Document:

Ex 4.2

FIVE-YEAR CREDIT AGREEMENT
dated as of
October 7, 2011,
among
BEST BUY CO., INC.,
The SUBSIDIARY GUARANTORS Party Hereto,
The LENDERS Party Hereto
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

________
$1,500,000,000

________
J.P. MORGAN SECURITIES LLC, 
U.S. Bank National Association, 
bbVA SECURITIES INC.,  
CITIGROUP GLOBAL MARKETS INC. 
and 
MORGAN STANLEY MUFG LOAN PARTNERS, LLC,
as Joint Lead Arrangers and Joint Bookrunners
U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent
BBVA SECURITIES INC.,  
CITIBANK, N.A. 
andMorgan Stanley MUFG Loan Partners, LLC,
as Documentation Agents

	
				
	 
	TABLE OF CONTENTS
	 

	 
	 
	 

	 
	 
	Page

	 
	 
	 

	 
	ARTICLE I
	 

	 
	 
	 

	 
	Definitions
	 

	 
	 
	 

	SECTION 1.01.
	Defined Terms
	1
	

	SECTION 1.02.
	Classification of Loans and Borrowings
	18
	

	SECTION 1.03.
	Terms Generally
	18
	

	SECTION 1.04.
	Accounting Terms; GAAP
	18
	

	 
	 
	 

	 
	ARTICLE II
	 

	 
	 
	 

	 
	The Credits
	 

	 
	 
	 

	SECTION 2.01.
	The Commitments
	19
	

	SECTION 2.02.
	Loans and Borrowings
	19
	

	SECTION 2.03.
	Requests for Syndicated Borrowings
	19
	

	SECTION 2.04.
	Competitive Bid Procedure
	20
	

	SECTION 2.05.
	Swingline Loans
	22
	

	SECTION 2.06.
	Letters of Credit
	23
	

	SECTION 2.07.
	Funding of Borrowings
	28
	

	SECTION 2.08.
	Interest Elections
	29
	

	SECTION 2.09.
	Termination, Reduction and Increase of the Commitments
	30
	

	SECTION 2.10.
	Repayments of Loans; Evidence of Debt
	32
	

	SECTION 2.11.
	Prepayment of Loans
	32
	

	SECTION 2.12.
	Fees
	33
	

	SECTION 2.13.
	Interest
	34
	

	SECTION 2.14.
	Alternate Rate of Interest
	34
	

	SECTION 2.15.
	Increased Costs
	35
	

	SECTION 2.16.
	Break Funding Payments
	36
	

	SECTION 2.17.
	Taxes
	37
	

	SECTION 2.18.
	Payments Generally; Pro Rata Treatment; Sharing Setoffs
	39
	

	SECTION 2.19.
	Mitigation Obligations; Replacement of Lenders
	41
	

	SECTION 2.20.
	Extension of Commitment Termination Date
	42
	

	SECTION 2.21.
	Defaulting Lenders
	43
	

	 
	 
	 

	 
	ARTICLE III
	 

	 
	 
	 

	 
	Guarantee
	 

	 
	 
	 

	SECTION 3.01.
	The Guarantee
	45
	

	SECTION 3.02.
	Obligations Unconditional
	46
	

	SECTION 3.03.
	Reinstatement
	46
	

	SECTION 3.04.
	Subrogation
	46
	

	
				
	SECTION 3.05.
	Remedies
	47
	

	SECTION 3.06.
	Instrument for the Payment of Money
	47
	

	SECTION 3.07.
	Continuing Guarantee
	47
	

	SECTION 3.08.
	Rights of Contribution
	47
	

	SECTION 3.09.
	General Limitation on Guarantee Obligations
	48
	

	SECTION 3.10.
	Designation of Subsidiary Guarantors
	48
	

	SECTION 3.11.
	Release of Guarantees
	48
	

	 
	 
	 

	 
	ARTICLE IV
	 

	 
	 
	 

	 
	Representations and Warranties
	 

	 
	 
	 

	SECTION 4.01.
	Organization
	48
	

	SECTION 4.02.
	Authorization; Enforceability
	48
	

	SECTION 4.03.
	Governmental Approvals; No Conflicts
	49
	

	SECTION 4.04.
	Financial Condition; No Material Adverse Change
	49
	

	SECTION 4.05.
	Properties
	49
	

	SECTION 4.06.
	Litigation and Environmental Matters
	49
	

	SECTION 4.07.
	Compliance with Laws and Agreements
	49
	

	SECTION 4.08.
	Investment Company Status
	49
	

	SECTION 4.09.
	Taxes
	50
	

	SECTION 4.10.
	ERISA
	50
	

	SECTION 4.11.
	Subsidiaries
	50
	

	SECTION 4.12.
	Federal Reserve Regulations
	50
	

	 
	 
	 

	 
	ARTICLE V
	 

	 
	 
	 

	 
	Conditions
	 

	 
	 
	 

	SECTION 5.01.
	Effective Date
	50
	

	SECTION 5.02.
	Each Credit Event
	51
	

	 
	 
	 

	 
	ARTICLE VI
	 

	 
	 
	 

	 
	Affirmative Covenants
	 

	 
	 
	 

	SECTION 6.01.
	Financial Statements, Rating Changes and Other Information
	52
	

	SECTION 6.02.
	Notices of Material Events
	53
	

	SECTION 6.03.
	Existence; Conduct of Business
	53
	

	SECTION 6.04.
	Payment of Obligations
	53
	

	SECTION 6.05.
	Maintenance of Properties; Insurance
	53
	

	SECTION 6.06.
	Book and Records; Inspection Rights
	54
	

	SECTION 6.07.
	Compliance with Laws
	54
	

	SECTION 6.08.
	New Specified Subsidiaries to Become Subsidiary Guarantors
	54
	

	SECTION 6.09.
	Use of Proceeds; Federal Reserve Regulations
	54
	

	
				
	 
	ARTICLE VII
	 

	 
	 
	 

	 
	Negative Covenants
	 

	 
	 
	 

	SECTION 7.01.
	Subsidiary Indebtedness
	54
	

	SECTION 7.02.
	Liens
	55
	

	SECTION 7.03.
	Fundamental Changes
	56
	

	SECTION 7.04.
	Restrictive Agreements
	57
	

	SECTION 7.05.
	Transactions with Affiliates
	58
	

	SECTION 7.06.
	Certain Financial Covenants
	58
	

	SECTION 7.07.
	Investments in Foreign Subsidiaries
	58
	

	 
	 
	 

	 
	ARTICLE VIII
	 

	 
	 
	 

	 
	Events of Default
	 

	 
	 
	 

	 
	ARTICLE IX
	 

	 
	 
	 

	 
	Agency
	 

	 
	 
	 

	SECTION 9.01.
	Administrative Agent
	60
	

	SECTION 9.02.
	Bookrunners, Etc
	63
	

	 
	 
	 

	 
	ARTICLE X
	 

	 
	 
	 

	 
	Miscellaneous
	 

	 
	 
	 

	SECTION 10.01.
	Notices
	63
	

	SECTION 10.02.
	Waivers; Amendments
	64
	

	SECTION 10.03.
	Expenses; Indemnity; Damage Waiver
	65
	

	SECTION 10.04.
	Successors and Assigns
	67
	

	SECTION 10.05.
	Survival
	70
	

	SECTION 10.06.
	Counterparts; Integration; Effectiveness; Electronic Execution
	70
	

	SECTION 10.07.
	Severability
	70
	

	SECTION 10.08.
	Right of Setoff
	70
	

	SECTION 10.09.
	Governing Law; Jurisdiction; Etc. (a) Governing Law
	71
	

	SECTION 10.10.
	WAIVER OF JURY TRIAL
	71
	

	SECTION 10.11.
	Headings
	72
	

	SECTION 10.12.
	Treatment of Certain Information; Confidentiality
	72
	

	SECTION 10.13.
	USA PATRIOT Act
	73
	

	SECTION 10.14.
	Interest Rate Limitation
	73
	

	SECTION 10.15.
	No Fiduciary Relationship
	73
	

SCHEDULE 2.01 ‐ Commitments
SCHEDULE 2.06 ‐ Existing Letters of Credit
SCHEDULE 4.11 ‐ Subsidiaries
SCHEDULE 7.01  ‐ Existing and Available Indebtedness
SCHEDULE 7.02 ‐ Certain Existing Liens
SCHEDULE 7.04 ‐ Restrictive Agreements

EXHIBIT A ‐ Form of Assignment and Assumption
EXHIBIT B ‐ Form of Guarantee Assumption Agreement
EXHIBIT C ‐ Form of Non-Bank Certificate
EXHIBIT D ‐ Form of Borrowing Request

1

FIVE-YEAR CREDIT AGREEMENT dated as of October 7, 2011, among BEST BUY CO., INC., the SUBSIDIARY GUARANTORS party hereto, the LENDERS party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent.
The Borrower (as hereinafter defined) has requested that the Lenders (as hereinafter defined) make extensions of credit (by means of loans and letters of credit) to the Borrower in an original aggregate principal or face amount not exceeding $1,500,000,000 at any one time outstanding in Dollars.  The Lenders are prepared to extend such credit upon the terms and conditions hereof, and, accordingly, the parties hereto agree as follows:
ARTICLE I 
 
Definitions
SECTION 1.01.    Defined Terms.  As used in this Agreement (including the introductory paragraph hereto), the following terms have the meanings specified below:
“364-Day Credit Agreement” means the 364-Day Credit Agreement dated as of the date hereof (as amended, supplemented, replaced or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein)), among the Borrower, the subsidiary guarantors party thereto, JPMCB, as administrative agent, and the lenders party thereto.
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
“Additional Commitment Lender” means any Person that agrees to provide a Commitment or (in the case of an existing Lender) agrees to increase the amount of its Commitment, in each case pursuant to Section 2.09(e) or 2.20, with the consent of the Administrative Agent, each Issuing Lender and each Swingline Lender (in each case, such consent not to be unreasonably withheld).
“Adjusted LIBO Rate” means, for the Interest Period for any Syndicated Eurocurrency Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate for such Interest Period.
“Administrative Agent” means JPMCB, in its capacity as administrative agent for the Lenders hereunder and under the other Loan Documents, and its successors in such capacity as provided in Article IX.
“Administrative Agent’s Account” means an account designated by the Administrative Agent in a notice to the Borrower and the Lenders.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in Dollars with a maturity of one month plus 1%.  For purposes of clause (c) 

2

above, the Adjusted LIBO Rate on any day shall be based on the rate per annum appearing on the Reuters “LIBOR01” screen displaying British Bankers’ Association Interest Settlement Rates (or on any successor or substitute screen provided by Reuters, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, on such day for deposits in Dollars with a maturity of one month.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, as the case may be.
“Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment.  If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.
“Applicable Rate” means, for any day, with respect to any ABR Loan (including any Swingline Loan) or Syndicated Eurocurrency Loan, or with respect to the facility fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption ABR Spread, Eurocurrency Spread or Facility Fee Rate, as the case may be, based upon the applicable Moody’s Rating and/or S&P Rating, respectively, applicable on such date:
	
							
	S&P Rating/ Moody’s Rating
	 
	ABR Spread
	 
	Eurocurrency Spread
	 
	Facility Fee Rate

	Category 1 
A-/A3 or higher
	 
	0.000%
	 
	0.875%
	 
	0.125%

	Category 2 
BBB+/Baa1
	 
	0.000%
	 
	0.975%
	 
	0.150%

	Category 3 
BBB/Baa2
	 
	0.200%
	 
	1.200%
	 
	0.175%

	Category 4 
BBB-/Baa3
	 
	0.275%
	 
	1.275%
	 
	0.225%

	Category 5 
BB+/Ba1 or lower, or unrated
	 
	0.475%
	 
	1.475%
	 
	0.275%

For purposes of the foregoing, (a) if any of Moody’s or S&P shall not have in effect a Moody’s Rating or an S&P Rating, as the case may be (other than by reason of the circumstances referred to in the last sentence of this definition), then the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect the unavailability of ratings from such rating agency and, pending the effectiveness of any such amendment, such rating agency shall be deemed to have established a rating in Category 5; (b) if the Moody’s Rating or S&P Rating established or deemed to have been established by Moody’s or S&P, as the case may be, shall fall within different Categories, the Applicable Rate shall be based on the higher of the two ratings, unless the ratings differ by two or more categories, in which case the Applicable Rate shall be based on the Category one level below that corresponding to the higher rating; and (c) if the Moody’s Rating or S&P Rating established or deemed to have been established by Moody’s or S&P, as the case may be, shall be changed (other than as a result of a change in the rating system of Moody’s or S&P), such change shall be effective as of the date on which it is first announced by the applicable rating agency, irrespective of when notice of such change shall have been furnished by the Borrower to the Administrative Agent and the Lenders pursuant to Section 6.01 or otherwise.  Each change in the Applicable Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change.  If the rating system of Moody’s or S&P shall change, or if any such rating agency shall cease to be in the business of rating corporate debt obligations, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system or the unavailability 

3

of ratings from such rating agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be determined by reference to the rating most recently in effect prior to such change or cessation.
“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and 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.
“Arranger” means each of J.P. Morgan Securities LLC, U.S. Bank National Association, BBVA Securities Inc., Citigroup Global Markets Inc. and Morgan Stanley MUFG Loan Partners, LLC, in its capacity as joint lead arranger and joint bookrunner for the credit facility established hereunder.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any Person whose consent is required by Section 10.04), and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form approved by the Administrative Agent.
“Auto-Renewal Letter of Credit” means a Letter of Credit with an initial expiry date of one year or less after the date of its issuance that has automatic renewal provisions.
“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Commitment Termination Date and the date of termination of the Commitments.
“Bankruptcy Event” means, with respect to any Person, that such Person has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment; provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority; provided, however, that such ownership interest  does not result in or provide such Person with immunity from the jurisdiction of courts within the United States of America or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any agreements made by such Person.
“Best Buy Europe Distributions” means Best Buy Europe Distributions Limited, a limited company incorporated in England and Wales with registered number 06534088.
“Board” means the Board of Governors of the Federal Reserve System of the United States of America.
“Borrower” means Best Buy Co., Inc., a Minnesota corporation.
“Borrowing” means (a) all Syndicated ABR Loans made, converted or continued on the same date, (b) Syndicated Eurocurrency Loans or Competitive Loans of the same Type that have the same Interest Period (or any single Competitive Loan that does not have the same Interest Period as any other Competitive Loan of the same Type) or (c) a Swingline Loan.
“Borrowing Request” means a request by the Borrower for a Syndicated Borrowing in accordance with Section 2.03.
“Business Day” means any day (a) that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed and (b) if such day relates to a Competitive Bid Request or Competitive Bid for a Competitive Eurocurrency Loan, or to a 

4

borrowing, a continuation or conversion of or into, or the Interest Period for, a Eurocurrency Borrowing, or to a notice by the Borrower with respect to any such borrowing, payment, prepayment, continuation, conversion, or Interest Period, that is also a day on which dealings in deposits denominated in Dollars are carried out in the London interbank market.
“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Cash Flow Leverage Ratio” means, as of the last day of any Measurement Period, the ratio of (a) the sum of (i) Net Interest-bearing Indebtedness on such day, (ii) the principal amount of the Securitization Transactions on such day plus (iii) eight times Rental and Lease Expense for the Measurement Period ended on such day, to (b) the sum of EBITDA and Rental and Lease Expense for the Measurement Period ended on such day.
“Change in Control” means either (a) the occurrence, after the Effective Date, of any of any Person or two or more Persons acting in concert acquiring beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act), directly or indirectly, of common stock of the Borrower representing 50% or more of the combined voting power of all common stock of the Borrower entitled to vote in the election of directors or (b) during any period of up to twelve consecutive months, whether commencing before or after the Effective Date, individuals who at the beginning of such twelve-month period were directors of the Borrower, ceasing for any reason (other than by reason of death, disability or scheduled retirement) to constitute a majority of the Board of Directors of the Borrower, unless such directors were replaced by new directors whose election to the Board of Directors of the Borrower, or whose nomination for election by the shareholders of the Borrower, was approved by a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved.
“Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that, notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, promulgated or issued; and provided, further, that the determination by any Lender of any additional amount owing to it, to the extent claimed in reliance on the preceding proviso, shall be made in good faith in a manner generally consistent with such Lender’s standard practices.
“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Syndicated Loans, Competitive Loans or Swingline Loans.
“Code” means the Internal Revenue Code of 1986.
“Commitment” means, with respect to each Lender, the commitment of such Lender to make Syndicated Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a) reduced or increased from time to time pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to 

5

Section 10.04.  The initial amount of each Lender’s Commitment is set forth on Schedule 2.01, in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment or, in the case of an Additional Commitment Lender, in the agreement reflecting its Commitment Increase (in the case of Section 2.09) or its new or additional commitment (in the case of Section 2.20), as applicable.  The initial aggregate amount of the Lenders’ Commitments is $1,500,000,000.
“Commitment Increase” has the meaning set forth in Section 2.09(e).
“Commitment Increase Date” has the meaning set forth in Section 2.09(e).
“Commitment Termination Date” means (a) October 7, 2016 (or, if such date is not a Business Day, the immediately preceding Business Day) or (b) with respect to any Lender the Commitment of which has been extended pursuant to Section 2.20, the date to which such Lender’s Commitment has been so extended.
“Competitive”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are made pursuant to Section 2.04.
“Competitive Bid” means an offer by a Lender to make a Competitive Loan in accordance with Section 2.04.
“Competitive Bid Rate” means, with respect to any Competitive Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender making such Competitive Bid.
“Competitive Bid Request” means a request by the Borrower for Competitive Bids in accordance with Section 2.04.
“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.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.
“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, (i) to fund any portion of its Loans, (ii) to fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) to pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified in writing, including, if applicable, by reference to a specific Default) has not been satisfied, (b) has notified the Borrower, the Administrative Agent or any other Lender in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good-faith determination that a condition precedent (specifically identified in such writing, including, if applicable, by reference to a specific Default) to funding a Loan cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent or any other Lender, made in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the receipt by the Administrative Agent or such other Lender of such certification, or (d) has become the subject of a Bankruptcy Event.

6

“Documentary Letter of Credit” means a Letter of Credit which requires that the drafts thereunder be accompanied by a document of title covering or securing title to the goods acquired with the proceeds of such drafts.
“Documentation Agent” means each of BBVA Securities Inc., Citibank, N.A. and Morgan Stanley MUFG Loan Partners, LLC in its capacity as documentation agent for the credit facility established hereunder. 
“Dollars” or “$” refers to lawful money of the United States of America.
“Domestic Securitization Transaction” means any transfer by the Borrower or any of its Domestic Subsidiaries of its accounts receivable or interests (including security interests) therein  (a) to a trust, partnership, corporation, limited liability company or other entity, which transfer is funded in whole or in part, directly or indirectly, by the incurrence or issuance by the transferee or successor transferee of Indebtedness or other securities that are to receive payments from, or that represent interests in, the cash flow derived from such accounts receivable or interests therein, or (b) directly to one or more investors or other purchasers.
“Domestic Subsidiary” means any Subsidiary of the Borrower organized or incorporated under the laws of any State within the United States of America or the District of Columbia.
“EBITDA” means, for any period, the consolidated net income of the Borrower and its consolidated Subsidiaries determined in accordance with GAAP (but excluding therefrom any portion thereof attributable to any noncontrolling interest in a Subsidiary and, prior to the Restricted Date, excluding all amounts relating to Best Buy Europe Distributions and its Subsidiaries) plus (a) to the extent deducted in determining such consolidated net income, the sum of (i) interest expense (net of interest income), income tax expense and depreciation and amortization, all as determined in accordance with GAAP, (ii) extraordinary, non-recurring or unusual charges or losses, (iii) charges resulting from the application of FASB Statement Number 123 (Revised), (iv) other non-cash charges, and (v) losses arising from the sale of assets other than in the ordinary course of business, minus (b) to the extent included in such consolidated net income, extraordinary gains and gains arising from the sale of assets other than in the ordinary course of business.
“Effective Date” means the date on which the Administrative Agent declares this Agreement effective as provided in Section 5.01.
“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“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 any trade or business (whether or not incorporated) that, together 

7

with the Borrower, 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) a failure by any Plan to meet the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA) applicable to such Plan, in each instance, 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 the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower 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 the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
“Eurocurrency”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to (a) in the case of a Syndicated Loan or a Syndicated Borrowing, the Adjusted LIBO Rate, or (b) in the case of a Competitive Loan or a Competitive Borrowing, the LIBO Rate.
“Event of Default” has the meaning specified in Article VIII.
“Excess Funding Guarantor” has the meaning specified in Section 3.08.
“Excess Payment” has the meaning specified in Section 3.08.
“Exchange Act” means the Securities Exchange Act of 1934.
“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any Issuing Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower or any Subsidiary Guarantor hereunder or under any other Loan Document, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes or minimum Taxes (in lieu of net income Taxes), and branch profits Taxes imposed as a result of such recipient being organized under the laws of, or having its principal office or, in the case of any Lender or Issuing Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof), (b) any Taxes that are Other Connection Taxes, (c) in the case of a Lender or an Issuing Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(b) or 2.20(b)), any withholding Tax that is imposed by the United States of America on amounts payable to such Lender at the time such Lender becomes a party hereto (or designates a new lending office), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.17(a) or 2.17(c), (d) Taxes attributable to such Lender’s or Issuing Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 2.17(f) or 2.17(g), and (e) any U.S. Federal withholding Taxes imposed under FATCA.
“Existing Commitment Termination Date” has the meaning set forth in Section 2.20(a).
“Existing Credit Agreement” means the Credit Agreement dated as of September 19, 2007, among the Borrower, the subsidiary guarantors party thereto, JPMCB, as administrative agent, and the lenders party thereto, as heretofore amended.
“Existing Letters of Credit” means each letter of credit previously issued for the account of 

8

the Borrower pursuant to the Existing Credit Agreement that is (a) outstanding on the Effective Date and (b) listed on Schedule 2.06.
“Extension Effective Date” has the meaning set forth in Section 2.20(a).
“Extension Request” has the meaning set forth in Section 2.20(a).
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.  
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“Financial Officer” means the principal financial officer, chief financial officer, principal accounting officer, treasurer, controller or director-treasury of the Borrower.
“Fixed Rate” means, with respect to any Competitive Loan (other than a Competitive Eurocurrency Loan), the fixed rate of interest per annum specified by the Lender making such Competitive Loan in its related Competitive Bid.  When used in reference to any Loan or Borrowing, “Fixed Rate” refers to whether such Loan, or the Loans comprising such Borrowing, are Competitive Loans bearing interest at a Fixed Rate.
“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than the United States of America, a State thereof or the District of Columbia.
“Foreign Securitization Transaction” means any transfer by any Foreign Subsidiaries of its accounts receivable or interests (including security interests) therein (a) to a trust, partnership, corporation, limited liability company or other entity, which transfer is funded in whole or in part, directly or indirectly, by the incurrence or issuance by the transferee or successor transferee of Indebtedness or other securities that are to receive payments from, or that represent interests in, the cash flow derived from such accounts receivable or interests therein, or (b) directly to one or more investors or other purchasers.
“Foreign Subsidiary” means any Subsidiary of the Borrower that is not a Domestic Subsidiary.
“GAAP” means generally accepted accounting principles in the United States of America.
“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply 

9

funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
“Guarantee Assumption Agreement” means a Guarantee Assumption Agreement substantially in the form of Exhibit B by (a) an entity that, pursuant to Section 6.08, is required to become a “Subsidiary Guarantor” hereunder or (b) any Domestic Subsidiary that, pursuant to Section 3.10, is designated a “Subsidiary Guarantor” by the Borrower, in each case in favor of the Administrative Agent.
“Guaranteed Obligations” has the meaning set forth in Section 3.01. 
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated as “toxic” or “hazardous” or as a “pollutant” or “contaminant” by any Governmental Authority.
“Hedging Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan (including the Borrower’s omnibus stock and incentive plan and the Borrower’s employee stock purchase plan) providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or its Subsidiaries shall be a Hedging Agreement.
“Indebtedness”  means, with respect to any Person at any time of determination, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid or accrued by such Person, (d) all obligations of such Person for the deferred purchase price of property not constituting a current liability, (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, actual or contingent, as an account party in respect of letters of credit or bankers’ acceptances, (g) all Guarantees by such Person of Indebtedness of others and (h) all Indebtedness of others secured by any Lien on property owned by such Person, whether or not the Indebtedness secured thereby has been assumed.  The Indebtedness of any Person shall include the Indebtedness of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such other Person, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“Indemnified Taxes” means Taxes imposed on or with respect to any payment made by or on account of any obligation of the Borrower or any Subsidiary Guarantor, other than Excluded Taxes.
“Indemnitee” has the meaning specified in Section 10.03(b).
“Information Memorandum” means the Confidential Information Memorandum dated September 2011 relating to the Borrower and the Transactions.
“Initial Purchase Price” means $2,167,000,000.
“Interest Coverage Ratio” means, for any Measurement Period, the ratio of (a) the sum of 

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EBITDA and Rental and Lease Expense for such Measurement Period to (b) the sum of Net Interest Expense/Income and Rental and Lease Expense for such Measurement Period.
“Interest Election Request” means a request by the Borrower to convert or continue a Syndicated Borrowing in accordance with Section 2.08.
“Interest Payment Date” means (a) with respect to any Syndicated ABR Loan and any Swingline Loan, each Quarterly Date, (b) with respect to any Eurocurrency Loan, the last day of each Interest Period therefor and, in the case of any Interest Period for a Eurocurrency Loan of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at three‐month intervals after the first day of such Interest Period and (c) with respect to any Fixed Rate Loan, the last day of the Interest Period therefor and, in the case of any Interest Period for a Fixed Rate Loan of more than 90 days’ duration (unless otherwise specified in the applicable Competitive Bid Request), each day prior to the last day of such Interest Period that occurs at 90‐day intervals after the first day of such Interest Period, and any other dates that are specified in the applicable Competitive Bid Request as Interest Payment Dates with respect to such Loan.
“Interest Period” means:
(a)    for any Syndicated Eurocurrency Loan or Borrowing, the period commencing on the date of such Loan or Borrowing and ending on the day that is seven days or the numerically corresponding day in the calendar month that is one, two, three or six months (or, with the consent of each Lender, nine or twelve months) thereafter, as specified in the applicable Borrowing Request or Interest Election Request;
(b)    for any Competitive Eurocurrency Loan or Borrowing, the period commencing on the date of such Loan or Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as specified in the applicable Competitive Bid Request; and
(c)    for any Fixed Rate Loan or Borrowing, the period (which shall not be less than seven days or more than 360 days) commencing on the date of such Loan or Borrowing and ending on the date specified in the applicable Competitive Bid Request;
provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurocurrency Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period pertaining to a Eurocurrency Borrowing 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 last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period and (iii) any Interest Period must comply with Section 2.02(d).  For purposes hereof, the date of a Loan or Borrowing initially shall be the date on which such Loan or Borrowing is made and, in the case of a Syndicated Loan or Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Loan or Borrowing.
“Inventory” means goods held for sale, lease or use by a Person in the ordinary course of business, net of any reserve for goods that have been segregated by such Person to be returned to the applicable vendor for credit, as determined in accordance with GAAP.
“Investments” means, for any Person: (a) the acquisition (whether for cash, property, services or securities or otherwise) of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of, or the making of any capital contribution to, any other Person or any agreement to make any such acquisition, (b) the making of any deposit with, or advance, loan or other extension of credit to, any other Person (including the purchase of property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such property to such Person), and (c) the entering into of any Guarantee of, 

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or other contingent obligation with respect to, Indebtedness or other liabilities of any other Person (provided that for purposes of Section 7.07(b), the amount of any such Guarantee or contingent obligation shall equal the then outstanding amount of the Indebtedness or other liabilities subject thereto).
“Issuing Lender” means each of JPMCB, USB and each other Lender designated by the Borrower as an “Issuing Lender” hereunder that has agreed to such designation (and is reasonably acceptable to the Administrative Agent), each in its capacity as an issuer of one or more Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(j), in each case so long as such Person shall remain an Issuing Lender hereunder.  Any Issuing Lender may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Lender, in which case the term “Issuing Lender” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.
“JPMCB” means JPMorgan Chase Bank, N.A.
“LC Disbursement” means a payment made by an Issuing Lender pursuant to a Letter of Credit.
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.
“Lender Parent” means, with respect to any Lender, any Person in respect of which such Lender is a subsidiary.
“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption or in accordance with Section 2.09 or 2.20, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lenders.
“Letter of Credit” means each Existing Letter of Credit and any letter of credit issued pursuant to this Agreement.
“Letter of Credit Documents” means, with respect to any Letter of Credit, collectively, any application therefor and any other agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b) any collateral security for any of such obligations, each as the same may be modified and supplemented and in effect from time to time.
“LIBO Rate” means, for the Interest Period for any Eurocurrency Borrowing, the rate appearing on the Reuters “LIBOR01” screen displaying British Bankers’ Association Interest Settlement Rates (or on any successor or substitute screen provided by Reuters, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such screen, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for deposits denominated in Dollars with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the LIBO Rate for such Interest Period shall be the rate at which deposits in Dollars in the amount of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, 

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hypothecation, encumbrance, charge or security interest in, on or of such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.
“Loan Documents” means this Agreement, each Guarantee Assumption Agreement, each agreement referred to in Section 2.09(e)(ii)(B), each agreement referred to in Section 2.20(b) and the Letter of Credit Documents.
“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.
“Margin” means, with respect to any Competitive Loan bearing interest at a rate based on the LIBO Rate, the marginal rate of interest, if any, to be added to or subtracted from the LIBO Rate to determine the rate of interest applicable to such Loan, as specified by the Lender making such Loan in its related Competitive Bid.
“Margin Stock” means “margin stock” within the meaning of Regulation U issued by the Board, as from time to time amended
“Material Adverse Effect” means (a) a materially adverse effect on the business, assets, operations, or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) material impairment of the ability of the Obligors taken as a whole to perform any material obligation under any Loan Document to which such Person is or becomes a party or (c) material impairment of any of the material rights of, or benefits available to, the Administrative Agent, the Issuing Lenders or the Lenders under any Loan Document.
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit) and Securitization Transactions, or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $150,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of (a) the obligations of the Borrower or any of its Subsidiaries in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or any Subsidiary would be required to pay if such Hedging Agreement were terminated at such time and (b) any Securitization Transaction shall be determined as set forth in the definition of such term. 
“Material Subsidiary” means, at any time, with respect to any fiscal year of the Borrower, any Subsidiary which accounted for an amount equal to or greater than 5.0% of the consolidated aggregate revenues of the Borrower for such fiscal year, provided that, notwithstanding the foregoing, each Subsidiary Guarantor shall be deemed to be a “Material Subsidiary”.
“Measurement Period” means a period of four consecutive fiscal quarters ending on the last day of a fiscal quarter of the Borrower.
“Moody’s” means Moody’s Investors Service, Inc., and any successor to its rating agency business.
“Moody’s Rating” means Moody’s rating of the Borrower’s long term, unenhanced, senior unsecured debt.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Net Interest-bearing Indebtedness” means, as of the last day of any Measurement Period, all Indebtedness of the Borrower and its Subsidiaries for borrowed money or that bears interest and that, in accordance with GAAP, would be classified as long term or short term debt on the consolidated balance sheet of the Borrower, net of the aggregate amount of invested cash and cash equivalents held by the Borrower or 

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any Subsidiary as of such date, excluding any such cash and cash equivalents that (a) are subject to any Liens (other than Liens in favor of the Administrative Agent, the Issuing Lenders, the Swingline Lenders or any other Lender created under the Loan Documents), (b) are subject to any restrictions on the use or disposition thereof or (c) are held by a Subsidiary, to the extent such Subsidiary is subject to any restriction on the distribution of such cash or cash equivalents without prior approval or waiver (that has not been obtained), pursuant to the terms of such Subsidiary’s organizational documents or any agreement, judgment, order, law or other restriction binding upon such Subsidiary; provided that in no event shall Net Interest-bearing Indebtedness be less than zero.
“Net Interest Expense/Income” means, for any period of determination, interest expense minus interest income, in each case calculated on a consolidated basis for the Borrower and its Subsidiaries in accordance with GAAP.
“Non-Defaulting Lender” means, at any time, any Lender that is not a Defaulting Lender at such time.
“Non-Extending Lender” has the meaning set forth in Section 2.20(a).
“Obligor” means the Borrower and each Subsidiary Guarantor.
“Other Connection Taxes” means, with respect to the Administrative Agent, any Lender, any Issuing Lender or any other recipient, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan, any other Guaranteed obligation or any Loan Document).
“Other Taxes” means any and all present or future recording, stamp, court, documentary, filing, excise, property or similar Taxes arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document, except (i) any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment pursuant to a request by the Borrower under Section 2.19(b) or 2.20(b)) and (ii) any Excluded Taxes.
“Participant” has the meaning set forth in Section 10.04(c)(i).
“Participant Register” has the meaning set forth in Section 10.04(c)(i).
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.
“Permitted Encumbrances” means: 
(a)    Liens for Taxes not delinquent or which are being contested in good faith by appropriate proceedings and for which whatever reserves required by GAAP have been established;
(b)    Liens consisting of easements, rights-of-way, zoning restrictions, restrictions on the use of real property, and defects and irregularities in the title thereto and other similar charges or encumbrances; 
(c)    Liens imposed by law, such as landlord’s, materialmens’, mechanic’s, workmen’s, repairmen’s, carriers’, warehousemans’, vendors’ or other similar liens and encumbrances arising in the ordinary course of the business of the Borrower or any of its Subsidiaries, or governmental (federal, state or municipal) Liens arising out of contracts for the sale of products or services by the Borrower 

14

or any of its Subsidiaries, in each case, securing obligations that are not overdue by more than 30 days or which are being contested in compliance with Section 6.04, or deposits or pledges to obtain the release of any of the foregoing Liens;
(d)    deposits to secure the performance of bids, trade contracts, leases, statutory obligations, government contracts, supply agreements, utilities, performance and return-of money bonds contracts, surety and appeal bonds and other obligations of a like nature, in each case in the ordinary course of business; 
(e)    licenses, leases, or subleases granted to third Persons or to the Borrower or its Subsidiaries by the Borrower and its Subsidiaries in the ordinary course of business;
(f)    Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Borrower and its Subsidiaries (excluding deposits securing the repayment of Indebtedness); 
(g)    Liens encumbering customary initial deposits and margin deposits, and other Liens incurred in the ordinary course of business and which are within the general parameters customary in the industry securing obligations under commodities agreements; 
(h)    Liens arising in connection with Capital Lease Obligations; provided that no such Lien shall extend to or cover any assets other than the assets subject to the applicable capital leases;
(i)    any (i) interest or title of a lessor or sublessor under any lease, (ii) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to, or (iii) subordination of the interest of the lessee or sublessee under such lease to any restriction or encumbrance referred to in the preceding clause (ii); 
(j)    Liens on any property or assets of any Person existing at the time such Person is merged into or consolidated with the Borrower or any Subsidiary, provided that such Lien was not incurred in contemplation thereof and does not extend to any other property of the Borrower or any of its Subsidiaries; 
(k)    Liens arising from filing UCC financing statements relating solely to leases not prohibited by this Agreement;
(l)    Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; 
(m)    judgment Liens in respect of judgments that do not constitute an Event of Default under clause (j) of Article VIII; 
(n)    Liens solely on cash earnest money deposits made by Borrower or any Subsidiary in connection with any letter of intent or purchase agreement permitted hereunder; provided that such Liens are granted on customary business terms and in the ordinary course of business of the Borrower or such Subsidiary; and
(o)    Liens (i) of a collection bank arising under Section 4-210 of the UCC on items in the course of collection and (ii) in favor of a banking institution arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry, in each case existing solely with respect to cash or cash equivalents. 
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

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“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA that is sponsored, maintained or contributed to by the Borrower or any ERISA Affiliate.
“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMCB as its prime rate in effect at its principal office in New York City.  Each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
“Pro Rata Share” has the meaning set forth in Section 3.08.
“Quarterly Dates” means the last Business Day of each fiscal quarter of the Borrower in each of its fiscal years, the first of which shall be the first such day after the date hereof.
“Receivables” means all rights of the Borrower or any of its Subsidiaries to payments (whether constituting accounts, chattel paper, instruments, general intangibles or otherwise, and including the right to payment of any interest or finance charges), which rights are identified (or, in the case of future rights to payments, are expected to be identified) in the accounting records of the Borrower or such Subsidiary as accounts receivable, as determined in accordance with GAAP.
“Register” has the meaning set forth in Section 10.04.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, members, trustees, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.
“Rental and Lease Expense” means, for any Measurement Period, all items that, in accordance with GAAP, would be classified as rental and lease expense that are included in selling, general and administrative expenses on the consolidated statement of earnings of the Borrower, in each case determined in accordance with GAAP, provided that Rental and Lease Expense shall not include any Rental and Lease Expense incurred during the Measurement Period under leases that have been assigned to and assumed by any Person (other than the Borrower or a Subsidiary) or that constitute or relate to discontinued operations for which the Borrower and its Subsidiaries are no longer obligated.
“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures and unused Commitments representing more than 50% of the sum of the total Revolving Credit Exposures and unused Commitments at such time (provided that, for purposes of declaring the Loans to be due and payable pursuant to Article VIII, and for all purposes after the Loans become due and payable pursuant to Article VIII or the Commitments expire or terminate, the outstanding Competitive Loans of the Lenders shall be included in their respective Revolving Credit Exposures in determining the Required Lenders).
“Restricted Date” has the meaning set forth in the definition of “Subsidiary”.
“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Syndicated Loans and its LC Exposure and Swingline Exposure at such time.
“Securitization Transaction” means any Domestic Securitization Transaction or any Foreign Securitization Transaction.   The “amount” or “principal amount” of any Domestic Securitization Transaction or Foreign Securitization Transaction shall be deemed at any time to be the aggregate principal or stated amount of the Indebtedness or other securities referred to in the definition of the term “Domestic Securitization Transaction” or “Foreign Securitization Transaction”, as applicable, or, if there shall be no such principal or stated amount, the uncollected amount of the accounts receivable or interests therein transferred pursuant to such Domestic Securitization Transaction or Foreign Securitization Transaction, as applicable, net of any such accounts receivable or interests therein that have been written off as uncollectible.

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“Specified Subsidiary” means, with respect to any fiscal year of the Borrower, any Domestic Subsidiary which accounted for an amount equal to or greater than 20.0% of the consolidated aggregate revenues of the Borrower for such fiscal year, provided that, if, in any fiscal year of the Borrower, the Subsidiaries (other than Best Buy Stores, L.P.), on a collective basis, accounted for more than 50.0% of the consolidated aggregate revenues of the Borrower for such fiscal year, then the percentage amount stated in the clause preceding the proviso clause of this definition shall be automatically and permanently reduced to 5.0%.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw–Hill Companies, Inc., and any successor to its rating agency business.
“S&P Rating” means S&P’s corporate credit rating for the Borrower.
“Statutory Reserve Rate” means, for the Interest Period for any Syndicated Eurocurrency Borrowing, a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the arithmetic mean, taken over each day in such Interest Period, of the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of the Board).  Such reserve percentages shall include those imposed pursuant to Regulation D of the Board.  Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D of the Board or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.  Unless otherwise specified, “Subsidiary” means a Subsidiary of the Borrower.  Notwithstanding the foregoing, Best Buy Europe Distributions and its Subsidiaries shall be deemed not to constitute “Subsidiaries” of the Borrower for the purposes of this Agreement and the other Loan Documents; provided that, (a) this sentence shall not apply to the definition of the term “Total Assets” and (b) the Borrower may specify in a written notice to the Administrative Agent (the date thereof, the “Restricted Date”) that Best Buy Europe Distributions and its Subsidiaries shall thereafter be treated as “Subsidiaries” of the Borrower for the purposes of this Agreement and the other Loan Documents, provided that, (i) immediately before and after the Restricted Date, no Default shall have occurred and be continuing, including, on a pro forma basis, pursuant to the covenants set forth in Section 7.06 (and the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer setting forth in reasonable detail the calculations demonstrating compliance with such covenants) and (ii) the Borrower may not subsequently specify that Best Buy Europe Distributions and its Subsidiaries shall no longer be treated as “Subsidiaries” of the Borrower for the purposes of this Agreement and the Loan Documents.  If the Restricted Date occurs, Best Buy Europe Distributions and its Subsidiaries shall be deemed to have incurred on such date any Indebtedness or Liens of Best Buy Europe Distributions or such Subsidiary existing on such date.
“Subsidiary Guarantor” means Best Buy Stores, L.P., BBC Investment Co., BBC Property Co., each Specified Subsidiary that becomes a “Subsidiary Guarantor” after the date hereof pursuant to Section 6.08 and each Domestic Subsidiary that becomes a “Subsidiary Guarantor after the date hereof pursuant to Section 3.10.
“Swingline Commitment” means, with respect to each Swingline Lender, the commitment 

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of such Swingline Lender to make Swingline Loans pursuant to Section 2.05, expressed as an amount representing the maximum aggregate amount of such Swingline Lender’s outstanding Swingline Loans hereunder.  The initial amount of each Swingline Lender’s Swingline Commitment is set forth on Schedule 2.05.  The aggregate amount of the Swingline Commitments on the date hereof is $200,000,000.
“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time.
“Swingline Lender” means each of JPMCB and USB, in its capacity as a lender of Swingline Loans hereunder.
“Swingline Loan” means a Loan made pursuant to Section 2.05.
“Syndicated”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are made pursuant to Section 2.01.
“Syndication Agent” means USB, in its capacity as syndication agent for the credit facility established hereunder. 
“Tangible Net Worth” means, as of any date, the sum for the Borrower and its Subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP, but excluding all amounts attributable to noncontrolling interests in any Subsidiary and, prior to the Restricted Date, all amounts relating to Best Buy Europe Distributions and its Subsidiaries), of the following:
(a)    the total assets of the Borrower and its Subsidiaries as shown on the consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal quarter or fiscal year of the Borrower most recently ended on or prior to such date prepared in accordance with GAAP, minus
(b)    the total liabilities of the Borrower and its Subsidiaries as shown on such consolidated balance sheet, minus
(c)    the net book amount of all assets of the Borrower and its Subsidiaries shown as intangible assets (including goodwill) on such consolidated balance sheet.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Total Assets” means, as of any date, for the Borrower and its Subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP), the total assets of the Borrower and its Subsidiaries as shown on the consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal quarter or fiscal year of the Borrower most recently ended prior to such date for which financial statements are available prepared in accordance with GAAP (but excluding therefrom all amounts attributable to noncontrolling interests in any Subsidiary).
“Transactions” means the execution, delivery and performance by each Obligor of this Agreement and the other Loan Documents to which such Obligor is intended to be a party, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.
“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate or, in the case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.

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“UCC” means the Uniform Commercial Code as in effect in the State of New York.
“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
“USB” means U.S. Bank National Association.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Withholding Agent” means the Borrower and the Administrative Agent.
SECTION 1.02.    Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Competitive Loan”), by Type (e.g., a “Eurocurrency  Loan”) or by Class and Type (e.g., a “Competitive Eurocurrency  Loan”).  Borrowings also may be classified and referred to by Class (e.g., a “Competitive Borrowing”), by Type (e.g., a “Eurocurrency  Borrowing”) or by Class and Type (e.g., a “Competitive Eurocurrency  Borrowing”).
SECTION 1.03.    Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real and personal, tangible and intangible assets and properties, including cash, securities, accounts and contract rights.  The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply), and all judgments, orders, writs and decrees, of all Governmental Authorities.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein (including this Agreement) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (c) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof and (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.
SECTION 1.04.    Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP as in effect from time to time; provided that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.  Notwithstanding the foregoing, (a) all liabilities under or in respect of any lease (whether now outstanding or at any time entered into or incurred) that, under GAAP as in effect on the Effective Date, would be accrued as Rental and Lease Expense and would not constitute a Capital Lease 

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Obligation, shall continue to be treated as Rental and Lease Expense in accordance with GAAP as in effect on the Effective Date and shall not constitute a Capital Lease Obligation, in each case, for purposes of the covenants set forth herein and all defined terms as used therein and (b) 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 any election under Statement of Financial Accounting Standards 159, The Fair Value Option for Financial Assets and Financial Liabilities, or any successor thereto (including pursuant to the Accounting Standards Codification), to value any Indebtedness of the Borrower or any Subsidiary at “fair value”, as defined therein.
ARTICLE II 
 
The Credits
SECTION 2.01.    The Commitments.  Subject to the terms and conditions set forth herein, each Lender agrees to make Syndicated Loans in Dollars to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (a) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or (b) the sum of the total Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans exceeding the total Commitments.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Syndicated Loans.
SECTION 2.02.    Loans and Borrowings.  (a)  Obligations of Lenders.  Each Syndicated Loan shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments.  Each Competitive Loan shall be made in accordance with the procedures set forth in Section 2.04, and each Swingline Loan shall be made in accordance with the procedures set forth in Section 2.05.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments and Competitive Bids of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.
(b)    Type of Loans.  Subject to Section 2.14, (i) each Syndicated Borrowing shall be comprised entirely of ABR Loans or of Eurocurrency Loans, as the Borrower may request in accordance herewith, and (ii) each Competitive Borrowing shall be comprised entirely of Eurocurrency Loans or Fixed Rate Loans, as the Borrower may request in accordance herewith.  Each Swingline Loan shall be an ABR Loan.  Each Lender at its option may make any Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.
(c)    Minimum Amounts; Limitation on Number of Borrowings.  Each Syndicated Eurocurrency Borrowing shall be in an aggregate amount of $5,000,000 or a larger multiple of $500,000.  Each Syndicated ABR Borrowing shall be in an aggregate amount equal to $2,000,000 or a larger multiple of $500,000; provided that a Syndicated ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(f).  Each Competitive Borrowing shall be in an aggregate amount equal to $5,000,000 or a larger multiple of $1,000,000.  Each Swingline Loan shall be in an amount equal to $1,000,000 or a larger multiple of $250,000.  Borrowings of more than one Class and Type may be outstanding at the same time; provided that there shall not at any time be more than a total of 20 Syndicated Eurocurrency Borrowings outstanding.
(d)    Limitations on Interest Periods.  Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request (or to elect to convert to or continue as a Syndicated Eurocurrency Borrowing) any Borrowing if the Interest Period requested therefor would end after the earliest Commitment Termination Date then in effect.
SECTION 2.03.    Requests for Syndicated Borrowings.  (a)  Notice by the Borrower.  

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To request a Syndicated Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (i) in the case of a Syndicated Eurocurrency Borrowing, not later than 1:00 pm, New York City time, three Business Days before the date of the proposed Borrowing or (ii) in the case of a Syndicated ABR Borrowing, not later than 1:00 p.m., New York City time, the same Business Day as the date of the proposed Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Borrowing Request in substantially the form of Exhibit D and signed by the Borrower.
(b)    Content of Borrowing Requests.  Each telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:
(i)    the aggregate principal amount of the requested Borrowing;
(ii)    the date of such Borrowing, which shall be a Business Day;
(iii)    whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;
(iv)    in the case of a Syndicated Eurocurrency Borrowing, the Interest Period therefor, which shall be a period contemplated by the definition of the term “Interest Period” and permitted under Section 2.02(d); and
(v)    the location and number of the Borrower’s account to which funds are to be disbursed, or, in the case of any Syndicated ABR Borrowing requested to finance the reimbursement of an LC Disbursement as provided in Section 2.06(f), the identity of the Issuing Lender that made such LC Disbursement.
(c)    Notice by the Administrative Agent to the Lenders.  Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.
(d)    Failure to Elect.  If no election as to the Type of a Syndicated Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Syndicated Eurocurrency Borrowing, the Borrower shall be deemed to have selected an Interest Period of one month’s duration.
SECTION 2.04.    Competitive Bid Procedure.  (a)  Requests for Bids by the Borrower.  Subject to the terms and conditions set forth herein, from time to time during the Availability Period the Borrower may request Competitive Bids and may (but shall not have any obligation to) accept Competitive Bids and borrow Competitive Loans denominated in Dollars; provided that (i) the sum of the total Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans at any time shall not exceed the total Commitments and (ii) in the event the Commitment Termination Date shall have been extended as provided in Section 2.20, the sum of (x) the LC Exposure attributable to Letters of Credit expiring after any Existing Commitment Termination Date, plus (y) the aggregate principal amount of outstanding Competitive Loans maturing after such Existing Commitment Termination Date plus (z) the Swingline Exposure attributable to Swingline Loans maturing after such Existing Commitment Termination Date shall not exceed the total Commitments that shall have been extended to a date after the latest expiration date of such Letters of Credit and the latest maturity date of such Competitive Loans and such Swingline Loans.  To request Competitive Bids, the Borrower shall notify the Administrative Agent of such request by telephone, in the case of a Eurocurrency Borrowing, not later than 1:00 p.m., New York City time, four Business Days before the date of the proposed Borrowing and, in the case of a Fixed Rate Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of the proposed Borrowing; provided that the Borrower may submit up to (but not more than) one Competitive Bid Request on the same day, but a Competitive Bid Request shall not be made within four Business Days after the date of any previous Competitive Bid Request, unless any and all such previous Competitive Bid Requests shall have been withdrawn or all 

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Competitive Bids received in response thereto rejected.  Each such telephonic Competitive Bid Request shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Competitive Bid Request in a form approved by the Administrative Agent and signed by the Borrower.  Each such telephonic and written Competitive Bid Request shall specify the following information in compliance with Section 2.02:
(i)    the aggregate amount of the requested Borrowing;
(ii)    the date of such Borrowing, which shall be a Business Day;
(iii)    the maturity date of such Borrowing, which date shall not be less than seven days or more than 360 days after the date of such Borrowing;
(iv)    whether such Borrowing is to be a Eurocurrency Borrowing or a Fixed Rate Borrowing;
(v)    the Interest Period for such Borrowing, which shall be a period contemplated by the definition of the term “Interest Period” that does not extend beyond the earliest Commitment Termination Date then in effect; and
(vi)    the location and number of the Borrower’s account to which funds are to be disbursed.
Promptly following receipt of a Competitive Bid Request in accordance with this Section, the Administrative Agent shall notify the Lenders of the details thereof, inviting the Lenders to submit Competitive Bids.
(b)    Making of Bids by Lenders.  Each Lender may (but shall not have any obligation to) make one or more Competitive Bids to the Borrower in response to a Competitive Bid Request.  Each Competitive Bid by a Lender must be in a form approved by the Administrative Agent and must be received by the Administrative Agent by facsimile, in the case of a Competitive Eurocurrency Borrowing, not later than 9:30 a.m., New York City time, three Business Days before the proposed date of such Borrowing, and in the case of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on the proposed date of such Borrowing.  Competitive Bids that do not conform substantially to the form approved by the Administrative Agent may be rejected by the Administrative Agent, and the Administrative Agent shall notify the applicable Lender of such rejection as promptly as practicable.  Each Competitive Bid shall specify (i) the principal amount (which shall be $5,000,000 or a larger multiple of $1,000,000 and which may equal the entire principal amount of the Competitive Borrowing requested by the Borrower) of the Competitive Loan or Loans that the Lender is willing to make, (ii) the Competitive Bid Rate or Competitive Bid Rates at which the Lender is prepared to make such Loan or Loans (expressed as a percentage rate per annum in the form of a decimal to no more than four decimal places) and (iii) the Interest Period for each such Loan and the last day thereof.
(c)    Notification of Bids by Administrative Agent.  The Administrative Agent shall promptly notify the Borrower by facsimile of the Competitive Bid Rate and the principal amount specified in each Competitive Bid and the identity of the Lender that shall have made such Competitive Bid.
(d)    Acceptance of Bids by the Borrower.  Subject only to the provisions of this paragraph, the Borrower may accept or reject any Competitive Bid.  The Borrower shall notify the Administrative Agent by telephone, confirmed by facsimile in a form approved by the Administrative Agent, whether and to what extent it has decided to accept or reject each Competitive Bid, in the case of a Competitive Eurocurrency Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of the proposed Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than 11:00 a.m., New York City time, on the proposed date of the Competitive Borrowing; provided, that (i) the failure of the Borrower to give such notice shall be deemed to be a rejection of each Competitive Bid, (ii) the Borrower shall not accept a Competitive Bid made at a particular Competitive Bid Rate if the Borrower rejects a Competitive Bid made at a lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive Bids 

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accepted by the Borrower shall not exceed the aggregate amount of the requested Competitive Borrowing specified in the related Competitive Bid Request, (iv) to the extent necessary to comply with clause (iii) of this proviso, the Borrower may accept Competitive Bids at the same Competitive Bid Rate in part, which acceptance, in the case of multiple Competitive Bids at such Competitive Bid Rate, shall be made pro rata in accordance with the amount of each such Competitive Bid, and (v) except pursuant to clause (iv) of this proviso, no Competitive Bid shall be accepted for a Competitive Loan unless such Competitive Loan is in a principal amount of $5,000,000 or a larger multiple of $1,000,000; provided further that if a Competitive Loan must be in an amount less than $5,000,000 because of the provisions of clause (iv) of the first proviso of this paragraph, such Competitive Loan may be in the amount of $1,000,000 or any multiple thereof, and in calculating the pro rata allocation of acceptances of portions of multiple Competitive Bids at a particular Competitive Bid Rate pursuant to such clause (iv) the amounts shall be rounded to multiples of $1,000,000 in a manner determined by the Borrower.  A notice given by the Borrower pursuant to this paragraph shall be irrevocable.
(e)    Notification of Acceptances by the Administrative Agent.  The Administrative Agent shall promptly notify each bidding Lender whether or not its Competitive Bid has been accepted (and, if so, the amount and Competitive Bid Rate so accepted), and each successful bidder will thereupon become bound, subject to the terms and conditions hereof, to make the Competitive Loan in respect of which its Competitive Bid has been accepted.
(f)    Bids by the Administrative Agent.  If the Administrative Agent shall elect to submit a Competitive Bid in its capacity as a Lender, it shall submit such Competitive Bid directly to the Borrower at least one quarter of an hour earlier than the time by which the other Lenders are required to submit their Competitive Bids to the Administrative Agent pursuant to paragraph (b) of this Section.  Any Competitive Bid submitted by the Administrative Agent that fails to comply with the provisions of paragraph (b) above and this paragraph (f) shall be void ab initio.
SECTION 2.05.    Swingline Loans.  (a)  Agreement to Make Swingline Loans.  Subject to the terms and conditions set forth herein, each Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Availability Period, in Dollars, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $200,000,000, (ii) the sum of the total Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans exceeding the total Commitments or (iii) in the event the Commitment Termination Date shall have been extended as provided in Section 2.20, the sum of (x) the LC Exposure attributable to Letters of Credit expiring after any Existing Commitment Termination Date, plus (y) the aggregate principal amount of outstanding Competitive Loans maturing after such Existing Commitment Termination Date, plus (z)  the Swingline Exposure attributable to Swingline Loans maturing after such Existing Commitment Termination Date exceeding the total Commitments that shall have been extended to a date after the latest expiration date of such Letters of Credit and the latest maturity date of such Competitive Loans and such Swingline Loans; provided that no Swingline Lender shall be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.  The Borrower may request any Swingline Loans from one or more of the Swingline Lenders, subject only to the limitation that the outstanding Swingline Loans of any Swingline Lender shall at no time exceed its Swingline Commitment.  The failure of any Swingline Lender to make any Swingline Loan required to be made by it shall not relieve any other Swingline Lender of its obligations hereunder; provided that the Swingline Commitments of each Swingline Lender are several and no Swingline Lender shall be responsible for any other Swingline Lender’s failure to make Swingline Loans as required.
(b)    Notice of Swingline Loans by the Borrower.  To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by facsimile), not later than 3:00 p.m., New York City time, on the day of a proposed Swingline Loan.  Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day), amount of the requested Swingline Loan, the Swingline Lender requested to make such Swingline Loan and the location and number 

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of the Borrower’s account to which funds are to be disbursed, or, in the case of any Swingline Loan requested to finance the reimbursement of an LC Disbursement as provided in Section 2.06(f), the identity of the Issuing Lender that made such LC Disbursement.  The Administrative Agent will promptly advise the applicable Swingline Lender of any such notice received from the Borrower.  The applicable Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to a deposit account of the Borrower as designated by the Borrower (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(f), by remittance to the respective Issuing Lender) by 5:00 p.m., New York City time, on the requested date of such Swingline Loan.
(c)    Participations by Lenders in Swingline Loans.  Each Swingline Lender may by written notice given to the Administrative Agent not later than 10:00 a.m., New York City time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of its Swingline Loans outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will be required to participate.  Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each Lender hereby absolutely and unconditionally agrees to pay, upon receipt of notice as provided above in this paragraph, to the Administrative Agent, for account of the applicable Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Lender further acknowledges and agrees that, in making any Swingline Loan, each Swingline Lender shall be entitled to rely, and shall not incur any liability for relying, upon the representation and warranty of the Borrower deemed made pursuant to Section 5.02, unless, at least two Business Days prior to the time such Swingline Loan was made, the Required Lenders shall have notified such Swingline Lender (with a copy to the Administrative Agent) in writing that, as a result of one or more events or circumstances described in such notice, one or more of the conditions precedent set forth in Section 5.02 would not be satisfied if such Swingline Loan were then made (it being understood and agreed that, in the event any Swingline Lender shall have received any such notice, no Swingline Lender shall make any Swingline Loan until and unless it shall be satisfied that the events and circumstances described in such notice shall have been cured or otherwise shall have ceased to exist).  Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders under this paragraph), and the Administrative Agent shall promptly pay to the applicable Swingline Lender the amounts so received by it from the Lenders.
The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to the preceding paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the applicable Swingline Lender.  Any amounts received by a Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by such Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; and any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to the preceding paragraph and to such Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to such Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason.  The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.
SECTION 2.06.    Letters of Credit.  (a)  General.  Subject to the terms and conditions set forth herein, in addition to the Loans provided for in Section 2.01, the Borrower may request any Issuing Lender to issue, at any time and from time to time during the Availability Period, Letters of Credit denominated in Dollars for its own account in such form as is acceptable to the Administrative Agent and such Issuing 

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Lender in its reasonable determination.  Letters of Credit issued hereunder shall constitute utilization of the Commitments.  From and after the Effective Date, each Existing Letter of Credit shall be deemed, for all purposes of this Agreement (including paragraphs (e) and (f) of this Section), to be a Letter of Credit issued for the account of the Borrower on the Effective Date.
(b)    Notice of Issuance, Amendment, Renewal or Extension; Auto-Renewal Letters of Credit.
(i)    To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit, other than an automatic renewal of an Auto-Renewal Letter of Credit permitted pursuant to clause (ii) of this Section 2.06(b)), the Borrower shall hand deliver or facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the recipient) to the relevant Issuing Lender and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (d) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the relevant Issuing Lender, the Borrower also shall submit a letter of credit application on such Issuing Lender’s standard form in connection with any request for a Letter of Credit.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, an Issuing Lender relating to any Letter of Credit, the terms and conditions of this Agreement shall control.
(ii)    Any Letter of Credit issuable under this Agreement may be issued, if the Borrower so requests and the relevant Issuing Lender so agrees, in the form of an Auto-Renewal Letter of Credit; provided that any such Auto-Renewal Letter of Credit must permit such Issuing Lender to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof of such Issuing Lender’s option not to extend the Letter of Credit beyond the expiration date (a “Non-Renewal Notice”).  Such Issuing Lender shall have the option to issue a Non-Renewal Notice during a specified period in each such twelve-month period to be agreed upon by the Borrower, such Issuing Lender and the Administrative Agent at the time such Letter of Credit is issued (the date of such notice shall be referred to herein as the “Non-Renewal Notice Date”).  Once an Auto-Renewal Letter of Credit has been issued, each Lender shall be deemed to have authorized (but may not require) the relevant Issuing Lender to permit the renewal of such Letter of Credit at any time to an expiry date not later than one year after its date of issuance or renewal; provided that such Issuing Lender shall not permit any such renewal if such Issuing Lender has reasonably determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms of this Agreement (by reason of the provisions of paragraph (c) or (d) of this Section or otherwise).
(c)    Limitations on Amounts.  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the aggregate LC Exposure shall not exceed $300,000,000, (ii) the sum of the total Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans shall not exceed the total Commitments and (iii) in the event the Commitment Termination Date shall have been extended as provided in Section 2.20, the sum of (x) the LC Exposure attributable to Letters of Credit expiring after any Existing Commitment Termination Date, plus (y) the aggregate principal amount of outstanding Competitive Loans maturing after such Existing Commitment Termination Date plus (z) the Swingline Exposure attributable to Swingline Loans maturing after such Existing Commitment Termination Date shall not exceed the total Commitments that shall have been extended to a date after the latest expiration date of such Letters of Credit and the latest maturity date of such Competitive Loans and such Swingline Loans.
(d)    Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business 

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on the earlier of (i) the date twelve months after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, twelve months after the then‐current expiration date of such Letter of Credit) and (ii) the date that is five Business Days prior to the Commitment Termination Date.
(e)    Participations.  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) by any Issuing Lender, and without any further action on the part of such Issuing Lender or the Lenders, such Issuing Lender hereby grants to each Lender, and each Lender hereby acquires from such Issuing Lender, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.  Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments.  Each Lender further acknowledges and agrees that each Issuing Lender shall be entitled to rely, and shall not incur any liability for relying, upon the representation and warranty of the Borrower deemed made pursuant to Section 5.02, unless, at least two Business Days prior to the time of issuance, or the time of any amendment, renewal or extension subject to Section 5.02, of any Letter of Credit by such Issuing Lender, the Required Lenders shall have notified the applicable Issuing Lender (with a copy to the Administrative Agent) in writing that, as a result of one or more events or circumstances described in such notice, one or more of the conditions precedent set forth in Section 5.02 would not be satisfied if such Letter of Credit were then issued or so amended, renewed or extended (it being understood and agreed that, in the event any Issuing Lender shall have received any such notice, no Issuing Lender shall issue, amend, renew or extend any Letter of Credit until and unless it shall be satisfied that the events and circumstances described in such notice shall have been cured or otherwise shall have ceased to exist).
In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for account of the relevant Issuing Lender, such Lender’s Applicable Percentage of each LC Disbursement made by an Issuing Lender promptly upon the request of such Issuing Lender at any time from the time of such LC Disbursement until such LC Disbursement is reimbursed by the Borrower or at any time after any reimbursement payment is required to be refunded to the Borrower for any reason.  Such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each such payment shall be made in the same manner as provided in Section 2.07 with respect to Syndicated Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders under this paragraph), and the Administrative Agent shall promptly pay to the relevant Issuing Lender the amounts so received by it from the Lenders.  Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to paragraph (f) of this Section, the Administrative Agent shall distribute such payment to the relevant Issuing Lender or, to the extent that the Lenders have made payments pursuant to this paragraph to reimburse such Issuing Lender, then to such Lenders and such Issuing Lender as their interests may appear.  Any payment made by a Lender pursuant to this paragraph to reimburse an Issuing Lender for any LC Disbursement shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.
(f)    Reimbursement.  If an Issuing Lender shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such Issuing Lender in respect of such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, New York City time, on (i) the Business Day that the Borrower receives notice of such LC Disbursement, if such notice is received prior to 10:00 a.m., New York City time, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time; provided that if such LC Disbursement is not less than (x) $2,000,000 in the case of a Syndicated ABR Borrowing and (y) $1,000,000 in the case of a Swingline Loan, the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with a Syndicated ABR Borrowing or a Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting Syndicated ABR Borrowing or Swingline Loan.

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If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof.
(g)    Obligations Absolute.  The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (f) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by an Issuing Lender under a Letter of Credit against presentation of a draft or other document that does not comply strictly with the terms of such Letter of Credit, (iv) the failure to perfect any lien or security interest granted to, or in favor of, the Administrative Agent or any of the Lenders as security for any reimbursement obligations in respect of any LC Disbursement or (v) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.
None of the Administrative Agent, the Lenders or the Issuing Lenders, or any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit by any Issuing Lender or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the relevant Issuing Lender; provided that the foregoing shall not be construed to excuse an Issuing Lender from liability to the Borrower to the extent of any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Lender’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree, to the fullest extent permitted by law, that, in the absence of gross negligence or willful misconduct on the part of an Issuing Lender (with such absence to be presumed unless otherwise determined by a court of competent jurisdiction in a final and nonappealable judgment), such Issuing Lender shall be deemed to have exercised care in each such determination, and that:
(i)    an Issuing Lender may accept documents that appear on their face to be in substantial compliance with the terms of a Letter of Credit without responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit;
(ii)    an Issuing Lender shall have the right, in its sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit; and
(iii)    this sentence shall establish the standard of care to be exercised by an Issuing Lender when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof (and the parties hereto hereby waive, to the extent permitted by applicable law, any standard of care inconsistent with the foregoing).
(h)    Disbursement Procedures.  The Issuing Lender for any Letter of Credit shall, within a reasonable time following its receipt thereof, examine all documents purporting to represent a demand for payment under such Letter of Credit.  Such Issuing Lender shall promptly after such examination notify the Administrative Agent and the Borrower by telephone (confirmed by facsimile) of such demand for payment 

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and whether such Issuing Lender has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Lender and the Lenders with respect to any such LC Disbursement.
(i)    Interim Interest.  If the Issuing Lender for any Letter of Credit shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to, but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to Syndicated ABR Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (f) of this Section, then Section 2.13(d) shall apply.  Interest accrued pursuant to this paragraph shall be for the account of such Issuing Lender, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse such Issuing Lender shall be for the account of such Lender to the extent of such payment, and shall be payable on demand or, if no demand has been made, on the date on which the Borrower reimburses the applicable LC Disbursement in full.
(j)    Additional Issuing Lenders; Termination of Issuing Lenders.  An Issuing Lender may be added, or an existing Issuing Lender may be terminated, under this Agreement at any time by written agreement between the Borrower, the Administrative Agent and the relevant Issuing Lender.  The Administrative Agent shall notify the Lenders of any such addition or termination.  At the time any such termination shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the Issuing Lender being terminated pursuant to Section 2.12(b).  From and after the effective date of any such addition, the new Issuing Lender shall have all the rights and obligations of an Issuing Lender under this Agreement with respect to Letters of Credit to be issued thereafter.  After the termination of an Issuing Lender hereunder, the terminated Issuing Lender shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Lender under this Agreement with respect to any outstanding Letters of Credit issued by it prior to such termination, but shall not be required to issue any new Letters of Credit or to renew or extend any such outstanding Letters of Credit.
(k)    Issuing Lender Reports to the Administrative Agent.  Unless otherwise agreed by the Administrative Agent, each Issuing Lender shall, in addition to its notification obligations set forth elsewhere in this Section, report in writing to the Administrative Agent (i) periodic activity (for such period or recurrent periods as shall be requested by the Administrative Agent) in respect of Letters of Credit issued by such Issuing Lender, including all issuances, extensions, amendments and renewals, all expirations and cancellations and all disbursements and reimbursements, (ii) reasonably prior to the time that such Issuing Lender issues, amends, renews or extends any Letter of Credit, the date of such issuance, amendment, renewal or extension, and the stated amount of the Letters of Credit issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension (and whether the amounts thereof shall have changed), (iii) on each Business Day on which such Issuing Lender makes any LC Disbursement, the date and amount of such LC Disbursement, (iv) on any Business Day on which the Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Lender on such day, the date of such failure and the amount of such LC Disbursement and (v) on any other Business Day, such other information as the Administrative Agent shall reasonably request as to the Letters of Credit issued by such Issuing Lender.
(l)    Cash Collateralization.  If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated pursuant to Article VIII, Lenders with LC Exposure representing more than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall immediately deposit into an account established and maintained on the books and records of the Administrative Agent, which account may be a “securities account” (within the meaning of Section 8‐501 of the UCC), in the name of the Administrative Agent and for the benefit of the Lenders, an amount in immediately available funds in Dollars equal to 103% of the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral 

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shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Article VIII.  The Borrower also shall deposit cash collateral in accordance with this paragraph as and to the extent required by Section 2.21.  Each such deposit shall be held by the Administrative Agent as collateral for the LC Exposure and other obligations of the Borrower under this Agreement, and for this purpose the Borrower hereby grants a security interest to the Administrative Agent for the benefit of the Lenders and the Issuing Lenders in such collateral account and in any financial assets (as defined in the UCC) or other property held therein.
The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account.  All amounts on deposit pursuant to this paragraph (l) shall be invested by the Administrative Agent in interest bearing instruments or accounts, with the selection of which instruments or accounts to be determined by the Administrative Agent in its sole discretion; provided that the Administrative Agent shall consult with the Borrower as to the selection of such instruments or accounts; provided further that such investments shall be at the risk and expense of the Borrower.  Other than any interest earned on the investment of such deposits, such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by the Administrative Agent to reimburse the relevant Issuing Lender for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but (i) subject to the consent of Lenders with LC Exposure representing 100% of the total LC Exposure and (ii) in the case of any such application at a time when any Lender is a Defaulting Lender (but only if, after giving effect thereto, the remaining cash collateral shall be less than the aggregate LC Exposure of all the Defaulting Lenders), the consent of each Issuing Lender)), be applied to satisfy other obligations of the Borrower under this Agreement.  If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, the amount (including any interest and profits earned thereon as aforesaid) standing to the credit of such account (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.  If the Borrower is required to provide an amount of cash collateral hereunder pursuant to Section 2.21, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower, as promptly as practicable, to the extent that, after giving effect to such return, no Issuing Lender shall have any exposure in respect of any outstanding Letter of Credit that is not fully covered by the Commitments of the Non-Defaulting Lenders and/or the remaining cash collateral and no Event of Default shall have occurred and be continuing.
SECTION 2.07.    Funding of Borrowings.  (a)  Funding by Lenders.  Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 2:00 p.m., New York City time (or, in the case of any Syndicated ABR Loan, 4:00 p.m. New York City time), to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.05.  The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable borrowing request; provided that Syndicated ABR Borrowings made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(f) shall be remitted by the Administrative Agent to the relevant Issuing Lender.
(b)    Presumption by the Administrative Agent.  Unless the Administrative Agent shall have received notice from a Lender prior to the proposed time of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal 

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Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by the Borrower, the interest rate applicable to Syndicated ABR Loans.  If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing.  Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.
SECTION 2.08.    Interest Elections.  (a)  Elections by the Borrower for Syndicated Borrowings.  The Loans comprising each Syndicated Borrowing initially shall be of the Type specified in the applicable Borrowing Request or as otherwise provided in Section 2.03(d) and, in the case of a Syndicated Eurocurrency Borrowing, shall have the Interest Period specified in such Borrowing Request or as otherwise provided in Section 2.03(d).  Thereafter, the Borrower may elect to convert such Borrowing to a Borrowing of a different Type or to continue such Borrowing as a Borrowing of the same Type and, in the case of a Syndicated Eurocurrency Borrowing, may elect the Interest Period therefor, all as provided in this Section.  The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.  This Section shall not apply to Competitive Borrowings or Swingline Borrowings, which may not be converted or continued.
(b)    Notice of Elections.  To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Syndicated Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.
(c)    Content of Interest Election Requests.  Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:
(i)    the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii)    the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii)    whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and
(iv)    if the resulting Borrowing is a Syndicated Eurocurrency Borrowing, the Interest Period therefor after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period” and permitted under Section 2.02(d).
(d)    Notice by the Administrative Agent to the Lenders.  Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e)    Failure to Elect; Events of Default.  If the Borrower fails to deliver a timely and 

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complete Interest Election Request with respect to a Syndicated Eurocurrency Borrowing prior to the end of the Interest Period therefor, then, unless such Syndicated Eurocurrency Borrowing is repaid as provided herein, the Borrower shall be deemed to have selected an Interest Period of one month’s duration.
Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower (provided that no such notice shall be required in the case of any Event of Default under clause (h) or (i) of Article VII with respect to the Borrower), then, so long as an Event of Default is continuing (A) no outstanding Syndicated Borrowing may be converted to or continued as a Syndicated Eurocurrency Borrowing and (B) unless repaid, each Syndicated Eurocurrency Borrowing shall be converted to a Syndicated ABR Borrowing at the end of the Interest Period therefor.
SECTION 2.09.    Termination, Reduction and Increase of the Commitments.  (a)  Scheduled Termination.  Unless previously terminated, the Commitments shall terminate on the Commitment Termination Date.
(b)    Voluntary Termination or Reduction.  The Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each partial reduction of the Commitments shall be in an amount that is $5,000,000 or a larger multiple thereof and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11, the sum of the total Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans would exceed the total Commitments.
(c)    Notice of Voluntary Termination or Reduction.  The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.
(d)    Effect of Termination or Reduction.  Any termination or reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.
(e)    Increase of Commitments.
(i)    Requests for Increase.  The Borrower may, at any time following the Effective Date, effect an increase in the Commitments hereunder (each such increase being a “Commitment Increase”) by having one or more Additional Commitment Lenders provide new or additional Commitments hereunder, by notice to the Administrative Agent specifying the amount of the relevant Commitment Increase, the identity of the Additional Commitment Lender(s) and the date on which such increase is to be effective (the “Commitment Increase Date”), which shall be a Business Day at least three Business Days after delivery of such notice and 30 days prior to the Commitment Termination Date (or, if at such time, there shall exist different Commitment Termination Dates for the Lenders hereunder, the latest applicable Commitment Termination Date); provided that:
(A)    the minimum amount of each Commitment Increase shall be $25,000,000;
(B)    immediately after giving effect to any Commitment Increase, the aggregate Commitments hereunder shall not exceed $2,000,000,000;

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(C)    at the time of any such Commitment Increase, no Default shall have occurred and be continuing or would result therefrom; and
(D)    the representations and warranties set forth in Article IV and in the other Loan Documents shall be true and correct on and as of the Commitment Increase Date as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).
Each notice by the Borrower under this paragraph shall be deemed to constitute a representation and warranty by the Borrower as to the matters specified in clauses (B), (C) and (D) above as of the relevant Commitment Increase Date.  Notwithstanding anything herein to the contrary, no Lender shall have any obligation hereunder to become an Additional Commitment Lender and any election to do so shall be in the sole discretion of each Lender.
(ii)    Effectiveness of Increase.  Each Commitment Increase (and the new or additional Commitment of each Additional Commitment Lender resulting therefrom) shall become effective as of the relevant Commitment Increase Date upon receipt by the Administrative Agent, on or prior to 2:00 p.m., New York City time, on such Commitment Increase Date, of:
(A)    a certificate executed by a Financial Officer of the Borrower stating that the conditions with respect to such Commitment Increase under this paragraph (e) have been satisfied;
(B)    an agreement, in form and substance satisfactory to the Borrower and the Administrative Agent, pursuant to which each such Additional Commitment Lender shall, effective as of such Commitment Increase Date, provide a new or additional Commitment hereunder in the amount specified therein and (if not then an existing Lender) become a Lender hereunder, in each case duly executed by each such Additional Commitment Lender and the Borrower and acknowledged by the Administrative Agent; and
(C)    such evidence of authority of the Borrower to effect such Commitment Increase as the Administrative Agent may reasonably request.
Upon the Administrative Agent’s receipt of a fully executed agreement from each Additional Commitment Lender referred to in clause (B) above, together with the certificates and/or other documents referred to in clauses (A) and (C) above, the Administrative Agent shall record the information contained in each such agreement in the Register and give prompt notice of the relevant Commitment Increase to the Borrower and the Lenders (including each Additional Commitment Lender).
On each Commitment Increase Date the Borrower shall (a) request funding of Syndicated Loans by each Additional Commitment Lender for whom a Commitment Increase is then effective in such amounts and with such Interest Periods as may be required (after giving effect to the partial payment provided for in clause (ii) below) to cause each outstanding Syndicated Borrowing to be held by all Lenders (including such Additional Commitment Lenders) ratably in proportion to the Commitments and (ii) direct the Administrative Agent to apply the proceeds of such funding to the partial prepayment of Syndicated Borrowings outstanding to Lenders immediately before giving effect to such Commitment Increase, ratably in proportion to the amount outstanding owing to them before giving effect to such Commitment Increase.  Each Lender will have the right to request compensation under Section 2.16 in respect of such partial prepayment, to the extent therein provided.  Upon each Commitment Increase, the participation interests of the Lenders in the then outstanding Letters of Credit shall automatically be adjusted to reflect, and each Lender (including each Additional Commitment Lender) shall have a participation in each such Letter of Credit equal to, the Lenders’ respective Applicable Percentage of the aggregate amount available to be drawn under each such Letter of Credit, after giving effect to such increase.

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SECTION 2.10.    Repayment of Loans; Evidence of Debt.  (a) Repayment.  The Borrower hereby unconditionally promises to pay the Loans as follows:
(i)    to the Administrative Agent for account of each Lender the outstanding principal amount of the Syndicated Loans of such Lender on the Commitment Termination Date applicable to such Syndicated Loans,
(ii)    to the Administrative Agent for account of each Lender the then unpaid principal amount of each Competitive Loan of such Lender on the last day of the Interest Period therefor, and 
(iii)    to the applicable Swingline Lender or, to the extent required by Section 2.05(c), to the Administrative Agent for account of the Lenders, the then unpaid principal amount of each Swingline Loan on the earlier of the Commitment Termination Date applicable to such Swingline Loan and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least seven Business Days after such Swingline Loan is made; provided that on each date that a Syndicated Borrowing or Competitive Borrowing is made, the Borrower shall repay all Swingline Loans then outstanding.
(b)    Manner of Payment.  Prior to any repayment or prepayment of any Borrowings hereunder, and subject (in the case of a prepayment) to any applicable provisions of Section 2.11, the Borrower shall select the Borrowing or Borrowings to be paid and shall notify the Administrative Agent by telephone (confirmed by facsimile) of such selection not later than 11:00 a.m., New York City time, three Business Days before the scheduled date of such repayment.  If the Borrower fails to make a timely selection of the Borrowing or Borrowings to be repaid or prepaid, such payment shall be applied, first, to pay any outstanding ABR Borrowings and, second, to other Borrowings in the order of the remaining duration of their respective Interest Periods (the Borrowing with the shortest remaining Interest Period to be repaid first).  Each payment of a Syndicated Borrowing shall be applied ratably to the Loans included in such Borrowing.
(c)    Maintenance of Records by Lenders.  Each Lender shall maintain in accordance with its usual practice records evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(d)    Maintenance of Records by the Administrative Agent.  The Administrative Agent shall maintain records in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and, if applicable, each Interest Period therefor, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for account of the Lenders and each Lender’s share thereof.
(e)    Effect of Entries.  The entries made in the records maintained pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such records or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans or pay any other amounts hereunder in accordance with the terms of this Agreement.
(f)    Promissory Notes.  Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender and its registered assigns and in customary form reasonably satisfactory to the Borrower and the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 10.04) be represented by one or more promissory notes in such form payable to the payee named therein or its registered assigns.
SECTION 2.11.    Prepayment of Loans.  (a)  Optional Prepayments.  The Borrower 

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shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty, subject to the requirements of this Section; provided that the Borrower shall not have the right to prepay any Competitive Loan without the prior consent of the Lender thereof.
(b)    Notices, Etc.  The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the applicable Swingline Lender) by telephone (confirmed by facsimile) of any prepayment hereunder (i) in the case of prepayment of a Syndicated Eurocurrency Borrowing or of a Competitive Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of a Syndicated ABR Borrowing, not later than 12:00 noon, New York City time, on the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 1:00 p.m., New York City time, on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid, any other information required to be in such notice pursuant to Section 2.10(b); provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09.  Promptly following receipt of any such notice relating to a Syndicated Borrowing or Competitive Borrowing, the Administrative Agent shall advise the relevant Lenders of the contents thereof.  Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of a Borrowing of the same Class and Type as provided in Section 2.02.  Each prepayment of a Syndicated Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13 and any payments pursuant to Section 2.16, if applicable. 
SECTION 2.12.    Fees.  (a)  Facility Fees.  The Borrower agrees to pay to the Administrative Agent for account of each Lender a facility fee, which shall accrue at the Applicable Rate on the daily amount of the Commitment of such Lender (whether used or unused) during the period from and including the date hereof to but excluding the date such Commitment terminates; provided that, if such Lender continues to have any Revolving Credit Exposure after its Commitment terminates, then such facility fee shall continue to accrue on the daily amount of such Lender’s Revolving Credit Exposure from and including the date on which its Commitment terminates to but excluding the date on which such Lender ceases to have any Revolving Credit Exposure.  Accrued facility fees shall be payable in arrears on each Quarterly Date and on the date the Commitments terminate, commencing on the first such date to occur after the date hereof; provided that any facility fees accruing after the date on which the Commitments terminate shall be payable on demand.  All facility fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(b)    Letter of Credit Fees.  The Borrower agrees to pay (i) to the Administrative Agent for account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at a rate per annum equal to the Applicable Rate applicable to interest on Syndicated Eurocurrency Loans (or, the case of Documentary Letters of Credit, 50% of such Applicable Rate) on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Lender a fronting fee, which shall accrue at the rate or rates per annum separately agreed upon between the Borrower and such Issuing Lender on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) in respect of Letters of Credit issued by such Issuing Lender during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as such Issuing Lender’s standard fees with respect to the administration, issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Participation fees and fronting fees accrued through and including each Quarterly Date shall be payable on the third Business Day following such Quarterly Date, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand.  Any other fees 

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payable to any Issuing Lender pursuant to this paragraph shall be payable within 10 days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(c)    Administrative Agent Fees.  The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.
(d)    Payment of Fees.  All fees payable hereunder shall be paid on the dates due, in Dollars and immediately available funds, to the Administrative Agent (or to the relevant Issuing Lender, in the case of fees payable to it) for distribution, in the case of facility fees and participation fees, to the Lenders entitled thereto.  Fees paid shall not be refundable under any circumstances.
SECTION 2.13.    Interest.  (a)  ABR Loans.  The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Rate.
(b)    Eurocurrency Loans.  The Loans comprising each Eurocurrency Borrowing shall bear interest at a rate per annum equal to (i) in the case of a Syndicated Eurocurrency Borrowing, the Adjusted LIBO Rate for the Interest Period for such Borrowing plus the Applicable Rate, or (ii) in the case of a Competitive Eurocurrency Borrowing, the LIBO Rate for the Interest Period for such Borrowing plus (or minus, as applicable) the Margin applicable to such Borrowing.
(c)    Fixed Rate Loans.  Each Fixed Rate Loan shall bear interest at a rate per annum equal to the Fixed Rate applicable to such Loan.
(d)    Default Interest.  Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided above or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section.
(e)    Payment of Interest.  Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Syndicated Loans and Swingline Loans, upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand; (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of a Syndicated ABR Loan prior to the Commitment Termination Date applicable to such Loan), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Syndicated Eurocurrency Borrowing prior to the end of the Interest Period therefor, accrued interest on such Borrowing shall be payable on the effective date of such conversion.
(f)    Computation.  All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.14.    Alternate Rate of Interest.  If prior to the commencement of the Interest Period for any Eurocurrency Borrowing:
(a)    the Administrative Agent determines (which determination shall be conclusive 

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absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate (in the case of a Syndicated Eurocurrency Borrowing) or the LIBO Rate (in the case of a Competitive Eurocurrency Borrowing) for such Interest Period; or
(b)    the Administrative Agent is advised by the Required Lenders (or, in the case of a Competitive Eurocurrency Borrowing, any Lender that is required to make a Loan included in such Borrowing) that the Adjusted LIBO Rate (in the case of a Syndicated Eurocurrency Borrowing) or the LIBO Rate (in the case of a Competitive Eurocurrency Borrowing) for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their respective Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Syndicated Borrowing to, or the continuation of any Syndicated Borrowing as, a Syndicated Eurocurrency Borrowing shall be ineffective and such Syndicated Borrowing (unless prepaid) shall be continued as, or converted to, a Syndicated ABR Borrowing and (ii) any Borrowing Request  for a Syndicated Eurocurrency Borrowing shall be treated as a request for a Syndicated ABR Borrowing.
SECTION 2.15.    Increased Costs.  (a)  Increased Costs Generally.  If any Change in Law shall:
(i)    impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing Lender;
(ii)    subject any Lender or any Issuing Lender or the Administrative Agent to any Tax (other than (A) Indemnified Taxes, (B) Other Taxes, (C) Taxes described in clauses (a) and (c) through (e) of the definition of Excluded Taxes, (D) Connection Income Taxes and (E) Taxes imposed on gross or net income, profits or revenue, including value-added and similar Taxes) of any kind whatsoever with respect to its loans, loan principal, letters of credit, commitments or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(iii)    impose on any Lender or any Issuing Lender or the London interbank market any other condition, cost or expense affecting this Agreement, Eurocurrency Loans or Fixed Rate Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurocurrency Loan or Fixed Rate Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or such Issuing Lender of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or such Issuing Lender or the Administrative Agent hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, such Issuing Lender or the Administrative Agent, as the case may be, the Borrower will pay to such Lender, such Issuing Lender or the Administrative Agent, as the case may be, in Dollars, such additional amount or amounts as will compensate such Lender, such Issuing Lender or the Administrative Agent, as the case may be, for such additional costs incurred or reduction suffered.
(b)    Capital Requirements.  If any Lender or any Issuing Lender determines that any Change in Law affecting such Lender or such Issuing Lender or any lending office of such Lender or such Issuing Lender or such Lender’s or such Issuing Lender’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or such Issuing Lender’s capital or on the capital of such Lender’s or such Issuing Lender’s holding company, if any, as a 

36

consequence of this Agreement, the Commitment of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by such Issuing Lender, to a level below that which such Lender or such Issuing Lender or such Lender’s or such Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Lender’s policies and the policies of such Lender’s or such Issuing Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or such Issuing Lender, as the case may be, in Dollars, such additional amount or amounts as will compensate such Lender or such Issuing Lender or such Lender’s or such Issuing Lender’s holding company for any such reduction suffered.
(c)    Certificates for Reimbursement.  A certificate of a Lender or an Issuing Lender setting forth the amount or amounts, in Dollars, necessary to compensate such Lender or such Issuing Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender or such Issuing Lender, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d)    Delay in Requests.  Failure or delay on the part of any Lender or any Issuing Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or such Issuing Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or an Issuing Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or such Issuing Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Issuing Lender’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 thereof).
(e)    Competitive Loans.  Notwithstanding the foregoing provisions of this Section, a Lender shall not be entitled to compensation pursuant to this Section in respect of any Competitive Loan if the Change in Law (other than any Change in Law referred to in the proviso of the definition of such term) that would otherwise entitle it to such compensation shall have been publicly announced prior to submission of the Competitive Bid pursuant to which such Loan was made.
SECTION 2.16.    Break Funding Payments.  In the event of (a) the payment of any principal of any Eurocurrency Loan or Fixed Rate Loan other than on the last day of the Interest Period therefor (including as a result of an Event of Default), (b) the conversion of any Syndicated Eurocurrency Loan other than on the last day of the Interest Period therefor, (c) the failure to borrow, convert, continue or prepay any Syndicated Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is permitted to be revocable under Section 2.11(b) and is revoked in accordance herewith), (d) the failure to borrow any Competitive Loan after accepting the Competitive Bid to make such Loan, or (e) the assignment as a result of a request by the Borrower pursuant to Section 2.19(b) of any Syndicated Eurocurrency Loan other than on the last day of the Interest Period therefor, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event.  In the case of a Eurocurrency Loan, the loss to any Lender attributable to any such event shall be deemed to include an amount determined by such Lender to be equal to the excess, if any, of (i) the amount of interest that such Lender would pay for a deposit equal to the principal amount of such Loan for the period from the date of such payment, conversion, failure or assignment to the last day of the Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, the duration of the Interest Period that would have resulted from such borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to the Adjusted LIBO Rate (in the case of a Syndicated Eurocurrency Loan) or the LIBO Rate (in the case of a Competitive Eurocurrency Loan) for such Interest Period, over (ii) the amount of interest that such Lender would earn on such principal amount for such period if such Lender were to invest such principal amount for such period at the interest rate that would be bid by such Lender (or an affiliate of such Lender) for deposits denominated in Dollars from other banks in the eurocurrency market at the commencement of such period.  A certificate of any Lender setting 

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forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17.    Taxes.  (a)  Payments Free of Taxes.  Any and all payments by or on account of any obligation of the Borrower or any Subsidiary Guarantor hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any Indemnified Taxes (including Other Taxes); provided that if the Borrower or any Subsidiary Guarantor shall be required by applicable law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Lender, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower or such Subsidiary Guarantor shall make or cause to be made such deductions and (iii) the Borrower or such Subsidiary Guarantor shall timely pay or cause to be paid the full amount deducted to the relevant Governmental Authority in accordance with applicable law.
(b)    Payment of Other Taxes by the Borrower.  Without limiting the provisions of paragraph (a) above, the Borrower and each Subsidiary Guarantor shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c)    Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent, each Lender and each Issuing Lender, within 30 days after written demand therefor, for the full amount of any Indemnified Taxes (including Other Taxes, and Indemnified Taxes imposed or asserted on or attributable to amounts paid or payable under this Section, but excluding Excluded Taxes under all circumstances) paid or payable by the Administrative Agent, such Lender or such Issuing Lender, as the case may be, and any penalties and interest  arising therefrom or with respect thereto, whether or not such Indemnified Taxes (including 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, prepared in good faith and delivered to the Borrower by a Lender or an Issuing Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an Issuing Lender, shall be conclusive absent manifest error.  The Borrower shall not be obligated to indemnify for any Indemnified Taxes (including Other Taxes) if a written demand therefor is not made by the Administrative Agent, a Lender or an Issuing Lender, as the case may be, within 120 days from the first date the Administrative Agent, such Lender or such Issuing Lender knows or reasonably should have known of the imposition of such Taxes.
(d)    Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes (including Other Taxes) by the Borrower or any Subsidiary Guarantor to a Governmental Authority, the Borrower or such Subsidiary Guarantor shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e)    Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent for any Taxes attributable to such Lender (but only to the extent that the Borrower and the Subsidiary Guarantors have not already indemnified the Administrative Agent for such Taxes and without limiting the obligation of the Borrower and the Subsidiary Guarantors to do so) that are paid or payable by the Administrative Agent in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this paragraph (e) shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent.  Such certificate shall be conclusive of the amount so paid or payable absent manifest error.
(f)    Foreign Lender Tax Certifications.  (i) Any Foreign Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any 

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Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without, or at a reduced rate of, withholding.  Upon the reasonable request of the Borrower or the Administrative Agent, any Lender shall update any form or certification previously delivered pursuant to this paragraph (f).  If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within 10 days after such expiration, obsolescence or inaccuracy) notify the Borrower and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.
(ii)    Without limiting the generality of the foregoing:
(A)    each Foreign Lender shall (x) furnish on or before the date on which it becomes a party to this Agreement either (1) two accurate and complete originally executed U.S. Internal Revenue Service Form W-8BEN (or successor form), (2) two accurate and complete originally executed U.S. Internal Revenue Service Form W-8ECI (or successor form), and/or (3) two accurate and complete originally executed U.S. Internal Service Form W-8IMY (together with the forms described in clauses (1) and (2), as required) certifying, in each case, to such Foreign Lender’s legal entitlement to a complete exemption from U.S. Federal withholding tax with respect to all interest payments hereunder, and (y) provide a new Form W-8BEN (or successor form) or Form W-8ECI (or successor form) and/or Form W-8IMY (or successor form) upon the expiration or obsolescence of any previously delivered form to reconfirm complete exemption from U.S. Federal withholding tax with respect to any interest payment hereunder to the extent (in case of this clause (y)) such Foreign Lender is legally able to do so; provided that any Foreign Lender that is relying on the so-called “portfolio interest exemption” and is not (x) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (y) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (z) a controlled foreign corporation described in Section 881(c)(3)(C) of the Code, shall also furnish a “Non-Bank Certificate” in the form of Exhibit C together with a Form W-8BEN.  Notwithstanding any other provision of this Section 2.17(f)(ii)(A), a Foreign Lender that is an assignee shall not be required to deliver any documentation pursuant to this Section 2.17(f)(ii)(A) that such Foreign Lender is not legally able to deliver.  For the avoidance of doubt, the legal inability of a Foreign Lender to provide any documentation pursuant to this Section 2.17(f)(ii)(A) shall not cause any Tax resulting from such inability to be an Excluded Tax in circumstances where such inability arises solely due to a Change in Law subsequent to the date the Foreign Lender becomes a party to this Agreement.  Subject to Section 2.17(a), if any Foreign Lender fails to provide the certifications described in this paragraph, each such Foreign Lender acknowledges that the Borrower and the Administrative Agent shall be entitled to deduct and withhold any Taxes imposed by the United States or any taxing authority thereof or therein, to the extent required by law.
(B)    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 Withholding Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Withholding 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 Withholding Agent as may be necessary for the Withholding Agent to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such 

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payment.  Solely for purposes of this Section 2.17(f)(ii)(B), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(g)    U.S. Lender Tax Certifications.  Any Lender that is a United States person, as defined in Section 7701(a)(30) of the Code and is not an exempt recipient within the meaning of Treasury Regulations Section 1.6049-4(c), shall deliver to the Borrower (with a copy to the Administrative Agent) two accurate and complete original signed copies of Internal Service Form W-9, or any successor form that such person is entitled to provide, establishing that the Lender is not subject to U.S. Federal backup withholding Tax.
(h)    Cooperation in Contesting Indemnified Taxes.  If the Borrower determines in good faith that a reasonable basis exists for contesting any Indemnified Taxes (including Other Taxes) for which additional amounts have been paid under this Section 2.17, the Administrative Agent or the relevant Lender or Issuing Lender, as the case may be, shall cooperate with the Borrower in challenging such Indemnified Taxes (including Other Taxes) at the Borrower’s expense, if so requested by the Borrower in writing; provided that, in the sole discretion, exercised in good faith, of the Administrative Agent, such Lender or such Issuing Lender, as the case may be, doing so would not materially prejudice the Administrative Agent, such Lender or such Issuing Lender, and the Administrative Agent, such Lender or such Issuing Lender would not be required to disclose any information it considers proprietary or make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Borrower or any other Person.
(i)    Treatment of Certain Refunds.  If the Administrative Agent, a Lender or an Issuing Lender determines, in its reasonable discretion, that it has received a refund of any Indemnified Taxes (including Other Taxes) as to which it has been indemnified by the Borrower or any Subsidiary Guarantor or with respect to which the Borrower or any Subsidiary Guarantor has paid additional amounts pursuant to this Section, it shall pay to the Borrower or such Subsidiary Guarantor an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower or such Subsidiary Guarantor under this Section with respect to the Indemnified Taxes (including Other Taxes) giving rise to such refund), net of all reasonable out-of-pocket expenses of the Administrative Agent, such Lender or such Issuing Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower or such Subsidiary Guarantor, upon the request of the Administrative Agent, such Lender or such Issuing Lender, shall repay the amount paid over to the Borrower or such Subsidiary Guarantor (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or such Issuing Lender in the event the Administrative Agent, such Lender or such Issuing Lender is required to repay such refund to such Governmental Authority.  This paragraph shall not be construed to require the Administrative Agent, any Lender or an Issuing Lender to disclose any information it considers proprietary or make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Borrower, any Subsidiary Guarantor or any other Person.
SECTION 2.18.    Payments Generally; Pro Rata Treatment; Sharing of Setoffs.  (a)  Payments by the Obligors.  Each Obligor shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise), or under any other Loan Document (except to the extent otherwise provided therein), prior to 1:00 p.m., New York City time, on the date when due, in immediately available funds, without setoff or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at the Administrative Agent’s Account, except as otherwise expressly provided in the relevant Loan Document and except payments to be made directly to an Issuing Lender or a Swingline Lender as expressly provided herein and except payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03, which shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such payments received by it for account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next 

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succeeding Business Day and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments under each Loan Document shall be made in Dollars.
(b)    Application of Insufficient Payments.  If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, to pay interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, to pay principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.
(c)    Pro Rata Treatment.  Except to the extent otherwise provided herein (for the avoidance of doubt, as this Agreement is in effect from time to time), including Sections 2.20(d) and 2.21: (i) each payment of facility fees under Section 2.12(a) and letter of credit fees under Section 2.12(b) shall be made for account of the Lenders, and each termination or reduction of the amount of the Commitments under Section 2.09 shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments (or, in the case of any such payment of facility fees at a time when the Commitments shall have terminated or expired, pro rata according to the amounts of their respective Revolving Credit Exposure); (ii) each Syndicated Borrowing shall be allocated pro rata among the Lenders according to the amounts of their respective Commitments (in the case of the making of Syndicated Loans) or their respective Loans that are to be included in such Borrowing (in the case of conversions and continuations of Loans); and (iii) each payment or prepayment of any Syndicated Borrowing shall be applied ratably to the Loans included in the repaid or prepaid Syndicated Borrowing.
(d)    Sharing of Payments by Lenders.  If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans (other than a Competitive Loan) or participations in LC Disbursements or Swingline Loans resulting in such Lender’s receiving payment of a greater proportion of the aggregate amount of its Loans (other than Competitive Loans) and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall (A) notify the Administrative Agent of such fact and (B) purchase (for cash at face value) participations in the Loans (other than Competitive Loans) and participations in LC Disbursements and Swingline Loans of other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amounts of principal of and accrued interest on their Loans (other than Competitive Loans) and participations in LC Disbursements and Swingline Loans, provided that:
(i)    if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii)    the provisions of this paragraph shall not be construed to apply to (x) any payment made by any Obligor pursuant to and in accordance with the express terms of this Agreement (for the avoidance of doubt, as this Agreement is in effect from time to time) or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements or Swingline Loans to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).
Each Obligor consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Obligor rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Obligor in the amount of such participation.
(e)    Payments by the Borrower; Presumptions by the Administrative Agent.  Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment 

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is due to the Administrative Agent for the account of the Lenders or an Issuing Lender hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or such Issuing Lender, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders or such Issuing Lender, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such Issuing Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(f)    Certain Deductions by the Administrative Agent.  If any Lender shall fail to make any payment required to be made by it hereunder to or for the account of the Administrative Agent, any Issuing Lender or any Swingline Lender, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations in respect of such payment until all such unsatisfied obligations have been discharged or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender pursuant to this Agreement (including pursuant to Sections 2.05(c), 2.06(e), 2.06(f), 2.07(b), 2.18(e) and 10.03(c)), in each case in such order as shall be determined by the Administrative Agent in its discretion.
SECTION 2.19.    Mitigation Obligations; Replacement of Lenders.  (a) Designation of a Different Lending Office.  If any Lender requests compensation under Section 2.15, or requires the Borrower to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign and delegate its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment and delegation (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment and delegation.
(b)    Replacement of Lenders.  If (i) any Lender requests compensation under Section 2.15, (ii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, (iii) any Lender has become a Defaulting Lender, (iv) any Lender has become a Non-Extending Lender or (v) any Lender does not consent to any proposed amendment, supplement, modification, consent or waiver of any provision of this Agreement or any other Loan Document that requires the consent of such Lender or each of the Lenders or each of the Lenders affected thereby (so long as the consent of the Required Lenders has been obtained), then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.04), all of its interests, rights and obligations under this Agreement and the related Loan Documents (other than any outstanding Competitive Loans held by it) to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:
(A)    the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Commitment or any Lender’s obligations in respect of LC Exposure or Swingline Exposure is being assigned, each Issuing Lender and each Swingline Lender), which consent shall not unreasonably be withheld;
(B)    the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 10.04;
(C)    such Lender shall have received payment of an amount equal to the outstanding 

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principal of its Loans (other than Competitive Loans) and participations in LC Disbursements and Swingline Loans that have been funded by such Lender, accrued interest thereon, accrued fees and all other amounts (except Competitive Loans) payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.16) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);
(D)    in the case of any such assignment and delegation resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment and delegation will result in a reduction in such compensation or payments thereafter;
(E)    in the case of any such assignment and delegation resulting from any Lender becoming a Non-Extending Lender, the assignee shall be an Additional Commitment Lender and, upon the effectiveness of any such assignment and delegation, such assignee shall be deemed to have consented to the extension of the Commitment Termination Date requested in the relevant Extension Request (and, if such assignment and delegation shall become effective after the relevant Extension Effective Date, the Commitment Termination Date with respect to such Additional Commitment Lender (insofar as relating to the interests, rights and obligations under this Agreement and the related Loan Documents so assigned and delegated) shall automatically extend to the date specified in the relevant Extension Request); and
(F)    such assignment does not conflict with applicable law.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.  Each party hereto agrees that an assignment and delegation required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee and that the Lender required to make such assignment and delegation need not be a party thereto.
SECTION 2.20.    Extension of Commitment Termination Date.  (a)  The Borrower may, by notice to the Administrative Agent (which shall promptly notify the Lenders) not more than 90 days and not less than 30 days prior to each anniversary of the date hereof (or if such anniversary date is not a Business Day, the Business Day next succeeding such anniversary), request (each, an “Extension Request”) that the Lenders extend the Commitment Termination Date then in effect (or, if at such time there shall exist different Commitment Termination Dates for the Lenders hereunder, the latest  applicable Commitment Termination Date then in effect) (the “Existing Commitment Termination Date”) for an additional one year (the date on which any such extension shall become effective is referred to herein as an “Extension Effective Date”); provided that only two Extension Requests may be requested hereunder.  Each Lender, acting in its sole discretion, shall, by notice to the Borrower and the Administrative Agent given not later than the 20th day (or such later day as shall be acceptable to the Borrower) following the date of the Borrower’s notice, advise the Borrower and the Administrative Agent whether or not such Lender agrees to such extension; provided that any Lender that does not so advise the Borrower shall be deemed to have rejected such Extension Request (any such Lender which shall have rejected or is deemed to have rejected such extension being a “Non-Extending Lender”).  The election of any Lender to agree to such extension shall not obligate any other Lender to so agree.  Notwithstanding anything herein to the contrary, no Lender shall have any obligation hereunder to extend its Commitment.
(b)    The Borrower shall have the right, at any time on or prior to, or at any time following, the relevant Extension Effective Date, unless an Event of Default shall have occurred and be continuing, to replace any Non-Extending Lender with one or more Additional Commitment Lenders in accordance with Section 2.19(b).  If requested by the Borrower or the Administrative Agent, each such Additional Commitment Lender shall enter into an agreement with the Borrower and the Administrative Agent, in form and substance satisfactory to the Borrower and the Administrative Agent, pursuant to which such Additional Commitment Lender shall reconfirm its Commitment hereunder so assumed from the relevant Non-Extending Lender and, 

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in the case of any such replacement becoming effective after the relevant Extension Effective Date, reconfirm the extension of the Commitment Termination Date applicable thereto as contemplated by clause (E) of Section 2.19(b).
(c)    If (and only if) the total of the Commitments of the Lenders that have agreed in connection with any Extension Request to extend the Existing Commitment Termination Date and (if applicable) the Commitments of the Additional Commitment Lender(s) that shall have replaced any Non-Extending Lender as contemplated by paragraph (b) above shall, in the aggregate, be at least 50% of the aggregate amount of the Commitments in effect immediately prior to the Extension Effective Date, then, effective as of the Extension Effective Date, the Commitment Termination Date, but only with respect to each Lender that has agreed to so extend its Commitment and (if applicable) each Additional Commitment Lender that has replaced a Non-Extending Lender (and to Commitments and Loans of each such Lender and Additional Commitment Lender), shall be extended to the date that is one year after the then Existing Commitment Termination Date (or, if such date is not a Business Day, the immediately preceding Business Day); provided that the extension of the Existing Commitment Termination Date shall not be effective with respect to any Lender unless as of the Extension Effective Date: (i) no Default shall have occurred and be continuing; (ii) the representations and warranties of the Obligors set forth in Article IV and in the other Loan Documents shall be true and correct on and as of the Existing Commitment Termination Date as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); (iii) the Administrative Agent shall have received a certificate of a Financial Officer of the Borrower stating that the conditions with respect to such extension have been satisfied; and (iv) the Administrative Agent shall have received such evidence and other related documents as it may reasonably request with respect to the authorization of the Borrower of such extension and its obligations hereunder as so extended.  Upon the effectiveness of such extension, the Administrative Agent shall record the relevant information in the Register and give prompt notice of such extension to the Borrower and the Lenders.
(d)    Notwithstanding anything herein to the contrary, (i) with respect to any Non-Extending Lender, the Commitment Termination Date for such Lender shall remain unchanged (and the Commitment of such Lender shall terminate, the Loans made by such Lender to the Borrower hereunder shall mature and be payable by the Borrower, and all other amounts owing to such Non-Extending Lender hereunder shall be payable, on such date), and on such date the Borrower shall also make such other prepayments of Loans as shall be required in order that, after giving effect to the termination of the Commitments of, and all payments to, the Non-Extended Lenders pursuant to this sentence, the sum of (x) the outstanding aggregate principal amount of all Loans and (y) the LC Exposure will not exceed the Commitments and (ii)  the “Availability Period” and the “Commitment Termination Date” (without taking into consideration any extension pursuant to this Section 2.20), as such terms are used in reference to any Issuing Lender or any Letters of Credit issued by such Issuing Lender or any Swingline Lender or any Swingline Loan made by such Swingline Lender, may not be extended without the prior written consent of such Issuing Lender and such Swingline Lender, as applicable (it being understood and agreed that, in the event any Issuing Lender or Swingline Lender shall not have consented to any such extension, (i) such Issuing Lender or Swingline Lender, as applicable, shall continue to have all the rights and obligations of an Issuing Lender or a Swingline Lender, as applicable, hereunder through the Existing Commitment Termination Date (or the Availability Period determined on the basis thereof, as applicable), and thereafter shall have no obligation to make any Swingline Loans or to issue, amend, extend or renew any Letter of Credit (but shall, in each case, continue to be entitled to the benefits of Sections 2.05, 2.06, 2.13, 2.15, 10.03 and 10.09, as applicable as to Letters of Credit or Swingline Loans issued or made prior to such time), and (ii) the Borrower shall cause the LC Exposure attributable to Letters of Credit issued by such Issuing Lender and the Swingline Exposure attributable to Swingline Loans made by such Swingline Lender to be zero no later than the day on which such LC Exposure or Swingline Exposure, as applicable, would have been required to have been reduced to zero in accordance with the terms hereof without giving effect to any effectiveness of the extension of the applicable Existing Commitment Termination Date pursuant to this Section (and, in any event, no later than such Existing Commitment Termination Date)).
SECTION 2.21.    Defaulting Lenders.  Notwithstanding any provision of this 

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Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a)    facility fees shall continue to accrue on the amount of the Commitment of such Defaulting Lender pursuant to Section 2.12(a) only to the extent of the Revolving Credit Exposure of such Defaulting Lender (excluding any portion thereof constituting Swingline Exposure or LC Exposure of such Defaulting Lender that is subject to reallocation under clause (c)(i) below);
(b)    the Commitment, the Revolving Credit Exposure and the aggregate principal amount of outstanding Competitive Loans of such Defaulting Lender shall not be included in determining whether the Required Lenders or any other requisite Lenders have taken or may take any action hereunder or under any other Loan Document (including any consent to any amendment, waiver or other modification pursuant to Section 10.02); provided that any amendment, waiver or other modification requiring the consent of all Lenders or all Lenders affected thereby shall, except as otherwise provided in Section 10.02, require the consent of such Defaulting Lender in accordance with the terms hereof;
(c)    if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:
(i)    the Swingline Exposure (other than any portion thereof with respect to which such Defaulting Lender shall have funded its participation as contemplated by Section 2.05(c)) and LC Exposure of such Defaulting Lender (other than any portion thereof attributable to unreimbursed LC Disbursements with respect to which such Defaulting Lender shall have funded its participation as contemplated by Sections 2.06(e) and 2.06(f)) shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages but only (x) to the extent that the sum of all Non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure (in each case, excluding the portion thereof referred to above) does not exceed the sum of all Non-Defaulting Lenders’ Commitments and (y) so long as no Default or an Event of Default shall have occurred and be continuing at such time;
(ii)    if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent (A) first, prepay the portion of such Defaulting Lender’s Swingline Exposure that has not been reallocated as set forth in such clause and (B) second, cash collateralize for the benefit of the Issuing Lenders the portion of such Defaulting Lender’s LC Exposure that has not been reallocated as set forth in such clause in accordance with the procedures set forth in Section 2.06(l) for so long as such LC Exposure is outstanding;
(iii)    if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay participation fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such portion of such Defaulting Lender’s LC Exposure for so long as such Defaulting Lender’s LC Exposure is cash collateralized;
(iv)    if any portion of the LC Exposure of such Defaulting Lender is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.12(b) shall be adjusted to give effect to such reallocation;
(v)    if all or any portion of such Defaulting Lender’s Swingline Exposure that is subject to reallocation pursuant to clause (i) above is neither reallocated nor reduced pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of any Swingline Lender or any other Lender hereunder, all facility fees that otherwise would have been payable to such Defaulting Lender with respect to such portion of its Swingline Exposure shall be payable to the Swingline Lenders (and allocated among them ratably based on the amount of such portion of the Swingline Exposure of such Defaulting Lender attributable to Swingline Loans made by each Swingline Lender) until 

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and to the extent that such Swingline Exposure is reallocated and/or reduced to zero; and
(vi)    if all or any portion of such Defaulting Lender’s LC Exposure that is subject to reallocation pursuant to clause (i) above is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of any Issuing Lender or any other Lender hereunder, all facility fees that otherwise would have been payable to such Defaulting Lender with respect to such portion of its LC Exposure, and all participation fees payable under Section 2.12(b) with respect to such portion of its LC Exposure, shall be payable to the Issuing Lenders (and allocated among them ratably based on the amount of such portion of the LC Exposure of such Defaulting Lender attributable to Letters of Credit issued by each Issuing Lender) until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and
(d)    so long as such Lender is a Defaulting Lender, no Swingline Lender shall be required to fund any Swingline Loan and no Issuing Lender shall be required to issue, amend, renew or extend any Letter of Credit, unless in each case it is satisfied that the related exposure and the Defaulting Lender’s then outstanding Swingline Exposure or LC Exposure, as applicable, will be fully covered by the Commitments of the Non-Defaulting Lenders and/or cash collateral provided by the Borrower in accordance with clause (c) above, and participating interests in any such funded Swingline Loan or in any such issued, amended, renewed or extended Letter of Credit will be allocated among the Non-Defaulting Lenders in a manner consistent with clause (c)(i) above (and such Defaulting Lender shall not participate therein).
In the event that a Bankruptcy Event with respect to a Lender Parent of any Lender shall have occurred following the date hereof and for so long as such Bankruptcy Event shall continue, no Swingline Lender shall be required to fund any Swingline Loan, and no Issuing Lender shall be required to issue, amend, renew or extend any Letter of Credit, unless such Swingline Lender or such Issuing Lender, as the case may be, shall have entered into arrangements (including arrangements referred to in clause (c) above, treating such Lender as if it were a Defaulting Lender (with each Lender hereby agreeing to such arrangements)) with the Borrower or the applicable Lender satisfactory to such Swingline Lender or such Issuing Lender, as the case may be, to defease any risk to it in respect of such Lender hereunder.
In the event that the Administrative Agent, the Borrower, each Swingline Lender and each Issuing Lender each agree that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Syndicated Loans of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.
ARTICLE III 
 
Guarantee
SECTION 3.01.    The Guarantee.  The Subsidiary Guarantors hereby jointly and severally, as a primary obligor and not merely as a surety, guarantee to each Lender, each other holder of a Guaranteed Obligation (as hereinafter defined) and the Administrative Agent and their respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest on the Loans made by the Lenders to the Borrower and all fees, indemnification payments and other amounts whatsoever, whether direct or indirect, absolute or contingent, now or hereafter from time to time owing to the Lenders or the Administrative Agent by the Borrower under this Agreement and by any Obligor under any of the other Loan Documents, in each case strictly in accordance with the terms thereof and including all interest, fees and expenses accrued or incurred subsequent to the commencement of any bankruptcy or insolvency proceedings with respect to the Borrower, whether or not such interest, fees or expenses are allowed as a claim in such proceeding (such obligations being herein collectively called the “Guaranteed Obligations”).  The Subsidiary Guarantors hereby further jointly and severally agree that if the Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of 

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the Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.
SECTION 3.02.    Obligations Unconditional.  The obligations of the Subsidiary Guarantors under Section 3.01 are absolute and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Borrower under this Agreement or any other agreement or instrument referred to herein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section that the obligations of the Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and several, under any and all circumstances.  Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Subsidiary Guarantors hereunder, which shall remain absolute and unconditional as described above:
(i)    at any time or from time to time, without notice to the Subsidiary Guarantors, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;
(ii)    any of the acts mentioned in any of the provisions of this Agreement or any other agreement or instrument referred to herein shall be done or omitted;
(iii)    the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect, or any right under this Agreement or any other agreement or instrument referred to herein  shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or
(iv)    any lien or security interest granted to, or in favor of, the Administrative Agent or any Lender or Lenders as security for any of the Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and all notices whatsoever.  Each Subsidiary Guarantor agrees that its guarantee hereunder constitutes a guarantee of payment when due (whether or not any bankruptcy, insolvency, receivership or similar proceeding shall have stayed the accrual or collection of any of the Guaranteed Obligations or operated as a discharge thereof) and not merely of collection, and hereby expressly waives any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against the Borrower under this Agreement or any other agreement or instrument referred to herein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations.
SECTION 3.03.    Reinstatement.  The obligations of the Subsidiary Guarantors under this Article shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and the Subsidiary Guarantors jointly and severally agree that they will indemnify the Administrative Agent and each Lender on demand for all reasonable costs and expenses (including fees of counsel) incurred by the Administrative Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.
SECTION 3.04.    Subrogation.  The Subsidiary Guarantors hereby jointly and severally 

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agree that until the payment and satisfaction in full of all Guaranteed Obligations and the expiration and termination of the Commitments of the Lenders under this Agreement they shall not exercise any right or remedy arising by reason of any performance by them of their guarantee in Section 3.01, whether by subrogation or otherwise, against the Borrower or any other guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations.
SECTION 3.05.    Remedies.  The Subsidiary Guarantors jointly and severally agree that, as between the Subsidiary Guarantors and the Lenders, the obligations of the Borrower under this Agreement may be declared to be forthwith due and payable as provided in Article VIII (and shall be deemed to have become automatically due and payable in the circumstances provided in Article VIII) for purposes of Section 3.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Borrower) shall forthwith become due and payable by the Subsidiary Guarantors for purposes of Section 3.01.
SECTION 3.06.    Instrument for the Payment of Money.  To the fullest extent permitted by N.Y. Civ. Prac. L&R § 3213 and other applicable law, each Subsidiary Guarantor hereby acknowledges that the guarantee in this Article constitutes an instrument for the payment of money, and consents and agrees that any Lender or the Administrative Agent, at its sole option, in the event of a dispute by such Subsidiary Guarantor in the payment of any moneys due hereunder, shall have the right to bring motion action under N.Y. Civ. Prac. L&R § 3213.
SECTION 3.07.    Continuing Guarantee.  The guarantee in this Article is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising.  Each Subsidiary Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, or amended or modified, without notice to or further assent from it, and that it will remain bound upon its guarantee hereunder notwithstanding any extension, renewal, amendment or modification of any Guaranteed Obligation. 
SECTION 3.08.    Rights of Contribution.  The Subsidiary Guarantors hereby agree, as between themselves, that if any Subsidiary Guarantor shall become an Excess Funding Guarantor (as defined below) by reason of the payment by such Subsidiary Guarantor of any Guaranteed Obligations, then each other Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the next sentence), pay to such Excess Funding Guarantor an amount equal to such Subsidiary Guarantor’s Pro Rata Share (as defined below and determined, for this purpose, without reference to the properties, debts and liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined below) in respect of such Guaranteed Obligations.  The payment obligation of a Subsidiary Guarantor to any Excess Funding Guarantor under this Section shall be subordinate and subject in right of payment to the prior payment in full of the obligations of such Subsidiary Guarantor under the other provisions of this Article and such Excess Funding Guarantor shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all of such obligations.
For purposes of this Section, (a) “Excess Funding Guarantor” means, in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (b) “Excess Payment” means, in respect of any Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and (c) “Pro Rata Share” means, for any Subsidiary Guarantor, the ratio (expressed as a percentage) of (i) the amount by which the aggregate present fair saleable value of all properties of such Subsidiary Guarantor (excluding any shares of stock or other equity interest of any other Subsidiary Guarantor) exceeds the amount of all the debts and liabilities of such Subsidiary Guarantor (including contingent, subordinated, unmatured and unliquidated liabilities, but excluding the obligations of such Subsidiary Guarantor hereunder and any obligations of any other Subsidiary Guarantor that have been Guaranteed by such Subsidiary Guarantor) to (ii) the amount by which the aggregate fair saleable value of all properties of all of the Subsidiary Guarantors exceeds the amount of all the debts and liabilities (including contingent, subordinated, unmatured and 

48

unliquidated liabilities, but excluding the obligations of the Borrower and the Subsidiary Guarantors hereunder and under the other Loan Documents) of all of the Subsidiary Guarantors, determined (A) with respect to any Subsidiary Guarantor that is a party hereto on the Effective Date, as of the Effective Date, and (B) with respect to any other Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.
SECTION 3.09.    General Limitation on Guarantee Obligations.  In any action or proceeding involving any state corporate law, or any state or Federal bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Subsidiary Guarantor under Section 3.01 would otherwise, taking into account the provisions of Section 3.08, be held or determined to be void, invalid or unenforceable on account of the amount of its liability under Section 3.01, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Subsidiary Guarantor, any Lender, the Administrative Agent or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding.
SECTION 3.10.    Designation of Subsidiary Guarantors.  The Borrower may at any time and from time to time designate, in its sole discretion, any Domestic Subsidiary as a Subsidiary Guarantor, in each case by delivery to the Administrative Agent of (a) a duly executed Guarantee Assumption Agreement properly completed for such Subsidiary and in such number of counterparts as may reasonably be requested by the Administrative Agent and (b) proof of corporate action, incumbency of officers, opinions of counsel and other documents consistent with those delivered by the Subsidiary Guarantors pursuant to Section 5.01 on the Effective Date as may reasonably be requested by the Administrative Agent.  Any Subsidiary Guarantor designated as such pursuant to this Section 3.10 shall continue to be a Subsidiary Guarantor until the Borrower shall have delivered written notice to the Administrative Agent of the termination of such designation; provided that the preceding clause shall not limit the Borrower’s obligations with respect to Specified Subsidiaries pursuant to Section 6.08.
SECTION 3.11.    Release of Guarantees.  A Subsidiary Guarantor will automatically be released from its obligations under this Article III, upon the consummation of any transaction permitted by this Agreement as a result of which neither the Borrower nor any of its Subsidiaries owns any equity interest in such Subsidiary Guarantor, provided that, if so required by this Agreement, the Required Lenders shall have consented to such transactions and the terms of such consent shall not have provided otherwise.  In connection with any release pursuant to this Section, the Administrative Agent shall execute and deliver to any Obligor, at such Obligor’s expense, all documents that such Obligor shall reasonably request to evidence such release.  Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent.
ARTICLE IV 
 
Representations and Warranties
The Borrower represents and warrants to the Administrative Agent and the Lenders that:
SECTION 4.01.    Organization.  Each Obligor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.
SECTION 4.02.    Authorization; Enforceability.  The Transactions are within each Obligor’s corporate or other organizational powers and have been duly authorized by all necessary corporate  or other organizational action.  This Agreement has been duly executed and delivered by each Obligor identified herein as a signatory party hereto and constitutes, and each of the other Loan Documents to which any Obligor is a party when executed and delivered by such Obligor will constitute, a legal, valid and binding obligation of such Obligor, enforceable against each Obligor in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of 

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equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
SECTION 4.03.    Governmental Approvals; No Conflicts.  The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (b) do not violate the charter, by‐laws or other organizational documents of any Obligor and do not violate in any material respect any applicable law or regulation or any order of any Governmental Authority, and (c) do not constitute a default under any material indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries.
SECTION 4.04.    Financial Condition; No Material Adverse Change.  (a) Financial Condition.  The Borrower’s consolidated balance sheet and statements of earnings, shareholders’ equity and cash flows (i) as of and for the fiscal year ended February 26, 2011, reported on by Deloitte & Touche LLP, independent registered public accounting firm, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended August 27, 2011, certified by the chief financial officer of the Borrower, present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year‐end audit adjustments and the absence of certain footnotes in the case of the statements referred to in clause (ii).
(b)    No Material Adverse Change.  Since February 26, 2011, there has been no material adverse change in the business, assets, operations or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.
SECTION 4.05.    Properties.  Except in respect of matters that would not reasonably be expected to have a Material Adverse Effect, the Borrower and its Subsidiaries have title to, or leasehold interests in, or the use of, property sufficient to conduct their business, except for defects in title that do not interfere with their ability to conduct their business.
SECTION 4.06.    Litigation and Environmental Matters.  (a)  Actions, Suits and Proceedings.  (i)  There are no material actions, suits or proceedings by or before any arbitrator or Governmental Authority now pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries, except as disclosed in the Annual Report on Form 10-K of the Borrower for the fiscal year ended February 26, 2011 as filed with the Securities and Exchange Commission.
(ii)    There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority now pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries that purport to affect the legality, validity or enforceability of any Loan Document, the borrowing or repayment of any Loans, or the issuance of any Letter of Credit or payment of any reimbursement obligation in respect thereof.
(b)    Environmental, Health and Safety Laws.  Neither the Borrower nor any Subsidiary has received any notice to the effect that any part of its operations or properties is not in compliance with any Environmental Law or order or any notice that it or its property is the subject of any governmental investigation evaluating whether any remedial action is needed to respond to any release of any Hazardous Material into the environment, which non-compliance or remedial action could reasonably be expected to have a Material Adverse Effect.
SECTION 4.07.    Compliance with Laws and Agreements.  Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.  No Default has occurred and is continuing.
SECTION 4.08.    Investment Company Status.  No Obligor is an “investment 

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company” as defined in, or subject to regulation under, the Investment Company Act of 1940.
SECTION 4.09.    Taxes.  Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all material Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Person has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect.
SECTION 4.10.    ERISA.  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.
SECTION 4.11.    Subsidiaries.  Set forth on Schedule 4.11 is a complete and correct list as of the Effective Date of (a) all of the Subsidiaries of the Borrower and (b) each Subsidiary holding ownership interests in other Subsidiaries of the Borrower, together with, for each such Subsidiary, the jurisdiction of organization of such Subsidiary.  Schedule 4.11 separately identifies all Specified Subsidiaries and Material Subsidiaries as of the date hereof.
SECTION 4.12.    Federal Reserve Regulations.  Neither the Borrower nor any Subsidiary is engaged principally or as one of its important activities in the business of extending credit for the purpose of purchasing or carrying Margin Stock.  The value of all Margin Stock owned by the Borrower and its Subsidiaries (including, without limitation, all capital stock of the Borrower held by the Borrower in treasury) does not constitute more than 25.0% of the value of the consolidated assets of the Borrower.
ARTICLE V 
 
Conditions
SECTION 5.01.    Effective Date.  The obligations of the Lenders to make Loans and of the Issuing Lenders to issue Letters of Credit hereunder shall not become effective until the date on which the following conditions shall have been satisfied (or delivery of such documents is waived in accordance with Section 10.02):
(a)    Executed Counterparts.  The Administrative Agent shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmission of a signed signature page to this Agreement) that such party has signed a counterpart of this Agreement.
(b)    Opinion of Counsel to the Obligors.  The Administrative Agent shall have received opinions, dated the Effective Date, of General Counsel of the Borrower and of Simpson Thacher & Bartlett LLP, special counsel for the Borrower in form and substance reasonably satisfactory to the Administrative Agent (and each Obligor hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent).
(c)    Corporate Documents.  The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Obligor, the authorization of the Transactions and any other legal matters relating to the Obligors, this Agreement or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.
(d)    Officer’s Certificate.  The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the president, a vice president or a Financial Officer of the 

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Borrower, confirming, to the best knowledge of such Person, following due inquiry, compliance with the conditions set forth in the lettered clauses of the first sentence of Section 5.02 (except, in the case of clause (a) thereof, without giving effect to the parenthetical statement therein).
(e)    Repayment of Existing Indebtedness.  The Administrative Agent shall have received evidence that the principal of and interest on, and all other amounts owing in respect of, Indebtedness under the Existing Credit Agreement shall have been (or shall simultaneously be) paid in full, that the commitments to extend credit under the Existing Credit Agreement have been (or shall simultaneously be) canceled or terminated and letters of credit outstanding thereunder shall have expired or been terminated or shall be Existing Letters of Credit.
(f)    Other Documents.  The Administrative Agent shall have received such other documents as the Administrative Agent or Cravath, Swaine & Moore LLP, New York counsel to JPMCB, may reasonably request.
(g)    Delivery of Information.  The Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act that have been requested at least five Business Days prior to the Effective Date.
The obligation of each Lender to make its initial extension of credit hereunder is also subject to the payment by the Borrower of such fees as the Borrower shall have agreed in writing to pay to any Lender or the Administrative Agent in connection herewith, including the reasonable and documented fees and expenses of Cravath, Swaine & Moore LLP, New York counsel to JPMCB, in connection with the negotiation, preparation, execution and delivery of this Agreement and the other Loan Documents and the extensions of credit hereunder (to the extent that statements for such fees and expenses have been delivered to the Borrower).
The Administrative Agent shall notify the Borrower and the Lenders when it determines that this Agreement has become effective, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Lenders to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 10.02) at or prior to 3:00 p.m., New York City time, on October 31, 2011 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).
SECTION 5.02.    Each Credit Event.  The obligation of each Lender to make any Loan, and of each Issuing Lender to issue, amend (if increasing the amount thereof), renew (other than automatic renewals of any Auto-Renewal Letter of Credit) or extend any Letter of Credit, is additionally subject to the satisfaction of the following conditions:
(a)    the representations and warranties of the Borrower set forth in this Agreement (other than, after the Effective Date, those set forth in Sections 4.04(b) and 4.06(a)(i)) shall be true and correct on and as of the date of such Loan or the date of such issuance, amendment, renewal or extension, as applicable; and
(b)    at the time of and immediately after giving effect to such Loan or such issuance, amendment, renewal or extension, no Default or Event of Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment (if increasing the amount thereof), renewal (other than automatic renewals of any Auto-Renewal Letter of Credit) or extension of any Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in the preceding sentence.
ARTICLE VI 

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Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed (or have been cash collateralized or backstopped on terms reasonably satisfactory to each applicable Issuing Lender), the Borrower covenants and agrees with the Lenders that:
SECTION 6.01.    Financial Statements, Rating Changes and Other Information.  The Borrower will furnish to the Administrative Agent and each Lender:
(a)    as soon as available and in any event within 90 days after the end of each fiscal year of the Borrower, the audited consolidated balance sheet and related statements of earnings, shareholders’ equity and cash flows of the Borrower and its Subsidiaries as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or another independent registered public accounting firm of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations and cash flows of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP;
(b)    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 Borrower, the consolidated balance sheet and related statements of earnings, shareholders’ equity and cash flows of the Borrower and its Subsidiaries as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for (or, in the case of the balance sheet, as of the end of) the corresponding period or periods of the previous fiscal year, all certified by a Financial Officer of the Borrower as presenting fairly in all material respects the financial condition and results of operations and cash flows of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year‐end audit adjustments and the absence of certain footnotes;
(c)    concurrently with any delivery of financial statements under clause (a) or (b) of this Section, a certificate of a Financial Officer of the Borrower (i) certifying as to whether, to the best knowledge of such Financial Officer (following due inquiry), a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 7.06, and (iii) stating whether any change in GAAP or in the application thereof has been given effect in the preparation of such financial statements that became effective after the date of the audited financial statements referred to in Section 4.04 that affects calculations pursuant to Section 7.06 and has not previously been reported in such a certificate and, if any such not previously reported change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;
(d)    promptly after Moody’s or S&P shall have publicly announced a change in the Moody’s Rating or the S&P Rating, as the case may be, written notice of such rating change; and
(e)    promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any of its Subsidiaries, or compliance with the terms of this Agreement and the other Loan Documents, as the Administrative Agent or any Lender through the Administrative Agent may reasonably request.
The Borrower’s obligations under clauses (a) and (b) of this Section shall in any event be deemed sufficiently performed if the financial statements referred to therein are delivered by the time required under the applicable 

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clause in such form and content as permitted under the Exchange Act.  Documents required to be delivered pursuant to clauses (a) and (b) of this Section (to the extent any such documents are included in materials otherwise filed with the Securities and Exchange Commission), may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date on which the Borrower posts such documents on www.sec.gov, or provides a link thereto on the Borrower’s website at www.bestbuy.com.  Notices required to be delivered pursuant to clause (d) of this Section may be delivered electronically and, if so delivered, shall be deemed delivered on the date on which the applicable rating agency posts such notice, or provides a link thereto, on the website of such rating agency.  All documents and notices required by this Section shall be deemed sufficiently delivered when posted on the Borrower’s behalf on IntraLinks/IntraAgency or another relevant website, if any, to which each Lender and the Administrative Agent have ready access without charge (whether a commercial, third-party website or whether sponsored by the Administrative Agent).
SECTION 6.02.    Notices of Material Events.  The Borrower will furnish to the Administrative Agent and each Lender (through the Administrative Agent) prompt written notice of the following:
(a)    the occurrence of any Default;
(b)    the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any of its Subsidiaries that could reasonably be expected to result in a Material Adverse Effect;
(c)    the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, results in, or could reasonably be expected to result in, a Material Adverse Effect; and
(d)    any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 6.03.    Existence; Conduct of Business.  The Borrower will, and will cause each of its Material Subsidiaries to, do or cause to be done all things necessary to obtain, preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges, authorizations and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any transaction permitted under Section 7.03.
SECTION 6.04.    Payment of Obligations.  The Borrower will, and will cause each of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, would result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest would not reasonably be expected to result in a Material Adverse Effect.
SECTION 6.05.    Maintenance of Properties; Insurance.  The Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in working order and condition sufficient to permit the conduct of business in the ordinary course, ordinary wear and tear excepted, and (b) maintain, with financially sound and reputable insurance companies (or with the Borrower’s captive self-insurance Subsidiary or other customary self insurance, so long as such arrangements are administered in accordance with sound business practices), insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.

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SECTION 6.06.    Books and Records; Inspection Rights.  The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in such detail as is necessary to allow the delivery of the reports required by Section 6.01, in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities in accordance with and as required by GAAP in all material respects.  The Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent (on its own behalf or as requested by any Lender), upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested (collectively, the “Inspections”); provided that the Borrower shall not be obligated to permit more than one Inspection in any calendar year unless a Default or Event of Default is then continuing or to make available material non-public information to any Person in any respect that would (in the opinion of counsel to the Borrower) violate applicable law, including the Exchange Act.
SECTION 6.07.    Compliance with Laws.  The Borrower will, and will cause each of its Subsidiaries to, comply with all laws (including ERISA and Environmental Laws) and all rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
SECTION 6.08.    New Specified Subsidiaries to Become Subsidiary Guarantors.  With respect to each Subsidiary that becomes a Specified Subsidiary after the Effective Date, the Borrower will (a) within 30 Business Days after such Subsidiary becomes a Specified Subsidiary, cause such Subsidiary to duly execute and deliver to the Administrative Agent a Guarantee Assumption Agreement properly completed for such Subsidiary and in such number of counterparts as may reasonably be requested by the Administrative Agent and (b) deliver to the Administrative Agent within a reasonable time (not exceeding 30 days) after its request therefor, such proof of corporate action, incumbency of officers, opinions of counsel and other documents consistent with those delivered by the Subsidiary Guarantors pursuant to Section 5.01 on the Effective Date as may reasonably be requested by the Administrative Agent.  Nothing in this Agreement shall obligate the Administrative Agent or the Lenders to release or terminate the Guarantee under Article III of this Agreement or any Guarantee Assumption Agreement of any Subsidiary Guarantor which ceases to be a Specified Subsidiary.
SECTION 6.09.    Use of Proceeds; Federal Reserve Regulations.  The Borrower will use the proceeds of the Loans, and the Letters of Credit will be used, for general corporate purposes (including, in the case of the Loans, to repay existing Indebtedness) in compliance with all applicable legal and regulatory requirements; provided that neither the Administrative Agent nor any Lender shall have any responsibility as to the use of any of such proceeds.  No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X, and the Borrower will not permit the value of all Margin Stock owned by the Borrower and its Subsidiaries (including, without limitation, all capital stock of the Borrower from time to time held by the Borrower in treasury) to constitute more than 25.0% of the value of the consolidated assets of the Borrower.
ARTICLE VII 
 
Negative Covenants
Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed (or have been cash collateralized or backstopped on terms reasonably satisfactory to each applicable Issuing Lender), the Borrower covenants and agrees with the Lenders that:
SECTION 7.01.    Subsidiary Indebtedness.  The Borrower will not permit any Domestic Subsidiary that is not an Obligor to create, incur, assume or permit to exist any Indebtedness, except:

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(a)    obligations under the Loan Documents;
(b)    any other Indebtedness existing on the Effective Date and described in Schedule 7.01 (and any Indebtedness that may be incurred after the Effective Date under commitments to extend such Indebtedness available on the Effective Date and so described), and Indebtedness the proceeds of which are used solely to refinance such Indebtedness;
(c)    Indebtedness referred to in, and secured by Liens permitted under, Section 7.02(e);
(d)    Indebtedness referred to in, and secured by Liens permitted under, Sections 7.02(c) and 7.02(d);
(e)    Indebtedness in respect of (i) documentary letters of credit and trade letters of credit incurred in the ordinary course of business and (ii) trade bank acceptance drafts incurred in the ordinary course of business;
(f)    current liabilities, other than for borrowed money, incurred in the ordinary course of business; 
(g)    Indebtedness of any Subsidiary owing to the Borrower or any other Subsidiary;
(h)    Indebtedness arising from Domestic Securitization Transactions permitted by Section 7.02(k), provided that the aggregate amount of such Indebtedness shall not exceed $300,000,000 at any time outstanding; and
(i)    other Indebtedness, provided that, as of the Effective Date and as of the time any Indebtedness is created, incurred or assumed in reliance on this clause (i), the aggregate principal amount of all Indebtedness outstanding in reliance on this clause (i) (together with the aggregate principal amount of any such Indebtedness to be created, incurred or assumed in reliance on this clause (i)) does not exceed the greater of (i) $250,000,000 and (ii) 5.0% of Tangible Net Worth as of the Effective Date or as of the date such Indebtedness is created, incurred or assumed, as applicable.
SECTION 7.02.    Liens.  The Borrower will not, nor will it permit any of its Subsidiaries to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:
(a)    Liens existing on the Effective Date and, if securing a liability in excess of $150,000,000, described on Schedule 7.02, and Liens on the same property (or, if such Lien attaches to a type or class of property of any Person, on the same type or class of property of such Person) securing any extension, renewal, refinancing, refunding or replacement of the liability secured by such Liens that do not increase the outstanding principal amount thereof;
(b)    deposits or pledges, or cash collateral given to any financial institution that has issued a letter of credit, to secure payment of workers’ compensation, unemployment insurance, old age pensions or other social security or employee benefit obligations, daylight overdraft exposure or ACH obligations, or liabilities under or in respect of self-insurance programs, in each case in the ordinary course of business of the Borrower and its Subsidiaries;
(c)    Liens created or assumed in connection with the acquisition of real property by the Borrower or any Subsidiary; provided that such Liens attach only to the property acquired and secure only Indebtedness incurred solely to finance the acquisition of such property, and Liens on the same property securing any Indebtedness the proceeds of which are used solely to refinance such Indebtedness;

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(d)    Liens on inventory of the Borrower or any Subsidiary and proceeds thereof pursuant to agreements with the suppliers of inventory or inventory letter of credit providers to the Borrower or such Subsidiary; provided that such Liens attach only to inventory financed pursuant to such agreements and secure only Indebtedness incurred solely to finance the acquisition of such inventory by the Borrower or such Subsidiary;
(e)    Liens securing Indebtedness and related obligations incurred to finance the acquisition or construction of capital assets not constituting real property or to reimburse the Borrower or a Subsidiary for expenditures made to acquire or construct such capital assets, and Liens securing Indebtedness and related obligations incurred by the same obligor to extend, renew, refinance, refund or replace any such Indebtedness or obligations so long as the outstanding principal amount thereof is not increased; provided that such Liens attach only to such capital assets and the proceeds thereof;
(f)    Liens securing Indebtedness and related obligations of any Subsidiary which became a Subsidiary after the Effective Date if such Indebtedness and Liens were outstanding prior to the time it became a Subsidiary and not incurred in contemplation of its becoming a Subsidiary, and Liens on the same property (or, if such Lien attaches to a type or class of property of any Person, on the same type or class of property of such Person) securing Indebtedness and related obligations incurred by the same obligor to extend, renew, refinance, refund or replace such Indebtedness or obligations so long as the outstanding principal thereof is not increased;
(g)    Permitted Encumbrances; 
(h)    Liens consisting of easements, rights of way, zoning restrictions, restrictions on the use of real property and defects and irregularities in the title thereto, landlords’, materialmen’s or mechanic’s liens and other similar liens and encumbrances  none of which interfere materially with the use of the property covered thereby in the ordinary course of the business of the Borrower or such Subsidiary and which do not materially detract from the value of such properties;
(i)    Liens on assets of Foreign Subsidiaries securing Indebtedness or other liabilities of Foreign Subsidiaries; 
(j)    cash collateral given to any financial institution that has issued a trade bank acceptance draft in the ordinary course of business of the Borrower and its Subsidiaries;
(k)    Securitization Transactions, and Liens on accounts receivable, interests therein and the proceeds thereof existing or deemed to exist in connection with any Securitization Transaction; provided that the aggregate amount of the Domestic Securitization Transactions shall not exceed $300,000,000 at any time;
(l)    Liens on assets securing obligations under the 364-Day Credit Agreement so long as obligations under this Agreement are secured on an equal and ratable basis on terms reasonably satisfactory to the Administrative Agent; and
(m)    Liens securing other liabilities, provided that, as of the Effective Date and as of the time any Lien securing any obligations is created, incurred or assumed in reliance on this clause (m), the aggregate principal amount of all liabilities secured by Liens in reliance on this clause (m) (together with the aggregate principal amount of all liabilities secured by such Lien to be created, incurred or assumed in reliance on this clause (m)) does not exceed the greater of (i) $250,000,000 and (ii) 10.0% of Tangible Net Worth as of the Effective Date or as of the date any such Lien is created, incurred or assumed, as applicable.
SECTION 7.03.    Fundamental Changes.  (a)  Mergers, Consolidations, Sales of Assets, Etc.
(i)    The Borrower will not, and will not permit any Subsidiary Guarantor to, merge 

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with or into or consolidate with (collectively, “merge” or a “merger”) any other Person, or permit any other Person to merge with or into it, or liquidate or dissolve; provided that, if at the time thereof and immediately after giving effect thereto no Default or Event of Default shall have occurred and be continuing, (A) any Subsidiary Guarantor may merge into the Borrower in a transaction in which the Borrower is the surviving entity; (B) any Subsidiary Guarantor may merge with or into any other Person (including in connection with any acquisition) in a transaction in which the surviving entity is, or concurrently with the consummation of such merger becomes, a Subsidiary Guarantor; (C) any Subsidiary Guarantor may be disposed of pursuant to a merger with or into another Person so long as such disposition does not violate clause (ii) below; (D) any Subsidiary Guarantor may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders; and (E) the Borrower may merge with or into any other Person organized under the laws of the United States of America or any State thereof, provided that (1) the Borrower is the surviving entity or (2) if the surviving entity is not the Borrower, then (x) the surviving entity assumes all of the Borrower’s obligations under this Agreement and the other Loan Documents pursuant to an agreement reasonably satisfactory to the Administrative Agent and (y) the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, with respect to such surviving entity, and provided further that on the date of consummation of any such merger, the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer demonstrating that the Borrower would be in pro forma compliance with Section 7.06 as of the last day of the fiscal quarter then most recently ended (determined as if such merger, and any related incurrence of Indebtedness, had occurred on the first day of the period of four consecutive fiscal quarters ending on such last day).
(ii)    The Borrower will not, and will not permit any of its Subsidiaries to, sell, transfer, lease, license or otherwise dispose of (in one transaction or in a series of transactions, and whether directly or through any merger or consolidation) assets representing all or substantially all the consolidated assets of the Borrower and the Subsidiaries (whether now owned or hereafter acquired), taken as a whole.
(b)    Lines of Business.  The Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.
SECTION 7.04.    Restrictive Agreements.  The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (collectively, “Restrictions”) (a) the ability of the Borrower or any Domestic Subsidiary to create, incur or permit to exist a first priority Lien upon any of its assets securing the obligations of the Borrower hereunder or, in the case of Domestic Subsidiaries, the Guarantees thereof, (b) the ability of any Subsidiary to pay dividends or similar distributions with respect to any shares of its capital stock (or similar Equity Interests) or to make or repay loans or advances to the Borrower or any Subsidiary Guarantor or (c) the ability of any Domestic Subsidiary to Guarantee any of the Guaranteed Obligations; provided that:
(i)    the foregoing shall not apply to (A) Restrictions imposed by law, rule, regulation or order or by this Agreement or any other Loan Document, (B) Restrictions existing on the date hereof identified on Schedule 7.04 (but shall apply to any amendment or modification expanding the scope of any such Restrictions), (C) Restrictions imposed by any agreement by which any Subsidiary is bound at the time such Subsidiary became a Subsidiary, so long as such agreement was in effect at the time of such acquisition and was not created in contemplation of such acquisition and such Restrictions only apply to such Subsidiary (but shall apply to any amendment or modification expanding the scope of any such Restriction), (D) customary Restrictions contained in agreements relating to the sale of a Subsidiary or assets pending such sale, provided that (1) such Restrictions 

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apply only to the Subsidiary or assets to be sold and (2) such sale is permitted hereunder, (E) Restrictions on cash or other deposits under contracts entered into in the ordinary course of business, (F) in the case of any Subsidiary that is not a wholly-owned Subsidiary of the Borrower, Restrictions imposed by its organizational documents or any related joint venture or similar agreement, provided that such Restrictions apply only to such Subsidiary and to any Equity Interests in such Subsidiary, and (G) Restrictions contained in lease agreements or agreements not relating to Indebtedness, in each case, entered into by the Borrower or any Subsidiary in the ordinary course of business;
(ii)    clause (a) of the foregoing shall not apply to (A) Restrictions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such Restrictions apply only to the assets securing such Indebtedness, (B) Restrictions imposed by any agreement relating to Indebtedness permitted by this Agreement incurred after the Effective Date to finance the acquisition of particular assets (and any agreement relating to any refinancing of such Indebtedness, so long as the aggregate principal amount of such refinancing Indebtedness does not exceed the then outstanding aggregate principal amount of such original Indebtedness), so long as such Restrictions apply only to such assets (other than Inventory and Receivables), (C) Restrictions imposed by any agreement relating to Indebtedness permitted by this Agreement, provided that neither the Borrower nor any Domestic Subsidiary may create, incur or permit to exist any Lien securing the Indebtedness under such agreement unless the Indebtedness under this Agreement is equally and ratably secured thereby on terms reasonably satisfactory to the Administrative Agent, and (D) customary provisions in leases and other contracts restricting the assignment thereof; and
(iii)    clause (b) of the foregoing shall not apply to Restrictions imposed by any agreement if the Borrower’s Board of Directors determines in good faith that such Restrictions could not reasonably be expected to have a material adverse effect on the ability of the Borrower and the Subsidiary Guarantors to pay their obligations under the Loan Documents when due.
SECTION 7.05.    Transactions with Affiliates.  The Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a)  at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties and (b) transactions between or among the Borrower and its Subsidiaries not involving any other Affiliate.
SECTION 7.06.    Certain Financial Covenants.  (a)  Cash Flow Leverage Ratio.  The Borrower will not permit the Cash Flow Leverage Ratio on the last day of any fiscal quarter to exceed 3.50 to 1.00.
(b)    Interest Coverage Ratio.  The Borrower will not permit the Interest Coverage Ratio, as at the end of any Measurement Period, to be less than 2.75 to 1.00.
SECTION 7.07.    Investments in Foreign Subsidiaries.  (a)The Borrower will not, and will not permit any of its Domestic Subsidiaries to, sell, transfer, lease, license or otherwise dispose of (in one transaction or in a series of transactions) to any Foreign Subsidiary (i) any Equity Interests in any Domestic Subsidiary, (ii) any United States patents, copyrights, trademarks, service marks, trade names, trade dress, logos and other source or business identifiers, all registrations and recordings thereof, all applications therefor, all extensions or renewals thereof and all goodwill associated therewith or symbolized thereby, that are, or are contemplated to be, used or useful in the conduct of the business of the Borrower and its Domestic Subsidiaries taken as a whole, (iii) any assets (other than (A) cash and cash equivalents and (B) Indebtedness or other obligations owing to the Borrower or any Domestic Subsidiary by any Foreign Subsidiary in the form  of intercompany loans or advances) that, individually or in the aggregate, are material to the conduct of the business of the Borrower and its Domestic Subsidiaries taken as a whole or (iv) all or any substantial portion of the assets of the Borrower and its Domestic Subsidiaries taken as a whole.
(b)    Prior to the Restricted Date, the Borrower will not, and will not permit any of its 

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Subsidiaries to, make any Investments in Best Buy Europe Distributions or its Subsidiaries unless, on the date of any such Investment, after giving effect thereto, the aggregate amount of all such Investments does not exceed the sum of (i) the Initial Purchase Price and (ii) 10.0% of Total Assets.
ARTICLE VIII 
 
Events of Default
If any of the following events (“Events of Default”) shall occur:
(a)    the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
(b)    the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or under any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three or more Business Days;
(c)    any representation or warranty made or deemed made by or on behalf of the Borrower or any other Obligor in or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof, or any waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof, or any waiver hereunder or thereunder, shall prove to have been incorrect in any material respect when made or deemed made;
(d)    the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 6.02(a), Section 6.03 (with respect to the Borrower’s existence) or Section 6.08 or in Article VII;
(e)    any Obligor shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article) or any other Loan Document and such failure shall continue unremedied for a period of 30 or more days after notice thereof from the Administrative Agent or the Required Lenders to the Borrower;
(f)    the Borrower or any of its Subsidiaries shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable (after giving effect to any grace period applicable thereto); provided that any such failure with respect to any Indebtedness arising from the purchase of goods or services by the Borrower that is being contested in good faith by appropriate proceedings shall not constitute an Event of Default as long as the Borrower’s or such Subsidiary’s title to any substantial part of its property is not materially adversely affected, its use of such property in the ordinary course of its business is not materially interfered with and adequate reserves with respect thereto have been set aside on its books in conformity with GAAP;
(g)    any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf, or, in the case of any Hedging Agreement, the applicable counterparty, or, in the case of any Securitization Transaction, the purchasers or lenders thereunder to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity or, in the case of any Hedging Agreement or Securitization Transaction, to cause the termination thereof; provided that this clause (g) shall not apply to secured 

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Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; 
(h)    an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any of its Material Subsidiaries or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any of its Material Subsidiaries or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for a period of 60 or more days or an order or decree approving or ordering any of the foregoing shall be entered;
(i)    the Borrower or any of its Material Subsidiaries shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any of its Material Subsidiaries or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding or (v) make a general assignment for the benefit of creditors;
(j)    one or more judgments for the payment of money in an aggregate amount in excess of $150,000,000 shall be rendered against the Borrower or any of its Subsidiaries or any combination thereof and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any of its Subsidiaries to enforce any such judgment;
(k)    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; or
(l)    a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole, and thereupon the principal of the Loans, together with accrued interest thereon and all fees and other obligations of the Obligors accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Obligor; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Obligors accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Obligor.
ARTICLE IX 
 
Agency
SECTION 9.01.    Administrative Agent.  Each of the Lenders and the Issuing Lenders hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and 

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its successors to serve as Administrative Agent under the Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lenders, and neither the Borrower nor any other Obligor shall have rights as a third party beneficiary of such provisions. 
The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender, an Issuing Lender or a Swingline Lender as any other Lender, Issuing Lender or Swingline Lender and may exercise the same as though it were not the Administrative Agent, and such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any of its Subsidiaries or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders, the Issuing Lenders or the Swingline Lenders.
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents.  Without limiting the generality of the foregoing, the Administrative Agent:
(a)    shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(b)    shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in Section 10.02); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or be contrary to any Loan Document or applicable law; and
(c)    shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 10.02) or (ii) in the absence of its own gross negligence or willful misconduct (with such absence to be presumed unless otherwise determined by a court of competent jurisdiction in a final and nonappealable judgment).  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice describing such Default is given to the Administrative Agent by the Borrower, a Lender, an Issuing Lender or a Swingline Lender.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (a) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (b) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (c) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default, (d) the sufficiency, validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (e) the satisfaction of any condition set forth in Article V or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.  Notwithstanding anything herein to the contrary, the Administrative Agent shall not 

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have any liability arising from any confirmation of the Revolving Credit Exposure or the component amounts thereof.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or such Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or such Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon.  The Administrative Agent may consult with legal counsel (who may be counsel for an Obligor), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub‐agents appointed by the Administrative Agent.  The Administrative Agent and any such sub‐agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall apply to any such sub‐agent and to the Related Parties of the Administrative Agent and any such sub‐agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Lenders and the Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the consent of the Borrower (such consent not to be unreasonably withheld, or required if an Event of Default under clauses (a), (b), (h) or (i) of Article VIII has occurred and is continuing), to appoint a successor, which shall be a bank with an office in the United States of America, or an Affiliate of any such bank.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the Issuing Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above provided that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (a) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents and (b) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each Issuing Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this paragraph.  Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this paragraph).  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 10.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub‐agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.
Each Lender, each Issuing Lender and each Swingline Lender acknowledges that it has, 

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independently and without reliance upon the Administrative Agent, any other Lender, any Issuing Lender, any Swingline Lender or any Arranger or any of their Related Parties, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender, each Issuing Lender and each Swingline Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, any other Lender any Issuing Lender, any Swingline Lender or any Arranger or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
Except as otherwise provided in Section 10.02(b) with respect to this Agreement, the Administrative Agent may, with the prior consent of the Required Lenders (but not otherwise), consent to any modification, supplement or waiver under any of the Loan Documents.
SECTION 9.02.    Bookrunners, Etc.  Anything herein to the contrary notwithstanding, none of the Arrangers, the Syndication Agent and the Documentation Agents listed on the cover page hereof shall have any duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender, an Issuing Lender or a Swingline Lender hereunder.
ARTICLE X 
 
Miscellaneous
SECTION 10.01.    Notices.  (a)  Notices Generally.  Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) 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:
(i)    if to the Borrower or any Subsidiary Guarantor, to Best Buy Co., Inc. at 7601 Penn Avenue South, Richfield, Minnesota, 55423, Attention of Treasurer (Telephone No. (612) 291-5781; Fax No. (952) 430-1316; email treasuryooo@bestbuy.com);
(ii)    if to the Administrative Agent, to JPMorgan Chase Bank, N.A., Loan and Agency Services Group, 1111 Fannin Street, 10th Floor, Houston, Texas 77002-6925, Attention of Ryan Mader (Telephone No. (713) 750-2936; Fax No. (713) 750-2956; email ryan.g.mader@jpmorgan.com) and Thai Pham (Telephone No. (713) 750-2884; Fax. No. (713) 750-2956, email thai.x.pham@jpmorgan.com) with a copy to JPMorgan Chase Bank, N.A., 383 Madison Avenue, 24th Floor, New York, New York 10179, Attention of Jocelyn Shields (Telephone No. (212) 270-3641; Fax No. (212) 270-6637; email jocelyn.t.shields@jpmorgan.com);
(iii)    if to JPMCB as Issuing Lender, to JPMorgan Chase Bank, N.A., 10420 Highland Manor Drive, 4th Floor, Tampa, Florida 33610-9128, Attention of James Alonzo (Telephone No. (813) 432-6339; Fax No. (856) 294-5256), in each case with a copy to JPMorgan Chase Bank, N.A., 383 Madison Avenue, 24th Floor, New York, New York 10179, Attention of Jocelyn Shields (Telephone No. (212) 270-3641; Fax No. (212) 270-6637; email jocelyn.t.shields@jpmorgan.com);
(iv)    if to USB as Swingline Lender, to U.S. Bank National Association, 111 SW 5th Avenue, Portland, Oregon 97204, Attention of Marnie Faust (Telephone No. (503) 275 5854; email: marnie.faust@usbank.com);
(v)    if to any other Issuing Lender, to it at its address as provided in writing to the Administrative Agent and the Borrower; 
(vi)    if to JPMCB as Swingline Lender, to JPMorgan Chase Bank, N.A., 1111 Fannin 

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Street, 10th Floor, Houston, Texas 77002-6925, Attention of Ryan Mader (Telephone No. (713) 750-2936; Fax No. (713) 750-2956; email ryan.g.mader@jpmorgan.com) and Thai Pham (Telephone No. (713) 750-2884; Fax. No. (713) 750-2956, email thai.x.pham@jpmorgan.com), in each case with a copy to JPMorgan Chase Bank, N.A., 383 Madison Avenue, 24th Floor, New York, New York 10179, Attention of Jocelyn Shields (Telephone No. (212) 270-3641; Fax No. (212) 270-6637; email jocelyn.t.shields@jpmorgan.com); 
(vii)    if to USB as Swingline Lender, to U.S. Bank National Association; 400 City Center, Oshkosh, Wisconsin 54901, Attention of Barbara Campbell (Telephone No. (920) 237-7370; email: Barbara.campbell@usbank.com); and
(viii)    if to a Lender, to it at its address (or fax number) set forth in its Administrative Questionnaire.
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 fax 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 paragraph (b) below, shall be effective as provided in said paragraph (b).
(b)    Electronic Communications.  Notices and other communications to the Lenders and the Issuing Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices under Article II to any Lender or Issuing Lender if such Lender or Issuing Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  Each Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
(c)    Change of Address, Etc.  Any party hereto may change its address or fax number for notices and other communications hereunder by notice to the other parties hereto (or, in the case of any such change by a Lender, by notice to the Borrower and the Administrative Agent).
SECTION 10.02.    Waivers; Amendments.  (a)  No Deemed Waivers; Remedies Cumulative.  No failure or delay by the Administrative Agent, any Issuing Lender or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent, the Issuing Lenders and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or consent to any departure by any Obligor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the execution and delivery of this Agreement, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or any Issuing Lender may have had notice or knowledge of such Default at the time.
(b)    Amendments.  Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall:
(i)    increase the Commitment of any Lender without the written consent of such Lender,

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(ii)    reduce the principal amount of any Loan or LC Disbursement outstanding to any Lender or reduce the rate of interest thereon (except in connection with the waiver of applicability of any post-default increase in interest rates pursuant to Section 2.13(d)), or reduce any fees payable to any Lender hereunder, without the written consent of such Lender,
(iii)    postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement outstanding to any Lender, or any interest thereon, or any fees payable to any Lender hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment of any Lender, without the written consent of such Lender,
(iv)    change Section 2.18(b), 2.18(c) or 2.18(d) in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly and adversely affected thereby,
(v)    change any of the provisions of this Section or the percentage in the definition of the term “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender directly and adversely affected thereby, or
(vi)    release all or substantially all of the Guarantors from their guarantee obligations under Article III without the written consent of each Lender, and
provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, any Issuing Lender or any Swingline Lender hereunder without the prior written consent of the Administrative Agent, such Issuing Lender or such Swingline Lender, as the case may be.
Notwithstanding the foregoing (but subject to the immediately preceding proviso), (A) any amendment of the definition of the term “Applicable Rate” pursuant to the last sentence of such definition shall require only the written consent of the Borrower and the Required Lenders, (B) no consent with respect to any amendment, waiver or other modification of this Agreement shall be required of any Defaulting Lender, except with respect to any amendment, waiver or other modification referred to in clause (i), (ii) or (iii) of the first proviso of this paragraph and then only in the event such Defaulting Lender shall be directly affected by such amendment, waiver or other modification, (C) the Administrative Agent may enter into one or more security agreements (including mortgages and pledge agreements) in connection with any grant of a security interest securing Indebtedness under this Agreement as contemplated by Sections 7.02(l) and 7.04 without the consent of any Lender and (D) this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower (x) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share in the benefits of this Agreement and the other Loan Documents and (y) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders.
SECTION 10.03.    Expenses; Indemnity; Damage Waiver.  (a)  Costs and Expenses.  The Borrower shall pay (i) all reasonable and documented out‐of‐pocket expenses incurred by the Administrative Agent, the Arrangers, the Documentation Agents, the Syndication Agent and each of their respective Affiliates (including the reasonable and documented fees, charges and disbursements of one firm of counsel (and one firm of local counsel in each applicable jurisdiction) for the foregoing), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable and documented out‐of‐pocket expenses incurred by any Issuing Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for 

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payment thereunder and (iii) all out‐of‐pocket expenses incurred by the Administrative Agent, any Issuing Lender or any Lender (including the reasonable fees, charges and disbursements of one firm of counsel (and one firm of local counsel in each applicable jurisdiction) for the Administrative Agent, the Issuing Lenders and the Lenders and of any separate counsel (including local counsel) that may be required in light of any conflicting interests among the foregoing parties) in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out‐of‐pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
(b)    Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent (and any sub‐agent thereof), the Arrangers, the Documentation Agents, the Syndication Agent, each Lender and each Issuing Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”), against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of one firm of counsel (and one firm of local counsel in each applicable jurisdiction) for the Indemnitees and of any separate counsel (including local counsel) that may be required in light of any conflicting interests among Indemnitees), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Obligor arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by any Issuing Lender to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Obligor, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee or its Related Parties or (y) result from a claim brought in good faith by the Borrower or any other Obligor against an Indemnitee for breach in bad faith, gross negligence or willful misconduct of such Indemnitee’s obligations hereunder or under any other Loan Document.
(c)    Reimbursement by Lenders.  To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under paragraph (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub‐agent thereof), an Issuing Lender or a Swingline Lender, or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub‐agent), such Issuing Lender or such Swingline Lender, or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub‐agent), such Issuing Lender or such Swingline Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub‐agent), such Issuing Lender or such Swingline Lender in connection with such capacity.  The obligations of the Lenders under this paragraph are several obligations.
(d)    Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, no Obligor shall assert, and each Obligor hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document 

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or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems, except to the extent they are determined by a final and non-appealable judgment of a court of competent jurisdiction to have resulted from the bad faith, willful misconduct or gross negligence of such Indemnitee or any of its Related Parties, or for any special, indirect, consequential or punitive damages in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
(e)    Payments.  All amounts due under this Section shall be payable promptly after demand therefor.
SECTION 10.04.    Successors and Assigns.  (a) Assignments Generally.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of an Issuing Lender that issues any Letter of Credit), except that (i) other than as expressly provided in Section 7.03(a)(i), the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of an Issuing Lender that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section), the Arrangers, the Documentation Agent, the Syndication Agent and, to the extent expressly contemplated hereby, the sub-agents of the Administrative Agent and the Related Parties of each of the Administrative Agent, the Issuing Lenders and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b)    Assignments by Lenders.
(i)    Assignments Generally.  Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees (other than any natural person) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:
(A)    the Borrower; provided that (x) no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee, and (y) the Borrower shall be deemed to have consented to any assignment unless it shall object thereto by written notice the Administrative Agent within 10 Business Days after having confirmed receipt of notice thereof;
(B)    the Administrative Agent; provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of the Commitments or Syndicated Loans to a Lender or an Affiliate of a Lender; 
(C)    each Issuing Lender; and
(D)    each Swingline Lender.
(ii)    Certain Conditions to Assignments.  Assignments shall be subject to the following additional conditions: 
(A)    except in the case of an assignment to a Lender or an Affiliate of a Lender 

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or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;
(B)    each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;
(C)    the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and
(D)    the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.
(iii)    Effectiveness of Assignments.  Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 10.03).  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 paragraph (c) of this Section.
(iv)    Maintenance of Register.  The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Lenders 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 the Borrower, any Issuing Lender and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(v)    Acceptance of Assignments by Administrative Agent.  Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and 

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Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(e) or 2.06(f), 2.07(b), 2.18(d) or 10.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
(c)    Participations.
(i)    Participations Generally.  Any Lender may, without the consent of the Borrower, the Administrative Agent, any Issuing Lender or any Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Lenders and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 10.02(b) that directly and adversely affects such Participant.  Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Sections 2.17(f) and 2.17(g) (it being understood that the documentation required under Sections 2.17(f) and 2.17(g) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided that such Participant agrees to be subject to Section 2.18(d) as though it were a Lender.  Each Lender selling participations shall keep a register (the “Participant Register”) in which it shall record the name and address of each Participant to which such Lender sells participations and the amount and terms of such participations, acting for this purpose as an agent of the Borrower; 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 Commitments, Loans, Letters of Credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(ii)    Limitations on Rights of Participants.  A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(f) as though it were a Lender.

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(d)    Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 10.05.    Survival.  All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any Issuing Lender or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.15, 2.16, 2.17, 2.18(f), 3.03 and 10.03 and Article IX shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.
SECTION 10.06.    Counterparts; Integration; Effectiveness; Electronic Execution.  (a)  Counterparts; Integration; Effectiveness.  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.  This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract between and among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof (but do not supersede any provisions of any separate letter agreements with respect to fees payable to the Administrative Agent or any Issuing Lender).  Except as provided in Section 5.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile (or other electronic transmission) shall be effective as delivery of a manually executed counterpart of this Agreement.
(b)    Electronic Execution of Assignments.  The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
SECTION 10.07.    Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 10.08.    Right of Setoff.  In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without notice to the Borrower or any Subsidiary Guarantor, any such notice being expressly waived by the Borrower and each Subsidiary Guarantor to the extent permitted by applicable law, upon any obligations of the Borrower or any Subsidiary Guarantor under this Agreement 

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or any other Loan Document becoming due and payable (whether at the stated maturity, by acceleration or otherwise), to apply to the payment of such obligations, by setoff or otherwise, any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender, any Affiliate thereof or any of their respective branches or agencies to or for the credit or the account of the Borrower or any Subsidiary Guarantor; provided that if any Defaulting Lender shall exercise any such right of setoff, all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of this Agreement and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lender and the Lenders (including the Swingline Lender).  Each Lender (including any Defaulting Lender) agrees to notify the Borrower and the Administrative Agent promptly after any such application made by such Lender, provided that the failure to give such notice shall not affect the validity of such application.
SECTION 10.09.    Governing Law; Jurisdiction; Etc. (a)  Governing Law.  This Agreement shall be governed by, and construed in accordance with, the law of the State of New York.
(b)    Submission to Jurisdiction.  Each Obligor irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent, any Issuing Lender or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Obligor or its properties in the courts of any jurisdiction.
(c)    Waiver of Venue.  Each Obligor irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section.  Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d)    Service of Process.  Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 10.01.  Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable law.
SECTION 10.10.    WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

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SECTION 10.11.    Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 10.12.    Treatment of Certain Information; Confidentiality.  (a) Treatment of Certain Information.  The Borrower acknowledges that from time to time financial advisory, investment banking and other services may be offered or provided to the Borrower or one or more of its Subsidiaries (in connection with this Agreement or otherwise) by any Lender, any Issuing Lender or by one or more Subsidiaries or Affiliates of such Lender or such Issuing Lender and the Borrower hereby authorizes each Lender and each Issuing Lender to share any information delivered to such Lender or such Issuing Lender by the Borrower and its Subsidiaries pursuant to this Agreement, or in connection with the decision of such Lender or such Issuing Lender to enter into this Agreement, with any Subsidiary or Affiliate of such Lender or Issuing Lender, it being understood that any such Subsidiary or Affiliate of any Lender receiving such information shall be bound by the provisions of paragraph (b) of this Section as if it were a Lender or an Issuing Lender hereunder.  Such authorization shall survive the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.
(b)    Confidentiality.  Each of the Administrative Agent, the Issuing Lenders and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, advisors and other representatives (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it or its Affiliates (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (x) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (y) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (vii) with the consent of the Borrower, (viii) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Issuing Lender or any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than an Obligor or (ix) to Moody’s or S&P.
For purposes of this Section, “Information” means all information received from any Obligor or any of its Subsidiaries relating to any Obligor or any of its Subsidiaries or any of their respective businesses, other than (a) any such information that is available to the Administrative Agent, any Issuing Lender or any Lender on a nonconfidential basis prior to disclosure by an Obligor or any of its Subsidiaries and (b) any such information that is publicly disclosed by the Borrower in connection with its public filings with the Securities and Exchange Commission.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
EACH LENDER, EACH ISSUING LENDER AND THE ADMINISTRATIVE AGENT ACKNOWLEDGES THAT INFORMATION (AS DEFINED IN THIS SECTION) FURNISHED TO IT PURSUANT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

73

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY ANY OBLIGOR OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES.  ACCORDINGLY, EACH LENDER AND EACH ISSUING LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.
SECTION 10.13.    USA PATRIOT Act.  Each Lender hereby notifies the Borrower and the other Obligors that pursuant to the requirements of the USA PATRIOT Act, such Lender may be required to obtain, verify and record information that identifies the Borrower and the other Obligors, which information includes the name and address of the Borrower and the other Obligors and other information that will allow such Lender to identify the Borrower and the other Obligors in accordance with the USA PATRIOT Act.
SECTION 10.14.    Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate for each day to the date of repayment, shall have been received by such Lender.
SECTION 10.15.    No Fiduciary Relationship.  The Borrower, on behalf of itself and its Subsidiaries, agrees that in connection with all aspects of the transactions contemplated hereby and any communications in connection therewith, the Borrower, its Subsidiaries and their Affiliates, on the one hand, and the Administrative Agent, the Lenders, the Issuing Lenders, the Arrangers, the Syndication Agent the Documentation Agents and their Affiliates, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of the Administrative Agent, the Lenders, the Issuing Lenders, the Arrangers, the Syndication Agent, the Documentation Agents or their Affiliates, and no such duty will be deemed to have arisen in connection with any such transactions or communications.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
	
			
	BORROWER

	 
	 
	 

	BEST BUY CO., INC.,

	 
	 
	 

	by
	/s/ CHRISTOPHER K.K. GOULD

	 
	Name:
	Christopher K.K. Gould

	 
	Title:
	Vice President, Treasurer

	
			
	SUBSIDIARY GUARANTORS

	 
	 
	 

	Best Buy Stores, L.P.,

	by:  BBC Property Co., its General Partner

	 
	 
	 

	by
	/s/ CHRISTOPHER K.K. GOULD

	 
	Name:
	Christopher K.K. Gould

	 
	Title:
	Vice President, Treasurer

	
			
	BBC Property Co.,

	 
	 
	 

	by
	/s/ CHRISTOPHER K.K. GOULD

	 
	Name:
	Christopher K.K. Gould

	 
	Title:
	Vice President, Treasurer

	
			
	BBC Investment Co.,

	 
	 
	 

	by
	/s/ CHRISTOPHER K.K. GOULD

	 
	Name:
	Christopher K.K. Gould

	 
	Title:
	Vice President, Treasurer

	
			
	LENDERS

	 
	 
	 

	JPMORGAN CHASE BANK, N.A., individually, as Issuing Lender, as Swingline Lender and as Administrative Agent

	 
	 
	 

	by
	/s/ SARAH L. FREEDMAN

	 
	Name:
	Sarah L. Freedman

	 
	Title:
	Vice President

	 
	 
	 

	 
	 
	 

	U.S. BANK NATIONAL ASSOCIATION, individually, as Issuing Lender and as Swingline Lender

	 
	 
	 

	by
	/s/ PETER I. BYSTOL

	 
	Name:
	Peter I. Bystol

	 
	Title:
	Senior Vice President

	 
	 
	 

	 
	 
	 

	Citibank, N.A.

	 
	 
	 

	by
	/s/ MARNI MCMANUS

	 
	Name:
	Marni McManus

	 
	Title:
	Managing Director

	 
	 
	 

	 
	 
	 

	Compass Bank

	 
	 
	 

	by
	/s/ RAMON GARCIA

	 
	Name:
	Ramon Garcia

	 
	Title:
	Vice President

	 
	 
	 

	 
	 
	 

	The Bank of Tokyo-Mitsubishi UFJ, Ltd.

	 
	 
	 

	by
	/s/ VICTOR PIERZCHALSKI

	 
	Name:
	Victor Pierzchalski

	 
	Title:
	Authorized Signatory

	 
	 
	 

	 
	 
	 

	Bank of America, N.A.

	 
	 
	 

	by
	/s/ THOMAS KAINAMURA

	 
	Name:
	Thomas Kainamura

	 
	Title:
	Vice President

	
			
	BARCLAYS BANK PLC

	 
	 
	 

	by
	/s/ DIANE ROLFE

	 
	Name:
	Diane Rolfe

	 
	Title:
	Director

	 
	 
	 

	 
	 
	 

	CREDIT SUISSE AG, Cayman Islands Branch

	 
	 
	 

	by
	/s/ ARI BRUGER

	 
	Name:
	Ari Bruger

	 
	Title:
	Vice President

	 
	 
	 

	by
	/s/ MICHAEL SPAIGHT

	 
	Name:
	Michael Spaight

	 
	Title:
	Associate

	 
	 
	 

	 
	 
	 

	GOLDMAN SACHS BANK USA

	 
	 
	 

	by
	/s/ MARK WALTON

	 
	Name:
	Mark Walton

	 
	Title:
	Authorized Signatory

	 
	 
	 

	 
	 
	 

	HSBC Bank USA, National Association

	 
	 
	 

	by
	/s/ THOMAS FOLEY

	 
	Name:
	Thomas Foley

	 
	Title:
	Managing Director

	 
	 
	 

	 
	 
	 

	Royal Bank of Canada

	 
	 
	 

	by
	/s/ GLEN BARISOFF

	 
	Name:
	Glen Barisoff

	 
	Title:
	Authorized Signatory

	 
	 
	 

	 
	 
	 

	The Royal Bank of Scotland plc

	 
	 
	 

	by
	/s/ TRACY RAHN

	 
	Name:
	Tracy Rahn

	 
	Title:
	Director

	
			
	DnB NOR Bank ASA

	 
	 
	 

	by
	/s/ PHILIP F. KURPIEWSKI

	 
	Name:
	Philip F. Kurpiewski

	 
	Title:
	Senior Vice President

	 
	 
	 

	by
	/s/ PAL BOGER

	 
	Name:
	Pal Boger

	 
	Title:
	Vice President

	 
	 
	 

	 
	 
	 

	FIFTH THIRD BANK

	 
	 
	 

	by
	/s/ GARY S. LOSEY

	 
	Name:
	Gary S. Losey

	 
	Title:
	VP - Corporate Banking

	 
	 
	 

	 
	 
	 

	LLOYDS TSB BANK PLC

	 
	 
	 

	by
	/s/ RICHARD HERDER

	 
	Name:
	Richard Herder

	 
	Title:
	Managing Director H003

	 
	 
	 

	by
	/s/ DEBORAH CARLSON

	 
	Name:
	Deborah Carlson

	 
	Title:
	Director Corporate Banking USA C103

	 
	 
	 

	 
	 
	 

	UBS AG, STAMFORD BRANCH

	 
	 
	 

	by
	/s/ IRJA R. OTSA

	 
	Name:
	Irja R. Otsa

	 
	Title:
	Associate Director

	 
	 
	 

	by
	/s/ MARY E. EVANS

	 
	Name:
	Mary E. Evans

	 
	Title:
	Associate Director

	 
	 
	 

	 
	 
	 

	MORGAN STANLEY BANK, N.A.

	 
	 
	 

	by
	/s/ MICHAEL KING

	 
	Name:
	Michael King

	 
	Title:
	Authorized Signatory

	
			
	Mizuho Corporate Bank (USA)

	 
	 
	 

	by
	/s/ ROBERT GALLAGHER

	 
	Name:
	Robert Gallagher

	 
	Title:
	Senior Vice President

	 
	 
	 

	 
	 
	 

	Standard Chartered Bank

	 
	 
	 

	by
	/s/ JAMES P. HUGHES

	 
	Name:
	James P. Hughes A2386

	 
	Title:
	Director

	 
	 
	 

	by
	/s/ ROBERT K. REDDINGTON

	 
	Name:
	Robert K. Reddington

	 
	Title:
	Credit Documentation Manager
Credit Documentation Unit, WB Legal-Americas

	 
	 
	 

	 
	 
	 

	Bank of China, New York Branch

	 
	 
	 

	by
	/s/ SHIQIANG WU

	 
	Name:
	Shiqiang Wu

	 
	Title:
	General Manager

	 
	 
	 

	 
	 
	 

	The Bank of Nova Scotia

	 
	 
	 

	by
	/s/ CHRISTOPHER USAS

	 
	Name:
	Christopher Usas

	 
	Title:
	Director

Schedule 2.01

$1,500,000,000 Five-Year Credit Agreement Commitments

	
					
	Lender Allocation
	 
	Allocation

	Chase Bank, N.A.
	 
	$
	130,200,000
	

	U.S. Bank National Association
	 
	$
	130,200,000
	

	Citibank, N.A.
	 
	$
	130,200,000
	

	Compass Bank
	 
	$
	130,200,000
	

	The Bank of Tokyo-Mitsubishi UFJ, Ltd.
	 
	$
	87,000,000
	

	Bank of America, N.A.
	 
	$
	75,000,000
	

	Barclays Bank PLC
	 
	$
	75,000,000
	

	Credit Suisse AG, Cayman Islands Branch
	 
	$
	75,000,000
	

	Goldman Sachs Bank USA
	 
	$
	75,000,000
	

	HSBC Bank USA, National Association
	 
	$
	75,000,000
	

	Royal Bank of Canada
	 
	$
	75,000,000
	

	The Royal Bank of Scotland plc
	 
	$
	75,000,000
	

	DnB NOR Bank ASA
	 
	$
	57,000,000
	

	Fifth Third Bank
	 
	$
	57,000,000
	

	Lloyds TSB Bank plc
	 
	$
	57,000,000
	

	UBS AG, Stamford Branch
	 
	$
	45,000,000
	

	Morgan Stanley Bank, N.A.
	 
	$
	43,200,000
	

	Mizuho Corporate Bank (USA)
	 
	$
	30,000,000
	

	Standard Chartered Bank
	 
	$
	30,000,000
	

	Bank of China, New York Branch
	 
	$
	24,000,000
	

	The Bank of Nova Scotia
	 
	$
	24,000,000
	

	TOTAL:
	 
	$
	1,500,000,000
	

Schedule 2.06

Existing Letters of Credit as of the Effective Date

	
											
	 Account Party
	 
	 Issuing Bank
	 
	 LC #
	 
	 Beneficiary
	 
	 Stated Amount
	 
	 Expiration

	Best Buy Co., Inc.
	 
	U.S. Bank National Association
	 
	SLCMMSP03077
	 
	National Union Fire Insurance Co. of Pittsburgh, PA (and Others)
	 
	$47,325,000
	 
	3/30/2012

Schedule 4.11

Best Buy Co., Inc. Entity Structure

	
					
	Name
	 
	 Material / Specified Subsidiary
	 
	 State or Other Jurisdiction of Incorporation or Organization

	BBC Insurance Agency Inc.
	 
	 
	 
	Minnesota

	BBC Investment Co.
	 
	Material
	 
	Nevada

	BBY Networks, Inc.
	 
	 
	 
	Minnesota

	BBC Property Co.
	 
	Material
	 
	Minnesota

	Best Buy Stores, L.P. (1)
	 
	Material / Specified
	 
	Virginia

	BestBuy.com, LLC
	 
	 
	 
	Virginia

	Best Buy Leasing, LLC
	 
	 
	 
	Virginia

	Best Buy Puerto Rico Holdings, LLC
	 
	 
	 
	Delaware

	Best Buy Stores Puerto Rico, LLC
	 
	 
	 
	Puerto Rico

	BBY Services, Inc.
	 
	 
	 
	Delaware

	Best Buy Connect, LLC
	 
	 
	 
	Delaware

	Best Buy Gov, LLC (2)
	 
	 
	 
	Delaware

	Best Buy Warehousing Logistics, Inc.
	 
	 
	 
	Delaware

	Nichols Distribution, LLC
	 
	 
	 
	Minnesota

	BBY Holdings International, Inc.
	 
	 
	 
	Minnesota

	Best Buy China Holdings, Ltd.
	 
	 
	 
	Mauritius

	Best Buy Shanghai, Ltd.
	 
	 
	 
	China

	Best Buy Enterprise Services, Inc.
	 
	 
	 
	Minnesota

	BBY Canada Finance, LLC
	 
	 
	 
	Delaware

	BBCAN Financial Services, L.P.
	 
	 
	 
	Alberta

	BBCAN UK, LLP
	 
	 
	 
	United Kingdom

	Best Buy, LLP
	 
	 
	 
	United Kingdom

	Best Buy Distributions Limited
	 
	 
	 
	United Kingdom

	BBY Business to Business, ULC
	 
	 
	 
	Nova Scotia

	BBY Solutions, Inc.
	 
	 
	 
	Minnesota

	Best Buy Asia Pacific Regional Holdings Limited
	 
	 
	 
	Hong Kong

	Best Buy Hangzhou Limited
	 
	 
	 
	China

	Best Buy Nanjing Limited
	 
	 
	 
	China

	Best Buy Canada Ltd. (3)
	 
	Material
	 
	Canada +

	6349021 Canada Ltd.
	 
	 
	 
	Canada +

	FutureGard Reinsurance Ltd.
	 
	 
	 
	Turks and Caicos

	Howell & Associates, Inc.
	 
	 
	 
	Ontario

	Best Buy Holdings B.V.
	 
	 
	 
	Netherlands

	Best Buy China Ltd.
	 
	 
	 
	Bermuda

	Best Buy Purchasing LLC (4)
	 
	 
	 
	Minnesota

	Best Buy Finance, Inc.
	 
	 
	 
	Minnesota

	BBY (Mauritius I) Ltd.
	 
	 
	 
	Mauritius

	BBY (Mauritius II) Ltd.
	 
	 
	 
	Mauritius

	 Best Buy China %
	 
	 
	 
	China

	BBY (Mauritius III) Ltd.
	 
	 
	 
	Mauritius

	Best Buy (AsiaPacific) Limited
	 
	 
	 
	China

	Best Buy China UK, LLP
	 
	 
	 
	United Kingdom

	Best Buy International Finance, S.a.r.l.
	 
	 
	 
	Luxembourg

	Best Buy Enterprises, S. de R.L. de C.V.
	 
	 
	 
	Mexico, Federal District

	
					
	Best Buy Imports, S. de R.L. de C.V.
	 
	 
	 
	Mexico, Federal District

	Best Buy Stores, S. de R.L. de C.V.
	 
	 
	 
	Mexico, Federal District

	Dovinic Limited
	 
	 
	 
	Hong Kong

	ExB Marketing Japan G.K.
	 
	 
	 
	Japan

	Five Star Trust %
	 
	 
	 
	China

	Best Buy Jiangsu Ltd.
	 
	 
	 
	Mauritius

	Jiangsu Five Star Appliance Co., Ltd.
	 
	 
	 
	China

	Anhui Five Star Appliance Co., Ltd
	 
	 
	 
	China

	Anhui Five Star Appliance Repair & Maintenance Service Co., Ltd
	 
	 
	 
	China

	Changzhou Five Star Appliance Co., Ltd #
	 
	 
	 
	China

	Chengdu Xingpu Five Star Electrical Appliance Co.
	 
	 
	 
	China

	Henan Five Star Appliance Co., Ltd
	 
	 
	 
	China

	Jiangsu Five Star Appliance Repair & Maintenance Co.,Ltd
	 
	 
	 
	China

	Jiangsu Five Star Appliance Service Co.,Ltd
	 
	 
	 
	China

	Jiangsu Five Star Central Air-conditioning Co., Ltd
	 
	 
	 
	China

	Jiangsu Five Star Purchase Co., Ltd
	 
	 
	 
	China

	Jiangsu Friendship Appliance Co., Ltd
	 
	 
	 
	China

	Jiangsu Hengxin Gree Air-conditioner Sales Co., Ltd @
	 
	 
	 
	China

	Jiangsu Taide Commercial & Trade Co., Ltd
	 
	 
	 
	China

	Jiangsu Xingpu Science & Technology Trading Co., Ltd
	 
	 
	 
	China

	Nanjing Appliance Central Air-conditioning Engineering Co., Ltd
	 
	 
	 
	China

	Ningbo Xingpu Five Star Appliance Co., Ltd
	 
	 
	 
	China

	Qingdao Five Star Appliance Service Co., Ltd
	 
	 
	 
	China

	Shandong Five Star Appliance Co., Ltd
	 
	 
	 
	China

	Sichuan Xingpu Five Star Appliance Co., Ltd
	 
	 
	 
	China

	Xuzhou Five Star Appliance Co., Ltd
	 
	 
	 
	China

	Xuzhou Five Star Appliance Service Co., Ltd
	 
	 
	 
	China

	Wuxi Five Star Appliance Co., Ltd
	 
	 
	 
	China

	Yancheng Asia Shopping Mall Co., Ltd
	 
	 
	 
	China

	Yunnan Five Star Appliance Co.,Ltd
	 
	 
	 
	China

	Zhejiang Xingpu Five Star Appliance Co., Ltd
	 
	 
	 
	China

	Zhejiang Xingpu Five Star Appliance Service Co., Ltd
	 
	 
	 
	China

	Best Buy - Fuse Capital Digital Media Fund, LLC
	 
	 
	 
	Delaware

	Best Buy UK Investments 1, LLC
	 
	 
	 
	Delaware

	Project Austin, LLC
	 
	 
	 
	Delaware

	Best Buy UK Investments 2, LLC
	 
	 
	 
	Delaware

	CCL Insurance Company
	 
	 
	 
	Vermont

	CP Gal Ritchfield, LLC
	 
	 
	 
	Delaware

	Jiangsu Five Star Capital Ltd.
	 
	 
	 
	Mauritius

	Jiangsu Five Star Investment Ltd.
	 
	 
	 
	Mauritius

	Magnolia Hi-Fi, Inc. (5)
	 
	 
	 
	Washington

	Napster, Inc.
	 
	 
	 
	Delaware

	Napster Card Company LLC
	 
	 
	 
	Virginia

	Napster, LLC (6)
	 
	 
	 
	Delaware

	Napster Deutschland GmbH
	 
	 
	 
	Germany

	Napster Luxembourg S. á r. l.
	 
	 
	 
	Luxembourg

	Napster UK Ltd.
	 
	 
	 
	United Kingdom

	Online Services Co.
	 
	 
	 
	Minnesota

	Pacific Sales Kitchen and Bath Centers, Inc.
	 
	 
	 
	California

	Redline Entertainment, Inc. (7)
	 
	 
	 
	Minnesota

	
					
	Talkback, Inc.
	 
	 
	 
	Washington

	vpr Matrix, Inc.
	 
	 
	 
	Minnesota

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	#              Best Buys owns 60% of this entity
	 
	 
	 
	 

	+              Federally chartered
	 
	 
	 
	 

	%            China Business Trust
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Also doing business as:
	 
	 
	 
	 

	 
	 
	 
	 
	 

	HD Gamer Store, GameDaemons, Best Buy Express, DealTree,  TechLiquidators, Napster, Cowboom, Warehouse B.

Schedule 7.01

Existing and Available Indebtedness as of August 27, 2011 1 

	
								
	 
	 
	 
	 
	 
	$ in Millions

	Best Buy Domestic Indebtedness 2
	 
	 
	 

	 
	 
	Financing Lease Obligations 3
	 
	 
	$
	109.6
	

	 
	 
	Capital Lease Obligations
	 
	 
	55.8
	

	 
	Sub-Total Best Buy Domestic
	 
	 
	$
	165.4
	

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	1 Balances approximate the amounts outstanding as of the Effective Date in all material respects.

	2 Best Buy Domestic refers to all Best Buy Co., Inc. entities not separately included herein.

	3 Amounts reimbursed from landlords on financing leases are recorded as financing lease obligations.

Schedule 7.02

Certain Existing Liens

Long term ground lease with Peoples Republic of China secured by Best Buy Shanghai Ltd. retail store

Schedule 7.04

Restrictive Agreements

Amended and Restated Lease between BB Property Company, as Lessor, and Best Buy Stores, L.P., as Lessee dated September 26, 2001 

364-Day Agreement dated as of October 7, 2011 (as amended, supplemented, replaced or otherwise modified from time to time) among Best Buy Co., Inc., the Subsidiary Guarantors, the Lenders and JPMorgan Chase Bank, N.A., as Administrative Agent

EXHIBIT A
[Form of Assignment and Assumption]
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between the Assignor identified below and the Assignee identified below.  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement (as defined below), receipt of a copy of which is hereby acknowledged by [the][each] Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor's rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the facility identified below (including any Letters of Credit, Guarantees and Swingline Loans included in such facility) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by the Assignor to the Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”).  Each such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.
	
					
	1.
	Assignor:
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	2.
	Assignee:
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

[for the Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]1 
	
				
	3.
	Borrower:
	 
	Best Buy Co., Inc. Best Buy Co., Inc., a Minnesota corporation 

	 
	 
	 
	 

	4.
	Administrative Agent:
	 
	JPMorgan Chase Bank, N.A., in its capacity as administrative agent under the Credit Agreement

	 
	 
	 
	 

	5.
	Credit Agreement:
	 
	$1,500,000,000 Five-Year Credit Agreement dated as of October 7, 2011 (as amended, amended and restated, supplemented or otherwise modified from time to time), among the Borrower, the Subsidiary Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as the Administrative Agent (the “Credit Agreement”)

________________________________________________ 
1  Select as appropriate. 

6.    Assigned Interest:
	
							
	Facility Assigned
	 
	Aggregate Amount of Commitments/ Syndicated Loans for all Lenders
	 
	Amount of Commitment/ Syndicated Loans/ Competitive Loan Assigned2
	 
	Percentage Assigned of Commitments/ Syndicated Loans for all Lenders3

	Commitment/ Syndicated Loans
	 
	$
	 
	$
	 
	%

	Competitive Loans4
	 
	N/A
	 
	$
	 
	N/A

Effective Date:  _____________ ___, 20___ [TO BE INSERTED BY THE ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
The Assignee, if not already a Lender, agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee's compliance procedures and applicable laws, including Federal and state securities laws.
________________________________________________ 
2  Must comply with Section 10.04(b)(ii) of the Credit Agreement.
3  Set forth, to at least 9 decimals, as a percentage of the Commitments/Syndicated Loans of all Lenders.
4  Specify the Competitive Loan assigned, including whether it is a Eurocurrency Loan or a Fixed Rate Loan.

The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
	
		
	[NAME OF ASSIGNOR]

	by

	 
	 

	 
	Name:

	 
	Title:

ASSIGNEE
	
		
	[NAME OF ASSIGNEE]

	by

	 
	 

	 
	Name:

	 
	Title:

[Consented to and]5  Accepted:

JPMORGAN CHASE BANK, N.A.,
  as Administrative Agent

by _________________________________
    Name:
    Title:

Consented to:6 

[NAME OF ISSUING LENDER]

by _________________________________
    Name:
    Title:

Consented to:7 

[NAME OF SWINGLINE LENDER]

by _________________________________
    Name:
    Title:

Consented to:8 

[BEST BUY CO., INC.]

by _________________________________
    Name:
    Title:

________________________________________________ 
5  To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.
6  Include a signature block for each Issuing Lender.
7  Include a signature block for each Swingline Lender.
8  To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.

ANNEX 1
$1,500,000,000 BEST BUY CO., INC. FIVE-YEAR CREDIT AGREEMENT

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1.    Representations and Warranties.
1.1    Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of its Assigned Interest, (ii) such Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document (other than its representations and warranties set forth herein), (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or other Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2.    Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender (subject to such consents, if any, as may be required under Section 10.04(b)(i) and (ii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of its Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase such Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent, any Arranger or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase such Assigned Interest, (vii) if it is a Lender that is a United States person, as defined in Section 7701(a)(30) of the Code and is not an exempt recipient within the meaning of Treasury Regulations Section 1.6049-4(c), attached to this Assignment and Assumption is two accurate and complete original signed copies of Internal Service Form W-9, or any successor form that such Lender is entitled to provide, establishing that such Lender is not subject to U.S. Federal backup withholding Tax, and (viii) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by such Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, any Arranger, any Issuing Lender, any Swingline Lender, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.
2.    Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.
3.    General Provisions.  This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

Exhibit B
[Form of Guarantee Assumption Agreement]
GUARANTEE ASSUMPTION AGREEMENT
GUARANTEE ASSUMPTION AGREEMENT dated as of [            , 20  ] (the “Guarantee Assumption Agreement”) by [NAME OF ADDITIONAL SUBSIDIARY GUARANTOR], a [JURISDICTION] [ENTITY TYPE] (the “Additional Subsidiary Guarantor”), in favor of JPMorgan Chase Bank, N.A., as administrative agent under the Credit Agreement referred to below (in such capacity, together with its successors in such capacity, the “Administrative Agent”.  Best Buy Co., Inc., a Minnesota corporation, the Subsidiary Guarantors referred to therein, the Lenders referred to therein and the Administrative Agent are parties to a Five-Year Credit Agreement dated as of October 7, 2011 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement
Pursuant to Section 3.10 or 6.08, as applicable, of the Credit Agreement, the Additional Subsidiary Guarantor hereby agrees to become a “Subsidiary Guarantor” for all purposes of the Credit Agreement.  Without limiting the foregoing, the Additional Subsidiary Guarantor hereby, jointly and severally with the other Subsidiary Guarantors, as a primary obligor and not merely as a surety, guarantees to each Lender, each other holder of a Guaranteed Obligation and the Administrative Agent and their respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of all Guaranteed Obligations in the same manner and to the same extent as is provided in Article III of the Credit Agreement.  
The Additional Subsidiary Guarantor hereby (a) agrees that, from and after the effectiveness of this Agreement, it shall be bound by all the obligations of a “Guarantor” and a “Subsidiary Guarantor” under the Credit Agreement and the other Loan Documents and (b) makes the representations and warranties set forth in Sections 4.01, 4.02 and 4.03 of the Credit Agreement with respect to itself and its obligations under this Agreement, as if each reference in such Sections to the Loan Documents included reference to this Agreement.
The Additional Subsidiary Guarantor hereby instructs its counsel to deliver the opinions referred to in Section 3.10 or 6.08, as applicable, of the Credit Agreement to the Lenders and the Administrative Agent.
The provisions of Sections 10.06, 10.07, 10.09 and 10.10 of the Credit Agreement are hereby incorporated by reference as if fully set forth herein, mutatis mutandis.
IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused this Guarantee Assumption Agreement to be duly executed and delivered as of the day and year first above written.
[NAME OF ADDITIONAL SUBSIDIARY GUARANTOR]
by ____________________________
     Name:
      Title:

Accepted and agreed:

JPMORGAN CHASE BANK, N.A., as Administrative Agent
by ____________________________
     Name:
     Title:

EXHIBIT C

[FORM OF]
U.S. TAX CERTIFICATE
(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Five-Year Credit Agreement dated as of October 7, 2011 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Best Buy Co., Inc. (the “Borrower”), a Minnesota corporation, the Subsidiary Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as the Administrative Agent.
Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code and (v) the interest payments in question are not effectively connected with the undersigned's conduct of a U.S. trade or business.
The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER]
By:______________________________________
Name:
Title:

Date: ________ __, 20[  ]

[FORM OF]
U.S. TAX CERTIFICATE
(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Five-Year Credit Agreement dated as of October 7, 2011 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Best Buy Co., Inc. (the “Borrower”), a Minnesota corporation, the Subsidiary Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as the Administrative Agent.
Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned's or its partners/members' conduct of a U.S. trade or business.
The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of its partners/members claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER]
By:______________________________________
Name:
Title:

Date: ________ __, 20[  ]

[FORM OF]
U.S. TAX CERTIFICATE
(For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Reference is hereby made to the Five-Year Credit Agreement dated as of October 7, 2011 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Best Buy Co., Inc. (the “Borrower”), a Minnesota corporation, the Subsidiary Guarantors party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as the Administrative Agent.
Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigned's conduct of a U.S. trade or business.
The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.
Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]
By:______________________________________
Name:
Title:

Date: ________ __, 20[  ]

EXHIBIT D
[Form of Borrowing Request]
BORROWING REQUEST
[Date]
JPMorgan Chase Bank, N.A., as Administrative Agent 
for the Lenders party to the Credit Agreement referred to below
Attention:  [          ]
Ladies and Gentlemen:
The undersigned, Best Buy Co., Inc., a Minnesota corporation (the “Borrower”), refers to the Five-Year Credit Agreement dated as of October 7, 2011, among the Borrower, the Subsidiary Guarantors party thereto, the Lenders party thereto and the Administrative Agent (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), and hereby gives you notice, pursuant to Section 2.03 of the Credit Agreement, that the undersigned hereby requests a Syndicated Borrowing under the Credit Agreement, and in that connection sets forth below the information relating to such Borrowing as required by Section 2.03(b) of the Credit Agreement:
(i)    the aggregate principal amount of the Borrowing is ________;
(ii)    the date of the Borrowing is [must be a Business Day]________;
(iii)    the Type of Loans initially comprising the Borrowing is [ABR Loans] [Eurocurrency Loans];
(iv)    the initial Interest Period for each Loan made as part of the Borrowing is ______ [days/month[s]]9; and
(v)    [the Borrowing is to be credited to the Borrower at [               ], ABA #[               ], Account #[               ], Attention:[               ]] [Issuing Lender(s):               ].10  

________________________________________________ 
		
	9 
	For Eurocurrency Loans only. To be a period permitted under the definition of “Interest Period” in the Credit Agreement.

		
	10 
	In the case of any Syndicated ABR Borrowing requested to finance the reimbursement of an LC Disbursement as provided in Section 2.06(f) of the Credit Agreement, provide the identity of the Issuing Lender that made such LC Disbursement.

Very truly yours,
	
		
	BEST BUY CO., INC.

	 

	by

	 
	 

	 
	Name:

	 
	Title:cacc_100611ind.htm

  

  

  

EXECUTION COPY

 

Exhibit 4(f)(152)

 

CREDIT ACCEPTANCE AUTO LOAN TRUST 2011-1

$157,500,000 CLASS A ASSET BACKED NOTES

$43,000,000 CLASS B ASSET BACKED NOTES

$161,704 CLASS C ASSET BACKED NOTES

_________________________________

 

INDENTURE

Dated as of October 6, 2011

_________________________________

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

as the Trust Collateral Agent/Indenture Trustee

 

CREDIT ACCEPTANCE AUTO LOAN TRUST 2011-1

 

as the Issuer

 

 

  

 

  

TABLE OF CONTENTS

	  	  	 	
PAGE

	 
	
ARTICLE I

	
Definitions and Incorporation by Reference

	 	 	2	 
	
SECTION 1.1.

	
Definitions

	 	 	2	 
	
SECTION 1.2.

	
Rules of Construction

	 	 	8	 
	
ARTICLE II

	
The Notes

	 	 	9	 
	
SECTION 2.1.

	
Form

	 	 	9	 
	
SECTION 2.2.

	
Execution, Authentication and Delivery

	 	 	9	 
	
SECTION 2.3.

	
Registration of Transfer and Exchange of Notes

	 	 	10	 
	
SECTION 2.4.

	
Mutilated, Destroyed, Lost, or Stolen Notes

	 	 	16	 
	
SECTION 2.5.

	
Persons Deemed Owners

	 	 	16	 
	
SECTION 2.6.

	
Access to List of Noteholders’ Names and Addresses

	 	 	16	 
	
SECTION 2.7.

	
Maintenance of Office or Agency

	 	 	17	 
	
SECTION 2.8.

	
Payment of Principal and Interest; Defaulted Interest

	 	 	17	 
	
SECTION 2.9.

	
Release of Collateral

	 	 	18	 
	
ARTICLE III

	
Covenants, Representations and Warranties

	 	 	18	 
	
SECTION 3.1.

	
Payment of Principal and Interest

	 	 	18	 
	
SECTION 3.2.

	
Maintenance of Office or Agency

	 	 	18	 
	
SECTION 3.3.

	
Money for Payments to be Held in Trust

	 	 	18	 
	
SECTION 3.4.

	
Existence

	 	 	20	 
	
SECTION 3.5.

	
Protection of Trust Property

	 	 	20	 
	
SECTION 3.6.

	
Opinions as to Trust Property

	 	 	21	 
	
SECTION 3.7.

	
Performance of Obligations; Servicing of Contracts

	 	 	21	 
	
SECTION 3.8.

	
Negative Covenants

	 	 	22	 
	
SECTION 3.9.

	
Annual Statement as to Compliance

	 	 	23	 
	
SECTION 3.10.

	
Issuer May Consolidate, Etc. Only on Certain Terms

	 	 	23	 
	
SECTION 3.11.

	
Successor or Transferee

	 	 	25	 
	
SECTION 3.12.

	
No Other Business

	 	 	25	 
	
SECTION 3.13.

	
No Borrowing

	 	 	25	 
	
SECTION 3.14.

	
Guarantees, Loans, Advances and Other Liabilities

	 	 	25	 
	
SECTION 3.15.

	
Capital Expenditures

	 	 	25	 
	
SECTION 3.16.

	
Compliance with Laws

	 	 	26	 
	
SECTION 3.17.

	
Restricted Payments

	 	 	26	 
	
SECTION 3.18.

	
Notice of Indenture Events of Default

	 	 	26	 
	
SECTION 3.19.

	
Further Instruments and Acts

	 	 	26	 
	
SECTION 3.20.

	
Amendments of Sale and Servicing Agreement and Trust Agreement

	 	 	26	 
	
SECTION 3.21.

	
Income Tax Characterization

	 	 	26	 
	
SECTION 3.22.

	
Perfection Representations, Warranties and Covenants

	 	 	27	 
	
ARTICLE IV

	
Satisfaction and Discharge

	 	 	27	 
	
SECTION 4.1.

	
Satisfaction and Discharge of Indenture

	 	 	27	 
	
SECTION 4.2.

	
Application of Trust Money

	 	 	28	 
	
SECTION 4.3.

	
Repayment of Moneys Held by Paying Agent

	 	 	28	 
	
ARTICLE V

	
Events of Default; Remedies

	 	 	29	 
	
SECTION 5.1.

	
Indenture Events of Default

	 	 	29	 
	
SECTION 5.2.

	
Rights Upon Indenture Event of Default

	 	 	30	 
	
SECTION 5.3.

	
Collection of Indebtedness and Suits for Enforcement by Indenture Trustee

	 	 	32	 
	
SECTION 5.4.

	
Remedies

	 	 	34	 
	
SECTION 5.5.

	
Optional Preservation of the Trust Property

	 	 	35	 
	
SECTION 5.6.

	
[Reserved]

	 	 	35	 
	
SECTION 5.7.

	
Limitation of Suits

	 	 	35	 
	
SECTION 5.8.

	
Unconditional Rights of Noteholders To Receive Principal and Interest

	 	 	36	 
	
SECTION 5.9.

	
Restoration of Rights and Remedies

	 	 	36	 
	
SECTION 5.10.

	
Rights and Remedies Cumulative

	 	 	37	 
	
SECTION 5.11.

	
Delay or Omission Not a Waiver

	 	 	37	 
	
SECTION 5.12.

	
[Reserved]

	 	 	37	 
	
SECTION 5.13.

	
Undertaking for Costs

	 	 	37	 
	
SECTION 5.14.

	
Waiver of Stay or Extension Laws

	 	 	37	 
	
SECTION 5.15.

	
Action on Notes

	 	 	37	 
	
SECTION 5.16.

	
Performance and Enforcement of Certain Obligations

	 	 	38	 
	
ARTICLE VI

	
The Indenture Trustee

	 	 	38	 
	
SECTION 6.1.

	
Duties of Indenture Trustee

	 	 	38	 
	
SECTION 6.2.

	
Rights of Indenture Trustee

	 	 	40	 
	
SECTION 6.3.

	
Individual Rights of Indenture Trustee

	 	 	41	 
	
SECTION 6.4.

	
Indenture Trustee’s Disclaimer

	 	 	41	 
	
SECTION 6.5.

	
Notice of Indenture Events of Default

	 	 	42	 
	
SECTION 6.6.

	
Reports by Indenture Trustee to Holders

	 	 	42	 
	
SECTION 6.7.

	
Compensation

	 	 	42	 
	
SECTION 6.8.

	
Replacement of Indenture Trustee

	 	 	43	 
	
SECTION 6.9.

	
Successor Indenture Trustee by Merger

	 	 	44	 
	
SECTION 6.10.

	
Appointment of Trust Collateral Agent

	 	 	44	 
	
SECTION 6.11.

	
Appointment of Co-Indenture Trustee or Separate Indenture Trustee

	 	 	45	 
	
SECTION 6.12.

	
Eligibility

	 	 	46	 
	
SECTION 6.13.

	
Trust Collateral Agent to Follow Indenture Trustee’s Directions

	 	 	46	 
	
SECTION 6.14.

	
Representations and Warranties of the Indenture Trustee

	 	 	46	 
	
SECTION 6.15.

	
Waiver of Setoffs

	 	 	47	 
	
SECTION 6.16.

	
Reserved

	 	 	47	 
	
SECTION 6.17.

	
Disqualification of the Indenture Trustee

	 	 	47	 
	
SECTION 6.18.

	
Authorization and Direction

	 	 	47	 
	
SECTION 6.19.

	
Action under the Intercreditor Agreement

	 	 	47	 
	
ARTICLE VII

	
Noteholders’ Lists and Reports

	 	 	48	 
	
SECTION 7.1.

	
Issuer To Furnish To Indenture Trustee Names and Addresses of Noteholders

	 	 	48	 
	
SECTION 7.2.

	
Preservation of Information; Communications to Noteholders

	 	 	48	 
	
ARTICLE VIII

	
Accounts, Disbursements and Releases

	 	 	48	 
	
SECTION 8.1.

	
Collection of Money

	 	 	48	 
	
SECTION 8.2.

	
Release of Trust Property

	 	 	49	 
	
SECTION 8.3.

	
Opinion of Counsel

	 	 	49	 
	
ARTICLE IX

	
Supplemental Indentures

	 	 	49	 
	
SECTION 9.1.

	
Supplemental Indentures Not Adversely Affecting Rights of Noteholders

	 	 	49	 
	
SECTION 9.2.

	
Supplemental Indentures with Consent of Noteholders..

	 	 	50	 
	
SECTION 9.3.

	
Execution of Supplemental Indentures

	 	 	52	 
	
SECTION 9.4.

	
Effect of Supplemental Indenture

	 	 	52	 
	
SECTION 9.5.

	
Reference in Notes to Supplemental Indentures

	 	 	52	 
	
ARTICLE X

	
Redemption of Notes

	 	 	52	 
	
SECTION 10.1.

	
Redemption

	 	 	52	 
	
SECTION 10.2.

	
Form of Redemption Notice

	 	 	53	 
	
SECTION 10.3.

	
Notes Payable on Redemption Date

	 	 	54	 
	
ARTICLE XI

	
Miscellaneous

	 	 	54	 
	
SECTION 11.1.

	
Compliance Certificates and Opinions, etc

	 	 	54	 
	
SECTION 11.2.

	
Form of Documents Delivered to Indenture Trustee

	 	 	55	 
	
SECTION 11.3.

	
Acts of Noteholders

	 	 	56	 
	
SECTION 11.4.

	
Notices, etc. to Indenture Trustee, Issuer,  and Rating Agencies

	 	 	57	 
	
SECTION 11.5.

	
Notices to Noteholders; Waiver

	 	 	57	 
	
SECTION 11.6.

	
Alternate Payment and Notice Provisions

	 	 	58	 
	
SECTION 11.7.

	
Effect of Headings and Table of Contents

	 	 	58	 
	
SECTION 11.8.

	
Successors and Assigns

	 	 	58	 
	
SECTION 11.9.

	
Separability

	 	 	58	 
	
SECTION 11.10.

	
Benefits of Indenture

	 	 	58	 
	
SECTION 11.11.

	
Legal Holidays

	 	 	59	 
	
SECTION 11.12.

	
GOVERNING LAW

	 	 	59	 
	
SECTION 11.13.

	
Counterparts

	 	 	59	 
	
SECTION 11.14.

	
Recording of Indenture

	 	 	59	 
	
SECTION 11.15.

	
Trust Obligation

	 	 	59	 
	
SECTION 11.16.

	
No Petition

	 	 	60	 
	
SECTION 11.17.

	
Inspection

	 	 	60	 
	
SECTION 11.18.

	
Maximum Interest Payable

	 	 	60	 
	
SECTION 11.19.

	
No Legal Title in Holders

	 	 	61	 
	
SECTION 11.20.

	
Third Party Beneficiary

	 	 	61	 
	
SECTION 11.21.

	
Multiple Roles

	 	 	61	 
	  	  	 	 	 	 
	
EXHIBIT A-1

	
Form of Class A Note A-1-1

	 	 	A-1-1 	 
	
EXHIBIT A-2

	
Form of Class B NoteA-2-1

	 	 	A-2-1 	 
	
EXHIBIT A-3

	
Form of Class C NoteA-3-1

	 	 	A-3-1 	 
	
EXHIBIT B

	
Form of Transferee Representation LetterB-1

	 	 	B-1 	 
	
EXHIBIT C

	
Form of Investment Letter C-1

	 	 	C-1 	 
	  	  	 	 	 	 
	
SCHEDULE A

	
Perfection Representations, Warranties and Covenant

	 	
Schedule A-1

	 

	  	 	  

  

 

  

INDENTURE dated as of October 6, 2011, between CREDIT ACCEPTANCE AUTO LOAN TRUST 2011-1, a Delaware statutory trust (the “Issuer”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States, as trust collateral agent (the “Trust Collateral Agent”) and as indenture trustee (the “Indenture Trustee”).

 

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Issuer’s $157,500,000 Class A 2.61% Asset Backed Notes (the “Class A Notes”), the $43,000,000 Class B 3.96% Asset Backed Notes (the “Class B Notes”) and $161,704 Class C Principal-Only Asset Backed Notes (the “Class C Notes,” and together with the Class A Notes and Class B Notes, the “Notes”):

 

GRANTING CLAUSE

 

The Issuer hereby grants to the Indenture Trustee for the benefit of itself and the Noteholders, as their respective interests may appear, a first-priority perfected security interest in all of the Issuer’s right, title and interest in and to all assets and personal property of the Issuer, including but not limited to, all of the Issuer’s accounts, chattel paper, goods, deposit accounts, documents, general intangibles, instruments, investment property, letter of credit rights, money and supporting obligations and all proceeds of the foregoing (as each such term is defined in the UCC, collectively, the “Collateral”) now owned or hereafter acquired, which Collateral shall be held by the Trust Collateral Agent on behalf of the Indenture Trustee, subject to the lien of this Indenture.

 

The foregoing grant is made in trust as security for the prompt and complete payment when due by the Issuer of the Issuer Secured Obligations.  Such grant shall include all rights, powers and options (but none of the obligations) of the Issuer, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring proceedings in the name of the Issuer or otherwise and generally to do and receive anything that the Issuer is or may be entitled to do or receive thereunder or with respect thereto.

 

The Indenture Trustee hereby acknowledges such grant, accepts the trusts under this Indenture in accordance with the provisions of this Indenture and agrees to perform its duties required in this Indenture to the best of its ability in order that the interests of the parties and the Noteholders, recognizing the priorities of their respective interests, may be adequately and effectively protected.

 

The Indenture Trustee, solely in its capacity as the named secured party or assignee of secured party on financing statements naming Credit Acceptance, the Seller or the Issuer as debtor or seller, acknowledges that in such capacity it is acting as a representative, within the meaning of Section 9-502(a)(2) of the UCC, for itself, the Trust Collateral Agent, the Noteholders, the Issuer and the Seller, to the extent and as their interests as secured parties with security interests in the collateral indicated on such financing statements may be.

 

  

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It is the intention of the Issuer and the Indenture Trustee that this grant constitutes a grant or assignment of a valid, first priority security interest in the Issuer’s rights in the Collateral, free and clear of all Liens (other than the security interest granted herein) to the Indenture Trustee.  This Agreement shall be deemed to create a security interest and deemed to be a security agreement with respect to the Collateral within the meaning of Article 1, Article 8 and Article 9 of the Uniform Commercial Code as in effect in the States of New York and Delaware and under the law of all jurisdictions governing the creation and perfection of security interests in the Collateral.

 

ARTICLE I

 

Definitions and Incorporation by Reference

 

SECTION 1.1.                                Definitions.

 

(a)           Except as otherwise specified herein, the following terms have the respective meanings set forth below for all purposes of this Indenture.

 

(b)           Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Sale and Servicing Agreement or the Trust Agreement.

 

“Act” has the meaning specified in Section 11.3(a).

 

“Authorized Officer” means, with respect to the Issuer, any officer or agent acting pursuant to a power of attorney of the Owner Trustee or, with respect to the Servicer, any officer or agent of the Servicer, and who is identified on the list of Authorized Officers delivered by each of the Owner Trustee and the Servicer to the Indenture Trustee, the Trust Collateral Agent and the Backup Servicer on the Closing Date (as such list may be modified or supplemented from time to time thereafter).

 

“Certificate Interest” has the meaning given to such term in the Trust Agreement.

 

“Class A Notes” means the 2.61% Class A Asset Backed Notes of the Issuer, substantially in the form of Exhibit A-1 hereto.

 

“Class A Note Rate” means 2.61% per annum.

 

“Class B Notes” means the 3.96% Class B Asset Backed Notes of the Issuer, substantially in the form of Exhibit A-2 hereto.

 

“Class B Note Rate” means 3.96% per annum.

 

“Class C Notes” means the Class C Asset Backed Notes of the Issuer, substantially in the form of Exhibit A-3 hereto.

 

“Clearing Agency” means the Depository Trust Company or its successor, which shall be an organization registered as a “clearing agency” pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.

 

  

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“Clearing Agency Participant” means the Depository Trust Company, and its successors, each of which shall be a broker, dealer, bank or other financial institution or other Person for whom from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and treasury regulations promulgated thereunder.

 

“Collateral” has the meaning set forth in Granting Clause.

 

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

 

“Excluded Dealer Agreement Rights” means, with respect to any Dealer Agreement listed on Schedule A to the Sale and Servicing Agreement, or listed on any addendum thereto, the rights of Credit Acceptance thereunder related to loans made to the related Dealer which are not Dealer Loans owned by the Issuer, including rights of set-off and rights of indemnification, related to such Dealer Loans.

 

“Indebtedness” means, with respect to any Person at any time, (a) indebtedness or liability of such Person for borrowed money whether or not evidenced by bonds, debentures, notes or other instruments, or for the deferred purchase price of property or services (including trade obligations); (b) obligations of such Person as lessee under leases which should have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases; (c) current liabilities of such Person in respect of unfunded vested benefits under plans covered by Title IV of ERISA; (d) obligations issued for or liabilities incurred on the account of such Person; (e) obligations or liabilities of such Person arising under acceptance facilities; (f) obligations of such Person under any guarantees, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any Person or otherwise to assure a creditor against loss; (g) obligations of such Person secured by any lien on property or assets of such Person, whether or not the obligations have been assumed by such Person; provided that the amount of such indebtedness if not so assumed shall in no event be deemed to be greater than the fair market value from time to time (as reasonably determined in good faith by the Issuer) of the property subject to such lien; or (h) obligations of such Person under any interest rate or currency exchange agreement.

 

“Indenture” means this Indenture as amended and supplemented from time to time.

 

“Indenture Default” means any occurrence that is, or with notice or the lapse of time or both would become, an Indenture Event of Default.

 

“Indenture Event of Default” has the meaning given such term in Section 5.1 herein.

 

“Indenture Trustee” means Wells Fargo Bank, National Association, a national banking association organized under the laws of the United States, not in its individual capacity but as trustee under this Indenture, or any successor trustee under this Indenture.

 

  

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“Independent” means, when used with respect to any specified Person, that the Person (a) is in fact independent of the Issuer, the Originator, any other obligor upon the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, the Originator, any such other obligor, the Seller or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, the Originator, any such other obligor, the Seller or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions.

 

“Independent Certificate” means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.1, prepared by an Independent appraiser or other expert appointed by an Issuer Order, in the exercise of reasonable care, which opinion or certificate shall state that the signer has read the definition of “Independent” in this Indenture and that the signer is Independent within the meaning thereof.

 

“Institutional Accredited Investor” shall have the meaning given to that term in Section 2.3(a) hereof.

 

“Interest Period” means the period from and including the preceding Distribution Date (or in the case of the first Distribution Date, the Closing Date) to, but excluding the current Distribution Date.

 

“Issuer” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein, each other obligor on the Notes.

 

“Issuer Order” and “Issuer Request” means a written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee.

 

“Issuer Secured Obligations” means all amounts and obligations which the Issuer may at any time owe to or on behalf of the Indenture Trustee for the benefit of the Indenture Trustee and the Noteholders under this Indenture, the Notes or the other Basic Documents.

 

 “Majority Noteholders” means the Holders of a majority by principal amount of the most senior then outstanding class of Notes.

 

“Note” means a Class A Note, Class B Note or Class C Note.

 

“Note Owner” means, with respect to any Note registered in the name of the Clearing Agency or its nominee, the Person who is the beneficial owner of such Note, as reflected on the books of the Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency).

 

“Note Register” and “Note Registrar” mean the register maintained and the registrar appointed pursuant to Section 2.3 hereof.

 

  

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“Noteholder” or “Holder” means the Person in whose name a Note shall be registered in the Note Register, except that, solely for the purposes of giving any consent, waiver, request, or demand pursuant to the Basic Documents, the interest evidenced by any Note registered in the name of the Seller, the Servicer, or any person controlling, controlled by, or under common control with the Seller or the Servicer, shall not be taken into account in determining whether the requisite percentage necessary to effect any such consent, waiver, request, or demand shall have been obtained.

 

“Officer’s Certificate” means a certificate signed by any Authorized Officer of the Owner Trustee, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.1 hereof.

 

“Opinion of Counsel” means one or more written opinions of counsel who may, except as otherwise expressly provided in this Indenture, or as otherwise required by the Indenture Trustee, be employees of or counsel to the Issuer and who shall be reasonably satisfactory to the Indenture Trustee, and which shall comply with any applicable requirements of Section 11.1 hereof, and shall be in form and substance reasonably satisfactory to the Indenture Trustee.

 

“Outstanding” means, as of the date of determination, all Notes theretofore authenticated and delivered under this Indenture except:

 

(i)           Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation;

 

(ii)           Notes or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Notes (provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture); and

 

(iii)           Notes in exchange for or in lieu of other Notes which have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser; provided, however, that (x) in determining whether the Holders of the requisite Outstanding Amount of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Notes owned by the Issuer, the Servicer, any other obligor upon the Notes, the Seller or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be fully protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee either actually knows to be so owned or has received written notice thereof shall be so disregarded.  Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any of the foregoing Persons and (y) to the extent

 

  

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that the Indenture Trustee is a Noteholder, Notes owned by the Indenture Trustee shall be disregarded for purposes of Section 6.8(b) hereof.

 

“Outstanding Amount” means the aggregate principal amount of all Notes, or class of Notes, as applicable, Outstanding at any date of determination.

 

“Paying Agent” means the Indenture Trustee (so long as Wells Fargo Bank, National Association is acting as the Indenture Trustee) or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.12 and is authorized by the Issuer to make the payments to and distributions from the Collection Account, the Note Distribution Account, the Reserve Account, the Principal Distribution Account and the Certificate Distribution Account including payment of principal of or interest on the Notes on behalf of the Issuer.

 

“Predecessor Note” means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.4 in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note.

 

“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.

 

“Qualified Institutional Buyer” shall have the meaning given to that term in Section 2.3(a) hereof.

 

“Rating Agency Condition” means, with respect to any action, that each Rating Agency shall have been given ten (10) days (or such shorter period as shall be acceptable to such Rating Agency) prior notice thereof and that such Rating Agency shall have notified the Seller, the Servicer, the Indenture Trustee, the Owner Trustee and the Issuer that such action will not result in a reduction or withdrawal of its then current rating of the then-rated Notes.

 

“Record Date” means, with respect to a Distribution Date and a class of Notes, (i) if such class of Notes is held in book-entry form, the day immediately preceding such Distribution Date; or (ii) if such class of Notes is held in definitive form, the last day of the calendar month preceding such Distribution Date; provided that the Record Date with respect to the First Distribution Date shall be the Closing Date.

 

“Redemption Date” means, in the case of a redemption of the Notes pursuant to Section 10.1 hereof, the Distribution Date specified by the Servicer or the Issuer pursuant to Section 10.1 hereof.

 

“Redemption Price” means in the case of a redemption of the Notes pursuant to Section 10.1 hereof an amount equal to the unpaid principal amount of the Outstanding Notes being redeemed plus accrued and unpaid interest thereon to but excluding the Redemption Date plus all amounts due to the Indenture Trustee, the Backup Servicer and the Owner Trustee under the Basic Documents.

 

  

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“Required Long-Term Debt Rating” shall be a rating on long-term unsecured debt obligations of no lower than investment grade by Moody’s and by S&P (or other equivalent rating by a nationally recognized rating agency), and any requirement that long-term unsecured debt obligations have the “Required Long-Term Debt Rating” shall mean that such long-term unsecured debt obligations have the foregoing required rating.

 

“Responsible Officer” means, with respect to the Indenture Trustee, the Trust Collateral Agent, the Paying Agent or the Owner Trustee, any officer within the Corporate Trust Office of the Indenture Trustee, the Trust Collateral Agent, the Paying Agent, or the Owner Trustee, as the case may be, including any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary, Associate, Trust Officer or any other officer of the Indenture Trustee, the Trust Collateral Agent, the Paying Agent, or the Owner Trustee customarily performing functions similar to those performed by any of the above designated officers, in each case with direct responsibility for the administration of the Indenture.

 

“Retained Noteholder” shall mean any Person in whose name a Retained Note of any Class is registered in the Note Register.

“Retained Notes” shall mean the Class C Notes retained on the Closing Date by Credit Acceptance Corporation or one of its Affiliates, for so long as such Notes are retained by Credit Acceptance Corporation or one of its Affiliates and, if transferred or assigned by Credit Acceptance Corporation or one of its Affiliates, until an Opinion of Counsel has been rendered with respect to the Class of such Notes that the Notes of such Class or any interest therein will be treated as debt for U.S. federal income tax purposes.

“Rule 144A” means Rule 144A of the Securities Act.

 

“Sale and Servicing Agreement” means the Sale and Servicing Agreement dated as of the Closing Date, among the Issuer, the Seller, Credit Acceptance Corporation, in its individual capacity and as the Servicer, the Trust Collateral Agent, Indenture Trustee and the Backup Servicer, as the same may be amended or supplemented from time to time in accordance with its terms.

 

“Subsidiary” means, with respect to any Person, any corporation or other Person (a) of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Person or (b) that is directly or indirectly controlled by such Person within the meaning of control under Section 15 of the Securities Act.

 

“Targeted Holder” shall mean each holder of (i) a right to receive interest or principal with respect to the Retained Notes, (ii) any interest in the Trust with respect to which an Opinion of Counsel has not been rendered that such interest will be treated as debt for federal income tax purposes, and (iii) a right to receive any amount in respect of the Trust Certificate; provided, however, that any Person holding more than one right or interest each of which would cause such Person to be a Targeted Holder shall be treated as a single Targeted Holder.

  

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“Tax Opinion” shall mean, with respect to any action, an Opinion of Counsel to the effect that, for federal income tax purposes, (a) such action will not cause the Notes of any outstanding class of Notes that were characterized as debt at the time of their issuance to be characterized as other than debt, (b) such action will not cause the Trust to be deemed to be an association (or publicly traded partnership) taxable as a corporation and (c) such action will not cause or constitute an event in which gain or loss would be recognized by any Holder.

“Termination Date” means the date on which all amounts owing to the Noteholders and, as certified in writing by the relevant party to the Owner Trustee, the Indenture Trustee, the Trust Collateral Agent, the Owner Trustee and the Backup Servicer under the Basic Documents are paid in full.

 

“Trust Certificate” has the meaning set forth in the Trust Agreement.

“Trust Collateral Agent” means, initially, Wells Fargo Bank, National Association, in its capacity as collateral agent on behalf of the Indenture Trustee for the benefit of the Noteholders, until and unless a successor Person shall have become the Trust Collateral Agent pursuant to the Sale and Servicing Agreement, and thereafter “Trust Collateral Agent” shall mean such successor Person.

 

“Trust Property” means (i) the Loans listed on Schedule A to the Sale and Servicing Agreement as the same may be amended from time to time; (ii) all rights under the Dealer Agreements and Purchase Agreements related thereto (other than the Excluded Dealer Agreement Rights), including Credit Acceptance’s right to service the Loans and the related Contracts and receive the related servicing fee and receive reimbursement of certain recovery and repossession expenses, in accordance with the terms of the Dealer Agreements and Purchase Agreements; (iii) Collections (other than Dealer Collections) after the applicable Cut-off Date; (iv) an ownership interest in each Contract evidencing a Purchased Loan and a security interest in each Contract securing each Dealer Loan; (v) all records and documents relating to the Loans and the Contracts; (vi) all security interests purporting to secure payment of the Loans; (vii) all security interests purporting to secure payment of each Contract (including a security interest in each Financed Vehicle); (viii) all guarantees, insurance (including insurance insuring the priority or perfection of any Contract) or other agreements or arrangements securing the Contracts; (ix) the Seller’s rights under the Sale and Contribution Agreement; (x) all of the Issuer’s rights under the Sale and Contribution Agreement and the Sale and Servicing Agreement; (xi) the Collection Account, the Reserve Account, the Principal Collection Account and the Note Distribution Account, amounts on deposit in those accounts and eligible investments of amounts on deposit in those accounts; and (xii) all Proceeds of the foregoing.

SECTION 1.2.                                 Rules of Construction.

 

Unless the context otherwise requires:

 

(i)           a term has the meaning assigned to it;

 

  

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(ii)           an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect from time to time;

 

(iii)           “or” is not exclusive;

 

(iv)           “including” means including without limitation; and

 

(v)           words in the singular include the plural and words in the plural include the singular.

 

ARTICLE II

 

 

The Notes

 

SECTION 2.1.                                Form.

 

The Class A Notes, the Class B Notes and the Class C Notes, in each case together with the Indenture Trustee’s certificate of authentication, shall be in substantially the form set forth in Exhibits A-1, A-2 and A-3 hereto, respectively, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of the Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.

 

The Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing such Notes, as evidenced by their execution of such Notes.

 

Each Note shall be dated the date of its authentication. The terms of each of the Class A Notes set forth in Exhibit A-1 hereto, the Class B Notes set forth in Exhibit A-2 hereto and the Class C Notes set forth in Exhibit A-3 hereto are part of the terms of this Indenture.

 

SECTION 2.2.                                Execution, Authentication and Delivery.

 

The Notes shall be executed on behalf of the Issuer by any of the Authorized Officers of the Owner Trustee.  The signature of any such Authorized Officer on the Notes may be manual or facsimile.

 

Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes.

 

The Indenture Trustee shall upon receipt of the Issuer Order authenticate and deliver the Class A Notes for original issue in an aggregate principal amount of $157,500,000, Class B Notes for original issue in the aggregate principal amount of $43,000,000 and Class C

 

  

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Notes for original issue in the aggregate principal amount of $161,704.  The Class A Notes, Class B Notes and Class C Notes outstanding at any time may not exceed such amounts.

 

Each Note shall be dated the date of its authentication.  The Class A Notes and Class B Notes (other than those held by Institutional Accredited Investors) shall be issuable as registered Notes in the minimum denomination of $250,000 and integral multiples of $1,000 thereafter.  Notes that are held by persons who are Institutional Accredited Investors will be required to be issued in the form of one or more physical notes, registered in the name of the beneficial owner thereof and only in minimum denominations of U.S.$250,000.

 

It is intended that the Class A Notes and Class B Notes be registered so as to participate in a book-entry system with the Clearing Agency as set forth herein.  The Class A Notes and Class B Notes shall each be initially issued in the form of a single fully-registered note with a denomination equal to the original principal balance of such class of Notes.  Upon initial issuance, the ownership of such Notes shall be registered in the Note Register in the name of Cede & Co., or any successor thereto, as nominee for the Clearing Agency.

 

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Indenture Trustee by the manual signature of one of its Responsible Officers, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

SECTION 2.3.                                Registration of Transfer and Exchange of Notes.

 

(a)           The Note Registrar shall keep or cause to be kept, at the office or agency maintained pursuant to Section 2.7, a Note Register in which, subject to such reasonable regulations as it may prescribe, the Indenture Trustee shall provide for the registration of Notes and for transfers and exchanges of Notes as herein provided.  The Indenture Trustee shall be the initial Note Registrar.  Wells Fargo Bank, National Association shall be the Note Registrar so long as it is acting as Indenture Trustee hereunder.   In the event that, subsequent to the Closing Date, the Indenture Trustee notifies the Seller that it is unable to act as Note Registrar, the Seller shall appoint another bank or trust company, having an office or agency located in Minneapolis, Minnesota or the Borough of Manhattan, The City of New York, agreeing to act in accordance with the provisions of this Indenture applicable to it, and otherwise acceptable to the Indenture Trustee, to act as successor Note Registrar under this Indenture.  If at any time the Indenture Trustee is not the Note Registrar, the Note Registrar shall make available to the Indenture Trustee ten (10) days prior to each Distribution Date and at such other times as the Indenture Trustee may reasonably request the names and addresses of the Holders as they appear in the Note Register.

 

No sale, conveyance, assignment, hypothecation, pledge, participation, or any other transfer (each a “Transfer”) of a Note shall be made unless such Transfer is (A) pursuant to an effective registration statement under the Securities Act, (B) for so long as the such Notes are eligible for resale pursuant to Rule 144A to a Person the transferor reasonably believes after due

  

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inquiry is a “qualified institutional buyer” as defined in Rule 144A (“Qualified Institutional Buyer”) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that the transfer is being made in reliance on Rule 144A, (C) made in a transfer exempt from the registration requirements of the Securities Act, to a Person that is an institutional “accredited investor” within the meaning of paragraphs (1), (2), (3) and (7) of Rule 501(a) of the Securities Act (an “Institutional Accredited Investor”) that purchases for its own account or for the account or accounts of an Institutional Accredited Investor, or (D) pursuant to another available exemption from the registration requirements of the Securities Act and any applicable state securities and blue sky laws or is made in accordance with said Act and state laws. The Indenture Trustee may require an Opinion of Counsel to be delivered to it in connection with any transfer of Notes pursuant to clauses (A), (C) or (D) of this paragraph.

Under no circumstances may an Institutional Accredited Investor take delivery in the form of a beneficial interest in a book-entry Note if such purchaser is not a Qualified Institutional Buyer.  The Notes that are sold to Persons that, at the time of acquisition, purported acquisition or proposed acquisition of any such Note are Institutional Accredited Investors shall be issued in the form of definitive, fully registered physical notes substantially in the form attached as Exhibit A-1 or A-2, which shall be registered in the name of the beneficial owner or a nominee thereof, duly executed by the Issuer and authenticated by the Indenture Trustee as hereinafter provided (the “Physical Notes”).  Any purchaser of the Physical Notes (other than the Initial Purchasers) will be required to deliver to the Indenture Trustee a transferee representation letter substantially in the form of Exhibit B attached hereto.  If any Holder of a Physical Note is determined not to have been an Institutional Accredited Investor when it acquired such Physical Note, the Issuer may demand that such Holder sell its Physical Note to an Institutional Accredited Creditor permitted under the Indenture within thirty (30) days after notice of such demand is given.  If the Holder fails to effect the sale within such 30-day period, upon direction from the Servicer or the Issuer, the Indenture Trustee, on behalf of and at the expense of the Issuer, will cause such Holder’s Physical Note to be transferred in a commercially reasonable sale (which may be conducted by an investment banker selected by the Indenture Trustee in accordance with Section 9-504(3) of the Uniform Commercial Code as in effect in the State of New York as applied to securities that are sold on a recognized market or  that may decline speedily in value) to an Institutional Accredited Creditor in accordance with the requirements of this Indenture.

No portion of the Retained Notes or any interest therein may be transferred, directly or indirectly, to any Person (other than Credit Acceptance Funding LLC 2011-1 in the initial offering, which shall not be subject to any of the transfer restrictions set forth herein that relate specifically to each initial purchaser) except in accordance with this Section 2.3(a).  No portion of the Retained Notes or any interest therein may be Transferred to any Person (each, an “Assignee”), unless the Assignee shall have executed and delivered the certifications referred to in this Section 2.3 and, except in connection with the initial Transfer of the Retained Notes to the Retained Noteholders, the Indenture Trustee has received a Tax Opinion with respect to such Transfer.  Any attempted Transfer that would cause the number of Targeted Holders to exceed ninety-five shall be void.  Upon request by a Retained Noteholder, the number of Targeted Holders shall be disclosed to such requesting Retained Noteholder.

 

All Opinions of Counsel required in connection with any transfer shall be by counsel reasonably acceptable to the Indenture Trustee.

 

  

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Only upon receipt by the Indenture Trustee of the written consent of each of the Seller and the Servicer to such Transfer shall the Retained Notes (or such portion thereof) be transferred upon the Note Register; provided, however, that such consent shall only be withheld based upon the reasonable belief of the Seller or the Servicer that such Transfer may cause the number of Targeted Holders to exceed ninety-five.  Such Transfers of all or any portion of the Retained Notes shall be subject to the restrictions set forth in this Section 2.3(a) and to such other restrictions as shall be set forth in the investment letter, substantially in the form attached hereto as Exhibit C, executed by the purchasing Retained Noteholder.  Successive registrations and registrations of Transfers as aforesaid may be made from time to time as desired, and each such registration shall be noted on the Note Register.  No Transfer of the Retained Notes will be effective and the Transfer Agent and Note Registrar shall not register such Transfer, unless the Assignee has delivered an investment letter substantially in the form attached hereto as Exhibit C to the Indenture Trustee.  Any purported Transfer or registration of Transfer of a Retained Note in violation of the preceding sentence shall be absolutely null and void and shall vest no rights in the purported Assignee.

 

Each Assignee shall certify to the Seller, the Servicer, and the Indenture Trustee that it is, for federal income tax purposes, (i) a citizen or resident of the United States, (ii) a corporation or partnership organized in or under the laws of the United States or any state or the District of Columbia which, if such entity is a tax-exempt entity, recognizes that payments with respect to the Retained Notes may constitute unrelated business taxable income, (iii) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source, or (iv) (a) a trust for which a court within the United States is able to exercise primary supervision over its administration and for which one or more persons described in this paragraph are able to control all substantial decisions or (b) a trust for which a valid election has been made to be treated as a United States person.  Each Assignee also shall agree that it will furnish to the Person from whom it is acquiring any interest in the Retained Notes, the Seller, the Servicer, and the Indenture Trustee, a properly executed U.S. Internal Revenue Service Form W-9 (and will agree to furnish a new Form W-9, or any successor applicable form, upon the expiration or obsolescence of any previously delivered form) and such other certifications, representations or Opinions of Counsel as may be requested by the Indenture Trustee.

 

Each Assignee shall certify to the Seller, the Servicer, and the Indenture Trustee that it has not acquired and it will not Transfer any interest in the Retained Notes, or cause an interest in the Retained Notes to be marketed, on or through an “established securities market” within the meaning of Section 7704(b)(1) of the Code and any Treasury regulations thereunder, including an over-the-counter market or an interdealer quotation system that regularly disseminates firm buy or sell quotations.  In addition, any Assignee shall certify to the Seller, the Servicer, and the Indenture Trustee, prior to any delivery or Transfer to it of any Retained Notes, (i) that it is not and will not become (and that, if it is disregarded as an entity separate from its owner within the meaning of Treasury Regulations Section 301.7701-3(a) (a “DRE”), its owner is not and will not become), for so long as it holds an interest in the Retained Notes, a partnership, Subchapter S corporation or grantor trust for U.S. federal income tax purposes (a “Flow-Thru Entity”), or (ii) that if it (or, if it is a DRE, its owner) is, or becomes, a Flow-Thru Entity, for so long as it (or, if it is a DRE, its owner) is a Flow-Thru Entity and it holds an interest in the Retained Notes, not more than 50% of the value of any interests in it (or, if it is a DRE, its owner) will be attributable to interests in the Trust held by it.  Each initial purchaser of

 

  

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an interest in the Retained Notes acknowledges that the Opinion of Counsel to the effect that the Trust will not be treated as an association or publicly traded partnership taxable as a corporation is dependent in part on the accuracy of its certifications described in this Section 2.3(a).

 

Each Assignee shall certify to the Seller, the Servicer, and the Indenture Trustee (i) that it has purchased its interest in the Retained Notes for investment only and not with a view to any public distribution thereof and (ii) that it will not offer, sell, pledge or otherwise transfer its interest in all or any portion of the Retained Notes, except in compliance with the Securities Act and other applicable laws and only (1) to the Seller, (2) pursuant to Rule 144A to a person who it reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, purchasing for its own account or for the account of a QIB, whom it has informed that such offer, sale or other transfer is being made in reliance on Rule 144A or (3) pursuant to an exemption from the registration requirements of the Securities Act to a person that is an Institutional Accredited Investor in a transaction meeting such exemption purchasing for its own account or one or more accounts of an Institutional Accredited Investor in reliance upon such exemption.  No Retained Noteholders will have the right to require the Seller to register the Retained Notes or any other securities under the Securities Act or any other securities laws.

 

The purchaser or transferee of each Note or any interest therein shall be deemed to represent and warrant that, with respect to the source of funds to be used by such transferee to acquire such Note or any interest therein (the “Source”) either (a) such Source is not, and is not directly or indirectly acting for, on behalf of or with any assets of, an employee benefit plan or other arrangement subject to Title I of ERISA, a “plan” to which Section 4975 of the Code applies, or a plan or other arrangement that is subject to any provision of any federal, state, local or other laws or regulations that are substantively similar to the foregoing provisions of ERISA or the Code (“Similar Law”), or (b) the acquisition and holding of such Notes or interest therein by such Source will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or a violation of Similar Law.

 

Neither the Issuer nor the Indenture Trustee is obligated to register the Notes under the Securities Act or any other securities law.  Any transfer in violation of the provisions of this Section 2.3 shall be void ab initio.

 

(b)           If an election is made to hold the Class A Notes or the Class B Notes in book-entry form, such class of Notes shall be registered in the name of a nominee designated by the Clearing Agency (and may be aggregated as to denominations with other Notes of such class held by the Clearing Agency).  With respect to Notes held in book-entry form:

 

(i)          the Note Registrar, the Trust Collateral Agent and the Indenture Trustee will be entitled to deal with the Clearing Agency for all purposes of this Indenture (including the payment of principal of and interest on such class or classes of Notes and the giving of instructions or directions hereunder) as the sole holder of such class or classes of Notes, and shall have no obligation to the Note Owners;

 

(ii)          the rights of such Note Owners will be exercised only through the Clearing Agency and will be limited to those established by law and agreements

 

  

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between such Note Owners and the Clearing Agency and/or the Clearing Agency Participants pursuant to the Depository Agreement;

 

(iii)          whenever this Indenture or any of the Basic Documents requires or permits actions to be taken based upon instructions or directions of Holders of such class or classes of Notes evidencing a specified percentage of the Class A Note Balance, the Class B Note Balance, or the Class C Note Balance, as applicable, the Clearing Agency will be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners and/or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the relevant class of Notes and has delivered such instructions to the Indenture Trustee; and

 

(iv)          without the consent of the Seller and the Indenture Trustee, no such class of Notes may be transferred by the Clearing Agency except to a successor Clearing Agency that agrees to hold such Note for the account of the Note Owners or except upon the election of the Note Owner thereof or a subsequent transferee to hold such Note in physical form.

 

Neither the Indenture Trustee nor the Note Registrar shall have any responsibility to monitor or restrict the transfer of beneficial ownership in any Note an interest in which is transferable through the facilities of the Clearing Agency.

 

If (i)(A) the Issuer advises the Indenture Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Class A Notes or the Class B Notes as described in the Depository Agreement and (B) the Issuer is unable to locate a qualified successor, (ii) the Issuer at its option advises the Indenture Trustee in writing that it elects to terminate the book-entry system through the Clearing Agency, or (iii) Note Owners representing beneficial interests in Class A Notes aggregating not less than a majority of the Class A Note Balance, in respect of the Class A Notes, or Note Owners representing beneficial interests in the Class B Notes aggregating not less than a majority of the Class B Note Balance, in respect of the Class B Notes, advise the Indenture Trustee and the Clearing Agency through the Clearing Agency Participants in writing that the continuation of a book-entry system through the Clearing Agency with respect to such class is no longer in the best interests of the related Note Owners, then the Indenture Trustee shall notify all such Note Owners, through the Clearing Agency, of the occurrence of any such event and of the availability of definitive Class A Notes or definitive Class B Notes, as applicable, to such Note Owners requesting the same.  Upon surrender to the Indenture Trustee of the related Notes by the Clearing Agency accompanied by registration instructions from the Clearing Agency, the Indenture Trustee shall issue definitive Notes of the related class and deliver such definitive Notes in accordance with the instructions of the Clearing Agency.  None of the Issuer, the Note Registrar nor the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions.  Upon the issuance of definitive Class A Notes or definitive Class B Notes, the Indenture Trustee shall recognize the Holders of the definitive Class A Notes or definitive Class B Notes, as applicable, as Noteholders hereunder.  The Indenture Trustee shall not be liable if the Seller is unable to locate a qualified successor Clearing Agency.

 

  

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       (c)           In order to preserve the exemption for resales and transfers provided by Rule 144A, the Issuer shall provide to any Holder of a Class A Note or Class B Note and any prospective purchaser designated by such Holder, upon request of such Holder or such prospective purchaser, such information required by Rule 144A as will enable the resale of such Note to be made pursuant to Rule 144A.  The Servicer and the Indenture Trustee shall cooperate with the Issuer in providing the Issuer such information regarding the Class A Notes and Class B Notes, the Collateral and other matters regarding the Trust as the Issuer shall reasonably request to meet its obligations under the preceding sentence.

 

(d)           Upon surrender for registration of transfer of any Note at the Corporate Trust Office, the Indenture Trustee shall, subject to Section 2.3(a), authenticate, and deliver, in the name of the designated transferee or transferees, one or more new Notes in authorized denominations of a like class and aggregate amount dated the date of authentication by the Indenture Trustee.  At the option of a Holder, Notes may be exchanged for other Notes of the same class in authorized denominations of a like aggregate amount upon surrender of the Notes to be exchanged at the Corporate Trust Office.

 

(e)           Every Note presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee and the Note Registrar duly executed by the Holder or his or her attorney duly authorized in writing.  Each Note surrendered for registration of transfer or exchange shall be canceled and subsequently disposed of by the Indenture Trustee in accordance with its customary practice.

 

Any Holder of a physical note may transfer such Note or exchange a certificate representing such Note in whole or in part (in a number equal to any authorized denomination) by surrendering the physical note at the corporate trust office of the Indenture Trustee, together with an executed instrument of assignment and a transferee representation letter substantially in the form attached as Exhibit B hereto. In exchange for any physical notes properly presented for transfer with all necessary accompanying documentation, the Indenture Trustee, will within five (5) Business Days of such request, deliver at the corporate trust office of the Indenture Trustee, to the transferee or send by first-class mail at the risk of the transferee to such address as the transferee may request, physical notes for a like amount of such physical notes as may be requested. The presentation for transfer of any physical notes will not be valid unless made at the corporate trust office of the Indenture Trustee by the registered Holder in person, or by a duly authorized attorney-in-fact. The Holder of a physical note will not be required to bear the costs and expenses of effecting any transfer or registration of transfer, except that the relevant Holder will be required to bear (i) the expenses of delivery by other than regular mail (if any) and (ii) if the Issuer so requires, the payment of a sum sufficient to cover any duty, stamp tax or governmental charge or insurance charges that may be imposed in relation to such transfer.

(f)           No service charge shall be made for any registration of transfer or exchange of Notes, but the Indenture Trustee may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Notes.

 

(g)           Subject to Article IX hereof, the Notes and this Indenture may be amended or supplemented from time to time, prior to the Termination Date, without the consent of any of

 

  

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the Noteholders, to modify restrictions on and procedures for resale and other transfers of the Notes to reflect any change in applicable law or regulations (or the interpretation thereof) or practices relating to the resale or transfer of restricted securities generally.

 

SECTION 2.4.                                Mutilated, Destroyed, Lost, or Stolen Notes.

 

If (a) any mutilated Note shall be surrendered to the Note Registrar, or if the Note Registrar shall receive evidence to its satisfaction of the destruction, loss, or theft of any Note and (b) there shall be delivered to the Note Registrar, the Issuer and the Indenture Trustee such security or indemnity (an unsecured indemnity agreement of a Noteholder with a net worth at least equal to $200,000,000 containing terms reasonably satisfactory to the Indenture Trustee being sufficient for such security or indemnity requirement), as may be required by them to save each of them and the Issuer harmless, then in the absence of notice that such Note shall have been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Issuer shall execute and the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost, or stolen Note, a new Note of like tenor and denomination.  In connection with the issuance of any new Note under this Section, the Indenture Trustee and the Note Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.  The Indenture Trustee may charge such Holder for its expenses (including the fees and expenses of its counsel) in replacing a Note.  Any duplicate Note issued pursuant to this Section shall constitute conclusive evidence of ownership of such Note, as if originally issued, whether or not the lost, stolen, or destroyed Note shall be found at any time.

 

SECTION 2.5.                                Persons Deemed Owners.

 

The Issuer, the Indenture Trustee, the Trust Collateral Agent, the Note Registrar and any agent of the Issuer, the Indenture Trustee or the Note Registrar may treat the Person in whose name any Note is registered as the owner of such Note for the purpose of receiving distributions pursuant to Section 5.08 of the Sale and Servicing Agreement and Section 5.2 hereof and for all other purposes whatsoever, and neither the Issuer, the Indenture Trustee, the Trust Collateral Agent nor the Note Registrar nor any such agent shall be bound by any notice to the contrary.

 

SECTION 2.6.                                Access to List of Noteholders’ Names and Addresses.

 

The Indenture Trustee shall furnish or cause to be furnished to the Servicer, within fifteen (15) days after receipt by the Indenture Trustee of a request therefor from the Servicer in writing, a list, in such form as the Servicer may reasonably require, of the names and addresses of the Noteholders as of the most recent Record Date.  If three or more Noteholders, or one or more Holders of Notes aggregating not less than 10% of the Aggregate Note Balance, apply in writing to the Indenture Trustee, and such application states that the applicants desire to communicate with other Noteholders with respect to their rights under this Indenture or under the Notes and such application shall be accompanied by a copy of the communication that such applicants propose to transmit, then the Indenture Trustee shall, within five (5) Business Days after the receipt of such application, make available to such Noteholders access during normal business hours to the current list of Noteholders.  Each Holder, by receiving and holding a Note, shall be deemed to have agreed to hold neither the Servicer nor the Indenture Trustee accountable by

 

  

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reason of the disclosure of its name and address, regardless of the source from which such information was derived.

 

SECTION 2.7.                                Maintenance of Office or Agency.

 

The Indenture Trustee shall maintain in Minneapolis, Minnesota, an office or offices or agency or agencies where Notes may be surrendered for registration of transfer or exchange and an office in Minneapolis, Minnesota, where notices and demands to or upon the Indenture Trustee in respect of the Notes and this Indenture may be served.  The Indenture Trustee initially designates the Corporate Trust Office as specified in this Indenture as its office for such purposes.  The Indenture Trustee shall give prompt written notice to the Servicer and to Noteholders of any change in the location of the Note Register or any such office or agency.

 

SECTION 2.8.                                Payment of Principal and Interest; Defaulted Interest.

 

(a)           The Class A Notes shall accrue interest as provided in the form of the Class A Note set forth in Exhibit A-1 hereto and the Class B Notes shall accrue interest as provided in the form of the Class B Note set forth in Exhibit A-2 hereto, such respective interest shall be due and payable on each Distribution Date as specified therein.  The Class C Notes shall not accrue interest.  Any installment of interest or principal, if any, payable on any Note which is punctually paid or duly provided for by the Issuer on the applicable Distribution Date or on the Stated Final Maturity shall be paid as set forth in Section 5.09(a) of the Sale and Servicing Agreement.

 

(b)           The principal of each Note shall be payable in installments on each Distribution Date as provided in the forms of the Class A Note, the Class B Note and the Class C Note, as set forth in Exhibits A-1, A-2 and A-3 hereto, respectively.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes, and all accrued interest thereon (if any), shall become due and payable, if not previously paid, upon the acceleration thereof after the occurrence of an Indenture Event of Default in the manner provided in Section 5.2.  All principal payments on each class of Notes shall be made as provided in Section 5.2 and in Section 5.09(a) of the Sale and Servicing Agreement, as applicable.  Upon written notice from the Issuer, the Indenture Trustee shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Distribution Date on which the Issuer expects that the final installment of principal of and interest on such Note will be paid. Such notice shall be mailed or transmitted by facsimile prior to such final Distribution Date and shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment.  Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.2.

 

(c)           If the Issuer defaults in a payment of interest on any class of Notes entitled thereto, such defaulted interest shall itself bear interest (to the extent lawful) at the Class A Note Rate or Class B Note Rate, as applicable.  Such defaulted interest (and such interest thereon) shall be paid on subsequent Distribution Dates pursuant to Section 5.09 of the Sale and Servicing Agreement, or as otherwise set forth below.

 

  

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       SECTION 2.9.                                Release of Collateral.

The Indenture Trustee shall, on or after the Termination Date and subject to the provisions of Section 4.1 hereof, release and shall cause the Trust Collateral Agent to release any remaining portion of the Trust Property from the lien created by this Indenture and shall cause the Trust Collateral Agent to deposit in the Collection Account any funds then on deposit in any other Trust Account.  The Indenture Trustee shall release property from the lien created by this Indenture pursuant to this Section 2.9 only upon receipt by the Indenture Trustee of an Issuer Request accompanied by an Officer’s Certificate and an Opinion of Counsel meeting the applicable requirements of Section 11.1.

 

ARTICLE III

 

 

Covenants, Representations and Warranties

 

SECTION 3.1.                                Payment of Principal and Interest.

 

The Issuer will duly and punctually pay the principal of and interest on the Notes in accordance with the terms of the Notes and this Indenture.  Without limiting the foregoing and in accordance with the terms set forth in Section 5.09(a) of the Sale and Servicing Agreement, the Issuer will cause to be distributed to the Noteholders all amounts on deposit in the Note Distribution Account on each Distribution Date deposited therein pursuant to the Sale and Servicing Agreement (i) for the benefit of the Class A Notes, to the Class A Noteholders, (ii) for the benefit of the Class B Notes, to the Class B Noteholders and (iii) for the benefit of the Class C Notes, to the Class C Noteholders.  Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture.

 

SECTION 3.2.                                Maintenance of Office or Agency.

 

For so long as the Indenture Trustee is the transfer agent, the Issuer will maintain in Minneapolis, Minnesota, an office or agency where Notes may be surrendered for registration of transfer or exchange, and an office in Minneapolis, Minnesota where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served.  The Issuer hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes.  The Issuer will give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of any such office or agency.  If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands.

 

SECTION 3.3.                                Money for Payments to be Held in Trust.

 

On or before each Distribution Date and Redemption Date, subject to Section 5.08 of the Sale and Servicing Agreement, the Issuer shall deposit or cause to be deposited in the Note Distribution Account from the Collection Account, an aggregate sum sufficient to pay the amounts then becoming due under the Notes, such sum to be held in trust for the benefit of the

 

  

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Persons entitled thereto and (unless the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee of its action or failure so to act.

 

The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will:

 

(i)          hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

 

(ii)          give the Indenture Trustee written notice of any default by the Issuer of which a Responsible Officer has actual knowledge (or any other obligor upon the Notes) in the making of any payment required to be made with respect to the Notes;

 

(iii)          at any time during the continuance of any such default by the Issuer, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;

 

(iv)          immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment specified in Section 6.12 hereof; and

 

(v)          comply with all requirements of the Code with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith in each case, as instructed by the Issuer.

 

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such a payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.

 

Subject to applicable laws with respect to the escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer on Issuer Request; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and

 

  

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of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than thirty (30) days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.  The Indenture Trustee shall also adopt and employ, at the expense of the Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder).

 

SECTION 3.4.                                Existence.

 

Except as otherwise permitted by the provisions of Section 3.10, the Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Collateral and each other instrument or agreement included in the Trust Property.

 

SECTION 3.5.                                Protection of Trust Property.

 

The Issuer intends the security interest granted pursuant to this Indenture in favor of the Indenture Trustee and the Noteholders to be prior to all other liens in respect of the Trust Property, and the Issuer shall take all actions necessary to obtain and maintain, in favor of the Indenture Trustee, for the benefit of the Noteholders, a first lien on and a first priority, perfected security interest in the Trust Property.  The Issuer will from time to time prepare (or shall cause to be prepared), execute, file and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:

 

(i)          grant more effectively all or any portion of the Trust Property;

 

(ii)          maintain or preserve the lien and security interest (and the priority thereof) in favor of the Indenture Trustee for the benefit of the Noteholders created by this Indenture or carry out more effectively the purposes hereof;

 

(iii)          perfect, publish notice of or protect the validity of any grant made or to be made by this Indenture;

 

(iv)          enforce any of the Trust Property;

 

(v)          preserve and defend title to the Trust Property and the rights of the Indenture Trustee in such Trust Property against the claims of all persons and parties; and

 

(vi)          pay all taxes or assessments levied or assessed upon the Trust Property when due.

 

  

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The Issuer hereby designates and authorizes the Indenture Trustee its agent and attorney-in-fact to execute or authorize, as applicable, upon Issuer request, any financing statement, continuation statement or other instrument required to be executed or authorized, as applicable, by the Issuer pursuant to this Section.  The Issuer authorizes the filing of financing statements in all appropriate jurisdictions describing the Collateral as “all assets of the Debtor” or words of similar effect, or being of equal or lesser scope or with greater detail.

 

SECTION 3.6.                                Opinions as to Trust Property.

 

(a)           On the Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to this Indenture with respect to the filing of any financing statements and continuation statements, as are necessary to perfect and make effective the first priority lien and security interest in favor of the Indenture Trustee, created by this Indenture and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien and security interest effective.

 

(b)           Within thirty (30) days after the end of each calendar quarter, beginning with the quarter ending March 31, 2012, the Issuer shall cause an Opinion of Counsel, dated as of a date during such 30-day period, to be delivered to the Indenture Trustee with respect to the creation of the Seller’s security interest under the Sale and Contribution Agreement, the creation of the Issuer’s security interest under the Sale and Servicing Agreement and the perfection and creation of the lien and security interest in favor of the Indenture Trustee in the Subsequent Conveyed Property transferred from Credit Acceptance to the Seller during such quarter (or in the case of the first such Opinion of Counsel, during the period from the Closing Date to March 31, 2012).

 

(c)           The Issuer will deliver or cause to be delivered to the Indenture Trustee within 90 days after the beginning of each calendar year beginning with 2013, an Opinion of Counsel for the Issuer, dated as of a date during such 90-day period, stating that, in the opinion of such counsel, the existing financing statement naming the Issuer as debtor and the Indenture Trustee as secured party and any related continuation statement or amendment (the “Financing Statement”) will remain effective and no additional financing statements, continuation statements or amendments with respect to the Financing Statement (other than a continuation statement to be filed within the period that is six months prior to the expiration of the Financing Statement, as applicable) will be required to be filed from the date of such opinion through the date that is the one year anniversary of the date of such opinion to maintain the perfection of the security interest of the Indenture Trustee as such lien otherwise exists on the date of such opinion.  Such Opinion of Counsel shall (i) describe the filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to preserve and protect the security interest of the Indenture Trustee in the Collateral, until the 90th day in the following calendar year and (ii) specify any action necessary (as of the date of such opinion) to be taken in the following calendar year to preserve perfection of such interest.

 

SECTION 3.7.                                Performance of Obligations; Servicing of Contracts.

 

(a)           The Issuer will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person’s

 

  

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material covenants or obligations under any instrument or agreement included in the Trust Property or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as ordered by any bankruptcy or other court or as expressly provided in this Indenture, the Basic Documents or such other instrument or agreement.

 

(b)           The Issuer may contract with other Persons acceptable to the Indenture Trustee, to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be deemed to be action taken by the Issuer.  Initially, the Servicer has agreed to assist the Issuer in performing its duties under this Indenture.

 

(c)           The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust Property, including, but not limited to, preparing (or causing to be prepared) and filing (or causing to be filed) all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the Sale and Servicing Agreement in accordance with and within the time periods provided for herein and therein.

 

(d)           Upon a Responsible Officer of the Owner Trustee having actual knowledge or written notice thereof, the Issuer shall promptly notify the Indenture Trustee and the Rating Agencies of the occurrence of a Servicer Default in accordance with Section 11.4 hereof, and shall specify in such notice the action, if any, the Issuer is taking in respect of such default.  If a Servicer Default shall arise from the failure of the Servicer to perform any of its duties or obligations under the Sale and Servicing Agreement with respect to the Loans or Contracts, the Issuer shall take all reasonable steps available to it to remedy such failure.

 

(e)           The Issuer agrees that it will not waive timely performance or observance by the Servicer or the Seller of their respective duties under the Basic Documents if the effect thereof would adversely affect the Holders of the Notes.

 

SECTION 3.8.                                Negative Covenants.

 

So long as any Notes are Outstanding, the Issuer shall not:

 

(i)          except as expressly permitted by this Indenture or the Basic Documents, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Trust Property, unless directed to do so by the Indenture Trustee, at the direction of the Majority Noteholders;

 

(ii)          claim any credit on, or make any deduction from the principal or interest payable in respect of, the Notes (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any part of the Trust Property; or

 

(iii)          (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien in favor of the Indenture Trustee created by this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any

 

  

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Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Property or any part thereof or any interest therein or the proceeds thereof (other than tax liens, mechanics’ liens and other liens that arise by operation of law, in each case on a Financed Vehicle and arising solely as a result of an action or omission of the related Obligor), (C) permit the lien of this Indenture not to constitute a valid perfected first priority security interest in the Trust Property, (D) change its name, identity, state of organization or structure as a statutory trust in any manner that would, could or might make any financing statement or continuation statement filed with respect to it seriously misleading within the meaning of Section 9-507 of the UCC or (E) waive, amend, modify, supplement or terminate any Basic Document or any provision thereof, or fail to comply with the provisions of the Basic Documents, in each case, prior to the Termination Date, without the prior written consent of the Indenture Trustee, at the direction of the Majority Noteholders.

 

SECTION 3.9.                                Annual Statement as to Compliance.

 

The Issuer will deliver to the Indenture Trustee, the Rating Agencies and the Noteholders on or before April 30th of each year beginning in the year 2012, an Officer’s Certificate dated as of the previous December 31st stating, as to the Authorized Officer signing such Officer’s Certificate, that:

 

(i)          a review of the activities of the Issuer during the preceding 12-month period (or, for the initial certificate, for such shorter period as may have elapsed from the initial issuance of the Notes to such December 31st) and of performance under this Indenture has been made under such Authorized Officer’s supervision; and

 

(ii)          to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such year, or, if there has been a default in the compliance of any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

 

SECTION 3.10.                                Issuer May Consolidate, Etc. Only on Certain Terms.

 

(a)           The Issuer shall not consolidate or merge with or into any other Person, unless:

 

(i)          the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America or any State and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein;

 

  

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           (ii)           immediately after giving effect to such transaction, no Early Amortization Event, Indenture Default or Indenture Event of Default shall have occurred and be continuing;

 

(iii)          the Rating Agency Condition shall have been satisfied with respect to such transaction;

 

(iv)          the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse tax consequence to the Trust, any Noteholder or any Certificateholder;

 

(v)          any action as is necessary to maintain the Lien and security interest created by this Indenture shall have been taken; and

 

(vi)          the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Section 3.10(a) and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

(b)           The Issuer shall not convey or transfer all or substantially all of its properties or assets, including those included in the Trust Property, to any Person, unless

 

(i)          the Person that acquires by conveyance or transfer the properties and assets of the Issuer the conveyance or transfer of which is hereby restricted shall (A) be a United States citizen or a Person organized and existing under the laws of the United States of America or any State, (B) expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture and each of the Basic Documents on the part of the Issuer to be performed or observed, all as provided herein, (C) expressly agree by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Holders of the securities and (D) unless otherwise provided in such supplemental indenture, expressly agree to indemnify, defend and hold harmless the Issuer against and from any loss, liability or expense arising under or related to this Indenture and the Notes;

 

(ii)          immediately after giving effect to such transaction, no Early Amortization Event, Indenture Default or Indenture Event of Default shall have occurred and be continuing;

 

(iii)          the Rating Agency Condition shall have been satisfied with respect to such transaction;

 

(iv)          the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse tax consequence to the Trust, any Noteholder or any Certificate holder;

 

  

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           (v)           any action as is necessary to maintain the Lien and security interest created by this Indenture shall have been taken; and

 

(vi)          the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Section 3.10(b) and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

SECTION 3.11.                                Successor or Transferee.

 

(a)           Upon any consolidation or merger of the Issuer in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.

 

(b)           Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.10(b), Credit Acceptance Auto Loan Trust 2011-1 will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of written notice from the Issuer to the Indenture Trustee stating that Credit Acceptance Auto Loan Trust 2011-1 is to be so released.

 

SECTION 3.12.                                No Other Business.

 

The Issuer shall not engage in any business other than financing, purchasing, owning, selling and managing the Contracts in the manner contemplated by this Indenture and the Basic Documents and activities incidental thereto and any other activities permitted under the Trust Agreement.

 

SECTION 3.13.                                No Borrowing.

 

The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any Indebtedness except for:  (i) the Notes; and (ii) any other Indebtedness permitted by or arising under the Basic Documents.  The proceeds of the Notes shall be used exclusively to fund the Issuer’s purchase of the Loans and the other assets specified in the Sale and Servicing Agreement, to fund the Reserve Account and to pay the Issuer’s organizational, transactional and start-up expenses.

 

SECTION 3.14.                                Guarantees, Loans, Advances and Other Liabilities.

 

Except as contemplated by the Sale and Servicing Agreement or this Indenture, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.

 

SECTION 3.15.                                Capital Expenditures.

 

  

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The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty) except as contemplated by the Basic Documents.

 

SECTION 3.16.                                Compliance with Laws.

 

The Issuer shall comply with the requirements of all applicable laws, the non-compliance with which would, individually or in the aggregate, materially and adversely affect the ability of the Issuer to perform its obligations under the Notes, this Indenture or any Basic Document.

 

SECTION 3.17.                                Restricted Payments.

 

The Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, distributions to the Servicer, the Seller, the Owner Trustee, the Indenture Trustee, the Trust Collateral Agent, the Backup Servicer and the Certificateholders as permitted by, and to the extent funds are available for such purpose under, the Sale and Servicing Agreement and the Trust Agreement. The Issuer will not, directly or indirectly, make payments to or distributions from the Collection Account except in accordance with this Indenture and the Basic Documents.

 

SECTION 3.18.                                Notice of Indenture Events of Default.

 

Upon a Responsible Officer of the Owner Trustee having actual knowledge or receipt of written notice thereof, the Issuer agrees to give the Indenture Trustee, the Trust Collateral Agent, the Backup Servicer and the Rating Agencies prompt written notice of each Indenture Event of Default hereunder and each default on the part of the Servicer or the Seller of its obligations under the Sale and Servicing Agreement.

 

SECTION 3.19.                                Further Instruments and Acts.

 

Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

SECTION 3.20.                                Amendments of Sale and Servicing Agreement and Trust Agreement.

 

The Issuer shall not agree to any amendment to Section 11.01 of the Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate the requirements thereunder that the Indenture Trustee or the Holders of the Notes consent to amendments thereto as provided therein.

 

SECTION 3.21.                                Income Tax Characterization.

 

  

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For purposes of federal income, state and local income and franchise and any other income taxes, the Issuer will, and each Noteholder by such Noteholder’s acceptance of any such Notes (and each Person who acquires an interest in any Notes through such Noteholder, by the acceptance by such Person of an interest in the applicable Notes) agrees to, treat the Notes that are characterized as indebtedness at the time of their issuance, and hereby instructs the Issuer to treat such Notes, as indebtedness for federal, state and other tax reporting purposes.  Each Noteholder agrees that it will cause any Person acquiring an interest in a Note through it to comply with this agreement as to treatment as indebtedness under applicable tax law, as described in this Section 3.21.

The Notes will be issued with the intention that, for federal, state and local income and franchise tax purposes the Trust shall not be treated as an association or publicly traded partnership taxable as a corporation.   The parties hereto agree that they shall not cause or permit the making, as applicable, of any election under Treasury Regulation Section 301.7701-3 (or any successor provision) whereby the Trust or any portion thereof would be treated as a corporation for federal income tax purposes.  The provisions of this Indenture shall be construed in furtherance of the foregoing intended tax treatment.

SECTION 3.22.                                Perfection Representations, Warranties and Covenants.

 

The perfection representations, warranties and covenants made by the Issuer and set forth on Schedule A hereto shall be a part of this Indenture for all purposes.

 

ARTICLE IV

 

 

Satisfaction and Discharge

 

SECTION 4.1.                                Satisfaction and Discharge of Indenture.

 

This Indenture shall cease to be of further effect with respect to the Notes except as to: (i) rights of registration of transfer and exchange; (ii) substitution of mutilated, destroyed, lost or stolen Notes; (iii) rights of Noteholders to receive payments of principal thereof and interest thereon; (iv) Sections 3.3, 3.4, 3.5, 3.7, 3.8, 3.10, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.19, 3.20 and 3.21; (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee under Section 4.2); and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee, or the Trust Collateral Agent, payable to all or any of them, and the Indenture Trustee, on written demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when

 

(A)           either

 

(1)           all Notes theretofore authenticated and delivered (other than (i) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.4 and (ii) Notes for whose payment money has theretofore been deposited in trust or segregated and

 

  

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held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.3) have been delivered to the Indenture Trustee for cancellation; or

 

(2)           all Notes not theretofore delivered to the Indenture Trustee for cancellation

 

(i)           have become due and payable,

 

(ii)           will become due and payable at their respective stated final maturity dates within one year, or

 

(iii)           are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuer,

 

and the Issuer, in the case of (i), (ii) or (iii) of this clause (2), has irrevocably deposited or caused to be irrevocably deposited with the Trust Collateral Agent cash or direct obligations of or obligations guaranteed by the United States of America (which will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Indenture Trustee for cancellation when due to the Stated Final Maturity or Redemption Date (if Notes shall have been called for redemption pursuant to Section 10.1), as the case may be;

 

(B)           the Issuer has paid or caused to be paid all Issuer Secured Obligations; and

 

(C)           the Issuer has delivered to the Indenture Trustee an Officer’s Certificate, an Opinion of Counsel and if required by the Indenture Trustee an Independent Certificate from a firm of certified public accountants, each meeting the applicable requirements of Section 11.1(a) and each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

 

Upon the satisfaction and discharge of the Indenture pursuant to this Section 4.1, the Indenture Trustee shall deliver to the Owner Trustee a certificate of a Responsible Officer stating that the Noteholders and the Indenture Trustee have been paid all amounts owed to them.

 

SECTION 4.2.                                Application of Trust Money.

 

All moneys deposited with the Indenture Trustee pursuant to Section 4.1 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Holders of the particular Notes for the payment or redemption of which such moneys have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal and interest; but such moneys need not be segregated from other funds except to the extent required herein or in the Sale and Servicing Agreement or required by law.

 

SECTION 4.3.                                Repayment of Moneys Held by Paying Agent.

 

  

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In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all moneys then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect to such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.3 and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

 

ARTICLE V

 

 

Events of Default; Remedies

 

SECTION 5.1.                                Indenture Events of Default.

 

“Indenture Event of Default”, wherever used herein or in the other Basic Documents, means any one of the following events (whatever the reason for such Indenture Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(i)          default by the Issuer in the payment of any interest on either (x) the Class A Notes or (y) the Class B Notes when the same becomes due and payable, and such default shall continue for a period of five (5) days or more; or

 

(ii)          default by the Issuer in the payment of the principal of or any installment of the principal of any class of Notes when the same becomes due and payable on the applicable stated final maturity date; or

 

(iii)          default in the observance or performance of any covenant or agreement of the Issuer made under this Indenture (other than a covenant or agreement, a default in the observance or performance of which is specifically dealt with elsewhere in this Section 5.1), or any representation or warranty of the Issuer made in this Indenture or in any certificate or other writing delivered pursuant to this Indenture or in connection with this Indenture proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of thirty (30) days (or a longer period, not in excess of sixty (60) days as may be reasonably necessary to remedy such default, if the default is capable of remedy within sixty (60) days or less, and the Servicer, on behalf of the Issuer, delivers an officer’s certificate to the Indenture Trustee to the effect that the Issuer has commenced, or will promptly commence and diligently pursue, all reasonable efforts to remedy the default) after there shall have been given to the Issuer by the Indenture Trustee at the direction of the Majority Noteholders, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a “Notice of Default” pursuant to this Indenture; or

 

(iv)          the filing of a decree or order for relief by a court having jurisdiction over the Seller, the Issuer or any substantial part of the Trust Property in an involuntary case under any applicable Federal or state bankruptcy, insolvency or other

 

  

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similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Seller or the Issuer, as applicable, or for any substantial part of the Trust Property, or ordering the winding-up or liquidation of the Seller’s affairs or the Issuer’s affairs, as applicable, and such decree or order shall remain unstayed and in effect for a period of sixty (60) consecutive days; or

 

(v)          the commencement by the Seller or the Issuer of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Seller or Issuer, as applicable, or for any substantial part of the Trust Property, or the making by the Seller or Issuer, as applicable, of any general assignment for the benefit of creditors, or the failure by the Seller or Issuer, as applicable, generally to pay its debts as such debts become due, or the taking of action by the Issuer in furtherance of any of the foregoing; or

 

(vi)          cumulative Collections through the end of the related Collection Period, expressed as a percentage of the cumulative Forecasted Collections through the end of the related Collection Period, are less than 65.0% for any three (3) consecutive Collection Periods; or

 

(vii)          the Seller sells or otherwise transfers ownership of the Certificate except as permitted by the Basic Documents; or

 

(viii)          the Seller fails to observe or perform in any material respect any of its separateness or limited purpose covenants in the Basic Documents to which it is a party (after notice and after giving effect to any applicable grace periods set forth therein) or its organizational documents; or

 

(ix)          the Indenture Trustee ceases to have a valid and perfected first priority security interest in the Trust Property and such failure has not been remedied within ten (10) Business Days; or

 

(x)          the Issuer becomes an “investment company” within the meaning of the Investment Company Act of 1940; or

 

(xi)          any Basic Document (in its entirety) ceases to be in full force and effect.

 

SECTION 5.2.                                Rights Upon Indenture Event of Default.

 

(a)           If an Indenture Event of Default described in clause (iv) or (v) of Section 5.1 shall have occurred, the entire unpaid principal balance of the Notes, all interest accrued and unpaid thereon and all other amounts payable under this Indenture and the Basic Documents shall automatically become immediately due and payable.  If any other Indenture Event of Default shall have occurred, the Indenture Trustee, if so requested in writing by the Majority Noteholders, shall declare by written notice to the Issuer that the entire principal balance of the

 

  

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Notes, all interest accrued and unpaid thereon and all other amounts payable under this Indenture and the other Basic Documents to be immediately due and payable.

 

(b)           If an Indenture Event of Default occurs and the Notes have been accelerated, the Indenture Trustee may exercise any of the remedies specified in Section 5.4(a).  Payments in accordance with Section 5.2(a) hereof following acceleration of the Notes shall be applied by the Indenture Trustee:

 

FIRST:  pari passu (x) pari passu, to the Servicer or the Backup Servicer, the Servicing Fee and any indemnification amounts owed to the Backup Servicer, and to the Trust Collateral Agent, the Indenture Trustee and the Owner Trustee, their related accrued and unpaid fees or Indenture Trustee Fee, as applicable, indemnification amounts and expenses and (y) to any successor servicer, any unpaid Transition Expenses which may be due to it pursuant to the terms of the Sale and Servicing Agreement;

 

SECOND:  to the Note Distribution Account, amounts to be applied sequentially (i) first, to the Class A Noteholders, the Class A Interest Distributable Amount due and payable on such Distribution Date and the Class A Interest Carryover Shortfall, if any, from any prior Distribution Date and (ii) second, to the Class B Noteholders, the Class B Interest Distributable Amount due and payable on such Distribution Date and the Class B Interest Carryover Shortfall, if any, from any prior Distribution Date; and

 

THIRD:  to the Note Distribution Account, amounts to be applied sequentially (i) first, to the Class A Noteholders, the Class A Principal Distributable Amount until the Class A Note Balance has been reduced to zero, (ii) second, to the Class B Noteholders, the Class B Principal  Distributable Amount until the Class B Note Balance has been reduced to zero, and (iii) third, to the Class C Noteholders, the Class C Principal Distributable Amount until the Class C Note Balance has been reduced to zero.

 

(c)           At any time after declaration of acceleration of maturity has been made in accordance with Section 5.2(a) hereof and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, the Majority Noteholders by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

 

(i)          the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:

 

(A)           all payments of principal of and interest on all Notes and all other amounts that would then be due hereunder or upon such Notes if the Indenture Event of Default giving rise to such acceleration had not occurred, which funds shall be deposited into the Note Distribution Account; and

 

(B)           all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel, which funds shall be deposited into the Collection Account.

 

  

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             (ii)           all Indenture Events of Default, other than the nonpayment of the interest on or the principal of the Notes that 

        has become due solely by such acceleration, have been cured or waived.

 

No such rescission shall affect any subsequent default or impair any right relating to or resulting from such default.

 

SECTION 5.3.                                Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

 

(a)           The Issuer hereby irrevocably and unconditionally appoints the Indenture Trustee as the true and lawful attorney-in-fact of the Issuer, with full power of substitution, to execute, acknowledge and deliver any notice, document, certificate, paper, pleading or instrument and to do in the name of the Indenture Trustee as well as in the name, place and stead of the Issuer such acts, things and deeds for or on behalf of and in the name of the Issuer under this Indenture (including specifically under Section 5.4) and under the Basic Documents which the Issuer could or might do or which may be necessary, desirable or convenient in the Indenture Trustee’s sole discretion to effect the purposes contemplated hereunder and under the Basic Documents and, without limitation, following the occurrence of an Indenture Event of Default, acting at the instruction or with the consent of the Majority Noteholders, in accordance with the terms of Article V hereof, exercise full right, power and authority to take, or defer from taking, any and all acts with respect to the administration, maintenance or disposition of the Trust Property.

 

(b)           Notwithstanding anything to the contrary contained in this Indenture (including Sections 5.4(a), 5.13 and 5.16), the Indenture Trustee, prior to the Termination Date, may with the prior written consent of the Majority Noteholders, or shall, at the direction of the Majority Noteholders, and thereafter may at its discretion, proceed to protect and enforce its rights and the rights of the Noteholders by such appropriate proceedings as the Indenture Trustee or the Majority Noteholders shall deem most effective to protect and enforce any such rights, whether for specific performance of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

 

(c)           In case there shall be pending, relative to the Issuer or any other obligor upon the Notes or any Person having or claiming an ownership interest in the Trust Property, proceedings under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable judicial proceedings relative to the Issuer or other obligor upon the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, at the expense of the Seller by intervention in such proceedings or otherwise:

 

  

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           (i)           to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence, bad faith or willful misconduct) and of the Noteholders allowed in such proceedings;

 

(ii)          unless prohibited by applicable law and regulations, to vote on behalf of the Holders of Notes in any election of a trustee, a standby trustee or person performing similar functions in any such proceedings;

 

(iii)          to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders and the Indenture Trustee on their behalf; and

 

(iv)          to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Holders of Notes allowed in any judicial proceedings relative to the Issuer, its creditors and its property;

 

and any trustee, receiver, liquidator, custodian or other similar official in any such proceeding is hereby authorized by each of such Noteholders to make payments to the Indenture Trustee, and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence, bad faith or willful misconduct.

 

(d)           Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar person.

 

(e)           All rights of action and of asserting claims under this Indenture or under any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Notes.

 

  

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        (f)           In any proceedings brought by the Indenture Trustee (and also any proceedings involving the interpretation of any provision of this Indenture), the Indenture Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Noteholder a party to any such proceedings.

 

SECTION 5.4.                                Remedies.

 

(a)           If an Indenture Event of Default shall have occurred and the maturity of the Notes shall been accelerated pursuant to the terms of Section 5.2(a) hereof, the Indenture Trustee at the written direction of the Majority Noteholders may do any one or more of the following:

 

(i)          institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer and any other obligor upon such Notes moneys adjudged due;

 

(ii)          institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Property;

 

(iii)          exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Holders of the Notes; and

 

(iv)          direct the Indenture Trustee to sell the Trust Property or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law; provided, however, that the Indenture Trustee shall not, and shall not be directed by the Majority Noteholders to, sell or otherwise liquidate the Trust Property following an Indenture Event of Default unless:

 

(A)           such Indenture Event of Default is of the type described in Section 5.1(iv) or (v); or

 

(B)           such Indenture Event of Default is of the type described in any other clause of Section 5.1 and the consent of the Noteholders to such sale or liquidation of the Trust Property in writing has been obtained; or

 

(C)           either (i) the proceeds of such sale or liquidation would be in an amount sufficient to discharge in full all amounts then due and unpaid upon such Notes for principal and interest or (ii) the Indenture Trustee determines that the Trust Property will not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if they had not been declared due and payable (it being understood that for purposes of making such determinations, the Indenture Trustee may conclusively rely on an independent auditor);

 

provided, however, that, subject to Section 6.1, the Indenture Trustee shall have the right to decline to follow any such direction if it, being advised by counsel, determines that the action so

 

  

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directed may not lawfully be taken, or if it, in good faith shall, by a Responsible Officer, determine that the proceedings so directed would be illegal or subject it to personal liability.

 

(b)           If the Indenture Trustee sells all or a portion of the Trust Property, following an Indenture Event of Default, the Trust Collateral Agent shall give Credit Acceptance at least ten (10) days’ prior notice of such sale, and Credit Acceptance may, but is not required to, make a bid for the portion, or all, of the Trust Property being sold by the Indenture Trustee.

 

SECTION 5.5.                                Optional Preservation of the Trust Property.

 

If the Notes have been declared to be due and payable under Section 5.2 following an Indenture Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, with the prior written consent of the Majority Noteholders, but need not unless directed in writing by the Majority Noteholders, maintain possession of the Trust Property which is in its possession and elect to direct the Trust Collateral Agent to maintain possession of the Trust Property which is in the possession of the Trust Collateral Agent.  It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Majority Noteholders, shall take such desire into account when determining whether or not to direct the Indenture Trustee or the Trust Collateral Agent, as applicable, to maintain possession of the Trust Property.  In determining whether to direct the Indenture Trustee or the Trust Collateral Agent, as applicable, to obtain possession of the Trust Property, the Majority Noteholders may, but need not maintain and conclusively rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Trust Property for such purpose.

 

SECTION 5.6.                                [Reserved].

 

SECTION 5.7.                                Limitation of Suits.

 

Subject to Section 5.8 and Section 6.8, no Holder of any Note shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

(i)          such Holder has previously given written notice to the Indenture Trustee of a continuing Indenture Event of Default;

 

(ii)          (A) the Indenture Event of Default arises from the Seller’s or the Servicer’s failure to remit payments under the Sale and Servicing Agreement when due or (B) the Majority Noteholders shall have made written request to the Indenture Trustee to institute such proceeding in respect of such Indenture Event of Default in its own name as Indenture Trustee hereunder;

 

(iii)          such Holder or Holders have offered to the Indenture Trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in complying with such request;

 

  

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           (iv)           the Indenture Trustee for thirty (30) days after its receipt of such notice, request and offer of indemnity has 

     failed to institute such proceedings; and

 

(v)          no direction inconsistent with such written request has been given to the Indenture Trustee during such 30-day period;

 

it being understood and intended that no one or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Noteholders.

 

In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Notes, each representing less than a majority of the Outstanding Amount of the Notes, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

 

SECTION 5.8.                                Unconditional Rights of Noteholders To Receive Principal and Interest.

 

Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

 

SECTION 5.9.                                Restoration of Rights and Remedies.

 

If the Indenture Trustee or any Noteholder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or such Noteholder, then and in every such case the Issuer, the Indenture Trustee and the Noteholders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such proceeding had been instituted.

 

  

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       SECTION 5.10.                                Rights and Remedies Cumulative.

 

Except as provided in Section 5.7, no right or remedy herein conferred upon or reserved for the Indenture Trustee or the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

SECTION 5.11.                                Delay or Omission Not a Waiver.

 

No delay or omission of the Indenture Trustee or any Holder of any Note to exercise any right or remedy accruing upon any Indenture Default or Indenture Event of Default shall impair any such right or remedy or constitute a waiver of any such Indenture Default or Indenture Event of Default or an acquiescence therein.  Every right and remedy given by this Article V or by law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.

 

SECTION 5.12.                                [Reserved].

 

SECTION 5.13.                                Undertaking for Costs.

 

All parties to this Indenture agree, and each Holder of any Note by such Holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant.

 

SECTION 5.14.                                Waiver of Stay or Extension Laws.

 

The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

SECTION 5.15.                                Action on Notes.

 

The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the

 

  

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Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Property or upon any of the assets of the Issuer.

 

SECTION 5.16.                                Performance and Enforcement of Certain Obligations.

 

(a)           Promptly following a request from the Indenture Trustee at the direction of the Majority Noteholders to do so and at the Issuer’s expense, the Issuer agrees to take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Seller and the Servicer, as applicable, of each of their obligations to the Issuer under or in connection with the Sale and Servicing Agreement, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale and Servicing Agreement to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of default on the part of the Seller or the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Seller or the Servicer of each of their obligations under the Sale and Servicing Agreement.

 

(b)           If an Indenture Event of Default has occurred, the Indenture Trustee may, with the prior written consent of the Majority Noteholders, but need not unless directed in writing by the Majority Noteholders, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Seller or the Servicer under or in connection with the Sale and Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Seller or the Servicer of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale and Servicing Agreement, and any right of the Issuer to take such action shall be suspended.

 

ARTICLE VI

 

 

The Indenture Trustee

 

SECTION 6.1.                                Duties of Indenture Trustee.

 

(a)           If an Indenture Event of Default has occurred and is continuing, the Indenture Trustee shall follow such instructions and directions as it may receive pursuant to Section 5.2 hereof and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b)           Except during the continuance of an Indenture Event of Default:

 

(i)          the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and the Basic Documents and no implied covenants or obligations shall be read into this Indenture or the Basic Documents against the Indenture Trustee; and

 

(ii)          in the absence of bad faith, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming

 

  

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  to the requirements of this Indenture and the Basic Documents; however, the Indenture Trustee shall examine the certificates and 

  opinions to determine whether or not they conform on their face to the requirements of this Indenture and the Basic Documents.

 

(c)           The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own bad faith or willful misconduct, except that:

 

(i)          this paragraph does not limit the effect of paragraph (b) of this Section 6.1; and

 

(ii)          the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Indenture Trustee unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts.

 

(d)           Money held in trust by the Indenture Trustee need not be segregated from other funds except to the extent required by law or the terms of this Indenture.

 

(e)           No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur liability (financial or otherwise) in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or indemnity satisfactory to it against such risk or liability is not reasonably assured to it.

 

(f)           Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section 6.1.

 

(g)           Without limiting the generality of this Section, the Indenture Trustee shall have no duty (A) to see to any recording, filing or depositing of this Indenture or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest in the Financed Vehicles, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing of any thereof, (B) to see to any insurance on the Financed Vehicles or Obligors or to effect or maintain any such insurance, (C) to see to the payment or discharge of any tax, assessment or other governmental charge or any Lien or encumbrance of any kind owing with respect to, assessed or levied against any part of the Trust, (D) to confirm or verify the contents of any reports or certificates delivered to the Indenture Trustee pursuant to this Indenture or the Sale and Servicing Agreement believed by the Indenture Trustee to be genuine and to have been signed or presented by the proper party or parties, or (E) to inspect the Financed Vehicles at any time or ascertain or inquire as to the performance or observance of any of the Issuer’s, the Seller’s or the Servicer’s representations, warranties or covenants or the Servicer’s duties and obligations as Servicer and as custodian of the original Certificates of Title of the Financed Vehicles under the Sale and Servicing Agreement.

 

(h)           In no event shall Wells Fargo Bank, National Association, in any of its capacities hereunder, be deemed to have assumed any duties of the Owner Trustee under the Delaware Statutory Trust Act, common law, or the Trust Agreement.

 

  

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         SECTION 6.2.                                Rights of Indenture Trustee.

 

Except as otherwise provided in Section 6.1:

 

(a)           Before the Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate and/or an Opinion of Counsel.  The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer’s Certificate or Opinion of Counsel.

 

(b)           The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee and shall not be responsible for the misconduct or negligence of any agent, attorney, custodian or nominee appointed with due care.

 

(c)           The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Indenture Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.

 

(d)           The Indenture Trustee shall not be deemed to have knowledge of an Indenture Event of Default unless a Responsible Officer of the Indenture Trustee has actual knowledge or has received written notice of such Indenture Event of Default.

 

(e)           The Indenture Trustee may consult with counsel, and the written advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the written advice or opinion of such counsel.

 

(f)           The Indenture Trustee shall be under no obligation to exercise any of the rights and powers vested in it by this Indenture or the other Basic Documents, or to institute, conduct or defend any litigation under this Indenture or in relation to this Indenture, at the request, order or direction of any of the Holders of Notes, pursuant to the provisions of this Indenture, unless it shall have been offered security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities that may be incurred therein or thereby; provided, however, that the Indenture Trustee shall, upon the occurrence of an Indenture Event of Default (that has not been cured), exercise the rights and powers vested in it by this Indenture with the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(g)           Except during the continuance of an Indenture Event of Default, the Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Majority Noteholders; provided, however, that if the payment within a reasonable time to the Indenture Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Indenture Trustee, not reasonably assured to the Indenture Trustee by the security afforded to it by the terms of this Indenture, the Indenture Trustee may

 

  

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require indemnity reasonably satisfactory to the Indenture Trustee against such cost, expense or liability as a condition to so proceeding; the reasonable expense of every such examination shall be paid by the requesting Holders or the instructing party, as the case may be, or, if paid by the Indenture Trustee, shall be reimbursed by the requesting Holders or the instructing party, as the case may be, upon demand.

 

(h)           In no event shall the Indenture Trustee be liable for any indirect, consequential, punitive or special damages, regardless of the form of action and whether or not any such damages were foreseeable or contemplated.

 

(i)           Delivery of any reports, information and documents to the Indenture Trustee provided for herein is for informational purposes only (unless otherwise expressly stated herein) and the Indenture Trustee’s receipt of such shall not constitute constructive knowledge of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its representations, warranties or covenants hereunder (as to which the Indenture Trustee is entitled to rely exclusively on Officers’ Certificates).

 

(j)           The Indenture Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.

 

(k)           In the event the Indenture Trustee is also acting in the capacity of Trust Collateral Agent, Paying Agent, transfer agent or Note Registrar, it shall be afforded all of the rights, protections, immunities and indemnities afforded to the Indenture Trustee hereunder in each of its capacities hereunder.

 

(l)           In no event shall the Indenture Trustee be liable for any act or omission on the part of the Issuer, the Seller or the Servicer or any other Person.  The Indenture Trustee shall not be responsible for monitoring or supervising the Issuer, the Seller, the Servicer or any other Person.

 

SECTION 6.3.                                Individual Rights of Indenture Trustee.

 

The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee.  Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights.  However, the Indenture Trustee must comply with Section 6.15.

 

SECTION 6.4.                                Indenture Trustee’s Disclaimer.

 

The Indenture Trustee shall not be responsible for and makes no representation as to the validity, sufficiency or adequacy of this Indenture, the Trust Property or the Notes, shall not be accountable for the Issuer’s use of the proceeds from the Notes, and shall not be responsible for any statement of the Issuer in the Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than, the Indenture Trustee’s certificate of authentication.

 

  

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       SECTION 6.5.                                Notice of Indenture Events of Default.

 

If an Indenture Event of Default occurs and is continuing and if written notice of the existence thereof has been delivered to a Responsible Officer of the Indenture Trustee or a Responsible Officer of the Indenture Trustee has actual knowledge thereof, the Indenture Trustee shall mail to the Rating Agencies and each Noteholder notice of the Indenture Event of Default within five (5) Business Days after such knowledge or notice occurs.

 

SECTION 6.6.                                Reports by Indenture Trustee to Holders.

 

The Indenture Trustee shall on behalf of the Issuer deliver to each Noteholder such information as may be reasonably required to enable such Holder to prepare its federal and state income tax returns.  Such obligation shall be satisfied if the Indenture Trustee provides such Noteholder a Form 1099.

 

SECTION 6.7.                                Compensation.

 

(a)           The Issuer shall pay to the Indenture Trustee from time to time compensation for its services as agreed in writing and in accordance with Section 5.08(a) of the Sale and Servicing Agreement.  The Indenture Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Issuer shall reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services, except any such expense as may be attributable to its willful misconduct, negligence or bad faith.  Such expenses shall include securities transaction charges relating to the investment of funds (net of investment earnings) on behalf of the Indenture Trustee or the Trust Collateral Agent on deposit in the Trust Accounts (except for the Certificate Distribution Account) and the reasonable compensation and reasonable expenses, disbursements and advances of the Indenture Trustee’s counsel and of all persons not regularly in its employ; provided, however, that the securities transaction charges referred to above shall, in the case of certain Eligible Investments selected by the Servicer, be waived for a particular investment in the event that any amounts are received by the Trust Collateral Agent from a financial institution in connection with the purchase of such Eligible Investments.  The Issuer agrees to indemnify the Indenture Trustee and Trust Collateral Agent as set forth in Section 6.05 of the Sale and Servicing Agreement.  The Indenture Trustee agrees that its recourse to the Issuer, the Seller and the Trust Property shall be limited to the right to receive distributions in accordance with Section 5.08(a) of the Sale and Servicing Agreement and Article V hereof and shall not be recourse to the assets of any Noteholder.

 

(b)           The Issuer’s payment obligations to the Indenture Trustee pursuant to this Section shall survive the discharge of this Indenture and the earlier resignation or removal of the Indenture Trustee.  When the Indenture Trustee incurs expenses after the occurrence of an Indenture Event of Default specified in Section 5.1(iv) or (v) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or similar law.  Notwithstanding anything else set forth in this Indenture or the Basic Documents, the Indenture Trustee agrees that the obligations of the Issuer to the Indenture Trustee hereunder and under the Basic Documents shall not be recourse to the assets of any Noteholder.

 

  

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          SECTION 6.8.                                Replacement of Indenture Trustee.

 

(a)           The Indenture Trustee may resign at any time by so notifying the Issuer in writing at least sixty (60) days prior and upon the appointment and assumption of its obligations by a successor Indenture Trustee.

 

(b)           The Issuer, with the prior written consent of the Majority Noteholders, may remove the Indenture Trustee by written notice if:

 

(i)          the Indenture Trustee fails to comply with Section 6.17 hereof;

 

(ii)          a court having jurisdiction over the Indenture Trustee in an involuntary case or proceeding under federal or state banking or bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or other similar law, shall have entered a decree or order granting relief or appointing a receiver, liquidator, assignee, custodian, trustee, conservator, sequestrator (or similar official) for the Indenture Trustee or for any substantial part of the Indenture Trustee’s property, or ordering the winding-up or liquidation of the Indenture Trustee’s affairs;

 

(iii)          an involuntary case under the federal bankruptcy laws, as now or hereafter in effect, or another present or future federal or state bankruptcy, insolvency or similar law is commenced with respect to the Indenture Trustee and such case is not dismissed within sixty (60) days;

 

(iv)          the Indenture Trustee commences a voluntary case under any federal or state banking or bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or other similar law, or consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, conservator, sequestrator (or other similar official) for the Indenture Trustee or for any substantial part of the Indenture Trustee’s property, or makes any assignment for the benefit of creditors or fails generally to pay its debts as such debts become due or takes any corporate action in furtherance of any of the foregoing;

 

(v)          the Indenture Trustee fails to comply with any material covenant hereunder; or

 

(vi)          the Indenture Trustee otherwise becomes legally incapable of acting.

 

(c)           [Reserved].

 

(d)           If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee.

 

A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee and to the Issuer.  Thereupon the resignation or

 

  

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removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the retiring Indenture Trustee under this Indenture subject to satisfaction of the Rating Agency Condition.  The successor Indenture Trustee shall mail a notice of its succession to Noteholders and the Rating Agencies.  The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

 

If a successor Indenture Trustee does not take office within sixty (60) days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or Majority Noteholders may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee that meets the eligibility requirements set forth in Section 6.12 hereof.

 

If the Indenture Trustee fails to comply with Section 6.15, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.

 

Any resignation or removal of the Indenture Trustee and appointment of a successor Indenture Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.8 and payment of all fees and expenses owed to the outgoing Indenture Trustee by the Servicer and the Issuer.

 

Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer’s and the Servicer’s obligations under Section 6.7 shall continue for the benefit of the retiring Indenture Trustee.

 

SECTION 6.9.                                           Successor Indenture Trustee by Merger.

 

If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation, provided it meets the eligibility requirements of Section 6.12, without any further act shall be the successor Indenture Trustee.  The Indenture Trustee shall provide the Rating Agencies and the Noteholders written notice of any such transaction.

 

In case at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Indenture Trustee shall have.

 

SECTION 6.10.                                Appointment of Trust Collateral Agent.

 

  

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The Issuer and the Indenture Trustee do hereby appoint Wells Fargo Bank, National Association to act as the initial trust collateral agent on behalf of the Indenture Trustee and Wells Fargo Bank, National Association hereby accepts such appointment.

SECTION 6.11.                                Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

 

(a)           Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust may at the time be located, the Issuer and the Indenture Trustee acting jointly and at the expense of the Issuer shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders, such title to the Trust, or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Issuer and the Indenture Trustee may consider necessary or desirable.  No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.12 and no notice to Noteholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.8 hereof.

 

(b)           Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

 

(i)          all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;

 

(ii)          no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder, including acts or omissions of predecessor or successor trustees; and

 

(iii)          the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

 

(c)           Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees as effectively as if given to each of them.  Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article VI.  Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property

 

  

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specified in its instrument of appointment, either jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee.  Every such instrument shall be filed with the Indenture Trustee.

(d)           Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name.  If any separate trustee or co-trustee shall die, dissolve, become insolvent, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

 

SECTION 6.12.                                Eligibility.

 

The Indenture Trustee under this Indenture shall at all times be a corporation or banking association having an office in the same state as the location of the Corporate Trust Office as specified, or to be specified, in this Indenture; organized and doing business under the laws of such state or the United States of America; authorized under such laws to exercise corporate trust powers; having a combined capital and surplus of at least $100,000,000; having long-term unsecured debt obligations which have at least the Required Long-Term Debt Rating and subject to supervision or examination by federal or state authorities.  If such corporation shall publish reports of its condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  In case at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section, the Indenture Trustee shall resign immediately.

 

SECTION 6.13.                                Trust Collateral Agent to Follow Indenture Trustee’s Directions.

 

The Indenture Trustee hereby authorizes the Trust Collateral Agent to take such action on its behalf, and to exercise such rights, remedies, powers and privileges hereunder, as the Indenture Trustee may direct and as are specifically authorized to be exercised by the Trust Collateral Agent by the terms hereof, together with such actions, rights, remedies, powers and privileges as are reasonably incidental thereto.

 

SECTION 6.14.                                Representations and Warranties of the Indenture Trustee.

 

The Indenture Trustee represents and warrants to the Issuer as follows:

 

(i)          The Indenture Trustee is a national banking association, duly organized and validly existing under the laws of the United States and is authorized and licensed to conduct and engage in a banking and trust business under such laws.

 

(ii)          The Indenture Trustee has full corporate power, authority, and legal right to execute, deliver, and perform this Indenture, and has taken all necessary

 

  

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action to authorize the execution, delivery, and performance by it of this Indenture and the other Basic Documents to which it is a party.

 

(iii)          Each of this Indenture, and the other Basic Documents to which it is a party, has been duly executed and delivered by the Indenture Trustee.

 

(iv)          Each of this Indenture, and the other Basic Documents to which it is a party, is a legal, valid and binding obligation of the Indenture Trustee enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity.

 

(v)          The execution, delivery and performance of this Indenture, and each other Basic Document to which it is a party, by the Indenture Trustee will not constitute a violation, to the best of the Indenture Trustee’s knowledge, with respect to any order or decree of any court or any order, regulation or demand of any federal, State, municipal or governmental agency binding on the Indenture Trustee, which violation might have consequences that would materially and adversely affect the performance of its duties under this Indenture or under any other Basic Document to which it is a party.

 

(vi)          The execution, delivery and performance of this Indenture, and each other Basic Document to which it is a party, by the Indenture Trustee do not require any approval or consent of any Person, do not conflict with the articles of incorporation or bylaws of the Indenture Trustee.

 

SECTION 6.15.                                Waiver of Setoffs.

 

Each of the Indenture Trustee and the Trust Collateral Agent hereby expressly waives any and all rights of setoff that the Indenture Trustee or the Trust Collateral Agent may otherwise at any time have under applicable law with respect to any Trust Account and agrees that amounts in the Trust Accounts shall at all times be held and applied solely in accordance with the provisions hereof and of the Sale and Servicing Agreement.

 

SECTION 6.16.                                Reserved.

 

SECTION 6.17.                                Disqualification of the Indenture Trustee.

 

If the Indenture Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act of 1939, as amended, the Indenture Trustee shall either eliminate such interest or resign to the extent in the manner provided by and subject to the provisions of this Indenture.

 

SECTION 6.18.                                Authorization and Direction.

 

The Issuer hereby authorizes and directs the Indenture Trustee to execute the Basic Documents to which it is a party.

 

SECTION 6.19.                                Action under the Intercreditor Agreement.

 

  

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Before taking or omitting to take any action under the Intercreditor Agreement, the Indenture Trustee may request and shall be entitled to receive direction from the Majority Noteholders with respect to any action required to be taken by it thereunder.  The Indenture Trustee shall not be required to take any action or omit to take any action in the absence of such consent.

 

ARTICLE VII

 

 

Noteholders’ Lists and Reports

 

SECTION 7.1.                                 Issuer To Furnish To Indenture Trustee Names and Addresses of Noteholders.

 

The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five (5) days after each Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Holders as of such Record Date and (b) at such other times as the Indenture Trustee may request in writing, within thirty (30) days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than ten (10) days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished.

 

SECTION 7.2.                                 Preservation of Information; Communications to Noteholders.

 

The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.1 and the names and addresses of Holders received by the Indenture Trustee in its capacity as Note Registrar.  The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.1 upon receipt of a new list so furnished.

 

ARTICLE VIII

 

 

Accounts, Disbursements and Releases

 

SECTION 8.1.                                           Collection of Money.

 

Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Trust Collateral Agent pursuant to the Sale and Servicing Agreement.  The Indenture Trustee shall apply all such money received by it, or cause the Trust Collateral Agent to apply all money received by it as provided in this Indenture and the Sale and Servicing Agreement.  Except as otherwise expressly provided in this Indenture or in the Sale and Servicing Agreement, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Property, the Indenture Trustee may at the expense of the Issuer take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate proceedings.  Any such action shall be without prejudice to any right to claim an Indenture Default or Indenture Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.

 

  

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       SECTION 8.2.                                Release of Trust Property.

 

Subject to the payment of its fees and expenses pursuant to Section 6.7, the Indenture Trustee (a) after the Termination Date, may and (b) when required by the provisions of this Indenture or from time to time when required by the provisions of the Sale and Servicing Agreement shall release, and shall cause the Trust Collateral Agent to execute instruments as may be necessary to release, property from the lien of this Indenture, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture.  No party relying upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.

 

SECTION 8.3.                                Opinion of Counsel.

 

The Indenture Trustee shall receive at least seven (7) days’ written notice when requested by the Issuer to take any action pursuant to Section 8.2, accompanied by copies of any instruments involved, and the Indenture Trustee shall also require as a condition to such action, an Opinion of Counsel in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of each of the Noteholders in contravention of the provisions of this Indenture; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Trust Property.  Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action.

 

ARTICLE IX

 

 

Supplemental Indentures

 

SECTION 9.1.                                           Supplemental Indentures Not Adversely Affecting Rights of Noteholders.

 

(a)           Without the consent of the Holders of any Notes and with prior notice to the Rating Agencies by the Issuer, as evidenced to the Indenture Trustee, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Indenture Trustee for any of the purposes set forth in clauses (i)-(vi) below; provided, however, if any party to this Indenture is unable to sign any amendment due to its dissolution, winding up or comparable circumstances, then the consent of the Majority Noteholders shall be sufficient to amend this Agreement without such party’s signature:

 

(i)          to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;

 

  

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           (ii)         to evidence the succession, in compliance with the applicable provisions hereof, of another person to the 

Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Notes contained;

 

(iii)          to add to the covenants of the Issuer, for the benefit of the Holders of the Notes, or to surrender any right or power herein conferred upon the Issuer;

 

(iv)          to convey, transfer, assign, mortgage or pledge any property to or with the Trust Collateral Agent;

 

(v)          to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture which may be inconsistent with any other provision herein or in any supplemental indenture or to add any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided that such action shall not adversely affect the interests of the Holders of the Notes; or

 

(vi)          to evidence and provide for the acceptance of the appointment hereunder by a successor Indenture Trustee with respect to the Notes and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one Indenture Trustee, pursuant to the requirements of Article VI.

 

The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained provided that such action shall not adversely affect the interests of the Holders of the Notes.

 

(b)           The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Notes and with prior notice to the Rating Agencies by the Issuer, as evidenced to the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that such action shall not, as evidenced by an Opinion of Counsel which may be based on a certificate of the Seller, adversely affect in any material respect the interests of any Noteholder.

 

SECTION 9.2.                                Supplemental Indentures with Consent of Noteholders.

 

The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may, with prior notice to the Rating Agencies by the Issuer and with the consent of the Majority Noteholders (which consent of any Holder of a Note given pursuant to this Agreement or pursuant to any other provision of this Agreement shall be conclusive and binding on such Holder and on all future Holders of such Note and of any Not e issued upon the registration of transfer thereof or in exchange thereof or in lieu thereof whether or not notation of such consent is made upon the Note), enter into an indenture or indentures supplemental hereto for the purpose of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, if any party to this Indenture is unable to sign any amendment due to its dissolution, winding up or

 

  

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comparable circumstances, then the consent of the Majority Noteholders shall be sufficient to amend this Agreement without such party’s signature; provided further, however, that, no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby:

 

(i)          change the time of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the interest rate thereon or the Redemption Price with respect thereto, change the provision of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust Property to payment of principal of or interest on the Notes;

 

(ii)          impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Notes on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);

 

(iii)          reduce the percentage of the Outstanding Amount of the Notes, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

 

(iv)          modify or alter the provisions of the proviso to the definition of the term “Outstanding Amount” or “Majority Noteholders”;

 

(v)          reduce the percentage of the Outstanding Amount of the Notes required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Property pursuant to Section 5.4;

 

(vi)          modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby;

 

(vii)          modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Distribution Date (including the calculation of any of the individual components of such calculation) or to affect the rights of the Holders of Notes to the benefit of any provisions for the mandatory redemption of the Notes contained herein; or

 

(viii)          permit the creation of any Lien ranking prior to or on a parity with the Lien of this Indenture with respect to any part of the Trust Property or, except as otherwise permitted or contemplated herein or in any of the Basic Documents, terminate the Lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security provided by the Lien of this Indenture.

 

  

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The Issuer may determine whether or not any Notes would be affected by any supplemental indenture and any such determination shall be conclusive upon the Holders of all Notes, whether theretofore or thereafter authenticated and delivered hereunder.  The Indenture Trustee shall not be liable for any such determination made in good faith.

 

Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall mail to the Holders of the Notes a copy of such supplemental indenture.  Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

SECTION 9.3.                                Execution of Supplemental Indentures.

 

In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.  The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.

 

SECTION 9.4.                                Effect of Supplemental Indenture.

 

Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

SECTION 9.5.                                Reference in Notes to Supplemental Indentures.

 

Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture.  If the Issuer or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

 

ARTICLE X

 

 

Redemption of Notes

 

SECTION 10.1.                                Redemption.

 

  

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The Notes are subject to redemption in whole, but not in part, at the direction of the Servicer pursuant to Section 10.01(a) of the Sale and Servicing Agreement, on any Distribution Date on which the Servicer exercises its option to reacquire the Trust Property pursuant to Section 10.01(a) of the Sale and Servicing Agreement for a redemption price equal to the Redemption Price; provided, however, that the Indenture Trustee on behalf of the Issuer has received funds sufficient to pay the Redemption Price.  The Issuer shall furnish the Rating Agencies notice of such redemption.  If the Notes are to be redeemed pursuant to this Section, the Issuer shall furnish notice of such election to the Trust Collateral Agent and the Indenture Trustee not later than twenty (20) days prior to the Redemption Date and promptly upon giving such notice, the Issuer shall designate amounts on deposit in the Collection Account and/or shall deposit or cause to be deposited with the Indenture Trustee in the Note Distribution Account the Redemption Price of the Notes to be redeemed whereupon all outstanding Notes shall be due and payable on the Redemption Date, together with other amounts due and owing at such time under the Basic Documents, upon the furnishing of a notice complying with Section 10.2 to each Holder of Notes; provided, however, that if the Class C Notes are being redeemed, if the Servicer is the holder of the Class C Notes and if the Servicer delivers the Class C Notes as part of the redemption price being paid by the Servicer to so re-acquire the Trust Property, then the Class C Notes so delivered shall be canceled and such portion of the Redemption Price representing the unpaid Class C Note Balance shall be deemed to have been paid in full to the Servicer as holder of the Class C Notes.

SECTION 10.2.                                Form of Redemption Notice.

 

Notice of redemption under Section 10.1 shall be given by the Indenture Trustee by facsimile or by first-class mail, postage prepaid, transmitted or mailed prior to the applicable Redemption Date to each Holder of the Notes, as of the close of business on the Record Date preceding the applicable Redemption Date, at such Holder’s address appearing in the Note Register.

 

All notices of redemption shall state:

 

(i)          the Redemption Date;

 

(ii)          the Redemption Price;

 

(iii)          that the Record Date otherwise applicable to such Redemption Date is not applicable and that payments shall be made only upon presentation and surrender of such Notes and the place where such Notes are to be surrendered for payment of the Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided in Section 2.7); and

 

(iv)          that interest on the Class A Notes and Class B Notes shall cease to accrue on the Redemption Date.

 

Notice of redemption of the Notes shall be given by the Indenture Trustee in the name and at the expense of the Issuer.  Failure to give notice of redemption, or any defect therein, to any Holder of any Note shall not impair or affect the validity of the redemption of any other Note.

 

  

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SECTION 10.3.                                Notes Payable on Redemption Date.

 

The Notes to be redeemed shall, following notice of redemption as required by Section 10.2 (in the case of redemption pursuant to Section 10.1), on the Redemption Date become due and payable at the Redemption Price and (unless the Issuer shall default in the payment of the Redemption Price) no interest shall accrue on the Redemption Price for any period after the date to which accrued interest is calculated for purposes of calculating the Redemption Price.

 

ARTICLE XI

 

 

Miscellaneous

 

SECTION 11.1.                                Compliance Certificates and Opinions, etc.

 

(a)           Upon any application or request by the Issuer to the Indenture Trustee or the Trust Collateral Agent to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee, or the Trust Collateral Agent, as the case may be, if such request is made by the Issuer, an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with.

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(i)          a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

 

(ii)          a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(iii)          a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with.

 

(b)           Other than with respect to the release of any Repurchased Loans or in the case of a redemption of the Notes pursuant to Section 10.1, prior to the deposit of any Collateral or other property or securities with the Trust Collateral Agent that is to be made the basis for the release of any property or securities subject to the lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 11.1(a) or elsewhere in this Indenture, furnish to the Indenture Trustee and the Trust Collateral Agent an Officer’s Certificate certifying or stating the opinion of each person signing such certificate (which may be based upon a certification of the Seller or the Servicer) as to the fair value (within ninety (90) days of such deposit) to the Issuer of the Collateral or other property or securities to be so deposited.

 

(c)           Whenever the Issuer is required to furnish to the Indenture Trustee and the Trust Collateral Agent an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (b) above, the Issuer shall also deliver to the

 

  

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Indenture Trustee and the Trust Collateral Agent an Independent Certificate as to the same matters, if the fair value to the Issuer of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (b) above and this clause (c), is 10% or more of the Outstanding Amount of the Notes, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof to the Issuer as set forth in the related Officer’s Certificate is less than $25,000.

 

(d)           Other than with respect to the release of any Repurchased Loans or in the case of a redemption of the Notes pursuant to Section 10.1, whenever any property or securities are to be released from the Lien of this Indenture, the Issuer shall also furnish to the Trust Collateral Agent and the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within ninety (90) days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

 

(e)           Whenever the Issuer is required to furnish to the Trust Collateral Agent and the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (d) above, the Issuer shall also furnish to the Trust Collateral Agent and the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property other than Purchased Loans, or securities released from the Lien of this Indenture since the commencement of the then current calendar year, as set forth in the certificates required by clause (d) above and this clause (e), equals 10% or more of the Outstanding Amount of the Notes, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officer’s Certificate is less than $25,000.

 

(f)           Notwithstanding Section 2.9 or any other provision of this Section, the Issuer may, without delivering any Officer’s Certificates or Independent Certificates (A) collect, liquidate, sell or otherwise dispose of Contracts as and to the extent required by the Basic Documents and (B) instruct the Trust Collateral Agent to make cash payments out of the Trust Accounts as and to the extent permitted or required by the Basic Documents.

 

SECTION 11.2.                                Form of Documents Delivered to Indenture Trustee.

 

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his or her certificate or opinion is based are erroneous.  Any such certificate of an Authorized Officer or

 

  

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Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer, the Seller or the Issuer, stating that the information with respect to such factual matters is in the possession of the Servicer, the Seller or the Issuer, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report.  The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to conclusively rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.

 

SECTION 11.3.                                Acts of Noteholders.

 

(a)           Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section.

 

(b)           The fact and date of the execution by any person of any such instrument or writing may be proved in any customary manner of the Indenture Trustee.

 

(c)           The ownership of Notes shall be proved by the Note Register.

 

(d)           Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

 

  

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        SECTION 11.4.                        Notices, etc. to Indenture Trustee, Issuer, and Rating Agencies.

 

Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to or filed with:

 

(a)           The Indenture Trustee by any Noteholder or by the Issuer shall be sufficient for every purpose hereunder if personally delivered, delivered by overnight courier, mailed certified mail, return receipt requested or by telecopy to: Wells Fargo Bank, National Association, MAC N9311-161, Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services – Asset-Backed Administration, Telephone: (612) 667-8058, Telecopy: (612) 667-3464 and shall be deemed to have been duly given upon receipt to the Indenture Trustee at its principal Corporate Trust Office;

 

(b)           The Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if personally delivered, delivered by overnight courier, mailed certified mail, return receipt requested or by telecopy to:  Credit Acceptance Corporation, Silver Triangle Building, 25505 West Twelve Mile Road, Suite 3000, Southfield, Michigan 48034-8339, Attention: Doug Busk, Telephone: (248) 353-2700 (ext. 4432), Telecopy:  (866) 743-2704.  The Issuer shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee;

 

(c)           [Reserved]; and

 

(d)           Notices required to be given to the Rating Agencies by the Issuer, the Indenture Trustee or the Owner Trustee shall be in writing, electronically delivered, personally delivered, delivered by overnight courier, or mailed certified mail, return receipt requested to the following addresses: (i) S&P, via electronic delivery to Servicer_reports@sandp.com (or for any information not available in electronic format, send hard copies to: 55 Water Street, New York, New York 10041) and (ii) in the case of DBRS, Inc., via electronic delivery to abs_surveillance@dbrs.com (or for any information not available in electronic format, send hard copies to: DBRS, ABS Surveillance, 140 Broadway, New York, NY 10005);

 

or, in each case, to such other address as shall be designated by written notice from the applicable notice party to the other parties.

 

SECTION 11.5.                                Notices to Noteholders; Waiver.

 

Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at his or her address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.  In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given.

 

  

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Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

 

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

 

Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute an Indenture Default or Indenture Event of Default.

 

SECTION 11.6.                                Alternate Payment and Notice Provisions.

 

Notwithstanding any provision of this Indenture or any of the Notes to the contrary, the Issuer may enter into any agreement with any Holder of a Note providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to such Holder, that is different from the methods provided for in this Indenture for such payments or notices, provided that such methods are reasonable and consented to by the Indenture Trustee (which consent shall not be unreasonably withheld). The Issuer will furnish to the Indenture Trustee a copy of each such agreement and the Indenture Trustee will cause payments to be made and notices to be given in accordance with such agreements.

 

SECTION 11.7.                                Effect of Headings and Table of Contents.

 

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

SECTION 11.8.                                Successors and Assigns.

 

All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its successors.

 

SECTION 11.9.                                Separability.

 

In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 11.10.                                Benefits of Indenture.

 

Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Noteholders, and any other party

 

  

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secured hereunder, and any other person with an Ownership interest in any part of the Trust Property, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

SECTION 11.11.                                Legal Holidays.

 

In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date an which nominally due, and no interest shall accrue for the period from and after any such nominal date.

 

SECTION 11.12.                                GOVERNING LAW.

 

THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

SECTION 11.13.                                Counterparts.

 

This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

SECTION 11.14.                                Recording of Indenture.

 

If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

 

SECTION 11.15.                                Trust Obligation.

 

No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Seller, the Owner Trustee, the Trust Collateral Agent or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against: (i) the Seller, the Indenture Trustee or the Trust Collateral Agent or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Issuer, the Seller, the Servicer, the Indenture Trustee or the Trust Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer or of any successor or assign of the Seller, the Servicer, the Indenture Trustee or the Trust Collateral Agent or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee or the Trust Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any

 

  

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unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.

 

SECTION 11.16.                                No Petition.

 

Each of the Indenture Trustee, by entering into this Indenture, and each Noteholder, by accepting a Note, hereby covenants and agrees that, until one year and one day after such time as the Notes issued under the Indenture are paid in full, it shall not: (i) institute the filing of a bankruptcy petition against the Seller or the Issuer based upon any claim in its favor arising hereunder or under the Basic Documents; (ii) file a petition or consent to a petition seeking relief on behalf of the Seller or the Issuer under the Bankruptcy Law; or (iii) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or similar official) of the Seller or the Issuer or any portion of the property of the Seller or the Issuer.  The parties hereto agree that all obligations of the Issuer and the Seller are non-recourse to the Issuer and the Seller except as specifically set forth in the Basic Documents.

 

SECTION 11.17.                                Inspection.

 

The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuer’s normal business hours, to examine all the books of account, records, reports, and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees, and independent certified public accountants, all at such reasonable times and as often as may be reasonably requested.  The Indenture Trustee shall and shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law or in connection with litigation, and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder and under the Basic Documents.

 

SECTION 11.18.                                Maximum Interest Payable.

 

The Issuer, the Indenture Trustee and the Holders of the Notes specifically intend and agree to limit contractually the amount of interest payable under this Indenture, the Notes and all other instruments and agreements related hereto and thereto to the maximum amount of interest lawfully permitted to be charged under applicable law.  Therefore, none of the terms of this Indenture, the Notes or any instrument pertaining to or relating to or executed in connection with this Indenture or the Notes shall ever be construed to create a contract to pay interest (or amounts deemed to be interest under applicable law) at a rate in excess of the maximum rate permitted to be charged under applicable law, and neither the Issuer nor any other party liable or to become liable hereunder, under the Notes or under any other instruments and agreements related hereto and thereto shall ever be liable for interest in excess of the amount determined at such maximum rate, and the provisions of this Section shall control over all other provisions of this Indenture, the Notes or any other instrument pertaining to or relating to the transactions herein or therein contemplated.  If any amount of interest taken or received by the Indenture Trustee or any Holder of a Note shall be in excess of said maximum amount of interest which, under applicable

 

  

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law, could lawfully have been collected by the Indenture Trustee or such Holder incident to such transactions, then such excess shall be deemed to have been the result of a mathematical error by all parties hereto and shall be automatically applied to the reduction of the principal amount owing under the Notes or if such excessive interest exceeds the unpaid principal balance of the Notes, such excess shall be refunded promptly by the Person receiving such amount to the party paying such amount.  All amounts paid or agreed to be paid in connection with such transactions which would under applicable law be deemed “interest” shall, to the extent permitted by such applicable law, be amortized, prorated, allocated and spread throughout the stated term of the Indenture.  “Applicable law” as used in this paragraph means that law in effect from time to time which permits the charging and collection of the highest permissible lawful, nonusurious rate of interest on the transactions herein contemplated including laws of each State which may be held to be applicable and of the United States of America, and “maximum rate” as used in this paragraph means, with respect to each of the Notes, the maximum lawful, nonusurious rates of interest (if any) which under applicable law may be charged to the Issuer from time to time with respect to such Notes.

 

SECTION 11.19.                                No Legal Title in Holders.

 

No Holder of a Note shall have legal title to any part of the Trust Property.  No transfer, by operation of law or otherwise, of any Note or other right, title and interest of any Holder of a Note in and to the Trust Property or hereunder shall operate to terminate this Indenture or the trusts hereunder or entitle any successor or transferee of such Holder to an accounting or to the transfer to it of legal title to any part of the Trust Property.

 

SECTION 11.20.                                Third Party Beneficiary.

 

The parties hereto acknowledge and agree that the Noteholders are express third party beneficiaries of this Indenture.

 

SECTION 11.21.                                Multiple Roles.

 

The parties expressly acknowledge and consent to Wells Fargo Bank, National Association acting in the possible dual capacity of successor Servicer and in the capacities of Indenture Trustee and Trust Collateral Agent.  Wells Fargo Bank, National Association may, in such dual capacity, discharge its separate functions fully, without hindrance or regard to conflict of interest principles, duty of loyalty principles or other breach of fiduciary duties to the extent that any such conflict or breach arises from the performance by Wells Fargo Bank, National Association of express duties set forth in this Indenture or any other Basic Document in any of such capacities, all of which defenses, claims or assertions are hereby expressly waived by the other parties hereto except in the case of negligence (other than errors in judgment) and willful misconduct by Wells Fargo Bank, National Association.

 

  

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[THIS SPACE LEFT INTENTIONALLY BLANK]

  

 

  

IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Indenture to be duly executed by their respective officers, hereunto duly authorized, all as of the day and year first above written.

 

 

CREDIT ACCEPTANCE AUTO LOAN TRUST 2011-1

 

By:           U.S. Bank Trust National Association, not in its individual capacity but solely as Owner Trustee,

 

	
By:

	
/s/ Annette Morgan

	
Name:

	
Annette E. Morgan

	
Title:

	
Assistant Vice President

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee,

 

	
By:

	
/s/ Julie Tanner Fischer

	
Name:

	
Julie Tanner Fischer

	
Title:

	
Vice President

[Indenture Signature Page]

  

  

  

EXHIBIT A-1

 

FORM OF CLASS A NOTE

 

THIS CLASS A NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE APPLICABLE SECURITIES LAWS OF ANY STATE.  ACCORDINGLY, TRANSFER OF THIS CLASS A NOTE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE INDENTURE.  BY ITS ACCEPTANCE OF THIS CLASS A NOTE THE HOLDER OF THIS CLASS A NOTE IS DEEMED TO REPRESENT TO THE SELLER AND THE INDENTURE TRUSTEE THAT IT (I) IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS) TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING GIVEN ON RELIANCE ON RULE 144A OR (II) IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF PARAGRAPHS (1), (2), (3) AND (7) OF RULE 501(A) OF THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”) AND IS ACQUIRING SUCH NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE INSTITUTIONAL ACCREDITED INVESTORS).

 

NO SALE, PLEDGE OR OTHER TRANSFER OF A CLASS A NOTE SHALL BE MADE UNLESS SUCH SALE, PLEDGE OR OTHER TRANSFER IS (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE CLASS A NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) IS OTHERWISE MADE IN A TRANSFER EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, TO A PERSON THAT IS AN INSTITUTIONAL “ACCREDITED INVESTOR”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OPINION OF COUNSEL TO BE DELIVERED TO IT IN CONNECTION WITH ANY TRANSFER OF THE NOTES PURSUANT TO CLAUSES (A), (C) OR (D)  ABOVE.  ALL OPINIONS OF COUNSEL REQUIRED IN CONNECTION WITH ANY TRANSFER SHALL BE BY COUNSEL REASONABLY ACCEPTABLE TO THE INDENTURE TRUSTEE.  ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF THE IMMEDIATELY PRECEDING RESTRICTION WILL BE VOID AB INITIO AND THE PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER OF THE NOTES FOR ALL PURPOSES.

 

EACH TRANSFEREE OF THIS CLASS A NOTE OR ANY INTEREST THEREIN IS DEEMED TO REPRESENT AND WARRANT THAT, WITH RESPECT TO THE SOURCE OF FUNDS TO BE USED BY SUCH TRANSFEREE TO ACQUIRE THIS CLASS A NOTE OR ANY INTEREST THEREIN (THE “SOURCE”) EITHER (A) SUCH SOURCE IS NOT, AND IS NOT DIRECTLY OR INDIRECTLY ACTING FOR, ON BEHALF OF OR WITH ANY ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF ERISA, A “PLAN” TO WHICH SECTION 4975 OF THE CODE APPLIES, OR A PLAN OR OTHER ARRANGEMENT THAT IS SUBJECT TO ANY PROVISION OF ANY FEDERAL, STATE, LOCAL OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAW”), OR (B) THE ACQUISITION AND HOLDING OF SUCH NOTES OR INTEREST THEREIN BY SUCH SOURCE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, OR A VIOLATION OF SIMILAR LAW.

 

[UNLESS THIS CLASS A NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS A NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

 

 

 

  

A-1-2

  

REGISTERED

 

CUSIP # 22532J AA7

 

 

No. A-1

 

THE PRINCIPAL OF THIS CLASS A NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

 

CREDIT ACCEPTANCE AUTO LOAN TRUST 2011-1

 

2.61% CLASS A ASSET BACKED NOTES

 

Credit Acceptance Auto Loan Trust 2011-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of ONE HUNDRED FIFTY-SEVEN MILLION, FIVE HUNDRED THOUSAND DOLLARS ($157,500,000) payable on each Distribution Date in an amount equal to the aggregate amount, if any, payable from the Class A Note Distribution Account in respect of principal on the Class A Notes pursuant to Section 3.1 of the Indenture and Section 5.09 of the Sale and Servicing Agreement until the Class A Note Balance is reduced to zero; provided, however, that the entire unpaid principal amount of this Class A Note shall be due and payable on March 15, 2019 (the “Class A Stated Final Maturity Date”).  The Issuer will pay interest on this Class A Note at the rate per annum shown above (the “Class A Note Rate”), which shall be due and payable on each Distribution Date until the principal of this Class A Note is paid, on the principal amount of this Class A Note outstanding on the last day of the immediately preceding Collection Period.  Interest on this Class A Note will accrue for each Distribution Date from the preceding Distribution Date to (or, in the case of the initial Distribution Date, from the Closing Date) but excluding the current Distribution Date.  Interest will be computed on the basis of a 360-day year and twelve thirty day months.

 

This Class A Note is one of a duly authorized issue of notes of the Issuer, designated as its 2.61% Class A Asset Backed Notes (the “Class A Notes”), issued under an Indenture dated as of October 6, 2011 (such indenture, as supplemented or amended, is herein called the “Indenture”), between the Issuer and Wells Fargo Bank, National Association, as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Class A Notes.  The Class A Notes are subject to all terms of the Indenture and the Sale and Servicing Agreement.  All terms used in this Class A Note that are defined in the Indenture, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture, as so supplemented or amended.

 

 

  

A-1-3

  

The Class A Notes are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

 

On each Distribution Date, Holders of the Class A Notes will be entitled to the Class A Interest Distributable Amount and its Class A Principal Distributable Amount in accordance with the terms of the Indenture.  “Distribution Date” means the fifteenth day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing October 17, 2011.

 

As described above, the entire unpaid principal amount of this Class A Note shall be due and payable on the earlier of the Class A Stated Final Maturity Date and the Redemption Date, if any, pursuant to Section 10.1 of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Class A Notes shall be due and payable if an Indenture Event of Default shall have occurred and be continuing, and the Class A Notes have been accelerated subject to the terms of the Indenture.

 

All principal payments on the Class A Notes shall be made pro rata to the Class A Noteholders entitled thereto.

 

Upon written notice from the Issuer, the Indenture Trustee shall notify the Person in whose name a Class A Note is registered at the close of business on the Record Date preceding the Distribution Date on which the Issuer expects that the final installment of principal of and interest on such Class A Note will be paid. Such notice shall be mailed or transmitted by facsimile prior to such final Distribution Date and shall specify that such final installment will be payable only upon presentation and surrender of such Class A Note and shall specify the place where such Class A Note may be presented and surrendered for payment of such installment.  Notices in connection with purchases of Class A Notes shall be mailed to Class A Noteholders as provided in the Indenture.

 

Distributions required to be made to Class A Noteholders on any Distribution Date shall be made to each Class A Noteholder of record on the preceding Record Date either by wire transfer, in immediately available funds, to the account of such Holder at a bank or other entity having appropriate facilities therefor, if (i) such Class A Noteholder shall have provided to the Note Registrar appropriate written instructions at least ten (10) Business Days prior to such Distribution Date and such Holder’s Notes in the aggregate evidence a denomination of not less than $250,000 and integral multiples of $1,000 or (ii) such Class A Noteholder is the Seller, or an Affiliate thereof, or, if not, by check mailed to such Class A Noteholder at the address of such holder appearing in the Note Register.

 

The Issuer shall pay interest on overdue installments of interest on the Class A Notes at the Class A Note Rate to the extent lawful.

 

As provided in the Indenture, the Class A Notes may be redeemed pursuant to Section 10.1 of the Indenture, in whole, but not in part, at the option of the Servicer, on any Distribution Date on or after the date on which the sum of the Class A Note Balance and the Class B Note Balance is less than or equal to 10% of the sum of the initial Class A Note Balance plus the initial Class B Note Balance.

 

 

  

A-1-4

  

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Class A Note may be registered on the Note Register upon surrender of this Class A Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, (i) accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee and the Note Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and (ii) accompanied by such other documents as the Indenture Trustee may require, and thereupon one or more new Class A Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Class A Note, but the Indenture Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such transfer or exchange of the Class A Notes.

 

Each Noteholder, by acceptance of a Class A Note covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Seller, the Servicer, the Owner Trustee, the Indenture Trustee or the Trust Collateral Agent under the Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Seller, the Servicer, the Indenture Trustee or the Trust Collateral Agent or the Owner Trustee, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Issuer, the Seller, the Servicer, the Indenture Trustee or the Trust Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture Trustee or the Trust Collateral Agent or of any successor or assign of the Seller, the Servicer, the Indenture Trustee, the Owner Trustee in its individual capacity, or the Trust Collateral Agent except as any such Person may have expressly agreed (it being understood that the Indenture Trustee or the Trust Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

 

Each Class A Noteholder, by acceptance of a Class A Note, covenants and agrees that by accepting the benefits of the Indenture that such Class A Noteholder will not at any time institute against the Seller or the Issuer or join in any institution against the Seller or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Class A Notes, the Indenture or the Basic Documents.  In addition, each Class A Noteholder, by acceptance of a Class A Note, agrees to treat the Class A Notes as indebtedness of the Issuer.

 

Prior to the due presentment for registration of transfer of this Class A Note, the Issuer, the Indenture Trustee and the Note Registrar and any agent of the Issuer, the Indenture Trustee and the Note Registrar may treat the Person in whose name this Class A Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Class A Note be overdue, and neither the Issuer, the Indenture Trustee, the Note Registrar nor any such agent shall be bound by notice to the contrary.

 

 

  

A-1-5

  

The term “Issuer” as used in this Class A Note includes any successor to the Issuer under the Indenture.

 

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders of Class A Notes under the Indenture.

 

The Class A Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Class A Note and the Indenture shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

No reference herein to the Indenture and no provision of this Class A Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Class A Note at the times, place, and rate, and in the coin or currency herein prescribed.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Indenture or the Basic Documents, neither U.S. Bank Trust National Association in its individual capacity, any owner of a beneficial interest in the Issuer, nor any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Class A Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Owner Trustee for the sole purposes of binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Class A Note by the acceptance hereof agrees that except as expressly provided in the Indenture or the Basic Documents, in the case of an Indenture Event of Default, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Class A Note.

 

The principal of and interest on this Class A Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Class A Note shall be applied first to interest due and payable on this Class A Note as provided above and then to the unpaid principal of this Class A Note.

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Class A Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

 

  

A-1-6

  

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer as of the date set forth below.

 

CREDIT ACCEPTANCE AUTO LOAN TRUST 2011-1

 

	
  

	
By:

	
U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement

 

By:         

Name:

Title:

 

Dated:                                                       

 

  

A-1-7

  

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Class A Notes designated above and referred to in the within-mentioned Indenture.

 

	
Date:

	
WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee,

 

	
  

	
by:

	 	 

	
  

	
Authorized Signatory

 

 

  

A-1-8

  

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number of assignee

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _________________________________________________________________________

(name and address of assignee)

 

the within Class A Note and all rights thereunder, and hereby irrevocably constitutes and appoints, attorney, to transfer said Class A Note on the books kept for registration thereof, with full power of substitution in the premises.

 

Dated:           1

 

  

	
1

	
NOTE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Class A Note in every particular, without alteration, enlargement or any change whatsoever.

 

 

  

A-1-9

  

EXHIBIT A-2

 

FORM OF CLASS B NOTE

 

THIS CLASS B NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE APPLICABLE SECURITIES LAWS OF ANY STATE.  ACCORDINGLY, TRANSFER OF THIS CLASS B NOTE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE INDENTURE.  BY ITS ACCEPTANCE OF THIS CLASS B NOTE THE HOLDER OF THIS CLASS B NOTE IS DEEMED TO REPRESENT TO THE SELLER AND THE INDENTURE TRUSTEE THAT IT (I) IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS) TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING GIVEN ON RELIANCE ON RULE 144A OR (II) IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF PARAGRAPHS (1), (2), (3) AND (7) OF RULE 501(A) OF THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”) AND IS ACQUIRING SUCH NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE INSTITUTIONAL ACCREDITED INVESTORS).

 

NO SALE, PLEDGE OR OTHER TRANSFER OF A CLASS B NOTE SHALL BE MADE UNLESS SUCH SALE, PLEDGE OR OTHER TRANSFER IS (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE CLASS B NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) OTHERWISE MADE IN A TRANSFER EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, TO A PERSON THAT IS AN INSTITUTIONAL “ACCREDITED INVESTOR”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

 

 

  

A-2-1

  

OPINION OF COUNSEL TO BE DELIVERED TO IT IN CONNECTION WITH ANY TRANSFER OF THE NOTES PURSUANT TO CLAUSES (A), (C) OR (D)  ABOVE.  ALL OPINIONS OF COUNSEL REQUIRED IN CONNECTION WITH ANY TRANSFER SHALL BE BY COUNSEL REASONABLY ACCEPTABLE TO THE INDENTURE TRUSTEE.  ANY ATTEMPTED TRANSFER IN CONTRAVENTION OF THE IMMEDIATELY PRECEDING RESTRICTION WILL BE VOID AB INITIO AND THE PURPORTED TRANSFEROR WILL CONTINUE TO BE TREATED AS THE OWNER OF THE NOTES FOR ALL PURPOSES.

 

EACH TRANSFEREE OF THIS CLASS B NOTE OR ANY INTEREST THEREIN IS DEEMED TO REPRESENT AND WARRANT THAT, WITH RESPECT TO THE SOURCE OF FUNDS TO BE USED BY SUCH TRANSFEREE TO ACQUIRE THIS CLASS B NOTE OR ANY INTEREST THEREIN (THE “SOURCE”) EITHER (A) SUCH SOURCE IS NOT, AND IS NOT DIRECTLY OR INDIRECTLY ACTING FOR, ON BEHALF OF OR WITH ANY ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF ERISA, A “PLAN” TO WHICH SECTION 4975 OF THE CODE APPLIES, OR A PLAN OR OTHER ARRANGEMENT THAT IS SUBJECT TO ANY PROVISION OF ANY FEDERAL, STATE, LOCAL OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAW”), OR (B) THE ACQUISITION AND HOLDING OF SUCH NOTES OR INTEREST THEREIN BY SUCH SOURCE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, OR A VIOLATION OF SIMILAR LAW.

 

[UNLESS THIS CLASS B NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CLASS B NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

 

.

 

 

  

A-2-2

  

REGISTERED

 

CUSIP # 22532J AB5

 

No. B-1

 

THE PRINCIPAL OF THIS CLASS B NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS B NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  IN ADDITION, THE PAYMENT OF PRINCIPAL AND INTEREST, RESPECTIVELY, ON THIS CLASS B NOTE IS SUBORDINATE TO THE PRIOR PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE CLASS A NOTES, RESPECTIVELY, AS PROVIDED IN THE INDENTURE.

 

CREDIT ACCEPTANCE AUTO LOAN TRUST 2011-1

 

3.96% CLASS B ASSET BACKED NOTES

 

Credit Acceptance Auto Loan Trust 2011-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of FORTY-THREE MILLION DOLLARS ($43,000,000) payable on each Distribution Date in an amount equal to the aggregate amount, if any, payable from the Class B Note Distribution Account in respect of principal on the Class B Notes pursuant to Section 3.1 of the Indenture and Section 5.09 of the Sale and Servicing Agreement until the Class B Note Balance is reduced to zero; provided, however, that the entire unpaid principal amount of this Class B Note shall be due and payable on September 16, 2019 (the “Class B Stated Final Maturity Date”).  The Issuer will pay interest on this Class B Note at the rate per annum shown above (the “Class B Note Rate”), which shall be due and payable on each Distribution Date until the principal of this Class B Note is paid, on the principal amount of this Class B Note outstanding on the last day of the immediately preceding Collection Period.  Interest on this Class B Note will accrue for each Distribution Date from the preceding Distribution Date to (or, in the case of the initial Distribution Date, from the Closing Date) but excluding the current Distribution Date.  Interest will be computed on the basis of a 360-day year and twelve thirty day months.

 

This Class B Note is one of a duly authorized issue of notes of the Issuer, designated as its 3.96% Class B Asset Backed Notes (the “Class B Notes”), issued under an Indenture dated as of October 6, 2011 (such indenture, as supplemented or amended, is herein called the “Indenture”), between the Issuer and Wells Fargo Bank, National Association, as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Class B Notes.  The Class B Notes are subject to all terms of the Indenture and the Sale and Servicing Agreement.  All terms used in this Class B Note that are defined in the Indenture, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture, as so supplemented or amended.

 

 

  

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The Class B Notes are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

 

On each Distribution Date, Holders of the Class B Notes will be entitled to the Class B Interest Distributable Amount and its Class B Principal Distributable Amount in accordance with the terms of the Indenture.  “Distribution Date” means the fifteenth day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing October 17, 2011.

 

As described above, the entire unpaid principal amount of this Class B Note shall be due and payable on the earlier of the Class B Stated Final Maturity Date and the Redemption Date, if any, pursuant to Section 10.1 of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Class B Notes shall be due and payable if an Indenture Event of Default shall have occurred and be continuing, and the Class B Notes have been accelerated subject to the terms of the Indenture.

 

All principal payments on the Class B Notes shall be made pro rata to the Class B Noteholders entitled thereto.

 

Upon written notice from the Issuer, the Indenture Trustee shall notify the Person in whose name a Class B Note is registered at the close of business on the Record Date preceding the Distribution Date on which the Issuer expects that the final installment of principal of and interest on such Class B Note will be paid. Such notice shall be mailed or transmitted by facsimile prior to such final Distribution Date and shall specify that such final installment will be payable only upon presentation and surrender of such Class B Note and shall specify the place where such Class B Note may be presented and surrendered for payment of such installment.  Notices in connection with purchases of Class B Notes shall be mailed to Class B Noteholders as provided in the Indenture.

 

Distributions required to be made to Class B Noteholders on any Distribution Date shall be made to each Class B Noteholder of record on the preceding Record Date either by wire transfer, in immediately available funds, to the account of such Holder at a bank or other entity having appropriate facilities therefor, if (i) such Class B Noteholder shall have provided to the Note Registrar appropriate written instructions at least ten (10) Business Days prior to such Distribution Date and such Holder’s Notes in the aggregate evidence a denomination of not less than $250,000 and integral multiples of $1,000 or (ii) such Class B Noteholder is the Seller, or an Affiliate thereof, or, if not, by check mailed to such Class B Noteholder at the address of such holder appearing in the Note Register.

 

The Issuer shall pay interest on overdue installments of interest on the Class B Notes at the Class B Note Rate to the extent lawful.

 

As provided in the Indenture, the Class B Notes may be redeemed pursuant to Section 10.1 of the Indenture, in whole, but not in part, at the option of the Servicer, on any Distribution Date on or after the date on which the sum of the Class A Note Balance and the Class B Note Balance is less than or equal to 10% of the sum of the initial Class A Note Balance plus the initial Class B Note Balance.

 

 

  

A-2-4

  

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Class B Note may be registered on the Note Register upon surrender of this Class B Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, (i) accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee and the Note Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and (ii) accompanied by such other documents as the Indenture Trustee may require, and thereupon one or more new Class B Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Class B Note, but the Indenture Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such transfer or exchange of the Class B Notes.

 

Each Noteholder, by acceptance of a Class B Note covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Seller, the Servicer, the Owner Trustee, the Indenture Trustee or the Trust Collateral Agent under the Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Seller, the Servicer, the Indenture Trustee or the Trust Collateral Agent or the Owner Trustee, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Issuer, the Seller, the Servicer, the Indenture Trustee or the Trust Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture Trustee or the Trust Collateral Agent or of any successor or assign of the Seller, the Servicer, the Indenture Trustee, the Owner Trustee in its individual capacity, or the Trust Collateral Agent except as any such Person may have expressly agreed (it being understood that the Indenture Trustee or the Trust Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

 

Each Class B Noteholder, by acceptance of a Class B Note, covenants and agrees that by accepting the benefits of the Indenture that such Class B Noteholder will not at any time institute against the Seller or the Issuer or join in any institution against the Seller or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Class B Notes, the Indenture or the Basic Documents.  In addition, each Class B Noteholder, by acceptance of a Class B Note, agrees to treat the Class B Notes as indebtedness of the Issuer.

 

Prior to the due presentment for registration of transfer of this Class B Note, the Issuer, the Indenture Trustee and the Note Registrar and any agent of the Issuer, the Indenture Trustee and the Note Registrar may treat the Person in whose name this Class B Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Class B Note be overdue, and neither the Issuer, the Indenture Trustee, the Note Registrar nor any such agent shall be bound by notice to the contrary.

 

 

  

A-2-5

  

The term “Issuer” as used in this Class B Note includes any successor to the Issuer under the Indenture.

 

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders of Class B Notes under the Indenture.

 

The Class B Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Class B Note and the Indenture shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

No reference herein to the Indenture and no provision of this Class B Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Class B Note at the times, place, and rate, and in the coin or currency herein prescribed.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Indenture or the Basic Documents, neither U.S. Bank Trust National Association in its individual capacity, any owner of a beneficial interest in the Issuer, nor any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Class B Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Owner Trustee for the sole purposes of binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Class B Note by the acceptance hereof agrees that except as expressly provided in the Indenture or the Basic Documents, in the case of an Indenture Event of Default, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Class B Note.

 

The principal of and interest on this Class B Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Class B Note shall be applied first to interest due and payable on this Class B Note as provided above and then to the unpaid principal of this Class B Note.

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Class B Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

 

  

A-2-6

  

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer as of the date set forth below.

 

CREDIT ACCEPTANCE AUTO LOAN TRUST 2011-1

 

	
  

	
By:

	
U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement

 

By:         

Name:

Title:

 

Dated:                                                       

 

  

A-2-7

  

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Class B Notes designated above and referred to in the within-mentioned Indenture.

 

	
Date:

	
WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee,

 

	
  

	
by:

	 	 

	
  

	
Authorized Signatory

 

 

  

A-2-8

  

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number of assignee

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _________________________________________________________________________

(name and address of assignee)

 

the within Class B Note and all rights thereunder, and hereby irrevocably constitutes and appoints, attorney, to transfer said Class B Note on the books kept for registration thereof, with full power of substitution in the premises.

 

Dated:           2

 

  

	
2

	
NOTE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Class B Note in every particular, without alteration, enlargement or any change whatsoever.

 

 

  

A-2-9

  

EXHIBIT A-3

FORM OF CLASS C NOTE

 

THIS CLASS C NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE APPLICABLE SECURITIES LAWS OF ANY STATE.  ACCORDINGLY, TRANSFER OF THIS CLASS C NOTE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE INDENTURE.  BY ITS ACCEPTANCE OF THIS CLASS C NOTE THE HOLDER OF THIS CLASS C NOTE IS DEEMED TO REPRESENT TO THE SELLER AND THE INDENTURE TRUSTEE THAT IF IT IS THE INITIAL HOLDER, IT IS THE SELLER OR IF IT IS A SUBSEQUENT HOLDER, IT IS (I) A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS) OR (II) AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF PARAGRAPHS (1), (2), (3) AND (7) OF RULE 501(A) OF THE SECURITIES ACT AND IS ACQUIRING THIS NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE INSTITUTIONAL ACCREDITED INVESTORS).

 

NO SALE, PLEDGE OR OTHER TRANSFER OF A CLASS C NOTE SHALL BE MADE UNLESS SUCH SALE, PLEDGE OR OTHER TRANSFER IS (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE CLASS C NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) OTHERWISE MADE IN A TRANSFER EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, TO A PERSON THAT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF PARAGRAPHS (1), (2), (3) AND (7) OF RULE 501(A) OF THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OR ACCOUNTS OF AN INSTITUTIONAL ACCREDITED INVESTOR OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IS MADE IN ACCORDANCE WITH SAID ACT AND THE APPLICABLE STATE SECURITIES AND BLUE SKY LAWS. THE INDENTURE TRUSTEE MAY REQUIRE AN OPINION OF COUNSEL TO BE DELIVERED TO IT IN CONNECTION WITH ANY TRANSFER OF THE NOTES PURSUANT TO CLAUSES (A), (C) OR (D) ABOVE.  THIS NOTE IS SUBJECT TO ADDITIONAL RESTRICTIONS ON RESALE OR TRANSFER SET FORTH IN SECTION 2.3 OF THE INDENTURE (AS DEFINED HEREIN).

ALL OPINIONS OF COUNSEL REQUIRED IN CONNECTION WITH ANY TRANSFER SHALL BE BY COUNSEL REASONABLY ACCEPTABLE TO THE INDENTURE TRUSTEE.

 

 

  

A-3-1

  

EACH TRANSFEREE OF THIS CLASS C NOTE OR INTEREST THEREIN IS DEEMED TO REPRESENT AND WARRANT THAT, WITH RESPECT TO THE SOURCE OF FUNDS TO BE USED BY SUCH TRANSFEREE TO ACQUIRE THIS CLASS C NOTE OR INTEREST THEREIN (THE “SOURCE”) EITHER (A) SUCH SOURCE IS NOT, AND IS NOT DIRECTLY OR INDIRECTLY ACTING FOR, ON BEHALF OF OR WITH ANY ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF ERISA, A “PLAN” TO WHICH SECTION 4975 OF THE CODE APPLIES, OR A PLAN OR OTHER ARRANGEMENT THAT IS SUBJECT TO ANY PROVISION OF ANY FEDERAL, STATE, LOCAL OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAW”), OR (B) THE ACQUISITION AND HOLDING OF SUCH NOTES OR INTEREST THEREIN BY SUCH SOURCE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, OR A VIOLATION OF SIMILAR LAW.

 

ANY TRANSFER IN VIOLATION OF THE FOREGOING OR THE RESTRICTIONS SET FORTH IN SECTIONS 2.3 OF THE INDENTURE (AS DEFINED HEREIN) WILL BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO TRANSFER ANY RIGHTS TO THE PURCHASER OR TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE CONTRARY TO THE ISSUER, THE INDENTURE TRUSTEE OR ANY INTERMEDIARY.

 

  

A-3-2

  

 

 

No. C-1

 

THE PRINCIPAL OF THIS CLASS C NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS C NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.  IN ADDITION, THE PAYMENT OF PRINCIPAL ON THIS CLASS C NOTE IS SUBORDINATE TO THE PRIOR PAYMENT OF THE PRINCIPAL OF THE CLASS A NOTES AND THE CLASS B NOTES AS PROVIDED IN THE INDENTURE.

 

CREDIT ACCEPTANCE AUTO LOAN TRUST 2011-1

 

CLASS C PRINCIPAL-ONLY ASSET BACKED NOTES

 

Credit Acceptance Auto Loan Trust 2011-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuer”), for value received, hereby promises to pay to Credit Acceptance Funding LLC 2011-1, or registered assigns, the principal sum of ONE HUNDRED SIXTY-ONE THOUSAND, SEVEN HUNDRED AND FOUR DOLLARS ($161,704) payable on each Distribution Date in an amount equal to the aggregate amount, if any, payable from the Class C Note Distribution Account in respect of principal on the Class C Notes pursuant to Section 3.1 of the Indenture and Section 5.09 of the Sale and Servicing Agreement until the Class C Note Balance is reduced to zero; provided, however, that the entire unpaid principal amount of this Class C Note shall be due and payable on March 16, 2020 (the “Class C Stated Final Maturity Date”).

 

This Class C Note is one of a duly authorized issue of notes of the Issuer, designated as the Class C Principal-Only Asset Backed Notes (the “Class C Notes”), issued under an Indenture dated as of October 6, 2011 (such indenture, as supplemented or amended, is herein called the “Indenture”), between the Issuer and Wells Fargo Bank, National Association, as indenture trustee (the “Indenture Trustee”, which term includes any successor Indenture Trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Holders of the Class C Notes.  The Class C Notes are subject to all terms of the Indenture and the Sale and Servicing Agreement.  All terms used in this Class C Note that are defined in the Indenture, as supplemented or amended, shall have the meanings assigned to them in or pursuant to the Indenture, as so supplemented or amended.

 

The Class C Notes are and will be equally and ratably secured by the collateral pledged as security therefor as provided in the Indenture.

 

On each Distribution Date, Holders of the Class C Notes will be entitled to its Class C Principal Distributable Amount in accordance with the terms of the Indenture.  “Distribution Date” means the fifteenth day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing October 17, 2011.

 

 

  

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As described above, the entire unpaid principal amount of this Class C Note shall be due and payable on the earlier of the Class C Stated Final Maturity Date and the Redemption Date, if any, pursuant to Section 10.1 of the Indenture.  Notwithstanding the foregoing, the entire unpaid principal amount of the Class C Notes shall be due and payable if an Indenture Event of Default shall have occurred and be continuing, and the Class C Notes have been accelerated subject to the terms of the Indenture.

 

All principal payments on the Class C Notes shall be made pro rata to the Class C Noteholders entitled thereto.

 

Upon written notice from the Issuer, the Indenture Trustee shall notify the Person in whose name a Class C Note is registered at the close of business on the Record Date preceding the Distribution Date on which the Issuer expects that the final installment of principal of such Class C Note will be paid. Such notice shall be mailed or transmitted by facsimile prior to such final Distribution Date and shall specify that such final installment will be payable only upon presentation and surrender of such Class C Note and shall specify the place where such Class C Note may be presented and surrendered for payment of such installment.  Notices in connection with purchases of Class C Notes shall be mailed to Class C Noteholders as provided in the Indenture.

 

Distributions required to be made to Class C Noteholders on any Distribution Date shall be made to each Class C Noteholder of record on the preceding Record Date either by wire transfer, in immediately available funds, to the account of such Holder at a bank or other entity having appropriate facilities therefor, if (i) such Class C Noteholder shall have provided to the Note Registrar appropriate written instructions at least ten (10) Business Days prior to such Distribution Date and such Holder’s Notes in the aggregate evidence a denomination of not less than $250,000 and integral multiples of $1,000 or (ii) such Class C Noteholder is the Seller, or an Affiliate thereof, or, if not, by check mailed to such Class C Noteholder at the address of such holder appearing in the Note Register.

 

As provided in the Indenture, the Class C Notes may be redeemed pursuant to Section 10.1 of the Indenture, in whole, but not in part, at the option of the Servicer, on any Distribution Date on or after the date on which the sum of the Class A Note Balance and the Class B Note Balance is less than or equal to 10% of the sum of the initial Class A Note Balance plus the initial Class B Note Balance.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Class C Note may be registered on the Note Register upon surrender of this Class C Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, (i) accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee and the Note Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and (ii) accompanied by such other documents as the Indenture Trustee may require, and thereupon one or more new Class C Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees.  No service charge will be charged for any registration of transfer or exchange of this Class C Note, but the Indenture Trustee may require payment of a sum

 

 

  

A-3-4

  

sufficient to cover any tax or other governmental charge that may be imposed in connection with any such transfer or exchange of the Class C Notes.

 

Each Noteholder, by acceptance of a Class C Note covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Seller, the Servicer, the Owner Trustee, the Indenture Trustee or the Trust Collateral Agent under the Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Seller, the Servicer, the Indenture Trustee or the Trust Collateral Agent or the Owner Trustee, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Issuer, the Seller, the Servicer, the Indenture Trustee or the Trust Collateral Agent or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Seller, the Servicer, the Owner Trustee or the Indenture Trustee or the Trust Collateral Agent or of any successor or assign of the Seller, the Servicer, the Indenture Trustee, the Owner Trustee in its individual capacity, or the Trust Collateral Agent except as any such Person may have expressly agreed (it being understood that the Indenture Trustee or the Trust Collateral Agent and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.

 

Each Class C Noteholder, by acceptance of a Class C Note, covenants and agrees that by accepting the benefits of the Indenture that such Class C Noteholder will not at any time institute against the Seller or the Issuer or join in any institution against the Seller or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings, under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Class C Notes, the Indenture or the Basic Documents.  In addition, each Class C Noteholder, by acceptance of a Class C Note, agrees to treat the Class C Notes as indebtedness of the Issuer.

 

Prior to the due presentment for registration of transfer of this Class C Note, the Issuer, the Indenture Trustee and the Note Registrar and any agent of the Issuer, the Indenture Trustee and the Note Registrar may treat the Person in whose name this Class C Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Class C Note be overdue, and neither the Issuer, the Indenture Trustee, the Note Registrar nor any such agent shall be bound by notice to the contrary.

 

The term “Issuer” as used in this Class C Note includes any successor to the Issuer under the Indenture.

 

The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders of Class C Notes under the Indenture.

 

The Class C Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

 

  

A-3-5

  

This Class C Note and the Indenture shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

No reference herein to the Indenture and no provision of this Class C Note or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of this Class C Note at the times and place, and in the coin or currency herein prescribed.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Indenture or the Basic Documents, neither U.S. Bank Trust National Association in its individual capacity, any owner of a beneficial interest in the Issuer, nor any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of, or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in this Class C Note or the Indenture, it being expressly understood that said covenants, obligations and indemnifications have been made by the Owner Trustee for the sole purposes of binding the interests of the Owner Trustee in the assets of the Issuer.  The Holder of this Class C Note by the acceptance hereof agrees that except as expressly provided in the Indenture or the Basic Documents, in the case of an Indenture Event of Default, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Class C Note.

 

The principal of this Class C Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  All payments made by the Issuer with respect to this Class C Note shall be applied to the unpaid principal of this Class C Note.

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Class C Note shall not be entitled to any benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

 

  

A-3-6

  

IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer as of the date set forth below.

 

CREDIT ACCEPTANCE AUTO LOAN TRUST 2011-1

 

	
  

	
By:

	
U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust Agreement

 

By:         

Name:

Title:

 

Dated:                                                       

 

  

A-3-7

  

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Class C Notes designated above and referred to in the within-mentioned Indenture.

 

	
Date:

	
WELLS FARGO BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee,

 

	
  

	
by:

	 	 

	
  

	
Authorized Signatory

 

 

  

A-3-8

  

ASSIGNMENT

 

Social Security or taxpayer I.D. or other identifying number of assignee

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _________________________________________________________________________

(name and address of assignee)

 

the within Class C Note and all rights thereunder, and hereby irrevocably constitutes and appoints, attorney, to transfer said Class C Note on the books kept for registration thereof, with full power of substitution in the premises.

 

Dated:           3

 

  

	
3

	
NOTE:  The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Class C Note in every particular, without alteration, enlargement or any change whatsoever.

 

 

  

A-3-9

  

EXHIBIT B

FORM OF TRANSFEREE REPRESENTATION LETTER

 

Date:  ___________

 

Credit Acceptance Corporation

Silver Triangle Building

25505 West Twelve Mile Road

Suite 3000

Southfield, Michigan 48034-8339

Wells Fargo Bank, National Association

MAC N9311-161

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

Re:           Credit Acceptance Auto Loan Trust 2011-1, $157,500,000 Class A  Asset Backed Notes and $43,000,000 Class B Asset Backed Notes

Ladies and Gentlemen:

 

In connection with our acquisition of the above Class A Asset Backed Notes and/or Class B Asset Backed Notes (“Notes”) we certify that: (a) we understand that the Notes have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, are being transferred to us in a transaction that is exempt from the registration requirements of the Securities Act and any such laws and the Notes are being transferred to it in a transaction not involving any public offering within the meaning of the Securities Act; (b) we have such knowledge and experience in financial and business matters, and we are a sophisticated institutional investor capable of evaluating the merits and risks of investments in the Notes; (c) we are aware that we (or any investor account on behalf of which the Notes may be purchased) may be required to bear the economic risk of an investment in the Notes for an indefinite period of time, and we are (or such account is) able to bear such risk for an indefinite period; (d) we have received and reviewed a copy of the Private Placement Memorandum, dated September 29, 2011, relating to the Notes, and we have had the opportunity to ask questions of and receive answers from the Issuer concerning the purchase of the Notes and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Notes; (e) we represent and warrant that, with respect to the source of funds to be used by us to acquire the Notes or any interest therein (the “Source”) either (i) such Source is not, and is not directly or indirectly acting for, on behalf of or with any assets of, an employee benefit plan or other arrangement subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), a “plan” to which Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) applies, or a plan or other arrangement that is subject to any provision of any federal, state, local or other laws or regulations that are substantively similar to the foregoing provisions of ERISA or the Code (“Similar Law”), or (ii) the acquisition and holding of such Notes or interest therein by such Source will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or a

 

  

B-1

  

violation of Similar Law; (f) we have not, nor has anyone acting on our behalf offered, transferred, pledged, sold or otherwise disposed of the Notes, any interest in the Notes or any other similar security to, or solicited any offer to buy or accept a transfer, pledge or other disposition of the Notes, any interest in the Notes or any other similar security from, or otherwise approached or negotiated with respect to the Notes, any interest in the Notes or any other similar security with, any person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action, that would constitute a distribution of the Notes under the Securities Act or that would render the disposition of the Notes a violation of Section 5 of the Securities Act or require registration pursuant thereto, nor will we act, nor have we authorized or will we authorize any person to act, in such manner with respect to the Notes; (g) we are: (i) a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act (“Rule 144A”) and are acquiring the Notes for our own institutional account or for the account or accounts of a qualified institutional buyer; (ii) an institutional “accredited investor” within the meaning of paragraphs (1), (2), (3) and (7) of Rule 501(a) under the Securities Act and are acquiring the Notes for our own institutional account or one or more accounts of an institutional accredited investor; or (iii) purchasing the Notes in a transaction exempt from registration under the Securities Act and in compliance with the provisions of the Indenture and in compliance with the legends placed on the Notes; and have completed the form of certification to that effect attached hereto as Annex 1, in the case of clause (i) and Annex 2, in the case of clause (ii); and (h) we have had the opportunity to ask questions and request information regarding the Notes, and we have received responses satisfactory to us.

We are aware that the sale to us is being made in reliance on Rule 144A or another exemption from the registration requirements of the Securities Act.  We are acquiring the Notes for our own account or for resale pursuant to Rule 144A or another exemption from the registration requirements of the Securities Act and further understand that such Notes may be resold, pledged or transferred only in accordance with applicable state securities laws and (i) in a transaction meeting the requirements of Rule 144A, to a person reasonably believed to be a qualified institutional buyer that purchases for its own account (or for the account or accounts of a qualified institutional buyer) and to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, (ii) in a transaction meeting an exemption from the registration requirements of the Securities Act, to a person that is an institutional accredited investor that purchases for its own account (or for the account or accounts of an institutional accredited investor), or (iii) to a person that is taking delivery of such Notes pursuant to a transaction that is otherwise exempt from registration requirements under the Securities Act, as confirmed in an opinion of counsel.

______                                 The Purchaser is a “U.S. Person” and it has attached hereto an Internal Revenue Service (“IRS”) Form W-9 (or successor form).*

______                                 The Purchaser is not a “U.S. Person” and under applicable law in effect on the date hereof, no Taxes will be required to be withheld by the Note Registrar (or its agent) with respect to Distributions to be made on the Note(s).  The Purchaser has attached hereto either (i) a duly executed IRS Form W 8BEN (or successor form), which identifies such Purchaser as the beneficial owner of the Note(s) and states that such Purchaser is not a U.S. Person or (ii) two duly

 

 

  

B-2

  

executed copies of IRS Form W-8ECI (or successor form), which identify such Purchaser as the beneficial owner of the Note(s) and state that interest and original issue discount on the Notes is, or is expected to be, effectively connected with a U.S. trade or business.  The Purchaser agrees to provide to the Note Registrar updated IRS Forms W-8BEN or IRS Forms W-8ECI, as the case may be, any applicable successor IRS forms, or such other certifications as the Note Registrar may reasonably request, on or before the date that any such IRS form or certification expires or becomes obsolete, or promptly after the occurrence of any event requiring a change in the most recent IRS form of certification furnished by it to the Note Registrar.*

 

For this purpose, “U.S. Person” means a citizen or resident of the United States, a corporation or partnership created or organized in or under the laws of the United States, any state thereof or the District of Columbia (unless, in the case of a partnership, regulations are adopted that provide otherwise), including an entity treated as a corporation or partnership for federal income tax purposes, an estate the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary supervision over the administration of such trust, and one or more such United States persons have the authority to control all substantial decisions of such trust (or, to the extent provided in applicable Treasury Regulations, certain trusts in existence on August 20, 1996 which are eligible to elect to be treated as U.S. Persons).

We acknowledge that restrictive legends have been placed on our Notes relating to the foregoing and we not in violation thereof; and we understand the above addressees and others are relying on our acknowledgments, representations, warranties or agreements in this letter and agree to promptly notify such addressees if any of the acknowledgments, representations, warranties or agreements made or deemed to have been made by us in connection with our purchase of the Notes are no longer accurate.

[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

  

	
  

	
*  Select the applicable paragraph.

 

 

  

B-3

  

Very truly yours,

[_____________]

By:                                                                 

      Name:

      Title:

 

  

B-4

  

ANNEX 1

 

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

 

[For Transferees Other Than Registered Investment Companies]

 

The undersigned (the “Buyer”) hereby certifies as follows to the parties listed in the Rule 144A Transferee Certificate to which this certification relates with respect to the Notes described therein:

 

1.           As indicated below, the undersigned is the President, Chief Financial Officer, Senior Vice President or other executive officer of the Buyer.

 

2.           In connection with purchases by the Buyer, the Buyer is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”), because (i) the Buyer owned and/or invested on a discretionary basis $10,000,000.004 in securities (except for the excluded securities referred to below) as of the end of the Buyer’s most recent fiscal year (such amount being calculated in accordance with Rule 144A) and (ii) the Buyer satisfies the criteria in the category marked below.

 

	
  

	
_____

	
Corporation, etc.  The Buyer is a corporation (other than a bank, savings and loan association or similar institution), Massachusetts or similar business trust, partnership, or charitable organization described in Section 501(c) (3) of the Internal Revenue Code of 1986, as amended.

 

	
  

	
_____

	
Bank.  The Buyer (a) is a national bank or banking institution organized under the laws of any state or territory of the United States or the District of Columbia, the business of which is substantially confined to banking and is supervised by the state or territorial banking commission or similar official or is a foreign bank or equivalent institution, and (b) has an audited net worth of at least $25,000,000.00 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.

 

	
  

	
_____

	
Savings and Loan.  The Buyer (a) is a savings and loan association, building and loan association, cooperative bank, homestead association or similar institution, which is supervised and examined by a state or federal authority having supervision over any such institutions or is a foreign savings and loan association or equivalent institution, and (b) has an audited net worth of at least $25,000,000.00 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.

 

	
  

	
_____

	
Broker dealer.  The Buyer is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended.

 

  

	
4

	
Buyer must own and/or invest on a discretionary basis at least $100,000,000.00 in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or invest on a discretionary basis at least $10,000,000.00 in securities.

 

  

  

  

	
  

	
_____

	
Insurance Company.  The Buyer is an insurance company whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a state or territory of the United States or the District of Columbia.

 

	
  

	
_____

	
State or Local Plan.  The Buyer is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of the state or its political subdivisions, for the benefit of its employees.

 

	
  

	
_____

	
ERISA Plan.  The Buyer is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended.

 

	
  

	
_____

	
Investment Advisor.  The Buyer is an investment advisor registered under the Investment Advisors Act of 1940, as amended.

 

	
  

	
_____

	
Small Business Investment Company.  The Buyer is a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.

 

	
  

	
_____

	
Business Development Company.  The Buyer is a business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940, as amended.

 

	
  

	
_____

	
Other.  The Buyer is an entity all of the equity holders of which are qualified institutional buyers.

 

3.           The term “securities” as used herein does not include (i) securities of issuers that are affiliated with the Buyer; (ii) securities that are part of an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer; (iii) securities issued or guaranteed by the United States or any instrumentality thereof; (iv) bank deposit notes and certificates of deposit; (v) loan participations; (vi) repurchase agreements; (vii) securities owned but subject to a repurchase agreement; and (viii) currency, interest rate and commodity swaps.

 

4.           For purposes of determining the aggregate amount of securities owned and/or invested on a discretionary basis by the Buyer, the Buyer used the cost of such securities to the Buyer and did not include any of the securities referred to in the preceding paragraph, except (i) where the Buyer reports its securities holdings in its financial statements on the basis of their market value, and (ii) no current information with respect to the cost of those securities has been published.  If clause (ii) in the preceding sentence applies, the securities may be valued at market.  Further, in determining such aggregate amount, the Buyer may have included securities owned by subsidiaries of the Buyer, but only if such subsidiaries are consolidated with the Buyer in its financial statements prepared in accordance with generally accepted accounting principles and if the investments of such subsidiaries are managed under the Buyer’s direction.  However, such securities were not included if the Buyer is a majority owned, consolidated subsidiary of another

 

 

  

2

  

enterprise and the Buyer is not itself a reporting company under the Securities Exchange Act of 1934, as amended.

 

5.           The Buyer acknowledges that it is familiar with Rule 144A and understands that the seller to it and other parties related to the Notes are relying and will continue to rely on the statements made herein because one or more sales to the Buyer may be in reliance on Rule 144A.

 

6.           Until the date of purchase of the Notes, the Buyer will notify each of the parties to which this certification is made of any changes in the information and conclusions herein.  Until such notice is given, the Buyer’s purchase of the Notes will constitute a reaffirmation of this certification as of the date of such purchase.  In addition, if the Buyer is a bank or savings and loan as provided above, the Buyer agrees that it will furnish to such parties updated annual financial statements promptly after they become available.

 

[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

 

  

3

  

[_______________________]

 

By:                                                                 

      Name:

      Title:

 

  

4

  

ANNEX 2

 

INSTITUTIONAL ACCREDITED INVESTOR STATUS

 

[For Transferees Other Than Registered Investment Companies]

 

The undersigned (the “Purchaser”) hereby certifies as follows to the parties listed in the Transferee Certificate to which this certification relates with respect to the Notes described therein:

 

1.           As indicated below, the undersigned is the President, Chief Financial Officer, Senior Vice President or other executive officer of the Purchaser.

 

2.           In connection with purchases by the Purchaser, the Purchaser is an institutional “accredited investor” within the meaning of paragraphs (1), (2), (3) and (7) of Rule 501(a) of the Securities Act of 1933, as amended (the “Securities Act”), because the Purchaser satisfies the criteria in the category marked below.

 

	
  

	
_____

	
Corporation, etc.  The Purchaser (i) is a corporation (other than a bank, savings and loan association or similar institution), partnership, limited liability company, business trust or tax-exempt organization described in Section 501(c) (3) of the Internal Revenue Code of 1986, as amended; (ii) has total assets in excess of $5,000,000 and (iii) was not formed for the purpose of investing in the Credit Acceptance Auto Loan Trust 2011-1 (the “Trust”).

 

	
  

	
_____

	
Non-Business Trust.  The Purchaser (i) is a personal (non-business) trust other than an employee benefit trust and whose decision to invest in the Trust has been directed by a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the investment; (ii) has total assets in excess of $5,000,000 and (iii) was not formed for the purpose of investing in the Trust.

 

	
  

	
_____

	
Bank.  The Purchaser (a) is a national bank or banking institution organized under the laws of any state or territory of the United States or the District of Columbia, the business of which is substantially confined to banking and is supervised by the state or territorial banking commission or similar official or is a foreign bank or equivalent institution, and (b) has an audited net worth of at least $25,000,000.00 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.

 

	
  

	
_____

	
Savings and Loan.  The Purchaser (a) is a savings and loan association, building and loan association, cooperative bank, homestead association or similar institution, which is supervised and examined by a state or federal authority having supervision over any such institutions or is a foreign savings and loan association or equivalent institution, and (b) has an

 

  

  

  

	
  

	
audited net worth of at least $25,000,000.00 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.

 

	
  

	
_____

	
Broker dealer.  The Purchaser is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended.

 

	
  

	
_____

	
Insurance Company.  The Purchaser is an insurance company whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a state or territory of the United States or the District of Columbia.

 

	
  

	
_____

	
State or Local Plan.  The Purchaser (i) is a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of the state or its political subdivisions, for the benefit of its employees and (ii) has total assets in excess of $5,000,000.

 

	
  

	
._____

	
ERISA Plan.  The Purchaser is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended.

 

	
  

	
_____

	
Investment Advisor.  The Purchaser is an investment advisor registered under the Investment Advisors Act of 1940, as amended.

 

	
  

	
_____

	
Small Business Investment Company.  The Purchaser is a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.

 

	
  

	
_____

	
Business Development Company.  The Purchaser is a business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940, as amended.

 

	
  

	
_____

	
Other.  The Purchaser is an entity in which all of the equity holders are institutional accredited investors.

 

3.           The Purchaser acknowledges that it is familiar with the exemption that is being relied upon in connection with the sale to it and understands that the seller to it and other parties related to the Notes are relying and will continue to rely on the statements made herein.

 

4.           Until the date of purchase of the Notes, the Purchaser will notify each of the parties to which this certification is made of any changes in the information and conclusions herein.  Until such notice is given, the Purchaser’s purchase of the Notes will constitute a reaffirmation of this certification as of the date of such purchase.  In addition, if the Purchaser is a bank or savings and loan as provided above, the Purchaser agrees that it will furnish to such parties updated annual financial statements promptly after they become available.

 

[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

 

  

2

  

[_______________________]

 

By:                                                                 

      Name:

      Title:

 

  

3

  

 

(1)           EXHIBIT C

 

 

(II)           FORM OF INVESTMENT LETTER

 

[Date]

 

Credit Acceptance Corporation,

 

 

as Originator and Servicer

 

 

[Address]

 

Credit Acceptance Funding LLC 2011-1

as Seller

[Address]

 

Wells Fargo Bank, National Association,

 

 

as the Trust Collateral Agent and Indenture Trustee

 

 

[Address]

 

(b) Re:           Credit Acceptance Auto Loan Trust 2011-1

(c) 

Ladies and Gentlemen:

(d) This letter (the “Investment Letter”) is delivered by the undersigned (the “Purchaser”) pursuant to Section 2.3(a) of the Series 2011-1 Indenture (the “Indenture”), dated as of October 6, 2011, between Credit Acceptance Auto Loan Trust 2011-1, a Delaware statutory trust, and Wells Fargo Bank, National Association, a national banking association organized under the laws of the United States, as trust collateral agent and as indenture trustee.  Capitalized terms used herein without definition shall have the meanings set forth or incorporated by reference in the Indenture.

(e) 

(f) The Purchaser hereby represents, warrants and agrees as follows with the Seller, the Servicer and the Indenture Trustee and their respective counsel (which representations, warranties and agreements will be deemed to be repeated by the Purchaser for their benefit as of the date on which the Purchaser purchases the Class C Notes):

(g) 

	
  

	
(a)

	
The Purchaser is authorized to purchase, take a participation in or take an assignment of the Class C Notes.

	
  

	
(b)

	
The Purchaser has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment in the Class C Note and is able to bear the economic risk of such investment.  The Purchaser has, independently and without reliance upon any person, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Issuer, the Seller and the Servicer and made its own decision to purchase its interest in the Class C Note.

 

  

C-1

  

	
  

	
(c)

	
The Purchaser is either (i) a Qualified Institutional Buyer within the meaning of Rule 144A under the Securities Act (a “QIB”) purchasing for its own account or a QIB purchasing for the account of a QIB, whom the Holder has informed, in each case, that the reoffer, resale, pledge or other transfer is being made in reliance on Rule 144A or (ii) an Institutional Accredited Investor within the meaning of paragraphs (1), (2), (3) and (7) of Rule 501(a) of the Securities Act purchasing for its own account or one or more accounts of an Institutional Accredited Investor.  The Purchaser understands that the offering and sale of the Class C Notes has not been and will not be registered under the Securities Act and has not and will not be registered or qualified under any applicable “blue sky” law, and that the offering and sale of the Class C Notes has not been reviewed by, passed on or submitted to any federal or state agency or commission, securities exchange or other regulatory body.

	
  

	
(d)

	
This Investment Letter has been duly executed and delivered and constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles affecting the enforcement of creditors’ rights generally and general principles of equity.

	
  

	
(e)

	
The Purchaser is, for federal income tax purposes, (i) a citizen or resident of the United States, (ii) a corporation or partnership organized in or under the laws of the United States or any state or the District of Columbia which, if such entity is a tax-exempt entity, recognizes that payments with respect to the Class C Notes may constitute unrelated business taxable income, (iii) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source, or (iv) either (x) a trust for which a court within the United States is able to exercise primary supervision over its administration and for which one or more persons described in this paragraph are able to control all substantial decisions or (y) a trust for which a valid election has been made to be treated as a United States person.  The Purchaser will furnish to the Person from whom it is acquiring any interest in the Class C Notes, the Servicer and the Indenture Trustee, the appropriate and properly executed U.S. Internal Revenue Service Form (and will furnish new forms, or any successor applicable form, upon the expiration or obsolescence of any previously delivered form) and such other certifications, representations or Opinions of Counsel as may be requested by the Indenture Trustee.

	
  

	
(f)

	
The Purchaser has not acquired and it will not Transfer any interest in the Class C Notes, or cause an interest in the Class C Notes to be marketed, on or through an “established securities market” within the meaning of Section 7704(b)(1) of the Code and any Treasury regulations thereunder, including an over-the-counter market or an interdealer quotation system that regularly disseminates firm buy or sell quotations.  In addition, (i) the Purchaser is not and will not become (and, if it

 

  

C-2

  

	
  

	
is disregarded as an entity separate from its owner within the meaning of Treasury Regulations Section 301.7701-3(a) (a “DRE”), its owner is not and will not become), for so long as it holds an interest in the Class C Notes, a partnership, Subchapter S corporation or grantor trust for U.S. federal income tax purposes (a “Flow-Thru Entity”) or (ii) if the it (or, if it is a DRE, its owner) is, or becomes, a Flow-Thru Entity, for so long as it (or, if it is a DRE, its owner) is a Flow-Thru Entity and it holds an interest in the Class C Notes, not more than 50% of the value of any interests in it (or, if it is a DRE, its owner) will be attributable to interests in the Trust held by it.  The Opinion of Counsel to the effect that the Trust will not be treated as an association or publicly traded partnership taxable as a corporation is dependent in part on the accuracy of the Purchaser’s certifications described in this paragraph.

	
  

	
(g)

	
The Purchaser (i) has purchased its interest in the Class C Notes for investment only and not with a view to any public distribution thereof, (ii) will not offer, sell, pledge or otherwise transfer its interest in all or any portion of the Class C Notes, except in compliance with the Securities Act and other applicable laws and only (1) to the Seller, (2) pursuant to Rule 144A to a person who the Purchaser reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, purchasing for its own account or for the account of a QIB, whom it has informed that such offer, sale or other transfer is being made in reliance on Rule 144A or (3) pursuant to an exemption from the registration requirements under the Securities Act to a person that is an Institutional Accredited Investor in a transaction meeting the requirements of such exemption.  In connection therewith, the Purchaser will not resell or otherwise transfer the Class C Notes or any interest therein unless the proposed transferee provides to the addressees hereof a letter substantially in the form hereof.  No Class C Noteholders, including the Purchaser, will have the right to require the Seller to register the Class C Notes or any other securities under the Securities Act or any other securities laws.

	
  

	
(h)

	
The Purchaser acknowledges (for the benefit of the Issuer, the Indenture Trustee, the Seller, the Servicer and the Rating Agencies) that various provisions of the Transaction Documents limit the voting rights of the Class C Noteholders.

	
  

	
(i)

	
The Purchaser of the Class C Note or any interest therein shall be deemed to represent and warrant that, with respect to the source of funds to be used by such transferee to acquire such Note or any interest therein (the “Source”) either (a) such Source is not, and is not directly or indirectly acting for, on behalf of or with any assets of, an employee benefit plan or other arrangement subject to Title I of ERISA, a “plan” to which Section 4975 of the Code applies, or a plan or other arrangement that is subject to any provision of any federal, state, local or other laws or regulations that are substantively similar to the foregoing provisions of ERISA or the Code (“Similar Law”), or (b) the acquisition and holding of such Notes or interest therein by such Source will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or a violation of Similar Law.

 

  

C-3

  

 

  

C-4

  

Very truly yours,

 

[NAME OF PURCHASER]

By:            

Name:

Title:

 

  

C-5

  

SCHEDULE A

to Indenture

 

Perfection Representations, Warranties and Covenants

 

In addition to the representations, warranties and covenants contained in the Indenture, the Issuer hereby represents, warrants, and covenants to the Trust, the Trust Collateral Agent and the Indenture Trustee as follows on the Closing Date and on each Distribution Date on which the Trust purchases Loans, in each case only with respect to the Collateral pledged to the Indenture Trustee on the Closing Date or the relevant Distribution Date:

 

General

 

1.           The Indenture creates a valid and continuing security interest (as defined in UCC Section 9-102) in the Collateral in favor of the Indenture Trustee, which security interest is prior to all other Liens, and is enforceable as such as against creditors of and purchasers from and assignees of the Trust.

 

2.           Each Contract constitutes “tangible chattel paper” or a “payment intangible”, within the meaning of UCC Section 9-102.  Each Loan constitutes a “payment intangible” or a “general intangible” within the meaning of UCC Section 9-102.

 

3.           Each Dealer Agreement and Purchase Agreement constitutes either a “general intangible” or “tangible chattel paper” within the meaning of UCC Section 9-102.

 

4.           The Trust has taken or will take all necessary actions with respect to the Loans to perfect the security interest of the Indenture Trustee in the Loans and in the property securing the Loans.

 

Creation

 

1.           The Trust owns and has good and marketable title to the Collateral, free and clear of any Lien, claim or encumbrance of any Person, excepting only liens for taxes, assessments or similar governmental charges or levies incurred in the ordinary course of business that are not yet due and payable or as to which any applicable grace period shall not have expired, or that are being contested in good faith by proper proceedings and for which adequate reserves have been established, but only so long as foreclosure with respect to such a lien is not imminent and the use and value of the property to which the Lien attaches is not impaired during the pendency of such proceeding.

 

Perfection

 

1.           The Trust has caused or will have caused, within ten (10) days after the effective date of the Indenture, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Collateral granted to the Indenture Trustee under the Indenture.

 

 

  

Schedule A-1

  

2.           With respect to Collateral that constitutes tangible chattel paper, such tangible chattel paper is in the possession of the Servicer, in its capacity as custodian for the Trust and the Trust Collateral Agent, and the Trust Collateral Agent has received a written acknowledgment from the Servicer, in its capacity as custodian, that it is holding such tangible chattel paper solely on its behalf and for the benefit of the Trust Collateral Agent, the Seller, the Trust and the relevant Dealer(s).  All financing statements filed or to be filed against the Trust in favor of the Indenture Trustee in connection with this Indenture describing the Trust Property contain a statement to the following effect: “A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Secured Party.”

 

Priority

 

1.           Other than the security interest granted to the Indenture Trustee pursuant to the Indenture, the Trust has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Trust Property.  None of the Originator, the Servicer nor the Seller has authorized the filing of, or is aware of any financing statements against either the Seller, the Originator or the Trust that includes a description of the Collateral and proceeds related thereto other than any financing statement:  (i) relating to the sale of the Originator Property by the Originator to the Seller under the Sale and Contribution Agreement; (ii) relating to the security interest granted to the Trust under the Sale and Servicing Agreement; (iii) relating to the security interest granted to the Indenture Trustee under the Indenture; or (iv) that has been terminated or amended to reflect a release of the Collateral.

 

2.           Neither the Seller, the Originator nor the Trust is aware of any judgment, ERISA or tax lien filings against either the Seller, the Originator or the Trust.

 

3.           None of the tangible chattel paper that constitutes or evidences the Contracts, the Dealer Agreements or the Purchase Agreements has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person other than the Originator, the Servicer, the Seller, the Trust, a collection agent or the Indenture Trustee.

 

Survival of Perfection Representations

 

1.           Notwithstanding any other provision of the Agreement, the Sale and Contribution Agreement, the Indenture or any other Basic Document, the Perfection Representations, Warranties and Covenants contained in this Schedule shall be continuing, and remain in full force and effect (notwithstanding any replacement of the Servicer or termination of Servicer’s rights to act as such) until such time as all obligations under the Sale and Servicing Agreement, Sale and Contribution Agreement and the Indenture have been finally and fully paid and performed.

 

No Waiver

 

1.           The parties hereto: (i) shall not, without obtaining a confirmation of the then-current ratings of the Notes, waive any of the Perfection Representations, Warranties or Covenants; (ii) shall provide the Rating Agencies with prompt written notice of any breach of the Perfection Representations, Warranties or Covenants, and shall not, without obtaining a confirmation of the then-current rating of the Notes as determined after any adjustment or withdrawal of the ratings

 

  

Schedule A-2

  

following notice of such breach, waive a breach of any of the Perfection Representations, Warranties or Covenants.

 

  

Schedule A-3

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