) upon demand, the amount of any Revolving Loans and Revolving  

 

   80  Swing Line Loans made after the Termination Date; together with interest on the principal amount  of such Revolving Loans and Revolving Swing Line Loans and LC Obligations, as set forth herein.  4.1.9 Reserve Amount.  (a) In addition to any other limitations set forth in this Article 4, in the  event that on any day the outstanding principal balance of all New Vehicle Floorplan Loans, plus  New Vehicle Swing Line Loans, plus requests for New Vehicle Floorplan Loans and New Vehicle  Swing Line Loans exceeds ninety-five percent (95%) of the Aggregate New Vehicle Floorplan  Loan Commitment as of such date, then until the next Business Day on which such condition no  longer exists (i) a portion of the Aggregate Revolving Loan Commitment (the “Reserve Amount”)  in an amount equal to the lesser of (A) Fifteen Million Dollars ($15,000,000.00) or (B) an amount  equal to the Maximum Revolving Loan Amount as of any date, minus the sum of the outstanding  principal balance of the Revolving Loans, Revolving Swing Lines Loans and LC Obligations as  of such date, shall be reserved and, except as set forth in Section 4.1.9 (b) shall no longer be  available for funding Revolving Loans or Revolving Swing Line Loans or for issuance of Letters  of Credit, and (ii) the Maximum Revolving Loan Amount shall be reduced by the amount of the  Reserve Amount.  (b) (i) Notwithstanding any contrary provision in Section 4.1.9(a), the  Reserve Amount may be used to fund Revolving Loans and Revolving Swing Line Loans which  are used to repay New Vehicle Swing Line Loans or New Vehicle Floorplan Loans, so long as after  giving effect to such Loans, the outstanding principal balance of the Revolving Loans, Revolving  Swing Line Loans and LC Obligations does not exceed the Maximum Revolving Loan Amount  (calculated without giving effect to reduction by the Reserve Amount); and (ii) if, after giving  effect to any payment described in Section 4.1.9(b)(i), the circumstances giving rise to the  requirement for a Reserve Amount are still in effect, then the requirements and limitations in  Section 4.1.9(a) shall continue in effect, including without limitation the requirement to maintain  the Reserve Amount and the restrictions on borrowing set forth therein.  4.2 Revolving Swing Line Loans.  4.2.1 Revolving Swing Line Commitment.  Subject to the terms and conditions  of this Agreement, the Swing Line Lender shall make loans (each, a “Revolving Swing Line  Loan”) to the Revolving Loan Borrower on a revolving credit basis during the period from the  Closing Date to but not including the Termination Date; provided that (a) the aggregate outstanding  principal balance of the Revolving Swing Line Loans shall not at any time exceed the Revolving  Swing Line Commitment; and (b) the outstanding principal balance of all Revolving Loans made  by all Lenders plus the outstanding principal balance of all Revolving Swing Line Loans, plus the  LC Obligations, shall not at any time exceed the Maximum Revolving Loan Amount.  Subject to  the terms and conditions hereof, the Revolving Loan Borrower may borrow, prepay and reborrow  Revolving Swing Line Loans.  4.2.2 Purpose of Revolving Swing Line Loans.  The Revolving Loan Borrower  shall use the proceeds of Revolving Swing Line Loans for purposes permitted by Section 4.1.2.  

 

   81  4.2.3 Requests for Revolving Swing Line Loans.  Whenever the Revolving  Loan Borrower wishes to obtain a Revolving Swing Line Loan, the Revolving Loan Borrower  shall give Agent irrevocable notice thereof no later than 1:00 p.m. (Pacific Time) on the requested  date of such Revolving Swing Line Loan, unless Swing Line Lender agrees in each instance, in its  sole discretion, to a shorter time period.  Such notice shall specify the requested borrowing date  (which must be a Business Day) and the amount of the Revolving Swing Line Loan and include  any other documentation and information reasonably requested by the Agent.  4.2.4 Revolving Swing Line Loan Payments.  (a) Interest Payments.  Interest on the unpaid principal balance of the  Revolving Swing Line Loans shall be paid monthly by the Revolving Loan Borrower in an amount  equal to all interest accrued during the prior calendar month.  Such interest payments shall be made  on each Used Vehicle/Revolving/Service Loaner Vehicle Monthly Payment Date commencing  with the first such date to occur following the Closing Date and continuing thereafter.  All accrued  interest outstanding on the Termination Date shall be due and payable in full on the Termination  Date.  (b) Principal Payments.  The entire outstanding principal balance of  the Revolving Swing Line Loans plus all interest accrued thereon shall be due and payable in full  by the Revolving Loan Borrower on the Termination Date.  In addition, the principal balance of  the Revolving Swing Line Loans shall be due and payable as required by Section 4.2.6.  4.2.5 Participation in Revolving Swing Line Loans.  Immediately upon the  making of a Revolving Swing Line Loan by the Swing Line Lender, the Swing Line Lender shall  be deemed to have sold and transferred to each Lender and each Lender shall be deemed to have  purchased and received from the Swing Line Lender, without any further action by any party, an  undivided participating interest in each Revolving Swing Line Loan in an amount equal to such  Lender’s Pro Rata Share; provided, however, that (a) no Lender shall be required to fund its  participation in any Revolving Swing Line Loan except as set forth in Section 4.2.6(b), and (b) no  Lender shall be entitled to share in any payments of principal or interest in respect of its  participation except, with respect to any participation funded by such Lender, as set forth herein.   Such participation shall be subject to the terms and conditions of this Agreement.  4.2.6 Settlement of Revolving Swing Line Loans.  (a) Refunding of Loans.  (i) Upon the request of the Swing Line Lender, the Agent from  time to time shall, on behalf of the Revolving Loan Borrower (and the Revolving Loan Borrower  hereby irrevocably authorizes the Agent to so act on its behalf) request that each Lender (including  Swing Line Lender in its capacity as a Lender) make a Revolving Loan to the Revolving Loan  Borrower, in accordance with the provisions of this Section 4.2.6(a), which shall be applied to  repay all or a portion of the outstanding principal balance of the Revolving Swing Line Loans  (each such Revolving Loan, a “Refunding Revolving Loan”), in an amount equal to that Lender’s  Pro Rata Share of all or a portion of the then outstanding principal balance of the Revolving Swing  Line Loans.  

 

   82  (ii) Without limiting the foregoing, each Lender agrees that the  Agent may request the Lenders to make Refunding Revolving Loans at any time if (A) a Default  has occurred and is continuing, or (B) in the judgment of Swing Line Lender, taking into account  the outstanding principal balance of the Revolving Swing Line Loans, and the anticipated usage  of the Revolving Swing Line Loans, such Refunding Revolving Loans are reasonably necessary  to ensure that the outstanding principal balance of the Revolving Swing Line Loans will not at any  time exceed the Revolving Swing Line Commitment or such lesser amount as is permitted to be  outstanding on the Revolving Swing Line Loans at such time (it being understood that in order to  attain such objective, Swing Line Lender may request refunding of the Revolving Swing Line  Loans even though the principal balance of the Revolving Swing Line Loans at the time of such  request is less than the Revolving Swing Line Commitment or the amount permitted to be  outstanding on the Revolving Swing Line Loans).  (iii) If the Agent makes a request for funding under this Section  4.2.6(a) by 1:00 p.m. (Pacific Time) on any Business Day, the Lenders will deliver the required  amount to the Agent no later than 11:00 a.m. (Pacific Time) on the Business Day after such request.   The proceeds of all Refunding Revolving Loans shall be paid by the Agent to the Swing Line  Lender in repayment of the outstanding principal balance of the applicable Revolving Swing Line  Loans.  (b) Funding of Participations.  In addition to the right of the Swing  Line Lender to request refunding of the Revolving Swing Line Loans pursuant to Section 4.2.6(a),  upon the request of the Swing Line Lender, the Agent may request each Lender (including Swing  Line Lender in its capacity as a Lender) to fund its participation in the Revolving Swing Line  Loans by paying to the Agent, for the account of the Swing Line Lender, its Pro Rata Share of the  principal amount of the Revolving Swing Line Loans.  If the Agent makes such request by 1:00  p.m. (Pacific Time) on any Business Day, the Lenders will deliver such amount to the Agent no  later than 11:00 a.m. (Pacific Time) on the Business Day after such request.  All participations  funded by the Lenders under this Section 4.2.6(b) shall be treated as the funding of the Revolving  Loans for purposes of the calculation of the Revolving Loan Commitment Fee.  If any payment  paid to any Lender with respect to its participating interest in any Revolving Swing Line Loan is  thereafter recovered from or must be returned or paid over by Swing Line Lender for any reason,  such Lender will pay to the Agent for the account of the Swing Line Lender, such Lender’s Pro  Rata Share of such amount and of any interest and other amounts paid or payable by the Swing  Line Lender with respect to such amount.  The Agent agrees not to request any funding of the  Lender’s participations in the Revolving Swing Line Loans under this Section 4.2.6(b) at any time  that such participations may be legally repaid using advances of the Revolving Loan under Section  4.2.6(a).  (c) Payment to Swing Line Lender.  Notwithstanding any contrary  provision of this Agreement (i) except as set forth in clause (ii) of this Section 4.2.6(c) all payments  of principal and interest on the Revolving Swing Line Loans shall be paid by the Agent solely to  the Swing Line Lender; and (ii) with respect to each participation in Revolving Swing Line Loans  which is funded by any Lender, such Lender (including Swing Line Lender in its capacity as  Lender) shall be entitled to receive its Pro Rata Share of payments of (A) principal on such  Revolving Swing Line Loans and (B) interest on such Revolving Swing Line Loans only for the  period following the date such participation is funded.  

 

   83  (d) Obligations Unconditional.  The obligation of each Lender to make  Revolving Loans to repay Revolving Swing Line Loans pursuant to Section 4.2.6(a) or to fund its  participation interests in Revolving Swing Line Loans pursuant to Section 4.2.6(b) shall be  absolute and unconditional and shall not be affected by the occurrence of a Default or Event of  Default, the fact that any one or more of the conditions in Article 9 is not satisfied, the termination  of the availability of Loans, the fact that such Revolving Loan is made after the Termination Date  to refinance Revolving Swing Line Loans made prior to the Termination Date, any defense, setoff,  counterclaim or claim for recoupment of any Lender against Agent or Swing Line Lender or any  other circumstance, whether or not similar to the foregoing.  Notwithstanding the foregoing, the  Lenders shall not be required to repay Revolving Swing Line Loans pursuant to Section 4.2.6(a)  or to fund their participation interests in Revolving Swing Line Loans pursuant to Section 4.2.6(b)  with respect to any portions of the outstanding principal balance of the Revolving Swing Line  Loans that are funded by Swing Line Lender after Agent is deemed to have knowledge or notice  of the occurrence of a Default or after the Termination Date.  ARTICLE 5   LETTERS OF CREDIT  5.1 Letter of Credit Commitment.  Subject to and upon the terms and conditions of  this Agreement, LC Issuer may from time to time during the period from the Closing Date to the  date which is 30 days prior to the Termination Date issue and renew, extend and amend (“Modify”  and such action, a “Modification”) one or more standby letters of credit for the account of the  Revolving Loan Borrower or a Subsidiary acceptable to LC Issuer, (so long as the Revolving Loan  Borrower is the applicant on and liable for repayment of such Letter of Credit under the applicable  LC Agreement); provided that (a) the LC Obligations shall not exceed at any time the Letter of  Credit Commitment; and (b) the outstanding principal balance of all Revolving Loans made by all  Lenders, plus the outstanding principal balance of all Revolving Swing Line Loans, plus the LC  Obligations shall not at any time exceed the Maximum Revolving Loan Amount.  5.2 Existing Letters of Credit.  LC Issuer has previously issued certain letters of credit  for the account of the Revolving Loan Borrower or a Subsidiary under the Existing Loan  Agreement (“Existing Letters of Credit”).  Each of the Existing Letters of Credit shall be a Letter  of Credit under and shall be subject to the terms and conditions of this Agreement.  5.3 LC Agreements.  From time to time as required by LC Issuer, the Revolving Loan  Borrower shall execute and deliver to LC Issuer a letter of credit reimbursement agreement or an  amendment to existing agreements executed by the Revolving Loan Borrower (each, an “LC  Agreement”) in a form acceptable to LC Issuer.  Whenever the Revolving Loan Borrower wishes  to request the issuance of a Letter of Credit, the Revolving Loan Borrower shall execute and deliver  to LC Issuer an application therefor in LC Issuer’s standard form appropriately completed with all  required information (an “LC Application”) and such other documents and information as LC  Issuer reasonably requires.  Each Letter of Credit shall be subject to all terms and conditions of  this Agreement and of the applicable LC Application and LC Agreement.  In the event of any  express conflict between the terms of this Agreement and of the applicable LC Agreement, the  terms of this Agreement shall control.  

 

   84  5.4 Expiry Date.  No Letter of Credit shall be issued later than 30 days prior to the  Termination Date.  Each Letter of Credit shall have an expiration date no later than the earlier of  (a) two years after the issuance date (or date of extension or renewal, if applicable); or (b) the  Termination Date.  Drafts drawn under a Letter of Credit may be sight drafts or time drafts;  provided, however, that no draft shall have a maturity date later than the Termination Date.  If  there are any Letters of Credit outstanding on the Termination Date, the Agent may require the  Revolving Loan Borrower to deliver to the Agent funds in an amount equal to the LC Obligations.   The Revolving Loan Borrower immediately shall deliver to the Agent all such funds required by  the Agent and the Agent shall hold such funds in the LC Collateral Account as collateral for the  Obligations and Permitted Swap Obligations.  5.5 Requests for Letters of Credit.  Each LC Application or request for a Modification  shall be submitted to the LC Issuer, with a copy to the Agent, at least five Business Days prior to  the proposed date of issuance or Modification (unless the LC Issuer, in any instance, in its sole  discretion, agrees to a shorter time period).  The Agent shall promptly notify the LC Issuer whether  such LC Application, and the issuance of a Letter of Credit pursuant thereto, conform to the  requirements of this Agreement.  Upon issuance or Modification of a Letter of Credit, the LC  Issuer shall promptly notify the Agent, and the Agent shall promptly notify the Lenders, of the  amount and terms thereof.  The LC Issuer shall have no independent duty to ascertain whether the  conditions set forth in Article 9 have been satisfied; provided, however, that the LC Issuer shall  not issue a Letter of Credit if, on or before the proposed date of issuance, the LC Issuer has received  notice from the Agent or Required Lenders that any such condition has not been satisfied or  waived.  In the event of any conflict between the terms of this Agreement and the terms of any LC  Application or LC Agreement, the terms of this Agreement shall control.  5.6 Participation in Letters of Credit.  Upon the issuance of a Letter of Credit in  accordance with this Agreement (or on the Closing Date with respect to Existing Letters of Credit),  each Lender shall be deemed to have purchased a pro rata participation in such Letter of Credit  and the related LC Obligations from the LC Issuer in an amount equal to its Pro Rata Share of the  related LC Obligations.  Without limiting the scope and nature of each Lender’s participation in  any Letter of Credit, to the extent that the LC Issuer is not reimbursed by the Revolving Loan  Borrower (and funds are not available in the LC Collateral Account) for any payment made by the  LC Issuer under any Existing Letter of Credit or any other Letter of Credit issued in accordance  with the terms hereof, or if any reimbursement received by LC Issuer is rescinded or must be  returned, each Lender shall reimburse Agent, for the benefit of the LC Issuer, an amount equal to  its Pro Rata Share of such reimbursement amount as set forth below.  To obtain funding by the  Lenders of any reimbursement amount, the Agent shall request, before 1:00 p.m. (Pacific Time)  on a Business Day, each Lender (including the LC Issuer in its capacity as a Lender) to fund an  amount equal to each Lender’s Pro Rata Share of the reimbursement amount.  The Lenders shall  fund to the Agent the amounts so requested no later than 11:00 a.m. (Pacific Time) on the Business  Day after the date that such request is delivered to the Lenders and all amounts so funded shall be  paid by the Agent to the LC Issuer in satisfaction of each Lender’s participation obligations.  The  obligation of each Lender to so reimburse Agent, on behalf of the LC Issuer, shall be absolute and  unconditional and shall not be affected by the occurrence of a Default or Event of Default, the  termination of the availability of Letters of Credit, the fact that any one or more of the conditions  in Article 9 is not satisfied, the fact that reimbursement is requested after the Termination Date,  any defense, setoff, counterclaim or claim for recoupment against Agent or LC Issuer, or any other  

 

   85  circumstance, whether or not similar to the foregoing.  Any such reimbursement shall not relieve  or otherwise impair the obligation of the Revolving Loan Borrower to reimburse the LC Issuer for  the amount of any payment made by the LC Issuer under any Letter of Credit, together with interest  as provided herein.  5.7 Payments.  The Revolving Loan Borrower agrees to pay to the LC Issuer, on the  date any payment is made by the LC Issuer, an amount equal to any payment made by the LC  Issuer with respect to each Letter of Credit, together with interest on such amount from the date of  any payment made by the LC Issuer at the Revolving Loan Borrowing Rate for the first three days  and thereafter at the Default Rate applicable to Revolving Loans.  The principal amount of any  such payment shall be used to reimburse the LC Issuer for the payment made by it under the Letter  of Credit and, to the extent that the Lenders have not reimbursed the Agent pursuant to Section  5.6, the interest amount of any such payment shall be solely for the account of the LC Issuer.  Each  Lender that has reimbursed the Agent pursuant to Section 5.6 for its Pro Rata Share of any payment  made by the LC Issuer under a Letter of Credit shall thereupon acquire a pro rata participation, to  the extent of such reimbursement, in the claim of the LC Issuer against the Revolving Loan  Borrower for reimbursement of principal and interest under this Section 5.7 and shall share, in  accordance with that pro rata participation, in any principal payment made by the Revolving Loan  Borrower with respect to such claim and in any interest payment made by the Revolving Loan  Borrower (but only with respect to periods subsequent to the date such Lender reimbursed the  Agent) with respect to such claim.  The LC Issuer shall promptly make available to the Agent, in  immediately available funds, any amounts due to the Lenders under this Section 5.7.  The LC  Issuer shall notify the Revolving Loan Borrower and the Agent whenever any demand for payment  is made under any Letter of Credit by the beneficiary thereof.  5.8 Terms Satisfactory to LC Issuer.  Notwithstanding any contrary provision of this  Agreement, any LC Agreement, LC Application, or any other Loan Document, all terms and  conditions of each Letter of Credit must be acceptable to LC Issuer in its sole discretion and each  Letter of Credit must conform to all requirements of the LC Issuer.  5.9 Obligations Absolute.  The obligation of the Revolving Loan Borrower to pay to  the LC Issuer the amount of any payment made by the LC Issuer under any Letter of Credit shall  be absolute, unconditional, and irrevocable.  Without limiting the foregoing, the Revolving Loan  Borrower’s obligation shall not be affected by any of the following circumstances, except in the  event of LC Issuer’s gross negligence or intentional misconduct:  (a) any lack of validity or enforceability of the Letter of Credit, this  Agreement, the other Loan Documents, or any other agreement or instrument relating thereto;  (b) the existence of any claim, setoff, defense, or other rights which any  Loan Party may have at any time against the LC Issuer, any beneficiary of the Letter of Credit (or  any Persons for whom any such beneficiary may be acting) or any other Person, whether in  connection with the Letter of Credit, this Agreement, or any other agreement or instrument relating  thereto, or any unrelated transactions;  

 

   86  (c) any draft, demand, statement, or any other document presented  under the Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement  therein being untrue or inaccurate in any respect whatsoever;  (d) the solvency or financial responsibility of any party issuing any  documents in connection with a Letter of Credit;  (e)  any failure or delay in notice of shipments or arrival of any property;  (f) any error, omission, interruption, delay, or loss in the transmission  or delivery of any draft, message, notice, advice, or other communication relating to a Letter of  Credit or any delay or interruption in any such message;  (g) any error, neglect or default of any correspondent of the LC Issuer  in connection with a Letter of Credit;  (h) any error in interpretation of technical terms or any consequence  arising from circumstances beyond the control of the LC Issuer;  (i) any other circumstance whatsoever, whether or not similar to any of  the foregoing that might constitute a legal or equitable discharge of, or provide a right of setoff  against, the Obligations of the Revolving Loan Borrower.  5.10 Letter of Credit Fees.  5.10.1 The Revolving Loan Borrower agrees to pay to the Agent, for the account  of the Lenders ratably in accordance with their Pro Rata Shares, on the date any Letter of Credit is  issued, renewed or extended, with respect to each Letter of Credit, a letter of credit fee at a per  annum rate equal to the LC Fee Percentage times the daily maximum amount available to be drawn  under such Letter of Credit (“LC Fee”).  The LC Fee on Letters of Credit shall be (i) computed on  a quarterly basis in arrears and (ii) due and payable on the first (1st) day of each April, July, October  and January, commencing with the first such date to occur after the issuance of such Letter of  Credit, on the Letter of Credit expiration date and thereafter on demand; provided, further, that if  any payment to be made by the Borrower under this Section 5.10.1 shall come due on a day other  than a Business Day, such payment shall be due on the next succeeding Business Day.  All fees  paid under this Section 5.10.1 are non-refundable, even if the Letter of Credit for which they are  paid is terminated or amended before its anticipated expiration or extended expiration date.  5.10.2 The Revolving Loan Borrower agrees to pay to LC Issuer, for its sole  account on demand, (a) the fees agreed to between them as set forth in any fee letter or as otherwise  agreed from time to time, and (b) with respect to each Letter of Credit and each draft drawn  thereunder, LC Issuer’s customary fees and charges, including processing, drawing, transfer,  amendment, negotiation, acceptance, and other fees and all out-of-pocket expenses incurred by the  LC Issuer in accordance with the issuance, Modification, administration or payment of any Letter  of Credit.  5.11 LC Collateral Account.  The Revolving Loan Borrower will, upon the request of  the Agent or Required Lenders and until the final expiration date of any Letter of Credit and  

 

   87  thereafter as long as any amount is payable to the LC Issuer or the Lenders in respect of any Letter  of Credit, maintain a special collateral account pursuant to arrangements satisfactory to the Agent  (the “LC Collateral Account”), in the name of the Revolving Loan Borrower but under the sole  dominion and control of the Agent, for the benefit of the Lenders and in which the Revolving Loan  Borrower shall have no interest.  The Revolving Loan Borrower hereby pledges, assigns and grants  to the Agent, on behalf of and for the ratable benefit of the Lenders and the LC Issuer, a security  interest in all of the Revolving Loan Borrower’s right, title and interest in and to all funds which  may from time to time be on deposit in the LC Collateral Account to secure the prompt and  complete payment and performance of the Obligations and Permitted Swap Obligations.  The  Agent will invest any funds on deposit from time to time in the LC Collateral Account in  certificates of deposit of the Agent having a maturity not exceeding 30 days.  Nothing in this  Section shall either obligate the Agent to require the Revolving Loan Borrower to deposit any  funds in the LC Collateral Account or limit the right of the Agent to release any funds held in the  LC Collateral Account.  5.12 Borrower Indemnification.  The Revolving Loan Borrower hereby agrees to  indemnify and hold harmless each Lender, the LC Issuer and the Agent, and their respective parent  corporations, affiliates, subsidiaries, successors, assigns, officers, directors, employees, agents,  attorneys and advisors (the “Indemnified Persons”) from and against any and all claims, losses,  liabilities, demands, damages, actions, causes of action, penalties, costs and expenses (including  Attorney Costs), defenses, counterclaims, setoffs and claims for recoupment (collectively,  “Claims”) which such Lender, the LC Issuer or the Agent may incur (or which may be claimed  against such Lender, the LC Issuer or the Agent by any Person whatsoever) by reason of or in  connection with the issuance, execution and delivery or transfer of or payment or failure to pay  under any Letter of Credit or any actual or proposed use of any Letter of Credit, including, without  limitation, any claims, damages, losses, liabilities, costs or expenses which the LC Issuer may  incur by reason of or in connection with (a) the failure of any other Lender to fulfill or comply  with its obligations to the LC Issuer hereunder (but nothing herein contained shall affect any rights  the Revolving Loan Borrower may have against any Defaulting Lender) or (b) by reason of or on  account of the LC Issuer issuing any Letter of Credit which specifies that the term “Beneficiary”  included therein includes any successor by operation of law of the named Beneficiary, but which  Letter of Credit does not require that any drawing by any such successor Beneficiary be  accompanied by a copy of a legal document, satisfactory to the LC Issuer, evidencing the  appointment of such successor Beneficiary; provided that the Revolving Loan Borrower shall not  be required to indemnify any Lender, the LC Issuer or the Agent for any Claim to the extent, but  only to the extent, caused by (y) the willful misconduct or gross negligence of the LC Issuer in  determining whether a request presented under any Letter of Credit complied with the terms of  such Letter of Credit or (z) the LC Issuer’s failure to pay under any Letter of Credit after the  presentation to it of a request strictly complying with the terms and conditions of such Letter of  Credit.  Nothing in this Section 5.12 is intended to limit the obligations of the Revolving Loan  Borrower under any other provision of this Agreement. Without limiting the provisions of Section  7.4, this Section 5.12 shall not apply with respect to Taxes other than any Taxes that represent  losses, claims, damages, etc. arising from any non-Tax claim.  5.13 Lenders’ Indemnification.  Each Lender shall, ratably in accordance with its Pro  Rata Share, indemnify the LC Issuer, its affiliates and their respective directors, officers, agents  and employees (to the extent not reimbursed by the Revolving Loan Borrower) against any Claims  

 

   88  (except such as result from the LC Issuer’s gross negligence or willful misconduct or the LC  Issuer’s failure to pay under any Letter of Credit after the presentation to it of a request strictly  complying with the terms and conditions of the Letter of Credit) that such indemnitees may suffer  or incur in connection with this Article 5 or any action taken or omitted by such indemnitees  hereunder.  ARTICLE 6   CERTAIN ADDITIONAL PROVISIONS  6.1 Interest.  6.1.1 Interest Rate.  Unless the Default Rate or the rate set forth in Section 7.3  is applicable, (a) New Vehicle Floorplan Loans and New Vehicle Swing Line Loans shall bear  interest at a variable rate per annum equal to the New Vehicle Floorplan Borrowing Rate, (b) Used  Vehicle Floorplan Loans and Used Vehicle Swing Line Loans shall bear interest at a variable rate  per annum equal to the Used Vehicle Floorplan Borrowing Rate; (c) Service Loaner Vehicle  Floorplan Loans and Service Loaner Vehicle Swing Line Loans shall bear interest at a variable rate  per annum equal to the Service Loaner Vehicle Floorplan Borrowing Rate and (d) Revolving Loans  and Revolving Swing Line Loans shall bear interest at a variable rate per annum equal to the  Revolving Loan Borrowing Rate, in each case adjusted without notice on the date of each change  in the Eurocurrency Rate.  6.1.2 Rates Applicable After Event of Default.  During the continuance of an  Event of Default the Required Lenders may, at their option, by notice to the Company, declare that  (a) the Loans shall bear interest at a rate per annum equal to the interest rate which would otherwise  be in effect from time to time pursuant to Section 6.1.1, plus 2% per annum (each, a “Default  Rate”), and (b) the LC Fee shall be increased by 2% per annum, provided that, during the  continuance of an Event of Default under Section 14.1.8, the interest rate set forth in clause (a)  above and the increase in the LC Fee set forth in clause (b) above shall automatically be applicable  to all Loans, Letters of Credit, and Credit Extensions without any election or action on the part of  the Agent or any Lender.  After an Event of Default has been cured or waived, the interest rate  applicable to the Loans and the LC Fee shall revert to the rates applicable prior to the occurrence  of an Event of Default.  6.1.3 Determination of Rate.  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  the Loans in any manner it elects; it being understood, however, that with respect to Eurocurrency  Loans, all determinations hereunder shall be made as if each Lender had actually funded and  maintained such Loans through the purchase of deposits in the London interbank eurodollar  market.  6.2 Evidence of Debt.  The Loans made by each Lender shall be evidenced by one or  more accounts or records maintained by such Lender and by the Agent in the ordinary course of  business.  The accounts or records maintained by the Agent and each Lender shall be conclusive  absent manifest error of the amount of the Loans made by the Lenders to the New Vehicle  Floorplan Borrowers, Used Vehicle Floorplan Borrower, Service Loaner Vehicle Floorplan  Borrower and Revolving Loan Borrower and the interest and payments thereon.  Any failure to so  

 

   89  record or any error in doing so shall not, however, limit or otherwise affect the obligation of the  Borrowers hereunder to pay any amount owing with respect to the Obligations.  In the event of  any conflict between the accounts and records maintained by any Lender and the accounts and  records of the Agent in respect of such matters, the accounts and records of the Agent shall control  in the absence of manifest error.  6.3 Borrowing Procedure.  6.3.1 Requests for Loans.  Whenever the New Vehicle Floorplan Borrowers, the  Used Vehicle Floorplan Borrower, Service Loaner Vehicle Floorplan Borrower or the Revolving  Loan Borrower, as applicable, wishes to request a Loan, the Company shall give Agent irrevocable  notice thereof within the time required by this Agreement.  The Company (on behalf of the  applicable Borrower or Borrowers) may request a Loan in writing or by telephone (or with respect  to Used Vehicle Sweep Advances, as set forth in Section 3.2.7 and Service Loaner Vehicle Sweep  Advances, as set forth in Section 3.4.7) for deposit into the Company’s deposit account(s) with the  Agent.  Requests for Loans to be deposited or forwarded elsewhere shall be in writing in such form  and containing such additional information as the Agent may reasonably require in order to  confirm the request and transmit funds.  Each Borrower hereby authorizes Lenders and the Agent  to make Advances and to transfer funds based on telephonic notices made by any Person which  the Agent or any Lender in good faith believes to be acting on behalf of the Company, it being  understood that the foregoing authorization is specifically intended to allow requests for Advances  to be given telephonically.  The Company agrees to deliver promptly to the Agent a written  confirmation (which may include e-mail) of each telephonic notice.  If the written confirmation  differs in any material respect from the action taken by the Agent and the Lenders, the records of  the Agent and the Lenders shall govern absent manifest error.  6.3.2 Lending Installations.  Each Lender may book its Advances and its  participation in any LC Obligations and Swing Line Loans and the LC Issuer may book the Letters  of Credit at any Lending Installation selected by such Lender or the LC Issuer, as the case may be,  and may change its Lending Installation from time to time.  All terms of this Agreement shall apply  to any such Lending Installation and the Loans, Letters of Credit, and participations in LC  Obligations and Swing Line Loans shall be deemed held by each Lender or the LC Issuer, as the  case may be, for the benefit of any such Lending Installation.  Each Lender and the LC Issuer may,  by written notice to the Agent and the Company, designate replacement or additional Lending  Installations through which Loans will be made by it or Letters of Credit will be issued by it and  for whose account Loan payments or payments with respect to Letters of Credit are to be made.  6.4 Obligations Several.  The failure of any Lender to make any Loan shall not relieve  any other Lender of its obligation to make its Loan on any date, but no Lender shall be responsible  for the failure of any other Lender to make any Loan to be made by such other Lender.  6.5 Non-Receipt of Funds by the Agent.  Unless the Company (on behalf of any  Borrower or Borrowers) or a Lender, as the case may be, notifies Agent prior to the date on which  Lender or a Borrower or Borrowers is scheduled to make payment to the Agent of (a) in the case  of a Lender, the proceeds of a Loan or participation or (b) in the case of a Borrower or Borrowers,  a payment of principal, interest or fees to the Agent for the account of the Lenders, that it does not  intend to make such payment, the Agent may assume that such payment has been made.  The  

 

   90  Agent may, but shall not be obligated to, make the amount of such payment available to the  intended recipient in reliance upon such assumption.  If such Lender or Borrower or Borrowers,  as the case may be, has not in fact made such payment to the Agent, the recipient of such payment  shall, on demand by the Agent, repay to the Agent the amount so made available together with  interest thereon in respect of each day during the period commencing on the date such amount was  so made available by the Agent until the date Agent recovers such amount at a rate per annum  equal to (y) in the case of payment by a Lender, the Federal Funds Effective Rate for such day for  the first three days and, thereafter, the interest rate applicable to the relevant Loan or (z) in the case  of payment by a Borrower or Borrowers, the interest rate applicable to the relevant Loan or  Reimbursement Obligations.  6.6 Authorization.  Any Loan made to any one or more of the Borrowers shall be  conclusively presumed to have been made to or for the benefit of such Borrower or Borrowers  when the proceeds of such Loan (a) are deposited to the credit of a Borrower in an account of a  Borrower with the Agent, or (b) are transmitted to any other bank with directions to credit the same  to the account of any Borrower at such bank, regardless of whether Persons other than those  authorized to make requests for Loans have authority to draw against any such account.  Each  Borrower acknowledges that the Agent cannot effectively determine whether a particular request  for a Loan is valid, authorized, or authentic.  Therefore, each Borrower assumes all risk of the  validity, authenticity, and authorization of such requests, whether or not the individual making  such requests has authority to request Loans.  The Agent shall be entitled to act on the instructions  of anyone identifying himself or herself as authorized to request Loans and each Borrower shall  be bound thereby in the same manner as if the Person were actually so authorized.  The Agent is  authorized to credit any account of (w) any New Vehicle Floorplan Borrower with the Agent (or  any account any New Vehicle Floorplan Borrower designates in writing) for Loans made to the  New Vehicle Floorplan Borrowers, (x) the Used Vehicle Floorplan Borrower with the Agent (or  any account the Used Vehicle Floorplan Borrower designates in writing) for loans made to the  Used Vehicle Floorplan Borrower, (y) the Service Loaner Vehicle Floorplan Borrower with the  Agent (or any account the Service Loaner Vehicle Floorplan Borrower designates in writing) for  loans made to the Service Loaner Vehicle Floorplan Borrower, and (z) the Revolving Loan  Borrower with the Agent (or any account the Revolving Loan Borrower designates in writing) for  loans made to the Revolving Loan Borrower.  A Borrower’s failure to confirm any telephonic  request or otherwise comply with the provisions of this Section 6.6 shall not in any manner affect  the obligation of the applicable Borrower or Borrowers to repay such Loans in accordance with  the terms of this Agreement.  Each Borrower agrees not to hold Agent or the Lenders liable  for any errors or misunderstanding in complying with any written or oral directions for  Loans; and each Borrower agrees to indemnify and hold Agent and the Lenders and the  other Indemnified Persons harmless from any and all Claims which may arise or be created  by the acceptance of instructions (telephonic or otherwise) for making Loans by wire transfer  or otherwise, or for application of payments, other than as a result of the Agent’s gross  negligence or willful misconduct.  6.7 Interest and Fee Basis.  All interest rates and fees referred to herein shall be  calculated for actual days elapsed on the basis of a 360-day year.  Interest shall be payable for the  day an Advance is made but not for the day of any payment on the amount paid if payment is  received prior to noon (Pacific Time) at the place of payment.  If any payment of principal of or  interest shall become due on a day which is not a Business Day, such payment shall be made on  

 

   91  the next succeeding Business Day, and such extension of time shall in such case be included in  computing interest on such payment.  6.8 Method of Payment.  All payments of the Obligations hereunder shall be made,  without setoff, deduction, or counterclaim, in immediately available funds to the Agent at the  Agent’s address specified for notice herein, or at any other Lending Installation of the Agent  specified in writing by the Agent to the Company, by noon (Pacific Time) on the date when due  and shall (except (a) with respect to repayments of Swing Line Loans, (b) in the case of  Reimbursement Obligations for which the LC Issuer has not been fully indemnified by the  Lenders, or (c) as otherwise specifically required hereunder) be applied ratably by the Agent  among the Lenders, in accordance with their Pro Rata Shares.  Each payment delivered to the  Agent for the account of any Lender shall be delivered promptly by the Agent to such Lender in  the same type of funds that the Agent received at its address specified for notice herein, or at any  Lending Installation specified in a notice received by the Agent from such Lender.  Each reference  to the Agent in this Section shall also be deemed to refer, and shall apply equally, to the LC Issuer,  in the case of payments required to be made by the Revolving Loan Borrower to the LC Issuer.  6.9 Payment by Automatic Debit.  Each Borrower hereby authorizes Agent to  automatically deduct the amount of all principal and interest payments, Reimbursement  Obligations and fees from one or more deposit accounts of the Company with the Agent specified  in a writing provided by the Company to the Agent.  Each Borrower will pay all the fees on the  account which result from the automatic deductions, including any overdraft and non-sufficient  funds charges.  If for any reason Agent does not charge the account for a payment, or if an  automatic payment is reversed, the payment is still due.  The Company may change any account  number by notifying Agent of the new account number.  6.10 Late Charges.  Subject to any limitations imposed by Applicable Law, if any  payment of principal or interest on the Loans, the LC Obligations, or other Obligations is fifteen  (15) days or more past due, the New Vehicle Floorplan Borrowers, Used Vehicle Floorplan  Borrower, Service Loaner Vehicle Floorplan Borrower, or the Revolving Loan Borrower, as  applicable, shall pay to the Agent on demand, for the account of the Lenders, a late charge of five  percent of the delinquent payment.  Each party hereto agrees that it would be difficult or costly to  determine the actual costs incurred by any Lender by reason of late payment.  Therefore, the parties  agree that this late charge represents a fair and reasonable estimate of the costs incurred by each  Lender and is reasonable under the circumstances existing as of the date hereof.  Collection of the  late payment fee shall not be deemed to be a waiver of any Default hereunder.  6.11 Limitation of Interest.  Borrowers, the Agent and Lenders intend to strictly  comply with all Applicable Laws, including applicable usury laws.  Accordingly, the provisions  of this Section shall govern and control over every other provision of this Agreement or any other  Loan Document which conflicts or is inconsistent with this Section, even if such provision declares  that it controls.  As used in this Section, the term “interest” includes the aggregate of all charges,  fees, benefits or other compensation which constitute interest under Applicable Law, provided  that, to the maximum extent permitted by Applicable Law, (a) any non-principal payment shall be  characterized as an expense or as compensation for something other than the use, forbearance or  detention of money and not as interest, and (b) all interest at any time contracted for, reserved,  charged or received shall be amortized, prorated, allocated and spread, in equal parts during the  

 

   92  full term of the Obligations.  In no event shall any Borrower or any other Person be obligated to  pay, or any Lender have any right or privilege to reserve, receive or retain, (y) any interest in  excess of the maximum amount of nonusurious interest permitted under the Applicable Laws (if  any) of the United States or of any applicable state, or (z) total interest in excess of the amount  which such Lender could lawfully have contracted for, reserved, received, retained or charged had  the interest been calculated for the full term of the Obligations at the Highest Lawful Rate.  On  each day, if any, that the interest rate (the “Stated Rate”) called for under this Agreement or any  other Loan Document exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall  automatically be fixed by operation of this sentence at the Highest Lawful Rate for that day, and  shall remain fixed at the Highest Lawful Rate for each day thereafter until the total amount of  interest accrued equals the total amount of interest which would have accrued if there were no  such ceiling rate as is imposed by this sentence.  Thereafter, interest shall accrue at the Stated  Rate unless and until the Stated Rate again exceeds the Highest Lawful Rate when the provisions  of the immediately preceding sentence shall again automatically operate to limit the interest  accrual rate.  The daily interest rates to be used in calculating interest at the Highest Lawful Rate  shall be determined by dividing the applicable Highest Lawful Rate per annum by the number of  days in the calendar year for which such calculation is being made.  None of the terms and  provisions contained in this Agreement or in any other Loan Document which directly or  indirectly relate to interest shall ever be construed without reference to this Section, or be  construed to create a contract to pay for the use, forbearance or detention of money at an interest  rate in excess of the Highest Lawful Rate.  If the term of any Obligation is shortened by reason  of acceleration of maturity as a result of any Event of Default or by any other cause, or by reason  of any required or permitted prepayment, and if for that (or any other) reason any Lender at any  time, including but not limited to, the stated maturity, is owed or receives (and/or has received)  interest in excess of interest calculated at the Highest Lawful Rate, then and in any such event all  of any such excess interest shall be canceled automatically as of the date of such acceleration,  prepayment or other event which produces the excess, and, if such excess interest has been paid  to such Lender, it shall be credited against the then-outstanding principal balance of the  obligations of the applicable Borrower or Borrowers to such Lender, effective as of the date or  dates when the event occurs which causes it to be excess interest, until such excess is exhausted  or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining  balance of such excess shall be promptly refunded to its payor.  6.12 Increase Option.  6.12.1 The Company may from time to time request an increase in the Aggregate  New Vehicle Floorplan Commitment, in minimum increments of $50,000,000.00 or such lower  amount as is agreed to between the Company and the Agent, so long as, after giving effect thereto,  (a) the aggregate amount of all such increases requested after the Closing Date does not exceed  $500,000,000.00, and (b) the Aggregate Commitment does not exceed $4,250,000,000.00.  6.12.2 The Company may arrange for any such increase to be provided by one or  more Lenders (each Lender so agreeing to an increase in its Commitment, an “Increasing  Lender”), or by one or more new banks, financial institutions (each such new bank, financial  institution or other entity, an “Additional Lender”), which Lender or Lenders shall increase their  existing Commitments, or extend Commitments, as the case may be; provided that (a) each  Additional Lender and each Increasing Lender and the amount of the increase of each Additional  

 

   93  Lender and Increasing Lender shall be subject to the reasonable approval of the Company, the  Agent and the LC Issuer, (b) (i) in the case of an Increasing Lender, the Agent, Borrowers and such  Increasing Lender shall execute an Increasing Lender Agreement substantially in the form of  Exhibit N hereto, and (ii) in the case of an Additional Lender, the Agent, Borrowers and such  Additional Lender shall execute an Additional Lender Agreement substantially in the form of  Exhibit M hereto, and (c) the applicable Borrower or Borrowers, Increasing Lender, Additional  Lender and any other Loan Party shall each deliver to the Agent such other documents or  amendments to existing Loan Documents as the Agent reasonably deems necessary.  6.12.3 No consent of any Lender (other than the Lenders participating in the  increase) shall be required for any increase pursuant to this Section 6.12.  Increases and new  Commitments created pursuant to this Section 6.12 shall become effective on the date agreed by  the Company, the Agent and the relevant Increasing Lenders or Additional Lenders, and the Agent  shall notify each Lender thereof.  Notwithstanding the foregoing, no increase in the Aggregate  New Vehicle Floorplan Commitment (or in the Commitment of any Lender) shall become effective  unless (a) on the proposed effective date of such increase, (i) no Default has occurred and is  continuing or will exist after giving effect to the increase and any Credit Extensions to be made on  the effective date, (ii) all representations and warranties in this Agreement are true and correct in  all material respects as of the effective date, (iii) the Company and its Subsidiaries will be in  compliance (on a Pro Forma Basis reasonably acceptable to the Agent) with the financial covenants  in Section 11.1 after giving effect to the increase, and (iv) Agent has received a certificate with  respect to the matters set forth in the foregoing clauses (a)(i) (ii) and (iii) dated the effective date  and executed by the Company’s chief financial officer or other officer acceptable to the Agent,  together with such supporting documentation as the Agent requires; and (b) the Agent has received  such documents as it requires to evidence the power and authority of the Borrowers to borrow and  the Guarantors to guaranty hereunder after giving effect to such increase.  6.12.4 On the effective date of any increase in the Aggregate New Vehicle  Floorplan Commitment, (a) each relevant Increasing Lender and Additional Lender shall make  available to the Agent such amounts in immediately available funds as the Agent shall determine,  for the benefit of the other Lenders, as being required in order to cause, after giving effect to such  increase and the use of such amounts to make payments to such other Lenders, each Lender’s  portion of the outstanding New Vehicle Floorplan Loans of all the Lenders to equal its applicable  Pro Rata Share of such outstanding Loans, and (b) the Borrowers shall make such other payments  and adjustments as the Agent reasonably deems necessary in connection with the changes in the  Commitments and Pro Rata Shares of the Lenders.  6.13 Authorization.  Each Borrower authorizes Agent and the Lenders (a) to furnish  information about the Loans to each manufacturer or distributor of Vehicles, and (b) to advise each  such manufacturer or distributor of any change or termination which may occur with respect to the  Obligations.  6.14 Defaulting Lenders.  6.14.1 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:  

 

   94  (a) 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.  (b) Defaulting Lender Waterfall.  Any payment of principal, interest,  fees or other amounts received by the Agent for the account of such Defaulting Lender (whether  voluntary or mandatory, at maturity, pursuant to Article 14 or otherwise) or received by the Agent  from a Defaulting Lender pursuant to Section 17.8 shall be applied at such time or times as may  be determined by the Agent as follows: first, to the payment of any amounts owing by such  Defaulting Lender to the Agent hereunder; second, to the payment on a pro rata basis of any  amounts owing by such Defaulting Lender to the LC Issuer and Swing Line Lender hereunder;  third, to Cash Collateralize the LC Issuer’s Fronting Exposure with respect to such Defaulting  Lender in accordance with Section 6.14.4; fourth, as the Company 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  Agent; fifth, if so determined by the Agent and the Company, to be held in a deposit account  (including the LC Collateral Account) and released pro rata in order to (i) satisfy such Defaulting  Lender’s potential future funding obligations with respect to Loans under this Agreement and (ii)  Cash Collateralize the LC Issuer’s future Fronting Exposure with respect to such Defaulting  Lender with respect to future Letters of Credit issued under this Agreement, in accordance with  Section 6.14.4; sixth, to the payment of any amounts owing to the Lenders, the LC Issuer or Swing  Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any  Lender, the LC Issuer or Swing Line Lender against such Defaulting Lender as a result of such  Defaulting Lender’s breach of its obligations under this Agreement; 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 such Borrower against such  Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this  Agreement; eighth, if so determined by the Agent, distributed to the Lenders other than the  Defaulting Lender until the ratio of the Outstanding Credit Exposure of such Lenders to the  Aggregate Outstanding Credit Exposure equals such ratio immediately prior to the Defaulting  Lender’s failure to fund any portion of any Loans or participations in Letters of Credit or Swing  Line Loans; and ninth, to such Defaulting Lender or as otherwise directed by a court of competent  jurisdiction; provided that if (i) such payment is a payment of the principal amount of any Loans  or Letters of Credit issuances in respect of which such Defaulting Lender has not fully funded its  appropriate share, and (ii) such Loans were made or the related Letters of Credit were issued at a  time when the conditions set forth in Sections 9.2 and 9.3 were satisfied or waived, such payment  shall be applied solely to pay the Credit Extensions and funded participations of all Non-Defaulting  Lenders on a pro rata basis prior to being applied to the payment of any Credit Extensions or  funded participations of such Defaulting Lender until such time as all Loans and funded and  unfunded participations in LC Obligations and Swing Line Loans are held by the Lenders pro rata  in accordance with the Commitments without giving effect to Section 6.14.1(d).  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  6.14.1(b) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender  irrevocably consents hereto.  (c) Certain Fees.  

 

   95  (i) No Defaulting Lender shall be entitled to receive any New  Vehicle Floorplan Commitment Fee, Used Vehicle Floorplan Commitment Fee, Service Loaner  Vehicle Floorplan Commitment Fee, Revolving Loan Commitment Fee or Per Annum Fee for any  period during which that Lender is a Defaulting Lender (and no Borrower shall be required to pay  any such fee that otherwise would have been required to have been paid to that Defaulting Lender).  (ii) Each Defaulting Lender shall be entitled to receive LC Fees  for any period during which that Lender is a Defaulting Lender only to the extent allocable to its  ratable share of the stated amount of Letters of Credit for which it has provided Cash Collateral  pursuant to Section 6.14.4.  (iii) With respect to any New Vehicle Floorplan Commitment  Fee, Used Vehicle Floorplan Commitment Fee, Service Loaner Vehicle Floorplan Commitment  Fee, Revolving Loan Commitment Fee or LC Fee not required to be paid to any Defaulting Lender  pursuant to clause (c)(i) or (ii) above, the applicable Borrower or Borrowers shall (X) 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 LC Obligations or Swing Line Loans that  has been reallocated to such Non-Defaulting Lender pursuant to clause (d) below, (Y) pay to the  LC Issuer and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to  such Defaulting Lender to the extent allocable to the LC Issuer’s or Swing Line Lender’s Fronting  Exposure to such Defaulting Lender, and (Z) not be required to pay the remaining amount of any  such fee.  (d) Reallocation of Participations to Reduce Fronting Exposure.   All or any part of such Defaulting Lender’s participation in LC Obligations and Swing Line Loans  shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Pro  Rata Shares (calculated without regard to such Defaulting Lender’s interest as provided in the  definition of Pro Rata Share) but only to the extent that (i) the conditions set forth in Sections 9.2  and 9.3 are satisfied at the time of such reallocation (and, unless the Company shall have  otherwise notified the Agent at such time, each Borrower shall be deemed to have represented  and warranted that such conditions are satisfied at such time), and (ii) such reallocation does not  cause the aggregate Outstanding Credit Exposure, Outstanding New Vehicle Floorplan Exposure,  Outstanding Used Vehicle Floorplan Exposure, Outstanding Service Loaner Vehicle Floorplan  Exposure or Outstanding Revolving Loan Exposure of any Non-Defaulting Lender to exceed such  Non-Defaulting Lender’s applicable 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.  (e) Cash Collateral, Repayment of Swing Line Loans.  If the  reallocation described in clause (d) above cannot, or can only partially, be effected, the applicable  Borrowers shall, without prejudice to any right or remedy available to it hereunder or under law,  (i) first, prepay Swing Line Loans in an amount equal to the Swing Line Lender’s Fronting  Exposure and (ii) second, Cash Collateralize the LC Issuer’s Fronting Exposure in accordance with  the procedures set forth in Section 6.14.4.  

 

   96  6.14.2 Defaulting Lender Cure.  If the Borrower, the Agent, the Swing Line  Lender and the LC Issuer agree in writing that a Lender is no longer a Defaulting Lender, the 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), that 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 Agent may determine to  be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and  Swing Line Loans to be held pro rata by the Lenders in accordance with the Commitments  (without giving effect to Section 6.14.1(d)), whereupon such Lender will cease to be a Defaulting  Lender; provided that 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  provided, further, that 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.  6.14.3 New Swing Line Loans/Letters of Credit.  So long as any Lender is a  Defaulting Lender, (a) the Swing Line Lender shall not be required to fund any Swing Line Loans  unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swing Line  Loan and (b) the LC Issuer 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.  6.14.4 Cash Collateral.  At any time that there shall exist a Defaulting Lender,  within one (1) Business Day following the written request of the Agent or the LC Issuer (with a  copy to the Agent) the Revolving Loan Borrower shall Cash Collateralize the LC Issuer’s Fronting  Exposure with respect to such Defaulting Lender (determined after giving effect to Section  6.14.1(d) 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 Revolving Loan Borrower, and to  the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Agent,  for the benefit of the LC Issuer, 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 LC Obligations, to be applied pursuant to clause (b) below.  If at any time the Agent determines  that Cash Collateral is subject to any right or claim of any Person other than the Agent and the LC  Issuer as herein provided, or that the total amount of such Cash Collateral is less than the Minimum  Collateral Amount, the Revolving Loan Borrower will, promptly upon demand by the Agent, pay  or provide to the Agent additional Cash Collateral in an amount sufficient to eliminate such  deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).  (b) Application.  Notwithstanding anything to the contrary contained  in this Agreement, Cash Collateral provided under this Section 6.14 in respect of Letters of Credit  shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations  in respect of LC Obligations (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.  

 

   97  (c) Termination of Requirement.  Cash Collateral (or the appropriate  portion thereof) provided to reduce the LC Issuer’s Fronting Exposure shall no longer be required  to be held as Cash Collateral pursuant to this Section 6.14.4 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 Agent and the LC Issuer that there exists  excess Cash Collateral; provided that, subject to this Section 6.14 the Person providing Cash  Collateral and the LC Issuer may agree that Cash Collateral shall be held to support future  anticipated Fronting Exposure or other obligations and provided further, such Cash Collateral  shall remain subject to the security interest granted pursuant to the Loan Documents.  6.15 Replacement of Lender.  If Borrowers are required pursuant to Section 7.1, 7.2 or  7.4 to make any additional payment to any Lender or if any Lender’s obligation to make Advances  based on the Eurocurrency Base Rate is suspended pursuant to Section 7.3 or if any Lender defaults  in its obligation to make a Loan, reimburse the LC Issuer pursuant to Section 5.6 or the Swing  Line Lender pursuant to Section 2.2.6, 3.2.6, or 4.2.6 or otherwise becomes a Defaulting Lender  (any Lender so affected an “Affected Lender”), the Company may elect, if such amounts continue  to be charged or such suspension is still effective, to replace such Affected Lender as a Lender  party to this Agreement, provided that no Default or Event of Default shall have occurred and be  continuing at the time of such replacement, and provided further that, concurrently with such  replacement, (a) another bank or other entity which is reasonably satisfactory to the Company and  the Agent shall agree, as of such date, to purchase for cash and to pay the Affected Lender on such  date 100% of the outstanding principal amount of the Loans and other Obligations due to the  Affected Lender pursuant to an Assignment Agreement and to become a Lender for all purposes  under this Agreement and to assume all obligations of the Affected Lender to be terminated as of  such date and to comply with the requirements of Section 17.4 applicable to assignments, and (b)  the Borrowers shall pay to such Affected Lender in same day funds on the day of such replacement  all interest, fees and other amounts then accrued but unpaid to such Affected Lender by the  Borrowers hereunder to and including the date of termination, including without limitation  payments due to such Affected Lender under Sections 7.1, 7.2 and 7.4.  6.16 Per Annum Fee.  The Borrowers agree to pay to the Agent, for the account of each  Lender, a fee (“Per Annum Fee”), calculated for each Lender at a per annum rate equal to the rate  set forth in the fee letter between such Lender and Borrowers, on the Aggregate Lender  Commitment of such Lender as of the last day of each fiscal quarter.  The Per Annum Fee shall be  due and payable in arrears on each Quarterly Payment Date hereafter and on the Termination Date  for the three month period or other time period ending on the last day of the preceding fiscal quarter  or on the Termination Date.  6.17 Reallocation of Commitments.  6.17.1 Subject to the provisions of this Section 6.17 and so long as no Event of  Default has occurred and is continuing or will exist after giving effect thereto, Borrowers may  from time to time request a reallocation of all or part of any unused portion of (a) the Aggregate  New Vehicle Floorplan Commitment to the Aggregate Used Vehicle Floorplan Commitment, the  Aggregate Revolving Loan Commitment and/or the Aggregate Service Loaner Vehicle Floorplan  Commitment, (b) the Aggregate Used Vehicle Floorplan Commitment to the Aggregate New  Vehicle Floorplan Commitment, the Aggregate Revolving Loan Commitment and/or the  

 

   98  Aggregate Service Loaner Vehicle Floorplan Commitment, (c) the Aggregate Revolving Loan  Commitment to the Aggregate New Vehicle Floorplan Commitment, the Aggregate Used Vehicle  Floorplan Commitment and/or the Aggregate Service Loaner Vehicle Floorplan Commitment or  (d) the Aggregate Service Loaner Vehicle Floorplan Commitment to the Aggregate Used Vehicle  Floorplan Commitment, the Aggregate New Vehicle Floorplan Commitment and/or the Aggregate  Revolving Loan Commitment (each a “Reallocation”).   6.17.2 Borrowers may request a Reallocation no more frequently than once in any  calendar month.  If Borrowers wish to request a Reallocation, the Company shall give the Agent  irrevocable written notice thereof substantially in the form attached hereto as Exhibit O, or in such  other form as is acceptable to the Agent (a “Reallocation Request”) no later than 11:00 a.m.  (Pacific Time) at least two Business Days prior to the requested effective date of the Reallocation.   The Agent will promptly notify the Company and the Lenders of the effective date of any  Reallocation, and the amount of the new Commitments for each Lender.  6.17.3 Following any Reallocation, (a) the Aggregate Commitment shall not  change; (b) the Aggregate New Vehicle Floorplan Commitment shall not be less than the then  outstanding principal balance of the New Vehicle Floorplan Loans and the New Vehicle Swing  Line Loans (which, for purposes of this determination, shall not be deemed to be reduced by  amounts in the PR Accounts); (c) the Aggregate Used Vehicle Floorplan Commitment (i) shall not  be more than 20.00% of the amount of the Aggregate Commitment at the time of such Reallocation  and (ii) shall not be less than the then outstanding principal balance of the Used Vehicle Floorplan  Loans and the Used Vehicle Swing Line Loans; (d) the Aggregate Revolving Loan Commitment  (i) shall not be more than 20.00% of the amount of the Aggregate Commitment at the time of such  Reallocation and (ii) shall not be less than the then outstanding principal balance of the Revolving  Loans and Revolving Swing Line Loans plus the LC Obligations and any Reserve Amount; and  (e) the Aggregate Service Loaner Vehicle Floorplan Commitment (i) shall not be more than 3.00%  of the amount of the Aggregate Commitment at the time of such Reallocation and (ii) shall not be  less than the then outstanding principal balance of the Service Loaner Vehicle Floorplan Loans and  the Service Loaner Vehicle Swing Line Loans.   6.17.4 All Reallocations shall be made pro rata among the Lenders according to  their respective Pro Rata Shares of the Aggregate New Vehicle Floorplan Commitment, Aggregate  Used Vehicle Floorplan Commitment, Aggregate Revolving Loan Commitment and/or Aggregate  Service Loaner Vehicle Floorplan Commitment, so that after giving effect to any Reallocation,  there is no change in the Pro Rata Shares of the Lenders.  6.17.5 In connection with a Reallocation (a) the New Vehicle Swing Line  Commitment, Used Vehicle Swing Line Commitment, Service Loaner Vehicle Swing Line  Commitment, Revolving Swing Line Commitment and LC Commitment shall not be increased,  (b) the New Vehicle Swing Line Commitment shall not be reduced, (c) the Used Vehicle Swing  Line Commitment shall not be reduced unless the Aggregate Used Vehicle Floorplan Commitment  is reduced to less than the amount of the Used Vehicle Swing Line Commitment, (d) the Revolving  Swing Line Commitment and the Letter of Credit Commitment shall not be reduced unless the  Aggregate Revolving Loan Commitment is reduced to less than the amount of the Revolving  Swing Line Commitment and Letter of Credit Commitment, and (e) the Service Loaner Vehicle  Swing Line Commitment shall not be reduced unless the Aggregate Service Loaner Vehicle  

 

   99  Floorplan Commitment is reduced to less than the amount of the Service Loaner Vehicle Swing  Line Commitment.  6.17.6 Following any Reallocation, the Aggregate New Vehicle Floorplan  Commitment, Aggregate Used Vehicle Floorplan Commitment, Aggregate Revolving Loan  Commitment and Aggregate Service Loaner Vehicle Floorplan Commitment and the Pro Rata  Shares and New Vehicle Floorplan Commitment, Used Vehicle Floorplan Commitment, Revolving  Loan Commitment and Service Loaner Vehicle Floorplan Commitment of each Lender shall be  noted in the Agent’s records, which records will be conclusive evidence thereof, absent manifest  error; provided, however, that any failure by the Agent to record such information shall not affect  or limit the obligations of the Borrowers hereunder.  6.18 Extension of Commitments.  6.18.1 Requests for Extension. The Company may, no more than one time  per Loan Year, by notice to the Agent (who shall promptly notify the Lenders) not earlier than  sixty (60) days and not later than thirty-five (35) days prior to the Anniversary Date in such  Loan Year, request that each Lender extend such Lender’s Termination Date for an additional  Loan Year from the existing Termination Date.  6.18.2 Lender Elections to Extend. Each Lender, acting in its sole and  individual discretion, shall, by notice to the Agent given not later than the date (the “Notice  Date”) that is thirty (30) days prior to the Anniversary Date in such Loan Year, advise Agent  whether or not such Lender agrees to such extension and each Lender that determines not to  so extend its Termination Date (a “Non-Extending Lender”) shall notify the Agent of such  fact promptly after such determination (but in any event no later than the Notice Date) and  any Lender that does not so advise Agent on or before the Notice Date shall be deemed to be  a Non-Extending Lender. The election of any Lender to agree to such extension shall not  obligate any other Lender to so agree. Furthermore, the election of any Non-Extending Lender  not to extend initially shall not prohibit such Lender from extending for an additional Loan  Year at subsequent request of the Company, so long as (i) the Company has not prepaid all  Loans outstanding of such Non-Extending Lender by such date and (ii) such Lender’s  Termination Date shall be modified to the Termination Date of all other Extending Lenders at  such time. Once a Lender extends its Termination Date in accordance with this Section it shall  no longer be deemed a Non-Extending Lender for all purposes of this Agreement.    6.18.3 Notification by the Agent. The Agent shall notify the Company of  each Lender’s determination under this Section no later than the date fifteen (15) days prior  to the Anniversary Date in such Loan Year (or, if such date is not a Business Day, on the next  preceding Business Day).  6.18.4 Additional Commitment Lenders. The Company shall have the right  to replace each Non-Extending Lender with, and add as “Lenders” under this Agreement in  place thereof, one or more Eligible Assignees (each, an “Additional Commitment Lender”)  as provided in Section 6.15; provided that each of such Additional Commitment Lenders shall  enter into an Assignment Agreement pursuant to which such Additional Commitment Lender  shall, effective as of the Anniversary Date in such Loan Year, undertake a Commitment (and,  

 

   100  if any such Additional Commitment Lender is already a Lender, its Commitment shall be in  addition to such Lender’s Commitment hereunder on such date).  6.18.5 Minimum Extension Requirement. If (and only if) the total of the  Commitments of the Lenders that have agreed so to extend their Termination Date (each, an  “Extending Lender”) and the additional Commitments of the Additional Commitment  Lenders shall be more than 80% of the Aggregate Commitment in effect immediately prior to  the Anniversary Date in such Loan Year, then, effective as of the Anniversary Date in such  Loan Year, the Termination Date of each Extending Lender and of each Additional  Commitment Lender shall be extended to the date falling one year after the existing  Termination Date (except that, if such date is not a Business Day, such Termination Date as  so extended shall be the next preceding Business Day) and each Additional Commitment  Lender shall thereupon become a “Lender” for all purposes of this Agreement.  6.18.6 Conditions to Effectiveness of Extensions. As a condition precedent  to such extension, the Company shall deliver to the Agent a certificate of each Loan Party  dated as of the Anniversary Date in such Loan Year (in sufficient copies for each Extending  Lender and each Additional Commitment Lender) signed by a Responsible Officer of such  Loan Party (i) certifying and attaching the resolutions adopted by such Loan Party approving  or consenting to such extension and (ii) in the case of the Company, certifying that, before  and after giving effect to such extension, (A) the representations and warranties contained in  Article X and the other Loan Documents are true and correct on and as of the Anniversary  Date in such Loan Year, except to the extent that such representations and warranties  specifically refer to an earlier date, in which case they are true and correct as of such earlier  date, and except that for purposes of this Section 6.18, the representations and warranties  contained in Section 10.4 shall be deemed to refer to the most recent statements furnished  pursuant to Section 11.1, and (B) no Default exists or would result therefrom. In addition, on  the Termination Date of each Non-Extending Lender, the Company shall prepay any Loans  outstanding on such date (and pay any additional amounts required pursuant to Section 7.5)  to the extent necessary to keep outstanding Loans ratable of the respective Lenders effective  as of such date.  6.18.7 Amendment; Sharing of Payments. In connection with any extension  of the Termination Date, the Company, and each Extending Lender may make such  amendments to this Agreement as the Agent determines to be reasonably necessary to  evidence the extension. This Section 6.18 shall supersede any provisions in Section 17.9 to  the contrary.  6.19 Designation of Dual Subsidiaries.   The Company may designate any Subsidiary as a “Dual Subsidiary” in order to finance  new Vehicles and used Vehicles through Permitted Dual Subsidiary Indebtedness so long as:  (a) with respect to any Dual Subsidiary that will finance new Vehicles  through Permitted Dual Subsidiary Indebtedness, the Company shall terminate the designation of  such Subsidiary as a “New Vehicle Floorplan Borrower” with respect to each franchise (any such  

 

   101  franchise, a “Removed Franchise”) that will obtain financing for new Vehicles through Permitted  Dual Subsidiary Indebtedness;  (b) the Company has (x) delivered notice of such request to the Agent,  (y) executed and delivered acknowledgements (in form and substance reasonably acceptable to the  Agent) of such Dual Subsidiary’s continuing Obligations under the Loan Documents (including  pursuant to the Guaranty and any other Collateral Documents) as requested by the Agent and (z)  prepaid all outstanding Loans with respect to such redesignation as required by Section 2.1.5(d),  Section 3.1.5(d) and otherwise complied with Section 13.16;  (c) such Subsidiary otherwise qualifies as a “Dual Subsidiary” entitled  to incur Permitted Dual Subsidiary Indebtedness pursuant to the terms of the Agreement at the  time of such redesignation;   (d) no Default or Event of Default then exists or will result therefrom.  Following any such redesignation, such Subsidiary shall no longer be entitled to utilize the credit  facilities provided for in Section 2 with respect to any Removed Franchise;  (e) the Company shall have provided to the Agent a Used Vehicle Loan  Borrowing Base Certificate as of the date of and after giving effect to such designation of such  Subsidiary as a Dual Subsidiary and deduction of all Used Vehicles of such Dual Subsidiary from  the Used Vehicle Borrowing Base;  (f) the Company shall have provided to the Agent a Service Loaner  Vehicle Loan Borrowing Base Certificate as of the date of and after giving effect to such  designation of such Subsidiary as a Dual Subsidiary and deduction of all Service Loaner Vehicles  of such Dual Subsidiary from the Service Loaner Vehicle Borrowing Base;   (g) the Company shall have provided to the Agent a Revolving Loan  Borrowing Base Certificate as of the date of and after giving effect to such designation of such  Subsidiary as a Dual Subsidiary and certifying that after giving effect to such designation the  Revolving Loan Availability is not less than $1.00;  (h) the Company shall have provided to the Agent a Compliance  Certificate (prepared on a Pro Forma Basis as of the most recent date for which a Compliance  Certificate was furnished to the Agent) signed by the Company’s chief financial officer or other  officer acceptable to the Agent;  (i) (A) the existing UCC-1 financing statement for the Dual Subsidiary  that names the Agent as secured party shall have been amended to remove certain assets and (B) a  new UCC-1 financing statement shall have been filed naming the Dual Subsidiary as debtor and  the applicable Dual Subsidiary Lender as secured party, in each case, in accordance with the terms  of the applicable Intercreditor Agreement; and  (j) prior to or concurrently with the initial incurrence of Permitted Dual  Subsidiary Indebtedness by any Dual Subsidiary from a Dual Subsidiary Lender, cause to be  delivered to the Agent an Intercreditor Agreement, or a joinder to an existing Intercreditor  

 

   102  Agreement, executed by each Required Intercreditor Counterparty, along with any applicable  revised exhibits thereto.  Notwithstanding the foregoing, this Section 6.19 shall not take effect until the Agent has  received (x) a duly executed Intercreditor Agreement (or a joinder or supplement thereof), in form  and substance satisfactory to the Agent and (y) any additional documentation requested by the  Agent in its sole discretion.  6.20 Erroneous Payments.  (a) If the Agent notifies a Lender, LC Issuer or other holder  of any Obligations (each, a “Lender Party”), or any Person who has received funds on behalf of  a Lender Party (any such Lender Party or other recipient, a “Payment Recipient”), that the Agent  has determined in its sole discretion (whether or not after receipt of any notice under immediately  succeeding clause (b)) that any funds received by such Payment Recipient from the Agent or any  of its Affiliates were erroneously transmitted to, or otherwise erroneously received by, such  Payment Recipient (whether or not such error is known to any Payment Recipient) (any such funds,  whether received as a payment, prepayment or repayment of principal, interest, fees, distribution  or otherwise, individually and collectively, an “Erroneous Payment”) and demands the return of  such Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain  the property of the Agent and shall be segregated by the Payment Recipient and held in trust for  the benefit of the Agent, and such Payment Recipient shall promptly, but in no event later than one  Business Day thereafter, return to the Agent the amount of any such Erroneous Payment (or portion  thereof) as to which such a demand was made, in same day funds (in the currency so received),  together with interest thereon in respect of each day from and including the date such Erroneous  Payment (or portion thereof) was received by such Payment Recipient to the date such amount is  repaid to the Agent in same day funds at the greater of the Federal Funds Effective Rate and a rate  determined by the Agent in accordance with banking industry rules on interbank compensation  from time to time in effect. A notice of the Agent to any Payment Recipient under this clause (a)  shall be conclusive, absent manifest error.    (b) Without limiting immediately preceding clause (a), if any Payment  Recipient receives a payment, prepayment or repayment (whether received as a payment,  prepayment or repayment of principal, interest, fees, distribution or otherwise) from the  Agent (or any of its Affiliates) that (x) is in a different amount than, or on a different date  from, that specified in a notice of payment, prepayment or repayment sent by the Agent (or  any of its Affiliates) with respect to such payment, prepayment or repayment, (y) was not  preceded or accompanied by a notice of payment, prepayment or repayment sent by the  Agent (or any of its Affiliates), or (z) such Payment Recipient otherwise becomes aware  was transmitted, or received, in error (in whole or in part):    (i) (A) in the case of immediately preceding clause (x) or (y), an error  shall be presumed to have been made (absent written confirmation from the Agent  to the contrary) or (B) in the case of immediately preceding clause (z), an error has  been made, in each case, with respect to such payment, prepayment or repayment;  and  

 

   103    (ii) such Payment Recipient shall promptly (and, in all events, within  one Business Day of its knowledge of such error) notify the Agent of its receipt of  such payment, prepayment or repayment, the details thereof (in reasonable detail)  and that it is so notifying the Agent pursuant to this Section 6.20(b).    (c) Each Lender Party hereby authorizes the Agent to set off, net and apply any  and all amounts at any time owing to such Lender Party under any Loan Document, or  otherwise payable or distributable by the Agent to such Lender Party from any source,  against any amount due to the Agent under immediately preceding clause (a) or under the  indemnification provisions of this Agreement.    (d) An Erroneous Payment shall not pay, prepay, repay, discharge or otherwise  satisfy any Obligations, except to the extent such Erroneous Payment comprises funds  received by the Agent from a Loan Party for the purpose of making such Erroneous  Payment.     (e) To the extent permitted by Applicable Law, each Payment Recipient hereby  agrees not to assert any right or claim to an Erroneous Payment, and hereby waives, and is  deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment,  including without limitation any defense based on “discharge for value” or any similar  doctrine, with respect to any demand, claim or counterclaim by the Agent for the return of  any Erroneous Payment.    (f) Each party’s agreements under this Section 6.20 shall survive the  resignation or replacement of the Agent, any transfer of rights or obligations by, or the  replacement of, a Lender or LC Issuer, the termination of the Commitments, or the  repayment, satisfaction or discharge of any or all Obligations.  ARTICLE 7  YIELD PROTECTION; TAXES  7.1 Yield Protection.  If, after the date of this Agreement, there occurs any adoption  of or change in any law, governmental or quasi-governmental rule, regulation, policy, guideline,  interpretation, or directive (whether or not having the force of law) or in the interpretation,  promulgation, implementation or administration thereof by any governmental or quasi- Governmental Authority, central bank or comparable agency charged with the interpretation or  administration thereof, including, notwithstanding the foregoing, all requests, rules, guidelines or  directives (x) in connection with the Dodd-Frank Wall Street Reform and Consumer Protection  Act or (y) promulgated by the Bank for International Settlements, the Basel Committee on Banking  Regulations and Supervisory Practices (or any successor or similar authority) or the United States  financial regulatory authorities, in each case of clauses (x) and (y), regardless of the date enacted,  adopted, issued, promulgated or implemented, or compliance by any Lender or applicable Lending  Installation or the LC Issuer with any request or directive (whether or not having the force of law)  

 

   104  of any such authority, central bank or comparable agency (any of the foregoing, a “Change in  Law”) which:  (a) subjects any Lender or any applicable Lending Installation, the LC  Issuer, or the Agent to any Taxes (other than with respect to Indemnified Taxes, Excluded Taxes,  and Other Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations,  or its deposits, reserves, other liabilities or capital attributable thereto, or  (b) imposes or increases or deems applicable any reserve, assessment,  insurance charge, special deposit or similar requirement against assets of, deposits with or for the  account of, or credit extended by, any Lender or any applicable Lending Installation or the LC  Issuer (other than reserves and assessments taken into account in determining the interest rate  applicable to Loans bearing interest based on the Eurocurrency Base Rate (“Eurocurrency  Loan”)), or  (c) imposes any other condition (other than Taxes) the result of which  is to increase the cost to any Lender or any applicable Lending Installation or the LC Issuer of  making, funding or maintaining its Eurocurrency Loans, or of issuing or participating in Letters of  Credit, or reduces any amount receivable by any Lender or any applicable Lending Installation or  the LC Issuer in connection with its Eurocurrency Loans, Letters of Credit, or participations  therein, or requires any Lender or any applicable Lending Installation or the LC Issuer to make  any payment calculated by reference to the amount of Eurocurrency Loans, Letters of Credit, or  participations therein held or interest or fees received by it, by an amount deemed material by such  Lender or the LC Issuer as the case may be, and the result of any of the foregoing is to increase  the cost to such Lender or the LC Issuer of making or maintaining its Loans or Commitments or  of issuing or participating in Letters of Credit or to reduce the return received by such Lender or  the LC Issuer in connection with such Loans or Commitment, Letters of Credit or participations  therein, then, within fifteen (15) days after demand by such Lender or the LC Issuer, the Borrowers  shall pay such Lender or the LC Issuer such additional amount or amounts as will compensate such  Lender or the LC Issuer for such increased cost or reduction in amount received. Failure or delay  on the part of any Lender or LC Issuer to demand compensation pursuant to this Section shall not  constitute a waiver of such Lender’s or LC Issuer’s right to demand such compensation; provided  that the Borrowers shall not be required to pay any amount to compensate any Lender or LC Issuer  pursuant to the foregoing provisions of this Section 7.1 for any such increased costs incurred or  reductions suffered more than nine months prior to the date that such Lender or such LC Issuer, as  the case may be, notifies the Company of the Change in Law giving rise to such increased costs or  reductions and of such Lender’s or such LC Issuer’s intention to claim compensation therefor  (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive,  then the nine-month period referred to above shall be extended to include the period of retroactive  effect).   7.2 Changes in Capital Adequacy Regulations.  If a Lender or the LC Issuer  determines the amount of capital or liquidity required or expected to be maintained by such Lender  or the LC Issuer, any Lending Installation of such Lender or the LC Issuer, or any corporation or  holding company controlling such Lender or the LC Issuer is increased as a result of (a) a Change  in Law or (b) any change after the date of this Agreement in the Risk-Based Capital Guidelines,  then, within fifteen (15) days of demand by such Lender or the LC Issuer, the Borrowers shall pay  

 

   105  such Lender or the LC Issuer the amount necessary to compensate for any shortfall in the rate of  return on the portion of such increased capital which such Lender or the LC Issuer determines is  attributable to this Agreement, its Outstanding Credit Exposure or its Commitment to make Loans  and issue or participate in Letters of Credit, as the case may be, hereunder (after taking into account  such Lender’s or the LC Issuer’s policies as to capital adequacy or liquidity), in each case that is  attributable to such Change in Law or change in the Risk-Based Capital Guidelines, as applicable.  Failure or delay on the part of any Lender or LC Issuer to demand compensation pursuant to this  Section shall not constitute a waiver of such Lender or LC Issuer’s right to demand such  compensation; provided that the Borrowers shall not be required to pay any amount to compensate  any Lender or LC Issuer pursuant to the foregoing provisions of this Section 7.2 for any shortfall  in the rate of return suffered more than nine months prior to the date that such Lender or such LC  Issuer, as the case may be, notifies the Company of the Change in Law giving rise to such shortfall  and of such Lender’s or such LC Issuer’s intention to claim compensation (except that, if the  Change in Law giving rise to such shortfall is retroactive, then the nine-month period referred to  above shall be extended to include the period of retroactive effect).  7.3 Availability of Types of Advances; Adequacy of Interest Rate.    7.3.1 (a) Notwithstanding anything to the contrary in this Agreement or any  other Loan Document (except as provided in clause (b) below), if the Agent determines (which  determination shall be conclusive absent manifest error), or the Required Lenders notify the  Agent that the Required Lenders have determined, that:  (i) deposits of a type and maturity appropriate to match fund Eurocurrency  Loans are not available to such Lenders in the relevant market, or  (ii) the interest rate applicable to Eurocurrency Loans for any requested Interest  Period is not ascertainable or available (including, without limitation, because the applicable  Reuters Screen (or on any successor or substitute page on such screen) is unavailable) or does  not adequately and fairly reflect the cost of making or maintaining Eurocurrency Loans,  then the Agent shall suspend the availability of the New Vehicle Floorplan Borrowing Rate,  Used Vehicle Floorplan Borrowing Rate, Service Loaner Vehicle Floorplan Borrowing Rate,  and Revolving Loan Borrowing Rate, the loans shall thereafter bear interest at the Alternate  Base Rate plus the Alternate Base Rate Margin (New Vehicle) for New Vehicle Floorplan  Loans and New Vehicle Swing Line Loans, the Alternate Base Rate plus the Alternate Base  Rate Margin (Used Vehicle) for Used Vehicle Floorplan Loans and Used Vehicle Swing Line  Loans, the Alternate Base Rate plus the Alternate Base Rate Margin (Service Loaner Vehicle)  for Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans,  and the Alternate Base Rate plus the Alternate Base Rate Margin (Revolving) for Revolving  Loans and Revolving Swing Line Loans.    (b)    (i)  Benchmark Transition Event; Early Opt-in Election.  Notwithstanding anything to the contrary herein or in any other Loan Document (and any  Swap shall be deemed not to be a “Loan Document” for purposes of this Section 7.3.1(b)), if  a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related  Benchmark Replacement Date have occurred prior to the Reference Time in respect of any  

 

   106  setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in  accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such  Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark  for all purposes hereunder and under any Loan Document in respect of such Benchmark  setting and subsequent Benchmark settings without any amendment to, or further action or  consent of any other party to, this Agreement or any other Loan Document and (y) if a  Benchmark Replacement is determined in accordance with clause (3) of the definition of  “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark  Replacement will replace such Benchmark for all purposes hereunder and under any Loan  Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on  the fifth Business Day after the date notice of such Benchmark Replacement is provided by  the Agent to the Lenders without any amendment to, or further action or consent of any other  party to, this Agreement or any other Loan Document so long as the Agent has not received,  by such time, written notice of objection to such Benchmark Replacement from Lenders  comprising the Required Lenders.  (ii) Term SOFR Transition Event.  Notwithstanding anything to the  contrary herein or in any other Loan Document and subject to the proviso below in this  paragraph, if a Term SOFR Transition Event and its related Benchmark Replacement Date  have occurred prior to the Reference Time in respect of any setting of the then-current  Benchmark, then the applicable Benchmark Replacement will replace the then-current  Benchmark for all purposes hereunder or under any Loan Document in respect of such  Benchmark setting and subsequent Benchmark settings, without any amendment to, or further  action or consent of any other party to, this Agreement or any other Loan Document; provided  that, this clause (b)(ii) shall not be effective unless the Agent has delivered to the Lenders and  the Company a Term SOFR Notice. For the avoidance of doubt, the Agent shall not be  required to deliver a Term SOFR Notice after a Term SOFR Transition Event and may do so  in its sole discretion.  (iii) Benchmark Replacement Conforming Changes. In connection with  the implementation of a Benchmark Replacement, the Agent will have the right to make  Benchmark Replacement Conforming Changes from time to time and, notwithstanding  anything to the contrary herein or in any other Loan Document, any amendments  implementing such Benchmark Replacement Conforming Changes will become effective  without any further action or consent of any other party to this Agreement or any other Loan  Document.   (iv) Notices; Standards for Decisions and Determinations. The Agent  will promptly notify the Company and the Lenders of (A) any occurrence of a Benchmark  Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark  Replacement Date, (B) the implementation of any Benchmark Replacement, (C) the  effectiveness of any Benchmark Replacement Conforming Changes, (D) the removal or  reinstatement of any tenor of a Benchmark pursuant to clause (v) below and (E) the  commencement or conclusion of any Benchmark Unavailability Period. Any determination,  decision or election that may be made by the Agent or, if applicable, any Lender (or group of  Lenders) pursuant to this Section 7.3.1(b), including any determination with respect to a tenor,  rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date  

 

   107  and any decision to take or refrain from taking any action or any selection, will be conclusive  and binding absent manifest error and may be made in its or their sole discretion and without  consent from any other party to this Agreement or any other Loan Document, except, in each  case, as expressly required pursuant to this Section 7.3.1(b).   (v) Unavailability of Tenor of Benchmark. Notwithstanding anything to  the contrary herein or in any other Loan Document, at any time (including in connection with  the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term  rate (including Term SOFR or the Eurocurrency Base Rate) and either (A) any tenor for such  Benchmark is not displayed on a screen or other information service that publishes such rate  from time to time as selected by the Agent in its reasonable discretion or (B) the regulatory  supervisor for the administrator of such Benchmark has provided a public statement or  publication of information announcing that any tenor for such Benchmark is or will be no  longer representative, then the Agent may modify the definition of “Interest Period” for any  Benchmark settings at or after such time to remove such unavailable or non-representative  tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is  subsequently displayed on a screen or information service for a Benchmark (including a  Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is  or will no longer be representative for a Benchmark (including a Benchmark Replacement),  then the Agent may modify the definition of “Interest Period” for all Benchmark settings at  or after such time to reinstate such previously removed tenor.  (vi) Benchmark Unavailability Period. Upon notice to the Company by  the Agent in accordance with Section 17.11 of the commencement of a Benchmark  Unavailability Period and until a Benchmark Replacement is determined in accordance with  this Section 7.3.1(b), any Borrower may revoke any request for a Eurocurrency Loan, or any  request for the conversion or continuation of a Eurocurrency Loan to be made, converted or  continued during any Benchmark Unavailability Period and, failing that, the applicable  Borrower will be deemed to have converted any such request into a request for a borrowing  at the Alternate Base Rate plus the applicable margin (e.g., the Alternate Base Rate Margin  (New Vehicle) for New Vehicle Floorplan Loans and New Vehicle Swing Line Loans, the  Alternate Base Rate Margin (Used Vehicle) for Used Vehicle Floorplan Loans and Used  Vehicle Swing Line Loans, the Alternate Base Rate Margin (Service Loaner Vehicle) for  Service Loaner Vehicle Floorplan Loans and Service Loaner Vehicle Swing Line Loans, and  the Alternate Base Rate Margin (Revolving) for Revolving Loans and Revolving Swing Line  Loans) or conversion to a borrowing at the Alternate Base Rate plus the applicable margin  (e.g., the Alternate Base Rate Margin (New Vehicle) for New Vehicle Floorplan Loans and  New Vehicle Swing Line Loans, the Alternate Base Rate Margin (Used Vehicle) for Used  Vehicle Floorplan Loans and Used Vehicle Swing Line Loans, the Alternate Base Rate Margin  (Service Loaner Vehicle) for Service Loaner Vehicle Floorplan Loans and Service Loaner  Vehicle Swing Line Loans, and the Alternate Base Rate Margin (Revolving) for Revolving  Loans and Revolving Swing Line Loans). During any Benchmark Unavailability Period or at  any time that a tenor for the then-current Benchmark is not an Available Tenor, the component  of the Alternate Base Rate based upon the then-current Benchmark or such tenor for such  Benchmark, as applicable, will not be used in any determination of the Alternate Base Rate.   7.4 Taxes.  

 

   108  7.4.1 Any and all payments by or on account of any obligation of any Loan Party  under any Loan Document shall be made without deduction or withholding for any Taxes, except  as required by Applicable Law.  If any Applicable Law (as determined in the good faith discretion  of the applicable withholding agent) requires the deduction or withholding of any Tax from any  such payment, then the applicable withholding agent shall be entitled to make such deduction or  withholding and shall timely pay the full amount deducted or withheld to the relevant  Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified  Tax or Other Tax, then the sum payable by the applicable Loan Party shall be increased as  necessary so that after such deduction or withholding has been made (including such deductions  and withholdings applicable to additional sums payable under this Section 7.4) the applicable  Lender, the LC Issuer or the Agent receives an amount equal to the sum it would have received  had no such deduction or withholding been made as provided in this Section 7.4.  7.4.2 The Loan Parties shall timely pay to the relevant Governmental Authority  in accordance with Applicable Law or at the option of the Agent timely reimburse it for the  payment of, any Other Taxes.  7.4.3 The Loan Parties shall indemnify the Lender, the LC Issuer or the Agent,  within fifteen (15) days after demand therefor, for the full amount of any Indemnified Taxes and  Other Taxes (including Indemnified Taxes and Other Taxes imposed or asserted on or attributable  to amounts payable under this Section 7.4) payable or paid by such Lender, the LC Issuer or the  Agent or required to be withheld or deducted from a payment to such Lender, the LC Issuer or the  Agent and any reasonable expenses arising therefrom or with respect thereto, whether or not such  Indemnified Taxes and Other 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 a  Borrower by a Lender or LC Issuer (with a copy to the Agent), or by the Agent on its own behalf  or on behalf of a Lender or LC Issuer, shall be conclusive absent manifest error.  7.4.4 Each Lender shall severally indemnify the Agent, within fifteen (15) days  after demand therefor, for (a) any Indemnified Taxes and Other Taxes attributable to such Lender  (but only to the extent that any Loan Party has not already indemnified the Agent for such  Indemnified Taxes and Other Taxes and without limiting the obligation of the Loan Parties to do  so), (b) any Taxes attributable to such Lender’s failure to comply with the provisions of Section  17.3.3 relating to the maintenance of a Participant Register, and (c) any Excluded Taxes  attributable to such Lender, in each case, that are payable or paid by the 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 Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes  the Agent to set off and apply any and all amounts at any time owing to such Lender under any  Loan Document or otherwise payable by the Agent to the Lender from any other source against  any amount due to the Agent under this Section 7.4.4.  7.4.5 As soon as practicable after any payment of Taxes by any Loan Party to a  Governmental Authority pursuant to this Section 7.4, such Loan Party shall deliver to the Agent  the original or a certified copy of a receipt issued by such Governmental Authority evidencing  

 

   109  such payment, a copy of the return reporting such payment or other evidence of such payment  reasonably satisfactory to the Agent.  7.4.6 (a) 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  Company and the Agent, at the time or times reasonably requested by the Company or the Agent,  such properly completed and executed documentation reasonably requested by the Company or  the 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 Company or the Agent, shall  deliver such other documentation prescribed by Applicable Law or reasonably requested by the  Company or the Agent as will enable the Company or the 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 7.4.6(b)(i), (b)(ii), and  (b)(iv)) 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.  (b) Without limiting the generality of the foregoing,  (i) any Lender that is a United States person for U.S. federal  income Tax purposes shall deliver to the Company and the 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 request of the Company or the Agent), executed originals of IRS Form W-9 certifying  that such Lender is exempt from U.S. federal backup withholding Tax;  (ii) any Non-U.S. Lender shall, to the extent it is legally entitled  to do so, deliver to the Company and the Agent (in such number of copies as shall be requested by  the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender under this  Agreement (and from time to time thereafter upon the reasonable request of the Company or the  Agent), whichever of the following is applicable:  (A) in the case of a Non-U.S. Lender claiming the  benefits of an income Tax treaty to which the United States is a party (1) with respect to payments  of interest under any Loan Document, executed copies of IRS Form W-8BEN  or IRS Form W- 8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant  to the “interest” article of such Tax treaty and (2) with respect to any other applicable payments  under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E 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;  (B) executed copies of IRS Form W-8ECI;  (C) in the case of a Non-U.S. Lender claiming the  benefits of the exemption for portfolio interest under Section 881(c) of the Code, (1) a certificate  to the effect that such Non-U.S. Lender is not a “bank” within the meaning of Section 881(c)(3)(A)  of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section  

 

   110  881(c)(3)(B) of the Code, or a “controlled foreign corporation” related to the Borrower as  described in Section 881(c)(3)(C) of the Code and (2) executed copies of IRS Form W-8BEN or  IRS Form W-8BEN-E; or  (D) to the extent a Non-U.S. Lender is not the beneficial  owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W- 8BEN, IRS Form W-8BEN-E, IRS Form W-8IMY or IRS Form W-9, and/or other certification  documents from each beneficial owner, as applicable.  (iii) any Non-U.S. Lender shall, to the extent it is legally entitled  to do so, deliver to the Company and the Agent (in such number of copies as shall be requested by  the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender under this  Agreement (and from time to time thereafter upon the reasonable request of the Company or the  Agent), executed originals of any other form prescribed by Applicable Law as a basis for claiming  exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such  supplementary documentation as may be prescribed by Applicable Law to permit the Company or  the Agent to determine the withholding or deduction required to be made; and  (iv) 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 Company  and the Agent at the time or times prescribed by law and at such time or times reasonably requested  by the Company or the 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 Company or the Agent as may be necessary for the Company and the 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, if any, to deduct and withhold  from such payment.  Solely for purposes of this clause (iv), “FATCA” shall include any  amendments made to FATCA after the date of this Agreement.  (c) Each Lender agrees that if any form or certification it previously  delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or  certification or promptly notify the Company and the Agent in writing of its legal inability to do  so.  7.4.7 If any party determines, in its sole discretion exercised in good faith, that it  has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 7.4  (including by the payment of additional amounts pursuant to this Section 7.4), it shall pay to the  indemnifying party an amount equal to such refund (but only to the extent of indemnity payments  made under this Section with respect to the Taxes giving rise to such refund), net of all out-of- pocket expenses (including Taxes) of such indemnified party and without interest (other than any  interest paid by the relevant Governmental Authority with respect to such refund).  Such  indemnifying party, upon the request of such indemnified party, shall repay to such indemnified  party the amount paid over pursuant to this paragraph (plus any penalties, interest or other charges  imposed by the relevant Governmental Authority) in the event that such indemnified party is  required to repay such refund to such Governmental Authority.  Notwithstanding anything to the  

 

   111  contrary in this paragraph, in no event will the indemnified party be required to pay any amount  to an indemnifying party pursuant to this paragraph the payment of which would place the  indemnified party in a less favorable net after-Tax position than the indemnified party would have  been in if the indemnification payments or additional amounts giving rise to such refund had never  been paid.  This paragraph shall not be construed to require any indemnified party to make  available its Tax returns (or any other information relating to its Taxes that it deems confidential)  to the indemnifying party or any other Person.  7.4.8 Each party’s obligations under this Section 7.4 shall survive the resignation  or replacement of the Agent or any assignment of rights by, or the replacement of, a Lender, the  termination of the Commitments and the repayment, satisfaction or discharge of all obligations  under any Loan Document.  7.4.9 For purposes of Sections 7.4.4 and 7.4.6, the term “Lender” includes the  LC Issuer.  7.4.10 For purposes of determining withholding Taxes imposed under FATCA,  from and after the Closing Date, the Company, the other Borrowers and the Agent shall treat (and  the Lenders hereby authorize Agent to treat) the Loans and the LC Obligations as not qualifying  as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471- 2(b)(2)(i).  7.5 Selection of Lending Installation; Mitigation Obligations; Lender Statements;  Survival of Indemnity.  To the extent reasonably possible, each Lender shall designate an  alternate Lending Installation with respect to its Eurocurrency Loans to reduce any liability of the  Borrowers to such Lender under Sections 7.1, 7.2, and 7.4 or to avoid the unavailability of  Eurocurrency Loans under Section 7.3, so long as such designation is not, in the judgment of such  Lender, disadvantageous to such Lender.  Each Lender shall deliver a written statement of such  Lender to the Company (with a copy to the Agent) as to the amount due, if any, under Sections  7.1, 7.2 or 7.4.  Such written statement shall set forth in reasonable detail the calculations upon  which such Lender determined such amount and shall be final, conclusive and binding on the  Borrowers in the absence of manifest error.  Determination of amounts payable under such  Sections in connection with a Eurocurrency Loan shall be calculated as though each Lender funded  its Eurocurrency Loan through the purchase of a deposit of the type and maturity corresponding to  the deposit used as a reference in determining the Eurocurrency Rate applicable to such Loan,  whether in fact that is the case or not.  Unless otherwise provided herein, the amount specified in  the written statement of any Lender shall be payable on demand after receipt by the Company of  such written statement.  The obligations of the Borrowers under Sections 7.1, 7.2 and 7.4 shall  survive payment of the Obligations and termination of this Agreement.  ARTICLE 8  SECURITY AND GUARANTIES  8.1 Security.  8.1.1 Collateral.  All present and future Loans, Letters of Credit, Obligations,  Guarantor Obligations, and Permitted Swap Obligations of the Loan Parties to the Agent and the  

 

   112  Lenders under this Agreement and the other Loan Documents shall be, subject to each Intercreditor  Agreement (once effective), secured by a perfected security interest, subject only to Permitted  Liens, in the property described in the Collateral Documents (collectively, “Collateral”);  including, without limitation, the following property of the Company and all of its present and  future Subsidiaries, except Excluded Subsidiaries and Silo Subsidiaries, whether now owned or  existing or hereafter acquired and wherever located, and all products and proceeds thereof:  (a) All inventory (including, without limitation, all parts inventory, all  Vehicles of whatever make, model and description, trade ins, repossessions and inventory held for  display or demonstration purposes); equipment (other than fixtures); investment property; stock;  partnership interests; membership interests; securities (certificated or uncertificated); security  entitlements; securities accounts; accounts; instruments; documents; promissory notes; chattel  paper (including electronic and tangible chattel paper); payment intangibles; general intangibles;  deposit accounts; contract rights and other rights to payment; personal property leases; rebates,  credits, factory holdbacks, incentive payments and other payments from any manufacturer, factory  or distributor.  (b) All attachments, accessions, accessories, tools, parts, supplies,  increases and additions to, and all replacements of, and substitutions for any property described in  this Section 8.1.1; all products, produce, and supporting obligations of any of the property  described in this Section 8.1.1; all proceeds (including insurance proceeds) of any of the property  described in this Section 8.1.1; and all records and data relating to any of the property described  in this Section 8.1.1, whether in the form of a writing, photograph, microfilm, microfiche, or  electronic media, together with all right, title and interest of the Company and each Subsidiary in  and to all computer software required to utilize, create, maintain, and process any such records or  data on electronic media.  Notwithstanding the foregoing, the New Vehicle Floorplan Loan Obligations shall be secured only  by the Collateral owned by the New Vehicle Floorplan Borrowers. For the avoidance of doubt and  notwithstanding anything to the contrary set forth in this Agreement or any Security Document,  the term “Collateral” as used in this Agreement and in the Security Documents shall not include  any Excluded Property.  8.1.2 Collateral Documents.  The security interests in the Collateral shall be  evidenced by such security agreements, assignments, Uniform Commercial Code financing  statements, Title Documents, trust deeds, mortgages, and other Collateral Documents covering the  Collateral as the Agent or Required Lenders may at any time reasonably require.  8.1.3 Additional Acts.  As a condition precedent to the effectiveness of this  Agreement, and from time to time at the Agent’s or any Lender’s request, each Person granting  Collateral shall execute and/or deliver to the Agent such security agreements, assignments, pledge  agreements, control agreements, Title Documents, landlord and owner consents, amendments to  any of the foregoing documents and any other documents and instruments (endorsed or assigned  to the Agent as the Agent may request), and shall take such other actions, as may be required under  Applicable Law or which the Agent or any Lender may reasonably request to effectuate the  transactions contemplated hereunder and to grant, preserve, protect, perfect and continue the  validity and priority of their security interests (subject to Permitted Liens).  

 

   113  8.1.4 Limitations.  Notwithstanding any contrary provision of this Agreement or  any Collateral Document, unless Agent otherwise requires (which the Agent may do at any time)  (a) the security interest of the Agent and the Lenders in any Loan Party’s patents, trademarks,  copyrights, trade names and other intellectual property will not be perfected by filing with the  United States Patent and Trademark Office or any other agency of the United States government;  (b) the security interest of the Agent and the Lenders will not be noted on the Title Document for  any Vehicle; (c) the security interest of the Agent and the Lenders in deposit accounts maintained  by any Loan Party with a financial institution other than U.S. Bank may not be perfected if the  Agent reasonably determines that the amounts generally maintained in such deposit accounts are  not material, (d) the security interest of the Agent and the Lenders in investment property will not  be perfected by control, and (e) the security interest of the Agent and the Lenders in aircraft will  not be perfected.  8.2 Guaranties.  All present and future Revolving Loans, Revolving Swing Line  Loans, LC Obligations, Used Vehicle Floorplan Loans, Used Vehicle Swing Line Loans, Service  Loaner Vehicle Floorplan Loans, Service Loaner Vehicle Swing Line Loans and other Revolving  Loan Obligations, Service Loaner Vehicle Floorplan Obligations and Used Vehicle Floorplan  Obligations of Revolving Loan Borrower, Service Loaner Vehicle Borrower and Used Vehicle  Floorplan Borrower to the Agent and the Lenders shall be guaranteed by each of the Guarantors.  ARTICLE 9   CONDITIONS PRECEDENT  9.1 Initial Conditions Precedent.  The effectiveness of this Agreement and the  obligation of the Lenders to make the initial Credit Extensions are subject to satisfaction of the  following conditions (each, an “Initial Condition”):  9.1.1 The Agent has received the following:  (a) Such fully executed original Loan Documents as the Agent or any  Lender requires, including, without limitation, this Agreement; the Security Agreement, the Pledge  Agreement, and any other Collateral Documents; the Guaranty signed by each Guarantor; any  required LC Agreement; and each other Loan Document required by the Agent or any Lender.  (b) Documentation satisfactory to the Agent to establish the due  organization, valid existence and (if applicable) good standing of each Loan Party; its qualification  to engage in business in each jurisdiction in which it is engaged in business or required to be so  qualified; its authority to execute, deliver and perform any Loan Documents to which it is a party  and the identity, authority and capacity of each Person authorized to act on its behalf, which shall,  without limitation, include certified copies of articles or certificates of incorporation and  amendments thereto, bylaws and amendments thereto, certificates of good standing, existence  and/or qualification to engage in business, corporate resolutions, incumbency certificates, and the  like.  (c) A favorable opinion of acceptable independent counsel for each  Loan Party covering such matters as the Agent or any Lender may reasonably request.  

 

   114  (d) A certificate, signed by the chief financial officer of the Company,  stating that on the date of the initial Credit Extension no Default or Event of Default has occurred  and is continuing.  (e) (i) One or more intercreditor agreements between the Agent and  each Person extending floorplan financing to the Dealerships or an amendment to the existing  intercreditor agreement, in form and content satisfactory to the Agent and the Required Lenders,  and (ii) any other subordination or intercreditor agreements or amendments to existing  intercreditor agreements required by the Agent or the Required Lenders, all in form and content  satisfactory to the Agent and the Lenders.  9.1.2 The Agent shall have received copies of any Seller Agreements which it has  requested, other than those disclosure of which is prohibited by the relevant manufacturer or  distributor, which must be reasonably satisfactory to the Agent, and has received such evidence as  it reasonably requires that all Seller Agreements which are necessary for the conduct of the  Company’s and each Dealership’s business, are in full force and effect.  9.1.3 The Agent shall have a valid and perfected security interest in the Collateral  (subject to the limitations found in Section 8.1.4) with a priority acceptable to the Agent and the  Required Lenders and subject only to Permitted Liens and the Agent shall have received  satisfactory evidence of perfection and the priority of such security interests, including without  limitation such Uniform Commercial Code and other searches, termination statements, and other  filings as it deems appropriate.  9.1.4 All required insurance shall be in full force and effect and the Agent shall  have received such evidence thereof as it requires.  9.1.5 The representations and warranties contained in this Agreement and in each  Loan Document shall be correct, accurate and complete in all material respects as of the Closing  Date.  9.1.6 No Default shall have occurred and is continuing on the Closing Date or  will exist after giving effect to the making of the Loans to be made on the Closing Date, the  Existing Letters of Credit, and any Letters of Credit to be issued on the Closing Date.  9.1.7 All fees accrued under the Existing Loan Agreement for periods prior to the  Closing Date and all interest accrued on the outstanding principal balance of the loans made under  the Existing Loan Agreement as of the Closing Date shall be paid; provided that (a) interest and  fees accrued under the Existing Loan Agreement as of the Closing Date in respect of the Aggregate  New Vehicle Floorplan Commitment and New Vehicle Floorplan Loans shall be due and payable  on the New Vehicle Monthly Payment Date immediately following the Closing Date, and (b) the  Per Annum Fee shall be due and payable on the Quarterly Payment Date immediately following  the Closing Date.  9.1.8 All fees and Attorney Costs payable on or prior to the Closing Date shall  have been paid.  

 

   115  9.1.9 The Agent shall have received such additional documents, opinions,  approvals, consents and information and each Loan Party shall have satisfied such additional  requirements as the Agent or any Lender may reasonably require.  9.1.10 Upon the reasonable request of any Lender made at least ten days prior to  the Closing Date, the Loan Parties must have provided to such Lender the documentation and other  information so requested in connection with applicable “know your customer” and anti-money- laundering rules and regulations, including the PATRIOT Act, in each case at least five days prior  to the Closing Date.  9.1.11 At least five days prior to the Closing Date, if any Borrower qualifies as a  “legal entity customer” under the Beneficial Ownership Regulation, such Borrower must deliver a  Beneficial Ownership Certification in relation to such Borrower.  9.1.12 The Agent shall have received a Compliance Certificate (calculated on a Pro  Forma Basis after giving effect to this Agreement), dated as of the last day of the fiscal quarter  ending December 31, 2020 and signed by the Company’s chief financial officer or other officer  acceptable to the Agent.    9.1.13 The Agent shall have received (a) a Used Vehicle Borrowing Base  Certificate dated as of the Closing Date certifying as to the Used Vehicle Borrowing Base as of the  last day of the calendar month preceding the calendar month ending prior to the Closing Date, (b)  a Service Loaner Vehicle Borrowing Base Certificate dated as of the Closing Date certifying as to  the Service Loaner Vehicle Borrowing Base as of the last day of the calendar month preceding the  calendar month ending prior to the Closing Date and (c) a Revolving Borrowing Base Certificate,  dated as of the Closing Date certifying as to the Revolving Borrowing Base as of the last day of  the calendar month preceding the calendar month ending prior to the Closing Date, in each case,  signed by the Company’s chief financial officer or other officer acceptable to the Agent.  9.2 Conditions Precedent to Each Credit Extension.  Except as otherwise set forth  herein (including without limitation Sections 2.2.6(d), 3.2.6(d), and 4.2.6(d)), all of the following  conditions must be satisfied on the date of any Credit Extension:  9.2.1 The Agent shall have received a request for the Loan or Letter of Credit as  required by the provisions of this Agreement.  9.2.2 No Default shall have occurred and be continuing or will exist after giving  effect to the making of such Credit Extension.  9.2.3 All representations and warranties in this Agreement and the other Loan  Documents shall be true and correct in all material respects as of such date, except to the extent  they relate to another date, and except as previously disclosed to and accepted by the Agent in  writing.  9.2.4 All Initial Conditions have been satisfied at the time of the initial Credit  Extension.  

 

   116  9.2.5 The Agent, and/or any Lender, as applicable, shall have received such  documents and information as they reasonably require.  9.2.6 All conditions in any other provision of this Agreement or any other Loan  Document have been satisfied as of the time required.  9.2.7 With respect to each New Vehicle Loan Advance, the Agent shall have  received the following:  (a) For New Vehicle Loan Advances made under a Payment  Commitment.  Manufacturer or distributor invoice, cash draft, electronic record, depository  transfer check, sight draft, or such other documents as specified in the applicable Payment  Commitment, identifying the Vehicles delivered or to be delivered to a New Vehicle Floorplan  Dealership.  (b) For New Vehicle Loan Advances made to finance Fleet Vehicles.   If required by the Agent, a copy of the applicable Fleet Sale Contract and/or an agreement from  the purchaser of the Fleet Vehicles agreeing to pay the purchase price due to a New Vehicle  Floorplan Dealership directly to the Agent.  (c) For New Vehicle Loan Advances made to finance New Vehicles  which are obtained from another dealer.  Copy of manufacturer or distributor invoice (or  substitute acceptable to the Agent) and bill of sale duly executed by the parties to the transaction  or other documentation acceptable to the Agent evidencing the acquisition cost to a New Vehicle  Floorplan Dealership of such Vehicles.  (d) For New Vehicle Loan Advances made to finance any other New  Vehicles.  Manufacturer or distributor invoice or other documents acceptable to the Agent  identifying the Vehicles purchased by a New Vehicle Floorplan Dealership.  9.3 Conditions Precedent to Initial Advance to any New Vehicle Floorplan  Borrower.  In addition to the requirements in Section 9.1 and 9.2, no New Vehicle Loans shall be  made to finance New Vehicles owned by any Dealership (including the initial New Vehicle  Floorplan Borrowers) and no Dealership shall become a New Vehicle Floorplan Borrower unless  all of the following conditions have been satisfied with respect to such Dealership:  9.3.1 All indebtedness and obligations of the Dealership (or if Required Lenders,  in their sole discretion, consent in writing, a franchise or location of a Dealership) to any lender  (“Former Lender”) for flooring lines of credit (other than permitted Other Service Loaner  Floorplan Financing) have been repaid or will be repaid with the proceeds of the first New Vehicle  Loan Advance to be made to finance New Vehicles owned by such Dealership and all commitments  of any Former Lender to extend floorplan financing to such Dealership (or if Required Lenders, in  their sole discretion, consent in writing, the applicable franchise or location of such Dealership)  have been terminated.  9.3.2 All Liens of any Former Lender in the Collateral (other than Permitted  Liens) have been terminated, or at the Agent’s sole discretion, satisfactory arrangements have been  made for termination of such Liens, or if such Liens are permitted hereunder, any subordination or  

 

   117  intercreditor agreement or amendment to any such agreement required by the Agent has been  executed and delivered to the Agent.  9.3.3 The Agent shall have conducted such audits of the Collateral of the New  Vehicle Floorplan Dealership as it requires, the results of which are satisfactory to the Agent.  9.3.4 The Agent shall have received such Repurchase Agreements relating to the  New Vehicle Floorplan Dealership as it requires.  9.3.5 All conditions in Section 9.1.2, 9.1.3, and 9.1.4 shall be satisfied for such  Dealership as of the date it becomes a New Vehicle Floorplan Dealership, and with respect to the  Dealership, (i) if it is a Subsidiary as of the date of this Agreement or has previously executed a  Guarantor Joinder Agreement, it shall have executed an Existing Subsidiary Joinder Agreement  (ii) if it is a new Acquisition Subsidiary, all conditions in Section 13.13 shall have been satisfied,  or (iii) if it is a new Subsidiary which is not an Acquisition Subsidiary, all conditions in Section  12.17 shall have been satisfied.  9.3.6 Each Loan Party has satisfied such other conditions as are reasonably  required by the Agent.  9.4 Real Property Conditions.  In addition to the other requirements set forth herein,  no Real Property shall be included or remain in the Revolving Loan Borrowing Base as Eligible  Real Property unless all of the following conditions have been satisfied and continue to be satisfied  with respect to such Real Property:  9.4.1 A Real Estate Subsidiary shall hold fee simple title to the Real Property free  and clear of all Liens and encumbrances of any nature or kind whatsoever except any easements,  rights of way, zoning restrictions and other minor encumbrances and exceptions which are  acceptable to the Agent in its sole discretion and which shall be the only encumbrances on the Real  Property, and such Real Estate Subsidiary shall not have entered into any agreement prohibiting  or limiting its ability to grant a Lien on such Real Property to the Agent and the Lenders.  9.4.2 Prior to inclusion of the Real Property in the Revolving Loan Borrowing  Base, the Agent shall receive the following, each in form and substance satisfactory to the Agent  and the Agent shall deliver to Lenders: (a) an acceptable Appraisal of the Real Property; and (b) a  title report regarding the Real Property from a title insurance company acceptable to the Agent,  showing the status of title to the Real Property, and all liens, encumbrances, easements and other  matters affecting the Real Property (“Title Report”).  9.4.3 If any Real Property remains in the Revolving Loan Borrowing Base for  one year or more, the Agent shall receive the following, each in form and substance satisfactory to  the Agent, on an annual basis (or, if required by the Agent, more frequently following the  occurrence of an Event of Default) (a) an initial Phase I environmental site assessment report and  such other environmental audits, assessments, studies and reports as the Agent requires, prepared  by a geotechnical engineer or other qualified Person acceptable to the Agent (“Environmental  Reports”) and thereafter such new or updated Environmental Reports as the Agent requires, (b)  such new or updated appraisals, evaluations or reports as the Agent requires to determine the Value  of the Real Property, and (c) such Title Reports as the Agent requires.  

 

   118  9.4.4 In addition to any other insurance required hereunder, all insurance covering  the Real Property which is reasonably required by the Agent shall be in full force and effect and  the Agent shall receive from time to time such evidence thereof as it requires.  9.4.5 The Real Property and improvements thereon shall be in good condition,  and no part of the Real Property and improvements shall have been damaged by fire or other  casualty or have been the subject of any eminent domain or condemnation proceedings.  9.4.6 There are no circumstances affecting the Real Property, including without  limitation any requirement of Applicable Law of the jurisdiction in which it is located which, in  the opinion of the Agent or its counsel, may materially affect the value of the Real Property.  9.4.7 The Agent shall have received such additional documents and information  and each Loan Party shall have satisfied such additional requirements as the Agent reasonably  requires, with respect to the Real Property.  9.4.8 The Revolving Loan Borrower shall pay all costs and expenses incurred by  the Agent in connection with the Real Property, including without limitation all appraisal and  appraisal review fees, costs of environmental audits and inspections, and fees of the Agent’s  counsel.  ARTICLE 10   REPRESENTATIONS AND WARRANTIES  Except as set forth in the Disclosure Schedule, each Loan Party hereby represents and  warrants to and agrees with the Agent and the Lenders:  10.1 Existence and Standing.  Each Loan Party (a) is a corporation, partnership or  limited liability company (i) duly and properly incorporated, organized or formed, as the case may  be, validly existing and in good standing (to the extent such concept applies to such entity) or current  status, in its jurisdiction of incorporation or organization and (ii) duly qualified and in good standing  (to the extent such concept applies to such entity) or current status, in each other jurisdiction where  the conduct of its business or the ownership of its properties requires such qualification, and (b) has  full power, authority and legal right to carry on its business as presently conducted, and to own and  operate its properties and assets; except in each case referred to in clause (a)(ii) or (b), to the extent  the failure to do so could not reasonably be expected to have a Material Adverse Effect.  10.2 Authorization and Validity.  Each Loan Party has the power and authority and  legal right to execute and deliver the Loan Documents to which it is a party and to perform its  obligations thereunder.  The execution, delivery, and performance of the Loan Documents by each  Loan Party have been duly authorized by proper corporate, limited liability company partnership  or other entity proceedings.  This Agreement constitutes, and each other Loan Document to which  any Loan Party is a party when executed and delivered to the Agent will constitute a legal, valid  and binding obligation of such Loan Party, enforceable in accordance with its terms, except as  enforceability may be limited by applicable bankruptcy, insolvency, moratorium, fraudulent  transfer and other similar laws affecting creditors’ rights generally.  

 

   119  10.3 Conflict; Government Consent.  Neither the execution and delivery by any Loan  Party of the Loan Documents to which it is a party, nor the consummation of the transactions  therein contemplated, nor compliance with the provisions thereof will violate (a) any law, rule,  regulation, order, writ, judgment, injunction, decree or award binding on any Loan Party or (b)  any Loan Party’s articles or certificate of incorporation, partnership agreement, certificate of  limited partnership, articles or certificate of formation or organization, by-laws, or operating or  other management agreement, as the case may be, or (c) the provisions of any loan, loan agreement,  indenture, instrument or agreement to which any Loan Party is a party or is subject, or by which  it, or its property, is bound, or conflict with or constitute a default thereunder, or result in, or  require, the creation or imposition of any Lien in, of or on the property of any Loan Party pursuant  to the terms of any such indenture, instrument or agreement, except, with respect to this clause (c),  as could not reasonably be expected to have a Material Adverse Effect. No Governmental  Approval of any Governmental Body is required for the due execution, delivery and performance  of the Loan Documents except such as have been obtained and are in full force and effect.  10.4 Financial Statements.  The financial statements that have heretofore been  delivered to the Agent or any Lender, and all schedules and notes included in such financial  statements, present fairly (a) the financial position of the Company and its Subsidiaries as of the  date of such statements and (b) the results of its operations for the periods covered thereby; and  with respect to the consolidated financial statements of the Company and its Subsidiaries  (including, for the avoidance of doubt, all Minority Dealer Subsidiaries), there are not any material  liabilities that should have been reflected in the financial statements or the notes thereto under  GAAP, contingent or otherwise, including liabilities for taxes or any unusual forward or long-term  commitments, that are not disclosed or reserved against in the statements referred to above or in  the notes thereto or that are not disclosed herein.  The consolidated financial statements of the  Company and its Subsidiaries (including, for the avoidance of doubt, all Minority Dealer  Subsidiaries) have been prepared in accordance with GAAP, except, as to interim financial  statements, for the absence of footnotes and subject to year-end adjustments.  10.5 Material Adverse Effect.  Since the date of the most recent audited financial  statements delivered to the Agent, no event or circumstance has occurred which has had or which  could reasonably be expected to have, a Material Adverse Effect.  10.6 Taxes.  Each Loan Party has filed all federal, state, local, and other tax returns  which are required to be filed and has paid all taxes due pursuant to said returns or pursuant to any  assessment received by any Loan Party, except such taxes, if any, as are being contested in good  faith and by proper proceedings and as to which adequate reserves have been provided in  accordance with GAAP and as to which no Lien exists.  10.7 Litigation.  There is no litigation, arbitration, governmental investigation,  proceeding or inquiry pending against any Loan Party or, to the knowledge of any of their officers,  threatened against or affecting any Loan Party which (a) purport to affect or pertain to this  Agreement or any other Loan Document, or any of the transactions contemplated thereby, which  seeks to prevent, enjoin or delay the making of any Credit Extension, or (b) if determined  adversely, could reasonably be expected to have a Material Adverse Effect.  

 

   120  10.8 Subsidiaries and Affiliates.  Set forth in the Disclosure Schedule is a complete and  accurate list as of the Closing Date of the Company and its Subsidiaries and Affiliates (including  a complete and accurate list of each Subsidiary that has been designated as a Silo Subsidiary as of  the Closing Date) excluding, as to Affiliates, (a) persons included in clause (c) of the definition of  Affiliate, and (b) Persons holding 5% or more of the Company’s Class A Common Stock who  have filed required reports under Sections 13(d), 13(g) or 16 of the Securities Exchange Act of  1934, as amended, or are not required to file such reports, showing the jurisdiction of incorporation  of each and showing the percentage of the Company’s ownership of the outstanding stock of each  Subsidiary and Affiliate.  All of the outstanding capital stock or other Equity Interests of each such  Subsidiary that is owned, directly or indirectly, by the Company has been validly issued, is fully  paid and nonassessable and is free and clear of all Liens other than Liens securing the Obligations.  10.9 ERISA.  With respect to each Plan, each Loan Party and all ERISA Affiliates have  paid all required minimum contributions and installments on or before the due dates provided  under Section 430(j) of the Code and could not reasonably be subject to a lien under Section 430(k)  of the Code or Title IV of ERISA.  Neither any Loan Party nor any ERISA Affiliate has filed,  pursuant to Section 412(c) of the Code or Section 302(c) of ERISA, an application for a waiver of  the minimum funding standard.  No ERISA Event has occurred or is reasonably expected to occur  that, when taken together with all other such ERISA Events for which liability is reasonably  expected to occur, could reasonably be expected to result in a Material Adverse Effect.  10.10 Accuracy of Information.    10.10.1     No report, financial statement, certificate or other written  information furnished by or on behalf of any Loan Party (other than projected financial  information, pro forma financial information and information of a general economic or  industry nature) to the Agent or any Lender in connection with the transactions contemplated  hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan  Document (in each case, as modified or supplemented by other written information so  furnished), when taken as a whole, contains any material misstatement of fact or omits to state  any material fact necessary to make the statements therein (when taken as a whole), in the  light of the circumstances under which they were made, not materially misleading; provided  that, with respect to projected and pro forma financial information, each Borrower represents  only that such information was prepared in good faith based upon assumptions believed to be  reasonable at the time of preparation and delivery; it being understood that such projections  may vary from actual results and that such variances may be material.  10.10.2     As of the Closing Date, the information included in any Beneficial  Ownership Certification is true and correct in all respects.  10.11 Regulation U.  Margin stock (as defined in Regulation U) constitutes less than 25%  of the value of those assets which are subject to any limitation on sale, pledge, or other restriction  hereunder.  10.12 Material Agreements.  The Company and each other Loan Party which is a  Dealership is in compliance with all Seller Agreements except as could not reasonably be expected  to have a Material Adverse Effect.  No Loan Party is a party to any agreement or instrument or  

 

   121  subject to any charter or other corporate, partnership, or limited liability company or other  restriction which could reasonably be expected to have a Material Adverse Effect.  No Loan Party  is in breach of or default in the performance, observance or fulfillment of any of the obligations,  covenants or conditions contained in (a) any agreement to which it is a party, or which is binding  on it or any of its assets, which default or default could reasonably be expected to have a Material  Adverse Effect or (b) any agreement or instrument evidencing or governing Indebtedness in excess  of Indebtedness of the Loan Parties described in Section 14.1.3.  10.13 Compliance with Laws.  Each Loan Party is in compliance with all Applicable  Laws, including without limitation all environmental permits, Environmental Laws, Access Laws,  and the FLSA, except as could not reasonably be expected to have a Material Adverse Effect.  10.14 Ownership of Properties.  Each Loan Party is the true and lawful owner of and  has good title to, or valid leasehold interests in, all properties and assets material to its business,  real and personal, intangible and tangible which it owns or leases, free of any liens and  encumbrances, except Permitted Liens.  10.15 Plan Assets; Prohibited Transactions.  No Loan Party is an entity deemed to hold  “plan assets” within the meaning of 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of  ERISA, of an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to  Title I of ERISA or any plan (within the meaning of Section 4975 of the Code), and neither the  execution of this Agreement nor the making of Credit Extensions hereunder gives rise to a  Prohibited Transaction.  10.16 Trademarks; Patents, Etc. Each Loan Party possesses or has the right to use all  licenses, permits, franchises, patents, copyrights, trademarks, trade names, servicemarks, or rights  thereto, material to the conduct of its business substantially as now conducted and as presently  proposed to be conducted and none of the Loan Parties are in material violation of any valid rights  of others with respect to any of the foregoing.  10.17 Burdensome Restrictions.  No Loan Party is a party to or otherwise bound by any  indenture, loan or credit agreement or any lease or other agreement or instrument or subject to any  charter, corporate, limited liability company or partnership or other restriction which could  reasonably be expected to have a Material Adverse Effect.  10.18 [Reserved].    10.19 Investment Company Act, Etc. No Loan Party, Person Controlling any Loan  Party, or Subsidiary is an “Investment Company” within the meaning of the Investment Company  Act of 1940.  No Loan Party is subject to regulation under the Federal Power Act, any state public  utilities code, or any other federal or state statute or regulation limiting its ability to incur  indebtedness.  10.20 Solvency.  Each Loan Party is Solvent and, after the execution and delivery of the  Loan Documents and the consummation of the transactions contemplated thereby, including the  making of each Credit Extension and the use of the proceeds thereof, will be Solvent.  

 

   122  10.21 Franchise Agreements; Material Business Relationships.  As of the Closing  Date, neither the Company nor any of its Subsidiaries is a party to any dealer franchise agreement,  dealer agreement, dealer sales and service agreement or similar agreement (each, a “Franchise  Agreement”) other than those specifically listed in the Disclosure Schedule, which schedule  shows the applicable manufacturer or distributor and the Company or Subsidiary, as the case may  be, that is a party to each such agreement, the date such agreement was entered into and the  expiration date of such agreement.  Except as could not reasonably be expected to result in a  Material Adverse Effect: (a) each of such Franchise Agreements is currently in full force and  effect; (b) neither the Company nor any Subsidiary has received any notice of termination with  respect to any such agreement; and (c) except as disclosed on the Disclosure Schedule, neither the  Company nor any Subsidiary is aware of any event that with notice, lapse of time or both would  allow any manufacturer or distributor that is a party of any Franchise Agreement to terminate any  such agreement.  There exists no actual or threatened termination, cancellation or limitation of, or  any modification or change in, the business relationship between the Company or any of its  Subsidiaries and any customer or any group of customers or with any manufacturer or distributor  that, in any case, could reasonably be expected to have a Material Adverse Effect.  10.22 Security Interests.  The Liens created or to be created in favor of the Agent and  the Lenders under the Collateral Documents do and will at all times on and after the Closing Date,  constitute perfected security interests (subject to Section 8.1.4), subject only to the Permitted  Liens, in the Collateral as security for the Obligations specified in the Collateral Documents.  10.23 Continuing Representations and Warranties.  Each request for a Credit  Extension shall be deemed to be each Borrower’s representation and warranty that (a) such Credit  Extension may be made without exceeding the applicable maximum amount determined in  accordance with the provisions of this Agreement, (b) no Default has occurred, or will exist after  giving effect to the making of such Credit Extension, and (c) all representations and warranties set  forth in this Agreement, the Collateral Documents and the other Loan Documents are true, accurate  and complete in all material respects as of the date of such request with the same effect as if made  on each date, except as previously disclosed to and accepted by the Agent in writing, and except  for representations and warranties which specifically refer only to another date.  10.24 Anti-Corruption Laws; Sanctions.  The Borrowers, their Subsidiaries and their  respective officers and employees, and to the knowledge of the Borrowers, their directors and  agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material  respects.  Each Borrower has implemented and maintains in effect for itself and its Subsidiaries  policies and procedures to ensure compliance by each Borrower, its Subsidiaries, and their  respective officers, employees, directors, and agents with Anti-Corruption Laws and applicable  Sanctions.  None of the Borrowers, any of their Subsidiaries or any director, officer, employee,  agent, or affiliate of such Borrower or any of its Subsidiaries is an individual or entity that is, or is  50% or more owned (individually or in the aggregate, directly or indirectly) or controlled by  individuals or entities (including any agency, political subdivision or instrumentality of any  government) that are (i) the target of any Sanctions or (ii) located, organized or resident in a  country or territory that is, or whose government is, the subject of Sanctions (currently Crimea,  Cuba, Iran, North Korea, Sudan and Syria).  10.25 EEA Financial Institution.  No Loan Party is an EEA Financial Institution.  

 

   123  ARTICLE 11   FINANCIAL COVENANTS AND INFORMATION  During the term of this Agreement and until termination of the availability of Credit  Extensions and payment and performance in full of all Obligations and Guarantor Obligations of  each Loan Party under the Loan Documents, each Borrower agrees that, unless Required Lenders  shall otherwise consent in writing:  11.1 Financial Covenants.  11.1.1 [Reserved].    11.1.2 Fixed Charge Coverage Ratio.  The Fixed Charge Coverage Ratio for the  Company and its Subsidiaries, on a consolidated basis, as of the last day of any fiscal quarter, for  the period of four consecutive fiscal quarters ending on such date (each, a “Measurement  Period”), shall not be less than 1.20 to 1.0.  As used herein,  “EBITDAR” means, for any Person, for any time period, (a) such Person’s net  income (or loss) for such time period (adjusted as set forth in the immediately following sentence),  plus (b) without duplication, the amounts which, in determining net income or loss, have been  deducted for (i) interest expense, (ii) income tax expense, (iii) depreciation, amortization, goodwill  impairment charges, stock-based compensation charges and other non-cash charges approved by  Required Lenders (less non-cash gains) and (iv) rental or lease expense.  For purposes of clause  (a) of this paragraph, net income or loss (A) shall exclude (1) extraordinary gains or losses, and  (2) Excluded Items, and (B) shall include net income or loss from discontinued operations.  “Excluded Items” means gain or loss from (a) the sale, sale and leaseback or  financing of real estate, or (b) the sale of all or substantially all of the Equity Interests or assets of  (i) a Dealership or other Subsidiary, (ii) a Dealership location, or (iii) any business unit or franchise  of a Dealership or other Subsidiary or a Dealership location.  “Fixed Charge Coverage Ratio” means, as of the last day of any fiscal quarter,  the ratio for the Measurement Period ending on such date of (a) (i) EBITDAR, minus (ii) dividends  and other distributions in respect of Equity Interests and amounts expended to repurchase Equity  Interests from a Person that is not a Loan Party, minus (iii) income tax expense to the extent paid  in cash, minus (iv) an allowance for maintenance capital expenditures in an amount equal to  $85,000 for each Dealership location, plus (v) if any Permitted Acquisition has occurred during  any Measurement Period, Pro Forma EBITDAR minus rental or lease expense attributable to any  new Acquisition Subsidiary or business acquired in connection with such Permitted Acquisition,  as applicable, calculated as if the Permitted Acquisition had occurred on the first day of such  Measurement Period (it being understood and agreed that Pro Forma EBITDAR minus rental or  lease expense may not be included in this calculation to the extent that it results in an annualized  increase of more than 10% in the Company’s consolidated EBITDAR minus rental or lease  expense prior to such adjustment, unless the Company provides to the Agent and the Required  Lenders the supporting calculations for such adjustment and such other information as they may  reasonably request to determine the accuracy of such calculations); to (b) the sum for the applicable  

 

   124  Measurement Period of (i) cash interest, plus (ii) required principal payments on Indebtedness plus  (iii) rental or lease expense.  11.1.3 Leverage Ratio.  The Leverage Ratio for the Company and its Subsidiaries  on a consolidated basis, as of the last day of any fiscal quarter, shall not be greater than 5.75 to 1.0.  As used herein:  “Leverage Ratio” means, as of the last day of any fiscal quarter, the ratio for the Company and  its Subsidiaries on a consolidated basis of: (a) (i) the then outstanding principal balance of all  Funded Debt (minus the sum of (A) unrestricted cash and cash equivalents plus (B) any amounts  held in the PR Accounts plus (C) any amounts held in accounts established by Dual Subsidiaries  or Silo Subsidiaries as an offset to floorplan notes payable (or interest thereon); provided that the  aggregate reduction for all of the foregoing clauses (A) through (C) shall not exceed  $200,000,000), minus (ii) the sum of the then outstanding principal balance of the New Vehicle  Floorplan Loans, New Vehicle Swing Line Loans, Used Vehicle Floorplan Loans, Used Vehicle  Swing Line Loans, Service Loaner Vehicle Floorplan Loans, Service Loaner Vehicle Swing Line  Loans, principal amount of any Other Service Loaner Floorplan Financing, Funded Debt permitted  under subsection (o) of Section 13.10 (but only to the extent constituting floor plan financing),  Funded Debt permitted under subsection (p) of Section 13.10, Funded Debt permitted under  subsection (r) of Section 13.10 (but only to the extent not guaranteed by the Company), and Funded  Debt permitted under subsection (s) of Section 13.10 and, without duplication, Funded Debt  permitted under subsection (f) of Section 13.10 (but only to the extent the underlying indebtedness  that is guaranteed constitutes floor plan financing), plus (iii) six times rental or lease expense for  the Measurement Period ending on such date; to (b) (i) Pro Forma EBITDAR for the Measurement  Period ending on such date (it being understood and agreed that Pro Forma EBITDAR minus rental  or lease expense may not be included in this calculation to the extent that it results in an annualized  increase of more than 10% in the Company’s consolidated EBITDAR minus rental or lease  expense prior to such adjustment, unless the Company provides to the Agent and the Required  Lenders the supporting calculations for such adjustment and such other information as they may  reasonably request to determine the accuracy of such calculations), minus (ii) interest expense with  respect to the New Vehicle Floorplan Loans, New Vehicle Swing Line Loans, Used Vehicle  Floorplan Loans, Used Vehicle Swing Line Loans, Service Loaner Vehicle Loans, Service Loaner  Vehicle Swing Line Loans and Funded Debt permitted under subsection (o) of Section 13.10 (but  only to the extent constituting floor plan financing), Funded Debt permitted under subsection (p)  of Section 13.10, Funded Debt permitted under subsection (r) of Section 13.10 (but only to the  extent not guaranteed by the Company), and Funded Debt permitted under subsection (s) of  Section 13.10, in each case for the Measurement Period ending on such date.    11.2 Financial Information.  The Company shall provide to the Agent and each Lender:  11.2.1 As soon as available and in any event within 120 days after the end of  each Fiscal Year of the Company: (a) the Form 10(k) for the Company and its Subsidiaries as filed  with the Securities and Exchange Commission, including financial statements certified by  independent public accountants of recognized national standing which are reasonably acceptable  to the Agent (without a “going concern” or like qualification or exception and without any  qualification or exception as to the scope of such audit and without any other material qualification  

 

   125  or exception) to the effect that such financial statements present fairly in all material respects the  financial condition and results of operations of the Company and its Subsidiaries (including, for  the avoidance of doubt, all Minority Dealer Subsidiaries) on a consolidated basis in accordance  with GAAP consistently applied; and (b) a consolidating balance sheet and income statement for  the Company and its Subsidiaries for such Fiscal Year.  11.2.2 As soon as available and in any event within 45 days after the end of each  of the first three fiscal quarters of each Fiscal Year of the Company, the Form 10-Q for the  Company and its Subsidiaries, as filed with the Securities and Exchange Commission certified by  the Company’s chief financial officer or other officer acceptable to the Agent as presenting fairly  in all material respects the financial condition and results of operations of the Company and its  Subsidiaries (including, for the avoidance of doubt, all Minority Dealer Subsidiaries) on a  consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit  adjustments and the absence of footnotes.  11.2.3 Promptly following the Agent’s or any Lender’s request, the internally  prepared consolidated balance sheet and statement of operations for the Company and its  Subsidiaries (including, for the avoidance of doubt, all Minority Dealer Subsidiaries) for such  month and for the fiscal year to date, including such detail as the Agent or any Lender reasonably  requires, certified by the Company’s chief financial officer or other officer acceptable to the Agent  as presenting fairly in all material respects the financial condition and results of operations of the  Company and its Subsidiaries (including, for the avoidance of doubt, all Minority Dealer  Subsidiaries) on a consolidated basis in accordance with GAAP consistently applied, subject to  normal year-end audit adjustments and the absence of footnotes.  11.2.4 Within 10 days following delivery thereof, copies of all financial  statements, proxy statements, and all material written reports and information provided to its  shareholders generally, and copies of all registration statements, regular, periodic or special  reports, and other documents of Company or any Subsidiary filed with the Securities and Exchange  Commission (or any successor agency), any other national securities exchange, or any other  governmental securities regulatory authority having jurisdiction over Company or its Subsidiaries.  11.2.5 With the financial statements required by Sections 11.2.1 and 11.2.2, and  in any event within the time required for delivery of such financial statements by Sections 11.2.1  and 11.2.2, a Compliance Certificate signed by the Company’s chief financial officer or other  officer acceptable to the Agent.  11.2.6 Within 30 days after the end of each month (or with respect to each month  ending December 31, within 45 days after the end of such month) (or more frequently if required  by the Agent or Required Lenders during the existence of a Default), a Used Vehicle Borrowing  Base Certificate, prepared as of the last day of such month, showing the calculation of the Used  Vehicle Borrowing Base.  11.2.7 Within 30 days after the end of each month (or with respect to each month  ending December 31, within 45 days after the end of such month) (or more frequently if required  by the Agent or Required Lenders during the existence of a Default), a Revolving Loan Borrowing  

 

   126  Base Certificate, prepared as of the last day of such month, showing the calculation of the  Revolving Loan Borrowing Base.  11.2.8 Within 30 days after the end of each month (or with respect to each month  ending December 31, within 45 days after the end of such month) (or more frequently if required  by the Agent or Required Lenders during the existence of a Default), a Service Loaner Vehicle  Borrowing Base Certificate, prepared as of the last day of such month, showing the calculation of  the Service Loaner Vehicle Borrowing Base.  11.2.9 Promptly following the Agent’s or any Lender’s request, a projected  consolidated balance sheet for the Company and its Subsidiaries (including, for the avoidance of  doubt, all Minority Dealership Subsidiaries) and related statements of income and cash flows for  the time period requested by the Agent or any Lender, signed by the Company’s chief financial  officer or other officer acceptable to the Agent, acknowledging his or her review of such  projections.  11.2.10 Promptly following the Agent’s or any Lender’s request, copies of each  financial statement delivered to a manufacturer or distributor by any Dealership, as required by its  agreement with the manufacturer or distributor.  11.2.11 Promptly following any request therefor, such other information  regarding the operations, business affairs and financial condition of any Loan Party, or compliance  with the terms of this Agreement, as the Agent or any Lender may reasonably request, which may  include without limitation a monthly statement of cash flows.  If any information which is required to be furnished to the Lenders under this Section is  required by law or regulation to be filed by any Loan Party with a government body on an earlier  date, then the information required hereunder shall be furnished to the Lenders at such earlier date.  Any financial statement required to be furnished pursuant to Section 11.2.1, 11.2.2, or  11.2.4 shall be deemed to have been furnished on the date on which the Lenders receive notice  that the Company has filed such financial statement with the Securities and Exchange Commission  and is available on the EDGAR website on the Internet at www.sec.gov or any successor  government website that is freely and readily available to the Agent and the Lenders without  charge; provided that the Company shall give notice of any such filing to the Agent (who shall  then give notice of any such filing to the Lenders).  Notwithstanding the foregoing, the Company  shall deliver paper copies of any such financial statement to the Agent if the Agent so requests,  until written notice to cease delivering such paper copies is given by the Agent.  ARTICLE 12   AFFIRMATIVE COVENANTS  During the term of this Agreement and until termination of the availability of Credit  Extensions and payment and performance in full of all Obligations and Guarantor Obligations of  each Loan Party under the Loan Documents, each Loan Party agrees that, unless Required Lenders  shall otherwise consent in writing:  

 

   127  12.1 Maintenance of Existence and Permits.  Except as permitted by Section 13.1,  each Borrower shall, and the Company shall cause each Subsidiary to, preserve and maintain its  corporate, limited liability company, partnership, trust or other existence and good standing or  current status in the jurisdiction of its incorporation or organization and qualify and remain  qualified, as a foreign corporation, limited liability company or other entity in each jurisdiction in  which such qualification is required (except to the extent such failure to qualify in a foreign  jurisdiction could not reasonably be expected to have a Material Adverse Effect), and to maintain  all patents, trademarks, copyrights, trade names, intellectual property, franchises, licenses, and  permits to the extent material and necessary for the conduct of its business and the transactions  contemplated by the Loan Documents.  12.2 ERISA.  Each Borrower shall maintain, and the Company shall cause each  Subsidiary to maintain, each Plan in compliance with all material applicable requirements of  ERISA and of the Code and with all applicable rulings and regulations issued under the provisions  of ERISA and of the Code and will not and not permit any of the ERISA Affiliates to (a) engage  in any transaction in connection with which any Loan Party or any of the ERISA Affiliates would  be subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed  by Section 4975 of the Code, (b) fail to make full payment when due of all amounts which, under  the provisions of any Plan, any Loan Party or any ERISA Affiliate is required to pay as  contributions thereto, or (c) fail to make any payments to any Multiemployer Plan that any Loan  Party or any of the ERISA Affiliates may be required to make under any agreement relating to  such Multiemployer Plan or any law pertaining thereto.  12.3 Inspection.  Each Borrower shall, and the Company shall cause each Subsidiary  to, permit representatives of the Agent and the Lenders to visit and inspect any of its properties,  audit and inspect any of the Collateral and examine any of its books and records (and make copies  at its expense) wherever located, including, but not limited to, all manufacturers’ statements of  origin, titles, demonstrator agreements, factory invoices, purchase orders, deal jackets and papers  included therein, buy-back agreements and other agreements with manufacturers, distributors or  other sellers of Vehicles (excluding agreements to the extent that disclosure is specifically  prohibited by the terms of such agreements), and all other instruments, documents and records at  any reasonable time and as often as the Agent or any Lender may reasonably desire; and each  Borrower shall and the Company shall cause each other Loan Party to, assist the Agent and the  Lenders in so doing.  12.4 Collateral Audits.  Each Borrower will, and the Company will cause each  Subsidiary to, permit the Agent by or through any of the Agent’s representatives, third party  inspectors, independent contractors, attorneys or accountants, at such intervals as may be required  by the Agent in its sole discretion, to conduct audits of and to verify, the Collateral.  Audit reports  for any month shall be provided by the Agent to the Lenders in the following month.  The New  Vehicle Floorplan Borrowers shall pay to the Agent, for the Agent’s sole account, such fees as are  agreed to between them for collateral audits relating to New Vehicles owned by the New Vehicle  Floorplan Dealerships; provided, that, (a) prior to the occurrence of an Event of Default, (i) the  New Vehicle Floorplan Borrowers shall not be required to pay such fee for more than three New  Vehicle collateral audits in any period of twelve consecutive months, if the Leverage Ratio is equal  to or less than 2.50 to 1.0 as of the end of each fiscal quarter during such time period, and (ii) the  New Vehicle Floorplan Borrowers shall not be required to pay such fee for more than four New  

 

   128  Vehicle collateral audits in any period of twelve consecutive months, if the Leverage Ratio is  greater than 2.50 to 1.0 as of the end of any fiscal quarter during such time period; and (b) following  the occurrence of an Event of Default, the New Vehicle Floorplan Borrowers shall pay the costs  of all New Vehicle collateral audits required by the Agent.  The Company shall pay the cost of all  collateral audits other than collateral audits relating to New Vehicles.  12.5 Books and Records.  Each Borrower shall, and the Company shall cause each  Subsidiary to, keep adequate records and books of account in which complete entries will be made  reflecting all material financial transactions and matters involving the assets and business of the  Company or such Subsidiary, as the case may be, including, books and records specifying the year,  make, model, cost, price, location and vehicle identification number of each New Vehicle owned  by the Company or such Subsidiary.  The Company will prepare all financial statements,  computations and information required hereunder for the Company and its Subsidiaries (including,  for the avoidance of doubt, all Minority Dealership Subsidiaries) consolidated in accordance with  GAAP.  12.6 Maintenance of Properties.  Each Borrower shall, and the Company shall cause  each Subsidiary to, maintain, repair, and preserve all of each Loan Party’s properties (whether  owned, leased or subleased) that are used or useful in the conduct of the business of the Loan  Parties, or where any Collateral is located (“Properties”) in good working order and condition,  ordinary wear and tear excepted, and will from time to time make or cause to be made all necessary  and proper replacements, repairs, renewals, and improvements so that the efficiency and value of  its Properties and facilities shall not be materially impaired.  12.7 Taxes and Other Obligations.  Each Borrower shall, and the Company shall cause  each Subsidiary to, timely file complete and correct United States federal and applicable foreign,  state and local tax returns required by law and to pay and discharge when due all indebtedness,  taxes, and other obligations for which it is liable or to which its income or property is subject and  all claims for labor and materials or supplies which, if unpaid, might become by law a lien upon  its assets, unless it is contesting the indebtedness, taxes, or other obligations in good faith and  provision has been made for the payment thereof through setting aside on its books appropriate  reserves with respect thereto in accordance with GAAP.  12.8 Insurance.  12.8.1 Maintenance of Insurance.  Each Borrower shall, and the Company shall  cause each Subsidiary to, maintain policies of insurance upon all of the insurable Collateral, and  on its properties and operations, carried with companies reasonably acceptable to the Agent, in  such form and amounts and covering such risks as the Agent may reasonably require and as are  required by Applicable Law.  Without limiting the foregoing, each Borrower shall, and the  Company shall cause each Subsidiary to, maintain with financially sound and reputable  independent insurers, insurance with respect to its properties and business against loss or damage  of such types and in such amounts as are customarily carried under similar circumstances by  Persons engaged in the same or similar businesses.  12.8.2 Form of Policies.  All policies shall be written in form, amounts, coverages  and basis reasonably acceptable to the Agent and shall be issued by a company or companies  

 

   129  reasonably acceptable to the Agent.  The Agent shall be designated as loss payee with a “Lender’s  Loss Payable” endorsement on casualty policies covering the Collateral and as an additional  insured on liability policies.  All policies shall include a provision that such policies will not be  cancelled or materially amended, which term shall include any reduction in the scope or limits of  coverage, without at least thirty (30) days prior written notice to the Agent.  Each policy also shall  include an endorsement providing that coverage in favor of the Agent will not be impaired in any  way by any act, omission or default of any Loan Party.  12.8.3 Delivery of Certificates.  Each Borrower shall, and the Company shall  cause each Subsidiary to, furnish to the Agent a certificate of insurance in a form reasonably  acceptable to the Agent evidencing such insurance coverage.  At least thirty (30) days prior to the  expiration date of each policy, the Agent shall be provided with a renewal certificate, together with  evidence that the renewal premium has been paid.  12.9 Compliance with Laws; Performance Under Agreements.  Each Borrower shall,  and shall cause each Subsidiary to, (i) comply with Applicable Laws, including, without limitation,  all applicable Environmental Laws, Anti-Corruption Laws and applicable Sanctions, except as  could not reasonably be expected to have a Material Adverse Effect and (ii) perform its obligations  under agreements to which it is a party except to the extent the failure to perform could not  reasonably be expected to have a Material Adverse Effect. Each Borrower shall maintain in effect  and enforce policies and procedures designed to ensure compliance by such Borrower, its  Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption  Laws and applicable Sanctions.  The Borrowers shall not use or allow any tenants or subtenants to  use, or permit any Subsidiary to use or allow any tenants or subtenants to use, its Property for any  business activity that violates in any material respect any federal or state law or that supports a  business that violates in any material respect any federal or state law.  12.10 Agreements with Sellers.  Each Borrower shall, and the Company shall cause each  Subsidiary to, comply with Franchise Agreements, other Seller Agreements, and all other  agreements between such Person and any manufacturer or distributor of New Vehicles in all  respects and shall maintain all such agreements in full force and effect, except (a) in accordance  with the disposition of or other transaction involving a Dealership or Subsidiary in accordance  with Section 13.1, (b) as a result of termination or cessation of business not restricted by Section  13.8, or (c) to the extent the failure to comply with this Section 12.10 could not reasonably be  expected to have a Material Adverse Effect.   12.11 Repurchase Agreements.  Each New Vehicle Floorplan Borrower shall comply  with all terms and conditions of any applicable Repurchase Agreement except to the extent the  failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each  New Vehicle Floorplan Borrower shall take any actions reasonably required by the Agent with  respect to any Repurchase Agreement.   12.12 [Reserved].  12.13 Landlord’s Consents.  Promptly following the Closing Date and from time to time  thereafter, each Borrower shall, and the Company shall cause each present and future Subsidiary  to, use commercially reasonable efforts to obtain and deliver to the Agent an agreement, release  

 

   130  and consent to the security interest of the Agent and the Lenders in the Collateral, in form and  substance reasonably acceptable to the Agent from any present or future owner or landlord of any  real property leased by a Loan Party (other than a Silo Subsidiary) as lessee (each a “Landlord’s  Consent”).  12.14 Notification.  Promptly after learning thereof, the Company will notify the Agent  in writing of:  12.14.1 The occurrence of any Default, and if such Default is then continuing, will  deliver to the Agent a certificate of the Company’s chief financial officer or other authorized officer  setting forth the details thereof and the action which it is taking or proposes to take with respect  thereto.  12.14.2 The occurrence of any of the following that could reasonably be expected  to have a Material Adverse Effect: (i) the release of any Hazardous Substances on, under, about,  from, or affecting any of the Properties, any adjacent property as a result of contamination, release  or activity on the Properties, or any Collateral or (ii) any other condition threatened or asserted  with respect to any such property arising under any Environmental Laws.  12.14.3 The details of any lien, litigation, administrative proceeding or judgment  involving $35,000,000.00 or more individually or in the aggregate threatened (in writing),  instituted or completed against any Loan Party, any Collateral, or any assets of any Loan Party.  12.14.4 Any citation, order to show cause, or other legal process or order that has  or could reasonably be expected to have a Material Adverse Effect, directing any Loan Party to  become a party to or to appear at any proceeding or hearing by or before any Governmental Body  that has granted to it any Governmental Approval, and include with such notice a copy of any  such citation, order to show cause, or other legal process or order.  12.14.5 Any (a) refusal, denial, threatened denial, or failure by any Governmental  Body to grant, issue, renew, or extend any material Governmental Approval; (b) proposed or actual  revocation, termination, or modification (whether favorable or adverse) of any material  Governmental Approval by any Governmental Body; (c) dispute or other adverse action with  regard to any material Governmental Approval by any Governmental Body; (d) notice from any  Governmental Body of the imposition of any material fines or penalties or forfeitures; or (e) written  threats or written notice with respect to any of the foregoing or with respect to any proceeding or  hearing that might result in any of the foregoing.  12.14.6 Any dispute concerning or any threatened nonrenewal or modification of  any lease for real or personal property to which it is a party if such dispute or nonrenewal or  modification could reasonably be expected to result in a Material Adverse Effect.  12.14.7 Any material change in the relationship between any Dealership and any  Vehicle manufacturer or distributor including, without limitation, the loss or cancellation, or  threatened loss or cancellation, of a franchise, or any notice of the existence of a default under  any Franchise Agreement or other Seller Agreement.  

 

   131  12.14.8 Any other event or circumstance which has or could reasonably be  expected to have a Material Adverse Effect.  12.14.9 The receipt of any material notices (including notices of default or  acceleration) received from any holder or trustee of, under or with respect to its Subordinated  Debt (if any) (which shall include copies of such notices).  12.14.10 With respect to a Plan, (i) any failure to pay all required minimum  contributions and installments on or before the due dates provided under Section 430(j) of the  Code or (ii) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA, of an  application for a waiver of the minimum funding standard.  12.14.11 The occurrence of any ERISA Event that, alone or together with any other  ERISA Events that have occurred, would reasonably be expected to result in material liability.  12.15 Further Assurances.  From time to time, when requested by the Agent or any  Lender, it shall, and the Company shall cause each Subsidiary to, duly execute and deliver or cause  to be duly executed and delivered to the Agent such further instruments, agreements, and  documents and do or cause to be done such further acts as the Agent or any Lender deems  reasonably necessary to carry out more effectively the provisions and purpose of this Agreement  and the other Loan Documents.  Without limiting the foregoing, each Borrower shall, and the  Company shall cause each Subsidiary to, promptly correct any defect or error that may be  discovered in any Loan Document or in the execution, acknowledgment or recordation thereof.   Promptly upon request by the Agent, each Borrower shall, and the Company shall cause each  Subsidiary to, do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re- register, any and all deeds, conveyances, mortgages, deeds of trust, trust deeds, assignments,  estoppel certificates, financing statements and continuations thereof, notices of assignment,  transfers, certificates, assurances and other instruments as the Agent may reasonably require from  time to time in order: (a) to carry out more effectively the purposes of the Loan Documents and  (b) to better assure, convey, grant, assign, transfer, preserve, protect and confirm unto the Agent  the rights granted now or hereafter intended to be granted to the Agent or the Lenders under any  Loan Document or under any other instrument executed in connection with any Loan Document  or that any Loan Party may be or become bound to convey, mortgage or assign to the Agent in  order to carry out the intention or facilitate the performance of the provisions of any Loan  Document.  Each Borrower shall, and the Company shall cause each Subsidiary to, furnish to the  Agent evidence satisfactory to the Agent of every such recording, filing or registration.  12.16 Deposit Accounts.  Except as consented to in writing by the Agent and Required  Lenders, which consent shall not be unreasonably withheld, each Borrower shall, and the Company  shall cause each Subsidiary (other than a Canadian Subsidiary, Excluded Subsidiary or Silo  Subsidiary) to, maintain its primary operating deposit accounts with one or more of the Lenders.   Except as provided in Subsection (c) of Section 8.1.4, all such deposit accounts other than trust  accounts shall be subject to a control agreement (in form and content reasonably satisfactory to  the Agent and the Required Lenders) between any Lender having a security interest in such  account, depository bank, the Agent, and the applicable Loan Parties, which control agreement  shall establish a perfected priority security interest (subject only to the Permitted Liens) in favor  of the Agent, for the benefit of the Lenders, in all such deposit accounts.  

 

   132  12.17 Joinder of New Subsidiaries and Dealerships.  Each Person that becomes a  Subsidiary of the Company (other than a Canadian Subsidiary, Excluded Subsidiary or Silo  Subsidiary) and that owns or operates a Dealership shall, within thirty (30) days thereof (or such  longer period as determined by the Agent in its sole discretion), execute a Guarantor Joinder  Agreement (or if it is to become a New Vehicle Floorplan Borrower, a Borrower Joinder  Agreement) and shall execute such other documents and satisfy such requirements as the Agent  reasonably requires so that such Person becomes a Guarantor and a Loan Party and, if applicable,  a New Vehicle Floorplan Borrower, and grants a security interest to the Agent for the benefit of  the Lenders in the Collateral owned by such Person.  Each such Person that becomes a Subsidiary  of the Company (other than a Silo Subsidiary) shall satisfy all requirements applicable to an  Acquisition Subsidiary which are set forth in Section 13.13 (d), (g), (i), (j), (k) (if such Subsidiary  is a Dealership), (l) and (p).  Each Person that becomes a Silo Subsidiary shall execute a Guarantor  Joinder Agreement, but only to become a “Guarantor” (as defined in the Loan Agreement and  Guaranty) and a Loan Party, and not to become a “Grantor” (as defined in the Security Agreement  and Pledge Agreement). The Company may cause, at any time and from time to time, any  Subsidiary that is a Real Estate Subsidiary to execute a Guarantor Joinder Agreement and such  other documents and satisfy such requirements as the Agent reasonably requires so that such  Person becomes a Guarantor and a Loan Party and grants a security interest to the Agent for the  benefit of the Lenders in the Collateral owned by such Real Estate Subsidiary.   In connection with each Subsidiary becoming a Borrower or a Guarantor hereunder, (a) the  Agent shall promptly notify the Lenders of the proposed designation of a Subsidiary as a Borrower  or Guarantor hereunder and (b) the Loan Parties shall provide to each Lender requesting the same  the documentation and other information so requested in connection with applicable “know your  customer” and anti-money-laundering rules and regulations, including the PATRIOT Act, in each  case at least five days prior to such Subsidiary becoming a Borrower or a Guarantor.  12.18 Use of Proceeds.  The Borrowers will not request any Loan or Letter of Credit, and  will not use, and the Borrowers will ensure that their Subsidiaries and its or their respective  directors, officers, employees and agents shall not use, the proceeds of any Loan or Letter of Credit  in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of  money, or anything else of value, to any Person in violation of any Anti-Corruption Laws. The  Borrowers will not, directly or indirectly,  use the proceeds of the Loans or any Letter of Credit,  or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture  partner or other Person, (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, to any Borrower’s knowledge, result in a  violation of Sanctions by any Person (including any Person participating in the Loans, whether as  underwriter, advisor, investor, or otherwise).  12.19 Anti-Money Laundering Compliance. Each Borrower shall, and shall cause each  Subsidiary to, provide such information and take such actions as are reasonably requested by the  Agent or any Lender in order to assist the Agent and the Lenders in maintaining compliance with  anti-money laundering laws and regulations.  12.20 Joinder of Additional Dual Subsidiary Lenders. To the extent not otherwise  required to be delivered pursuant to Section 13.16, prior to or concurrently with the initial  

 

   133  incurrence of Permitted Dual Subsidiary Indebtedness by any Dual Subsidiary from a Dual  Subsidiary Lender, cause to be delivered to the Agent an Intercreditor Agreement, or a joinder  agreement to an existing Intercreditor Agreement, executed by each Required Intercreditor  Counterparty, along with any applicable revised exhibits thereto.  ARTICLE 13  NEGATIVE COVENANTS  During the term of this Agreement and until termination of the availability of Credit  Extensions and payment and performance in full of all Obligations and Guarantor Obligations of  each Loan Party under the Loan Documents, each Loan Party agrees that, unless Required Lenders  shall otherwise consent in writing:  13.1 Mergers, Etc.  13.1.1 (a) Each Borrower shall not, and the Company shall not permit any  Subsidiary to, wind up, liquidate, dissolve or reorganize, merge into or consolidate with any other  Person, permit any other Person to merge into or consolidate with it, or convey, sell, transfer, lease  or otherwise dispose of (in one transaction or in a series of transactions) all or any substantial part  of its assets (except, with respect to sales of less than substantially all of its assets, for sales of  inventory, chattel paper and equipment in the ordinary course of business) or all or any substantial  part of the stock or other Equity Interests of Subsidiaries of the Company (in each case, whether  now owned or hereafter acquired), or take any action to authorize winding up, dissolution, or  liquidation, except that, if at the time thereof and after giving effect thereto no Default shall have  occurred and be continuing (i) any Subsidiary may merge into the Company in a transaction in  which the Company is the surviving corporation, (ii) any wholly-owned Subsidiary may merge  into another wholly-owned Subsidiary, (iii) any wholly-owned Subsidiary may sell, transfer, lease  or otherwise dispose of its assets to the Company or to another wholly-owned Subsidiary, (iv)  the  Company or any wholly-owned Subsidiary may sell, transfer or otherwise dispose of a portion or  all of the Equity Interests of any wholly-owned Subsidiary to the Company or to another wholly- owned Subsidiary and (v) the Company or any wholly-owned Subsidiary may engage in a  transaction to convert its legal form of organization from one entity type to another entity type or  change its jurisdiction of organization, so long as the Agent and the Lenders shall continue to have  a perfected security interest in any transferred Collateral, subject to no Liens other than Permitted  Liens existing on the date of the transfer.  (b) If (i) any New Vehicle Floorplan Dealership is involved in a  transaction described in clause (i), (ii), (iii), (iv) or (v) of Section 13.1.1(a) or in Section 13.1.2  and, as a result thereof, will cease to be a New Vehicle Floorplan Dealership, (ii) any Minority  Dealer that is a New Vehicle Floorplan Borrower ceases to be a Minority Dealer Subsidiary  because a Loan Party is no longer the manager of such Minority Dealer or because the manager of  the Minority Dealer has no longer delegated to a Loan Party all or a substantial portion of such  manager’s power and authority under the Minority Dealer’s applicable organizational documents,  (iii) any New Vehicle Floorplan Dealership ceases to own or operate any Dealership and any  Eligible Real Property or (iv) any New Vehicle Floorplan Dealership will otherwise cease to be a  New Vehicle Floorplan Dealership (whether as a result of becoming a Minority Dealer Affiliate,  otherwise ceasing to be a Subsidiary or otherwise), the Subsidiary that is the transferor or will not  

 

   134  survive the merger or otherwise will cease to be a New Vehicle Floorplan Dealership  (“Terminating Borrower”) shall execute a Borrower Termination Agreement (or if the Dealership  will also cease to be a Guarantor, a Loan Party Termination Agreement), the Dealership Loan Limit  for such Dealership shall be deleted, and the Agent shall obtain any required amendment to any  intercreditor agreement, the Related Principal Portion of all New Vehicle Loans made to finance  New Vehicles for such Terminating Borrower shall be repaid, and all conditions in Section 9.3  shall be satisfied with respect to any transferee or surviving New Vehicle Floorplan Dealership.  (c) If (i) any Subsidiary other than a New Vehicle Floorplan Dealership  is involved in a transaction described in clause (i), (ii), (iii), (iv) or (v) of Section 13.1.1(a) or in  Section 13.1.2 and, as a result thereof, will cease to be a Guarantor, (ii) any Subsidiary ceases to  own or operate any Dealership and any Eligible Real Property or (iii) any Subsidiary otherwise  ceases to be a Guarantor (whether as a result of becoming a Minority Dealer Affiliate, otherwise  ceasing to be a Subsidiary or otherwise), the Subsidiary that is the transferor or will not survive  the merger or otherwise will cease to be a Guarantor shall execute a Loan Party Termination  Agreement and satisfy such other conditions as the Agent reasonably requires to remove such  Subsidiary as a Guarantor.  13.1.2 Notwithstanding the provisions of Section 13.1.1, the Company or any  Subsidiary may sell (y) any Equity Interests in any Minority Dealer or any Dealership that as a  result of such sale becomes a Minority Dealer (provided such Equity Interests are sold to a  Minority Dealer Partner in such Minority Dealer) and (z) all or any substantial part of the assets  of, or all or any substantial part of its capital stock or Equity Interests in, any Dealership or other  Subsidiary (or of any business unit or franchise of a Dealership or other Subsidiary) for not less  than fair market value, if, in each case, (a)(i) after giving Pro Forma Effect to such sale (and all  other sales permitted under this Section 13.1.2), the Company shall be in compliance with the  requirements of Section 11.1, (ii) if the sales price (excluding real property and Vehicle inventory)  for the assets or Equity Interests sold is greater than $20,000,000.00, the Company shall have  delivered to the Agent a Revolving Loan Borrowing Base Certificate, Used Vehicle Floorplan  Borrowing Base Certificate and Service Loaner Vehicle Borrowing Base Certificate, each  calculated on a Pro Forma Basis after giving effect to such sale, (iii) no Default shall exist  immediately prior to or upon giving effect to any such sale and (iv) the conditions in Section 13.1.1  are satisfied, or (b) Required Lenders have consented in writing to the sale and each Loan Party  has complied with all terms and conditions of such consent.  13.1.3 Notwithstanding the provisions of this Agreement (including Sections 12.1,  13.1.1, 13.1.2, 13.8 and 13.9), any Subsidiary that no longer has assets (or that has assets (x) with  an aggregate book value less than $25,000 or (y) that will be distributed solely to a Loan Party)  may discontinue operations and dissolve or liquidate unless such action would constitute a Material  Adverse Effect or any Default shall exist immediately prior to or upon giving effect thereto.  13.2 [Reserved].   13.3 Liens.  Each Borrower shall not, and the Company shall not permit any Subsidiary  to, grant or permit to exist a security interest in or Lien on its presently owned or hereafter acquired  real or personal property except:  

 

   135  (a) Liens in favor of the Agent for the benefit of the Lenders which  secure the Obligations, Guarantor Obligations, and Permitted Swap Obligations.  (b) Liens for taxes, assessments or other government charges or levies  not yet due and payable or, if due and payable, if they are being contested in good faith by  appropriate proceedings and for which appropriate reserves are maintained.  (c) Liens imposed by law, such as mechanics’, materialmen’s,  landlords’, warehousemen’s, and carriers’ Liens, and other similar Liens, securing obligations  incurred in the ordinary course of business which are not past due for more than 30 days or which  are being contested in good faith by appropriate proceedings and for which appropriate reserves  have been established.  (d) Liens under workers’ compensation, unemployment insurance,  Social Security, or similar legislation (excluding, however, Liens arising under ERISA) which are  not past due for more than sixty (60) days or which are being contested in good faith by appropriate  proceedings and for which appropriate reserves have been established.  (e) Liens, deposits, or pledges to secure the performance of bids,  tenders, contracts (other than contracts for the payment of money), leases (permitted under the  terms of this Agreement), public or statutory obligations, surety, stay, appeal, indemnity,  performance or other similar bonds, or other similar obligations arising in the ordinary course of  business which are not past due for more than 30 days or which are being contested in good faith  by appropriate proceedings and for which appropriate reserves have been established.  (f) Judgment and other similar Liens arising in connection with court  proceedings, in an aggregate amount not in excess of 3% of Tangible Net Worth as of the last day  of the most recently ended fiscal quarter of the Company and its Subsidiaries; provided the  execution or other enforcement of such Liens is effectively stayed and the claims secured thereby  are being actively contested in good faith and by appropriate proceedings, and the existence thereof  does not constitute a Default hereunder.  (g) Easements, rights-of-way, zoning restrictions, and other similar  encumbrances in existence on the date of this Agreement or which, in the aggregate, do not  materially interfere with the occupation, use, and enjoyment by any Loan Party of the property or  assets encumbered thereby in the normal course of its business or materially impair the value of  the property subject thereto.  (h) Liens on Service Loaner Vehicles of a Dealership and proceeds  thereof securing Other Service Loaner Floorplan Financing permitted by Section 13.10(e), and  which are, only as to liens in existence on the Closing Date, securing Indebtedness listed on the  Disclosure Schedule; provided that if required by the Agent, the Other Service Loaner Floorplan  Lender providing such financing has entered into an intercreditor agreement with the Agent in  form and content reasonably satisfactory to the Agent and the Required Lenders.  (i) Purchase money Liens hereafter created by any Loan Party to  secure the purchase price of equipment acquired after the Closing Date, so long as (i) such  equipment is acquired in the ordinary course of such Person’s business, (ii) such Lien attaches to  

 

   136  such equipment no later than 10 days after the acquisition thereof; (iii) such Lien does not extend  to any property other than the equipment acquired, (iv) such Lien secures only the obligation to  pay the purchase price of such equipment, and (v) the Indebtedness secured is permitted by  Section 13.10(j) hereof.  (j) Liens in existence on the Closing Date securing Indebtedness  permitted by Section 13.10 hereof (if such Indebtedness is permitted to be secured), which are  listed on the Disclosure Schedule.  (k) Liens securing obligations in respect of Capitalized Leases provided  that such Capitalized Leases are otherwise permitted under this Agreement, and such Liens attach  only to the property being leased.  (l) Liens arising solely by virtue of any statutory or common law  provision relating to banker’s liens, rights of setoff or similar rights and remedies as to deposit  accounts or other funds maintained with a creditor depository institution (provided that such  deposit accounts are permitted) and, if such deposit accounts are with a Lender (or with another  financial institution, if required by the Agent), such liens are subordinated to the Liens in favor of  the Agent and the Lenders under the Collateral Documents.  (m) Liens on property (excluding Collateral) acquired after the Closing  Date which are in existence at the time such property is acquired, which were not incurred in  contemplation of the acquisition, and which secure Indebtedness permitted by this Agreement.  (n) Liens on assets owned by any Excluded Tax Credit Investment  Subsidiary or any other Subsidiary (other than Collateral and Eligible Real Property) which secure  Indebtedness permitted by Section 13.10(d), and Liens on Equity Interests in Excluded Tax Credit  Investment Subsidiaries (other than LCDC) granted in connection with Investments described in  Section 13.6(p).  (o) Liens consented to in writing by the Agent and Required Lenders.  (p) Liens on Vehicles and other assets of a Silo Subsidiary securing  Funded Debt permitted by Section 13.10(o), provided that such Vehicles and other assets do not  constitute Collateral.  (q) Liens on assets of Canadian Dealerships and proceeds thereof  securing Indebtedness permitted by Section 13.10(p).  (r) (x) Restrictions on transfer and (y) with respect to Equity Interests  in Minority Dealer Subsidiaries, call options or other buy-sell rights in favor of Minority Partners,  in each case, set forth in the organizational documents of Subsidiaries.  (s) Liens securing Pari Passu Funded Debt.  (t) Liens  (including, without limitation, certain rights of set-off and  title retention agreements) in favor of an Original Equipment Manufacturer attaching to Inventory  sold to a Loan Party by such Original Equipment Manufacturer and securing amounts owing in  

 

   137  connection with the purchase of such Inventory by such Loan Party  from such Original Equipment  Manufacturer, so long as such Liens do not secure Indebtedness and such Liens arise in the  ordinary course of business consistent with the Company's existing business practices, and Liens  consisting of purchase options and rights of first refusal arising under any Franchise Agreement or  Repurchase Agreement.  (u) Liens not otherwise permitted under this Section 13.3 provided that  (i) at the time of the creation or incurrence of any such Lien, no Default or Event of Default shall  exist or would result from such Lien, (ii) no such Lien attaches to any Collateral, and (iii) the  aggregate amount of Indebtedness secured by all such Liens shall not exceed $50,000,000 at any  time.  (v) Liens securing Funded Debt incurred by any DFC Subsidiary to the  extent such Funded Debt is permitted by Section 13.10(r).  (w) Liens securing Permitted Dual Subsidiary Indebtedness so long as  each Required Intercreditor Counterparty has executed and delivered an Intercreditor Agreement,  or a joinder to an existing Intercreditor Agreement, to the Agent and such Liens are subject to an  Intercreditor Agreement.  Notwithstanding the foregoing, except for Liens in favor of the Agent, there shall not be any Liens  on any of the capital stock or other Equity Interests of any Subsidiary except for capital stock or  Equity Interests owned, directly or indirectly, by a Person other than the Company or any  Subsidiary where such ownership is otherwise permitted by this Agreement.  13.4 Restricted Payments.  Each Borrower shall not, and the Company shall not permit  any Subsidiary to (a) declare or pay, or agree to declare or pay, or set aside funds for the payment,  directly or indirectly of, any Restricted Payment, or (b) pay or agree to pay or set aside funds to  pay any management fees or similar fees in the case of the Company, to any direct or indirect  Affiliate thereof, or in the case of any other Loan Party, to any direct or indirect owner of its Equity  Interests or any direct or indirect Affiliate thereof, except (c) (i) Subsidiaries of the Company may  make Restricted Payments or payments of such fees to the Company or to any other Loan Party,  (ii) the Company may reacquire shares from eligible participants in its stock incentive plans, as  required under the terms of the plans to permit cashless exercise and tender of shares to meet  withholding obligations for income tax purposes and (iii) any Subsidiary may make cash dividends  or distributions to the holders of its Equity Interests that are not Loan Parties so long as, if any  Loan Party is a holder of such Equity Interests, such Loan Party receives at least its pro rata share  of such cash dividends or distributions.  Notwithstanding the foregoing, and so long as no Default  or Event of Default has occurred and is continuing or would exist after giving effect thereto, (w)  each Minority Dealer may make distributions to any of its Minority Dealer Partners, (x) the  Company or any Subsidiary may acquire, from time to time, any Equity Interests in any Minority  Dealer, directly or indirectly, from a Minority Dealer Partner, (y) the Company may pay dividends  on its capital stock, and (z) the Company may repurchase shares of its capital stock.  13.5 Subordinated Debt.  If any Subordinated Debt is outstanding, each Borrower shall  not, and the Company shall not permit any Subsidiary to (a) make any amendment or modification  to the indenture, note or other agreement evidencing or governing any Subordinated Debt; (b)  

 

   138  make any scheduled payment of the principal of or interest on any Subordinated Debt which would  be prohibited by the terms of such Subordinated Debt or any related subordination agreement; (c)  directly or indirectly make any prepayment on or purchase, redeem or defease any Subordinated  Debt or offer to do so (whether such prepayment, purchase or redemption, or offer with respect  thereto, is voluntary or mandatory); (d) take or omit to take any action if as a result of such action  or omission the subordination of such Subordinated Debt, or any part thereof, to the Obligations  might be terminated, impaired or adversely affected; or (e) omit to give Agent prompt notice of  any notice received from any holder of Subordinated Debt, or any trustee therefor, or of any default  under any agreement or instrument relating to any Subordinated Debt by reason whereof such  Subordinated Debt might become or be declared to be due or payable.  13.6 Loans and Investments.  Each Borrower shall not, and the Company shall not  permit any Subsidiary to (a) make or contract to make any loan or advance to any Person (other  than short term trade advances in the ordinary course of business); or (b) purchase or otherwise  acquire, any capital stock, obligations, or other securities of, make any capital contributions to, or  otherwise invest in or acquire any interest in any Person, or participate as a partner or joint venturer  with any other Person (the matters described in clause (a) and (b) are collectively, “Investments”),  except:  (a) Investments by the Company in any Subsidiary or Affiliate or by  any Subsidiary in any of its Subsidiaries or Affiliates, in each case, which exist as of the Closing  Date;  (b) In the ordinary course of business, Investments by the Company in  any Subsidiary or by any Subsidiary in the Company, or by any Subsidiary in any other Subsidiary,  by way of capital contributions, intercompany loans, advances or guaranties, to the extent  permitted by this Agreement;  (c) Investments in Canadian Subsidiaries provided that the aggregate  amount of such Investments made by the Company or any Subsidiary (other than a Canadian  Subsidiary) does not exceed $100,000,000, net of any cash dividends received by the Company  and its Subsidiaries (other than Canadian Subsidiaries);  (d) Cash Equivalent Investments;  (e) Bank deposits in the ordinary course of business;  (f) Investments in securities of account debtors received pursuant to  any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such  account debtors or otherwise in settlement of claims arising in the ordinary course of business;  (g) Investments pursuant to a Permitted Acquisition;  (h) Investments not otherwise permitted under this Section 13.6  provided that the aggregate amount of such Investments does not exceed $100,000,000;  (i) Investments listed on the Disclosure Schedule;  

 

   139  (j) Extensions of credit to customers made in the ordinary course of  business and in connection with the sale or lease of inventory in the ordinary course of business;  (k) (i) Investments (other than loans or other advances) in Minority  Dealers, including the acquisition of equity ownership interests of Minority Dealers from one or  more Minority Dealer Partners, and (ii) Investments not exceeding $60,000,000 in the aggregate  consisting of loans or other advances to Minority Dealers or the Minority Dealer Partners in such  Minority Dealers;  (l) Such other Investments as are consented to by the Required Lenders  in their sole discretion;   (m) Extensions of credit to Persons acquiring the assets of a Dealership  or another Subsidiary pursuant to a sale permitted by Section 13.1.2 (“Seller Notes”); provided,  that at least 75% of consideration received from such sale (together with all other consideration  received in all other such sales since the Closing Date, on a cumulative basis) is cash;   (n) Investments in equity interests in Permitted New Dealerships;  (o) Investments not in the ordinary course of business in equity interests  in Other New Subsidiaries, provided that the aggregate of all investments in Other New  Subsidiaries under this clause (o) shall not exceed $4,000,000.00 during the time period from the  Closing Date to the Termination Date;  (p) Investments by the Company or any Subsidiary (i) in Community  Development Entities under the Federal New Markets Tax Credit Program or (ii) in any other  Person formed for (and continuing to operate for) the purpose of making investments that are  intended to qualify for renewable energy or other tax credits, provided that the aggregate amount  of such Investments do not exceed $50,000,000.00 outstanding at any one time;  (q) Investments by the Company and its Subsidiaries in Shift consisting  of (a)(i) preferred equity investments, together with warrants to acquire additional equity interests  and any additional equity interests acquired upon exercise of such warrants in an aggregate amount  not to exceed $54,000,000, or (ii) other equity investments, loans or other extensions of credit by  the Company and its Subsidiaries to Shift (and/or one or more of its subsidiaries) in an aggregate  amount not to exceed $25,000,000 at any time outstanding and (b) guarantees or direct financing  by the Company of the Shift Facility or the acquisition of the Shift Facility from the lenders  providing such financing to Shift (each, a “Shift Investment” and collectively, the “Shift  Investments”);  (r) Investments by the Company and its Subsidiaries with the proceeds  of any issuance of Equity Interests by such Person; and  (s) Investments made solely by one or more DFC Subsidiaries.  provided that (x) any Investment which when made complies with the requirements of the  definition of the term “Cash Equivalent Investment” may continue to be held notwithstanding that  such Investment if made thereafter would not comply with such requirements; (y) no Investment  

 

   140  otherwise permitted by clause (c), (g), (h), or (k) shall be permitted to be made if, immediately  before or after giving effect thereto, any Default or Event of Default exists; and (z) the Company  shall not, and shall not permit any Subsidiary to, create or acquire, or make any Investment in any  Subsidiary not organized under the laws of a State of the United States or a province or the federal  laws of Canada.  13.7 Transactions with Affiliates.  Other than (i) service agreements with DiMar  Holdings, LLC and its subsidiaries and Minority Dealer Affiliates and (ii) any agreement, contract  or transaction entered into in connection with the Shift Investments, each Borrower shall not, and  the Company shall not permit any Subsidiary to, enter into any transaction with any Affiliate,  except a Loan Party, including without limitation, the purchase, sale, or exchange of property or  the rendering of any service, except upon fair and reasonable terms no less favorable to it than  those that would prevail in a comparable arm’s length transaction with a Person not an Affiliate.  13.8 Type of Business.  Each Borrower shall not, and the Company shall not permit any  Subsidiary to (i) engage in any line of business different from those lines of business conducted  by the Company and its Subsidiaries on the date hereof or any business substantially related or  incidental thereto or (ii) except as a result of transactions permitted by Sections 13.1, interrupt or  cease to engage in, for a time deemed material by the Agent, any material portion of its business  activities or operations.  13.9 Structure.  Each Borrower shall not, and the Company shall not permit any  Subsidiary to, make any material change in its organizational structure or capital structure, or make  any material modification in its Articles of Organization or Incorporation, Partnership Agreement,  Operating Agreement, Bylaws, or other organizational documents, in each case to the extent such  change or modification impairs the enforceability of any Loan Documents, impairs the ability of  any Loan Party to perform its obligations under any Loan Document or would otherwise  reasonably be expected to result in a Material Adverse Effect.  13.10 Indebtedness.  Each Borrower shall not, and the Company shall not permit any  Subsidiary to, incur or permit to exist any Indebtedness to any Person except:  (a) Indebtedness (including Contingent Obligations) incurred pursuant  to this Agreement and the Loan Documents.  (b) Short-term unsecured trade obligations incurred in the ordinary  course of business which are outstanding not more than 90 days after the original date on which  such trade obligations were created.  (c) Indebtedness in respect of Permitted Swap Obligations.  (d) Funded Debt of any Subsidiary which is secured primarily by real  estate owned by such Subsidiary, and Funded Debt of any Excluded Tax Credit Investment  Subsidiary (other than LCDC).  (e) Subject to satisfaction of the requirements of Section 13.3(h) by  each Other Service Loaner Floorplan Lender, Funded Debt of the Dealerships with respect to Other  Service Loaner Floorplan Financing provided by Other Service Loaner Floorplan Lenders.  

 

   141  (f) Unsecured guarantees by the Company of, and unsecured co- borrower obligations of the Company in respect of, (i) Other Service Loaner Floorplan Financing  obligations of Dealerships to Other Service Loaner Floorplan Lenders, (ii) debt of any Subsidiary  which is permitted under Section 13.10(d), (iii) operating leases of its Subsidiaries and Minority  Dealer Affiliates, (iv) extensions of credit to a Minority Dealer Affiliate, all proceeds of which are  used to purchase New Vehicles or Service Loaner Vehicles to be held by the Minority Dealer  Affiliate for sale and/or lease in the ordinary course of business, (v) obligations of Dealerships to  manufacturers or distributors of New Vehicles under Seller Agreements, (vi) Indebtedness which  is permitted under Section 13.10(o), (p) and (s), (vii) the Shift Facility and (viii) DFC Indebtedness  in an aggregate outstanding principal amount at any time not to exceed, with respect to the  Company’s guarantee under this clause (viii), $250,000,000.  (g) Unsecured Indebtedness of the Company to any Subsidiary.  (h) Unsecured Indebtedness of any Subsidiary to the Company or  another Subsidiary.  (i) Indebtedness existing on the Closing Date and set forth on the  Disclosure Schedule, solely to the extent that such Indebtedness is not increased and no additional  collateral is provided for such Indebtedness.  (j) Funded Debt consisting of purchase money indebtedness incurred  to acquire equipment which is secured only by the equipment acquired and proceeds therefrom  and such equipment secures only the obligation to pay the purchase price.  (k) Unsecured guaranties by a Subsidiary of the obligations of any other  Subsidiary on (i) real estate leases between such other Subsidiary and an owner of real estate which  has been subleased by such other Subsidiary to such Subsidiary, and (ii) Indebtedness incurred by  such other Subsidiary which is permitted under Subsection 13.10(d) and which is obtained to  finance real estate leased by such other Subsidiary to such Subsidiary.  (l) Additional Funded Debt, including, without limitation, (i) Pari  Passu Funded Debt and (ii) Contingent Obligations in respect of Funded Debt of the Company or  any of its Subsidiaries, provided that, after giving Pro Forma Effect to the incurrence of such  additional Funded Debt, the Company would have been in compliance with Section 11.1.3 as of  such day (and for purposes of determining such compliance for any Funded Debt incurred in  connection with a Permitted Acquisition, “Pro Forma Effect” shall take into account, for the  Measurement Period most recently ended prior to the incurrence, the Pro Forma EBITDAR  attributable to the business or businesses acquired, less interest expense attributable to the business  or businesses acquired with respect to vehicle floor plan financing, calculated as if the Permitted  Acquisition had occurred on the first day of such Measurement Period).  (m) Indebtedness appearing as a claims reserve (or similar term) on the  balance sheet of the Company and its Subsidiaries, which represents amounts which have been  received but which will be expended to pay warranty and service claims by customers of the  Dealerships.  

 

   142  (n) Guaranties by Lithia Financial Corporation of Permitted Swap  Obligations.  (o) Funded Debt owing by a Silo Subsidiary; provided that no Loan  Party other than (i) the Company and (ii) one or more Silo Subsidiaries, has any obligation  (contingent or otherwise) with respect to such Funded Debt.  (p) Funded Debt of Canadian Dealerships not secured by any assets of  the Company or any Subsidiary other than assets of Canadian Dealerships.  (q) Obligations in respect of put rights and other buy-sell rights granted   to a Minority Dealer Partner that are set forth in the organizational documents of a Minority Dealer.  (r) Funded Debt incurred by any DFC Subsidiary and not secured by  any assets of the Company or any Subsidiary other than assets of a DFC Subsidiary (“DFC  Indebtedness”); provided that no Loan Party other than the Company and one or more DFC  Subsidiaries has any obligation (contingent or otherwise) with respect to such Funded Debt.  (s) Permitted Dual Subsidiary Indebtedness so long as each Required  Intercreditor Counterparty has executed and delivered an Intercreditor Agreement, or a joinder to  an existing Intercreditor Agreement, to the Agent.  13.11 Margin Stock; Speculation.  Each Borrower shall not, and the Company shall not  permit any Subsidiary to, use any part of the proceeds of any Loan, either directly or indirectly,  for the purpose, whether immediate, incidental, or ultimate, of purchasing or carrying any margin  stock (within the meaning of Regulation U) or extending credit to others for the purpose of  purchasing or carrying any margin stock or for any purpose which violates any applicable  provision of any regulation of the Board of Governors of the Federal Reserve System.  No Loan  Party shall be engaged principally or as one of its important activities in the business of extending  credit for the purpose of purchasing or conveying any margin stock.  No part of the proceeds of  any Loan will be used for speculative investment purposes, including without limitation  speculating or hedging in the commodities and/or futures market.  13.12 Restrictive Agreements.  Except for Permitted Restrictions, the provisions of this  Agreement and the other Loan Documents or as could not reasonably be expected to have a  Material Adverse Effect, each Borrower shall not, and the Company shall not permit any  Subsidiary to, (a) enter into or permit to exist any arrangement, contract, or agreement which  directly or indirectly prohibits any Loan Party from or imposes any restrictions on creating,  assuming or incurring any Lien upon all or any portion of its properties, revenues or assets or those  of any of its Subsidiaries (other than Excluded Subsidiaries) whether now owned or hereafter  acquired, to secure the Obligations or to secure any renewals, refundings, replacements,  refinancings or restructurings of the Obligations in an aggregate outstanding principal amount or  aggregate committed amount that is less than or equal to the Aggregate Commitments as of the  date of such arrangement, contract, or agreement, (b) enter into or permit to exist any agreement,  contract or arrangement restricting the ability of any Subsidiary (other than Excluded Subsidiaries)  from paying or making dividends or distributions in cash or kind to the Company or any other  Loan Party, from making loans, advances or other payments of whatsoever nature to the Company  

 

   143  or any other Loan Party, from making transfers or distributions of all or any part of its assets to the  Company or any other Loan Party, or from borrowing money from the Company or any other Loan  Party, (c) enter into or permit to exist any agreement, contract or arrangement which directly or  indirectly prohibits any Subsidiary (other than an Excluded Subsidiary) from guarantying, or  imposes restrictions on the ability of any Subsidiary to guaranty, the Obligations, or (d) enter into  or permit to exist any agreement or arrangement which would be violated by the extensions of  credit contemplated hereunder or the performance by any Loan Party of its obligations under the  Loan Documents.  13.13 Permitted Acquisitions.  Except as otherwise permitted by Section 13.6 and except  for acquisitions of real estate, each Borrower shall not, and the Company shall not permit any  Subsidiary to acquire Control of any Person or acquire all or substantially all of the assets of any  Person or of any business unit or line of business of any Person (an “Acquisition”) except upon  satisfaction of the following requirements:  (a) The Acquisition consists of the acquisition by the Company, directly  or indirectly, of (i) a Person engaged in a line of business that the Company is not prohibited from  engaging in under Section 13.8 of this Agreement, (ii) a Real Estate Subsidiary or (iii) a non- operating holding company; provided, that in each case of the foregoing clauses (i) through (iii),  such entity is organized under the laws of a State of the United States or a province or the federal  laws of Canada.  (b) The Company shall give Agent prior written notice of the proposed  Acquisition at least 30 days prior to the closing date of such Acquisition or, if later, within 5 days  after execution of the purchase agreement for such Acquisition.  (c) The Board of Directors (or other Persons exercising similar  functions) of the seller have not disapproved the transaction or recommended that such transaction  be disapproved.  (d) [Reserved].  (e) Each New Loan Party shall have executed a Guarantor Joinder  Agreement or Borrower Joinder Agreement, as applicable, and any other documents reasonably  required by the Agent so that such New Loan Party (i) becomes a Guarantor of the Used Vehicle  Floorplan Obligations, Service Loaner Vehicle Floorplan Obligations, Revolving Loan  Obligations, (ii) if applicable, becomes a New Vehicle Floorplan Borrower, and (iii) if applicable,  grants a security interest in the Collateral of such Acquisition Subsidiary.  (f) Subject to Section 1.5, all representations and warranties in this  Agreement shall be true and correct in all material respects as of the date of any Acquisition unless  such representation or warranty refers to another date and except as previously disclosed to and  accepted by the Agent in writing, and no Default shall have occurred and be continuing or will  exist after giving effect to the Acquisition.  For purposes of this determination, all requirements  applicable to any Guarantor, New Vehicle Floorplan Borrower (if applicable), or Subsidiary shall  be deemed to apply to any Acquisition Subsidiary.  

 

   144  (g) The Agent shall have received the organizational documents, status  or good standing certificates and resolutions, or other authorizations demonstrating the due  organization, valid existence, qualification to do business, good standing and authority of each  New Loan Party to become a Loan Party, New Vehicle Floorplan Borrower (if applicable), and  Guarantor.  (h) The Agent shall have received copies of the purchase agreement and  lease, if any, relating to that Acquisition.  (i) The Agent shall have perfected security interests in the Collateral  owned by the New Loan Party as security for all of the Used Vehicle Floorplan Obligations,  Service Loaner Vehicle Floorplan Obligations, Revolving Loan Obligations, Guarantor  Obligations, and Permitted Swap Obligations, and if applicable, the New Vehicle Floorplan Loan  Obligations, subject only to Permitted Liens, and shall have received satisfactory evidence of  perfection and the priority of such security interests, including without limitation such Uniform  Commercial Code and other searches, signed termination statements or payoff letters and other  filings as the Agent deems appropriate, which shall include evidence of the termination of, or  reasonably satisfactory arrangements for the termination of, the security interests of any secured  party in any of the assets acquired or of the New Loan Party.  (j) The Agent shall have conducted such audits of any Collateral being  acquired or which is owned by any New Loan Party as is desired by the Agent, the results of which  shall be satisfactory to the Agent.  (k) The Company and/or any New Loan Party shall have received  approval of all material Seller Agreements (including without limitation Franchise Agreements),  between any New Loan Party and any manufacturer or distributor of Vehicles for which the New  Loan Party will act as a dealer as may be necessary for the New Loan Party to conduct its intended  business following the Acquisition.  The Company or the New Loan Party shall deliver to the  Agent copies of all such Seller Agreements promptly upon receipt, other than those disclosure of  which is prohibited by the relevant manufacturer or distributor, if requested by the Agent.  (l) All insurance required under Section 12.8 shall have been obtained  and the Agent shall have received evidence thereof in the form of a certificate of insurance as  required under Section 12.8.  (m) The Company has delivered to the Agent a certificate in a form  acceptable to the Agent and signed by its chief financial officer or other officer acceptable to the  Agent, certifying that all conditions in Section 13.13(a), (c), (f) and (k) have been satisfied or will  be satisfied as of the date of the Acquisition.  (n) If requested by the Agent, the Company has delivered to the Agent,  (i) a Compliance Certificate, together with all supporting documentation reasonably required by the  Agent, prepared on a Pro Forma Basis as of the most recent date for which a Compliance Certificate  was furnished to the Agent, demonstrating that the Company and its Subsidiaries would have been  in compliance with the requirements of Section 11.1 if the Acquisition had occurred on the first day  of the period covered by the Compliance Certificate, and (ii) if requested by the Agent, copies of  

 

   145  the seller’s financial statements. The Agent hereby agrees to promptly provide to the Lenders copies  of all documents received under the foregoing clauses (i) and (ii).  (o) For any single Acquisition or group of related Acquisitions, either  (x) on the date of consummation of such Acquisition or group of related Acquisitions (or in the  case of a Limited Condition Acquisition, on the LCA Test Date) and after giving Pro Forma Effect  thereto, the Leverage Ratio is below 5.75 to 1.0; or (y) the aggregate consideration paid for the  assets acquired (other than real property and Vehicles), or the Equity Interests acquired, is less than  or equal to 10% of Tangible Net Worth as of the last day of the fiscal quarter of the Company and  its Subsidiaries most recently ended prior to the date of consummation of such Acquisition or  Acquisitions.  For purposes of this subsection (o) of Section 13.13, “Pro Forma Effect” shall mean  that the Leverage Ratio shall be calculated as if (i) such Acquisition or Acquisitions had occurred  on the first day of the Measurement Period most recently ended prior to consummation of such  Acquisition or Acquisitions, taking into account the Pro Forma EBITDAR attributable to the  business or businesses acquired, less interest expense attributable to the business or businesses  acquired with respect to vehicle floor plan financing, and (ii) any Indebtedness incurred or acquired  in connection with such Acquisition or Acquisitions (including without limitation any  Indebtedness incurred to enable the Company or any Subsidiary to effect such Acquisition or  Acquisitions) had been incurred or acquired on the last day of such Measurement Period.  (p) Agent has received such additional documents, approvals, consents  and information and each Loan Party has satisfied such additional requirements as the Agent  reasonably requests.  13.14 Accounting Changes; Fiscal Year.  Each Borrower shall not, and the Company  shall not permit any Subsidiary to, make any change in accounting treatment or reporting practices,  except as permitted by GAAP, or change its Fiscal Year.  13.15 Excluded Tax Credit Investment Subsidiaries.   No Excluded Tax Credit  Investment Subsidiary (other than LCDC) shall own any assets other than Investments permitted  under Section 13.6(p).  13.16 Dual Subsidiaries.   Each Borrower shall not, and the Company shall not permit  any Subsidiary to become a Dual Subsidiary unless (i) each Required Intercreditor Counterparty  has delivered to the Agent an Intercreditor Agreement, or a joinder agreement to an existing  Intercreditor Agreement, (ii) no Used Vehicles or New Vehicles of any such Dual Subsidiary shall  be financed by the Used Vehicle Floorplan Facility or the New Vehicle Floorplan Facility, as  applicable, (iii) no Dual Subsidiary Lender may finance Used Vehicles at the applicable dealership  unless it finances New Vehicles at such dealership, (iv) prior to the time of designation of such  Subsidiary as a Dual Subsidiary, all outstanding New Vehicle Floorplan Loans with respect to  such Subsidiary for New Vehicles of any dealerships which will be financed by such Permitted  Dual Subsidiary Indebtedness shall have been repaid, (v) prior to the time of designation of such  Subsidiary as a Dual Subsidiary, all outstanding Used Vehicle Floorplan Loans with respect to  such Subsidiary for Used Vehicles of any dealerships which will be financed by such Permitted  Dual Subsidiary Indebtedness shall have been repaid and (vi) the Company has complied with all  requirements set forth in Section 6.19 and this Section 13.16. Notwithstanding the foregoing, this  Section 13.16 shall not take effect until the Agent (w) has received a duly executed Intercreditor  

 

   146  Agreement, in form and substance satisfactory to the Agent, (x) the existing UCC-1 financing  statements for any Dual Subsidiaries shall have been amended, without limitation, to remove New  Vehicles and Used Vehicles from the collateral description, in each case, in form and substance  satisfactory to the Agent, (y) new UCC-1 financing statements have been filed naming each Dual  Subsidiary as debtor and the applicable Dual Subsidiary Lender as secured party, in each case, in  form and substance satisfactory to the Agent and (z) the Agent has received any additional  documentation requested by the Agent in its sole discretion. The Lenders party hereto hereby  consent to the Agent entering into each Intercreditor Agreement (and any joinder or supplement  thereof) on or after the Closing Date on behalf of the Lenders.  13.17 Additional Credit Support Documentation.   Each Borrower shall not, and the Company shall not permit any Subsidiary to Guarantee  or grant any Lien in favor of any Dual Subsidiary Lender in respect of Permitted Dual Subsidiary  Indebtedness except for such Guarantees by and Liens granted by Dual Subsidiaries which receive  Permitted Dual Subsidiary Indebtedness from such Dual Subsidiary Lender. Without limiting the  foregoing and without limiting the generality of the Guaranty or Section 12.17, in the event any  Dual Subsidiary Lender receives a Guarantee or Lien in violation of the previous sentence, the  Company shall cause the applicable Subsidiaries to provide substantially similar Guarantees to the  Agent, each L/C Issuer and the Lenders or grant substantially similar Liens in favor of the Agent  (for the benefit of the Secured Parties) to the same extent.  ARTICLE 14   DEFAULT AND REMEDIES  14.1 Events of Default.  The occurrence of any of the following shall constitute an Event  of Default under this Agreement and each of the Loan Documents:  14.1.1 Any Loan Party shall fail to pay (a) when due, any principal owing under  this Agreement, Letter of Credit, LC Agreement, or any other Loan Document, except as described  in the following clause (d), or (b) within five (5) days after it is due, any interest or fee payable  under this Agreement, Letter of Credit, LC Agreement, or any other Loan Document or (c) when  due and uncured within five (5) days after notice from the Agent that such amount remains unpaid,  any other amount payable under this Agreement, Letter of Credit, LC Agreement, or any other  Loan Document or (d) the Company shall fail to cure any Out of Balance Condition, which  condition shall remain unremedied for a period of four (4) days after notice from the Agent, New  Vehicle Swing Line Lender, Used Vehicle Swing Line Lender or Service Vehicle Swing Line  Lender.  14.1.2 Any default under or any failure of any Loan Party to perform or comply  with any term, condition, covenant or obligation (a) set forth in Section 11.1, 12.1, 12.10 or Article  13 of this Agreement (except Section 13.15) or (b) set forth in any provision of this Agreement  (except an Event of Default specified in Section 14.1.1, 14.1.2(a) or elsewhere in Section 14.1),  any other Loan Document or any other Agreement between the Agent or any Lender and any Loan  Party, and such default or failure is not cured within 30 days after the earlier of the date any Loan  Party knows thereof or the date on which the Agent gives written notice thereof to the Company  

 

   147  (provided, however, that such cure period is available only if the applicable default or failure is  reasonably capable of being cured).  14.1.3 Any Loan Party defaults in the payment or performance of any material  provisions of any agreement or condition relating to any Indebtedness of such Loan Party (except  as described in Section 14.1.16) in an aggregate amount outstanding for such Indebtedness for all  Loan Parties that, together with amounts described in Section 14.1.16, is in excess of $50,000,000  (other than Indebtedness owing under the Loan Documents but including Permitted Dual  Subsidiary Indebtedness), and the period of grace, if any, to cure such default shall have passed,  and the default constitutes (a) nonpayment or (b) any event or condition, the effect of which is to  cause or permit the holder of such Indebtedness to cause such Indebtedness to become due prior  to its maturity date.  14.1.4 (a) Any default occurs under or any Loan Party fails to pay, perform or  comply with any material terms, conditions or obligations in any Collateral Document or (b) other  than in accordance with the terms of such Collateral Document, any Lien created or purported to  be created by any Collateral Document shall cease to be, or shall be asserted by any Person not to  be, a valid, perfected Lien with a priority that is subject only to the Permitted Liens, and in each  case, such default or failure is not cured within ten (10) days after the earlier of the date any Loan  Party knows thereof or the date on which the Agent gives written notice thereof to the Company.  14.1.5 (a) Other than in accordance with the terms of the Loan Documents, any  Guaranty or other Loan Document ceases to be, or shall be asserted by any Borrower or any  Guarantor not to be, in full force and effect, or (b) any Guarantor shall attempt to revoke, repudiate,  or limit any Guaranty.  14.1.6 Any warranty, representation, statement, or information made or  furnished to the Agent or any Lender by or on behalf of any Loan Party proves to have been false  or misleading in any material respect when made, furnished, or certified, or when deemed made,  furnished, or certified.  14.1.7 Custody or control of any substantial part of the property of any Loan  Party is assumed by any Governmental Body or any Governmental Body takes any final action,  the effect of which would be a Material Adverse Effect.  14.1.8 (a) Any Loan Party shall commence any case, proceeding, or other action  (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,  insolvency, reorganization, or relief of debtors, seeking to have an order for relief entered with  respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,  arrangement, adjustment, winding-up, liquidation, dissolution, composition, or other relief with  respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian, or other similar  official for it or for all or any substantial part of its assets, or any Loan Party shall make a general  assignment for the benefit of its creditors; or (b) there shall be commenced against any Loan Party  any case, proceeding, or other action of a nature referred to in clause (a) above which (iii) results  in the entry of an order for relief or any such adjudication or appointment or (iv) remains  undismissed, undischarged, unstayed, or unbonded for a period of 30 days; or (c) there shall be  commenced against any Loan Party any case, proceeding, or other action seeking issuance of a  

 

   148  warrant of attachment, execution, distraint, or similar process against all or any substantial part of  its assets that results in the entry of an order for any such relief which shall not have been vacated,  discharged, stayed, or bonded pending appeal within 30 days from the entry thereof; or (d) any  Loan Party shall take any action in furtherance of, or indicating its consent to, approval of, or  acquiescence in any of the acts set forth in clauses (a), (b), or (c) above; (e) any Loan Party shall  admit in writing its inability to pay its debts as they become due or shall, within the meaning of  the United States Bankruptcy Code (11 U.S.C.  §101 et seq.), generally not pay its debts as they  become due; or (f) any Loan Party is not Solvent.  14.1.9 Except as permitted by Section 13.1, (a) any Loan Party which is a  corporation, partnership, limited liability company or other type of entity is dissolved or liquidated  or takes any action to authorize a dissolution or liquidation; or (b) any Loan Party which is a trust  (or trustee acting with respect to property held in trust) is revoked, amended or terminated.  14.1.10 Any refusal or failure by any Governmental Body to issue, renew, or  extend any material lease or Governmental Approval with respect to the operation of the business  of any Loan Party or its Subsidiaries, or any denial, forfeiture or revocation by any Governmental  Body of any Governmental Approval, that could reasonably be expected to have a Material  Adverse Effect.  14.1.11 One or more judgments, writs of attachment, or similar process, in an  aggregate amount in excess of $50,000,000 (in excess of insurance coverage) shall be entered or  filed against any Loan Party or any property of any Loan Party and remains unpaid, unvacated,  unbonded or unstayed for a period of sixty (60) days or more.  14.1.12 (a) With respect to a Plan, a Loan Party or an ERISA Affiliate is subject  to a lien in excess of $50,000,000, pursuant to Section 430(k) of the Code or Section 302(c) or  ERISA or Title IV or ERISA, or (b) an ERISA Event shall have occurred that, in the opinion of the  Required Lenders, when taken together with all other ERISA Events that have occurred, could  reasonably be expected to result in a Material Adverse Effect.  14.1.13 (a) The Company or any New Vehicle Floorplan Dealership fails to pay,  perform or comply with any term, condition or obligation in any Seller Agreement, or any such  agreement ceases to be, or is asserted by any Person not to be, in full force and effect, or the other  party to such agreement gives notice of default to the Company or any New Vehicle Floorplan  Dealership, or (b) any event specified in clause (a) occurs with respect to any Loan Party other  than a New Vehicle Floorplan Borrower, except in each case described in clauses (a) and (b) above  to the extent such failure, cessation, assertion or notice of default (either individually or in the  aggregate with all other such failures, cessations, assertions and notices of default) could not  reasonably be expected to have a Material Adverse Effect.  14.1.14 Any Repurchase Agreement ceases to be, or is asserted by any  manufacturer or distributor of Vehicles not to be, in full force and effect, except in each case to the  extent such cessation or assertion (either individually or in the aggregate with all other such  cessations and assertions) could not reasonably be expected to have a Material Adverse Effect.  14.1.15 There is any Change in Control.  

 

   149  14.1.16 (a) Any default occurs under or any Loan Party fails to pay, perform or  comply with the terms of any Swap or (b) there occurs under any Swap an Early Termination Date  (as defined in such Swap) resulting from (i) any event of default under such Swap as to which the  Company or any Subsidiary is the Defaulting Party (as defined in such Swap) or (ii) any  Termination Event (as so defined) under such Swap as to which the Company or any Subsidiary is  an Affected Party (as so defined) and, in either event, the Swap Termination Value owing by the  Applicable Loan Parties under all such Swaps as a result thereof, together with all defaulted  Indebtedness of the Loan Parties described in Section 14.1.3, is greater than 1.25% of the amount  of the Aggregate Commitment.  14.2 Consequences of Default; Rights and Remedies.  Time is of the essence of this  Agreement.  14.2.1 Upon the occurrence or existence of any Event of Default (other than an  Event of Default referred to in Section 14.1.8) and at any time thereafter during the continuance  of such Event of Default, the Agent shall have the right, by written notice to the Company, to: (a)  terminate the availability of PR Account Advances and terminate the Commitments to make Loans  and issue Letters of Credit; (b) declare all outstanding Obligations payable by the Revolving Loan  Borrower, Used Vehicle Floorplan Borrower, Service Loaner Vehicle Floorplan Borrower, and the  New Vehicle Floorplan Borrowers to be immediately due and payable without presentment,  demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything  contained herein or in the Loan Documents to the contrary notwithstanding; (c) direct the  Revolving Loan Borrower to deliver to the Agent funds in an amount equal to the aggregate stated  amount of the LC Obligations, such funds to be held in the LC Collateral Account, and/or (d) direct  the New Vehicle Floorplan Borrowers to deliver to the Agent funds in an amount which the Agent  estimates it or the Swing Line Lender may be required to pay pursuant to Payment Commitments  which may be presented thereafter, such collateral to be held in the Payment Commitment  Collateral Account.  The applicable Borrowers shall immediately deliver to the Agent all such  funds required by the Agent.  14.2.2 Upon the occurrence or existence of any Event of Default described in  Section 14.1.8, immediately and without notice, (a) the Commitments and the availability of Loans  and Letters of Credit shall automatically terminate, (b) all outstanding Obligations shall  automatically become immediately due and payable, without presentment, demand, protest or any  other notice of any kind, all of which are hereby expressly waived, anything contained herein or  in the Loan Documents to the contrary notwithstanding, (c) the Revolving Loan Borrower shall  automatically become obligated to deliver to the Agent Cash Collateral in an amount equal to the  aggregate stated amount of the LC Obligations, which funds shall be held by the Agent in the LC  Collateral Account, and (d) the New Vehicle Floorplan Borrowers shall automatically become  obligated to deliver to the Agent funds in an amount which the Agent estimates it or the Swing  Line Lender may be required to pay pursuant to Payment Commitments which may be presented  thereafter, which funds shall be held by the Agent in the Payment Commitment Collateral Account.  14.2.3 In addition to the foregoing remedies, upon the occurrence or existence of  any Event of Default, the Agent and the Lenders shall have the right to exercise any right, power  or remedy available under this Agreement, any of the other Loan Documents, or otherwise  available at law or in equity.  

 

   150  14.2.4 The Agent shall promptly inform the Lenders of the occurrence of any Event  of Default of which it is deemed to have knowledge or notice pursuant to Section 16.9 and will  promptly provide the Lenders with copies of any and all notices that the Agent has received with  respect thereto.  After such notification, the Lenders shall meet to determine the desired course of  action and the Agent shall take such course of action, and pursue such rights and remedies under  the Loan Documents, as the Required Lenders shall determine.  If the Required Lenders have not  agreed upon a course of action within 90 days after the date that the Lenders have received a  notice from the Agent of the occurrence of an Event of Default, the Agent shall (and shall be  obligated to) terminate the Commitments, accelerate all of the Obligations, apply all amounts  collected from the Borrowers, any Guarantors and the Collateral as set forth herein and pursue  such other rights and remedies as are prudent under the circumstances.  During the time between  the Agent’s giving notice of the occurrence of an Event of Default to the Lenders and the earlier  of (a) the Required Lender’s agreement on a course of action or (b) the expiration of the 90 day  decision period, the Agent shall take such actions on behalf of the Lenders as the Agent deems  prudent.  To the extent inconsistent with Section 14.2.2, this Section shall not apply to any Event  of Default referred to in Section 14.1.8 and any Event of Default referred to in Section 14.1.8  shall be governed by Section 14.2.2.  However, decisions as to how to handle, vote, or  compromise the Agent’s claims on behalf of the Lenders in any bankruptcy or insolvency  proceeding shall be governed by this Section.  This Section confers no rights upon any Loan Party.  14.3 Application of Payments.  If the Obligations have become due and payable in full  or if at any time insufficient funds are received by and available to the Agent to fully pay all fees,  costs, expenses, principal, interest and other amounts due to the Agent and the Lenders under this  Agreement and the other Loan Documents, such funds received by the Agent shall be applied: (a)  first, to the payment of fees, costs, disbursements, indemnities and other expenses (including  Attorney Costs of the Agent’s counsel) owing to the Agent, including without limitation, if  applicable, amounts incurred in realizing on Collateral or otherwise enforcing the Loan Documents;  (b) second, to the payment of fees, costs, disbursements, indemnities, and other expenses owing  to the Lenders (other than LC Fees, Revolving Loan Commitment Fee, Used Vehicle Floorplan  Commitment Fee, Service Loaner Vehicle Floorplan Commitment Fee and New Vehicle  Floorplan Commitment Fee), including without limitation, if applicable, amounts incurred in  realizing on Collateral or otherwise enforcing the Loan Documents and amounts owing pursuant  to Article 7 and Section 17.1; (c) third, to the payment of LC Fees, Revolving Loan  Commitment Fees, New Vehicle Floorplan Commitment Fee, Used Vehicle Floorplan  Commitment Fee and Service Loaner Vehicle Floorplan Commitment Fee; (d) fourth to the  payment of accrued interest on all of the Loans and other Obligations, (e) fifth to the payment  to Swing Line Lender of any principal amount of the New Vehicle Swing Line Loans in excess  of the New Vehicle Swing Line Commitment; (f) sixth, to the payment of the remaining  principal owing to all of the Lenders on all of the Loans, LC Obligations, and other Obligations,  allocated to the Lenders based upon their Pro Rata Shares; (g) seventh, to fully cash collateralize  the LC Obligations and any outstanding Payment Commitments; (h) eighth, to payment of the  Permitted Swap Obligations, ratably among the Lenders in proportion to the respective amounts  described in this clause (h) held by them; and (i) ninth, the balance, if any, to the Borrowers or  as otherwise required by law.  ARTICLE 15   HAZARDOUS SUBSTANCES  

 

   151  15.1 Representations and Warranties.  Each Borrower represents and warrants that to  its knowledge, as of the Closing Date, any Properties identified as such in the Disclosure Schedule  are the only Properties requiring remedial action under applicable Environmental Laws, resulting  from the use, generation, manufacture, storage, treatment, disposal, release, or threatened release  of any Hazardous Substances on, under, about or from any of the Properties.  The performance of  such remedial actions will not have a Material Adverse Effect on any Loan Party or its businesses.  15.2 Activities.  Each Borrower shall, and the Company shall cause each Subsidiary to  use, generate, manufacture, store, treat, release or dispose of Hazardous Substances on, under,  about or from the Properties only as is reasonable and necessary in the operation of its business,  and in substantial compliance with all applicable Environmental Laws.  15.3 Inspections.  Each Borrower will permit and the Company will cause each other  Loan Party to permit representatives of the Agent and the Lenders to enter upon the Properties to  make such inspections and tests as they may reasonably deem appropriate to determine compliance  of the Properties with this Article.  Any such inspections or tests shall be at the expense of  Borrowers and for Agents’ and the Lenders’ purposes only, and shall not be construed to create  any responsibility or liability on the part of the Agent or any Lender to any Borrower or any other  Person.  15.4 Release and Indemnity.  Each Borrower hereby (a) releases and waives any future  claims against Agent and each Lender for indemnity or contribution in the event the Company or  any of its Subsidiaries becomes liable for cleanup or other costs under any Environmental Laws,  and (b) agrees to indemnify and hold harmless Agent and each Lender and the other Indemnified  Persons against any and all Claims which such Person may directly or indirectly sustain or suffer  resulting from a breach of this Article by the Company or any other Borrower or as a consequence  of any use, generation, manufacture, storage, disposal, release or threatened release of a Hazardous  Substance on the Properties, except to the extent arising from the gross negligence or willful  misconduct of such Indemnified Person.  15.5 Survival.  The provisions of this Article, including the obligation to indemnify,  shall survive the repayment of the Loans and Letters of Credit and other liabilities and Obligations  of any one or more of the Borrowers under this Agreement and the other Loan Documents, and  the termination or expiration of this Agreement, and, if applicable, shall not be affected by  Lender’s acquisition of any interest in any of the Properties, whether by foreclosure or otherwise.  ARTICLE 16   THE AGENT  16.1 Appointment; Nature of Relationship.  U.S. Bank is hereby appointed by each of  the Lenders as its contractual representative (herein referred to as the “Agent”) hereunder and  under each other Loan Document, and each of the Lenders irrevocably authorizes Agent to act as  the contractual representative of such Lender with the rights and duties expressly set forth herein  and in the other Loan Documents.  The Agent agrees to act as such contractual representative upon  the express conditions contained in this Article 16.  Notwithstanding the use of the defined term  “Agent,” it is expressly understood and agreed that the Agent shall not have any fiduciary  responsibilities to any Lender by reason of this Agreement or any other Loan Document and that  

 

   152  the Agent is merely acting as the contractual representative of the Lenders with only those duties  as are expressly set forth in this Agreement and the other Loan Documents.  In its capacity as the  Lenders’ contractual representative, the Agent (a) does not hereby assume any fiduciary duties to  any of the Lenders, (b) is a “representative” of the Lenders within the meaning of the term “secured  party” as defined in the Uniform Commercial Code and (c) is acting as an independent contractor,  the rights and duties of which are limited to those expressly set forth in this Agreement and the  other Loan Documents.  Each of the Lenders hereby agrees to assert no claim against Agent on  any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims  each Lender hereby waives.  16.2 Powers.  The Agent shall have and may exercise such powers under the Loan  Documents as are specifically delegated to the Agent by the terms of each thereof, together with  such powers as are reasonably incidental thereto.  The Agent shall have no implied duties to the  Lenders, or any obligation to the Lenders to take any action thereunder except any action  specifically provided by the Loan Documents to be taken by the Agent.  16.3 General Immunity.  Neither Agent nor any of its directors, officers, agents or  employees shall be liable to any Borrower or any Lender for any action taken or omitted to be  taken by it or them hereunder or under any other Loan Document or in connection herewith or  therewith except to the extent such action or inaction is determined in a final non-appealable  judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful  misconduct of such Person.  16.4 No Responsibility for Loans, Recitals, Etc. Neither Agent nor any of its directors,  officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into,  or verify (a) any statement, warranty or representation made in connection with any Loan  Document or any borrowing hereunder; (b) the performance or observance of any of the covenants  or agreements of any obligor under any Loan Document, including, without limitation, any  agreement by an obligor to furnish information directly to each Lender; (c) the satisfaction of any  condition specified in Article 9, except receipt of items required to be delivered solely to the Agent;  (d) the existence or possible existence of any Default or Event of Default; (e) the validity,  enforceability, effectiveness, sufficiency or genuineness of any Loan Document or any other  instrument or writing furnished in connection therewith; (f) the value, sufficiency, creation,  perfection or priority of any Lien in any Collateral; or (g) the financial condition of any Loan Party  or of any of any Loan Party’s Subsidiaries.  The foregoing notwithstanding, however, the Agent  shall, upon a reasonable request from a Lender, provide such information as may be necessary to  demonstrate to such Lender that the Agent has the ability to comply, or has in fact complied, with  all regulations or mandates from a governing entity that are applicable to the Loans, including  without limitation, the Flood Disaster Protection Act of 1973 and the national Flood Insurance  Reform Act (1994).  16.5 Action on Instructions of Lenders.  The Agent shall in all cases be fully protected  in acting, or in refraining from acting, hereunder and under any other Loan Document in  accordance with written instructions signed by the Required Lenders, and such instructions and  any action taken or failure to act pursuant thereto shall be binding on all of the Lenders.  The  Lenders hereby acknowledge that the Agent shall be under no duty to take any discretionary action  permitted to be taken by it pursuant to the provisions of this Agreement or any other Loan  

 

   153  Document unless it shall be requested in writing to do so by the Required Lenders.  The Agent  shall be fully justified in failing or refusing to take any action hereunder and under any other Loan  Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any  and all liability, cost and expense that it may incur by reason of taking or continuing to take any  such action.  16.6 Employment of the Agents and Counsel.  The Agent may perform any of its  duties as the Agent hereunder and under any other Loan Document by or through employees,  agents, and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or  securities received by it or its authorized agents, for the default or misconduct of any such agents  or attorneys-in-fact selected by it with reasonable care.  The Agent shall be entitled to advice of  counsel concerning the contractual arrangement between Agent and the Lenders and all matters  pertaining to the Agent’s duties hereunder and under any other Loan Document.  16.7 Reliance on Documents; Counsel.  The Agent shall be entitled to rely upon any  notice, consent, certificate, affidavit, letter, telegram, facsimile, telex, electronic mail message,  statement, paper or document believed by it to be genuine and correct and to have been signed or  sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel  selected by the Agent, which counsel may be employees of the Agent.  For purposes of determining  compliance with the conditions specified in Article 9, each Lender that has signed this Agreement  shall be deemed to have consented to, approved or accepted or to be satisfied with, each document  or other matter required thereunder to be consented to or approved by or acceptable or satisfactory  to a Lender unless Agent shall have received notice from such Lender prior to the applicable date  specifying its objection thereto.  16.8 Reimbursement and Indemnification.  The Lenders agree to reimburse and  indemnify Agent ratably in proportion to their respective Commitments (or, if the Commitments  have been terminated, in proportion to their Commitments immediately prior to such termination)  (a) for any amounts not reimbursed by the Borrowers for which the Agent is entitled to  reimbursement by a Borrower or Borrowers under the Loan Documents, (b) for any other expenses  incurred by the Agent on behalf of the Lenders, in connection with the preparation, execution,  delivery, administration and enforcement of the Loan Documents (including, without limitation,  for any expenses incurred by the Agent in connection with any dispute between Agent and any  Lender or between two or more of the Lenders) and (c) for any liabilities, obligations, losses,  damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and  nature whatsoever which may be imposed on, incurred by or asserted against Agent in any way  relating to or arising out of the Loan Documents or any other document delivered in connection  therewith or the transactions contemplated thereby (including, without limitation, for any such  amounts incurred by or asserted against Agent in connection with any dispute between Agent and  any Lender or between two or more of the Lenders), or the enforcement of any of the terms of the  Loan Documents or of any such other documents, provided that (y) no Lender shall be liable for  any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment  by a court of competent jurisdiction to have resulted from the gross negligence or willful  misconduct of the Agent and (z) any indemnification required pursuant to Section 7.4.4 shall,  notwithstanding the provisions of this Section, be paid by the relevant Lender in accordance with  the provisions thereof.  The obligations of the Lenders under this Section shall survive payment of  the Obligations and Permitted Swap Obligations and termination of this Agreement.  

 

   154  16.9 Notice of Event of Default.  The Agent shall not be deemed to have knowledge or  notice of the occurrence of any Default or Event of Default hereunder, except with respect to  defaults in the payment of principal, interest and fees required to be paid to the Agent, unless (i)  Agent has actual knowledge of such Default or Event of Default or (ii) Agent has received written  notice from a Lender or 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 Agent receives  such a notice, the Agent shall give prompt notice thereof to the Lenders; provided that, except as  expressly set forth in the Loan Documents, the Agent shall not have any duty to disclose, and shall  not be liable for the failure to disclose, any information relating to a Loan Party or any of its  Subsidiaries that is communicated to or obtained by the bank serving as the Agent or any of its  Affiliates in any capacity.  16.10 Rights as a Lender.  The Agent shall have the same rights and powers hereunder  and under any other Loan Document with respect to its Commitments and its Loans as any Lender  and may exercise the same as though it were not Agent, and the term “Lender” or “Lenders” shall,  at any time when Agent is a Lender, unless the context otherwise indicates, include Agent in its  individual capacity.  The Agent and its Affiliates may accept deposits from, lend money to, and  generally engage in any kind of trust, debt, equity or other transaction, in addition to those  contemplated by this Agreement or any other Loan Document, with any Loan Party, or any of their  Subsidiaries and Affiliates in which any Loan Party is not restricted hereby from engaging with  any other Person.  16.11 Lender Credit Decision, Legal Representation.  (a) Each Lender acknowledges that it has, independently and without  reliance upon Agent, or any other Lender and based on the financial statements prepared by the  Borrowers and such other documents and information as it has deemed appropriate, made its own  credit analysis and decision to enter into this Agreement and the other Loan Documents.  Each  Lender also acknowledges that it will, independently and without reliance upon Agent, or any other  Lender and based on such documents and information as it shall deem appropriate at the time,  continue to make its own credit decisions in taking or not taking action under this Agreement and  the other Loan Documents.  Except for any notice, report, document or other information expressly  required to be furnished to the Lenders by the Agent hereunder or as may be reasonably requested  by a Lender from the Agent, the Agent shall have no duty or responsibility (either initially or on a  continuing basis) to provide any Lender with any notice, report, document, credit information or  other information concerning the affairs, financial condition or business of any Loan Party or any  of its Affiliates that may come into the possession of the Agent (whether or not in its capacity as  the Agent) or any of their Affiliates.  (b) Each Lender further acknowledges that it has had the opportunity to  be represented by legal counsel in connection with its execution of this Agreement and the other  Loan Documents, that it has made its own evaluation of all Applicable Laws relating to the  transactions contemplated hereby, and that the counsel to the Agent represents only Agent and not  the Lenders in connection with this Agreement and the transactions contemplated hereby.  16.12 Successor Agent.  The Agent may resign at any time by giving written notice  thereof to the Lenders and the Company, such resignation to be effective upon the appointment of  

 

   155  a successor Agent or, if no successor Agent has been appointed, forty-five days after the retiring  Agent gives notice of its intention to resign.  Upon any such resignation, the Required Lenders  shall have the right to appoint, on behalf of the Borrowers and the Lenders, a successor Agent.   Unless a Default exists, such successor Agent shall be reasonably acceptable to the Company.  If  no successor Agent shall have been so appointed by the Required Lenders within thirty days after  the resigning Agent’s giving notice of its intention to resign, then the resigning Agent may appoint,  on behalf of Borrowers and the Lenders, a successor Agent.  Notwithstanding the previous  sentence, the Agent may at any time without the consent of any Borrower or any Lender, appoint  any of its Affiliates which is a commercial bank as a successor Agent hereunder.  If the Agent has  resigned and no successor Agent has been appointed, the Lenders may perform all the duties of  the Agent hereunder and each Borrower shall make all payments in respect of the Obligations to  the applicable Lender and for all other purposes shall deal directly with the Lenders.  No successor  Agent shall be deemed to be appointed hereunder until such successor Agent has accepted the  appointment.  Any such successor Agent shall be a commercial bank having capital and retained  earnings of at least $3,000,000,000.00.  Upon the acceptance of any appointment as the Agent  hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become  vested with all the rights, powers, privileges and duties of the resigning Agent.  Upon the  effectiveness of the resignation of the Agent, the resigning Agent shall be discharged from its  duties and obligations hereunder and under the Loan Documents.  After the effectiveness of the  resignation of an Agent, the provisions of this Article 16 shall continue in effect for the benefit of  such Agent in respect of any actions taken or omitted to be taken by it while it was acting as the  Agent hereunder and under the other Loan Documents.  In the event that there is a successor to the  Agent by merger, or Agent assigns its duties and obligations to an Affiliate pursuant to this Section,  then the term “Prime Rate” as used in this Agreement shall mean the prime rate, base rate or other  analogous rate of the new Agent.  16.13 Agent’s Fees.  Each Borrower agrees to pay to the Agent, for its account, the fees  agreed to by such Borrower and the Agent pursuant to any fee letter between them, or as otherwise  agreed from time to time.  16.14 Delegation to Affiliates.  Each Borrower and the Lenders agree that the Agent may  delegate any of its duties under this Agreement to any of its Affiliates.  Any such Affiliate (and  such Affiliate’s directors, officers, agents and employees) which performs duties in connection  with this Agreement shall be (i) entitled to the same benefits of the indemnification, waiver and  other protective provisions to which the Agent is entitled under this Agreement; and (ii) subject to  the same obligations of the Agent hereunder.  16.15 Execution of Collateral Documents.  The Lenders hereby empower and authorize  Agent to execute and deliver the Collateral Documents and all related agreements, documents or  instruments as shall be necessary or appropriate to effect the purposes of the Collateral Documents.  16.16 Collateral Releases.  The Lenders hereby empower and authorize Agent to execute  and deliver on their behalf any agreements, documents or instruments as shall be necessary or  appropriate to effect any releases of Collateral which shall be permitted by the terms hereof or any  other Loan Document or which shall otherwise have been approved by the Required Lenders (or,  if required by the terms of this Agreement, all of the Lenders) in writing.  If any of the Collateral  shall be sold or otherwise disposed of by any Loan Party in a transaction permitted by the Loan  

 

   156  Documents, then Agent, at the request and sole expense of the applicable Loan Party, shall execute  and deliver to such Loan Party all releases and other documents reasonably necessary or advisable  for the release of the Liens created under the Loan Documents on such Collateral, provided that  the applicable Loan Party shall provide to the Agent evidence of such transaction's compliance  with the Loan Documents as the Agent shall reasonably request.  16.17 No Advisory or Fiduciary Responsibility.  In connection with all aspects of each  transaction contemplated hereby (including in connection with any amendment, waiver or other  modification hereof or of any other Loan Document), each Borrower acknowledges and agrees  that: (a)(i) the arranging and other services regarding this Agreement provided by the Lenders are  arm’s-length commercial transactions between each Borrower and its Affiliates, on the one hand,  and the Lenders, on the other hand, (ii) each Borrower has consulted its own legal, accounting,  regulatory and tax advisors to the extent it has deemed appropriate, and (iii) each Borrower is  capable of evaluating, and understands and accepts, the terms, risks and conditions of the  transactions contemplated hereby and by the other Loan Documents; (b)(i) each of the Lenders is  and has been acting solely as a principal and, except as expressly agreed in writing by the relevant  parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any  Borrower or any of its Affiliates, or any other Person and (ii) no Lender has any obligation to any  Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those  obligations expressly set forth herein and in the other Loan Documents; and (c) each of the Lenders  and their respective Affiliates may be engaged in a broad range of transactions that involve  interests that differ from those of the Borrowers and their Affiliates, and no Lender has any  obligation to disclose any of such interests to any Borrower or its Affiliates.  To the fullest extent  permitted by law, each Borrower hereby waives and releases any claims that it may have against  each of the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in  connection with any aspect of any transaction contemplated hereby.  16.18 Co-Documentation Agents, Syndication Agent, etc.  Neither any Documentation  Agent or the Syndication Agent shall have any right, power, obligation, liability, responsibility or  duty under this Agreement other than those applicable to all Lenders as such.  Without limiting  the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with  any Lender.  Each Lender hereby makes the same acknowledgments with respect to such Persons  as it makes with respect to the Agent in Section 16.11.  16.19 Certain ERISA Matters.   (a)    Each Lender (x) represents and warrants, as of the date such Person  became a Lender party hereto, to, and (y) covenants, from the date such Person became a  Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit  of, the Agent and the Arranger and their respective Affiliates, and not, for the avoidance of  doubt, to or for the benefit of the Company or any other Loan Party, that at least one of the  following is and will be true: (i) such Lender is not using “plan assets” within the meaning of  29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA, of any Benefit Plans with  respect to such Lender’s entrance into, participation in, administration of and performance of  the Loans, the Letters of Credit or the Commitments, (ii) the transaction exemption set forth  in one or more prohibited transaction exemptions issued by the Department of Labor (each, a  “PTE”), such as PTE 84-14 (a class exemption for certain transactions determined by  

 

   157  independent qualified professional asset managers), PTE 95-60 (a class exemption for certain  transactions involving insurance company general accounts), PTE 90-1 (a class exemption for  certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a  class exemption for certain transactions involving bank collective investment funds) or PTE  96-23 (a class exemption for certain transactions determined by in-house asset managers), is  applicable with respect to such Lender’s entrance into, participation in, administration of and  performance of the Loans, the Letters of Credit, the Commitments and this Agreement, (iii)  (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager”  (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager  made the investment decision on behalf of such Lender to enter into, participate in, administer  and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the  entrance into, participation in, administration of and performance of the Loans, the Letters of  Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b)  through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the  requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such  Lender’s entrance into, participation in, administration of and performance of the Loans, the  Letters of Credit, the Commitments and this Agreement, or (iv) such other representation,  warranty and covenant as may be agreed in writing between the Agent, in its sole discretion,  and such Lender.    (b) In addition, unless either (1) sub-clause (i) in the immediately preceding  clause (a) is true with respect to a Lender or (2) such Lender has not provided another  representation, warranty and covenant as provided in sub-clause (iv) in the immediately  preceding clause (a), such Lender further (x) represents and warrants, as of the date such  Person became a Lender party hereto, to, and (y) covenants, from the date such Person became  a Lender party hereto to the date such Person ceases being a Lender party hereto, for the  benefit of, the Agent and the Arranger and their respective Affiliates, and not, for the  avoidance of doubt, to or for the benefit of the Company or any other Loan Party, that the  Agent is not a fiduciary with respect to the assets of such Lender involved in such Lender’s  entrance into, participation in, administration of and performance of the Loans, the Letters of  Credit, the Commitments and this Agreement (including in connection with the reservation or  exercise of any rights by the Agent under this Agreement, any Loan Document or any  documents related hereto or thereto).  ARTICLE 17   MISCELLANEOUS  17.1 Expenses; Indemnification.  Each Borrower hereby agrees:  (a) to pay or reimburse Agent on demand for all reasonable costs and  expenses (including reasonable Attorney Costs of the Agent’s counsel) incurred in connection with  the syndication, negotiation, due diligence, preparation, execution, delivery, distribution  (including, without limitation, via DebtX and any other internet service selected by the Agent),  review, administration and enforcement of the Loan Documents and the transactions contemplated  thereby, and any amendment, supplement or modification to, the Loan Documents and any other  documents prepared in connection therewith, whether or not the transactions contemplated hereby  are consummated, including without limitation all recording costs, filing fees, consultants’ fees,  

 

   158  travel expenses, costs of appraisals and reviews, environmental audits and reviews (including costs  of internal review of a third party report), collateral audits (subject to Section 12.4), title insurance,  lien searches, and costs of perfecting, continuing, monitoring, preserving and protecting security  interests in the Collateral;  (b) to pay or reimburse Agent and each Lender for all their  reasonable costs and expenses incurred in connection with, and to pay, indemnify, and hold  the Indemnified Persons harmless from and against any and all claims, liabilities, obligations,  losses, damages, penalties, actions, judgments, suits, costs, expenses, disbursements, and  Attorney Costs of every kind and nature arising out of or in connection with, the collection,  enforcement or protection of any rights and remedies under the Loan Documents and any  other documents prepared in connection therewith (including without limitation in  connection with negotiations or workout or restructuring affecting the Loan Documents or  Obligations and any bankruptcy, or similar proceeding or other legal proceeding involving  any Loan Party);  (c) to pay, indemnify, and to hold the Indemnified Persons harmless  from, any and all recording and filing fees and any and all liabilities with respect to, or  resulting from any failure or delay in paying, stamp, excise and other taxes (other than  income and gross revenue taxes), if any, which may be payable or determined to be payable  in connection with the execution and delivery of, or consummation of any of the transactions  contemplated by, or any amendment, supplement or modification of, or any waiver or  consent under or in respect of, any Loan Document and any such other documents including  reasonable Attorney Costs of counsel to the Agent and each Lender in connection with the  foregoing and in connection with advising Agent with respect to its rights and responsibility  under any Loan Document; and  (d) to pay, indemnify, and hold the Indemnified Persons harmless  from and against any and all other liabilities, obligations, losses, damages, penalties, actions,  judgments, suits, costs, expenses or disbursements of any kind or nature (including  reasonable Attorney Costs) which may be incurred by or asserted against any Indemnified  Person arising out of or in connection with the Loan Documents, the transactions  contemplated by the Loan Documents, or the use of the proceeds of the Loans (including,  without limitation, in connection with any investigation, litigation, or proceeding or  preparation of defense in connection therewith), whether or not any of the indemnified  Persons is a party thereto, or by reason of or in connection with the execution and delivery  or transfer of, or payment or failure to make payments under, Letters of Credit (it being  agreed that nothing in this Section 17.1 is intended to limit the Revolving Loan Borrower’s  obligations pursuant to Section 5.9).  Notwithstanding the foregoing, a Borrower shall have no obligation to indemnify any  Indemnified Person with respect to any costs of the matters described in subsections (a), (b),  (c) and (d) of this Section 17.1 which arise from the gross negligence or willful misconduct of  such Indemnified Person.  The agreements in this Section 17.1 shall survive repayment of  the Obligations and Permitted Swap Obligations and termination of this Agreement.  Without limiting the provisions of Section 7.4, this Section 17.1(d) shall not apply with  

 

   159  respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising  from any non-Tax claim.  17.2 Successors and Assigns.  The terms and provisions of the Loan Documents shall  be binding upon and inure to the benefit of the Borrowers and the Lenders and their respective  successors and assigns permitted hereby, except that (a) no Borrower shall have the right to assign  its rights or obligations under the Loan Documents without the prior written consent of each  Lender, (b) any assignment by any Lender must be made in compliance with Section 17.4, and  (c) any transfer by participation must be made in compliance with the terms of this Agreement.   Any attempted assignment or transfer by any party not made in compliance with this Section shall  be null and void, unless such attempted assignment or transfer is treated as a participation in  accordance with the terms of this Agreement.  The parties to this Agreement acknowledge that  clause (b) of this Section relates only to absolute assignments and this Section 17.2 does not  prohibit assignments creating security interests, including, without limitation, any pledge or  assignment by any Lender of all or any portion of its rights under this Agreement to a Federal  Reserve Bank; provided, however, that no such pledge or assignment creating a security interest  shall release the transferor Lender from its obligations hereunder unless and until the parties  thereto have complied with the provisions of Section 17.4.  The Agent may treat the Person which  made any Loan as the owner thereof for all purposes hereof unless and until such Person complies  with Section 17.4; provided, however, that the Agent may in its discretion (but shall not be  required to) follow instructions from the Person which made any Loan to direct payments relating  to such Loan to another Person.  Any assignee of the rights to any Loan agrees by acceptance of  such assignment to be bound by all the terms and provisions of the Loan Documents.  Any request,  authority or consent of any Person, who at the time of making such request or giving such  authority or consent is the owner of the rights to any Loan, shall be conclusive and binding on  any subsequent holder or assignee of the rights to such Loan.  17.3 Participations.  17.3.1 Permitted Participants; Effect.  Any Lender may, in accordance with  Applicable Law, at any time sell to one or more banks or other entities (each, a “Participant”)  participating interests in any Outstanding Credit Exposure owing to such Lender, the  Commitments of such Lender or any other interest of such Lender under the Loan Documents.  In  the event of any such sale by a Lender of participating interests to a Participant, such Lender’s  obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely  responsible to the other parties hereto for the performance of such obligations, such Lender shall  remain the owner of its Outstanding Credit Exposure for all purposes under the Loan Documents,  all amounts payable by Borrowers under this Agreement shall be determined as if such Lender had  not sold such participating interests, and Borrowers and Agent shall continue to deal solely and  directly with such Lender in connection with such Lender’s rights and obligations under the Loan  Documents.  17.3.2 Voting Rights.  Each Lender shall retain the sole right to approve, without  the consent of any Participant, any amendment, modification or waiver of any provision of the  Loan Documents; provided, however, that any agreement pursuant to which any Lender sells a  participating interest may require the Lender to obtain Participant’s consent to any amendment,  modification or waiver which would require the consent of all Lenders pursuant to Section 17.9.  

 

   160  17.3.3 Benefit of Certain Provisions.  Each Borrower agrees that each Participant  shall be deemed to have the right of setoff provided in Section 17.8 in respect of its participating  interest in amounts owing under the Loan Documents to the same extent as if the amount of its  participating interest were owing directly to it as a Lender under the Loan Documents, provided  that each Lender shall retain the right of setoff provided in Section 17.8 with respect to the amount  of participating interests sold to each Participant.  The Lenders agree to share with each  Participant, and each Participant, by exercising the right of setoff provided in Section 17.8, agrees  to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such  amounts to be shared in accordance with Section 17.7 as if each Participant were a Lender.  Each  Borrower further agrees that each Participant shall be entitled to the benefits of Sections 7.1, 7.2,  7.4, and 17.1 to the same extent as if it were a Lender and had acquired its interest by assignment  pursuant to Section 17.4, provided that (a) a Participant shall not be entitled to receive any greater  payment under Sections 7.1 or 7.2, or 7.4 than the Lender who sold the participating interest to  such Participant would have received had it retained such interest for its own account, unless the  sale of such interest to such Participant is made with the prior written consent of the Company,  and (b) a Participant shall not be entitled to receive any greater payment under Section 7.4 than  the Lender who sold the participating interest to such Participant would have received had it  retained such interest for its own account (i) except to the extent such entitlement to receive a  greater payment results from a change in treaty, law or regulation (or any change in the  interpretation or administration thereof by any Governmental Authority) that occurs after the  Participant acquired the applicable participation and (ii), in the case of any Participant that would  be a Non-U.S. Lender if it were a Lender, such Participant agrees to comply with the provisions  of Section 7.4 to the same extent as if it were a Lender (it being understood that the documentation  required under Section 7.4.6 shall be delivered to the participating Lender).  Each Lender that  sells a participation shall, acting solely for this purpose as an 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 any Outstanding Credit Exposure, any  Commitment or any 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 of any Participant or any information relating to a Participant’s  interest in any Outstanding Credit Exposure, any Commitment or any other obligations under the  Loan Documents) to any Person except to the extent that such disclosure is necessary to establish  that such Outstanding Credit Exposure, any Commitment or any other obligations under the Loan  Documents 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 Agent (in its capacity as the Agent) shall have no  responsibility for maintaining a Participant Register.  17.4 Assignments.  17.4.1 Permitted Assignments.  Any Lender may at any time sell to one or more  Eligible Assignees or other financial institutions reasonably acceptable to the Agent (each an  “Assignee”) all or a ratable part of its Loans and participations in Swing Line Loans and Letters  of Credit and other interests under this Agreement and the Loan Documents; provided, however,  that (a) unless each of the Company and the Agent otherwise consents, each assignment shall be  

 

   161  in a minimum amount of $5,000,000 or if less, the entire Aggregate Lender Commitment and  Outstanding Credit Exposure of such Lender; (b) after giving effect to any Assignment, the  Aggregate Lender Commitment of the assigning Lender shall be at least $5,000,000.00 or shall be  $0; and (c) each assignment shall be of a constant and not a varying, percentage of all of the  interests of such Lender in its Outstanding Credit Exposure and all Commitments, Loans and  Letters of Credit.  Any assignment shall be pursuant to an Assignment Agreement in such other  form reasonably acceptable to the Agent as may be agreed to by the parties thereto.  17.4.2 Consents.  The consent of the Company shall be required prior to an  assignment becoming effective unless the Assignee is a Lender, an Affiliate of a Lender or an  Approved Fund, provided that the consent of the Company shall not be required if an Event of  Default has occurred and is continuing; provided further that the Company shall be deemed to  have consented to any such assignment unless it shall object thereto by written notice to the Agent  within five (5) Business Days after having received written notice thereof.  The consent of the  Agent shall be required prior to an assignment becoming effective unless the Assignee is a Lender,  an Affiliate of a Lender or an Approved Fund.  The consent of each of the LC Issuer and the Swing  Line Lender shall be required prior to an assignment of a Commitment becoming effective unless  the Assignee is a Lender with a Commitment.  Any consent required under this Section 17.4.2 shall  not be unreasonably withheld or delayed.  17.4.3 Effect; Effective Date.  Upon (a) delivery to the Agent of an Assignment  Agreement, together with any required consents, and (b) payment of a $3,500 fee to the Agent for  processing such assignment (unless such fee is waived by the Agent), such assignment shall  become effective on the effective date specified in such assignment.  The assignment shall contain  a representation by the Assignee to the effect that none of the consideration used to make the  purchase of the Commitments and Outstanding Credit Exposure under the applicable Assignment  Agreement constitutes “plan assets” as defined under ERISA and that the rights and interests of  the Assignee in and under the Loan Documents will not be “plan assets” under ERISA.  On and  after the effective date of such assignment, the Assignee shall for all purposes be a Lender party  to this Agreement and any other Loan Document executed by or on behalf of the Lenders and shall  have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if  it were an original party thereto, and the transferor Lender shall be released with respect to the  Commitments and Outstanding Credit Exposure assigned to the Assignee without any further  consent or action by any Borrower, the Lenders or the Agent.  In the case of an assignment covering  all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease  to be a Lender hereunder but shall continue to be entitled to the benefits of, and subject to, those  provisions of this Agreement and the other Loan Documents which survive payment of the  Obligations and termination of the applicable agreement.  Any assignment or transfer by a Lender  of rights or obligations under this Agreement that does not comply with this Section 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 Section 17.3.    17.4.4 Tax Treatment.  If any interest in any Loan Document is transferred to any  Assignee or Participant which is not incorporated under the laws of the United States or any State  thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of  such transfer, to comply with the provisions of Section 7.4.  

 

   162  17.5 Register.  The Agent, acting solely for this purpose as an agent of the Borrowers,  shall maintain at one of its offices in the United States of America, a copy of each Assignment  delivered to it and a register for the recordation of the names and addresses of the Lenders, and the  Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender,  and participations of each Lender in Letters of Credit, pursuant to the terms hereof from time to  time (the “Register”).  The entries in the Register shall be conclusive in the absence of manifest  error, and the Borrower, the Agent and the Lenders may 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, notwithstanding notice to the contrary.  The Register shall be available for inspection  by any Borrower or Lender at any reasonable time and from time to time upon reasonable prior  notice.  17.6 Dissemination of Information.  Each Borrower, for itself and its Subsidiaries,  authorizes each Lender to disclose to any Participant or Assignee and prospective Participant or  Assignee any and all financial or other information in such Lender’s possession concerning any  Loan Party, subject to the confidentiality requirements of Section 17.26 of this Agreement.  17.7 Ratable Payments.  If any Lender, whether by setoff or otherwise, has payment  made to it upon its Outstanding Credit Exposure, Outstanding New Vehicle Floorplan Exposure,  Outstanding Used Vehicle Floorplan Exposure, Outstanding Service Loaner Vehicle Floorplan  Exposure, and/or Outstanding Revolving Loan Exposure (other than payments received pursuant  to Sections 7.1, 7.2 or 7.4 or payments specifically payable only to such Lender) in a greater  proportion than that received by any other Lender, such Lender agrees, promptly upon demand, to  purchase a portion of the Aggregate Outstanding Credit Exposure held by the other Lenders so  that after such purchase each Lender will hold its Pro Rata Share of the Aggregate Outstanding  Credit Exposure, Outstanding New Vehicle Floorplan Exposure, Outstanding Used Vehicle  Floorplan Exposure, Outstanding Service Loaner Vehicle Floorplan Exposure and/or Outstanding  Revolving Loan Exposure.  If any Lender, whether in connection with setoff or amounts which  might be subject to setoff or otherwise, receives collateral or other protection for its Obligations  or such amounts which may be subject to setoff, such Lender agrees, promptly upon demand, to  take such action necessary such that all Lenders share in the benefits of such collateral or other  protection ratably in proportion to their respective Pro Rata Shares.  In case any such payment is  disturbed by legal process, or otherwise, appropriate further adjustments shall be made.  17.8 Setoff.  Each Borrower hereby grants each Lender a security interest in all deposits,  credits and deposit accounts (including all account balances, whether provisional or final and  whether or not collected or available) of such Borrower with such Lender or any Affiliate of such  Lender (the “Deposits”).  In addition to, and without limitation of, any rights of the Lenders under  Applicable Law, if any Borrower is not Solvent, or if any Event of Default occurs, each Borrower  authorizes each Lender to offset and apply all such Deposits toward the payment of the Obligations  owing to such Lender, whether or not the Obligations, or any part thereof, shall then be due and  regardless of the existence or adequacy of any collateral, guaranty or any other security, right or  remedy available to such Lender or the Lenders; provided, that in the event that any Defaulting  Lender shall exercise such right of setoff, (a) all amounts so set off shall be paid over immediately  to the Agent for further application in accordance with the provisions of Section 6.14 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 Agent, the LC Issuer, and the Lenders, and (b) the Lender shall  

 

   163  provide promptly to the Agent a statement describing in reasonable detail the Obligations owing  to such Defaulting Lender as to which it exercised such right of setoff.  The aforesaid rights may  be exercised by the Agent or such Lender against any Borrower or against any trustee in  bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver or execution,  judgment or attachment creditor of any Borrower or against anyone else claiming through or  against any Borrower or such trustee in bankruptcy, debtor in possession, assignee for the benefit  of creditors, receiver, or execution, judgment or attachment creditor, notwithstanding the fact that  such right of setoff shall not have been exercised by the Agent or such Lender prior to the  occurrence of an Event of Default.  17.9 Amendments and Waivers.  17.9.1 Subject to the provisions of this Section 17.9, the Required Lenders (or the  Agent with the consent in writing of the Required Lenders) and the Borrowers may enter into  agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan  Documents or changing in any manner the rights of the Lenders or Borrowers hereunder or waiving  any Event of Default hereunder; provided, however, that no such supplemental agreement shall:  (a) without the consent of all Lenders, extend the final maturity of any  Loan, or extend the expiry date of any Letter of Credit to a date after the Termination Date or  postpone any regularly scheduled payment of principal of any Loan or forgive all or any portion  of the principal amount thereof or any Reimbursement Obligation, or reduce the rate (except as  provided in Section 7.3) or extend the time of payment of interest or fees thereon or on  Reimbursement Obligations or increase the amount of any Commitment of any Lender hereunder;  (b) without the consent of all of the Lenders, change the definition of  Required Lenders or the Pro Rata Shares (or payment mechanics provided in Section 6.9) required  to take any action hereunder;  (c) without the consent of all of the Lenders, extend the Termination  Date, or permit any Borrower to assign its rights under this Agreement;  (d) without the consent of all of the Lenders, amend this Section 17.9,  or any provision herein which requires consent or other action by all Lenders;   (e) without the consent of all of the Lenders, except as permitted by this  Agreement, release any Guarantor or, except as provided herein or in the Collateral Documents,  release all or a substantial part of the Collateral;   (f) without the consent of all of the Lenders, except pursuant to an  Intercreditor Agreement or as otherwise permitted by this Agreement, (i) subordinate, or have the  effect of subordinating, the Obligations hereunder to any other Indebtedness or other obligation or  (ii) subordinate, or have the effect of subordinating, the Liens securing the Obligations to Liens  securing any other Indebtedness or other obligation; or   (g) without the consent of all of the Lenders, amend Section 14.3 or  Section 17.7.   

 

   164  No amendment of any provision of this Agreement relating to the Agent shall be effective without  the written consent of the Agent, and no amendment of any provision relating to the LC Issuer  shall be effective without the written consent of the LC Issuer.  No amendment to any provision  of this Agreement relating to the Swing Line Lender or any Swing Line Loans shall be effective  without the written consent of the Swing Line Lender.  17.9.2 Notwithstanding the foregoing, or the provisions of this Section 17.9, any  fee or other amount payable by any Borrower or Borrowers solely to the Agent, the Swing Line  Lender or the LC Issuer, may be changed with the consent of only such Borrower or Borrowers  and the Agent and, if applicable, the affected Swing Line Lender or LC Issuer, provided that no  Lender will be required to pay any such fee to which it has not agreed.  17.10 Waiver; Cumulative Remedies.  No failure or delay on the part of the Agent or  any Lender in exercising any right, power, remedy or privilege hereunder or under any of the other  Loan Documents and no course of dealing between any Loan Party and the Agent or any Lender  will operate as a waiver of such right, power, remedy or privilege, nor will any single or partial  exercise of any right, power or privilege hereunder preclude other or further exercise thereof or  the exercise of any other right, power, remedy or privilege.  Waiver of any Default shall not be a  waiver of any other subsequent or prior Default.  No waiver of any Default (whether or not Agent  or any Lender knows or should have known of such Default) shall be deemed to have occurred  unless Agent (to the extent authorized under Section 14.2.4 or 17.9.2) or the Required Lenders has  expressly agreed in writing specifying such waiver.  No amendment, modification or waiver of, or  consent with respect to, any provision of this Agreement shall in any event be effective unless the  same shall be in writing and signed and delivered by the Agent, the Required Lenders, or all of the  Lenders, as otherwise set forth in this Agreement.  Any waiver of any provision of this Agreement,  and any consent to any departure by any Loan Party from the terms of any provision of this  Agreement, shall be effective only in the specific instance and for the specific purpose for which  given.  No notice to or demand on any Loan Party not required hereunder shall in any event entitle  any Loan Party to any other or further notice or demand in similar or other circumstances or  constitute a waiver of the right of the Agent or any Lender to any other or further action in any  circumstances without notice or demand.  The rights and remedies herein specified are cumulative  and are not exclusive of any rights or remedies which the Agent or any Lender would otherwise  have at law or in equity or otherwise by agreement.  17.11 Notices.  17.11.1 Notices Generally.  Except in the case of notices and other  communications expressly permitted to be given by telephone (and except as provided in Section  17.11.2 below), all notices and other communications provided for herein shall be in writing and  shall be delivered by hand or overnight courier service, mailed by certified or registered mail or  sent by facsimile as follows:  (a) if to any Borrower, at its address or facsimile number set forth on the  signature page hereof;  (b) if to the Agent, at its address or facsimile number set forth on the signature  page hereof;  

 

   165  (c) if to LC Issuer, at its address or facsimile number set forth on the signature  page hereof;  (d) if to a Lender, to it at its address or facsimile number set forth in its  Administrative Questionnaire, a copy of which Administrative Questionnaire shall be provided to  the Company.  Notices sent by hand or overnight courier service, or mailed by certified or  registered mail, shall be deemed to have been given when received; notices sent by facsimile shall  be deemed to have been given when sent (except that, if not given during normal business hours  for the recipient, shall be deemed to have been given at the opening of business on the next  Business Day for the recipient).  Notices delivered through electronic communications to the  extent provided in Section 17.11.2 below, shall be effective as provided in said Section 17.11.2.   Notwithstanding any contrary provision hereof, any request for a Credit Extension shall not be  effective until received by the Agent.  17.11.2 Electronic Communications.  (a) Notices and other communications to the Lenders and the LC Issuer  hereunder may be delivered or furnished by electronic communication (including e-mail and  internet or intranet websites) pursuant to procedures approved by the Agent or as otherwise  determined by the Agent, provided that the foregoing shall not apply to notices to any Lender or  the LC Issuer if such Lender or the LC Issuer, as applicable, has notified the Agent that it is  incapable of receiving notices by electronic communication.  The Agent or any Borrower may, in  its respective discretion, agree to accept notices and other communications to it hereunder by  electronic communications pursuant to procedures approved by it or as it otherwise determines,  provided that such determination or approval may be limited to particular notices or  communications.  (b) Unless the Agent otherwise prescribes, (i) notices and other  communications sent to an e-mail address shall be deemed received upon the sender’s receipt of  an acknowledgement from the intended recipient (such as by the “return receipt requested”  function, as available, return e-mail or other written acknowledgement), provided that if such  notice or other communication is not given during the normal business hours of the recipient, such  notice or communication shall be deemed to have been given at the opening of business on the  next Business Day for the recipient, and (ii) notices or communications posted to an Internet or  intranet website shall be deemed received upon the deemed receipt by the intended recipient at its  e-mail address as described in the foregoing clause (a) of notification that such notice or  communication is available and identifying the website address therefor.  17.11.3 Change of Address.  Any party hereto may change its address or  facsimile number for notices and other communications hereunder by notice to the other parties  hereto.  17.12 Integration; Conflicting Terms.  This Agreement (including the exhibits and  schedules) together with the other Loan Documents embody the entire agreement of the parties on  the subject matter hereof and except as otherwise specifically set forth in this Agreement or any  

 

   166  other Loan Document, supersedes and replaces all prior agreements, oral and written, on such  subject matter.  If any term of any of the other Loan Documents expressly conflicts with the  provisions of this Agreement, the provisions of this Agreement shall control; provided, however,  that the inclusion of additional, greater or supplemental rights and remedies of the Agent and  Lenders or the inclusion of additional or greater obligations and responsibilities of the Loan  Parties, in any of the other Loan Documents shall not be deemed a conflict with this Agreement.  17.13 Governing Law.  Except to the extent that the Agent or any Lender has greater  rights and remedies under federal law or to the extent otherwise specifically stated in any Loan  Document, this Agreement and the other Loan Documents shall be governed by and construed and  enforced in accordance with the laws of the State of Oregon without regard to conflicts of law  principles but giving effect to federal laws applicable to national banks, except that matters  concerning the validity and perfection of security interests covered thereby shall be governed by  the conflicts of law provisions of the applicable Uniform Commercial Code.  17.14 Consent To Jurisdiction.  EACH BORROWER HEREBY IRREVOCABLY  SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES  FEDERAL OR STATE COURT LOCATED IN OR WITH JURISDICTION OVER  PORTLAND, OREGON IN ANY ACTION OR PROCEEDING ARISING OUT OF OR  RELATING TO THE OBLIGATIONS AND THE LOAN DOCUMENTS AND EACH  BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT  OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY  SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR  HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR  PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN  INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE  AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST  ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.  ANY  JUDICIAL PROCEEDING BY ANY BORROWER AGAINST THE AGENT, THE LC  ISSUER OR ANY LENDER OR ANY AFFILIATE OF THE AGENT, THE LC ISSUER  OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN  ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN  DOCUMENT SHALL BE BROUGHT ONLY IN A COURT LOCATED IN OR WITH  JURISDICTION OVER PORTLAND, OREGON.  17.15 Documents Satisfactory to the Agent and Required Lenders.  All information,  documents and instruments required to be executed or delivered to the Agent shall be in form and  substance reasonably satisfactory to the Agent and the Required Lenders.  17.16 Exhibits.  All exhibits and schedules referred to herein are attached hereto and  hereby incorporated by reference as if fully set forth herein.  17.17 Headings.  Section headings in the Loan Documents are for convenience of  reference only, and shall not govern the interpretation of any of the provisions of the Loan  Documents.  

 

   167  17.18 Nonliability of Lenders.  The relationship between the Borrowers on the one hand  and the Lenders, the LC Issuer and the Agent on the other hand shall be solely that of borrower  and lender.  Neither the Agent, the Arranger, the LC Issuer nor any Lender shall have any fiduciary  responsibilities to any Borrower.  Neither the Agent, the Arranger, the LC Issuer nor any Lender  undertakes any responsibility to any Borrower to review or inform any Borrower of any matter in  connection with any phase of any Borrower’s business or operations.  Each Borrower agrees that  neither the Agent, the Arranger, the LC Issuer nor any Lender shall have liability to any Borrower  (whether sounding in tort, contract or otherwise) for losses suffered by any Borrower in  connection with, arising out of, or in any way related to, the transactions contemplated and the  relationship established by the Loan Documents, or any act, omission or event occurring in  connection therewith, unless it is determined in a final non-appealable judgment by a court of  competent jurisdiction that such losses resulted from the gross negligence or willful misconduct  of the party from which recovery is sought.  Neither the Agent, the Arranger, the LC Issuer nor  any Lender shall have any liability with respect to, and each Borrower hereby waives, releases  and agrees not to sue for, any special, indirect, consequential or punitive damages suffered by any  Borrower in connection with, arising out of, or in any way related to the Loan Documents or the  transactions contemplated thereby.  It is agreed that the Arranger shall, in its capacity as such,  have no duties or responsibilities under the Agreement or any other Loan Document.  Each Lender  acknowledges that it has not relied and will not rely on the Arranger in deciding to enter into the  Agreement or any other Loan Document or in taking or not taking any action.  17.19 Survival of Representations.  All representations and warranties of any Borrower  contained in this Agreement shall survive the making of the Credit Extensions herein  contemplated.  17.20 Governmental Regulation.  Anything contained in this Agreement to the contrary  notwithstanding, neither the LC Issuer nor any Lender shall be obligated to extend credit to the  Borrowers in violation of any limitation or prohibition provided by any Applicable Law.  17.21 Counterparts.  This Agreement may be executed in counterparts (and by different  parties hereto in different counterparts), each of which shall constitute an original, but all of which  when taken together shall constitute a single contract. Delivery of an executed counterpart of a  signature page of this Agreement by telecopy shall be effective as delivery of a manually executed  counterpart of this Agreement.  17.22 Severability.  Whenever possible, each provision of this Agreement and each of  the other Loan Documents shall be interpreted in such a manner as to be valid and effective under  Applicable Law.  Any provision in any Loan Document that is held to be inoperative,  unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative,  unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the  operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the  provisions of all Loan Documents are declared to be severable.  17.23 Construction.  This Agreement and the other Loan Documents are the result of  negotiations among, and have been reviewed by, each Loan Party, each Lender, the Agent and  their respective counsel (or, if any party has not had the Loan Documents reviewed by its counsel,  such party has had the opportunity to do so and has voluntarily chosen not to do so).  Accordingly,  

 

   168  the Loan Documents shall be deemed to be the product of all parties hereto, and no ambiguity shall  be construed in favor of or against any Loan Party, the Agent, or any Lender.  17.24 USA Patriot Act Notification.  The following notification is provided to each  Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318:  Each Lender that is subject to the requirements of the PATRIOT Act hereby notifies each Borrower  and each other Loan Party that pursuant to the requirements of the PATRIOT Act, it is required to  obtain, verify and record information that identifies such Loan Party, which information includes  the name and address of such Loan Party and other information that will allow such Lender to  identify such Loan Party in accordance with the PATRIOT Act.  17.25 Nonreliance.  Each Lender hereby represents that it is not relying on or looking to  any margin stock (as defined in Regulation U) of the Board for the repayment of the Credit  Extensions provided for herein.  17.26 Confidentiality.  The Agent and each Lender agree to take reasonable precautions,  in accordance with customary procedures, to maintain the confidentiality of all non-public  information provided to it by any Loan Party under this Agreement or any other Loan Document,  which is identified as confidential at the time such Person provides the information, and agrees  that it shall not use any such information other than in connection with or in enforcement of this  Agreement and the other Loan Documents or in connection with other business now or hereafter  existing or contemplated with any Loan Party, except to the extent such information (a) was or  becomes generally available to the public other than as a result of disclosure by the Agent or  Lender, or (b) was or becomes available on a non-confidential basis from a source other than a  Loan Party, provided that such source is not bound by a confidentiality agreement with a Loan  Party known to the Agent or such Lender; provided, however, that the Agent or any Lender may  disclose such confidential information (p) at the request or pursuant to any requirement of any  Governmental Body or in connection with an examination of the Agent or such Lender by any  such authority; (q) pursuant to subpoena or other court process; (r) when requested or required to  do so in accordance with the provisions of any Applicable Law; (s) to the extent reasonably  required in connection with any litigation or proceeding to which the Agent, any Lender or their  respective affiliates may be party; (t) to the extent reasonably required in connection with the  exercise of any remedy hereunder or under any other Loan Document; (u) to the Agent’s or such  Lender’s and its affiliates, directors, officers, employees and agents, including accountants,  attorneys and other professional advisors who are subject to similar limitations; (v) to any  Participant or Assignee, actual or potential, provided that such Person agrees in writing to keep  such information confidential to the same extent required of the Lenders hereunder; (w) to its direct  or indirect contractual counterparties in swap agreements or to legal counsel, accountants and other  professional advisors to such counterparties, (x) to rating agencies if requested or required by such  agencies in connection with a rating relating to the Obligations hereunder; (y) as to the Agent or  any Lender or its affiliates, as expressly permitted under the terms of any other document or  agreement regarding confidentiality to which any Loan Party is party or is deemed party with the  Agent or such Lender or affiliate; and (z) to its affiliates; provided, that with respect to disclosures  under clauses (q) and (r), such Lender shall use commercially reasonable efforts to notify the  Company (unless such notification is prohibited by any Applicable Law) of the proposed  

 

   169  disclosure before such disclosure is made to reasonably afford the Company the opportunity to  seek to prevent such disclosure.  17.27 Ford Letter Agreement.  Each Lender hereby agrees to the terms and conditions  set forth in the letter agreement regarding Clarification of Supplemental Terms and Conditions  Agreement dated April 5, 2012 and agreed to on April 10, 2012 between Ford Motor Company  and the Company, a copy of which has been provided to each Lender.  17.28 Waiver of Jury Trial.  TO THE FULLEST EXTENT PERMITTED BY  APPLICABLE LAW, EACH BORROWER, THE AGENT, THE LC ISSUER AND EACH  LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING  INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING  IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED  TO, OR CONNECTED WITH THE OBLIGATIONS AND THE LOAN DOCUMENTS OR  THE RELATIONSHIP ESTABLISHED THEREUNDER.  EACH OF THEM  REPRESENTS TO THE OTHER PARTIES THAT THIS WAIVER IS KNOWINGLY,  WILLINGLY AND VOLUNTARILY GIVEN.  17.29 Disclosure.  Under Oregon law, most agreements promises and commitments  made by any Lender concerning loans and other credit extensions which are not for personal,  family or household purposes or secured solely by the borrower's residence must be in  writing, express consideration and be signed by the Lender to be enforceable.  17.30 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 which may be payable to it by any  party hereto that is an EEA Financial Institution; and  (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 entity, 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  

 

   170  (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.  17.31 Amendment and Restatement. This Agreement constitutes an amendment and  restatement of the Existing Loan Agreement effective from and after the Closing Date.  The  execution and delivery of this Agreement shall not constitute a novation of any indebtedness or  other obligations owing to the existing Lenders or Agent under the Existing Loan Agreement.  On  the Closing Date, the credit facilities described in the Existing Loan Agreement shall be amended,  supplemented, modified and restated in their entirety as described herein, and all loans and other  obligations of the Company and the other Borrowers outstanding as of such date under the Existing  Loan Agreement shall be deemed to be loans and obligations outstanding under the corresponding  facilities described herein, without any further action by any Person, except that the Agent shall  make such transfers of funds as are necessary in order that the outstanding balance of such loans,  together with any extensions of credit made on the Closing Date, reflect the Commitments of the  Lenders hereunder.  17.32 Acknowledgement Regarding any Supported QFCs.  To the extent that the Loan  Documents provide support, through a guarantee or otherwise, for any Swap or any other  agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC,  a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution  power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and  Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the  regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such  Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding  that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws  of the State of New York and/or of the United States or any other state of the United States):  (a) In the event a Covered Entity that is party to a Supported QFC (each,  a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the  transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and  obligation in or under such Supported QFC and such QFC Credit Support, and any rights in  property securing such Supported QFC or such QFC Credit Support) from such Covered Party will  be effective to the same extent as the transfer would be effective under the U.S. Special Resolution  Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and  rights in property) were governed by the laws of the United States or a state of the United States.  In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a  proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents  that might otherwise apply to such Supported QFC or any QFC Credit Support that may be  exercised against such Covered Party are permitted to be exercised to no greater extent than such  Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC  and the Loan Documents were governed by the laws of the United States or a state of the United  States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of  the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered  Party with respect to a Supported QFC or any QFC Credit Support.  

 

   171  (b) As used in this Section 17.31, the following terms have the following  meanings:   “BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and  interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.  “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined  in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is  defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that  term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).  “Default Right” has the meaning assigned to that term in, and shall be interpreted in  accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.  “QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be  interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).  [Signature pages follow]    

 

    BORROWERS:    LITHIA MOTORS, INC.      By: /s/ Tina Miller      Name: Tina Miller  Title: Senior Vice President and Chief Financial Officer    ANN ARBOR-B, LLC  ANN ARBOR-CC, LLC  ANN ARBOR-CJD, LLC  ANN ARBOR-M, LLC  AUSTIN-H, INC.  AUSTIN-KI, INC.  AVONDALE-N, INC.  BAIERL AUTOMOTIVE CORPORATION  BAIERL CHEVROLET, INC.  BEND-CDJR, LLC  BEND-N, LLC  CADILLAC OF PORTLAND LLOYD CENTER, LLC  CAMP AUTOMOTIVE, INC.  CLEAR LAKE-I, INC.  CLINTON-C, LLC  CRANBERRY AUTOMOTIVE, INC.  DALLAS-H, INC.  DALLAS-K, INC.  DALLAS-T, INC.  DARON MOTORS LLC  DCH (OXNARD) INC.  DCH BLOOMFIELD LLC  DCH CA, LLC  DCH CALABASAS-A, LLC  DCH CALIFORNIA MOTORS INC.  DCH DEL NORTE, INC.  DCH ESSEX INC.  DCH FREEHOLD LLC  DCH KOREAN IMPORTS LLC  DCH MAMARONECK LLC  DCH MISSION VALLEY LLC  DCH MONMOUTH LLC  DCH MONTCLAIR LLC  DCH MOTORS LLC  DCH NANUET LLC  DCH NY MOTORS LLC  

 

    DCH OXNARD 1521 IMPORTS INC.  DCH RIVERSIDE-S, INC.  DCH TEMECULA IMPORTS LLC  DCH TEMECULA MOTORS LLC  DCH TORRANCE IMPORTS INC.  FARMINGTON HILLS IMPORTS, LLC  FARMINGTON HILLS-CJD, LLC  FARMINGTON HILLS-H, LLC  FARMINGTON HILLS-N, LLC  FARMINGTON HILLS-T, LLC  FERNDALE-BG, LLC  FREEHOLD NISSAN LLC  FRISCO-K, INC.  GARDEN CITY-CJD, LLC  HOUSTON-A, INC.  HOUSTON-H, INC.  HOUSTON-I, INC.  HUTCHINS EUGENE NISSAN, INC.  HUTCHINS IMPORTED MOTORS, INC.  KATY-H, INC.  KNOXVILLE-CJD, LLC  LAD CARSON-N, LLC  LAD MISSION VIEJO-JLR, INC.  LAD-AU, LLC  LAD-MB, LLC  LAD-N, LLC  LAD-P, LLC  LAD-T, LLC  LAD-V, LLC  LBMP, LLC  LEAGUE CITY-H, INC  LGPAC, INC.  LITHIA ACDM, INC.  LITHIA ANCHORAGE-C, LLC  LITHIA ANCHORAGE-H, LLC  LITHIA ARMORY GARAGE, LLC  LITHIA BAIERL-S, LLC  LITHIA BRYAN TEXAS, INC.  LITHIA BUFFALO-A, LLC  LITHIA CCTF, INC.  LITHIA CDH, INC.  LITHIA CIMR, INC.  LITHIA CJDO, INC.  LITHIA CJDSA, INC.  LITHIA CJDSF, INC.  

 

    LITHIA CM, INC.  LITHIA CO, INC.  LITHIA CRATER LAKE-M, INC.  LITHIA CSA, INC.  LITHIA DE, INC.  LITHIA DES MOINES-VW, LLC  LITHIA DMID, INC.  LITHIA DODGE OF TRI-CITIES, INC.  LITHIA FRESNO, INC.  LITHIA HAMILTON-H, LLC  LITHIA HAZLETON-H, LLC  LITHIA HDM, INC.  LITHIA HGF, INC.  LITHIA HMID, INC.  LITHIA IMPORTS OF ANCHORAGE, INC.  LITHIA JEF, INC.  LITHIA KLAMATH, INC.  LITHIA KLAMATH-T, INC.  LITHIA LSGF, INC.  LITHIA MBDM, INC.  LITHIA MEDFORD HON, INC.  LITHIA MIDDLETOWN-L, LLC  LITHIA MOON-S, LLC  LITHIA MOON-V, LLC  LITHIA MORGANTOWN-CJD, LLC  LITHIA MORGANTOWN-S, LLC  LITHIA MTLM, INC.  LITHIA NA, INC.  LITHIA NC, INC.  LITHIA ND ACQUISITION CORP. #3  LITHIA ND ACQUISITION CORP. #4  LITHIA NDM, INC.  LITHIA NF, INC.  LITHIA OF ABILENE, LLC  LITHIA OF ANCHORAGE, INC.  LITHIA OF BEND #1, LLC  LITHIA OF BEND #2, LLC  LITHIA OF BENNINGTON – 2, LLC  LITHIA OF BENNINGTON – 3, LLC  LITHIA OF BENNINGTON – 4, LLC  LITHIA OF BILLINGS II LLC  LITHIA OF BILLINGS, INC.  LITHIA OF CLEAR LAKE, LLC  LITHIA OF DES MOINES, INC.  LITHIA OF EUREKA, INC.  

 

    LITHIA OF FAIRBANKS, INC.  LITHIA OF GREAT FALLS, INC.  LITHIA OF HELENA, INC.  LITHIA OF HONOLULU-A, INC.  LITHIA OF HONOLULU-BGMCC, LLC  LITHIA OF HONOLULU-V, LLC  LITHIA OF KILLEEN, LLC  LITHIA OF LODI, INC.  LITHIA OF MAUI-H, LLC  LITHIA OF MISSOULA II, LLC  LITHIA OF MISSOULA, INC.  LITHIA OF POCATELLO, INC.  LITHIA OF PORTLAND I, LLC  LITHIA OF PORTLAND, LLC  LITHIA OF ROBSTOWN, LLC  LITHIA OF ROSEBURG, INC.  LITHIA OF SANTA ROSA, INC.  LITHIA OF SEATTLE, INC.  LITHIA OF SOUTH CENTRAL AK, INC.  LITHIA OF STOCKTON, INC.  LITHIA OF STOCKTON-V, INC.  LITHIA OF TF, INC.  LITHIA OF TROY, LLC  LITHIA OF UTICA – 1, LLC  LITHIA OF UTICA – 3, LLC  LITHIA OF UTICA – 4, LLC  LITHIA OF WALNUT CREEK, INC.  LITHIA OF WASILLA, LLC  LITHIA OF YORKVILLE – 1, LLC  LITHIA OF YORKVILLE – 2, LLC  LITHIA OF YORKVILLE – 3, LLC  LITHIA OF YORKVILLE – 4, LLC  LITHIA OF YORKVILLE – 5, LLC  LITHIA ORCHARD PARK-H, LLC  LITHIA PARAMUS-M, LLC  LITHIA PITTSBURGH-S, LLC  LITHIA RAMSEY-B, LLC  LITHIA RAMSEY-L, LLC  LITHIA RAMSEY-M, LLC  LITHIA RAMSEY-T, LLC  LITHIA RENO SUB-HYUN, INC.  LITHIA RENO-CJ, LLC  LITHIA RENO-VW, LLC  LITHIA SALMIR, INC.  LITHIA SEA P, INC.  

 

    LITHIA SEASIDE, INC.  LITHIA SOC, INC.  LITHIA SPOKANE-B, LLC  LITHIA SPOKANE-S, LLC  LITHIA TA, INC.  LITHIA TO, INC.  LITHIA TR, INC.  LITHIA VAUDM, INC.  LITHIA WEXFORD-H, LLC  LLL SALES CO LLC  LMBB, LLC  LMBP, LLC  LMOP, LLC  LOS ANGELES-M, INC.  MESQUITE-K, INC.  MESQUITE-M, INC.  MISSION HILLS-H, INC.  NEW PORT RICHEY-V, LLC  NOVI-I, LLC  ORLANDO-JLR, LLC  PARAMUS WORLD MOTORS LLC  PHOENIX-T, INC.  PLYMOUTH-C, LLC  ROCKWALL-H, INC.  ROCKWALL-K, INC.  ROUND ROCK-K, INC.  SACRAMENTO-L, INC.  SALEM-B, LLC  SALEM-H, LLC  SALEM-V, LLC  SAN FRANCISCO-B, INC.  SANFORD-CJD, LLC  SHARLENE REALTY LLC  SHERMAN OAKS-A, INC.  SHERMAN OAKS-AC, LLC  SHERMAN OAKS-B, LLC  STERLING-BM, LLC  STERLING-RLM, LLC  TAMPA-H, LLC  THOUSAND OAKS-S, INC.  TROY EXOTICS, LLC  TROY-BG, LLC  TROY-C, LLC  TROY-CJD, LLC  TROY-H, LLC  

 

    TROY-I, LLC  TROY-JLR, LLC  TROY-M, LLC  TROY-N, LLC  TROY-S, LLC  TROY-T, LLC  TROY-V, LLC  TROY-VW, LLC  TUSTIN MOTORS INC.  UNION-H, LLC  URBANDALE-S, LLC  VALENCIA-A, INC.  VAN NUYS-C, INC.  VAN NUYS-H, INC.  VAN NUYS-L, INC.  VAN NUYS-T, INC.  WESLEY CHAPEL-C, LLC  WESLEY CHAPEL-H, LLC  WESLEY CHAPEL-M, LLC  WESLEY CHAPEL-T, LLC      By: /s/ Tina Miller      Name: Tina Miller  Title: Senior Vice President and Chief Financial Officer  

 

    [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  ACKNOWLEDGMENT AND CONSENT OF GUARANTORS  Each undersigned Guarantor hereby acknowledges, consents, and agrees to all  terms and conditions of the foregoing agreement.    797 VALLEY STREET LLC  ANN ARBOR-B, LLC  ANN ARBOR-CC, LLC  ANN ARBOR-CJD, LLC  ANN ARBOR-M, LLC  AUSTIN-H, INC.  AUSTIN-KI, INC.  AVONDALE-N, INC.  BAIERL AUTO PARTS, LLC  BAIERL AUTOMOTIVE CORPORATION  BAIERL CHEVROLET, INC.  BAIERL HOLDING, LLC  BEND-CDJR, LLC  BEND-N, LLC  CADILLAC OF PORTLAND LLOYD CENTER, LLC  CAMP AUTOMOTIVE, INC.  CARBONE AUTO BODY, LLC  CLEAR LAKE-I, INC.  CLINTON-C, LLC  CRANBERRY AUTOMOTIVE, INC.  DAH CHONG HONG CA TRADING LLC  DAH CHONG HONG TRADING CORPORATION  DALLAS COLLISION, INC.  DALLAS-H, INC.  DALLAS-K, INC.  DALLAS-T, INC.  DARON MOTORS LLC  DCH (OXNARD) INC.  DCH AUTO GROUP (USA) INC.  DCH BLOOMFIELD LLC  DCH CA LLC  DCH CALABASAS-A, LLC  DCH CALIFORNIA INVESTMENTS LLC  DCH CALIFORNIA MOTORS INC.  DCH DEL NORTE, INC.  DCH DMS NJ, LLC  DCH ESSEX INC.  DCH FINANCIAL NJ, LLC  DCH FREEHOLD LLC  

 

    [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  DCH HOLDINGS LLC  DCH INVESTMENTS INC. (NEW JERSEY)  DCH INVESTMENTS INC. (NEW YORK)  DCH KOREAN IMPORTS LLC  DCH MAMARONECK LLC  DCH MISSION VALLEY LLC  DCH MONMOUTH LLC  DCH MONTCLAIR LLC  DCH MOTORS LLC  DCH NANUET LLC  DCH NORTH AMERICA INC.  DCH NY MOTORS LLC  DCH OXNARD 1521 IMPORTS INC.  DCH RIVERSIDE-S, INC.  DCH SIMI VALLEY INC.  DCH SUPPORT SERVICES, LLC  DCH TEMECULA IMPORTS LLC  DCH TEMECULA MOTORS LLC  DCH THOUSAND OAKS-F, INC.  DCH TL HOLDINGS LLC  DCH TL NY HOLDINGS LLC  DCH TORRANCE IMPORTS INC.  DRIVEWAY MOTORS, LLC  FARMINGTON HILLS IMPORTS, LLC  FARMINGTON HILLS-CJD, LLC  FARMINGTON HILLS-H, LLC  FARMINGTON HILLS-N, LLC  FARMINGTON HILLS-T, LLC  FERNDALE COLLISION, LLC  FERNDALE-BG, LLC  FERNDALE-F, LLC  FH COLLISION, LLC  FLORIDA SS, LLC  FREEHOLD NISSAN LLC  FRISCO-K, INC.  FUSE AUTO SALES, LLC  GARDEN CITY-CJD, LLC  GREENCARS, INC.  HOUSTON-A, INC.  HOUSTON-H, INC.  HOUSTON-I, INC.  HUTCHINS EUGENE NISSAN, INC.  HUTCHINS IMPORTED MOTORS, INC.  KATY-H, INC.  

 

    [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  KNOXVILLE-CJD, LLC  LA MOTORS HOLDING, LLC  LAD ADVERTISING, INC.  LAD CARSON-N, LLC  LAD MISSION VIEJO-JLR, INC.  LAD MOBU, INC.  LAD-AU, LLC  LAD-MB, LLC  LAD-N, LLC  LAD-P, LLC  LAD-T, LLC  LAD-V, LLC  LATHAM FORD-F, LLC  LBMP, LLC  LEAGUE CITY-H, INC.  LFKF, LLC  LGPAC, INC.  LITHIA ACDM, INC.  LITHIA AIRCRAFT, INC.  LITHIA ANCHORAGE-C, LLC  LITHIA ANCHORAGE-H, LLC  LITHIA ARMORY GARAGE, LLC  LITHIA AUCTION & RECON, LLC  LITHIA AUTO SERVICES, INC.  LITHIA BA HOLDING, INC.  LITHIA BAIERL-S, LLC  LITHIA BNM, INC.  LITHIA BRYAN TEXAS, INC.  LITHIA BUFFALO-A, LLC  LITHIA CCTF, INC.  LITHIA CDH, INC.  LITHIA CIMR, INC.  LITHIA CJDO, INC.  LITHIA CJDSA, INC.  LITHIA CJDSF, INC.  LITHIA CM, INC.  LITHIA CO, INC.  LITHIA CRATER LAKE-F, INC.  LITHIA CRATER LAKE-M, INC.  LITHIA CSA, INC.  LITHIA DE, INC.  LITHIA DES MOINES-VW, LLC  LITHIA DM, INC.  LITHIA DMID, INC.  

 

    [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  LITHIA DODGE OF TRI-CITIES, INC.  LITHIA EATONTOWN-F, LLC  LITHIA FINANCIAL CORPORATION  LITHIA FLCC, LLC  LITHIA FLORIDA HOLDING, INC.  LITHIA FMF, INC.  LITHIA FORD OF BOISE, INC.  LITHIA FRESNO, INC.  LITHIA HAMILTON-H, LLC  LITHIA HAZLETON-H, LLC  LITHIA HDM, INC.  LITHIA HGF, INC.  LITHIA HMID, INC.  LITHIA HPI, INC.  LITHIA IDAHO FALLS-F, INC.  LITHIA IMPORTS OF ANCHORAGE, INC.  LITHIA JEF, INC.  LITHIA KLAMATH, INC.  LITHIA KLAMATH-T, INC.  LITHIA LBGGF, INC.  LITHIA LHGF, INC.  LITHIA LSGF, INC.  LITHIA MBDM, INC.  LITHIA McMURRAY-C, LLC  LITHIA MEDFORD HON, INC.  LITHIA MICHIGAN HOLDING, INC.  LITHIA MIDDLETOWN-L, LLC  LITHIA MMF, INC.  LITHIA MONROEVILLE-A, LLC  LITHIA MONROEVILLE-C, LLC  LITHIA MONROEVILLE-F, LLC  LITHIA MOON-S, LLC  LITHIA MOON-V, LLC  LITHIA MORGANTOWN-CJD, LLC  LITHIA MORGANTOWN-F, LLC  LITHIA MORGANTOWN-S, LLC  LITHIA MOTORS SUPPORT SERVICES, INC.  LITHIA MTLM, INC.  LITHIA NA, INC.  LITHIA NC, INC.  LITHIA ND ACQUISITION CORP. #1  LITHIA ND ACQUISITION CORP. #3  LITHIA ND ACQUISITION CORP. #4  LITHIA NDM, INC.  

 

    [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  LITHIA NF, INC.  LITHIA NORTHEAST REAL ESTATE, LLC  LITHIA NORTHWEST REAL ESTATE, LLC  LITHIA OF ABILENE, LLC  LITHIA OF ANCHORAGE, INC.  LITHIA OF BEND #1, LLC  LITHIA OF BEND #2, LLC  LITHIA OF BENNINGTON – 1, LLC  LITHIA OF BENNINGTON – 2, LLC  LITHIA OF BENNINGTON – 3, LLC  LITHIA OF BENNINGTON – 4, LLC  LITHIA OF BILLINGS II LLC  LITHIA OF BILLINGS, INC.  LITHIA OF CASPER, LLC  LITHIA OF CLEAR LAKE, LLC  LITHIA OF CORPUS CHRISTI, INC.  LITHIA OF DES MOINES, INC.  LITHIA OF EUREKA, INC.  LITHIA OF FAIRBANKS, INC.  LITHIA OF GREAT FALLS, INC.  LITHIA OF HELENA, INC.  LITHIA OF HONOLULU-A, INC.  LITHIA OF HONOLULU-BGMCC, LLC  LITHIA OF HONOLULU-F, LLC  LITHIA OF HONOLULU-V, LLC  LITHIA OF KILLEEN, LLC  LITHIA OF LODI, INC.  LITHIA OF MAUI-H, LLC  LITHIA OF MISSOULA II, LLC  LITHIA OF MISSOULA III, INC.  LITHIA OF MISSOULA, INC.  LITHIA OF POCATELLO, INC.  LITHIA OF PORTLAND I, LLC  LITHIA OF PORTLAND, LLC  LITHIA OF ROBSTOWN, LLC  LITHIA OF ROSEBURG, INC.  LITHIA OF SANTA ROSA, INC.  LITHIA OF SEATTLE, INC.  LITHIA OF SOUTH CENTRAL AK, INC.  LITHIA OF SPOKANE II, INC.  LITHIA OF SPOKANE, INC.  LITHIA OF STOCKTON, INC.  LITHIA OF STOCKTON-V, INC.  LITHIA OF TF, INC.  

 

    [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  LITHIA OF TROY, LLC  LITHIA OF UTICA – 1, LLC  LITHIA OF UTICA – 2, LLC  LITHIA OF UTICA – 3, LLC  LITHIA OF UTICA – 4, LLC  LITHIA OF WALNUT CREEK, INC.  LITHIA OF WASILLA, LLC  LITHIA OF YORKVILLE – 1, LLC  LITHIA OF YORKVILLE – 2, LLC  LITHIA OF YORKVILLE – 3, LLC  LITHIA OF YORKVILLE – 4, LLC  LITHIA OF YORKVILLE – 5, LLC  LITHIA ORCHARD PARK-H, LLC  LITHIA PARAMUS-M, LLC  LITHIA PITTSBURGH-S, LLC  LITHIA RAMSEY-B, LLC  LITHIA RAMSEY-L, LLC  LITHIA RAMSEY-M, LLC  LITHIA RAMSEY-T, LLC  LITHIA REAL ESTATE, INC.  LITHIA RENO SUB-HYUN, INC.  LITHIA RENO-CJ, LLC  LITHIA RENO-VW, LLC  LITHIA ROSE-FT, INC.  LITHIA SALMIR, INC.  LITHIA SEA P, INC.  LITHIA SEASIDE, INC.  LITHIA SOC, INC.  LITHIA SPOKANE-B, LLC  LITHIA SPOKANE-S, LLC  LITHIA SSP, LLC  LITHIA TA, INC.  LITHIA TENNESSEE HOLDING, INC.  LITHIA TO, INC.  LITHIA TR, INC.  LITHIA UNIONTOWN-C, LLC  LITHIA VA REAL ESTATE, LLC  LITHIA VAUDM, INC.  LITHIA VF, INC.  LITHIA VIRGINIA HOLDING, INC.  LITHIA WEXFORD-H, LLC  LLL SALES CO LLC  LMBB, LLC  LMBP, LLC  

 

    [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  LMOP, LLC  LOS ANGELES-M, INC.  LSTAR, LLC  MEDFORD INSURANCE, LLC  MESQUITE-K, INC.  MESQUITE-M, INC.  MILFORD DCH, INC.  MISSION HILLS-H, INC.  NEW PORT RICHEY-H, LLC  NEW PORT RICHEY-V, LLC  NORTHLAND FORD INC.  NOVI-I, LLC  ORLANDO-JLR, LLC  PA REAL ESTATE, LLC  PA SUPPORT SERVICES, LLC  PARAMUS COLLISION, LLC  PARAMUS WORLD MOTORS LLC  PERSONALIZED MARKETING, LLC  PHOENIX-T, INC.  PLYMOUTH-C, LLC  RAMSEY HOLDINGCO, INC.  RFA HOLDINGS, LLC  ROCKWALL-H, INC.  ROCKWALL-K, INC.  ROUND ROCK-K, INC.  SACRAMENTO-L, INC.  SALEM-B, LLC  SALEM-H, LLC  SALEM-V, LLC.  SAN FRANCISCO-B, INC.  SANFORD-CJD, LLC  SHARLENE REALTY LLC  SHERMAN OAKS-A, INC.  SHERMAN OAKS-AC, LLC  SHERMAN OAKS-B, LLC  SHIFT PORTLAND, LLC  STERLING HEIGHTS-F, LLC  STERLING-BM, LLC  STERLING-RLM, LLC  SUBURBAN AUTO AGENCY, LLC  TAMPA-H, LLC  THOUSAND OAKS-S, INC.  TN REAL ESTATE, LLC  TROY COLLISION, LLC  

 

    [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  TROY EXOTICS, LLC  TROY-A, LLC  TROY-BG, LLC  TROY-C, LLC  TROY-CJD, LLC  TROY-H, LLC  TROY-I, LLC  TROY-JLR, LLC  TROY-M, LLC  TROY-N, LLC  TROY-S, LLC  TROY-T, LLC  TROY-V, LLC  TROY-VW, LLC  TUSTIN MOTORS INC.  UNION-H, LLC  URBANDALE-S, LLC  VALENCIA-A, INC.  VAN NUYS-C, INC.  VAN NUYS-H, INC.  VAN NUYS-L, INC.  VAN NUYS-T, INC.  WATERFORD-F, LLC  WESLEY CHAPEL-C, LLC  WESLEY CHAPEL-H, LLC  WESLEY CHAPEL-Hy, LLC  WESLEY CHAPEL-M, LLC  WESLEY CHAPEL-T, LLC  ZELIENOPLE REAL ESTATE I, L.P.  ZELIENOPLE REAL ESTATE, L.L.C.      By: /s/ Tina Miller      Name: Tina Miller  Title: Senior Vice President and Chief Financial Officer        

 

    U.S. BANK NATIONAL ASSOCIATION, as   Agent, Lender, Swing Line Lender, and LC Issuer  By:  /s/ Shaun Ross      Name: Shaun Ross    Title: Vice President     Notice Address:  13010 SW 68th Parkway   Portland, OR 97223   Fax: (503) 872-7562   

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  JPMORGAN CHASE BANK, N.A., as Lender    By:       /s/ Jeff Calder   Name: Gerald Jules  Title:   Executive Director     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  TOYOTA MOTOR CREDIT CORPORATION, as Lender    By:       /s/ Gerald Jules   Name: Gerald Jules  Title:   National Manager, National Accounts     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  BANK OF AMERICA, N.A., as Lender    By:       /s/ Don R. Carroll, Jr.   Name: Don R. Carroll, Jr.  Title:   Senior Vice President     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  MERCEDES-BENZ FINANCIAL SERVICES USA LLC, as Lender    By:       /s/ Robert Rappold   Name: Robert Rappold  Title:   Regional Dealer Credit - National Account Manager     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  AMERICAN HONDA FINANCE CORP., as Lender    By:       /s/ Matthew Weitzer   Name: Matthew Weitzer  Title:   DFS Manager     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  TD BANK, N.A., as Lender    By:       /s/ Judy C. Johnson   Name: Judy C. Johnson  Title:   VP, Market Credit Manager, Major Accounts     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  TRUIST BANK, as Lender    By:       /s/ Tesha Winslow   Name: Tesha Winslow  Title:   Director     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  WELLS FARGO BANK, NATIONAL ASSOCIATION, as Lender    By:       /s/ Eric Scott Fuller   Name: Eric Scott Fuller  Title:   Senior Vice President     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  CAPITAL ONE NATIONAL ASSOCIATION, as Lender    By:       /s/ Jeff Edge   Name: Jeff Edge  Title:   Senior Vice President     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  BMW FINANCIAL SERVICES NA, LLC, as Lender    By:       /s/ Tom Rumfola   Name: Tom Rumfola  Title:   General Manager, Credit    By:       /s/ Alex Calcasola   Name: Alex Calcasola  Title:   Credit Manager       

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  PNC BANK, NATIONAL ASSOCIATION, as Lender    By:       /s/ Ana Gaytan   Name: Ana Gaytan  Title:   Assistant Vice President     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  SANTANDER BANK, N.A., as Lender    By:       /s/ Michael A. Lee   Name: Michael A. Lee  Title:   EVP     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  ALLY BANK, as Lender    By:       /s/ Sheldon W. Nicklin   Name: Sheldon W. Nicklin  Title:   Authorized Representative     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  THE HUNTINGTON NATIONAL BANK, as Lender    By:       /s/ Michael Hall   Name: Michael Hall   Title:   Senior Vice President     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  VW CREDIT, INC., as Lender    By:       /s/ Robb Nerdin   Name: Robb Nerdin  Title:   Senior Manager Commercial Credit     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  BMO HARRIS BANK, N.A., as Lender    By:       /s/ Joe Connolly   Name: Joe Connolly  Title:   Managing Director     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  HYUNDAI CAPITAL AMERICA, as Lender    By:       /s/ Andrew Leone   Name: Andrew Leone  Title:   VP, Commercial & Mobility     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  MANUFACTURERS AND TRADERS TRUST CORPORATION, as Lender    By:       /s/ Brendan Kelly   Name: Brendan Kelly  Title:   VP     

 

  [LITHIA MOTORS – FOURTH AMENDED AND RESTATED LOAN AGREEMENT]  NISSAN MOTOR ACCEPTANCE COMPANY, LLC, as Lender    By:       /s/ Todd Voorhies   Name: Todd Voorhies  Title:   Sr. Manager, Commercial Credit and Wholesale Processing     

 

    SCHEDULE 1  Name of  Financial  Institution  Pro Rata Share  of Aggregate  Lender  Commitment  New Vehicle  Floorplan  Commitment  Used Vehicle  Floorplan  Commitment  Revolving  Loan  Commitment  Service Loaner  Vehicle  Commitment  U.S. Bank  $[***]   $[***]   $[***]   $[***]   $[***]   JP Morgan Chase  Bank   $[***]   $[***]   $[***]   $[***]   $[***]   Toyota Motor Credit  $[***]   $[***]   $[***]   $[***]   $[***]   Bank of America  $[***]   $[***]   $[***]   $[***]   $[***]   Mercedes-Benz  Financial    $[***]   $[***]   $[***]   $[***]   $[***]   American Honda  Finance Corporation   $[***]   $[***]   $[***]   $[***]   $[***]   TD Bank  $[***]   $[***]   $[***]   $[***]   $[***]   Truist Bank  $[***]   $[***]   $[***]   $[***]   $[***]   Wells Fargo Bank,  NA   $[***]   $[***]   $[***]   $[***]   $[***]   Capital One NA  $[***]   $[***]   $[***]   $[***]   $[***]   BMW Financial  Services   $[***]   $[***]   $[***]   $[***]   $[***]   PNC Bank, National  Association   $[***]   $[***]   $[***]   $[***]   $[***]   Santander Bank, N.A.  $[***]   $[***]   $[***]   $[***]   $[***]   Ally Bank  $[***]   $[***]   $[***]   $[***]   $[***]   The Huntington  National Bank   $[***]   $[***]   $[***]   $[***]   $[***]   VW Credit, Inc.   $[***]   $[***]   $[***]   $[***]   $[***]   BMO Harris Bank  $[***]   $[***]   $[***]   $[***]   $[***]   Hyundai Capital  America   $[***]   $[***]   $[***]   $[***]   $[***]   M&T Bank  $[***]   $[***]   $[***]   $[***]   $[***]   

 

    Nissan Motor  Acceptance  Corporation   $[***]   $[***]   $[***]   $[***]   $[***]   TOTAL $3,750,000,000.00 $2,880,000,000.00 $336,000,000.00 $434,000,000.00 $100,000,000.00    

 

    SCHEDULE 2 – DUAL SUBSIDIARIES  None.   

 

    PRICING SCHEDULE  In addition to the terms defined elsewhere in this Agreement, for purposes of determining  the applicable interest rates and fees, the following terms shall have the meanings set forth in this  Pricing Schedule:  “Alternate Base Rate Margin (New Vehicle)” means a percentage rate per annum equal  to 0.10%.  “Alternate Base Rate Margin (Service Loaner Vehicle)” means a percentage rate per  annum equal to 0.10%.  “Alternate Base Rate Margin (Used Vehicle)” means a percentage rate per annum equal  to 0.40%.  “LC Fee Percentage” means the applicable percentage rates per annum set forth below  opposite the applicable Leverage Ratio, as adjusted from time to time.  “New Vehicle Floorplan Commitment Fee Rate” means a percentage rate per annum  equal to 0.15%.  “New Vehicle Floorplan Margin” means a percentage rate per annum equal to 1.10%.  “Revolving Loan Margin”, “Revolving Loan Commitment Fee Rate” and “Alternate  Base Rate Margin (Revolving)” mean the applicable percentage rates per annum set forth below  opposite the applicable Leverage Ratio, as adjusted from time to time.  Leverage Ratio  LC Fee  Percentage/  Revolving  Loan Margin  Revolving Loan  Commitment Fee Rate  Alternate Base Rate  Margin (Revolving)  Greater than 4.50 to 1.00 2.00% 0.40% 1.00%  Greater than 4.00 to 1.00 but less  than or equal to 4.50 to 1.00  1.75% 0.30% 0.75%  Greater than 3.50 to 1.00 but less  than or equal to 4.00 to 1.00  1.50% 0.25% 0.50%  Greater than 2.50 to 1.00 but less  than or equal to 3.50 to 1.00  1.25% 0.20% 0.25%  

 

    Leverage Ratio  LC Fee  Percentage/  Revolving  Loan Margin  Revolving Loan  Commitment Fee Rate  Alternate Base Rate  Margin (Revolving)  Less than or equal to 2.50 to 1.00 1.00% 0.15%    0.15%  The Revolving Loan Margin (“Applicable Margin”) and Revolving Loan Commitment  Fee Rate (“Applicable Fee Rate”) shall be determined by the Agent from time to time based upon  the information set forth in Borrower’s financial statements and Compliance Certificate furnished  to the Agent pursuant to this Agreement as of the end of each fiscal quarter and shall be based  upon the Leverage Ratio as of such date.  Any change in the Applicable Margin or Applicable Fee Rate shall take effect on the first  Business Day of the month following the date of delivery to the Agent of the applicable financial  statements and Compliance Certificate, and the Applicable Margin and Applicable Fee Rate, as so  determined, shall remain in effect until the earlier of:  a. the first Business Day of the month following the delivery to the Agent of  a subsequent financial statement and Compliance Certificate indicating a Leverage Ratio  requiring a change in the Applicable Margin or Applicable Fee Rate, or    b. the day upon which the Company fails to deliver to the Agent the applicable  financial statements and Compliance Certificate within the time provided under this  Agreement.  Upon any failure of the Company to deliver to the Agent the applicable  financial statements and Compliance Certificate within the time required by this  Agreement, the Applicable Margin and Applicable Fee Rate shall be the highest Applicable  Margin and Applicable Fee Rate set forth in the foregoing table, which shall remain in  effect until five Business Days following the date of delivery to the Agent of financial  statements and Compliance Certificate reflecting a Leverage Ratio for which a lower  Applicable Margin and Applicable Fee Rate would be applicable.    Notwithstanding the foregoing, the Revolving Loan Margin shall be 1.25% and the Revolving  Loan Commitment Fee Rate shall be 0.20% from the Closing Date until the earlier of (a) the first  Business Day of the month following the delivery to the Agent of a financial statement and  Compliance Certificate indicating a Leverage Ratio requiring a change in the Applicable Margin  or Applicable Fee Rate, per the delivery requirements set forth in Section 11.2.5, or (b) the day  upon which the Company fails to deliver to the Agent the applicable financial statements and  Compliance Certificate within the time provided under this Agreement.  If, as a result of any restatement of or other adjustment to the financial statements of the  Company and its Subsidiaries or for any other reason, the Agent determines that the calculation of  the Leverage Ratio by the Company as of the last day of any fiscal quarter was inaccurate and a  correct calculation of the Leverage Ratio would have resulted in a higher Applicable Margin and  

 

    Applicable Fee Rate, the Applicable Margin and Applicable Fee Rate shall be retroactively  adjusted to the rate that would have been applicable if the Leverage Ratio had been correctly  calculated.  Promptly upon demand by the Agent, the Revolving Loan Borrower shall pay to the  Agent for the account of the Lenders the additional interest and fees that would have been payable  based upon the correct calculation of the Leverage Ratio.  Nothing set forth herein shall limit the  Required Lenders’ right to increase the interest rate upon the occurrence of an Event of Default.  “Service Loaner Vehicle Floorplan Commitment Fee Rate” means a percentage rate  per annum equal to 0.15%.  “Service Loaner Vehicle Floorplan Margin” means a percentage rate per annum equal  to 1.20%.  “Used Vehicle Floorplan Commitment Fee Rate” means a percentage rate per annum  equal to 0.15%.  “Used Vehicle Floorplan Margin” means a percentage rate per annum equal to 1.40%.

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