Document:

a01-loanagreementmizuhox

EXECUTION VERSION  154304283v7  ______________________________________________________________________________  DFC BUSINESS SERVICES, LLC,   as the Borrower,  DRIVEWAY FINANCE CORPORATION,  as the Servicer and as the Collateral Custodian,  the LENDERS  from time to time parties hereto,  the AGENTS  from time to time parties hereto,  and  MIZUHO BANK, LTD.,  as the Administrative Agent and the Account Bank    LOAN AGREEMENT  Dated as of November 1, 2022  ______________________________________________________________________________    

 

  i  154304283v7  TABLE OF CONTENTS  Page  ARTICLE ONE    DEFINITIONS; CONSTRUCTION  Section 1.01. Definitions..................................................................................................................1   Section 1.02. Accounting Terms and Determinations ...................................................................45  Section 1.03. Computation of Time Periods ..................................................................................45   Section 1.04. Interpretation ............................................................................................................45   ARTICLE TWO    LOANS  Section 2.01. Loans ........................................................................................................................45   Section 2.02. Funding Mechanics ..................................................................................................46   Section 2.03. Reduction of Commitments .....................................................................................47   Section 2.04. Extensions of Commitments ....................................................................................48   Section 2.05. Interest Calculations and Payment Allocations .......................................................49   Section 2.06. Settlement Procedures ..............................................................................................51   Section 2.07. Payments, Computations, Etc. .................................................................................52   Section 2.08. Collections and Allocations; Investment of Funds ..................................................53  Section 2.09. Fees. .........................................................................................................................54   Section 2.10. Increased Cost and Reduced Return. .......................................................................55   Section 2.11. Taxes. .......................................................................................................................56   Section 2.12. Take-outs..................................................................................................................60   Section 2.13. The Account Bank. ..................................................................................................62   Section 2.14. [Reserved] ................................................................................................................65   Section 2.15. Replacement of Lender Group .................................................................................65   Section 2.16. Defaulting Committed Lenders................................................................................66  Section 2.17. Alternate Rate of Interest. ........................................................................................66   ARTICLE THREE    SECURITY  Section 3.01. Collateral. .................................................................................................................68   Section 3.02. Release of Collateral; No Legal Title. .....................................................................70  Section 3.03. Protection of Security Interest; Administrative Agent, as Attorney-in-Fact. ..........70  Section 3.04. Assignment of the Purchase Agreement ..................................................................71   Section 3.05. Waiver of Certain Laws ...........................................................................................72   

 

Page     ii  154304283v7  ARTICLE FOUR    CONDITIONS OF CLOSING AND LOANS  Section 4.01. Conditions to Effectiveness of this Agreement .......................................................72   Section 4.02. Conditions Precedent to All Loans ..........................................................................73   ARTICLE FIVE    REPRESENTATIONS AND WARRANTIES  Section 5.01. Representations and Warranties of the Borrower ....................................................74   Section 5.02. Representations and Warranties of the Borrower Relating to the  Receivables...........................................................................................................79  Section 5.03. Representations and Warranties of the Servicer ......................................................79  Section 5.04. Retransfer of Certain Receivables. ..........................................................................81   ARTICLE SIX    COVENANTS  Section 6.01. Affirmative Covenants of the Borrower ..................................................................82   Section 6.02. Negative Covenants of the Borrower .......................................................................89   Section 6.03. Covenant of the Borrower Relating to Hedging ......................................................91  Section 6.04. Affirmative Covenants of the Servicer ....................................................................94  Section 6.05. Negative Covenants of the Servicer .........................................................................96   ARTICLE SEVEN    ADMINISTRATION AND SERVICING OF RECEIVABLES  Section 7.01. Designation of Servicing..........................................................................................98   Section 7.02. Servicing Compensation ..........................................................................................98  Section 7.03. Duties of the Servicer...............................................................................................99   Section 7.04. Collection of Payments ..........................................................................................102   Section 7.05. Servicer Advances .................................................................................................103  Section 7.06. Payment of Certain Expenses by Servicer .............................................................103   Section 7.07. Reports and Audit. .................................................................................................103   Section 7.08. Quarterly Statement as to Compliance ..................................................................105   Section 7.09. Backup Servicer; Entry into Backup Servicing Agreement. .................................105  Section 7.10. Rights After Assumption of Duties by Backup Servicer or Designation of  Successor Servicer; Liability ..............................................................................105  Section 7.11. Limitation on Liability of the Servicer and Others ................................................106  Section 7.12. The Servicer Not to Resign ....................................................................................106   Section 7.13. Servicer Termination Events..................................................................................107   Section 7.14. Appointment of Successor Servicer .......................................................................109   

 

Page     iii  154304283v7  Section 7.15. Merger or Consolidation, Assumption of Obligations or Resignation of the  Servicer...............................................................................................................111  Section 7.16. Responsibilities of the Borrower ...........................................................................111   Section 7.17. Custody of Receivable Files ..................................................................................112   Section 7.18. Duties of Collateral Custodian ...............................................................................112   ARTICLE EIGHT    TERMINATION EVENTS  Section 8.01. Termination Events ................................................................................................114   Section 8.02. Actions Upon Declaration of the Occurrence of the Termination Date ................118  Section 8.03. Exercise of Remedies .............................................................................................119   Section 8.04. Waiver of Certain Laws .........................................................................................120   Section 8.05. Power of Attorney ..................................................................................................120   ARTICLE NINE    INDEMNIFICATION  Section 9.01. Indemnities by the Borrower .................................................................................120   Section 9.02. Indemnities by the Servicer ...................................................................................123   Section 9.03. Indemnities by the Backup Servicer in its Capacity as the Successor  Servicer...............................................................................................................124  ARTICLE TEN    THE ADMINISTRATIVE AGENT AND THE AGENTS  Section 10.01. Authorization and Action .....................................................................................125   Section 10.02. Delegation of Duties ............................................................................................125   Section 10.03. Exculpatory Provisions ........................................................................................126   Section 10.04. Reliance................................................................................................................126   Section 10.05. Non-Reliance on Agents and Other Lenders .......................................................127   Section 10.06. Indemnification ....................................................................................................127   Section 10.07. Agents in their Individual Capacity .....................................................................128   Section 10.08. Successor Administrative Agent ..........................................................................128   Section 10.09. Erroneous Payments.............................................................................................129   ARTICLE ELEVEN    ASSIGNMENTS; PARTICIPATIONS  Section 11.01. Assignments and Participations ...........................................................................130   

 

Page     iv  154304283v7  ARTICLE TWELVE    MUTUAL COVENANTS REGARDING CONFIDENTIALITY  Section 12.01. Covenants of the Borrower, the Servicer, the Backup Servicer, the  Account Bank and the Collateral Custodian ......................................................133  Section 12.02. Covenants of the Administrative Agent, the Agents and the Lenders .................133   Section 12.03. Non-Confidentiality of Tax Treatment and Tax Structure ..................................134   ARTICLE THIRTEEN    MISCELLANEOUS  Section 13.01. Amendments and Waivers ...................................................................................135   Section 13.02. Notices, Etc. .........................................................................................................135   Section 13.03. No Waiver, Rights and Remedies ........................................................................136   Section 13.04. Binding Effect ......................................................................................................136   Section 13.05. Term of this Agreement .......................................................................................136  Section 13.06. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER  OF OBJECTION TO VENUE ........................................................................136  Section 13.07. WAIVER OF JURY TRIAL .............................................................................136  Section 13.08. Costs and Expenses ..............................................................................................137   Section 13.09. No Insolvency Proceedings..................................................................................137   Section 13.10. Recourse Against Certain Parties.........................................................................137   Section 13.11. Patriot Act Compliance ........................................................................................138   Section 13.12. Execution in Counterparts; Electronic Signatures; Severability; Integration ......138    SCHEDULES  Schedule A – Lender Supplement (Mizuho Lender Group)  ................................................ SA-1  Schedule B – Eligible Receivable Criteria  ........................................................................... SB-1  Schedule C – Schedule of Receivables ................................................................................. SC-1  Schedule D – Location of Receivable Files  ......................................................................... SD-1  Schedule E – [Reserved]  .......................................................................................................SE-1  Schedule F – Financial Covenants (Lithia) ............................................................................ SF-1  Schedule G – Approved Backup Servicers ........................................................................... SG-1  Schedule H – Escrow Accounts ............................................................................................ SH-1  

 

Page     v  154304283v7  EXHIBITS  Exhibit A – Form of Funding Request  ............................................................................... A-1  Exhibit B – Form of Assignment and Acceptance  ..............................................................B-1  Exhibit C – Credit and Collection Policy  ............................................................................C-1  Exhibit D – Form of Power of Attorney .............................................................................. D-1  Exhibit E – Form of Take-out Release  ................................................................................ E-1  Exhibit F – Form of Monthly Report  .................................................................................. F-1  Exhibit G – Forms of U.S. Tax Compliance Certificates .................................................... G-1  

 

  154304283v7  LOAN AGREEMENT  This Loan Agreement, dated as of November 1, 2022 (as amended, restated,  supplemented or otherwise modified from time to time, this "Agreement"), is by and among DFC  BUSINESS SERVICES, LLC, a Delaware limited liability company, as borrower (the  "Borrower"), DRIVEWAY FINANCE CORPORATION, an Oregon corporation formerly  known as Southern Cascades Finance Corporation ("DFC"), as servicer (in such capacity, the  "Servicer") and as collateral custodian (in such capacity, the "Collateral Custodian") for the  Secured Parties (as defined herein), the Lenders from time to time parties hereto (the "Lenders"),  the Agents for the Lender Groups (as defined herein) from time to time parties hereto (the  "Agents") and MIZUHO BANK, LTD., as administrative agent for the Lenders and the Agents  (in such capacity, the "Administrative Agent") and as account bank (in such capacity, the  "Account Bank").  W I T N E S S E T H:  WHEREAS, the Borrower was formed for the purpose of purchasing and holding various  assets, including motor vehicle retail installment sale contracts, amounts received on or in  respect of such motor vehicle retail installment sale contracts and proceeds of the foregoing;   WHEREAS, the Borrower has requested that the Lenders make loans to the Borrower  from time to time, the proceeds of which will be used to finance the purchase price of motor  vehicle retail installment contracts as described herein; and  WHEREAS, the Lenders have agreed to make such loans to the Borrower upon the terms  and subject to the conditions set forth herein.  NOW THEREFORE, in consideration of the premises and for other good and valuable  consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto  agree as follows:  ARTICLE ONE    DEFINITIONS; CONSTRUCTION  Section 1.01.  Definitions.  Whenever used herein, unless the context otherwise requires,  the following words and phrases shall have the following meanings:  "Account Bank" has the meaning given to such term in the Preamble.  "Account Collateral" means the Collection Account and the Hedge Reserve Account,  together with all cash, securities, financial assets (as defined in Section 8-102(a)(9) of the UCC  as then in effect in the relevant State) and investments and other property from time to time  deposited or credited to the Collection Account or the Hedge Reserve Account, and all proceeds  of the foregoing.  "Adjusted Principal Balance" means, as of any date for any Receivable, (i) if the related  amount of Excess Spread is at least equal to the Target Rate for such Receivable, the Principal  

 

     2  154304283v7  Balance of such Receivable as of such date, and (ii) if the related amount of Excess Spread as of  such date is less than the Target Rate for such Receivable, then (a) if the APR of such Receivable  is less than the related Required Rate, the present value (calculated using a discount rate equal to  the related Required Rate) of all Scheduled Payments (including past due Scheduled Payments)  remaining on such Receivable, assuming that all such Scheduled Payments are paid on a timely  basis after such date or (b) if the APR of such Receivable is equal to or greater than the related  Required Rate, the Principal Balance of such Receivable as of such date  "Administrative Agent" has the meaning given to such term in the Preamble.  "Administrative Agent's Account" means the account or accounts identified by the  Administrative Agent to the Borrower and each Agent as the Administrative Agent's Account  hereunder.  "Advisors" means accountants, attorneys, consultants, advisors, credit enhancers,  liquidity providers and Persons similar to the foregoing and the respective directors, officers,  employees and managers of each of the foregoing.  "Affiliate" means, with respect to a Person, any other Person controlling, controlled by or  under common control with such Person.  For purposes of this definition, "control" when used  with respect to any specified Person means the power to direct the management and policies of  such Person, directly or indirectly, whether through the ownership of voting securities, by  contract or otherwise; and the terms "controlling" or "controlled" have meanings correlative to  the foregoing.  "Agent" means the agent for a particular Lender Group, as identified in the related Lender  Supplement, and as of any date, "Agents" means all agents for all Lender Groups as of such date.  "Aggregate Commitment" means, as of any day, the sum of the Commitments of each  Lender Group.  "Aggregate Unpaids" means, with respect to any date, an amount equal to the sum of  (i) the Loans Outstanding, (ii) all accrued but unpaid Interest and (iii) all Program Fees,  Structuring Fees, Unused Commitment Fees, Hedge Breakage Costs, Indemnified Amounts, and  other Obligations owed (whether due or accrued) by the Borrower or the initial Servicer to the  Secured Parties, the Administrative Agent, the Backup Servicer, the Account Bank, the  Indemnified Parties, and any Successor Servicer under this Agreement and the other Basic  Documents.  "Agreement" has the meaning given to such term in the Preamble.  "Alternate Base Rate" means, with respect to any date, a rate per annum equal to the  greatest of (i) the Prime Rate in effect on such day, (ii) the NYFRB Rate in effect on such day  plus 1⁄2 of 1%, and (iii) Daily Simple SOFR plus 1%.  Any change in the Alternate Base Rate due  to a change in the Prime Rate, the NYFRB Rate, or Daily Simple SOFR shall be effective from  and including the effective date of such change in the Prime Rate, the NYFRB Rate, or Daily  Simple SOFR, respectively.  If the Alternate Base Rate is being used as an alternate rate of  interest pursuant to Section 2.17 (for the avoidance of doubt, only until the Benchmark  

 

     3  154304283v7  Replacement has been determined pursuant to Section 2.17(b)), then the Alternate Base Rate  shall be the greater of clauses (i) and (ii) above and shall be determined without reference to  clause (iii) above.  For the avoidance of doubt, if the Alternate Base Rate as determined pursuant  to the foregoing would be less than 0%, such rate shall be deemed to be 0% for purposes of this  Agreement.  "Amortization Period" means the period commencing on the Termination Date and  ending on the day on which the Loans Outstanding are reduced to zero and all other Aggregate  Unpaids have been paid in full.  "Amount Financed" means, with respect to a Receivable, the aggregate amount advanced  under such Receivable toward the purchase price of the related Financed Vehicle and any related  costs, including taxes, title and licensing fees, and amounts advanced in respect of accessories,  insurance premiums, service and warranty contracts, other items customarily financed as part of  a Contract, and related costs.  "Ancillary Fees" means (i) late fees, (ii) extension fees, (iii) prepayment charges, (iv)  overdraft charges, and (v) all other administrative fees or similar charges allowed by Applicable  Law received by or on behalf of the Servicer with respect to the Receivables.  "Annual Percentage Rate" or "APR" means, with respect to a Receivable, the rate per  annum of finance charges stated in such Receivable as the "annual percentage rate" (within the  meaning of the Federal Truth-in-Lending Act).  If, after the applicable Funding Date, the rate per  annum with respect to a Receivable as of such Funding Date is reduced (i) as a result of an  Insolvency Proceeding involving the related Obligor or (ii) pursuant to the Servicemembers Civil  Relief Act or similar State law, "Annual Percentage Rate" or "APR" shall refer to such reduced  rate.  "Anti-Corruption Laws" means all laws, rules, and regulations of the United States or any  State that are applicable to DFC, Lithia, the Borrower or their respective Affiliates or  Subsidiaries from time to time concerning or relating to bribery or corruption.   "Applicable Law" means, for any Person, all existing and future applicable laws, rules,  regulations (including proposed, temporary and final income tax regulations), statutes, treaties,  codes, ordinances, permits, certificates, orders and licenses of and interpretations by any  Governmental Authority (including usury laws, the Federal Truth in Lending Act, Regulation Z  and Regulation B of the Federal Reserve Board, the Securities Act (including Regulation AB  thereunder) and the Exchange Act), and applicable judgments, decrees, injunctions, writs, orders  or line actions of any court, arbitrator or other administrative, judicial or quasi-judicial tribunal  or agency of competent jurisdiction.  "Assignment and Acceptance" means an assignment and acceptance agreement between a  Lender and an Eligible Assignee, in substantially the form of Exhibit B hereto.  "Available Amount" means, with respect to any day, the positive amount, if any, by  which the Facility Amount exceeds the Loans Outstanding on such day.  

 

     4  154304283v7  "Available Funds" means, for any Payment Date and the related Collection Period,  Collections on deposit in the Collection Account, to the extent received during the related  Collection Period.  "Backup Servicer" means a Person that is (i) reasonably acceptable to the Administrative  Agent and that has been (ii) appointed as the "Backup Servicer" under a Backup Servicing  Agreement that is entered into in accordance with Section 7.09.    "Backup Servicing Agreement" means an agreement entered into by the Servicer, the  Borrower and a Person that is either (i) listed on Schedule G hereto (as the same may be updated  from time to time by the Administrative Agent in its sole discretion) or (ii) otherwise reasonably  acceptable to the Administrative Agent, and who agrees thereunder to serve as the backup  servicer, pursuant to which such Person agrees (a) to perform certain servicing duties with  respect to the Receivables as set forth therein, including but not limited to providing a Monthly  Backup Servicer Certificate to the Administrative Agent and the Lenders each month, (b) to be  bound by the terms and provisions relating to the Backup Servicer as set forth in the Basic  Documents, except for any such terms and provisions that are expressly modified or waived in  the Backup Servicing Agreement (with the express consent of the Administrative Agent), and (c)  to succeed to the role of Servicer if the initial Servicer resigns or is terminated in accordance  with the terms of this Agreement.  "Backup Servicing Fee" means (i) prior to the appointment of a Backup Servicer, $0, and  (ii) thereafter, the fees payable to the Backup Servicer as set forth in the Backup Servicing  Agreement.  "Backup Servicing Fee Rate" means, (i) with respect to any Collection Period prior to the  appointment of a Backup Servicer, 0%, and (ii) with respect to the Collection Period during  which the Backup Servicer was first engaged pursuant to Section 7.09 and for each Collection  Period thereafter, (a) the percentage equivalent of a fraction, (1) the numerator of which is the  Backup Servicing Fee and (2) the denominator of which is the average daily Pool Balance during  the related Collection Period, times (b) 12.  "Bankruptcy Code" means the United States Bankruptcy Code (Title 11 of the United  States Code).  "Basel II" means the second Basel Accord issued by the Basel Committee on Banking  Supervision.   "Basel III" means the third Basel Accord issued by the Basel Committee on Banking  Supervision.   "Basic Documents" means this Agreement, the Purchase Agreement, each Purchase  Agreement Supplement, the Fee Letter, all Hedging Agreements, the Control Agreement, the  Performance Guaranty, each Electronic Vault Services Agreement, the Backup Servicing  Agreement (if any), and any other document, certificate, opinion, agreement or writing the  execution of which is necessary or incidental to carrying out the transactions contemplated by  this Agreement or any of the other foregoing documents.  

 

     5  154304283v7  "Benchmark" means, with respect to the portion of the Loans Outstanding that is funded  or maintained by a Committed Lender, initially, Daily Simple SOFR; provided, that if a  Benchmark Transition Event and the related Benchmark Replacement Date have occurred with  respect to Daily Simple SOFR or the then-current Benchmark, then "Benchmark" means the  applicable Benchmark Replacement to the extent that such Benchmark Replacement has  replaced such prior benchmark rate pursuant to clause (b) of Section 2.17.  "Benchmark Replacement" means, with respect to the portion of the Loans Outstanding  that is funded or maintained by a Committed Lender, the sum of: (a) the alternate benchmark rate  that has been selected by the Administrative Agent and the Borrower as the replacement for the  then-current Benchmark giving due consideration to (1) any selection or recommendation of a  replacement benchmark rate or the mechanism for determining such a rate by the Relevant  Governmental Body or (2) any evolving or then-prevailing market convention for determining a  benchmark rate as a replacement for the then-current Benchmark for dollar-denominated  syndicated credit facilities at such time in the United States and (b) the related Benchmark  Replacement Adjustment.  If the Benchmark Replacement as determined pursuant to the above  would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the  purposes of this Agreement and the other Basic Documents.  "Benchmark Replacement Adjustment" means, with respect to any replacement of the  then-current Benchmark with an Unadjusted Benchmark Replacement for any setting of such  Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or  determining such spread adjustment, (which may be a positive or negative value or zero) that has  been selected by the Administrative Agent and the Borrower giving due consideration to (i) any  selection or recommendation of a spread adjustment, or method for calculating or determining  such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted  Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark  Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining  a spread adjustment, or method for calculating or determining such spread adjustment, for the  replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for  dollar-denominated syndicated credit facilities at such time.  "Benchmark Replacement Conforming Changes" means, with respect to any Benchmark  Replacement, any technical, administrative or operational changes (including changes to the  definition of "Alternate Base Rate," the definition of "Business Day," the definition of "U.S.  Government Securities Business Day," the definition of "Interest Period," timing and frequency  of determining rates and making payments of interest, timing of borrowing requests or  prepayment, conversion or continuation notices, length of lookback periods, the applicability of  breakage provisions, and other technical, administrative, or operational matters) that the  Administrative Agent decides may be appropriate to reflect the adoption and implementation of  such Benchmark Replacement and to permit the administration thereof by the Administrative  Agent in a manner substantially consistent with market practice (or, if the Administrative Agent  decides that adoption of any portion of such market practice is not administratively feasible or if  the Administrative Agent determines that no market practice for the administration of such  Benchmark Replacement exists, in such other manner of administration as the Administrative  Agent decides is reasonably necessary in connection with the administration of this Agreement  and the other Basic Documents).  

 

     6  154304283v7  "Benchmark Replacement Date" means, with respect to any Benchmark, the earliest to  occur of the following events with respect to such then-current Benchmark:   (i) in the case of clause (i) or (ii) of the definition of "Benchmark  Transition Event," the later of (a) the date of the public statement or publication of  information referenced therein and (b) the date on which the administrator of such  Benchmark (or the published component used in the calculation thereof)  permanently or indefinitely ceases to provide such Benchmark (or such  component thereof); or;   (ii) in the case of clause (iii) of the definition of "Benchmark  Transition Event," the first date on which such Benchmark (or the published  component used in the calculation thereof) has been determined and announced  by the regulatory supervisor for the administrator of such Benchmark (or such  component thereof) to be no longer representative; provided, that such non- representativeness will be determined by reference to the most recent statement or  publication referenced in such clause (iii).   For the avoidance of doubt, (1) if the event giving rise to the Benchmark Replacement  Date occurs on the same day as, but earlier than, the Reference Time in respect of any  determination, the Benchmark Replacement Date will be deemed to have occurred prior to the  Reference Time for such determination and (2) the "Benchmark Replacement Date" will be  deemed to have occurred in the case of clause (i) or (ii) with respect to any Benchmark upon the  occurrence of the applicable event or events set forth therein with respect to such Benchmark (or  the published component used in the calculation thereof).  "Benchmark Transition Event" means, with respect to any Benchmark, the occurrence of  one or more of the following events with respect to such then-current Benchmark:   (i) a public statement or publication of information by or on behalf of  the administrator of such Benchmark (or the published component used in the  calculation thereof) announcing that such administrator has ceased or will cease to  provide such Benchmark (or such component thereof), permanently or  indefinitely; provided, that at the time of such statement or publication, there is no  successor administrator that will continue to provide such Benchmark (or such  component thereof);   (ii) a public statement or publication of information by the regulatory  supervisor for the administrator of such Benchmark (or the published component  used in the calculation thereof), the Federal Reserve Board, the NYFRB, an  insolvency official with jurisdiction over the administrator for such Benchmark  (or such component), a resolution authority with jurisdiction over the  administrator for such Benchmark (or such component), or a court or an entity  with similar insolvency or resolution authority over the administrator for such  Benchmark (or such component), in each case, which states that the administrator  of such Benchmark (or such component) has ceased or will cease to provide such  Benchmark (or such component thereof) permanently or indefinitely; provided,   

 

     7  154304283v7  that at the time of such statement or publication, there is no successor  administrator that will continue to provide such Benchmark (or such component  thereof); or   (iii) a public statement or publication of information by the regulatory  supervisor for the administrator of such Benchmark (or the published component  used in the calculation thereof) announcing that such Benchmark (or such  component thereof) is no longer, or as of a specified future date will no longer be,  representative  For the avoidance of doubt, a "Benchmark Transition Event" will be deemed to have  occurred with respect to any Benchmark if a public statement or publication of information set  forth above has occurred with respect to such Benchmark (or the published component used in  the calculation thereof).  "Benchmark Unavailability Period" means, with respect to any Benchmark, the period (if  any) (i) beginning at the time that a Benchmark Replacement Date pursuant to clauses (i) or (ii)  of that definition has occurred if, at such time, no Benchmark Replacement has replaced such  then-current Benchmark for all purposes hereunder and under any Basic Document in  accordance with Section 2.17 and (ii) ending at the time that a Benchmark Replacement has  replaced such then-current Benchmark for all purposes hereunder and under any Basic Document  in accordance with Section 2.17.  "Beneficial Ownership Certification" means a certification regarding beneficial  ownership as required by the Beneficial Ownership Rule.  "Beneficial Ownership Rule" means 31 C.F.R. § 1010.230.  "Benefit Plan" means each (i) employee pension benefit plan (as defined in Section 3(2)  of ERISA) that are subject to Title I of ERISA, (ii) plan described in Section 4975(e)(1) of the  Code, including individual retirement accounts or Keogh Plans that are not exempt under  Section 4975(g) of the Code, and (iii) any entity whose underlying assets include "plan assets"  (as defined in Section 3(42) of ERISA and Department of Labor Regulations Section 2510.3- 101) by reason of an employee benefit plan's or plans' investment in such entities.  "Borrower" has the meaning given to such term in the Preamble.  "Borrower Basic Documents" means all Basic Documents to which the Borrower is a  party or by which it is bound.  "Borrower's Account" means the bank account of the Borrower, as notified to the  Administrative Agent from time to time in writing by the Borrower.  "Borrowing Base" means, as of any date of determination, an amount equal to (i) the  difference of (a) the Net Eligible Pool Balance as of such date, after giving effect to the related  additions or removals of Receivables on such date, minus (b) the Required Overcollateralization  as of such date, minus (c) the aggregate Adjusted Principal Balance of all Receivables that are  owned by the Borrower on such date, after giving effect to the related additions or removals of  

 

     8  154304283v7  Receivables on such date, for which no Certificate of Title of the type described in clause (i) or  (ii) of the definition thereof was obtained by the 180th day following the day on which the related  Receivable was originated (provided, that if any such Certificate of Title is obtained after such  180th day, the Adjusted Principal Balance of the related Receivable will no longer be deducted  pursuant to this clause (c)), plus (ii) the amount of Collections in respect of principal payments  that are on deposit in the Collection Account on such date (but only to the extent such principal  payments have been allocated to reduce the Principal Balance of the related Receivables in  respect of which such principal payments were made on or before such date).    "Borrowing Base Deficiency" means, as of any date of determination, the positive  amount, if any, by which (i) the Loans Outstanding exceeds (ii) the Borrowing Base.   "Breakage Costs" means (i) such amount or amounts as shall compensate any Lender for  any actual loss, cost or expense (but excluding lost profits) incurred by such Lender (as  reasonably determined by such Lender) as a result of any prepayment of a Loan (and interest  thereon) that is made on less than three Business Days' prior written notice to the Lenders and  (ii) such amount or amounts due to any Lender pursuant to Section 2.07(c).  "Business Day" means any day (other than a Saturday or a Sunday) on which commercial  banking institutions are not required or authorized to be closed in New York, New York,  Chicago, Illinois, and Medford, Oregon.  "Certificate of Title" means, with respect to a Financed Vehicle, (i) the original certificate  of title relating thereto, (ii) if the applicable Registrar of Titles issues a letter or other form of  evidence of lien in lieu of a certificate of title (including electronic titling), the original lien entry  letter, or (iii) prior to the time that a certificate of title of the type described in clause (i) or (ii) is  issued, copies of correspondence to the applicable Registrar of Titles, and all enclosures thereto,  for issuance of the original certificate of title or the original lien entry letter or form, as  applicable, and which, in all of the foregoing cases, shall name the related Obligor as the owner  of such Financed Vehicle and DFC, the Borrower or the Administrative Agent, as secured party.   For Financed Vehicles registered in States that issue confirmation of the lienholder's interest  electronically, the "Certificate of Title" may consist of notification of an electronic recordation,  by either a third party service provider or the relevant Registrar of Titles, which indicates that the  lien of the secured party on the Financed Vehicle is recorded on the original certificate of title on  the electronic lien and title system of the applicable State.    "Change in Control" means (i) DFC owns, directly or indirectly, less than 100% of the  membership interests of the Borrower or (ii) Lithia owns, directly or indirectly, less than 51% of  the voting and equity interests in DFC.   "Closing Date" means November 1, 2022.  "Code" means the Internal Revenue Code of 1986.  "Collateral" has the meaning given to such term in Section 3.01(a).  "Collateral Custodian" has the meaning given to such term in the Preamble.  

 

     9  154304283v7  "Collection Account" means the segregated account established by the initial Servicer, on  behalf of the Borrower, with the Account Bank in the name of the Borrower for the benefit of the  Secured Parties, and identified as the "Collection Account" on Schedule H of this Agreement,  into which all Collections shall be deposited and which at all times will be subject to the Control  Agreement.  "Collection Period" means, with respect to any date of determination, the immediately  preceding calendar month, except for dates occurring on or prior to the first Payment Date, in  which case such term means the period from but excluding the initial Cutoff Date to and  including November 30, 2022.  "Collections" means (i) all cash collections or other cash proceeds of any Receivable  received by the Servicer (including from DFC or the Borrower) from or on behalf of any Obligor  in payment of any amounts owed in respect of such Receivable, including all Release Price  amounts deposited in the Collection Account pursuant to Section 5.04, Insurance Proceeds,  investment earnings in the Collection Account, and all Recoveries, (ii) any other funds received  by the Servicer (including from DFC or the Borrower) with respect to any Receivable (exclusive  of Ancillary Fees which may be retained by the Servicer), Financed Vehicle or any other  Collateral, (iii) all payments received by the Borrower pursuant to any Hedging Agreement or  Hedge Transaction, and (iv) any Servicer Advances.  "Commitment" means, with respect to any Lender or Lender Group, the commitment of  such Lender or Lender Group to fund Loans in an aggregate amount not to exceed the amount set  forth as the "Commitment" in the related Lender Supplement, as such amount may be modified  from time to time in accordance with the terms hereof.  "Commitment Termination Date" means November 1, 2025 or, with respect to any  Committed Lender, such later date to which the Commitment Termination Date may be extended  for such Committed Lender in accordance with Section 2.04(a).  "Committed Lender" means any Person that is designated as a "Committed Lender" in  any Lender Supplement or in the Assignment and Acceptance pursuant to which it became a  party to this Agreement, and any assignee of such Committed Lender to the extent of the portion  of such Commitment assumed by such assignee pursuant to its respective Assignment and  Acceptance, and as of any date, "Committed Lenders" means, collectively, all of the foregoing  Persons as of such date.  "Committed Lender Rate" means, with respect to any date during an Interest Period on  which all or any portion of a Loan is funded by a Committed Lender, an interest rate per annum  equal to the Daily Simple SOFR on such date.  "Conduit Portfolio Deferral Ratio" means, with respect to any date of determination, the  percentage equivalent of a fraction, (i) the numerator of which is the aggregate Principal Balance  of all Receivables with respect to which a Deferral was granted during the most recently  completed Collection Period and (ii) the denominator of which is the aggregate Principal  Balance of all Receivables as of the last day of such Collection Period.  

 

     10  154304283v7  "Conduit Portfolio Delinquency Ratio" means, with respect to any date of determination,  the percentage equivalent of a fraction, (i) the numerator of which is the aggregate Principal  Balance of all Delinquent Receivables as of the last day of the most recently completed  Collection Period and (ii) the denominator of which is the Pool Balance as of the last day of such  Collection Period.  "Conduit Portfolio Net Loss Ratio (Non-Prime)" means, with respect to any date of  determination, the product of (i) the percentage equivalent of a fraction, (a) the numerator of  which is the difference of (1) the aggregate Principal Balance of all Non-Prime Receivables that  became Defaulted Receivables during the most recently completed Collection Period minus (2)  all Recoveries received during such Collection Period with respect to Non-Prime Receivables  and (b) the denominator of which is the aggregate Principal Balance of all Non-Prime  Receivables as of the first day of such Collection Period times (ii) twelve.  "Conduit Portfolio Net Loss Ratio (Prime)" means, with respect to any date of  determination, the product of (i) the percentage equivalent of a fraction, (a) the numerator of  which is the difference of (1) the aggregate Principal Balance of all Prime Receivables that  became Defaulted Receivables during the most recently completed Collection Period minus (2)  all Recoveries received during such Collection Period with respect to Prime Receivables and (b)  the denominator of which is the aggregate Principal Balance of all Prime Receivables as of the  first day of such Collection Period times (ii) twelve.  "Confidential Information" means any information, data, documents and materials in any  form and at any time (including prior to the date of this Agreement) with respect to the  Borrower, DFC, or any of their Affiliates and their respective businesses and financial  information, the Receivables and the Serviced Portfolio and includes (i) information transmitted  in written, oral, magnetic or any other medium, (ii) all copies and reproductions, in whole or in  part, of such information and (iii) all summaries, analyses, compilations, studies, notes or other  records which contain, reflect or are generated from such information; provided, that  "Confidential Information" does not include, with respect to a Person, information that (a) was  already known to such Person and such knowledge was not obtained from any other entity who  was known by such Person to be subject to an obligation of confidentiality or otherwise  prohibited from transmitting such information to such Person, (b) is or has become part of the  public domain through no act or omission of such Person, (c) is or was lawfully disclosed to such  Person without restriction on disclosure by a third party, (d) is or was developed independently  by such Person, or (e) is or was lawfully and independently provided to such Person prior to  disclosure hereunder, from a third party who is not known by such Person to be subject to an  obligation of confidentiality or otherwise prohibited from transmitting such information.  "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.  "Consent" or "Consented" means a consent or an action of the Administrative Agent that  has been approved by the Required Lenders or the Consenting Lenders, as applicable.  

 

     11  154304283v7  "Consenting Lenders" means at a particular time, Lenders with aggregate Commitments  equal to at least 100% of the Aggregate Commitment.  "Contract" means any retail installment sale contract executed by an Obligor for a  Financed Vehicle under which an extension of credit by DFC is made in the ordinary course of  business to such Obligor and which is secured by the related Financed Vehicle.  "Contractual Obligation" means, with respect to any Person, any provision of any  securities issued by such Person or any indenture, mortgage, deed of trust, contract, undertaking,  agreement, instrument or other document to which such Person is a party or by which it or any of  its property is bound or is subject.  "Control Agreement" means that certain Escrow and Control Agreement, dated as of  November 1, 2022, among the Borrower, Mizuho Bank, Ltd., as escrow agent and bank, and the  Administrative Agent.    "Cram Down Loss" means, with respect to a Receivable, if a court of appropriate  jurisdiction in an Insolvency Proceeding shall have issued an order reducing the amount owed on  such Receivable or otherwise modifying or restructuring the Scheduled Payments to be made on  such Receivable, an amount equal to such reduction in the Principal Balance of such Receivable  or the reduction in the net present value (using as the discount rate the lower of the contract rate  or the rate of interest specified by the court in such order) of the Scheduled Payments as so  modified or restructured.  A "Cram Down Loss" shall be deemed to have occurred on the date  such order is entered.   "Credit and Collection Policy" means, with respect to (i) the initial Servicer, the credit  and collection policies of the Servicer as are in effect on the Closing Date, as the same may be  amended, modified, or supplemented from time to time in accordance with this Agreement, or  (ii) any Successor Servicer, the customary credit and collection policies of such Successor  Servicer, in each case as revised from time to time in accordance with this Agreement.   "Credit Support Annex" has the meaning given to such term in Section 6.03(b).  "Cutoff Date" means, with respect to Receivables transferred to the Borrower on a  Funding Date, the date that is three calendar days immediately preceding such Funding Date.  "Daily Simple SOFR" means, with respect to any date (a "SOFR Rate Day"), a rate per  annum equal to the greater of (i) SOFR for the date (such date, the related "SOFR Determination  Date") that is five U.S. Government Securities Business Days prior to (a) if such SOFR Rate Day  is a U.S. Government Securities Business Day, such SOFR Rate Day, or (b) if such SOFR Rate  Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business  Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by  the SOFR Administrator on the SOFR Administrator's Website and (ii) 0%.  Any change in  Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective  date of such change in SOFR without notice to the Borrower.  

 

     12  154304283v7  "Dealer" means an automobile dealer that is wholly-owned by Lithia that facilitated the  extension of credit on a Financed Vehicle to an Obligor and through which the Contract and  related Receivable were originated by DFC pursuant to the related Dealer Agreement.  "Dealer Agreement" means an existing agreement between a Dealer and DFC regarding  the terms and conditions of the facilitation by the Dealer of the underwriting by DFC of  Contracts and the related Receivables.   "Debt-to-Equity Ratio" means, with respect to any date of determination, (i) an amount  equal to DFC's aggregate Indebtedness divided by (ii) an amount equal to DFC's Tangible Net  Worth.  "Debt-to-Income Ratio" means, with respect to any Receivable and the related Obligor,  (i) the sum of (a) all of the related obligor's and any related co-obligor's (but no related  guarantor's) monthly fixed payment obligations (including mortgage and other loan payments,  rents, credit card payments, student loan payments and child support payments) at the time such  Receivable was originated, as determined by DFC in accordance with the Credit and Collection  Policy in effect at such time, plus (b) the monthly Scheduled Payment under the related Contract,  divided by (ii) the sum of all of such related obligor's and any related co-obligor's (but no related  guarantor's) monthly gross income for the calendar month immediately preceding the date such  Receivable was originated, as determined by DFC in accordance with the Credit and Collection  Policy in effect at such time.    "Default Rate" means a per annum rate equal to the sum of (i) the Alternate Base Rate  and (ii) 2.75%.  "Defaulted Receivable" means any Receivable (i) that has been, or is required to be,  treated as "defaulted" in accordance with the Credit and Collection Policy, (ii) with respect to  which the Servicer has determined in good faith that payments thereunder have ceased and are  not likely to be resumed, (iii) with respect to which the greater of (a) $50 and (b) 10% or more of  any Scheduled Payment remains unpaid for more than 120 days from the related due date, or (iv)  for which the related Financed Vehicle has been repossessed.  "Defaulting Committed Lender" means any Committed Lender that, as determined by the  Administrative Agent:  (i) has failed to fund any of its obligations to make Loans in accordance  with Section 2.01, notwithstanding that all conditions to funding under Section 4.02 and, with  respect to the Initial Loan, Section 4.01 have been satisfied or waived in accordance with the  terms thereof, within three Business Days of the date required to be funded by it hereunder, (ii)  has notified the Administrative Agent or the Borrower in writing that it does not intend to  comply with such funding obligations, or has made a public statement to that effect with respect  to such funding obligations hereunder, or (iii) has become subject to an Insolvency Event;  provided, that a Committed Lender shall not be deemed to be a Defaulting Committed Lender  hereunder solely by virtue of any control of or ownership interest in, or the acquisition of any  ownership interest in, such Committed Lender (or its direct or indirect parent company) or the  exercise of control over such Committed Lender (or its direct or indirect parent company) by a  Governmental Authority thereof, if and for so long as such ownership interest does not result in  or provide such Committed Lender (or its direct or indirect parent company) with immunity from  

 

     13  154304283v7  the jurisdiction of courts within the United States or from the enforcement of judgments or writs  of attachment on its assets or permit such Committed Lender (or its direct or indirect parent  company) or such Governmental Authority to reject, repudiate, disavow or disaffirm obligations  such as those under this Agreement.  "Deferral" means, with respect to any Receivable or Serviced Portfolio Receivable, a  deferral that is granted by the Servicer to an Obligor whereby (i) all or any portion of one or  more Scheduled Payments is waived for the related due date and (ii) such waived amount is due  from such Obligor by no later than the final due date for the related Contract (which final due  date may have been extended by the Servicer in connection with such deferral).  For purposes of  this definition, the "Obligor," "Scheduled Payment" and "Contract" for each Serviced Portfolio  Receivable that is not a Receivable shall be determined as if it were a "Receivable" for purposes  of all related defined terms.   "Delinquent Receivable" means any Receivable, (i) with respect to which the greater of  (a) $50 and (b) 10% or more of any Scheduled Payment remains unpaid for 60 or more days  from the related due date and (ii) that is not a Defaulted Receivable.  "Derivatives" means any (i) exchange-traded or over-the-counter forward, future, option,  swap, cap, collar, floor or foreign exchange contract or any combination of the foregoing,  whether for physical delivery or cash settlement, relating to any interest rate, interest rate index,  currency, currency exchange rate, currency exchange rate index, debt instrument, debt price, debt  index, depository instrument, depository price, depository index, equity instrument, equity price,  equity index, commodity, commodity price or commodity index, (ii) similar transaction,  contract, instrument, undertaking or security or (iii) transaction, contract, instrument,  undertaking or security containing any of the foregoing.  "DFC" has the meaning given to such term in the Preamble.  "Dodd-Frank Act" means The Dodd-Frank Wall Street Reform and Consumer Protection  Act (Pub.L. 111-203, H.R. 4173).  "Dollars" or "$" means the lawful currency of the United States.  "Early Adoption Increased Costs" has the meaning given to such term in Section 2.10.  "Early Adoption Increased Costs Representation" has the meaning given to such term in  Section 2.10.  "Early Amortization Event" means, on any date of determination, that:  (i) as of any Reporting Date, the arithmetic mean of the Conduit  Portfolio Net Loss Ratio (Prime) for the three Collection Periods immediately  preceding such Reporting Date is greater than 4.00% (provided, that no Early  Amortization Event will occur under this clause (i) if a Significant Take-out Date  occurred during any of such three Collection Periods);   

 

     14  154304283v7  (ii) as of any Reporting Date, the arithmetic mean of the Conduit  Portfolio Net Loss Ratio (Non-Prime) for the three Collection Periods  immediately preceding such Reporting Date is greater than 6.00% (provided, that  no Early Amortization Event will occur under this clause (ii) if a Significant  Take-out Date occurred during any of such three Collection Periods);   (iii) as of any Reporting Date, the arithmetic mean of the Conduit  Portfolio Delinquency Ratio for the three Collection Periods immediately  preceding such Reporting Date is greater than 4.00% (provided, that no Early  Amortization Event will occur under this clause (iii) if a Significant Take-out  Date occurred during any of such three Collection Periods);  (iv) as of any Reporting Date, the arithmetic mean of the Conduit  Portfolio Deferral Ratio for the three Collection Periods immediately preceding  such Reporting Date is greater than 1.50% (provided, that no Early Amortization  Event will occur under this clause (iv) if a Significant Take-out Date occurred  during any of such three Collection Periods);  (v) a Borrowing Base Deficiency exists that has not been cured for at  least three Business Days;  provided, that if such Borrowing Base Deficiency  would not have occurred but for the occurrence of a Step-up Event, then no Early  Amortization Event will occur under this clause (v) unless such Borrowing Base  Deficiency continues to exist as of the Reporting Date that occurs during the third  Collection Period after the Collection Period during which such Borrowing Base  Deficiency first existed;   (vi) a breach of any Financial Covenant (Lithia) or any Financial  Covenant (DFC) has occurred;  (vii) any Servicer Termination Event (other than a Servicer Termination  Event of the type specified in subsections (l), (m), (n) or (o) of Section 7.13)  occurs;  (viii) a Termination Event has occurred; or  (ix) a Material Adverse Change has occurred.  provided, that any Early Amortization Event may be waived in a writing by the  Consenting Lenders to the Borrower, with a copy to the Administrative Agent and the  Servicer.   "Election Period" means the period commencing on the date that a request for an  extension pursuant to Section 2.04(a) is delivered and ending on the earlier of (i) the 45th  calendar day thereafter or (ii) the 15th calendar day preceding the related Commitment  Termination Date.  

 

     15  154304283v7  "Electronic Contract" means a Contract that constitutes "electronic chattel paper" (under  and as defined in Article 9 of the UCC as then in effect in the relevant State) evidencing any  Receivable.  "Electronic Vault" means the electronic vault wherein custody of Electronic Contracts  shall be maintained in electronic form through a third-party Electronic Vault Provider that  enables electronic contracting pursuant to the related Electronic Vault Services Agreement.  "Electronic Vault Provider" means (i) RouteOne LLC, (ii) Dealertrack, Inc. or (iii) any  other third-party provider of the technology platform on which the Electronic Vault operates that  has been approved in writing by the Administrative Agent.  "Electronic Vault Services Agreement" means an agreement among the Collateral  Custodian and an Electronic Vault Provider pursuant to which the Electronic Vault Provider  maintains the related Electronic Vault.  "Electronic Vault System" means the electronic vault system with characteristics  reasonably acceptable to the Administrative Agent provided by the Electronic Vault Provider  pursuant to the Electronic Vault Services Agreement that enables electronic contracting.  "Eligible Assignee" means (i) Mizuho Bank, Ltd., (ii) any other Committed Lender, (iii)  a multi-seller commercial asset-backed paper conduit that is administered by a Lender, an Agent  or the Administrative Agent or an Affiliate of any of them and the commercial paper notes of  which are rated at least "A-1" by Standard & Poor's and "Prime-1" by Moody's, (iv) any other  Person that is acceptable to the Agent related to the portion of the Commitment being assigned  and with respect to which the Borrower has consented to in writing prior to such assignment  (such consent of the Borrower not to be unreasonably withheld); provided, that no such consent  of the Borrower shall be required during the occurrence and continuation of a Servicer  Termination Event or Termination Event.    "Eligible Pool Balance" means, as of any date of determination, the sum of the Adjusted  Principal Balances of all Eligible Receivables as of such date.  "Eligible Receivable" means, as of any date of determination, any Receivable (i) for  which the related Receivable File is in the possession or "control" (within the meaning of Section  9-105 of the UCC as then in effect in the relevant State) of the Collateral Custodian, (ii) which is  identified on the Schedule of Receivables delivered by the Borrower to the Administrative Agent  as part of a Funding Request and (iii) which satisfies each of the eligibility requirements set forth  on Schedule B hereto, in each case as of such date of determination.  "ERISA" means the Employee Retirement Income Security Act of 1974, and the  regulations promulgated and rulings issued thereunder.  "ERISA Affiliate" means (i) any corporation which is a member of the same controlled  group of corporations (within the meaning of Section 414(b) of the Code) as the Borrower, (ii) a  trade or business (whether or not incorporated) under common control (within the meaning of  Section 414(c) of the Code) with the Borrower, or (iii) a member of the same affiliated service  

 

     16  154304283v7  group (within the meaning of Section 414(m) of the Code) as the Borrower, any corporation  described in clause (i) above or any trade or business described in clause (ii) above.  "Excess Concentration Amounts" means, as of any date of determination and without  duplication, the sum of:  (i) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables for which the related Obligor has a  billing address in the State with the highest concentration of Receivables by  Obligor billing address as of such date minus (b) an amount equal to the product  of (1) 43.0% times (2) the Eligible Pool Balance on such date;   (ii) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables for which the related Obligor has a  billing address in the State with the second highest concentration of Receivables  by Obligor billing address as of such date minus (b) an amount equal to the  product of (1) 33.0% times (2) the Eligible Pool Balance on such date;  (iii) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables for which the related Obligor has a  billing address in the State with the third highest concentration of Receivables by  Obligor billing address as of such date minus (b) an amount equal to the product  of (1) 23.0% times (2) the Eligible Pool Balance on such date;  (iv) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables for which the related Obligor has a  billing address in any State other than those States accounted for in clauses (i),  (ii), and (iii), above, minus (b) an amount equal to the product of (1) 20.0% times  (2) the Eligible Pool Balance on such date;  (v) without duplication, the sum of (a) the positive difference, if any,  of (1) the aggregate Adjusted Principal Balance of the Eligible Receivables for  which the related Obligors had FICO Scores of less than 700 minus (2) the  product of (A) 75.0% times (B) the Eligible Pool Balance as of such date plus (b)  the positive difference, if any, of (1) the aggregate Adjusted Principal Balance of  the Eligible Receivables for which the related Obligors had FICO Scores of less  than 620 minus (2) the product of (A) 20.0% times (B) the Eligible Pool Balance  as of such date plus (c) the positive difference, if any, of (1) the aggregate  Adjusted Principal Balance of the Eligible Receivables for which the related  Obligors had FICO Scores of less than 550 minus (2) the product of (A) 10.0%  times (B) the Eligible Pool Balance as of such date, calculated in all cases with  Receivables that do not have such FICO Scores being deemed to have FICO  Scores of zero;  (vi) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables for which the related Obligors did  

 

     17  154304283v7  not have a FICO Score or had a FICO Score of zero minus (b) the product of (1)  5.0% times (2) the Eligible Pool Balance as of such date;  (vii) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables for which the related Loan-to-Value  Ratios were greater than 125% at the time of underwriting minus (b) the product  of (1) 30.0% times (2) the Eligible Pool Balance as of such date;  (viii) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables that had original Principal Balances  of greater than $40,000 minus (b) the product of (1) 60.0% times (2) the Eligible  Pool Balance as of such date;  (ix) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables which or on any prior date were  (but which no longer are as of such date of determination) Serviced Portfolio  Defaulted Receivables minus (b) the product of (1) 1.0% times (2) the Eligible  Pool Balance as of such date;  (x) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables for which the related Financed  Vehicle was a Used Vehicle at the time such Receivable was originated minus (b)  the product of (1) 80.0% times (2) the Eligible Pool Balance as of such date;   (xi) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables for which the original term to  maturity was more than 75 months  minus (b) the product of (1) 27.5% times (2)  the Eligible Pool Balance as of such date;  (xii) the aggregate Adjusted Principal Balance of the Eligible  Receivables that had FICO Scores of less than 660 at the time of their  underwriting that would need to be subtracted from the Eligible Pool Balance on  such date in order to cause the weighted average FICO Score of all Eligible  Receivables (excluding Receivables that do not have a FICO Score or have a  FICO Score of zero) to 660, with such weighted average calculated using the  FICO Score of each such Receivable at the time of its underwriting;  (xiii) the aggregate Adjusted Principal Balance of the Eligible  Receivables that had Loan-to-Value Ratios at the time of their underwriting of  greater than 118% that would need to be subtracted from the Eligible Pool  Balance on such date in order to cause the weighted average Loan-to-Value Ratio  of all Eligible Receivables at the time of their underwriting to equal 118%;  (xiv) the aggregate Adjusted Principal Balance of the Eligible  Receivables that had Payment-to-Income Ratios of greater than 12.0% at the time  of their underwriting that would need to be subtracted from the Eligible Pool  Balance on such date in order to cause the weighted average Payment-to-Income  Ratios of all Eligible Receivables at the time of their underwriting to equal 12.0%;  

 

     18  154304283v7  (xv) the aggregate Adjusted Principal Balance of the Eligible  Receivables that had Debt-to-Income Ratios of greater than 45.0% at the time of  their underwriting that would need to be subtracted from the Eligible Pool  Balance on such date in order to cause the weighted average Debt-to-Income  Ratio of all Eligible Receivables at the time of their underwriting to equal 45.0%;   (xvi) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables for which the related Financed  Vehicle had an odometer reading of more than 125,000 miles at the time such  Receivable was originated minus (b) the product of (1) 2.0% times (2) the Eligible  Pool Balance as of such date;  (xvii) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables for which the related Loan-to-Value  Ratios were greater than 140% at the time of underwriting minus (b) the product  of (1) 3.0% times (2) the Eligible Pool Balance as of such date; and  (xviii) the positive difference, if any, of (a) the aggregate Adjusted  Principal Balance of the Eligible Receivables that had original Principal Balances  of greater than $100,000 minus (b) the product of (1) 2.5% times (2) the Eligible  Pool Balance as of such date.  "Excess Spread" means as of any date of determination, the difference of (i) the weighted  average APR of all Eligible Receivables as of such date (weighted by the Principal Balance of  such Eligible Receivables) minus (ii) the Servicing Fee Rate minus (iii) the Program Fee Rate  minus (iv) the Weighted Average Hedge Rate as of such date minus (v) the Backup Servicing  Fee Rate as of such date.  "Excess Spread (Adjusted)" means, as of any date of determination, either:  (i) with respect to any Receivable that is a Prime Receivable, the  difference of (a) the percentage equivalent of a fraction, (1) the numerator of  which equals the sum of (A) for each Eligible Receivable that is a Prime  Receivable and has an APR that is less than the related Required Rate, the product  of (x) the Adjusted Principal Balance of such Eligible Receivable as of such date  times (y) the related Required Rate plus (B) for each Eligible Receivable that is a  Prime Receivable and has an APR that is greater than or equal to the related  Required Rate, the product of (x) the Adjusted Principal Balance of such Eligible  Receivable as of such date times (y) the APR of such Eligible Receivable and (2)  the denominator of which is the sum of the Adjusted Principal Balances as of such  date of all Eligible Receivables that are Prime Receivables minus (b) the  Servicing Fee Rate minus (c) the Program Fee Rate minus (d) the Weighted  Average Hedge Rate as of such date minus (e) the Backup Servicing Fee Rate as  of such date;  (ii) with respect to any Receivable that is a Near Prime Receivable, the  difference of (a) the percentage equivalent of a fraction, (1) the numerator of  

 

     19  154304283v7  which equals the sum of (A) for each Eligible Receivable that is a Near Prime  Receivable and has an APR that is less than the related Required Rate, the product  of (x) the Adjusted Principal Balance of such Eligible Receivable as of such date  times (y) the related Required Rate plus (B) for each Eligible Receivable that is a  Near Prime Receivable and has an APR that is greater than or equal to the related  Required Rate, the product of (x) the Adjusted Principal Balance of such Eligible  Receivable as of such date times (y) the APR of such Eligible Receivable and (2)  the denominator of which is the sum of the Adjusted Principal Balances as of such  date of all Eligible Receivables that are Near Prime Receivables minus (b) the  Servicing Fee Rate minus (c) the Program Fee Rate minus (d) the Weighted  Average Hedge Rate as of such date minus (e) the Backup Servicing Fee Rate as  of such date; or  (iii) with respect to any Receivable that is a Subprime Receivable, the  difference of (a) the percentage equivalent of a fraction, (1) the numerator of  which equals the sum of (A) for each Eligible Receivable that is a Subprime  Receivable and has an APR that is less than the related Required Rate, the product  of (x) the Adjusted Principal Balance of such Eligible Receivable as of such date  times (y) the related Required Rate plus (B) for each Eligible Receivable that is a  Subprime Receivable and has an APR that is greater than or equal to the related  Required Rate, the product of (x) the Adjusted Principal Balance of such Eligible  Receivable as of such date times (y) the APR of such Eligible Receivable and (2)  the denominator of which is the sum of the Adjusted Principal Balances as of such  date of all Eligible Receivables that are Subprime Receivables minus (b) the  Servicing Fee Rate minus (c) the Program Fee Rate minus (d) the Weighted  Average Hedge Rate as of such date minus (e) the Backup Servicing Fee Rate as  of such date.  "Exchange Act" means the Securities Exchange Act of 1934, as amended.   "Excluded Taxes" means any of the following Taxes imposed on or with respect to a  Recipient or required to be withheld or deducted from a payment to a Recipient, (i) Taxes  imposed on or measured by net income (however denominated), franchise Taxes, and branch  profits Taxes, in each case, (a) 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, its applicable lending office  located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (b) that are  Other Connection Taxes, (ii) in the case of a Lender, U.S. federal withholding Taxes imposed on  amounts payable to or for the account of such Lender with respect to an applicable interest in a  Loan or Commitment pursuant to a law in effect on the date on which (a) such Lender acquires  such interest in the Loan or Commitment or (b) such Lender changes its lending office, except in  each case to the extent that, pursuant to Section 2.11, amounts with respect to such Taxes were  payable either to such Lender's assignor immediately before such Lender became a party hereto  or to such Lender immediately before it changed its lending office, (iii) Taxes attributable to  such Recipient's failure to comply with Section 2.11(g) and (iv) any withholding Taxes imposed  under FATCA.  

 

     20  154304283v7  "Facility Amount" means, as of any date of determination, (i) prior to the Termination  Date, the Aggregate Commitment on such day and (ii) on and after the Termination Date, the  Loans Outstanding.  "Facility Termination Date" means the date following the Termination Date on which the  Aggregate Unpaids have been indefeasibly paid in full.  "FATCA" means Sections 1471 through 1474 of the Code, as of the date of this  Agreement (or any amended or successor version that is substantively comparable and not  materially more onerous to comply with), any current or future regulations or official  interpretations thereof and any applicable agreement entered into pursuant to Section 1471(b)(1)  of the Code, any applicable intergovernmental agreement with respect to the foregoing, and any  regulations and official administrative guidance thereunder.  "Federal Funds Effective Rate" means, for any day, the rate calculated by the NYFRB  based on such day's federal funds transactions by depositary institutions, as determined in such  manner as  shall be set forth on the NYFRB's Website  from time to time, and published on the  next succeeding Business Day by the NYFRB as the effective federal funds rate; provided that if  the Federal Funds Effective Rate as so determined would be less than 0%, such rate shall be  deemed to be 0% for the purposes of this Agreement.  "Federal Reserve Board" means the Board of Governors of the Federal Reserve System.  "Fee Letter" means the "Fee Letter", dated as of November 1, 2022, by and among the  Borrower, the initial Servicer, and the Administrative Agent, setting forth, among other things,  the Program Fee Rate, the Structuring Fee, and the Unused Commitment Fee Rate.  "FICO Score" means with respect to any Receivable, the decisioned credit risk score that  is generated by Equifax (or, if such credit risk score is unavailable through Equifax, the  decisioned credit risk score that is generated by TransUnion or another equivalent consumer  credit reporting agency) using their version 8 scorecard for use in the automotive lending sector,  at the time of underwriting for the related Contract, which credit risk score is generated using  statistical models established by Fair Isaac Corporation (or any successor entity thereto) for  either (i) the related obligor or (ii) if greater, the related co-obligor under the related receivable.    "Financed Vehicle" means, with respect to a Receivable, any new or used automobile,  light-duty truck, minivan, sport utility vehicle or other passenger vehicle, together with all  accessions thereto, securing the related Obligor's Indebtedness thereunder.  "Financial Covenants (Lithia)" means each of the covenants listed on Schedule F to this  Agreement.    "Financial Covenants (DFC)" means each of:  (i) DFC's Tangible Net Worth for the most recently ended fiscal  quarter shall at least equal (a) on or prior to June 29, 2023, $300,000,000, (b)  from and including June 30, 2023 and through and including December 30, 2023,  $330,000,000, (c) from and including December 31, 2023 and through and  

 

     21  154304283v7  including June 29, 2024, $375,000,000, and (d) from and including June 30, 2024  and on all dates thereafter, $525,000,000; and  (ii) DFC's Debt-to-Equity Ratio for the most recently ended fiscal  quarter shall not exceed 7.50 to 1.0.  "Floor" means the benchmark rate floor, if any, provided in this Agreement initially (as  of the execution of this Agreement, the modification, amendment or renewal of this Agreement  or otherwise) with respect to Daily Simple SOFR, as applicable.  For the avoidance of doubt the  initial Floor for Daily Simple SOFR shall be 0%.  "Force Majeure Event" means an act of God or the public enemy, acts of declared or  undeclared war (including acts of terrorism), public disorder, rebellion or sabotage, epidemics,  pandemics, landslides, lightening, fire, hurricanes, earthquakes, floods or similar causes.  "Foreign Lender" means a Lender that is not a U.S. Person.  "Formation Documents" means, with respect to (i) the Borrower, its limited liability  company agreement and certificate of formation, (ii) DFC, its certificate of incorporation and  bylaws, and (iii) Lithia, its certificate of incorporation and bylaws.  "Fully Hedged" means a condition that exists as of any date of determination if the  aggregate notional amount under all Hedge Transactions as of such date is at least equal to 100%  of the Loans Outstanding as of such date (after giving effect to any changes to the Loans  Outstanding on such date).  "Funding Date" means each Business Day on which a Loan is made and Receivables are  added to the Collateral in connection with such Loan.  "Funding Request" means a written notice from the Borrower requesting a Loan and  including the items required by Section 2.01(b), substantially in the form of Exhibit A hereto.  "GAAP" means generally accepted accounting principles as in effect from time to time in  the United States.  "Governmental Authority" means, with respect to any Person, any nation or government,  any State or other political subdivision thereof, any entity exercising executive, legislative,  judicial, regulatory or administrative functions of or pertaining to government and any court or  arbitrator having jurisdiction over such Person.  "Hedge Breakage Costs" means, with respect to any Hedge Transaction, any amount  payable by the Borrower to the related Hedge Counterparty upon the early termination of such  Hedge Transaction or any portion thereof.  "Hedge Collateral" means all of the rights of the Borrower, whether now existing and  hereafter acquired, in and to all Hedging Agreements, Hedge Transactions and all present and  future amounts payable by all Hedge Counterparties to the Borrower under or in connection with  such Hedging Agreements and Hedge Transactions with such Hedge Counterparties.  

 

     22  154304283v7  "Hedge Counterparty" means any entity that on the date of entering into any Hedge  Transaction is (i) Mizuho Bank or an Affiliate thereof or (ii) (a) is an interest rate swap dealer,  (b) whose debt ratings satisfy each of the Long-Term Rating Requirement and the Short-Term  Rating Requirement and (c) agrees that in the event that Moody's or Standard & Poor's reduces  its long-term unsecured debt rating below the Long-Term Rating Requirement or its short-term  unsecured debt rating below the Short-Term Rating Requirement, it shall (1) transfer its rights  and obligations under each Hedge Transaction to another entity that meets the requirements of  this definition and has entered into a Hedging Agreement with the Borrower on or prior to the  date of such transfer, or (2) post collateral in an amount satisfactory to the Required Lenders.   Each Hedge Counterparty must consent to the assignment of the Borrower's rights under the  Hedging Agreement to the Administrative Agent pursuant to Section 6.03(f).   "Hedge Counterparty Collateral Account" has the meaning given to such term in Section  6.03(b).  "Hedge Reserve Account" means the segregated account established by the initial  Servicer, on behalf of the Borrower, with the Account Bank in the name of the Borrower for the  benefit of the Secured Parties, and identified as the "Hedge Reserve Account" on Schedule H to  this Agreement, into which amounts may be deposited by the Borrower in accordance with  Section 6.03(a) and which at all times will be subject to the Control Agreement.  "Hedge Reserve Account Required Amount" means, as of any date of determination on  which a Hedge Shortfall exists, an amount equal to the product of (i) 110% times (ii) the quoted  purchase price from any Lender, any Agent, or any Affiliate of any Lender or Agent (which price  shall be reasonably determined based on prevailing market conditions and such Lender or  Agent's pricing of caps of a similar size, duration and cap rate) most recently received by the  Borrower (or the Servicer on behalf of the Borrower) pursuant to Section 6.03(a)(ii) hereof  (which quote shall, for purpose of this definition, continue in effect until the next succeeding  date on which such a quote is received pursuant to Section 6.03(a)(ii) hereof), for an interest rate  cap (A) that has a notional amount equal to the Hedge Shortfall, and a duration, amortization and  cap rate that is agreed upon by the Borrower and the Administrative Agent for such date and (B)  the cap rate for which is the maximum cap rate that would cause the Excess Spread to equal the  "Average Target Rate" if a Hedge Transaction in the form of an interest rate cap having such  strike rate and having the notional amount referenced in clause (A) was included in the  calculation of "Weighted Average Hedge Rate" on such date.  For purposes of this definition, the  "Average Target Rate" as of any date of determination is the weighted average Target Rate of all  Eligible Receivables (weighted by the Principal Balance of such Eligible Receivables).    "Hedge Shortfall" means, as of any date of determination, the positive difference of (i)  the Loans Outstanding (after giving effect to any changes to the Loans Outstanding on such date)  minus (ii) the aggregate notional amount of all outstanding Hedge Transactions on such date.  "Hedge Transaction" means each interest rate hedge transaction between the Borrower  and a Hedge Counterparty that is entered into pursuant to Section 6.03 and is governed by a  Hedging Agreement.  

 

     23  154304283v7  "Hedging Agreement" means each agreement between the Borrower and a Hedge  Counterparty which governs one or more Hedge Transactions entered into pursuant to  Section 6.03, which agreement shall be reasonably acceptable to the Administrative Agent and  shall consist of a "Master Agreement" in a form published by the International Swaps and  Derivatives Association, Inc., together with a "Schedule" thereto, any applicable Credit Support  Annex and each "Confirmation" thereunder confirming the specific terms of each such Hedge  Transaction.  "Indebtedness" means, with respect to any Person and any day, without duplication, (i) all  indebtedness of such Person for borrowed money or for the deferred purchase price of property  or services (other than current liabilities incurred in the ordinary course of business and payable  in accordance with customary trade practices) or which is evidenced by a note, bond, debenture  or similar instrument, (ii) all obligations of such Person under capital leases, (iii) all obligations  of such Person in respect of acceptances issued or created for the account of such Person, (iv) all  liabilities secured by any Lien on any property owned by such Person even though such Person  has not assumed or otherwise become liable for the payment thereof and (v) all indebtedness,  obligations or liabilities of that Person in respect of Derivatives.  "Indemnified Amounts" has the meaning given to such term in Section 9.01.  "Indemnified Party" has the meaning given to such term in Section 9.01.  "Indemnified Taxes" means (a) Taxes, other than Excluded Taxes, imposed on or with  respect to any payment made by or on account of any obligation of the Borrower under any  Borrower Basic Document and (b) to the extent not otherwise described in (a), Other Taxes.  "Independent Director" means a natural Person who either (i) (a) shall not have been at  the time of such Person's appointment or at any time during the preceding five years, and shall  not be as long as such Person is a director of the Borrower, (1) a director, officer, employee,  partner, shareholder, equity owner, member, manager or Affiliate of DFC or Lithia, or any  Affiliate of DFC, Lithia, or the Borrower (other than as an independent director or manager of  such Person), (2) a customer or supplier of DFC, Lithia, the Borrower or any of their respective  Affiliates, (3) a Person controlling or under common control with any partner, shareholder,  member, manager, Affiliate, customer or supplier of DFC, Lithia, the Borrower or any of their  respective Affiliates or (4) a member of the immediate family of any Person described in clauses  (1) through (3) above; provided, that such Independent Director may be an independent director  of another special purpose entity affiliated with DFC or Lithia or any of their respective  Affiliates, (b) is an employee of a company that (1) is in the business of providing independent  director services for special purpose entities and (2) is recognized in the securitization market as  a provider of such services, (c) has prior experience as an independent director or manager for a  corporation or limited liability company whose charter documents required the unanimous  consent of all independent directors or managers thereof before such corporation or limited  liability company could consent to the institution of insolvency proceedings against it or could  file a petition seeking relief under any applicable insolvency laws and (d) has at least three years  of employment experience with one or more entities that provide, in the ordinary course of their  respective businesses, advisory, management or placement services to issuers of securitization or  

 

     24  154304283v7  structured finance instruments, agreements or securities or (ii) has otherwise been approved in  writing by the Administrative Agent.  "Ineligible Receivable" means, as of any date of determination, a Receivable that is not  an Eligible Receivable.  "Initial Loan" means the first Loan made on or after the Closing Date.  "Insolvency Event" means, with respect to a specified Person, (i) the filing of a decree or  order for relief by a court having jurisdiction in the premises in respect of such Person or any  substantial part of its property in an involuntary case under any applicable Insolvency Law now  or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,  sequestrator or similar official for such Person or for any substantial part of its property, or  ordering the winding-up or liquidation of such Person's affairs, and such decree or order shall  remain unstayed and in effect for a period of 60 consecutive days or (ii) the commencement by  such Person of a voluntary case under any Insolvency Law now or hereafter in effect, or the  consent by such Person to the entry of an order for relief in an involuntary case under any such  law, or the consent by such Person to the appointment of or taking possession by a receiver,  liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any  substantial part of its property, or the making by such Person of any general assignment for the  benefit of creditors, or the failure by such Person generally to pay its debts as such debts become  due, or the taking of action by such Person in furtherance of any of the foregoing.  "Insolvency Laws" means the Bankruptcy Code and all other applicable liquidation,  conservatorship, bankruptcy, moratorium, arrangement, rearrangement, receivership, insolvency,  reorganization, suspension of payments, marshaling of assets and liabilities or similar debtor  relief laws from time to time in effect affecting the rights of creditors generally.  "Insolvency Proceeding" means, with respect to any Person, any bankruptcy, insolvency,  arrangement, rearrangement, conservatorship, moratorium, suspension of payments,  readjustment of debt, reorganization, receivership, liquidation, marshaling of assets and liabilities  or similar proceeding of or relating to such Person under any Insolvency Laws.  "Instrument" means any "instrument" (as defined in Article 9 of the UCC), other than an  instrument that constitutes part of chattel paper.  "Insurance Policy" means, with respect to any Receivable, (i) an insurance policy  covering physical damage to or loss of the related Financed Vehicle or (ii) any lender's single  interest, credit life, disability, hospitalization and similar insurance policies with respect to the  related Obligor.  "Insurance Proceeds" means any amounts payable or any payments made under any  Insurance Policy.  "Interest" means, for any Interest Period and each Loan outstanding during such Interest  Period, interest on the Principal Amount of such Loan computed pursuant to Sections 2.05(b)  and 2.05(d); provided, that (i) no provision of this Agreement shall require or permit the  collection of Interest in excess of the Maximum Lawful Rate and (ii) Interest shall not be  

 

     25  154304283v7  considered paid by any distribution if at any time such distribution is rescinded or must  otherwise be returned for any reason.  "Interest Period" means, with respect to each Payment Date, the immediately preceding  Collection Period (or, in the case of the first Payment Date, the period from and including the  Closing Date through and including November 30, 2022); provided, that any Interest Period that  commences before the Facility Termination Date that would otherwise end after the Facility  Termination Date shall end on the Facility Termination Date.  "Invested Percentage" means, for a Lender as of any date of determination, the  percentage equivalent of (i) the sum of (a) the portion of the Loans Outstanding (if any) funded  by such Lender on or prior to such day, plus (b) with duplication of any amount in clause (a), any  portion of the Loans Outstanding acquired by such Lender on or prior to such day as an assignee  from another Lender pursuant to an Assignment and Acceptance, minus (c) any portion of the  Loans Outstanding assigned by such Lender to an assignee on or prior to such day pursuant to an  Assignment and Acceptance, divided by (ii) the Loans Outstanding on such day.  "Investment" means, with respect to any Person, any direct or indirect loan, advance or  investment by such Person in any other Person, whether by means of share purchase, capital  contribution, loan or otherwise, and excluding commission, travel and similar advances to  officers, employees and directors made in the ordinary course of business.  "Investment Company Act" means the Investment Company Act of 1940, as amended.  "IRS" means the U.S. Internal Revenue Service.  "ISDA Definitions" means the 2006 ISDA Definitions published by the International  Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented  from time to time, or any successor definitional booklet for interest rate derivatives published  from time to time by the International Swaps and Derivatives Association, Inc. or such successor  thereto.  "Lender Advance" means a Lender's Lender Percentage of the Principal Amount of a  particular Loan to be made to the Borrower on a Funding Date.  "Lender Group" means each group of Lenders consisting of (i) one or more Lenders and  (ii) an Agent, in each case as indicated on the related Lender Supplement.  As of the Closing  Date, the sole Lender Group is the Mizuho Lender Group.  "Lender Percentage" means a Lender's Commitment as a percentage of the Aggregate  Commitment.  "Lender Register" has the meaning given to such term in Section 11.01(c).  "Lenders" means, collectively, the Committed Lenders.  "Lender Supplement" means (i) with respect to the Mizuho Lender Group, the  information set forth in Schedule A to this Agreement and (ii) with respect to any other Lender  

 

     26  154304283v7  Group, the information set forth in the related Lender Supplement, in each case as the same may  be amended or otherwise modified from time to time, with, in the case of changes to the Facility  Amount and any Commitment, the consent of the Borrower.  With respect to the Lender  Supplement for any Lender Group other than the Mizuho Lender Group, such Lender  Supplement shall contain substantially similar information to that set forth in Schedule A with  respect to the Mizuho Lender Group.  "Liability" means any duty, responsibility, obligation or liability.  "Lien" means any mortgage, lien, pledge, charge, claim, security interest or encumbrance  of any kind.  "Lithia" means Lithia Motors, Inc., an Oregon corporation.  "Loan" has the meaning given to such term in Section 2.01(a).  "Loan-to-Value Ratio" means, with respect to any Receivable, the percentage equivalent  of a fraction, (i) the numerator of which is the original Principal Balance of such Receivable and  (ii) the denominator of which is the book value of the related Financed Vehicle at the date of  underwriting, where such book value is the selling price of the Financed Vehicle as determined  in accordance with the Credit and Collection Policy.  "Loans Outstanding" means, on any day, the aggregate Principal Amount of all Loans  made on or prior to such day, reduced from time to time by payments and distributions in respect  of principal of the Loans in accordance with the terms hereof.  "Lockbox Account" means one or more deposit accounts established and maintained at  the Lockbox Bank by DFC.  "Lockbox Bank" means, initially, JPMorgan Chase Bank, N.A. or any other bank as  agreed to by the Borrower, the Administrative Agent and the Required Lenders.   "Lockboxes" means one or more post office boxes or operating accounts established by  DFC and maintained at the Lockbox Bank.  "Long-Term Rating Requirement" means, with respect to any Person, that such Person  has a long-term unsecured debt rating of not less than "A" by Standard & Poor's and not less than  "A2" by Moody's.  "Mandatory Hedging Condition" means that, as of any date of determination, one or more  of the following events has occurred and the occurrence of a Mandatory Hedging Condition has  not been expressly waived in accordance with Section 13.01 (regardless of whether any such  event, or any other consequences of such event, have been waived, either in accordance with  Section 13.01 or otherwise):  (i) any Termination Event has occurred; (ii) any Servicer  Termination Event has occurred; or (iii) the Commitment Termination Date occurs.  "Material Adverse Change" means any event or condition which would have a material  adverse effect on (i) the collectability of all or a material portion of the Receivables, (ii) the  

 

     27  154304283v7  condition (financial or otherwise), business or properties of the Borrower, (iii) the ability of the  Servicer to collect on the Receivables, (iv) the condition (financial or otherwise), business or  properties of DFC, or (v) the condition (financial or otherwise), businesses or investments of the  Performance Guarantor.  For the avoidance of doubt, the following is a non-exclusive list of  changes to the Credit and Collection Policy which, if reasonably likely to negatively impact the  creditworthiness or collectability of any Receivables, will be deemed to constitute a “Material  Adverse Change” unless such changes are made with the consent of the Administrative Agent in  the manner set forth in this Agreement:  changes that would modify any of (a) the maximum  allowable threshold limitations for substantial underwriting criteria, including but not limited to  those related to loan term, Debt-to-Income Ratio, Payment-to-Income Ratio, and Loan-to-Value  Ratio; (b) the categorization of receivables as delinquent, non-performing, defaulted or charged- off; (c) material collection processes relating, without limitation, to delinquent, non-performing,  defaulted or charged-off receivables, loan loss recognition, loan modification (including  extensions and deferrals), end-of-term recovery and processing, and collateral recovery; (d) any  provisions for credit exceptions; and (e) stated creditworthiness thresholds required for obligors.   "Material Adverse Effect" means, with respect to any Person and to any event or  circumstance, a material adverse effect on (i) the business, condition (financial or otherwise),  operations, performance, properties or prospects of such Person (including any such change or  effect resulting from the introduction of or change in any Applicable Laws or any ruling, order or  other action by any Governmental Authority), taken as a whole, (ii) the validity or enforceability  of this Agreement or any other Basic Document or the validity, enforceability or collectability of  a material portion of (a) the Contracts (taken as a whole), (b) the Receivables (taken as a whole)  or (c) any other Collateral (taken as a whole), (iii) the rights and remedies of the Administrative  Agent and Secured Parties under the Basic Documents, (iv) the ability of such Person to perform  its obligations under this Agreement or any other Basic Document to which it is a party, or (v)  the status, existence, perfection, priority or enforceability of the interest of the Administrative  Agent or the Lenders in the Collateral.  "Maximum Lawful Rate" means the highest rate of interest permissible under Applicable  Law.  "Member" has the meaning set forth in the Borrower's Formation Documents.  "Mizuho Agent" means Mizuho Bank, Ltd., in its capacity as Agent for the Mizuho  Lender Group, and its successors in such capacity.  "Mizuho Bank" means Mizuho Bank, Ltd.  "Mizuho Lender Group" means the group of Lenders consisting of (a) the Committed  Lender identified on the Lender Supplement attached hereto as Schedule A, and (b) the Mizuho  Agent.  "Monthly Backup Servicer Certificate" means a monthly report of the Backup Servicer in  the form prescribed by the Backup Servicing Agreement which shall set forth, among other  items, the Backup Servicer's recalculation of the Eligible Pool Balance, the Borrowing Base, the  Conduit Portfolio Delinquency Ratio, the Conduit Portfolio Net Loss Ratio (Non-Prime), the  

 

     28  154304283v7  Conduit Portfolio Net Loss Ratio (Prime),  the Serviced Portfolio Delinquency Ratio, the  Serviced Portfolio Net Loss Ratio (Non-Prime), and the Serviced Portfolio Net Loss Ratio  (Prime), in each case as of the end of the Collection Period immediately preceding the date on  which such certificate is delivered.  "Monthly Principal Payment Amount" means either (i) with respect to any Payment Date  occurring prior to the Termination Date, the lesser of (a) the excess (if any) of the Loans  Outstanding on such date (excluding any additional amounts to be borrowed on such Payment  Date) over the Borrowing Base on such Payment Date and (b) the amount of Available Funds  that is available to be applied pursuant to Section 2.06(v)(B) on such Payment Date (after giving  effect to all payments pursuant to sub-clauses (i) through (v) of Section 2.06 on such Payment  Date) or (ii) with respect to any Payment Date occurring on or after the Termination Date, the  lesser of (a) the Loans Outstanding on such date and (b) the amount of Available Funds that is  available to be applied pursuant to Section 2.06(v)(B) on such Payment Date (after giving effect  to all payments pursuant to subclauses (i) through (v) of Section 2.06 on such Payment Date) .  "Monthly Report" means a monthly statement of the Servicer delivered pursuant to  Section 7.07(a) on each Reporting Date with respect to the related Collection Period,  substantially in the form of Exhibit F.  "Moody's" means Moody's Investors Service, Inc.  "Multiemployer Plan" means a "multiemployer plan" as defined in Section 4001(a)(3) of  ERISA which is or was at any time during the current year or the immediately preceding five  years contributed to by the Borrower, DFC, Lithia or any ERISA Affiliate on behalf of their  employees.  "Near Prime Receivable" means a Receivable for which, at the time of underwriting, the  related FICO Score was (i) less than 680 but also (ii) greater than or equal to 620.  "Net Eligible Pool Balance" means, as of any date of determination, the difference of (i)  the Eligible Pool Balance as of such date minus (ii) the Excess Concentration Amount as of such  date.  "Non-Extending Lender" means, after its respective Commitment Termination Date, each  Lender that has declined to extend its Commitment Termination Date in accordance with  Section 2.04, to the extent not replaced pursuant to Section 2.04(b).  "Non-Prime Receivable" means a Receivable that is either a Near Prime Receivable or a  Subprime Receivable.    "Non-Prime Serviced Portfolio Receivable" means a Serviced Portfolio Receivable for  which, at the time of underwriting, (i) the related FICO Score was less than 680 (including a  FICO Score of zero) or (ii) there was no FICO Score.  "NYFRB" means the Federal Reserve Bank of New York.  

 

     29  154304283v7  "NYFRB Rate" means, for any day, the greater of (a) the Federal Funds Effective Rate in  effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any  day that is not a Business Day, for the immediately preceding Business Day); provided, that if  none of such rates are published for any day that is a Business Day, the term "NYFRB Rate"  means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the  Administrative Agent from a federal funds broker of recognized standing selected by it;  provided, further, that if any of the aforesaid rates as so determined be less than 0%, such rate  shall be deemed to be 0% for purposes of this Agreement.  "NYFRB's Website" means the website of the NYFRB at http://www.newyorkfed.org, or  any successor source.  "Obligations" means all loans, advances, debts, liabilities, indemnities and obligations for  monetary amounts owing by the Borrower to the Secured Parties, the Collateral Custodian, the  Backup Servicer, any Successor Servicer, the Administrative Agent, the Agents or any of their  respective assigns, as the case may be, whether due or to become due, matured or unmatured,  liquidated or unliquidated, contingent or non-contingent and all covenants and duties regarding  such amounts, of any kind or nature, present or future, arising under or in respect of any of the  Loans or any Hedging Agreement, whether or not evidenced by any separate note, agreement or  other instrument, including all principal, interest (including interest that accrues after the  commencement against the Borrower of any action under the Bankruptcy Code), amounts  payable pursuant to Section 2.12, Breakage Costs, Hedge Breakage Costs, fees, including any  and all arrangement fees, loan fees, Program Fees, Structuring Fees, and Unused Commitment  Fees and any and all other fees, expenses, costs or other sums (including attorney fees and  disbursements) chargeable to the Borrower under the Basic Documents.  "Obligor" means each Person obligated to make payments pursuant to a Receivable,  including any guarantor thereof.  "Officer's Certificate" means a certificate signed by any Responsible Officer of the  Borrower, the Servicer, DFC, Lithia, the Backup Servicer or the Collateral Custodian, as the case  may be, and delivered to the Administrative Agent.  "Opinion of Counsel" means, with respect to any Person, a written opinion of counsel,  who is reasonably acceptable to the Administrative Agent.  "Other Connection Taxes" means, with respect to any Recipient, Taxes imposed as a  result of a present or former connection between such Recipient and the jurisdiction imposing  such 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  Borrower Basic Document, or sold or assigned an interest in any Loan or Borrower Basic  Document).  "Other Taxes" means all present or future stamp, court or documentary, intangible,  recording, filing or similar Taxes that arise from any payment made under, from the execution,  delivery, performance, enforcement or registration of, from the receipt or perfection of a security  

 

     30  154304283v7  interest under, or otherwise with respect to, any Borrower Basic Document, except any such  Taxes that are Other Connection Taxes imposed with respect to an assignment.  "Overnight Bank Funding Rate" means, for any date, the rate comprised of both  overnight federal funds and overnight eurodollar transactions denominated in Dollars by U.S.- managed banking offices of depository institutions, as such composite rate shall be determined  by the NYFRB as set forth on the NYFRB's Website from time to time, and published on the  next succeeding Business Day by the NYFRB as an overnight bank funding rate.  "Owners" means the Lenders that are owners of record of the Loans or, with respect to  any Loan owned by an Agent hereunder as nominee on behalf of Lenders in the related Lender  Group, the Lenders that are beneficial owners of such Loan as reflected on the books of such  Agent in accordance with this Agreement and the other Basic Documents.  "Partial Expiration Event" means the occurrence of the election of one or more  Non-Extending Lenders after its respective Commitment Termination Date to not extend its  Commitment, unless such Non-Extending Lender is replaced pursuant to Section 2.04(b) or  unless the Termination Date shall have occurred.  "Partial Expiration Event Amount" means the portion of Loans Outstanding payable  pursuant to Section 2.06(vi) in connection with a Partial Expiration Event.  "Participant Register" has the meaning given to such term in Section 11.01(e).  "Patriot Act" means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law  October 26, 2001)).  "Payment" has the meaning assigned to it in Section 10.09.  "Payment Date" means the 20th day of each calendar month, or if any such day is not a  Business Day, the next succeeding Business Day, commencing December 20, 2022.  "Payment Notice" has the meaning assigned to it in Section 10.09.  "Payment-to-Income Ratio" means, with respect to any Receivable as of the date of  underwriting, the ratio (expressed as a percentage) of (i) the monthly payment owed by the  related Obligor pursuant to the related Contract to (ii) the sum of all of the related obligor's and  any related co-obligor's (but no related guarantor's) monthly gross income for the calendar month  immediately preceding the date such Receivable was originated, as determined by DFC in  accordance with the Credit and Collection Policy in effect at such time.  "Pension Plan" means an "employee pension benefit plan," as such term is defined in  Section 3(2) of ERISA, maintained by the Borrower, DFC, Lithia, or any ERISA Affiliate, or in  which employees of the Borrower are entitled to participate, as from time to time in effect.  "Performance Guarantor" means Lithia.  

 

     31  154304283v7  "Performance Guaranty" means the Performance Guaranty, dated as of November 1,  2022, by the Performance Guarantor in favor of the Secured Parties.  "Permitted Investments" means any of the following types of investments:  (i) marketable obligations of the United States, the full and timely  payment of which are backed by the full faith and credit of the United States and  which have a maturity of not more than 30 days from the date of acquisition;  (ii) bankers' acceptances and certificates of deposit and other  interest-bearing obligations (in each case having a maturity of not more than  30 days from the date of acquisition) denominated in Dollars and issued by any  bank with capital, surplus and undivided profits aggregating at least  $100,000,000, the short-term obligations of which meet or exceed the Short-Term  Rating Requirement;  (iii) commercial paper rated at least A-1 by Standard & Poor's and  Prime-1 by Moody's;  (iv) money market funds registered under the Investment Company Act  having a rating, at the time of such investment, of not less than Aaa by Moody's  and AAAm by Standard & Poor's;  (v) interest-bearing demand deposits, time deposits or certificates of  deposit (having original maturities of no more than 365 days) of depository  institutions or trust companies incorporated under the laws of the United States or  any State (or domestic branches of any foreign bank) and subject to supervision  and examination by federal or State banking or depository institution authorities;  provided, that at the time such investment, or the commitment to make such  investment, is entered into, the short-term debt rating of such depository  institution or trust company shall meet or exceed the Short-Term Rating  Requirement; and  (vi) any other investments approved in writing by the Administrative  Agent;  provided, that each of the Permitted Investments may be purchased from the Administrative  Agent, the Account Bank, or any of their respective Affiliates.  "Permitted Liens" means (i) Liens in favor of the Borrower created pursuant to the  Purchase Agreement, (ii) Liens in favor of any Agent or the Administrative Agent, as agent for  the Secured Parties created pursuant to this Agreement or any other Basic Document, (iii) Liens  for taxes and assessments not yet due or for taxes which the Borrower is contesting in good faith  and by appropriate legal proceedings the validity, applicability or amount thereof and such  contest does not materially endanger any right or interest of the Secured Parties under the Basic  Documents, (iv) Liens arising in the ordinary course of business by virtue of any contractual,  statutory or common law provision relating to banker's Liens, rights of set-off or similar rights  and remedies covering deposit or securities accounts (including funds or other assets credited  

 

     32  154304283v7  thereto) or other funds maintained with a depository institution or securities intermediary, (v)  Liens created pursuant to the  Control Agreement, and (vi) mechanics' liens and other liens  arising by operation of law.  "Person" means an individual, partnership, corporation, trust (including a business or  statutory trust), limited liability company, joint stock company, unincorporated association, sole  proprietorship, joint venture, government (or any agency or political subdivision thereof) or other  entity.   "Plan Event" means the occurrence of any of the following:  (i) a notice of intent to  terminate a Pension Plan has been filed; (ii) a Pension Plan termination under Section 4041(f) of  ERISA; (iii) the Pension Benefit Guaranty Corporation institutes proceedings to terminate, or  appoint a trustee to administer any Pension Plan; or (iv) the occurrence of an event or existence  of any condition that might constitute grounds under Section 4042 of ERISA for the termination  of, or the appointment of a trustee to administer, a Pension Plan.  "Pool Balance" means, as of any date of determination, the sum of the Adjusted Principal  Balances of all Receivables as of such date.  "Posted Collateral" has the meaning given to such term in Section 6.03(b).  "Prime Rate" means the rate of interest last quoted by The Wall Street Journal as the  "Prime Rate" in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per  annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical  Release H.15 (519) (Selected Interest Rates) as the "bank prime loan" rate or, if such rate is no  longer quoted therein, any similar rate quoted therein (as determined by the Administrative  Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative  Agent). Each change in the Prime Rate shall be effective from and including the date such  change is publicly announced or quoted as being effective.  "Prime Receivable" means a Receivable for which, at the time of underwriting, the  related FICO Score was 680 or greater.  "Prime Serviced Portfolio Receivable" means a Serviced Portfolio Receivable for which,  at the time of underwriting, the related FICO Score was 680 or greater.  "Principal Amount" means, with respect to any Loan, the aggregate amount advanced by  the Lenders on the Funding Date in respect of such Loan.  "Principal Balance" means, for any Receivable as of any date of determination, (i) the  related Amount Financed minus (ii) the sum, without duplication, of (a) that portion of all  Scheduled Payments actually received on or prior to such day allocable to principal using the  Simple Interest Method plus (b) any payment of the Release Price with respect to such  Receivable allocable to principal plus (c) any Cram Down Loss in respect of such Receivable  plus (d) any prepayment in full or any partial prepayment applied in reduction of principal of  such Receivable.  

 

     33  154304283v7  "Program Fee" means, for any Collection Period, the fee payable by the Borrower on the  related Payment Date in an amount equal to the product of (i) the Program Fee Rate times (ii) the  average daily Loans Outstanding during such Collection Period times (iii) a fraction, (a) the  numerator of which is the actual number of days during such Collection Period and (b) the  denominator of which is 360.  "Program Fee Rate" has the meaning given to such term in the Fee Letter.  "Purchase Agreement" means the Purchase Agreement, dated as of November 1, 2022,  between DFC and the Borrower, together with each Purchase Agreement Supplement.  "Purchase Agreement Supplement" means a Purchase Agreement Supplement in  substantially the form attached to the Purchase Agreement as Exhibit A, executed by the  Borrower and DFC in connection with a transfer of Receivables and the related Collateral on any  Funding Date.  "Qualified Institution" means any depository institution or trust company organized under  the laws of the United States or any State (or any domestic branch of a foreign bank), (i) (a) that  meets (or the parent of which meets) either (1) the Long-Term Rating Requirement or (2) the  Short-Term Rating Requirement or (b) is otherwise acceptable to the Administrative Agent and  (ii) whose deposits are insured by the Federal Deposit Insurance Corporation.  "Quarterly Report" means a data tape, which shall include as to each Receivable such  information as shall be agreed upon by the Administrative Agent and the initial Servicer or the  Successor Servicer, as applicable, including such information as the Administrative Agent may  reasonably request from time to time to satisfy or fulfill regulatory requirements applicable to the  Secured Parties, including capital treatment under Basel II or Basel III.    "Receivable" means Indebtedness owed to DFC or the Borrower by an Obligor (without  giving effect to any pledge hereunder) under a Contract included as part of the Collateral,  whether constituting an account, chattel paper, instrument or general intangible, arising out of or  in connection with the sale of the Financed Vehicle related thereto, and including the right of  payment of any finance charges and other obligations of the Obligor with respect thereto.   Notwithstanding the foregoing, once the Administrative Agent has released its security interest  in a Receivable and the related Contract in accordance with the terms of this Agreement, such  Receivable shall no longer be a Receivable hereunder.  "Receivable File" means a file pertaining to each Receivable containing, among other  things, each of the following documents:    (i) a fully executed original of the related Contract;   (ii) (a) a certificate of insurance, (b) an application form for insurance  signed by the related Obligor, or (c) a signed representation letter from the  Obligor pursuant to which the Obligor has agreed to obtain physical damage  insurance for the related Financed Vehicle;   

 

     34  154304283v7  (iii)  a copy of the application filed to amend the Certificate of Title to  indicate the security interest of DFC in the related Financed Vehicle and, from  and after the time that such Certificate of Title has been so amended, if the  applicable jurisdiction (a) issues original certificates of title, the original  Certificate of Title or, until such original Certificate of Title is available, an  application therefor, or (b) does not issue original certificates of title, a copy of  such Certificate of Title or other equivalent issued by such jurisdiction;  (iv) an electronic copy of the original credit application signed by the  related Obligor;  (v) electronic copies of all original assumption, consolidation,  extension, modification or waiver agreements, if any, relating to such Receivable;  (vi) any other documents that the Servicer shall keep on file, in  accordance with its customary procedures or the Credit and Collection Policy  relating to such Receivable, the related Obligor or the related Financed Vehicle;  and   (vii) electronic copies of any additional original loan documents  evidencing any assumption, consolidation, extension, modification or waiver of  such Receivable.  "Recipient" means the Administrative Agent or any Lender.  "Records" means, with respect to any Contract, all documents, books, records and other  information (including computer programs, tapes, disks, punch cards, data processing software  and related property and rights) maintained with respect to any related item of Collateral and the  related Obligor.  "Recoveries" means, with respect to any Defaulted Receivable and Collection Period, all  monies collected from whatever source during such Collection Period in respect of such  Defaulted Receivable, including Insurance Proceeds but excluding payment of the related  Release Price, net of any amounts required by Applicable Law to be remitted to the related  Obligor and net of the Servicer's expenses (other than overhead) incurred in connection with the  liquidation of such Defaulted Receivable and the related Financed Vehicle.  "Reference Time" means, with respect to any setting of the then-current Benchmark, (i) if  such Benchmark is Daily Simple SOFR, then four Business Days prior to such setting or (ii) if  such Benchmark is not Daily Simple SOFR, the time determined by the Administrative Agent in  its reasonable discretion.  "Registrar of Titles" means, with respect to any State, the governmental agency or body  responsible for the registration of, and the issuance of certificates of title relating to, motor  vehicles and liens thereon.  "Regulatory Requirement" has the meaning set forth in Section 2.10(a).  

 

     35  154304283v7  "Release Price" means an amount equal to the sum of (i) the Principal Balance of each  Receivable retransferred pursuant to Section 5.04(a) or 5.04(b), as applicable plus (ii) accrued  interest on each such Receivable (at the related APR) through the date of repurchase plus (iii) all  related Breakage Costs plus (iv) all Hedge Breakage Costs due to the relevant Hedge  Counterparties for any termination, in whole or in part, of one or more Hedge Transactions  related to the relevant Hedging Agreement, as required by the terms of any Hedging Agreement.  "Relevant Governmental Body" means the Federal Reserve Board and/or the NYFRB, as  applicable, or a committee officially endorsed or convened by the Federal Reserve Board and/or  the NYFRB or, in each case, any successor thereto.  "Reportable Event" means any of the events set forth in Section 4043(c) of ERISA for  which the 30-day notice provision has not been waived.  "Reporting Date" means, with respect to any Payment Date and the related Collection  Period, the second Business Day prior to such Payment Date.  "Required Lenders" means at a particular time, Lenders with aggregate Commitments  equal to 100% of the Aggregate Commitment.  "Required Overcollateralization" means, as of any date, an amount equal to the product of  (i) Weighted Average Overcollateralization Percentage as of such date times (ii) the highest Net  Eligible Pool Balance since the most recent Funding Date or, if more recent, the most recent  Take-out Date, in each case after giving effect to the related additions or removals of  Receivables on such date.  "Required Overcollateralization Percentage" means, as of any date, (i) with respect to  Prime Receivables, either (a) on any date of determination as of which no Step-up Event (Prime)  has occurred and is continuing, 8.00% or (b) on any date of determination as of which a Step-up  Event (Prime) has occurred and is continuing, 15.00%, (ii) with respect to Near Prime  Receivables, either (a) on any date of determination as of which no Step-up Event (Non-Prime)  has occurred and is continuing, 20.50% or (b) on any date of determination as of which as Step- up Event (Non-Prime) has occurred and is continuing, 28.50%, and (iii) with respect to Subprime  Receivables, either (a) on any date of determination as of which no Step-up Event (Non-Prime)  has occurred and is continuing, 37.00% or (b) on any date of determination as of which as Step- up Event (Non-Prime) has occurred and is continuing, 43.50%.  "Required Rate" means, as of any date and any Eligible Receivable, the sum of (i) the  Weighted Average Hedge Rate as of such date plus (ii) the Program Fee Rate as of such date  plus (iii) the Servicing Fee Rate plus (iv) the Backup Servicing Fee Rate plus (v) the greater of  (a) zero percent (0.00%) and (b) the percentage which will result in Excess Spread (Adjusted) for  such Eligible Receivable that is at least equal to the related Target Rate.  "Requirements of Law" means, with respect to any Person, the certificate of  incorporation or articles of association and by-laws or other organizational or governing  documents of such Person, and any law, treaty, rule or regulation, or order or determination of an  arbitrator or Governmental Authority, in each case applicable to or binding upon such Person or  to which such Person is subject, whether federal, State or local (including usury laws, the Federal  

 

     36  154304283v7  Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair  Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act,  the Magnuson-Moss Warranty Act, the Servicemembers Civil Relief Act, Regulations B, U, T, X  and Z of the Federal Reserve Board, the Dodd-Frank Act, the Gramm-Leach-Bliley Act, each  applicable state Motor Vehicle Retail Installment Sales Act, and state adaptations of the National  Consumer Act and of the Uniform Consumer Credit Code and all other consumer protection and  usury laws).  "Responsible Officer" means, when used with respect to any Person, any officer of such  Person, including any president, vice president, assistant vice president, secretary, assistant  secretary or any other officer thereof customarily performing functions similar to those  performed by the individuals who at the time shall be such officers, respectively, or to whom any  matter is referred because of such officer's knowledge of or familiarity with the particular  subject.  "Revolving Period" means the period commencing on the Closing Date and ending on the  day immediately preceding the Termination Date.  "Sanctioned Country" means, at any time, a country or territory which is the subject or  target of any Sanctions.  "Sanctioned Person" means, at any time, (i) any Person listed in any Sanctions-related list  of designated Persons maintained by the Office of Foreign Assets Control of the U.S.  Department of the Treasury or the U.S. Department of State, (ii) any Person operating, organized  or resident in a Sanctioned Country or (iii) any Person controlled by any such Person.  "Sanctions" means economic or financial sanctions or trade embargoes imposed,  administered or enforced from time to time by the U.S. government, including those  administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or  the U.S. Department of State.  "Schedule of Documents" means the schedule of documents attached hereto as  Schedule E.  "Schedule of Receivables" means the schedule of Receivables attached hereto as  Schedule C, as updated from time to time in connection with each Funding Request and any  Take-out Release.  "Scheduled Payments" means, with respect to each Receivable, the regularly scheduled  payments to be made by the related Obligor pursuant to the terms of the related Contract.  "Secured Party" means (i) the Administrative Agent, (ii) each Lender and (iii) each  Hedge Counterparty.  "Securities Act" means the Securities Act of 1933, as amended.  "Seller" means DFC in its capacity as Seller under the Purchase Agreement.  

 

     37  154304283v7  "Senior Monthly Interest and Fees" means, for any Payment Date, the sum of (i) the  amount of any accrued and unpaid Interest for such Payment Date, calculated at a per annum rate  equal to the Committed Lender Rate plus (ii) the Program Fee for such Payment Date plus (iii)  the Unused Commitment Fee for such Payment Date.  "Serviced Portfolio" means the Servicer's entire portfolio of motor vehicle retail  installment sale contracts and installment loans that (i) are originated, directly or indirectly, by  DFC in accordance with the Credit and Collection Policy, (ii) are serviced by DFC, (iii) are  owned by DFC or an Affiliate or a Subsidiary of DFC and (iv) satisfy each of the eligibility  requirements set forth on Schedule B hereto.  For the avoidance of doubt, no motor vehicle retail  installment sale contracts or installment loans that were originated, directly or indirectly, by DFC  in accordance with any predecessor set of credit policies and underwriting guidelines to the  Credit and Collection Policy shall be included in the Serviced Portfolio.  "Serviced Portfolio Defaulted Receivable" means, as of any date of determination, any  Serviced Portfolio Receivable (i) that has been, or is required to be, treated as "defaulted" in  accordance with the Credit and Collection Policy, (ii) with respect to which the Servicer has  determined in good faith that payments thereunder have ceased and are not likely to be resumed,  (iii) with respect to which the greater of (a) $50 and (b) 10% or more of any Scheduled Payment  remains unpaid for more than 120 days from the related due date, or (iv) for which the related  Financed Vehicle has been repossessed   For purposes of this definition, the "Scheduled  Payment" and "Financed Vehicle" for each Serviced Portfolio Receivable that is not a  Receivable shall be determined as if it were a "Receivable" for purposes of all related defined  terms.   "Serviced Portfolio Deferral Ratio" means, as of any date of determination, the  percentage equivalent of a fraction, (i) the numerator of which is the aggregate Principal Balance  of all Serviced Portfolio Receivables with respect to which a Deferral was granted during the  most recently completed Collection Period and (ii) the denominator of which is the aggregate  Principal Balance of all Serviced Portfolio Receivables as of the last day of such Collection  Period.  For purposes of this definition, the "Principal Balance" for each Serviced Portfolio  Receivable that is not a Receivable shall be determined as if it were a "Receivable" for purposes  of all related defined terms.  "Serviced Portfolio Delinquency Ratio" means, as of any date of determination, the  percentage equivalent of a fraction, (i) the numerator of which is the aggregate Principal Balance  of all Serviced Portfolio Delinquent Receivables as of the last day of the most recently  completed Collection Period and (ii) the denominator of which is the aggregate Principal  Balance of all Serviced Portfolio Receivables as of the last day of such Collection Period.  For  purposes of this definition, the "Principal Balance" for each Serviced Portfolio Receivable that is  not a Receivable shall be determined as if it were a "Receivable" for purposes of all related  defined terms.   "Serviced Portfolio Delinquent Receivable" means, as of any date of determination, any  Serviced Portfolio Receivable, (i) with respect to which the greater of (a) $50 and (b) 10% or  more of any Scheduled Payment remains unpaid for 60 or more days from the related due date  and (ii) that is not a Defaulted Receivable.  For purposes of this definition, the "Scheduled  

 

     38  154304283v7  Payment" for each Serviced Portfolio Receivable that is not a Receivable shall be determined as  if it were a "Receivable" for purposes of all related defined terms.   "Serviced Portfolio Net Loss Ratio (Non-Prime)" means, with respect to any date of  determination, the product of (i) the percentage equivalent of a fraction, (a) the numerator of  which is the difference of (1) the aggregate Principal Balance of all Non-Prime Serviced  Portfolio Receivables that became Serviced Portfolio Defaulted Receivables during the most  recently completed Collection Period minus (2) all Recoveries received during such Collection  Period with respect to Non-Prime Serviced Portfolio Receivables and (b) the denominator of  which is the aggregate Principal Balance of all Non-Prime Serviced Portfolio Receivables as of  the first day of such Collection Period times (ii) twelve.  For purposes of this definition, the  "Principal Balance" and "Recoveries" for each Non-Prime Serviced Portfolio Receivable that is  not a Receivable shall be determined as if it were a "Receivable" for purposes of all related  defined terms.  "Serviced Portfolio Net Loss Ratio (Prime)" means, with respect to any date of  determination, the product of (i) the percentage equivalent of a fraction, (a) the numerator of  which is the difference of (1) the aggregate Principal Balance of all Prime Serviced Portfolio  Receivables that became Serviced Portfolio Defaulted Receivables during the most recently  completed Collection Period minus (2) all Recoveries received during such Collection Period  with respect to Prime Serviced Portfolio Receivables and (b) the denominator of which is the  aggregate Principal Balance of all Prime Serviced Portfolio Receivables as of the first day of  such Collection Period times (ii) twelve.  For purposes of this definition, the "Principal Balance"  and "Recoveries" for each Prime Serviced Portfolio Receivable that is not a Receivable shall be  determined as if it were a "Receivable" for purposes of all related defined terms.  "Serviced Portfolio Receivable" means any motor vehicle receivable that is included in  the Serviced Portfolio.  "Servicer" has the meaning given to such term in the Preamble.  "Servicer Advance" means an advance made by the initial Servicer pursuant to  Section 7.05.   "Servicer Basic Documents" means all Basic Documents to which the initial Servicer is a  party or by which it is bound.  "Servicer Termination Event" has the meaning given to such term in Section 7.13.  "Servicer Termination Notice" has the meaning given to such term in Section 7.13.  "Servicing Fee" means the fee payable to the Servicer on each Payment Date in  accordance with Section 2.09(b) in an amount equal to either (i) in the case of the initial  Servicer, the product of (a) one-twelfth times (b) the applicable Servicing Fee Rate times (c) the  average daily Principal Balance of the Receivables during the related Collection Period or (ii) in  the case of the Backup Servicer in its capacity as Successor Servicer, the related fees set forth in  the Backup Servicing Agreement; provided, that the Servicing Fee for a Successor Servicer may  

 

     39  154304283v7  be subject to a minimum monthly fee to be mutually agreed upon by the Required Lenders and  such Successor Servicer.   "Servicing Fee Rate" means in the case of the initial Servicer, a rate per annum equal to  2.00%.  "Short-Term Rating Requirement" means, with respect to any Person, that such Person  has a short-term unsecured debt rating of not less than A-1 by Standard & Poor's and not less  than Prime-1 by Moody's.  "Significant Take-out Date" means any Take-out Date on which the Receivables that are  released from the Collateral in accordance with Section 2.12 have an aggregate Adjusted  Principal Balance (i) of at least $40,000,000 and (ii) that represents 80% or more of the Eligible  Pool Balance on such Take-out Date (before giving effect to such Take-out); provided, that if  any Receivables that are so released on a Take-out Date are included in the Collateral again  during the Collection Period in which the related Take-out Date occurred or during either of the  two succeeding Collection Periods, then such Receivables shall be deemed not to have been  released from the Collateral on the initial Take-out Date for purposes of this definition, but only  as of the date on which they are again included in the Collateral.  "Simple Interest Method" means the method of allocating a fixed level payment to  principal and interest, pursuant to which the portion of such payment that is allocated to interest  is equal to the product of the fixed rate of interest multiplied by the unpaid principal balance  multiplied by the period of time elapsed since the preceding payment of interest was made.  "SOFR" means a rate equal to the secured overnight financing rate as administered by the  SOFR Administrator.  "SOFR Administrator" means the NYFRB (or a successor administrator of the secured  overnight financing rate).  "SOFR Administrator's Website" means the NYFRB's website, currently at  http://www.newyorkfed.org, or any successor source for the secured overnight financing rate  identified as such by the SOFR Administrator from time to time.  "SOFR Determination Date" has the meaning given to such term in the definition of  "Daily Simple SOFR.”  "SOFR Rate Day" has the meaning given to such term in the definition of "Daily Simple  SOFR.”  "Solvent" means, as to any Person at any time, having a state of affairs such that (i) the  fair value of the property owned by such Person is greater than the amount of such Person's  liabilities (including disputed, contingent and unliquidated liabilities) as such value is established  and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code; (ii) the present  fair salable value of the property owned by such Person in an orderly liquidation of such Person  is not less than the amount that will be required to pay the probable liability of such Person on its  debts as they become absolute and matured; (iii) such Person is able to realize upon its property  

 

     40  154304283v7  and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities)  as they mature in the normal course of business; (iv) such Person does not intend to, and does not  believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and  liabilities mature; and (v) such Person is not engaged in business or a transaction, and is not  about to engage in a business or a transaction, for which such Person's property would constitute  unreasonably small capital.  "Standard & Poor's" means S&P Global Ratings, a Standard & Poor's Financial Services  LLC business.  "State" means any state of the United States or the District of Columbia.   "Step-up Event" means the occurrence as of any Reporting Date of any of the following  events:  (i) the arithmetic mean of the Serviced Portfolio Net Loss Ratio  (Prime) for the three previous Collection Periods is greater than 3.50%;   (ii) the arithmetic mean of the Conduit Portfolio Net Loss Ratio  (Prime) for the three previous Collection Periods is greater than 3.00% (provided,  that no Step-up Event will occur under this clause (ii) if a Significant Take-out  Date occurred during any of such three Collection Periods);   (iii) the arithmetic mean of the Serviced Portfolio Net Loss Ratio (Non- Prime) for the three previous Collection Periods is greater than 6.00%;   (iv) the arithmetic mean of the Conduit Portfolio Net Loss Ratio (Non- Prime) for the three previous Collection Periods is greater than 5.00% (provided,  that no Step-up Event will occur under this clause (iv) if a Significant Take-out  Date occurred during any of such three Collection Periods);   (v) the arithmetic mean of the Serviced Portfolio Delinquency Ratio  for the three previous Collection Periods is greater than 3.50%; or  (vi) the arithmetic mean of the Conduit Portfolio Delinquency Ratio for  the three previous Collection Periods is greater than 3.00% (provided, that no  Step-up Event will occur under this clause (vi) if a Significant Take-out Date  occurred during any of such three Collection Periods);  Any Step-up Event that occurs will be deemed to be continuing until the earlier of (a) the  first Reporting Date on which none of the events described above exists or (b) the  effective date of any waiver that is provided by the Consenting Lenders with respect to  the related Step-up Event.  "Step-up Event (Non-Prime)" means any Step-up Event described in clause (iii), (iv), (v)  or (vi) of the definition thereof.  

 

     41  154304283v7  "Step-up Event (Prime)" means any Step-up Event described in clause (i), (ii), (v) or (vi)  of the definition thereof.  "Stop-Funding Event" means the occurrence of any of the following:  (i) as of any Reporting Date, the arithmetic mean of the Serviced  Portfolio Delinquency Ratio for the three previous Collection Periods is greater  than 4.50%;  (ii) as of any Reporting Date, the arithmetic mean of the Serviced  Portfolio Net Loss Ratio (Prime) for the three previous Collection Periods is  greater than 5.00%;   (iii) as of any Reporting Date, the arithmetic mean of the Serviced  Portfolio Net Loss Ratio (Non-Prime) for the three previous Collection Periods is  greater than 7.00%; or  (iv) either (A) no Backup Servicing Agreement has been executed and  become effective by the date pursuant to Section 7.09(a), or (B) after the date on  which the Borrower initially enters into a Backup Servicing Agreement, such  Backup Servicing Agreement is thereafter terminated without the consent of the  Required Lenders.  Any Stop-Funding Event that occurs will be deemed to be continuing until the earlier of  (a) either (1) with respect to the Stop-Funding Events set forth in clauses (i), (ii) and (iii),  the first Reporting Date on which none of the events described in such clauses exists, or  (2) with respect to the Stop-Funding Event set forth in clause (iv), the first date thereafter  on which a Backup Servicing Agreement becomes effective in accordance with the terms  of this Agreement or (b) the effective date of any waiver that is provided by the Required  Lenders with respect to the related Step-up Event.  "Structuring Fee" has the meaning given to such term in the Fee Letter.  "Subordinated Hedge Breakage Costs" means Hedge Breakage Costs payable by the  Borrower to a Hedge Counterparty in connection with the termination of a Hedge Transaction  where either (i) such Hedge Counterparty is a "Defaulting Party" (as such term is defined in the  related Hedging Agreement) or (ii) such Hedge Counterparty is the sole "Affected Party" with  respect to a "Termination Event" (as such terms are defined in the related Hedging Agreement),  other than a Termination Event relating to illegality, force majeure and taxes, which by its terms  applies to such Hedge Counterparty, in all cases other than to the extent of a return of equivalent  collateral (and income thereon).  "Subordinated Monthly Interest Payment Amount" means, for any Payment Date, the  difference of (i) the sum of (a) the amount of any accrued and unpaid Interest for such Payment  Date, calculated pursuant to Section 2.05  plus (b) the Program Fee, if applicable, plus (c) the  Unused Commitment Fee, if applicable, minus (ii) the Senior Monthly Interest and Fees.  

 

     42  154304283v7  "Subprime Receivable" means a Receivable for which, at the time of underwriting, the  related FICO Score was (i) less than 620 (including a FICO Score of zero) or (ii) there was no  FICO Score.  "Subsequent Loan" means each Loan made following the Initial Loan.  "Subsequent Receivable" means each Receivable that becomes a part of the Collateral on  a Funding Date other than the Funding Date relating to the Initial Loan.  "Subsidiary" means, with respect to a Person, any entity with respect to which more than  50% of the outstanding voting securities shall at any time be owned or controlled, directly or  indirectly, by such Person and/or one or more of its Subsidiaries, or any similar business  organization which is so owned or controlled.  "Successor Servicer" has the meaning given to such term in Section 7.14(b).  "Take-out" means any transaction pursuant to which all or a portion of the Receivables  are released from the Lien granted to the Administrative Agent hereunder, a corresponding  portion of the Loans Outstanding are repaid, and such Receivables are transferred by the  Borrower to the Seller or another Person.  "Take-out Date" means the date upon which a Take-out is consummated.  "Take-out Date Certificate" means a certificate delivered by a Responsible Officer of the  Servicer on the Take-out Date indicating that the requirements set forth in this Agreement for a  Take-out has been satisfied.  "Take-out Release" means a release executed pursuant to Section 2.12, substantially in  the form of Exhibit E.  "Tangible Contract" means a Contract that constitutes "tangible chattel paper" (under and  as defined in the UCC as then in effect in the relevant State) evidencing any Receivable.  "Tangible Net Worth" means at any time with respect to DFC, the difference of DFC's (i)  assets minus (ii) liabilities minus (iii) without duplication, intangible assets, including goodwill,  franchises, licenses, deferred tax assets, patents, trademarks, trade names, copyrights and service  marks, in all cases calculated on a consolidated basis and in accordance with GAAP.   "Target Rate" means (i) with respect to any Prime Receivable, 2.25%, (ii) with respect to  any Near Prime Receivable, 3.75%, and (iii) with respect to any Subprime Receivable, 6.25%.  "Tax" or "Taxes" means all present or future taxes, levies, imposts, duties, deductions,  withholdings (including backup withholding), assessments, fees or other charges imposed by any  Governmental Authority, including any interest, additions to tax, additional amounts or penalties  applicable thereto.  "Termination Date" means the earliest to occur of (i) the occurrence of the Commitment  Termination Date with respect to all Lenders, (ii) the Business Day designated by the Borrower  

 

     43  154304283v7  to the Lenders as the Termination Date at any time following 30 days' prior written notice, (iii)  the date on which a Servicer Termination Event occurs, (iv) the date on which the Termination  Date either automatically occurs or is declared, as applicable, following the occurrence of a  Termination Event and pursuant to Section 8.01(b) or (v) the date on which an Early  Amortization Event occurs.    "Termination Event" has the meaning given to such term in Section 8.01(a).  "Transition Expenses" has the meaning given to such term in Section 7.14(f).  "U.S. Person" means any Person that is a "United States person" as defined in Section  7701(a)(30) of the Code.  "U.S. Tax Compliance Certificate" has the meaning specified in Section 2.11(g)(ii)(B)(3).  "UCC" means the Uniform Commercial Code as from time to time in effect in the  applicable jurisdiction.  "Unadjusted Benchmark Replacement" means the applicable Benchmark Replacement  excluding the related Benchmark Replacement Adjustment.  "United States" or "U.S." means the United States of America.  "Unmatured Servicer Termination Event" means any event that, with the giving of notice  or the lapse of time, or both, would become a Servicer Termination Event.  "Unmatured Termination Event" means any event that, with the giving of notice or the  lapse of time, or both, would become a Termination Event.  "Unreimbursed Servicer Advances" means, at any time, the amount of all previous  Servicer Advances (or portions thereof) as to which the Servicer has not been reimbursed as of  such time pursuant to Section 2.06.  "Unused Commitment Fee" means, for any Interest Period prior to the commencement of  the Amortization Period, the fee payable by the Borrower on the related Payment Date in an  amount equal to product of (i) the Unused Commitment Fee Rate times (ii) an amount equal to  the positive difference, if any, of (a) the average daily Aggregate Commitment during such  Interest Period minus (b) the average daily Loans Outstanding during such Interest Period times  (iii) a fraction, (A) the numerator of which is the actual number of days during such Interest  Period and (B) the denominator of which is 360.   "Unused Commitment Fee Rate" has the meaning given to such term in the Fee Letter.   "U.S. Government Securities Business Day" means any day except for (i) a Saturday, (ii)  a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association  recommends that the fixed income departments of its members be closed for the entire day for  purposes of trading in United States government securities.  

 

     44  154304283v7  "Used Vehicle" means a Financed Vehicle that (i) has an odometer reading of 500 miles  or greater, (ii) is a vehicle model that is more than two years old or (iii) was owned by and titled  in the name of any Person (other than Lithia or DFC).  "Weighted Average Hedge Rate" means, as of any date of determination, the percentage  equivalent of a fraction, (i) the numerator of which equals the sum of (a) the product of (1) the  aggregate notional amount under all Hedge Transactions that the Borrower has entered into and  that remain in effect on such date (after giving effect to any Hedge Transactions that the  Borrower enters into or terminates on such date) times (2) the weighted average for all such  Hedge Transactions (weighted by the notional amounts of such Hedge Transactions) of (A) with  respect to any Hedge Transaction that is in the form of an interest rate cap transaction, the  threshold rate above which payments are made by the related Hedge Counterparty to the  Borrower and (B) with respect to any Hedge Transaction that is in the form of an interest rate  swap transaction, the fixed rate payable by the Borrower thereunder plus (b) the product of (1)  the Hedge Shortfall times (2) the cap rate that is used as of such date pursuant to clause (ii)(B) of  the definition of "Hedge Reserve Account Required Amount" and (ii) the denominator of which  is equal to the Loans Outstanding on such date.  "Weighted Average Overcollateralization Percentage" means, as of any date of  determination, the percentage equivalent of a fraction, (i) the numerator of which equals the sum  of (a) the product of (1) the applicable Required Overcollateralization Percentage with respect to  Prime Receivables as of such date times (2) the difference of (A) the aggregate Adjusted  Principal Balance of all Prime Receivables that are Eligible Receivables as of such date minus  (B) the portion of the Excess Concentration Amount that is allocable to the Prime Receivables as  of such date plus (b) the product of (1) the applicable Required Overcollateralization Percentage  with respect to Near Prime Receivables as of such date times (2) the difference of (A) the  aggregate Adjusted Principal Balance of all Near Prime Receivables that are Eligible  Receivables as of such date minus (B) the portion of the Excess Concentration Amount that is  allocable to the Near Prime Receivables as of such date plus (c) the product of (1) the applicable  Required Overcollateralization Percentage with respect to Subprime Receivables as of such date  times (2) the difference of (A) the aggregate Adjusted Principal Balance of all Subprime  Receivables that are Eligible Receivables as of such date minus (B) the portion of the Excess  Concentration Amount that is allocable to the Subprime Receivables as of such date, and (ii) the  denominator of which is equal to the Net Eligible Pool Balance as of such date.  For purposes of  calculating the Weighted Average Overcollateralization Percentage on any date of determination,  the Excess Concentration Amount on such date shall be allocated among the Prime Receivables,  the Near Prime Receivables, and the Subprime Receivables based on the percentage of the  Eligible Pool Balance that is represented, respectively, by the Adjusted Principal Balance of all  Prime Receivables that are Eligible Receivables as of such date, the Adjusted Principal Balance  of all Near Prime Receivables that are Eligible Receivables as of such date, and the Adjusted  Principal Balance of all Subprime Receivables that are Eligible Receivables as of such date.  "Withholding Agent" means the Borrower and the Administrative Agent.   

 

     45  154304283v7  Section 1.02.  Accounting Terms and Determinations.  Unless otherwise defined or  specified herein, all accounting terms shall be construed herein, all accounting determinations  hereunder shall be made, all financial statements required to be delivered hereunder shall be  prepared and all financial records shall be maintained in accordance with GAAP.  Section 1.03.  Computation of Time Periods.  Unless otherwise stated in this Agreement,  in the computation of a period of time from a specified date to a later specified date, the word  "from" means "from and including" and the words "to" and "until" each mean "to but excluding".  Section 1.04.  Interpretation.  When used in this Agreement, unless a contrary intention  appears:  (i) a term has the meaning assigned to it; (ii) "or" is not exclusive; (iii) "including"  means including without limitation; (iv) words in the singular include the plural and words in the  plural include the singular; (v) any agreement, instrument or statute defined or referred to herein  or in any instrument or certificate delivered in connection herewith means such agreement,  instrument or statute as from time to time amended, modified or supplemented and includes (in  the case of agreements or instruments) references to all attachments thereto and instruments  incorporated therein; (vi) references to a Person are also to its successors and permitted assigns;  (vii) the words "hereof", "herein" and "hereunder" and words of similar import when used in this  Agreement shall refer to this Agreement as a whole and not to any particular provision hereof;  (viii) references contained herein to Section, Schedule and Exhibit, as applicable, are references  to Sections, Schedules and Exhibits in this Agreement unless otherwise specified; (ix) references  to "writing" include printing, typing, lithography and other means of reproducing words in a  visible form; and (x) the term "proceeds" has the meaning set forth in the applicable UCC.  ARTICLE TWO    LOANS  Section 2.01.  Loans.  (a) On the terms and conditions set forth herein, including this Section and  Article Four, the Borrower may from time to time on any Business Day during the Revolving  Period on which no Stop-Funding Event exists, request that each Lender make an advance (the  aggregate amount of such advances on a Funding Date, a "Loan") in the amount of each such  Lender's Lender Advance, to the Borrower on a Funding Date.  Any such Loan shall be made by  the related Committed Lender, to the extent that such Loan would not cause the portion of the  Loans Outstanding funded by such Lender Group, determined after giving effect to such funding,  to exceed its Commitment.  For the avoidance of doubt, no Committed Lender shall have any  obligation on any date to fund an amount that would cause its Lender Percentage of the Loans  Outstanding, determined after giving effect to such funding, to exceed its Commitment.  (b) No later than 3:00 p.m., New York City time, two Business Days prior to a  proposed Funding Date, the Borrower shall notify the Administrative Agent and the Agents of  such proposed Funding Date and Loan by delivering to the Administrative Agent and the Agents  (with a copy to the Account Bank):  

 

     46  154304283v7  (i) a Funding Request, which will include, among other things,  the proposed Funding Date, a calculation of the Borrowing Base as of the date the  Loan is requested (including all components of such calculation, including any Excess  Concentration Amounts) and the Principal Amount of the Loan requested, which shall  be in an amount at least equal to $1,000,000 or integral multiples of $100,000 in  excess thereof (or, if less, an amount equal to the Available Amount (after giving  effect to any payments on the related Payment Date if the Funding Date occurs on a  Payment Date)); and   (ii) an updated Schedule of Receivables that includes each  Receivable that is the subject of the proposed Loan.  (c) Following receipt by the Administrative Agent and the Agents of a Funding  Request, and prior to the Termination Date, each Lender Group severally agrees to make its  Lender Advance of any Loan requested by the Borrower pursuant to Section 2.01(b), subject to  the conditions contained herein, in an aggregate amount equal to the Loan so requested.  (d) In no event shall:  (i) a Lender be required to fund a Principal Amount that would  cause its Lender Percentage of the Loans Outstanding, determined after giving effect  to such funding, to exceed its Commitment;  (ii)  a Lender be required on any date to fund a Principal  Amount that would cause its Lender Percentage of the Loans Outstanding, determined  after giving effect to such funding, to exceed its Commitment;  (iii) any Loan be requested hereunder, nor shall any Lender be  obligated to fund its Lender Advance of any Loan, to the extent that after giving effect  to such Loan, the Loans Outstanding would exceed the Borrowing Base;  (iv) the Principal Amount of any Loan exceed the Available  Amount on such day; and  (v) more than one Loan be funded on any Business Day.  Section 2.02.  Funding Mechanics.  (a) If any Funding Request is delivered to the Administrative Agent and the Agents  after 3:00 p.m., New York City time, two Business Days prior to the proposed Funding Date,  such Funding Request shall be deemed to be received prior to 3:00 p.m., New York City time, on  the next succeeding Business Day and the proposed Funding Date of such proposed Loan shall  be deemed to be the second Business Day following the date of such deemed receipt.  Each  Funding Request shall include a representation by the Borrower that (i) the requested Loan will  not, on the related Funding Date, exceed the Available Amount and (ii) all conditions precedent  to the making of such Loan have been satisfied or will be satisfied as of the proposed Funding  Date.  Any Funding Request shall be irrevocable.  

 

     47  154304283v7  (b) Each Lender's Lender Advance of a Loan shall be made available to the Agent for  its Lender Group, subject to the fulfillment of the applicable conditions set forth in Section 2.01  and Article Four, at or prior to 1:00 p.m., New York City time, on the applicable Funding Date,  by deposit of immediately available funds to the Administrative Agent's Account.  The  Administrative Agent shall promptly notify the Borrower and the related Agent in the event that  any Lender Group either fails to make such funds available before such time or notifies the  Administrative Agent that it will not make such funds available before such time.  Subject to the  fulfillment of the applicable conditions set forth in Section 2.01 and Article Four, as determined  by the Administrative Agent, the Administrative Agent will not later than 3:00 p.m., New York  City time, on such Funding Date make all such funds deposited to the Administrative Agent's  Account by the Agents available, in the same type of funds received, by wire transfer thereof to  the Borrower's Account.  If any Lender Group makes available to the Administrative Agent  funds for any Loan to be made by such Lender Group as provided in the foregoing provisions of  this Article, and such funds are not made available to the Borrower by the Administrative Agent  because the conditions to the applicable Loan set forth in Section 2.01 and Article Four are not  satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return  such funds (in like funds as received from such Lender) to the related Agent for such Lender  Group, without interest.   (c) 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 of the  Lender Groups are several and no Lender Group shall be responsible for any other Lender  Group's failure to make Loans as required.  Section 2.03.  Reduction of Commitments.  (a) At any time the Borrower may, upon at least five Business Days' prior written  notice to the Administrative Agent, each Agent, the Account Bank and each Hedge  Counterparty, reduce the Facility Amount to an amount not less than the Loans Outstanding,  which reduction shall be applied, unless otherwise Consented to by the Administrative Agent and  the Agents, to the Commitments of each Lender pro rata based on the Lender Percentage  represented by such Commitment.  If any such written notice is delivered after 3:00 p.m., New  York City time, five Business Days prior, such notice shall be deemed to be received prior to  3:00 p.m., New York City time, on the next succeeding Business Day.  Each partial reduction  shall be in a minimum aggregate amount of $5,000,000 or integral multiples of $1,000,000 in  excess thereof.  Any request for a reduction in the Facility Amount shall be irrevocable and the  Borrower shall deliver no more than four such requests in any 12-month period.  (b) In connection with any reduction of the Facility Amount, the Borrower shall remit  to the Administrative Agent and the Agents, (i) instructions regarding such reduction and  (ii) cash for payment to each Lender, in an amount sufficient to pay any Aggregate Unpaids with  respect to such reduction, including any associated Breakage Costs; provided, that no such  reduction shall be given effect unless the Borrower has complied with the terms of any Hedging  Agreement requiring that one or more Hedge Transactions be terminated in whole or in part as a  result of any such reduction in the Loans Outstanding and the Borrower has paid all Hedge  Breakage Costs due to the relevant Hedge Counterparty for any such termination.  Upon receipt  of any such amounts, the Administrative Agent and Agents shall apply such amounts first to the  

 

     48  154304283v7  pro rata reduction of the Loans Outstanding, second to the payment of the remaining Aggregate  Unpaids with respect thereto, including any Breakage Costs, by paying such amounts to the  Lenders pro rata, based on their respective Lender Percentages.  (c) On the Commitment Termination Date for a Committed Lender, the Commitment  of such Committed Lender shall be automatically reduced to zero.  On the Termination Date, the  Commitments of all Committed Lenders shall be automatically reduced to zero; provided, that if  the Termination Date occurs solely due to the occurrence of an Early Amortization Event and all  Lenders have consented to the waiver of such Early Amortization Event, then the Commitments  of all Committed Lenders shall remain at their levels immediately prior to the occurrence of such  Early Amortization Event.   Section 2.04.  Extensions of Commitments.  (a) Neither more than 120 days nor fewer than 60 days prior to any Commitment  Termination Date, the Borrower may request in writing to the related Agent on behalf of its  related Lender Group (with a copy to the Administrative Agent), that the related Committed  Lender extend its Commitment Termination Date for an additional 364-day period as herein  provided, which request will be granted or denied by each Lender Group in its sole discretion.   Upon receipt of any such request, the related Agent shall notify each Committed Lender in its  Lender Group.  On or before the last day of the Election Period, the related Committed Lender  shall notify the Agent for its Lender Group of its willingness or refusal to so extend its  Commitment Termination Date; provided, that the failure of any Committed Lender to respond  prior to the last day of the Election Period shall be deemed to be its refusal to so extend the  Commitment Termination Date.  The Agent for such Lender Group shall notify the Borrower  and the Administrative Agent of such willingness or refusal by the Committed Lender not later  than the Business Day following the last day of the Election Period.  If (i) the Committed Lender  in a Lender Group has agreed to extend the related Commitment Termination Date and (ii) as of  the Commitment Termination Date then in effect, no Termination Event shall have occurred and  be continuing, the Commitment Termination Date then in effect for each such Committed Lender  that has agreed to extend the Commitment Termination Date shall be extended to the date which  is 364 days following the Commitment Termination Date then in effect or, if such day is not a  Business Day, the next preceding Business Day (or to any other date as agreed upon by the  Borrower and each Committed Lender).   (b) Within two Business Days following the end of an Election Period, the Agent for  each Lender Group shall notify each other Lender in such Lender Group, the Administrative  Agent and the Borrower of the identity of any Non-Extending Lender and the amount of its  Commitment.  The Administrative Agent and the Borrower may (but shall not be required to)  request one or more other Committed Lenders to acquire all or a portion of the Commitment of  the Non-Extending Lender and all amounts payable to it hereunder in accordance with  Article Eleven on or prior to the related Commitment Termination Date of such Non-Extending  Lender.  Each Non-Extending Lender hereby agrees to assign all or a portion of its Commitment  and the amounts payable to it hereunder to a replacement Committed Lender identified in  accordance with the preceding sentence, subject to ratable payment of such Non-Extending  Lender's Invested Percentage of the Loans Outstanding, together with all accrued and unpaid  interest thereon, and a ratable portion of all fees and other amounts due to it hereunder.  

 

     49  154304283v7  (c) Prior to the occurrence of the Termination Date, if a Partial Expiration Event has  occurred, the Administrative Agent shall give notice to the Borrower and the Servicer to apply  any Collections in accordance with Section 2.06(vi)(B), except as otherwise provided in  Section 2.06, pro rata to the repayment of such amounts owing to any Non-Extending Lender as  of the date of the related Partial Expiration Event, commencing no later than the first Payment  Date which is at least two Business Days following the Commitment Termination Date for the  Non-Extending Lender, specifying the amounts thereof.  Section 2.05.  Interest Calculations and Payment Allocations.  (a) Each Loan shall bear interest at a rate per annum calculated in accordance with  this Section 2.05.  Prior to the declaration of the occurrence of the Termination Date pursuant to  Section 8.01(b), each Lender’s Invested Percentage of the Loans Outstanding shall accrue  interest on each day during the related Interest Period at a rate per annum equal to the Committed  Lender Rate for such day. On and after the declaration of the occurrence of the Termination Date  pursuant to Section 8.01(b), each Lender’s Invested Percentage of the Loans Outstanding shall  accrue Interest on each day during the related Interest Period at a per annum rate equal to the  Default Rate for such day.  (b) Interest computed by reference to Daily Simple SOFR hereunder shall be  computed on the basis of a year of 360 days.  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).  In each case interest shall be  payable for the actual number of days elapsed (including the first day but excluding the last day).   All interest hereunder on any Loan shall be computed on a daily basis based upon the  outstanding principal amount of such Loan as of the applicable date of determination.  The  applicable Alternate Base Rate or Daily Simple SOFR shall be determined by the Administrative  Agent, and such determination shall be conclusive absent manifest error.    (c) The Borrower shall pay Interest on the unpaid Principal Amount of each Loan for  the period from the related Funding Date until the date that such Loan shall be paid in full.   Interest shall accrue during each Interest Period and be payable on the Loans Outstanding on  each Payment Date in accordance with Section 2.06.  (d) The principal of and Interest on the Loans shall be paid as provided herein.  In the  case of Loans owned by an Agent as agent for its Lender Group, such Agent shall allocate to the  members of its Lender Group each payment in respect of the Loans received by such Agent as  provided herein.  Payments in respect of principal and Interest (including pursuant to Section  2.13) shall be allocated and applied to Owners of such Loan based on their respective Invested  Percentages, or in any such case in such other proportions as each affected Lender may agree  upon in writing from time to time with such Agent and the Borrower; provided, that from and  after the Commitment Termination Date for each Dissenting Lender until the earlier to occur of  (i) the Termination Date and (ii) the date on which the aggregate amount of payments in  reduction of Loans Outstanding made after the date of the occurrence of the related Partial  Expiration Event equals the Partial Expiration Event Amount, except as otherwise provided in  Section 2.06, payments pursuant to Section 2.06(vi)(B) in reduction of the Partial Expiration  

 

     50  154304283v7  Event Amount shall be allocated and applied to Non-Extending Lenders pro rata based on their  respective Lender Percentages as of the date of the related Partial Expiration Event.  (e) The interest rate on a Loan may be derived from an interest rate benchmark that  may be discontinued or is, or may in the future become, the subject of regulatory reform.  Upon  the occurrence of a Benchmark Transition Event, Section 2.17(b) provides a mechanism for  determining an alternative rate of interest.  The Administrative Agent does not warrant or accept  any responsibility for, and shall not have any liability with respect to, the administration,  submission, performance or any other matter related to any interest rate used in this Agreement,  or with respect to any alternative or successor rate thereto, or replacement rate thereof, including  without limitation, whether the composition or characteristics of any such alternative, successor  or replacement reference rate will be similar to, or produce the same value or economic  equivalence of, the existing interest rate being replaced or have the same volume or liquidity as  did any existing interest rate prior to its discontinuance or unavailability.  The Administrative  Agent and its affiliates and/or other related entities may engage in transactions that affect the  calculation of any  interest rate used in this Agreement or any alternative, successor or alternative  rate (including any Benchmark Replacement) and/or any relevant adjustments thereto, in each  case, in a manner adverse to the Borrower.  The Administrative Agent may select information  sources or services in its reasonable discretion to ascertain any interest rate used in this  Agreement, any component thereof, or rates referenced in the definition thereof, in each case  pursuant to the terms of this Agreement, and shall have no liability to the Borrower, any Lender  or any other person or entity for damages of any kind, including direct or indirect, special,  punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract  or otherwise and whether at law or in equity), for any error or calculation of any such rate (or  component thereof) provided by any such information source or service.  (f) At or before 3:00 p.m., New York City time, on the third Business Day prior to  each Reporting Date, (i) each Lender shall notify the Agent for its Lender Group of (A) Daily  Simple SOFR in effect for each day during the related Interest Period, and (B) if applicable, the  date on which the Alternate Base Rate became applicable to its Invested Percentage of the Loans  Outstanding or a portion thereof.  At or before 5:00 p.m., New York City time, on the third  Business Day prior to each Reporting Date, the Agents shall then notify the Borrower of all such  rates.  For such purposes, the Agents may rely conclusively on notices from Lenders as to the  interest rate or rates from time to time applicable to their respective Invested Percentage of the  Loans Outstanding.  Each determination by a Lender of Daily Simple SOFR pursuant to this  Agreement shall be conclusive and binding on the Lenders, each Agent, the Borrower, the  Servicer, and the Collateral Custodian, in the absence of manifest error.  (g) Notwithstanding any other provision of this Agreement or the other Basic  Documents, if at any time the rate of interest payable by any Person under the Basic Documents  exceeds the Maximum Lawful Rate, then, so long as the Maximum Lawful Rate would be  exceeded, such rate of interest shall be equal to the Maximum Lawful Rate.  If at any time  thereafter the rate of interest so payable is less than the Maximum Lawful Rate, such Person  shall continue to pay Interest at the Maximum Lawful Rate until such time as the total interest  received from such Person is equal to the total Interest that would have been received had  Applicable Law not limited the interest rate so payable.  In no event shall the total Interest  received by a Lender under this Agreement and the other Basic Documents exceed the amount  

 

     51  154304283v7  which such Lender could lawfully have received, had the Interest due been calculated from the  Closing Date at the Maximum Lawful Rate.  Section 2.06.  Settlement Procedures.  On each Payment Date, the Servicer shall instruct  the Account Bank to pay, to the following Persons, from the Collection Account to the extent of  Available Funds the following amounts in the following order of priority, as set forth in the  related Monthly Report:  (i) First, to the Servicer, an amount equal to any Unreimbursed  Servicer Advances, to the extent not previously retained by the Servicer;  (ii) Second, to the Backup Servicer, the Backup Servicing Fee,  any out-of-pocket expenses that are reimbursable to the Backup Servicer pursuant to  the Backup Servicing Agreement (including any Transition Expenses, but only if the  Backup Servicer is not the Successor Servicer), and any indemnifiable amounts due to  the Backup Servicer; provided, that Transition Expenses payable to the Backup  Servicer pursuant to this clause may not exceed $100,000 in any calendar year;  (iii) Third, pro rata (A) to the Servicer (including any  Successor Servicer), the accrued and unpaid Servicing Fee and all Ancillary Fees to  the extent not previously retained by the Servicer and (B) to any Successor Servicer,  any out-of-pocket expenses and indemnities due to the Successor Servicer; provided,  that aggregate amounts payable to any Successor Servicer pursuant to this clause may  not exceed $100,000 in any calendar year;  (iv) Fourth, pro rata (A) to each Hedge Counterparty (based on  amounts due to each Hedge Counterparty pursuant to this subclause), any net  payments due and payable under the related Hedging Agreement (other than Hedge  Breakage Costs), and (B) to each Agent (based on amounts due to the members of  each Lender Group pursuant to this subclause), for further payment to each related  Lender, an amount equal to the sum of (1) the portion of Senior Monthly Interest and  Fees due to members of the related Lender Group plus (2) any Breakage Costs of any  related Lender;   (v) Fifth, pro rata (A) to each Hedge Counterparty that has any  due and payable Hedge Breakage Costs (other than Subordinated Hedge Breakage  Costs), such Hedge Breakage Costs, and (B) to each Agent (based on Lender  Percentage) for further payment to each related Lender, the Monthly Principal  Payment Amount;  (vi) Sixth, if the Termination Date has not occurred but a Partial  Expiration Event has occurred, pro rata to each Agent for a Lender Group that  includes a Non-Extending Lender (based on the Loans Outstanding to each such Non- Extending Lender) for further payment to each related Non-Extending Lender, an  amount equal to the product of (A) such Non-Extending Lender's Invested Percentage  as of its Commitment Termination Date times (B) all remaining Available Funds until  

 

     52  154304283v7  the portion of the Loan Outstanding owned by such Non-Extending Lender is reduced  to zero;  (vii) Seventh, pro rata to each Agent (based on the amount of  the Subordinated Monthly Interest Payment Amount due to members of the related  Lender Group), for further payment to each related Lender, the Subordinated Monthly  Interest Payment Amount;  (viii) Eighth, pro rata to each Hedge Counterparty that has any  due and payable Subordinated Hedge Breakage Costs (based on such amounts due),  such Subordinated Hedge Breakage Costs;  (ix) Ninth, pro rata to each Agent (based on such amounts due)  for further payment to the related Lender or the related Indemnified Parties, all other  Aggregate Unpaids (other than the principal amount of the Loans Outstanding) then  due to the Lenders and Indemnified Parties under this Agreement;   (x) Tenth, pro rata (based on such amounts due) to the Backup  Servicer and the Successor Servicer, any fees, expenses (including Transition  Expenses) and indemnities not paid pursuant to clauses (ii) or (iii), above, as  applicable; and   (xi) Eleventh, any remaining amount shall be distributed to, or  as otherwise directed by, the Borrower.    Section 2.07.  Payments, Computations, Etc.  (a) Unless otherwise expressly provided herein, all amounts to be paid or deposited  by the Borrower hereunder shall be paid or deposited in accordance with the terms hereof no  later than 3:00 p.m., New York City time, on the day when due in Dollars in immediately  available funds to the Administrative Agent's Account, for further payment by the  Administrative Agent to the Persons to who such amounts are due and payable.  (b) Whenever any payment hereunder (i) shall be stated to be due on a day other than  a Business Day, such payment shall be made on the next succeeding Business Day, except in the  case where the next succeeding Business Day would occur in the succeeding calendar month, in  which case such payment shall be due on the preceding Business Day or (ii) is received after  3:00 p.m., New York City time, such payment shall be deemed to have been received on the next  succeeding Business Day, and any such extension of time shall in such case be included in the  computation of payment of Interest, other interest or any fee payable hereunder, as the case may  be.  (c) If any Loan requested by the Borrower and approved by a Lender and the  Administrative Agent pursuant to Section 2.01 is not, for any reason other than due to the fault of  an Agent, a Lender or the Administrative Agent, made or effectuated, as the case may be, on the  date specified therefor, the Borrower shall indemnify such Lender against any reasonable loss,  cost or expense incurred by such Lender, including any loss (including loss of anticipated profits,  net of anticipated profits in the reemployment of such funds in the manner determined by such  

 

     53  154304283v7  Lender), cost or expense incurred by reason of the liquidation or reemployment of deposits or  other funds acquired by such Lender to fund or maintain such Loan.  (d) All payments hereunder shall be made without set-off or counterclaim and in such  amounts as may be necessary in order that all such payments shall not be less than the amounts  otherwise specified to be paid under this Agreement.  (e) To the extent that (i) any Person makes a payment to the Borrower, the  Administrative Agent, the Servicer, the Backup Servicer, the Collateral Custodian or any Lender  or Agent or (ii) the Borrower, the Administrative Agent, the Servicer, the Backup Servicer, the  Collateral Custodian or any Lender or Agent receives or is deemed to have received any payment  or proceeds for application to an obligation, which payment or proceeds or any part thereof are  subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be  repaid to a trustee, receiver or any other party under any Insolvency Law, State or federal law,  common law or for equitable cause, then, to the extent such payment or proceeds are set aside,  the obligation or part thereof intended to be satisfied shall be revived and continue in full force  and effect, as if such payment or proceeds had not been received or deemed received by the  Borrower, the Administrative Agent, the Servicer, the Backup Servicer, the Collateral Custodian  or any Lender or Agent, as the case may be.  Section 2.08.  Collections and Allocations; Investment of Funds.  (a) On or before the applicable Funding Date, the Borrower or the Servicer shall  direct and instruct all related Obligors to make payments in respect of the related Receivables  that are made (i) by mail to be made directly to the Lockboxes and (ii) by electronic payments to  be made to the Lockbox Account.  On and after the applicable Funding Date, the Borrower and  the Servicer shall use commercially reasonable efforts to ensure that all Collections are deposited  to the Lockbox Account (unless this Agreement specifically provides that such Collections are to  be deposited directly to the Collection Account).   (b) The Servicer shall instruct the Lockbox Bank to remove all Collections from the  Lockbox Account and deposit such amounts into the Collection Account within two Business  Days of their deposit to the Lockbox Account.  The Servicer and the Borrower shall deposit all  other Collections to the Collection Account as soon as practicable, but in no event later than two  Business Days after receipt thereof, and at all times prior to such deposit to the Collection  Account the Servicer or the Borrower, as applicable, shall hold such Collections in trust for the  benefit of the Administrative Agent.  Notwithstanding the foregoing, the Servicer shall be  permitted to make all deposits in accordance with Section 7.03(c)(v) whenever the conditions set  forth in that Section are satisfied.  (c) The Servicer shall be entitled to retain and to reimbursement of all amounts  remitted by or on behalf of the Obligors to the Servicer under the terms of, or with respect to, the  related Receivables, that represent Ancillary Fees.  (d) To the extent there are uninvested amounts on deposit in the Collection Account  or the Hedge Reserve Account, such amounts shall be invested in Permitted Investments that  mature no later than the Business Day before the next Payment Date, which Permitted  

 

     54  154304283v7  Investments shall be selected (i) prior to the occurrence of any Termination Event, by the  Borrower or (ii) from and after the occurrence of any Termination Event, by the Administrative  Agent.  Absent the written instruction of the Borrower or the Administrative Agent, the Account  Bank shall invest funds on deposit in the Collection Account and the Hedge Reserve Account in  Permitted Investments described in clause (v) of the definition thereof.  No Permitted Investment  may be purchased at a premium.  Any earnings (and losses) on the foregoing investments shall  be for the account of the Borrower.  (e) At any time that any amounts are on deposit in the Hedge Reserve Account, (i)  the Administrative Agent may, in its sole discretion, enter into one or more Hedge Transactions  on behalf of the Borrower in the form of interest rate cap transactions, any up-front payments  related to which will be paid with amounts that are withdrawn from the Hedge Reserve Account  or (ii) if a Mandatory Hedging Condition exists, the Borrower may elect to withdraw amounts  that are on deposit in the Hedge Reserve Account in order to fund any up-front payments that it  is required to pay under Hedge Transactions that it enters into in order to ensure that it is Fully  Hedged.  With respect to any Hedge Transaction entered into by the Administrative Agent  pursuant to clause (i), the Administrative Agent shall provide a copy of all applicable  documentation related to such Hedge Transaction to the Borrower and the Servicer.  (f) If on any Payment Date no Termination Event or Unmatured Termination Event  has occurred and is continuing, then if the amount on deposit in the Hedge Reserve Account is  greater than the Hedge Reserve Account Required Amount as of such Payment Date, the initial  Servicer may withdraw such excess amount and pay such amount to, or at the direction of, the  Borrower.  Furthermore, any amounts remaining on deposit in the Hedge Reserve Account  at  any time that the Borrower is Fully Hedged, may be withdrawn from the Hedge Reserve Account  by the initial Servicer and paid to, or as directed by, the Borrower.  Section 2.09.  Fees.  (a) The Borrower hereby agrees to pay to each Agent, to the extent of Available  Funds, for the account of the related Lenders, monthly in arrears, the Unused Commitment Fee  and the Program Fee from the Collection Account in accordance with Section 2.06.  Payments of  the Program Fee and the Unused Commitment Fee shall be allocated and paid to Owners based  upon their respective Invested Percentages for the applicable Interest Period.    (b) The Servicer and the Backup Servicer shall be entitled to receive any accrued and  unpaid fees due to them, respectively, in accordance with Section 2.06.  (c) The Borrower shall pay to the Administrative Agent on the Closing Date the  Structuring Fee and from time to time any reasonable out-of-pocket expenses (including fees  charged by any nationally recognized statistical rating organization in connection with reviewing  the transactions contemplated by this Agreement) in immediately available funds.  (d) The Borrower shall pay to Katten Muchin Rosenman LLP, counsel to the  Administrative Agent and the Lenders, in immediately available funds and in all cases within 30  days after receiving an invoice for the related amounts, (i) its reasonable fees accrued through  and including the Closing Date (not to exceed $250,000) and out-of-pocket expenses for services  

 

     55  154304283v7  rendered through and including the Closing Date, and (ii) any additional reasonable fees and out- of-pocket expenses incurred by such counsel for services rendered to the Administrative Agent  and the Lenders after the Closing Date.  (e) The Borrower shall pay to the Administrative Agent from time to time the  reasonable out-of-pocket expenses of any on-going surveillance fees charged by any nationally  recognized statistical rating organization in connection with reviewing the transactions  contemplated by this Agreement.    Section 2.10.  Increased Cost and Reduced Return.  (a) If any Regulatory Requirement (i) subjects any Lender to any charge or  withholding on or with respect to this Agreement or a Lender's obligations under this Agreement  or on or with respect to the Receivables, or changes the basis of taxation of payments to any  Lender of any amounts payable under this Agreement (except for changes in the rate of Tax on  the overall net income of a Lender, Indemnified Taxes, or Excluded Taxes), (ii) imposes,  modifies or deems applicable any reserve, assessment, fee, tax (other than (A) Indemnified  Taxes, (B) Taxes described in clauses (ii) through (iv) of the definition of Excluded Taxes and  (C) Connection Income Taxes), insurance charge, special deposit or similar requirement against  assets of, deposits with or for the account of, or liabilities of a Lender, or credit extended by a  Lender pursuant to this Agreement or, (iii) imposes any other condition the result of which is to  increase the cost to a Lender of performing its obligations or this Agreement, or to reduce the  rate of return on a Lender's capital or assets as a consequence of its obligations under this  Agreement, or to reduce the amount of any sum received or receivable by a Lender under a this  Agreement, or to require any payment calculated by reference to the amount of interests or loans  held or interest received by it, then, upon demand by the Administrative Agent, the Borrower  shall pay to the Administrative Agent, for the benefit of the relevant Lender, such amounts  charged to such Lender or such amounts to otherwise compensate such Lender for such increased  cost or such reduction.  The term "Regulatory Requirement" shall mean (i) the adoption after the date hereof of  any applicable law, rule or regulation (including any applicable law, rule or regulation regarding  capital adequacy or liquidity coverage) or any change therein after the date hereof, or (ii) any  change after the date hereof in the interpretation or administration thereof by any governmental  authority, central bank or comparable agency charged with the interpretation or administration  thereof, or compliance with any request or directive (whether or not having the force of law) of  any such authority, central bank or comparable agency; provided, that for purposes of this  definition, (A) the Dodd-Frank Act and all requests, rules, guidelines or directives thereunder,  issued in connection therewith or in implementation thereof, and (B) all requests, rules,  guidelines and directives promulgated by the Bank for International Settlements, the Basel  Committee on Banking Supervision (or any successor or similar authority) or the United States  or foreign regulatory authorities, in each case pursuant to Basel II or Basel III, shall in each case  be deemed to be a "Regulatory Requirement", regardless of the date enacted, adopted, issued or  implemented.  The Borrower acknowledges that any Lender may institute measures in  anticipation of a Regulatory Requirement (including, without limitation, the imposition of  internal charges on such Person's interests or obligations under this), and may commence  allocating charges to or seeking compensation from the Borrower under this Section in  

 

     56  154304283v7  connection with such measures, in advance of the effective date of such Regulatory Requirement  (such charges or compensation, "Early Adoption Increased Costs").  The Borrower agrees to pay  Early Adoption Increased Costs to the Administrative Agent, for the benefit of such Lender,  which are incurred by such Lender, beginning sixty (60) days after delivery by such Lender (or  the Agent on its behalf) to the Borrower of a written representation and warranty (an "Early  Adoption Increased Costs Representation") to the effect that such Lender is (x) recognizing Early  Adoption Increased Costs, (y) setting forth the amount or amounts necessary to compensate such  Lender, and (z) that such Lender actually incurred such costs.  The Borrower further  acknowledges that any charge or compensation demanded hereunder may take the form of a  monthly charge to be assessed by such Lender.  For the avoidance of doubt, the Borrower shall  not be required to pay any Early Adoption Increased Costs incurred by any Lender prior to the  expiration of sixty (60) days after receipt by the Borrower of the Early Adoption Increased Costs  Representation from or on behalf of such Lender.  The Early Adoption Increased Costs  Representation shall be conclusive absent manifest error.    (b) Failure or delay on the part of any Lender to demand compensation pursuant to  this Section shall not constitute a waiver of such Lender's right to demand such compensation;  provided, that the Borrower shall not be required to compensate a Lender pursuant to this Section  for any increased costs incurred or reductions suffered more than six months prior to the date that  such Lender notifies the Borrower of the Regulatory Requirement giving rise to such increased  costs or reductions, and of such Lender's intention to claim compensation therefor (except that, if  the Regulatory Requirement 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).  Section 2.11.  Taxes.  (a) Defined Term.  For purposes of this Section, the term "applicable law" includes  FATCA.  (b) Payments Free of Taxes.  Any and all payments by or on account of any  obligation of the Borrower under any Borrower Basic Document shall be made without  deduction or withholding for any Taxes, except as required by applicable law.  If any applicable  law (as determined in the good faith discretion of an applicable Withholding Agent) requires the  deduction or withholding of any Tax from any such payment by a Withholding Agent, then the  applicable Withholding Agent shall be entitled to make such deduction or withholding and shall  timely pay the full amount deducted or withheld to the relevant Governmental Authority in  accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by  the Borrower shall be increased as necessary so that after such deduction or withholding has  been made (including such deductions and withholdings applicable to additional sums payable  under this Section) the applicable Recipient receives an amount equal to the sum it would have  received had no such deduction or withholding been made.  (c) Payment of Other Taxes by the Borrower.  The Borrower shall timely pay to the  relevant Governmental Authority in accordance with applicable law, or at the option of the  Administrative Agent timely reimburse it for the payment of, any Other Taxes.  

 

     57  154304283v7  (d) Indemnification by the Borrower.  The Borrower shall indemnify each Recipient,  within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including  Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section)  payable or paid by such Recipient or required to be withheld or deducted from a payment to such  Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not  such Indemnified Taxes were correctly or legally imposed or asserted by the relevant  Governmental Authority.  A certificate as to the amount of such payment or liability delivered to  the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative  Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.  (e) Indemnification by the Lenders.  Each Lender shall severally indemnify the  Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes  attributable to such Lender (but only to the extent that the Borrower has not already indemnified  the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the  Borrower to do so), (ii) any Taxes attributable to such Lender's failure to comply with the  provisions of Section 11.01(e) relating to the maintenance of a Participant Register and (iii) any  Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the  Administrative Agent in connection with any Borrower Basic Document, and any reasonable  expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or  legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the  amount of such payment or liability delivered to any Lender by the Administrative Agent shall  be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to  set off and apply any and all amounts at any time owing to such Lender under any Borrower  Basic Document or otherwise payable by the Administrative Agent to the Lender from any other  source against any amount due to the Administrative Agent under this paragraph (e).  (f) Evidence of Payments.  As soon as practicable after any payment of Taxes by the  Borrower to a Governmental Authority pursuant to this Section, the Borrower shall deliver to the  Administrative Agent the original or a certified copy of a receipt issued by such Governmental  Authority evidencing such payment, a copy of the return reporting such payment or other  evidence of such payment reasonably satisfactory to the Administrative Agent.  (g) Status of Lenders.  (i) Any Lender that is entitled to an exemption from or  reduction of withholding Tax with respect to payments made under any Borrower  Basic Document shall deliver to the Borrower and the Administrative Agent, at the  time or times reasonably requested by the Borrower or the Administrative Agent, such  properly completed and executed documentation reasonably requested by the  Borrower or the Administrative Agent as will permit such payments to be made  without withholding or at a reduced rate of withholding.  In addition, any Lender, if  reasonably requested by the Borrower or the Administrative Agent, shall deliver such  other documentation prescribed by applicable law or reasonably requested by the  Borrower or the Administrative Agent as will enable the Borrower or the  Administrative Agent to determine whether or not such Lender is subject to backup  withholding or information reporting requirements.  Notwithstanding anything to the  contrary in the preceding two sentences, the completion, execution and submission of  

 

     58  154304283v7  such documentation (other than such documentation set forth in Section 2.11(g)(ii)(A),  (ii)(B) and (ii)(D) below) shall not be required if in the Lender's reasonable judgment  such completion, execution or submission would subject such Lender to any material  unreimbursed cost or expense or would materially prejudice the legal or commercial  position of such Lender.  (ii) Without limiting the generality of the foregoing:   (A)  any Lender that is a U.S. Person shall deliver to the  Borrower and the Administrative Agent on or prior to the date on which  such Lender becomes a Lender under this Agreement (and from time to  time thereafter upon the reasonable request of the Borrower or the  Administrative Agent), executed copies of IRS Form W-9 certifying that  such Lender is not subject to U.S. federal backup withholding tax;   (B)  any Foreign Lender shall, to the extent it is legally entitled  to do so, deliver to the Borrower and the Administrative Agent (in such  number of copies as shall be requested by the recipient) on or prior to the  date on which such Foreign Lender becomes a Lender under this  Agreement (and from time to time thereafter upon the reasonable request  of the Borrower or the Administrative Agent), whichever of the following  is applicable:  (1)   in the case of a Foreign Lender claiming the  benefits of an income tax treaty to which the United States is a  party (x) with respect to payments of interest under any Borrower  Basic Document, executed copies of IRS Form  W-8BEN orW- 8BEN-E establishing an exemption from, or reduction of, U.S.  federal withholding Tax pursuant to the "interest" article of such  tax treaty and (y) with respect to any other applicable payments  under any Borrower Basic Document, IRS Form W-8BEN or W- 8BEN-E establishing an exemption from, or reduction of, U.S.  federal withholding Tax pursuant to the "business profits" or "other  income" article of such tax treaty;  (2)   executed copies of IRS Form W-8ECI;  (3)  in the case of a Foreign Lender claiming the  benefits of the exemption for portfolio interest under Section  881(c) of the Code, (x) a certificate substantially in the form of  Exhibit G-1 to the effect that such Foreign Lender is not a "bank"  within the meaning of Section 881(c)(3)(A) of the Code, a "10  percent shareholder" of the Borrower within the meaning of  Section 881(c)(3)(B) of the Code, or a "controlled foreign  corporation" described in Section 881(c)(3)(C) of the Code (a  "U.S. Tax Compliance Certificate") and (y) executed copies of IRS  Form W-8BEN or W-8BEN-E; or  

 

     59  154304283v7  (4)  to the extent a Foreign Lender is not the beneficial  owner, executed copies of IRS Form W-8IMY, accompanied by  IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E,  a U.S. Tax Compliance Certificate substantially in the form of  Exhibit G-2 or Exhibit G-3, IRS Form W-9, and/or other  certification documents from each beneficial owner, as applicable;  provided, that if the Foreign Lender is a partnership and one or  more direct or indirect partners of such Foreign Lender are  claiming the portfolio interest exemption, such Foreign Lender  may provide a U.S. Tax Compliance Certificate substantially in the  form of Exhibit G-4 on behalf of each such direct and indirect  partner;  (C)   any Foreign Lender shall, to the extent it is legally entitled  to do so, deliver to the Borrower and the Administrative Agent (in such  number of copies as shall be requested by the recipient) on or prior to the  date on which such Foreign Lender becomes a Lender under this  Agreement (and from time to time thereafter upon the reasonable request  of the Borrower or the Administrative Agent), executed copies of any  other form prescribed by applicable law as a basis for claiming exemption  from or a reduction in U.S. federal withholding Tax, duly completed,  together with such supplementary documentation as may be prescribed by  applicable law to permit the Borrower or the Administrative Agent to  determine the withholding or deduction required to be made; and  (D)  if a payment made to a Lender under any Borrower Basic  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 Borrower and the Administrative Agent at the time or times  prescribed by law and at such time or times reasonably requested by the  Borrower or the Administrative Agent such documentation prescribed by  applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the  Code) and such additional documentation reasonably requested by the  Borrower or the Administrative Agent as may be necessary for the  Borrower and the Administrative Agent to comply with their obligations  under FATCA and to determine that such Lender has complied with such  Lender's obligations under FATCA or to determine the amount to deduct  and withhold from such payment, if any.  Solely for purposes of this  clause, "FATCA" shall include any amendments made to FATCA after the  date of this Agreement.  Each Lender agrees that if any form or certification it previously delivered expires or  becomes obsolete or inaccurate in any respect, it shall update such form or certification or within  five Business Days of its knowledge thereof notify the Borrower and the Administrative Agent in  writing of its legal inability to do so.  

 

     60  154304283v7  (h) Treatment of Certain Refunds.  If any party determines, in its sole discretion  exercised in good faith, that it has received a refund of any Taxes as to which it has been  indemnified pursuant to this Section (including by the payment of additional amounts pursuant to  this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to  the extent of indemnity payments made under this Section with respect to the Taxes giving rise  to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party  and without interest (other than any interest paid by the relevant Governmental Authority with  respect to such refund).  Such indemnifying party, upon the request of such indemnified party,  shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus  any penalties, interest or other charges imposed by the relevant Governmental Authority) in the  event that such indemnified party is required to repay such refund to such Governmental  Authority.  Notwithstanding anything to the contrary in this paragraph (h), in no event will the  indemnified party be required to pay any amount to an indemnifying party pursuant to this  paragraph (h) the payment of which would place the indemnified party in a less favorable net  after-Tax position than the indemnified party would have been in if the Tax subject to  indemnification and giving rise to such refund had not been deducted, withheld or otherwise  imposed and the indemnification payments or additional amounts with respect to such Tax had  never been paid.  This paragraph shall not be construed to require any indemnified party to make  available its Tax returns (or any other information relating to its Taxes that it deems confidential)  to the indemnifying party or any other Person.  (i) Survival.  Each party's obligations under this Section shall survive the resignation  or replacement of the Administrative Agent or any assignment of rights by, or the replacement  of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of  all obligations under any Borrower Basic Document.  (j) If the Borrower is required to pay additional amounts to or for the benefit of any  Lender pursuant to this Section as a result of a change of law or treaty occurring after such  Lender first became a party to this Agreement, such Lender will, at the Borrower's request,  change the jurisdiction of its applicable lending office if, in the sole judgment of such Lender,  such change (i) will eliminate or reduce any such additional payment which may thereafter  accrue and (ii) will not, in the judgment of such Lender, be otherwise disadvantageous to it or  inconsistent with its internal policies.  Section 2.12.  Take-outs.  (a) On any Business Day, the Borrower shall have the right to prepay all or a portion  of the Loans Outstanding and require the Administrative Agent to release its security interest and  Lien on the related Receivables, subject to the following terms and conditions:  (i) the Borrower shall have given the Administrative Agent, each Agent, the  Servicer and the Backup Servicer at least ten Business Days' prior written notice  of its intent to effect the related Take-out;  (ii) unless a Take-out is to be effected on a Payment Date (in which case the  relevant calculations with respect to such Take-out shall be reflected on the  applicable Monthly Report), the initial Servicer shall deliver to the Administrative  

 

     61  154304283v7  Agent (A) a Take-out Date Certificate (which shall include a calculation of the  Borrowing Base after giving effect to such Take-out), together with evidence to  the reasonable satisfaction of the Administrative Agent that the Borrower shall  have sufficient funds on the related Take-out Date to effect such Take-out in  accordance with this Agreement, which funds may come from the proceeds of  sales of the Receivables in connection with such Take-out and (B) a computer  tape of the Receivables, both before and after giving effect to such Take-out;  (iii) on the related Take-out Date, the following shall be true and correct and  the Borrower shall be deemed to have certified that after giving effect to the Take- out and the release to the Borrower of the related Receivables on the related Take- out Date, (A) no Borrowing Base Deficiency exists, (B) neither an Unmatured  Termination Event nor a Termination Event has occurred, nor will either result  from such Take-out, (C) the fractional portion of the Eligible Pool Balance that  represents the aggregate Adjusted Principal Balance of all Delinquent Receivables  constituting Collateral will be no greater than 150% of the fractional portion of  the Eligible Pool Balance that was represented by the aggregate Adjusted  Principal Balance of all Delinquent Receivables that constituted Collateral  immediately prior to the release of the related Receivables and (D) the fractional  portion of the Eligible Pool Balance that represents the aggregate Adjusted  Principal Balance of all Defaulted Receivables constituting Collateral will be no  greater than 150% of the fractional portion of the Eligible Pool Balance that was  represented by the aggregate Adjusted Principal Balance of all Defaulted  Receivables that constituted Collateral immediately prior to the release of the  related Receivables;  (iv) on the related Take-out Date, the Servicer shall have received an amount  equal to all Unreimbursed Servicer Advances associated with the Receivables to  be released and the Administrative Agent shall have received, for the benefit of  the Lenders and the Hedge Counterparties, as applicable, in immediately available  funds, and shall then distribute to the applicable entities, an amount equal to the  sum of (A) the portion of the Loans Outstanding to be prepaid, (B) an amount  equal to all unpaid Interest (including Interest not yet accrued) to the extent  reasonably determined by the Administrative Agent to be attributable to that  portion of the Loans Outstanding to be paid in connection with the Take-out,  (C) an aggregate amount equal to the sum of all other amounts due and owing to  the Administrative Agent, the Lenders and the Hedge Counterparties, as  applicable, under this Agreement and the other Basic Documents, to the extent  accrued to such date (including Breakage Costs and Hedge Breakage Costs) and  (D) all other Aggregate Unpaids with respect thereto; and   (v) on or prior to the related Take-out Date, the Borrower shall have delivered  to the Administrative Agent an updated Schedule of Receivables listing all  Receivables that will continue to be owned by the Borrower immediately  following the related Take-out.  

 

     62  154304283v7  (b) The Borrower hereby agrees to pay the reasonable legal fees and expenses of the  Administrative Agent, the Lenders and the Account Bank in connection with any Take-out  (including expenses incurred in connection with the release of the Lien of the Administrative  Agent, the Lenders and any other party having such an interest in the Receivables in connection  with such Take-out).  (c) In connection with any Take-out, on the related Take-out Date, subject to  satisfaction of the conditions referred to in this Section, the Administrative Agent shall, at the  expense of the Borrower (i) execute such instruments of release with respect to the portion of the  Receivables (and the other related Collateral) to be released to the Borrower, including a Take- out Release, in favor of the Borrower as the Borrower may reasonably request, (ii) deliver, or  cause to be delivered, any portion of the Receivables (and the other related Collateral) to be  released to the Borrower in its possession to the Borrower and (iii) otherwise take such actions,  and cause or permit the Collateral Custodian to take such actions, as are necessary and  appropriate to release the Lien of the Administrative Agent on the portion of the Receivables  (and the other related Collateral) to be released to the Borrower and deliver to the Borrower such  Receivables and related Collateral.  Section 2.13.  The Account Bank.  (a) The Borrower hereby appoints Mizuho Bank, Ltd. as the initial Account Bank.   All payments of amounts due and payable in respect of the Obligations that are to be made from  amounts withdrawn from the Collection Account shall be made on behalf of the Borrower by the  Account Bank.  (b) The Account Bank shall not be charged with knowledge of any Early  Amortization Event, Termination Event or Unmatured Termination Event unless a Responsible  Officer of the Account Bank obtains actual knowledge of such event or the Account Bank  receives written notice of such event from the Borrower, the Servicer or any Secured Party.  (c) Without limiting the generality of this Section, the Account Bank shall have no  duty (i) to see to any recording, filing or depositing of this Agreement or any agreement referred  to herein or any financing statement or continuation statement evidencing a security interest in  the Collateral, or to see to the maintenance of any such recording or filing or depositing or to any  recording, refiling or redepositing of any thereof, (ii) to see to any insurance of the Financed  Vehicles or Obligors or to effect or maintain any such insurance, (iii) 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 Contracts, (iv) to  confirm or verify the contents of any reports or certificates of the Servicer or the Borrower  delivered to the Account Bank pursuant to this Agreement believed by the Account Bank to be  genuine and to have been signed or presented by the proper party or parties or (v) to inspect the  Financed Vehicles at any time or ascertain or inquire as to the performance or observance of any  of the Borrower's or the Servicer's representations, warranties or covenants or the initial  Servicer's duties and obligations as Servicer and as custodian of books, records, files and  computer records relating to the Contracts under this Agreement.  

 

     63  154304283v7  (d) The Account Bank shall not be required to expend or risk its own funds or  otherwise incur financial liability in the performance of any of its duties hereunder, or in the  exercise of any of its rights or powers, if there shall be reasonable ground for believing that the  repayment of such funds or adequate indemnity against such risk or liability shall not be  reasonably assured to it, and none of the provisions contained in this Agreement shall in any  event require the Account Bank to perform, or be responsible for the manner of performance of,  any of the obligations of the Servicer under this Agreement.  (e) The Account Bank may rely and shall be protected in acting or refraining from  acting upon any resolution, Officer's Certificate, any Monthly Report, certificate of auditors or  any other certificate, statement, instrument, opinion, report, notice, request, consent, order,  appraisal, bond or other paper or document reasonably believed by it to be genuine and to have  been signed or presented by the proper party or parties.  (f) The Account Bank may consult with counsel of its choice with regard to legal  questions arising out of or in connection with this Agreement and the advice or opinion of such  counsel shall be full and complete authorization and protection in respect of any action taken,  omitted or suffered by the Account Bank in good faith in accordance therewith.  (g) The Account Bank shall be under no obligation to exercise any of the rights,  powers or remedies vested in it by this Agreement (except to comply with its obligations under  this Agreement and any other Basic Document to which it is a party) or to institute, conduct or  defend any litigation under this Agreement or in relation to this Agreement, at the request, order  or direction of the Administrative Agent pursuant to the provisions of this Agreement, unless the  Administrative Agent, on behalf of the Secured Parties, shall have offered to the Account Bank  reasonable security or indemnity against the costs, expenses and liabilities that may be incurred  therein or thereby.  (h) The Account Bank shall not be bound to make any investigation into the facts of  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  so to do by a Secured Party; provided, that if the payment within a reasonable time to the  Account Bank of the costs, expenses or liabilities likely to be incurred by it in the making of  such investigation shall be, in the opinion of the Account Bank, not reasonably assured by the  Borrower, the Account Bank may require reasonable indemnity against such cost, expense or  liability as a condition to so proceeding.  The reasonable expense of every such examination  shall be paid by the Borrower or, if paid by the Account Bank, shall be reimbursed by the  Borrower upon demand.  (i) The Account Bank may execute any of the trusts or powers hereunder or perform  any duties under this Agreement either directly or by or through agents or attorneys or a  custodian.  The Account Bank shall not be responsible for any misconduct or negligence of any  such agent or custodian appointed with due care by it hereunder.  (j) (i) The Account Bank shall have no duties or responsibilities except those  that are specifically set forth herein, and no implied covenants or obligations shall be read into  this Agreement against the Account Bank.  If the Account Bank shall request instructions from  

 

     64  154304283v7  the Administrative Agent or the Servicer with respect to any act, action or failure to act in  connection with and as set forth in this Agreement, the Account Bank shall be entitled to refrain  from taking such action and continue to refrain from acting unless and until the Account Bank  shall have received written instructions from the Administrative Agent or the Servicer, as  applicable without incurring any liability therefor to the Administrative Agent, the Borrower, the  Servicer or any other person.  (ii) The Account Bank may act in reliance upon any written  communication of the Administrative Agent concerning the delivery of Collateral  pursuant to this Agreement.  The Account Bank does not assume and shall have no  responsibility for, and makes no representation as to, monitoring the value of the  Contracts and other Collateral.  The Account Bank shall not be liable for any action or  omission to act hereunder, except for its own gross negligence, bad faith or willful  misconduct.  THE FOREGOING PROVISIONS SHALL APPLY WHETHER OR NOT SUCH LIABILITIES  ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY  CLAIM OR THEORY OF STRICT LIABILITY, OR ARE CAUSED, IN WHOLE OR IN  PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY THE ACCOUNT  BANK.  (k) Control Provisions  (i) The parties acknowledge and agree that each of the  Collection Account and the Hedge Reserve Account is intended to be a "securities  account" (as defined in Section 8-501 of the UCC), and the Account Bank shall be the  "securities intermediary" with respect to each of the Collection Account and the Hedge  Reserve Account.  Notwithstanding such intention, if the Collection Account and/or  the Hedge Reserve Account constitutes a "deposit account" (as defined in Section 9- 102(a)(29) of the UCC), the provisions of this Agreement governing a "deposit  account" shall apply to the Collection Account and/or the Hedge Reserve Account, as  applicable.  (ii) All securities or other property, including Permitted  Investments, constituting financial assets credited to the Collection Account or the  Hedge Reserve Account (other than cash, in either case) shall be registered in the  name of the Account Bank, indorsed to the Account Bank or in blank or credited to  another securities account maintained in the name of the Account Bank, and in no case  will any financial asset credited to the Collection Account or the Hedge Reserve  Account be registered in the name of the Borrower or any other person, payable to the  order of the Borrower or any other person or specially indorsed to the Borrower or any  other person except to the extent the foregoing have been specially indorsed to the  Account Bank or in blank.  (iii) All property delivered to the Account Bank pursuant to this  Agreement that is granted to the Administrative Agent, as agent for the Secured  

 

     65  154304283v7  Parties shall be promptly credited to the Collection Account or the Hedge Reserve  Account, as applicable and in accordance with the terms of this Agreement.  (iv) Each of the Collection Account and the Hedge Reserve  Account is an account to which financial assets or other property are or may be  credited, and the Account Bank shall, subject to the terms of this Agreement, treat the  Borrower as entitled to exercise the rights that comprise any financial asset or other  property credited to either such account.  (v) The Account Bank hereby agrees that each item of property  (whether investment property, financial asset, security, instrument, general intangible  or cash) credited to the Collection Account or the Hedge Reserve Account, to the  extent that the related account constitutes a securities account, shall be treated as a  "financial asset" within the meaning of Section 8-102(a)(9) of the UCC.  (vi) If at any time the Account Bank shall receive any order  from the Administrative Agent as agent for the Secured Parties directing transfer or  redemption of any financial asset relating to the Collection Account or the Hedge  Reserve Account, or any instruction originated by the Secured Party directing the  disposition of funds in the Collection Account or the Hedge Reserve Account, the  Account Bank shall comply with such entitlement order or instruction without further  consent by the Borrower or any other person.  If the Borrower is otherwise entitled to  issue entitlement orders or instructions and such entitlement orders or instructions  conflict with any entitlement order or instruction issued by the Secured Party, the  Account Bank shall follow the entitlement orders or instructions issued by the Secured  Party.  (vii) Regardless of any provision in any other agreement, for  purposes of the UCC, New York shall be deemed to be the "bank's jurisdiction"  (within the meaning of Section 9-304 of the UCC) and the "securities intermediary's  jurisdiction" (within the meaning of Section 8-110 of the UCC).  Section 2.14.  [Reserved].    Section 2.15.  Replacement of Lender Group.  If (a) any Lender requests compensation  under Section 2.10 or (b) any Committed Lender becomes a Defaulting Committed Lender, then  the Borrower may, at its sole expense and effort, upon notice to the related Agent and the  Administrative Agent, require each Lender in such Agent's Lender Group to assign and delegate,  without recourse (in accordance with and subject to the restrictions contained in Section 11.01),  all of its respective interests, rights and obligations under this Agreement to an assignee that shall  assume such obligations (which assignee may be another Lender if a Lender accepts such  assignment); provided, that (i) the Borrower shall have received the prior written consent of the  Administrative Agent with respect to any assignee that is not already a member of a Lender  Group hereunder, which consent shall not unreasonably be withheld, conditioned or delayed, (ii)  each member of such assigning Lender Group shall have received payment of an amount equal  to all outstanding Loans funded or maintained by such Lender Group, together with all accrued  Interest thereon and all accrued Unused Commitment Fees and Program Fees, as applicable, and  

 

     66  154304283v7  any other Obligations payable to them hereunder and under the Basic Documents, from the  assignee (to the extent of such outstanding Loans) or Seller (in the case of all other amounts),  and (iii) in the case of any such assignment resulting from a claim for compensation under  Section 2.10, such assignment will result in a reduction in such compensation or payments.  A  Lender shall not be required to make any such assignment and 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 exist.    Section 2.16.  Defaulting Committed Lenders.    (a) Notwithstanding any provision of this Agreement to the contrary, if any  Committed Lender becomes a Defaulting Committed Lender, then the following provisions shall  apply for so long as such Committed Lender is a Defaulting Committed Lender:  (i) Unused Commitment Fees shall cease to accrue on the  unfunded portion of the Commitment of such Defaulting Committed Lender pursuant  to Section 2.09(a);  (ii) notwithstanding anything to the contrary contained in  Section 2.03 hereof, the unused portion of the Commitment of such Defaulting  Committed Lender may be reduced to zero without any contemporaneous ratable  reduction of the Commitments of the other Committed Lenders;  (iii) the unfunded portion of the Commitment of such  Defaulting Committed Lender shall not be included in determining whether all  Lenders, a majority of the Lenders, the Consenting Lenders or the Required Lenders  have taken or may take any action hereunder (including, in each case, any consent to  any amendment or waiver pursuant to Section 13.01); provided, that this subclause  (iii) will not be applicable with respect to any waiver, amendment or modification  requiring the consent of all Lenders or each affected Lender, as applicable, which  affects such Defaulting Committed Lender differently than other affected Lenders; and  (iv) the Borrower may replace such Defaulting Committed  Lender in accordance with Section 2.15 of this Agreement.  (b) In the event that the Administrative Agent determines that a Defaulting  Committed Lender has adequately remedied all matters that caused such Committed Lender to  be a Defaulting Committed Lender, then (i) the Lender Percentages shall be readjusted to reflect  the inclusion of such Committed Lender's Commitment and on such date such Committed  Lender shall purchase at par such of the Loans of the other Lenders as the Administrative Agent  and the Agents shall determine may be necessary in order for such Committed Lender to hold  such Loans in accordance with its Lender Percentage and (ii) the provisions of clause (a), above,  shall, from and after such determination, cease to be of further force or effect with respect to  such Committed Lender.  Section 2.17.  Alternate Rate of Interest.    (a) Subject to clauses (b), (c), (d) and (e) of this Section 2.17, if:  

 

     67  154304283v7  (i) the Administrative Agent determines (which determination  shall be conclusive absent manifest error) at any time, that adequate and reasonable  means do not exist for ascertaining Daily Simple SOFR; or   (ii) the Administrative Agent is advised by the Required  Lenders that at any time, the Daily Simple SOFR will not adequately and fairly reflect  the cost to such Lenders (or Lender) of making or maintaining their Loans (or its  Loan) included in such Borrowing;  then the Administrative Agent shall give notice thereof to the Borrower and  the Lenders by telephone, telecopy or electronic mail 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 with  respect to the relevant Benchmark, the Loans shall bear interest at the Alternate  Base Rate.  (b) Notwithstanding anything to the contrary herein or in any other Basic Document  (and any Hedging Agreements shall be deemed not to be a "Basic Document" for purposes of  this Section 2.17), if a Benchmark Transition Event and its related Benchmark Replacement Date  have occurred prior to the Reference Time in respect of any setting of the then-current  Benchmark, then such Benchmark Replacement will replace such Benchmark for all purposes  hereunder and under any Basic Document in respect of any Benchmark setting at or after 5:00  p.m. (New York City time) on the fifth Business Day after the date notice of such Benchmark  Replacement is provided to the Lenders without any amendment to, or further action or consent  of any other party to, this Agreement or any other Basic Document so long as the Administrative  Agent has not received, by such time, written notice of objection to such Benchmark  Replacement from Lenders comprising the Required Lenders.  (c) Notwithstanding anything to the contrary herein or in any other Basic Document,  the Administrative Agent will have the right to make Benchmark Replacement Conforming  Changes from time to time and, notwithstanding anything to the contrary herein or in any other  Basic Document, any amendments implementing such Benchmark Replacement Conforming  Changes will become effective without any further action or consent of any other party to this  Agreement or any other Basic Document.  (d) The Administrative Agent will promptly notify the Borrower and the Lenders of  (i) any occurrence of a Benchmark Transition Event, (ii) the implementation of any Benchmark  Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, and  (iv) the commencement or conclusion of any Benchmark Unavailability Period.  Any  determination, decision or election that may be made by the Administrative Agent or, if  applicable, any Lender (or group of Lenders) pursuant to this Section 2.17, including any  determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence  of an event, circumstance or date and any decision to take or refrain from taking any action or  any selection, will be conclusive and binding absent manifest error and may be made in its or  their sole discretion and without consent from any other party to this Agreement or any other  Basic Document, except, in each case, as expressly required pursuant to this Section 2.17.  

 

     68  154304283v7  (e) Upon the Borrower's receipt of notice of the commencement of a Benchmark  Unavailability Period, and at all times during the continuation of a Benchmark Unavailability  Period, the Loans will bear interest at the Alternate Base Rate.  (f) Notwithstanding anything to the contrary herein or in any other Basic Document,  at any time (including in connection with the implementation of a Benchmark Replacement), (i)  if the then-current Benchmark is a term rate and either (A) any tenor for such Benchmark is not  displayed on a screen or other information service that publishes such rate from time to time as  selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor  for the administrator of such Benchmark has provided a public statement or publication of  information announcing that any tenor for such Benchmark is or will be no longer representative,  then the Administrative Agent may modify the definition of "Interest Period" for any Benchmark  settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a  tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a  screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is  not, or is no longer, subject to an announcement that it is or will no longer be representative for a  Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify  the definition of "Interest Period" for all Benchmark settings at or after such time to reinstate  such previously removed tenor.  ARTICLE THREE    SECURITY  Section 3.01.  Collateral.    (a) The parties hereto intend that this Agreement constitute a security agreement and  the transactions effected hereby constitute secured loans by the Lenders to the Borrower under  Applicable Law.  As collateral security for the prompt, complete and indefeasible payment and  performance in full when due, whether by lapse of time, acceleration or otherwise, of the  Obligations, the Borrower hereby grants to the Administrative Agent, as agent for the Secured  Parties, a lien on and security interest in all of the Borrower's right, title and interest in, to and  under the following, whether now existing or owned or hereafter arising or acquired by the  Borrower (collectively, the "Collateral"):  (i) the Receivables and the related Contracts (including the  right to service the Receivables in connection therewith) and any accounts or  obligations evidenced thereby, any guarantee thereof, all Collections and all monies  due (including any payments made under any guarantee or similar credit enhancement  with respect to any such Receivables) or to become due or received by any Person in  payment of any of the foregoing on or after the related Cutoff Date;  (ii) the Financed Vehicles related to such Receivables  (including Financed Vehicles that have been repossessed) or in any document or  writing evidencing any security interest in any Financed Vehicle and each security  interest in each Financed Vehicle securing each such Receivable, including all  proceeds from any sale or other disposition of such Financed Vehicles;  

 

     69  154304283v7  (iii) the Account Collateral;  (iv) the Borrower's rights to Collections on deposit in the  Lockbox Account;  (v) subject to the Control Agreement, the Borrower's rights to  the Collection Account and the Hedge Reserve Account;   (vi) all Hedge Collateral;  (vii) all Receivable Files, the Schedule of Receivables, and all  documents, agreements and instruments included in the Receivable Files, including  rights of recourse of the Borrower against DFC and/or any Dealer with respect to the  Receivables;  (viii) all Records, documents and writings evidencing or related  to the Receivables or the Contracts;  (ix) all rights to payment under all Insurance Policies with  respect to a Financed Vehicle, including any monies collected from whatever source in  connection with any default of an Obligor with respect to a Financed Vehicle and any  proceeds from claims or refunds of premiums on any Insurance Policy;  (x) all guaranties, indemnities, warranties, insurance (and  proceeds and premium refunds thereof) and other agreements or arrangements of  whatever character from time to time supporting or securing payment of the  Receivables, whether pursuant to the related Contracts or otherwise;  (xi) all rights to payment under all service contracts and other  contracts and agreements associated with the Receivables;  (xii) all security interests, Liens, guaranties and other  encumbrances in favor of or assigned or transferred to the Borrower in and to the  Receivables and Financed Vehicles;  (xiii) all deposit accounts, monies, deposits, funds, accounts and  instruments relating to the foregoing (subject to the Control Agreement);  (xiv) the Purchase Agreement (including each Purchase  Agreement Supplement) and remedies thereunder and the assignment to the  Administrative Agent of all UCC financing statements filed by the Borrower against  DFC under or in connection with the Purchase Agreement; and  (xv) all income and proceeds of the foregoing.  (b) The grant under this Section does not constitute and is not intended to result in a  creation or an assumption by the Administrative Agent, any Agent, or any other Secured Party of  any obligation of the Borrower or any other Person in connection with any or all of the Collateral  

 

     70  154304283v7  or under any agreement or instrument relating thereto.  Anything herein to the contrary  notwithstanding, (i) the Borrower shall remain liable under the Contracts to the extent set forth  therein to perform all of its duties and obligations thereunder to the same extent as if this  Agreement had not been executed, (ii) the exercise by the Administrative Agent of any of its  rights in the Collateral shall not release the Borrower from any of its duties or obligations under  the Collateral and (iii) none of the Administrative Agent, any Agent, or any other Secured Party  shall have any obligations or liability under the Collateral by reason of this Agreement, nor shall  any of the Administrative Agent, any Agent, or any other Secured Party be obligated to perform  any of the obligations or duties of the Borrower thereunder or to take any action to collect or  enforce any claim for payment assigned hereunder.  Each of DFC and the Borrower represents  and warrants as to itself that each remittance of Collections by DFC or the Borrower to the  Administrative Agent or any Lender hereunder will have been (A) in payment of a debt incurred  by the Borrower in the ordinary course of business or financial affairs of the Lenders and the  Borrower and (B) made in the ordinary course of business or financial affairs of the Lenders and  the Borrower.  (c) Notwithstanding the foregoing grant of security interest, no account, instrument,  chattel paper or other obligation or property of any kind due from, owned by or belonging to a  Sanctioned Person shall be Collateral.  Section 3.02.  Release of Collateral; No Legal Title.  (a) At the same time as any Contract (i) expires by its terms or (ii) has been prepaid  in full, and in each case all amounts in respect thereof have been paid by the related Obligor and  subsequently deposited into a Lockbox Account or the Collection Account, the Administrative  Agent will, to the extent requested by the Servicer, promptly release its interest and lien in such  Contract and the related Collateral.  In connection with any sale of a Financed Vehicle, after the  deposit by the Servicer of the proceeds of such sale into the Lockbox Account and subsequent  deposit within two Business Days thereafter into the Collection Account, the Administrative  Agent will, at the sole expense of the Servicer (which, in the case of any Successor Servicer,  shall be reimbursable in accordance with the provisions of Section 2.06), promptly execute and  deliver to the Servicer any assignments, bills of sale, termination statements and any other  releases and instruments as the Servicer may reasonably request in order to effect the release and  transfer of such Financed Vehicle; provided, that the Administrative Agent will not make any  representation or warranty, express or implied, with respect to any such Financed Vehicle in  connection with such sale or transfer and assignment.  Nothing in this Section shall diminish the  Servicer's obligations pursuant to Section 7.03 with respect to the proceeds of any such sale.  (b) Upon (i) the transfer of any Receivables and the related Collateral in connection  with a Take-out or (ii) the Facility Termination Date, the Administrative Agent, at the  Borrower's expense, upon receipt of payment in full of the related Aggregate Unpaids, shall  execute and file such partial or full releases or partial or full assignments of financing statements  and other documents and instruments as may be reasonably requested by the Borrower to  effectuate the release of the relevant portion of the Collateral.  Section 3.03.  Protection of Security Interest; Administrative Agent, as Attorney-in-Fact.  

 

     71  154304283v7  (a) The Borrower agrees that from time to time, at its expense, it will promptly  execute and deliver all instruments and documents, and take all actions, that may reasonably be  necessary or desirable, or that the Administrative Agent may deem necessary, to perfect, protect,  or more fully evidence the security interest granted to the Administrative Agent in the  Receivables and the other Collateral, or to enable the Secured Parties to exercise and enforce  their rights and remedies hereunder and thereunder; provided, that prior to the declaration of a  Termination Event, the Borrower shall in no case be required to relien  a security interest on any  Financed Vehicle in favor of the Administrative Agent or other Secured Party.  (b) If the Borrower fails to perform any of its obligations hereunder after five  Business Days' notice from any Secured Party, such Secured Party may (but shall not be required  to) perform, or cause performance of, such obligation; and the reasonable costs and expenses of  such Secured Party incurred in connection therewith shall be payable by the Borrower as  provided in Article Nine.  The Borrower irrevocably authorizes the Administrative Agent and  appoints the Administrative Agent, as its attorney-in-fact to act on behalf of the Borrower, (i) to  execute or cause to be executed on behalf of the Borrower as debtor and to file financing  statements necessary or desirable in the Administrative Agent's sole discretion to perfect and to  maintain the perfection and priority of the interest of the Secured Parties in the Receivables and  the other Collateral and (ii) to file a carbon, photographic or other reproduction of this  Agreement or any financing statement with respect to the Receivables and the other Collateral,  as a financing statement in such offices as the Administrative Agent in its sole discretion deems  necessary or desirable to perfect and to maintain the perfection and priority of the interests of the  Secured Parties in the Receivables and the other Collateral.  Such financing statements may  describe the Collateral in the same manner as described herein or may contain an indication or  description of collateral that describes such property in any other manner as the Administrative  Agent may determine, in its reasonable discretion, is necessary, advisable or prudent to ensure  the perfection of the security interest in the Collateral granted to the Administrative Agent  herein. The Borrower hereby authorizes the filing of financing statements describing the  collateral as "all assets of the debtor, whether now owned or existing or hereafter acquired or  arising and wherever located, and all proceeds and products thereof" or words to that effect.   This appointment is coupled with an interest and is irrevocable.  Section 3.04.  Assignment of the Purchase Agreement.  The Borrower hereby represents,  warrants and confirms to the Administrative Agent that the Borrower has assigned to the  Administrative Agent, for the ratable benefit of the Secured Parties hereunder, all of the  Borrower's right and title to and interest in the Purchase Agreement (including each Purchase  Agreement Supplement).  The Borrower confirms that, during the continuation of a Termination  Event, the Administrative Agent shall have the sole right to enforce the Borrower's rights and  remedies under the Purchase Agreement or any Purchase Agreement Supplement for the benefit  of the Secured Parties, but without any obligation on the part of the Secured Parties or any of  their respective Affiliates, to perform any of the obligations of the Borrower under the Purchase  Agreement or any Purchase Agreement Supplement.  The Borrower further confirms and agrees  that such assignment to the Administrative Agent shall terminate upon the Facility Termination  Date; provided, that the rights of the Secured Parties pursuant to such assignment with respect to  rights and remedies in connection with any indemnities and any breach of any representation,  warranty or covenants made by DFC pursuant to the Purchase Agreement, which rights and  

 

     72  154304283v7  remedies survive the termination of the Purchase Agreement, shall be continuing and shall  survive any termination of such assignment.  Section 3.05.  Waiver of Certain Laws.  Each of the Borrower, the Servicer, the Backup  Servicer and Collateral Custodian agrees, to the full extent that it may lawfully so agree, that  neither it nor anyone claiming through or under it will set up, claim or seek to take advantage of  any appraisement, valuation, stay, extension or redemption law now or hereafter in force in any  locality where any part of the Collateral may be situated in order to prevent, hinder or delay the  enforcement or foreclosure of this Agreement, or the absolute sale of any of the Collateral or any  part thereof, or the final and absolute putting into possession thereof, immediately after such  sale, of the purchasers thereof, and each of the Borrower, the Servicer, the Backup Servicer and  the Collateral Custodian, for itself and all who may at any time claim through or under it, hereby  waives, to the full extent that it may be lawful so to do, the benefit of all such laws, and any and  all right to have any of the properties or assets constituting the Collateral marshaled upon any  such sale, and agrees that the Administrative Agent or any court having jurisdiction to foreclose  the security interests granted in this Agreement may sell the Collateral as an entirety or in such  parcels as the Administrative Agent or such court may determine.  ARTICLE FOUR    CONDITIONS OF CLOSING AND LOANS  Section 4.01.  Conditions to Effectiveness of this Agreement.  The Closing Date shall not  occur and no party hereto will be obligated to take, fulfill or perform any action hereunder, until  each of the following conditions have been satisfied, in the sole discretion of the Administrative  Agent:   (a) Each Basic Document (other than any Hedging Agreements) shall have  been duly executed by, and delivered to, the parties hereto and thereto and the  Administrative Agent shall have received complete and, where applicable, executed  versions of all other documents, instruments, agreements and legal opinions specified in  the Schedule of Documents, each in form and substance satisfactory to the  Administrative Agent.  (b) The Administrative Agent shall have received (i) satisfactory evidence  that the Borrower, the Servicer, DFC, Lithia, the Collateral Custodian, and the Account  Bank have obtained all required consents and approvals of all Persons, including all  requisite Governmental Authorities, to the execution, delivery and performance of this  Agreement and the other Basic Documents to which each is a party and the  consummation of the transactions contemplated hereby or thereby or (ii) an Officer's  Certificate from each of the Borrower, the Servicer, DFC, Lithia, the Collateral  Custodian, and the Account Bank, in form and substance satisfactory to the  Administrative Agent, affirming that no such consents or approvals are required; it being  understood that the acceptance of such evidence or Officer's Certificate shall in no way  limit the recourse of the Administrative Agent or any Secured Party against DFC or the  Borrower for a breach of DFC's or the Borrower's representation or warranty that all such  consents and approvals have, in fact, been obtained.  

 

     73  154304283v7  (c) The Borrower, the initial Servicer, DFC and Lithia shall each be in  compliance in all material respects with all Applicable Laws and shall have delivered an  Officer's Certificate to the Administrative Agent as to this and other closing matters.   (d) The Borrower shall have paid all fees required to be paid by it on the  Closing Date.  (e) No Termination Event or Unmatured Termination Event shall have  occurred.  (f) No Servicer Termination Event or Unmatured Servicer Termination Event  shall have occurred.  Section 4.02.  Conditions Precedent to All Loans.  Each request for a Loan (including the  Initial Loan) by the Borrower to a Lender shall be subject to the conditions set forth in  Section 4.01 and the further conditions precedent that:  (a) The initial Servicer shall have delivered to the Administrative Agent, on or  prior to the date of such Loan, (i) a Funding Request and (ii) a Purchase Agreement  Supplement (Exhibit A to the Purchase Agreement including the Schedule of Receivables  attached thereto), dated within two Business Days prior to the date of such Loan, in each  case containing such additional information as may be reasonably requested by the  Administrative Agent.  (b) On the date of such Loan, the following shall be true and correct and the  Borrower shall be deemed to have certified that, after giving effect to the proposed Loan  and pledge of the Collateral:  (i) the representations and warranties contained in  Sections 5.01 and 5.02 are true and correct on and as of such day as though made on  and as of such day and shall be deemed to have been made on such day (except to the  extent such representation or warranty expressly relates to a prior date);  (ii) no Stop-Funding Event has occurred and is continuing;  (iii) no event has occurred and is continuing, or would result  from such transaction that constitutes (A) a Termination Event or Unmatured  Termination Event or (B) a Servicer Termination Event or Unmatured Servicer  Termination Event;  (iv) on and as of such day, after giving effect to such  transaction, the aggregate Loan Outstanding does not exceed the Borrowing Base;  (v) on and as of each such day, the Borrower and the Servicer  each has performed all of the agreements contained in this Agreement and the other  Basic Documents to be performed by it at or prior to such day; and  

 

     74  154304283v7  (vi) no law or regulation shall prohibit, and no order, judgment  or decree of any federal, State or local court or governmental body, agency or  instrumentality shall prohibit or enjoin, the making of such Loan by the Lenders in  accordance with the provisions hereof.  (c) After giving effect to the proposed Loan and the related pledge of  Collateral:  (i) the weighted average FICO Score of all Eligible Receivables  (excluding Eligible Receivables that do not have a FICO Score or have a FICO  Score of zero) shall be at least 660, with such weighted average calculated using  the FICO Score of each such Receivable at the time of its underwriting and the  Principal Balance as of such date of determination;  (ii) the weighted average Loan-to-Value Ratio of all  Eligible  Receivables at the time of underwriting of such Eligible Receivables shall be no  greater than 118.0%, with such weighted average calculated using the Principal  Balances as of such date of determination;  (iii) the weighted average Payment-to-Income Ratio of all Eligible  Receivables at the time of underwriting of such Eligible Receivables shall be no  greater than 12.0%, with such weighted average calculated using the Principal  Balances as of such date of determination; and  (iv) the weighted average Debt-to-Income Ratio of all Eligible  Receivables at the time of underwriting of such Eligible Receivables shall be no  greater than 45.0%, with such weighted average calculated using the Principal  Balances as of such date of determination;  (d) For each Loan other than the Initial Loan, the Borrower shall be in  compliance with Section 6.03 and with all requirements of any Hedging Agreement  required thereby.   (e) On the date of such transaction, the Administrative Agent shall have  received such other approvals, opinions, information or documents as the Administrative  Agent may reasonably require.  ARTICLE FIVE    REPRESENTATIONS AND WARRANTIES  Section 5.01.  Representations and Warranties of the Borrower.  The Borrower represents  and warrants, as of the Closing Date, the date of this Agreement, and each Funding Date, as  follows:  (a) Organization and Good Standing.  The Borrower has been duly organized,  and is validly existing as a limited liability company in good standing under the laws of  the State of Delaware, with all requisite power and authority to own or lease its properties  

 

     75  154304283v7  and conduct its business as such business is presently conducted, and the Borrower had at  all relevant times, and now has all necessary power, authority and legal right to acquire,  own, sell and pledge the Receivables and the other Collateral.  (b) Due Qualification.  The Borrower is duly qualified to do business and is in  good standing as a limited liability company, and has obtained all necessary licenses and  approvals in all jurisdictions in which the ownership or lease of property or the conduct  of its business (including, as applicable, the purchase, sale and pledge of the Receivables)  requires such qualifications, licenses or approvals, except those jurisdictions in which  failure to be so qualified would not have a Material Adverse Effect.  (c) Power and Authority; Due Authorization.  The Borrower (i) has all  necessary power, authority and legal right to (A) execute and deliver the Borrower Basic  Documents, (B) carry out the terms of the Borrower Basic Documents and (C) grant the  security interest in the Collateral on the terms and conditions herein provided and (ii) has  duly authorized by all necessary limited liability company action the execution, delivery  and performance of the Borrower Basic Documents and the grant of the security interest  in the Collateral on the terms and conditions herein and therein provided.  (d) Binding Obligation.  Each Borrower Basic Document constitutes a legal,  valid and binding obligation of the Borrower, enforceable against the Borrower in  accordance with its respective terms, except as such enforceability may be limited by  Insolvency Laws and except as such enforceability may be limited by general principles  of equity (whether considered in a suit at law or in equity).  (e) No Violation.  The execution and delivery of the Borrower Basic  Documents, the consummation of the transactions contemplated by the Borrower Basic  Documents and the fulfillment of the terms hereof and thereof will not (i) conflict in any  material respect with, result in any material breach of any of the terms and provisions of,  or constitute (with or without notice or lapse of time or both) a default under the  Borrower's Formation Documents or a default in any material respect under any  Contractual Obligation of the Borrower, (ii) result in the creation or imposition of any  Lien upon any of the Borrower's properties (other than Permitted Liens) or (iii) violate  any Applicable Law, the violation of which could reasonably be expected to have a  Material Adverse Effect.  (f) No Proceedings.  There is no litigation, proceeding or investigation  pending or, to the best knowledge of the Borrower, threatened against the Borrower,  before any Governmental Authority (i) asserting the invalidity of any Borrower Basic  Document, (ii) seeking to prevent the consummation of any of the transactions  contemplated by any Borrower Basic Document or (iii) seeking any determination or  ruling that could reasonably be expected to have a Material Adverse Effect.  (g) All Consents Required.  All approvals, authorizations, consents, orders,  licenses or other actions of any Person or of any Governmental Authority required for the  due execution, delivery and performance by the Borrower of the Borrower Basic  Documents have been obtained.  

 

     76  154304283v7  (h) Bulk Sales.  The execution, delivery and performance of the Borrower  Basic Documents do not require compliance with any "bulk sales" act or similar law by  the Borrower.  (i) Solvency.  The transactions contemplated by the Borrower Basic  Documents do not and will not cause the Borrower not to be Solvent.  (j) Taxes.  The Borrower has filed or caused to be filed all federal, state and  other tax returns that are required to be filed by it.  The Borrower has paid or made  adequate provisions for the payment of all Taxes made against it or any of its property  (other than any amount of Tax the validity of which is currently being contested in good  faith by appropriate proceedings and with respect to which reserves in accordance with  GAAP have been provided on the books of the Borrower), and no Tax lien has been filed  and, to the Borrower's knowledge, no claim is being asserted, with respect to any such  Tax.  (k) Quality of Title.  Each Receivable, together with the Contract related  thereto, shall, at all times, be owned by the Borrower free and clear of any Lien except  for Permitted Liens, and upon the Initial Loan or each Subsequent Loan, the  Administrative Agent, as agent for the Secured Parties, shall acquire a valid and perfected  first priority security interest in each Receivable and in the related Collateral then  existing or thereafter arising, free and clear of any Lien, other than Permitted Liens.  No  effective financing statement or other instrument similar in effect covering any portion of  the Collateral shall at any time be on file in any recording office except such as may be  filed in favor of (i) the Borrower in accordance with the Purchase Agreement or (ii) the  Administrative Agent in accordance with this Agreement.  (l) Security Interest.  The Borrower has granted a security interest (as defined  in the UCC) to the Administrative Agent, as agent for the Secured Parties, in the  Collateral, which is enforceable in accordance with Applicable Law upon execution and  delivery of this Agreement.  Upon the filing of UCC-1 financing statements describing  the Collateral, naming the Administrative Agent as secured party, and naming the  Borrower as debtor, the Administrative Agent, as agent for the Secured Parties, shall have  a first priority (except for any Permitted Liens) perfected security interest in the  Collateral.  All filings (including UCC filings) as are necessary in any jurisdiction to  perfect the interest of the Administrative Agent, as agent for the Secured Parties, in the  Collateral have been made.   (m) Reports Accurate.  All Monthly Reports (if prepared by the Borrower, or  to the extent that information contained therein is supplied by the Borrower, such portion  supplied by the Borrower), information, exhibits, financial statements, documents, books,  records or reports furnished or to be furnished by the Borrower to each Agent, any  Secured Party, the Backup Servicer and the Account Bank in connection with this  Agreement are true, complete and correct in all material respects.  (n) Location of Offices.  The principal place of business and chief executive  office of the Borrower and the office where the Borrower keeps all the Records are  

 

     77  154304283v7  located at the address of the Borrower referred to in Section 13.02 (or at such other  locations as to which the notice and other requirements specified in Section 6.02(f) shall  have been satisfied) and has been so for the last four months.  (o) Lockboxes; Lockbox Account; Collection Account.  None of the  Lockboxes, the Lockbox Account nor any interest therein is currently pledged or  assigned to any party.  The Collection Account or any interest therein has not been  pledged or assigned to any party other than the Administrative Agent.  (p) Tradenames.  The Borrower has no trade names, fictitious names, assumed  names or "doing business as" names or other names under which it has done or is doing  business.  (q) Purchase Agreement.  The Purchase Agreement is the only agreement  pursuant to which the Borrower purchases Receivables and the related Contracts.  (r) Value Given.  The Borrower shall have given reasonably equivalent value  to DFC in consideration for the transfer to the Borrower of the Receivables and the  related Collateral under the Purchase Agreement, no such transfer shall have been made  for or on account of an antecedent debt owed by DFC to the Borrower and no such  transfer is or may be voidable or subject to avoidance under any section of the  Bankruptcy Code.  (s) Accounting.  The Borrower accounts for the transfers to it from DFC of  the Receivables and related Collateral under the Purchase Agreement as true sales/true  contributions of such Receivables and related Collateral in its books, records and  financial statements, in each case consistent with GAAP and with the requirements set  forth herein.    (t) Special Purpose Entity.  The Borrower is in compliance with  Section 6.01(o).  (u) Confirmation from DFC.  The Borrower has received confirmation from  DFC that, so long as the Borrower is not "insolvent" within the meaning of the  Bankruptcy Code or otherwise unable to pay its debts as they become due, DFC will not  cause the Borrower to file a voluntary petition under the Bankruptcy Code or any other  Insolvency Laws.  Each of the Borrower and DFC is aware that in light of the  circumstances described in the preceding sentence and other relevant facts, the filing of a  voluntary petition under the Bankruptcy Code for the purpose of making any Receivable  or any other assets of the Borrower available to satisfy claims of the creditors of DFC  would not result in making such assets available to satisfy such creditors under the  Bankruptcy Code.  (v) ERISA Matters.  The Borrower is not a "benefit plan investor" (as defined  under Section 3(42) of ERISA).  The Borrower does not sponsor, maintain or contribute  to any Pension Plan or Multiemployer Plan.  Neither the Borrower nor any ERISA  Affiliate does not have any liability (contingent or otherwise) with respect to any Pension  Plan or Multiemployer Plan except to the extent such liability could reasonably be  

 

     78  154304283v7  expected to have a Material Adverse Effect.  Each Pension Plan sponsored, maintained or  contributed to by DFC or any ERISA Affiliate of the Borrower, under which employees  of the Borrower participate in or participated in, complies in all respects with ERISA and  all other applicable laws except to the extent the failure to comply could not reasonably  be expected to have a Material Adverse Effect. No Plan Event has occurred or is  reasonably expected to occur that might result, directly or indirectly, in any material lien  being imposed on the property or assets of the Borrower. The Borrower is not a "benefit  plan investor" (as defined under Section 3(42) of ERISA).  The Borrower does not  sponsor, maintain or contribute to any Pension Plan or Multiemployer Plan.  Neither the  Borrower nor any ERISA Affiliate does not have any liability (contingent or otherwise)  with respect to any Pension Plan or Multiemployer Plan except to the extent such liability  could reasonably be expected to have a Material Adverse Effect.  Each Pension Plan  sponsored, maintained or contributed to by DFC or any ERISA Affiliate of the Borrower,  under which employees of the Borrower participate in or participated in, complies in all  respects with ERISA and all other applicable laws except to the extent the failure to  comply could not reasonably be expected to have a Material Adverse Effect. No Plan  Event has occurred or is reasonably expected to occur that might result, directly or  indirectly, in any material lien being imposed on the property or assets of the Borrower.  (w) Investment Company Act.  The Borrower (i) is not a "covered fund" under  regulations adopted to implement section 619 of the Dodd-Frank Wall Street Reform and  Consumer Protection Act, commonly known as the "Volcker Rule" and (ii) is not, and  after giving effect to the transactions contemplated hereby, will not be required to register  as an "investment company" within the meaning of the Investment Company Act.  In  determining that the Borrower is not required to register as an "investment company"  within the meaning of the Investment Company Act, the Borrower is entitled to either the  benefit of the exemption provided under Section 3(c)(5) of the Investment Company Act.   (x) Accuracy of Representations and Warranties.  Each representation or  warranty by the Borrower contained herein, in any other Basic Document or in any  certificate or other document furnished by the Borrower pursuant hereto or thereto or in  connection herewith or therewith is true and correct in all material respects.  (y) Representations and Warranties in Purchase Agreement.  The  representations and warranties made by DFC to the Borrower in Section 3.03 of the  Purchase Agreement are hereby remade by the Borrower on each date to which they  speak in the Purchase Agreement, as if such representations and warranties were set forth  herein.  For purposes of this Section, such representations and warranties are incorporated  herein by reference as if made by the Borrower to the Administrative Agent and to each  of the Secured Parties under the terms hereof mutatis mutandis.  (z) Anti-Corruption Laws and Sanctions.  The Borrower is subject to policies  and procedures of Lithia that are designed to ensure compliance by Lithia and its  Subsidiaries, directors, officers, employees and agents with Anti-Corruption Laws and  applicable Sanctions. The Borrower, its officers, directors and employees are in  compliance with Anti-Corruption Laws and applicable Sanctions in all material  respects.  None of (a) the Borrower or any of its directors, officers or employees, or  

 

     79  154304283v7  (b)  to the knowledge of the Borrower, any agent of the Borrower that will act in any  capacity in connection with or benefit from the facility established hereby, is a  Sanctioned Person.  No Loan, use of proceeds or other transaction contemplated by this  Agreement will violate Anti-Corruption Laws or applicable Sanctions.   (aa) Beneficial Ownership Rule.  At least 51% of the equity interests in the  Borrower is owned, directly or indirectly, by a listed entity, and the Borrower is excluded  on that basis from the definition of "Legal Entity Customer" as defined in the Beneficial  Ownership Rule.  Section 5.02.  Representations and Warranties of the Borrower Relating to the  Receivables.  The Borrower hereby represents and warrants as of each Funding Date, as follows:  (a) Schedule C and the information contained in the related Funding Request  is an accurate and complete listing in all material respects of the Receivables (including  the Receivables being transferred on such Funding Date) constituting a portion of the  Collateral as of the date of the related Loan and the information contained therein with  respect to the identity of such Receivables and the amounts owing thereunder is true and  correct in all material respects as of the related Cutoff Date; and  (b) each Receivable referenced on the related Funding Request is an Eligible  Receivable.  Section 5.03.  Representations and Warranties of the Servicer.  The initial Servicer  represents and warrants, as of the Closing Date, the date of this Agreement, and each Funding  Date, as follows:  (a) Organization and Good Standing.  The Servicer has been duly organized  and is validly existing as a corporation in good standing under the laws of the State of  Oregon, with all requisite power and authority to own or lease its properties and to  conduct its business as such business is presently conducted and to enter into and perform  its obligations pursuant to this Agreement.  (b) Due Qualification.  The Servicer is duly qualified to do business and is in  good standing as a corporation, and has obtained all necessary licenses and approvals in  all jurisdictions in which the ownership or lease of its property and or the conduct of its  business, including the underwriting and servicing of the Receivables, requires such  qualification, licenses or approvals, except to the extent the failure to obtain such  consents or approvals could not reasonably be expected to have a Material Adverse  Effect.  (c) Power and Authority; Due Authorization.  The Servicer (i) has all  necessary power, authority and legal right to (A) execute and deliver the Servicer Basic  Documents and (B) carry out the terms of the Servicer Basic Documents and (ii) has duly  authorized by all necessary corporate action the execution, delivery and performance of  the Servicer Basic Documents.  

 

     80  154304283v7  (d) Binding Obligation.  Each Servicer Basic Document constitutes a legal,  valid and binding obligation of the Servicer enforceable against the Servicer in  accordance with its respective terms except as such enforceability may be limited by  Insolvency Laws and except as such enforceability may be limited by general principles  of equity (whether considered in a suit at law or in equity).  (e) No Violation.  The execution and delivery of the Servicer Basic  Documents, the consummation of the transactions contemplated by the Servicer Basic  Documents and the fulfillment of the terms hereof and thereof will not (i) conflict in any  material respect with, result in any material breach of any of the terms and provisions of,  or constitute (with or without notice or lapse of time or both) a default under, the  Servicer's Formation Documents or, in any material respect, any Contractual Obligation  of the Servicer, (ii) result in the creation or imposition of any Lien upon any of the  Servicer's properties (other than Permitted Liens) or (iii) violate any Applicable Law, the  violation of which could reasonably be expected to have a Material Adverse Effect.  (f) No Proceedings.  There is no litigation, proceeding or investigation  pending or, to the best knowledge of the Servicer, threatened against the Servicer, before  any Governmental Authority (i) asserting the invalidity of any Servicer Basic Document,  (ii) seeking to prevent the consummation of any of the transactions contemplated by any  Servicer Basic Document, (iii) challenging the enforceability of a material portion of the  Receivables or (iv) seeking any determination or ruling that could reasonably be expected  to have Material Adverse Effect.  (g) All Consents Required.  All approvals, authorizations, consents, orders or  other actions of any Person or of any Governmental Authority (if any) required for the  due execution, delivery and performance by the Servicer of the Servicer Basic  Documents have been obtained.  (h) Reports Accurate.  All Monthly Reports, information, exhibits, financial  statements, documents, books, records or reports furnished or to be furnished by the  Servicer to any Agent, any Secured Party, the Backup Servicer and the Account Bank in  connection with this Agreement are accurate, true and correct in all material respects.  (i) Servicer's Performance.  The Servicer has the knowledge, the experience  and the systems, financial and operational capacity available to timely perform each of its  obligations hereunder.  (j) Accounts.  The Lockbox Account is not currently subject to a pledge made  by the Servicer or subject to a control agreement entered into by the Servicer.  The  Servicer has neither pledged nor entered into a control agreement (other than the Control  Agreement) with respect to the Collection Account or amounts on deposit therein or the  Hedge Reserve Account or amounts on deposit therein.  (k) Tradenames and Place of Business.  (i) Except as otherwise indicated in  this Agreement or as the same may be changed in accordance with Section 6.05(b), the  Servicer has no trade names, fictitious names, assumed names or "doing business as"  

 

     81  154304283v7  names or other names under which it has done or is doing business and (ii) the principal  place of business and chief executive office of the Servicer are located at the address of  the Servicer set forth on the signature pages hereto and has been so for the last four  months.  (l) Compliance with the Credit and Collection Policy.  The Servicer has, with  respect to the Receivables, complied in all material respects with the Credit and  Collection Policy.  (m) ERISA Matters.  No Plan Event has occurred or is reasonably expected to  occur that might result, directly or indirectly, in any lien being imposed on the property  of the Servicer which could result in a Material Adverse Effect.  (n) Investment Company Act.  The Servicer is not an "investment company"  within the meaning of the Investment Company Act.  (o) Anti-Corruption Laws and Sanctions.  The Servicer is subject to policies  and procedures of Lithia that are designed to ensure compliance by Lithia and its  Subsidiaries, directors, officers, employees and agents with Anti-Corruption Laws and  applicable Sanctions. The Servicer, its officers, directors and employees are in  compliance with Anti-Corruption Laws and applicable Sanctions in all material  respects.  None of (a) the Servicer or any of its directors, officers or employees, or (b) to  the knowledge of the Borrower, any agent of the Servicer that will act in any capacity in  connection with or benefit from the facility established hereby, is a Sanctioned  Person.  No Loan, use of proceeds or other transaction contemplated by this Agreement  will violate Anti-Corruption Laws or applicable Sanctions.  Section 5.04.  Retransfer of Certain Receivables.    (a) Retransfer of an Ineligible Receivable.  If a Receivable is an Ineligible Receivable  at the time it was initially pledged hereunder, no later than the earlier of (i) knowledge by the  Borrower of such Receivable having been an Ineligible Receivable when it was so pledged and  (ii) receipt by the Borrower from the Administrative Agent or the initial Servicer of written  notice thereof (which notice the initial Servicer shall be required to give within two Business  Days of any of its Responsible Officers having actual knowledge thereof), the Borrower shall  (A) disclose the identity of such Ineligible Receivable on the next Monthly Report and (B) on or  before the next Payment Date, to the extent such breach has not been cured or waived, make a  deposit of the Release Price for each such Ineligible Receivable to the Collection Account in  immediately available funds and accept the release of each such Ineligible Receivable.  The  Administrative Agent shall be deemed, upon deposit of the Release Price into the Collection  Account, to convey to the Borrower, without recourse, representation or warranty, all of its right,  title and interest in such Ineligible Receivable and the Borrower shall accept the release of each  such Ineligible Receivable from the Administrative Agent, and the aggregate Pool Balance shall  be reduced by the Principal Balance (as of the end of the most recent Collection Period) of each  such Ineligible Receivable.  Upon each release to the Borrower of such Ineligible Receivable, the  Administrative Agent shall automatically and without further action be deemed to transfer,  assign and set-over to the Borrower, without recourse, representation or warranty, all the right,  

 

     82  154304283v7  title and interest of the Administrative Agent in, to and under such Ineligible Receivable and all  future monies due or to become due with respect thereto, all proceeds of such Ineligible  Receivable and Recoveries and Insurance Proceeds relating thereto, all rights to security for any  such Ineligible Receivable, and all proceeds and products of the foregoing.  The Administrative  Agent shall, at the sole expense of the Servicer (which, in the case of any Successor Servicer,  shall be reimbursable in accordance with the provisions of Section 2.06), execute such  documents and instruments of release as may be prepared by the Servicer on behalf of the  Borrower and take such other actions as shall reasonably be requested by the Borrower to effect  the release of such Ineligible Receivable pursuant to this subsection.  (b) Retransfer of Receivables for Breach of Servicing Covenant.  In the event that the  initial Servicer breaches a servicing covenant pursuant to Section 7.03(c)(i) with respect to any  Receivable, which breach adversely affects the Receivable or the interests of the Lenders, no  later than the earlier of (i) knowledge by the initial Servicer of such event or (ii) receipt by the  initial Servicer from the Administrative Agent or the Borrower of written notice thereof, the  initial Servicer shall (A) disclose the identity of such Receivable on the next Monthly Report and  (B) on or before the next Payment Date, to the extent such breach has not been cured or waived,  make a deposit of the Release Price for each such Receivable into the Collection Account in  immediately available funds, and the initial Servicer shall accept the release of such  Receivable(s), in each case as described in Section 5.04(a).    (c) Notice of Retransfer.  The Borrower or the Servicer, as applicable, shall provide  written notice to the Administrative Agent and each Hedge Counterparty on the Monthly Report  of any release of Receivables pursuant to Sections 5.04(a) and (b).  With respect to any such  release, the Borrower shall provide written notice to the Administrative Agent and each Hedge  Counterparty of any release of Receivables prior to 3:00 p.m., New York City time, three  Business Days prior to the related repurchase date, and such notice shall include a calculation of  the Borrowing Base after giving effect to such release, as well as representations and warranties  by the Borrower that no Termination Event or Servicer Termination Event has occurred, that the  Borrowing Base calculation included with such notice is accurate and that any required Hedging  Agreements are in full effect.  ARTICLE SIX    COVENANTS  Section 6.01.  Affirmative Covenants of the Borrower.  From the Closing Date until the  Facility Termination Date:  (a) Compliance with Laws.  The Borrower will comply in all material respects  with all Applicable Laws, including those with respect to the Receivables and related  Financed Vehicles.  (b) Preservation of Existence.  The Borrower will preserve and maintain its  existence, rights, franchises and privileges in the State of Delaware, and qualify and  remain qualified in good standing as a foreign limited liability company in each  jurisdiction where the failure to preserve and maintain such existence, rights, franchises,  

 

     83  154304283v7  privileges and qualification has had, or could reasonably be expected to have, a material  adverse effect.  (c) Performance and Compliance with Agreements.  The Borrower will, at its  expense, timely and fully perform and comply (or cause the Seller to perform and comply  pursuant to this Agreement, the Purchase Agreement and all Purchase Agreement  Supplements), in all material respects, all provisions, covenants and other promises  required to be observed by it under the Basic Documents and the Contracts.  (d) Keeping of Records and Books of Account.  To the extent not maintained  and implemented by the Servicer, the Borrower will maintain and implement  administrative and operating procedures (including an ability to recreate records  evidencing Receivables in the event of the destruction of the originals thereof), and keep  and maintain all documents, books, records, financial statements and other information  reasonably necessary or advisable for the collection of all Receivables.  Such books and  records shall include reports adequate to permit the daily identification of each new  Receivable and all Collections of and adjustments to each existing Receivable.  (e) Borrower Assets.  With respect to each Receivable, the Borrower will:  (i) acquire such Receivable pursuant to and in accordance with the terms of the Purchase  Agreement, (ii) take all action necessary to perfect, protect and more fully evidence the  Borrower's ownership of such Receivable, including (A) filing and maintaining, effective  financing statements (Form UCC-1) listing DFC, respectively, as debtor in all necessary  filing offices (and will cause DFC to obtain similar financing statements from each entity  from which it acquired the Receivables), and filing continuation statements, amendments  or assignments with respect thereto in such filing offices and (B) executing or causing to  be executed such other instruments or notices as may be necessary and (iii) take all  additional action that the Administrative Agent may reasonably request, including the  filing of financing statements listing the Administrative Agent as secured party to perfect,  protect and more fully evidence the respective interests of the parties to this Agreement in  the Collateral.  (f) Delivery of Collections.  The Borrower will deliver to the Servicer, for  further remittance to the Collection Account, all Collections received by Borrower in  respect of the Receivables no later than two Business Days after the Borrower's receipt  thereof.  (g) Separate Corporate Existence.  The Borrower shall be in compliance with  the special purpose entity requirements set forth in Section 6.01(o).  (h) Credit and Collection Policy.  The Borrower will, or will cause DFC or the  Servicer to, as the case may be, (i) with respect to each Receivable, comply with the  Credit and Collection Policy (which may include originating or servicing Receivables in  accordance with those discretionary exceptions that are set forth therein) and (ii) furnish  to the Administrative Agent written notice of any material changes to the Credit and  Collection Policy and revised versions of the Credit and Collection Policy containing  such changes.   

 

     84  154304283v7  (i) Notice of Certain Events.  The Borrower will provide the Administrative  Agent with written notice within one Business Day of the date on which the Borrower  receives notice of, or obtains knowledge of, the occurrence of any Termination Event,  Unmatured Termination Event, Step-up Event, Early Amortization Event, Servicer  Termination and Unmatured Servicer Termination Event.  (j) Taxes.  The Borrower will file and pay any and all Taxes, including those  required to meet the obligations of the Basic Documents, except Taxes that the Borrower  is contesting in good faith and by appropriate legal proceedings the validity, applicability  or amount thereof and such contest does not materially endanger any right or interest of  the Secured Parties under the Basic Documents.  (k) Liens.  The Borrower will not create, or participate in the creation of, or  permit to exist, any Liens (other than Permitted Liens) with respect to the Lockbox  Account or the Collection Account.  (l) Reporting.  The Borrower will furnish or cause to be furnished to the  Administrative Agent, each Agent and, to the extent requested by a Hedge Counterparty,  such Hedge Counterparty:  (i) Monthly Report.  Not later than each Reporting Date, a  Monthly Report.   (ii) Quarterly Report.  By the 15th of each February, May,  August and November, a Quarterly Report, including information as of the previous  month-end, as to the Receivables such as collections, delinquencies, losses, recoveries,  cash flows and such other information as reasonably requested by the Administrative  Agent.  (iii) Financial Statements.    (A) Within 60 days after the end of the first three quarterly fiscal  periods of each fiscal year of DFC, the unaudited unconsolidated balance  sheets of DFC as at the end of such period and the related unaudited  unconsolidated statements of income and retained earnings for DFC for  such period, setting forth in comparative figures for the previous fiscal  quarter (to the extent such prior quarterly financial statements were  delivered pursuant to this Section or are otherwise available),  accompanied by a certificate of a Responsible Officer of DFC, which  certificate shall state that each such unconsolidated financial statement  fairly presents the financial condition of DFC in accordance with GAAP,  consistently applied, as at the end of, and for, such period (subject to  normal year end audit adjustments).  (B) Within 60 days after the end of the first three quarterly fiscal  periods of each fiscal year of the Performance Guarantor, the unaudited  consolidated balance sheets of the Performance Guarantor as at the end of  such period and the related unaudited consolidated statements of income  

 

     85  154304283v7  and retained earnings for the Performance Guarantor for such period,  setting forth in comparative figures for the previous quarter (to the extent  such prior quarter financial statements were delivered pursuant to this  Section or are otherwise available), accompanied by a certificate of a  Responsible Officer of the Performance Guarantor, which certificate shall  state that each such consolidated financial statement fairly presents the  financial condition of the Performance Guarantor in accordance with  GAAP, consistently applied, as at the end of, and for, such period (subject  to normal year end audit adjustments).  Notwithstanding the foregoing, if  any such report is timely filed with the Securities and Exchange  Commission and is publicly available on its the Electronic Data Gathering,  Analysis and Retrieval (EDGAR) system on the date that the related report  would otherwise be due hereunder, such report shall be deemed to have  been timely delivered in accordance with this subclause.  (C) Within 120 days after each fiscal year of (i) DFC, the  unaudited consolidated balance sheets of DFC as of the end of such fiscal  year and the related unaudited consolidated statements of income and  retained earnings and of cash flows for DFC for such year and (ii) the  Performance Guarantor, the audited consolidated balance sheets of the  Performance Guarantor as at the end of such fiscal year and the related  audited consolidated statements of income and retained earnings and of  cash flows for the Performance Guarantor for such year, setting forth in  comparative form the figures for the previous year, accompanied by an  opinion thereon of independent certified public accountants of recognized  national standing, which opinion shall not be qualified as to scope of audit  or going concern (other than a qualification as to going concern based  solely on the tenor of the Commitments hereunder) and shall state that  each consolidated financial statement fairly presents the financial  condition and results of operations of the Performance Guarantor at the  end of, and for, such fiscal year in accordance with GAAP.   Notwithstanding the foregoing, if any such report is timely filed with the  Securities and Exchange Commission and is publicly available on its the  Electronic Data Gathering, Analysis and Retrieval (EDGAR) system on  the date that the related report would otherwise be due hereunder, such  report shall be deemed to have been timely delivered in accordance with  this subclause.    (D) Within 120 days of the end of each fiscal year of DFC, a  certificate of a Responsible Officer of DFC, which certificate shall state  that the unaudited consolidated balance sheets of DFC delivered pursuant  to subclause (C) fairly present the financial condition of DFC in  accordance with GAAP, consistently applied, at the end of, and for, such  fiscal year.  Within 120 days of the end of each fiscal year of the  Performance Guarantor, a certificate of a Responsible Officer of the  Performance Guarantor, which certificate shall state that the audited  consolidated balance sheets of the Performance Guarantor delivered, or  

 

     86  154304283v7  deemed to have been delivered, pursuant to subclause (C) fairly present  the financial condition of the Performance Guarantor in accordance with  GAAP, consistently applied, as at the end of, and for, such fiscal year.    (iv) Representations.  Promptly following the Borrower's  obtaining knowledge of the same, the Borrower shall notify the Administrative Agent  that any representation or warranty set forth in Section 5.01 or 5.02 was incorrect in  any material respect at the time it was given or deemed to have been given, and at the  same time shall deliver to the Administrative Agent a written notice setting forth in  reasonable detail the nature of such facts and circumstances.  In particular, but without  limiting the foregoing, the Borrower shall notify the Administrative Agent in the  manner set forth in the preceding sentence before any Funding Date of any facts or  circumstances within the knowledge of the Borrower which would render any of such  representations and warranties untrue in any material respect at the date when they  were made or deemed to have been made.  (v) Proceedings.  As soon as possible and in any event within  two Business Days of the date on which the Borrower receives notice of, or obtains  knowledge of, the same, the Borrower shall provide notice of any settlement of,  material judgment (including a material judgment with respect to the liability phase of  a bifurcated trial) in or commencement of any labor controversy (of a material nature),  litigation, action, suit or proceeding before any court or Governmental Authority,  domestic or foreign, affecting the Borrower or any of its Affiliates that would  reasonably be expected to have a Material Adverse Effect.  (vi) Notice of Material Events.  Promptly following any  Responsible Officer of the Borrower obtaining knowledge the same, the Borrower  shall provide notice of any other event or circumstances that, in the reasonable  judgment of the Borrower, would reasonably be expected to have a Material Adverse  Effect.  (m) Anti-Corruption Laws and Sanctions.  The Borrower will remain subsect  to, and enforce, Lithia's policies and procedures designed to ensure compliance by Lithia  and its Subsidiaries and each of their respective Subsidiaries and their respective  directors, officers, employees and agents with Anti-Corruption Laws and applicable  Sanctions.    (n) Beneficial Ownership Certification.  From time to time any Lender that  has a reasonable basis for requesting such a certification may request that the Borrower  deliver, and within five Business Days of each such request the Borrower shall execute  and deliver to such Lender, a Beneficial Ownership Certification, in form and substance  reasonably acceptable to such Lender.  Furthermore, promptly following any change that  would result in a change to the status of the Borrower as an excluded "Legal Entity  Customer" under the Beneficial Ownership Rule, the Borrower shall execute and deliver  to each Lender a Beneficial Ownership Certification, in form and substance reasonably  acceptable to each such Lender.  

 

     87  154304283v7  (o) Special Purpose Entity.  The Borrower shall take or perform each of the  following actions (and the Borrower has not heretofore failed to take or perform any such  actions in the past):   (i) maintain its own separate deposit and other bank accounts  and funds to which no other Person has any access (except to the extent permitted  under the Basic Documents) which accounts shall be maintained in the name of the  Borrower;  (ii) maintain full books of accounts and records (financial or  other) and financial statements separate from those of any other Person (including, all  resolutions, records, agreements or instruments underlying or regarding the  transactions contemplated by the Basic Documents or otherwise);  (iii) at all times hold itself out to the public and all other  Persons as a legal entity separate from the and any other Person;  (iv) have its own board of directors;  (v) file its own tax returns separate from those of any other  Person, if any, as may be required under applicable law, to the extent (A) not part of a  consolidated group filing a consolidated return or returns or (B) not treated as a  division for tax purposes of another taxpayer, and pay any taxes so required to be paid  under applicable law;  (vi) ensure that any consolidated financial statements of any  Affiliate or any other Person that are filed with the Securities Exchange Commission  or any other governmental authority or are furnished to any creditors of any Affiliate  or any other Person include notes clearly stating that the Borrower is a separate  corporate entity and that its assets are available first and foremost to satisfy the claims  of the creditors of the Borrower; and  (vii) except as contemplated by the Basic Documents, not  commingle its assets with assets of any other Person and maintain the assets of the  Borrower in such a manner that it is not costly or difficult to segregate, identify or  ascertain its individual assets from those of any other Person, including any Affiliate;  (viii) conduct its business in its own name and strictly comply  with all organizational formalities to maintain its separate existence;  (ix) disclose, and cause each Member to disclose, in its  financial statements the effects of all transactions between such Member and the  Borrower in a manner which makes it clear that (A) the Borrower is a separate legal  entity, (B) the assets of the Borrower are not assets of any Affiliate and are not  available to pay creditors of any Affiliate and (C) neither such Member nor any  Affiliate thereof is liable or responsible for the debts of the Borrower;  

 

     88  154304283v7  (x) pay its own liabilities and expenses only out of its own  funds;  (xi) except for capital contributions or capital distributions  permitted under the terms and conditions of the Borrower's Formation Documents, not  enter into any transaction with an Affiliate of the Borrower except on arm's length  terms;  (xii) compensate (either directly or through reimbursement of  the Borrower's allocable share of any shared expenses) all employees, consultants and  agents and Affiliates, to the extent applicable, for services provided to the Borrower by  such employees, consultants and agents or Affiliates, in each case, from the Borrower's  own funds and either maintain a sufficient number of employees, and/or employ  sufficient consultants or agents, in light of its contemplated operations; provided, the  foregoing shall not require the Members to make any additional capital contributions  to the Borrower;  (xiii) except as expressly permitted under any of the Basic  Documents, pay from its own bank accounts for accounting and payroll services, rent,  lease and other expenses (or the Borrower's allocable share of any such amounts  provided by one or more other Affiliates) and not have such operating expenses (or the  Borrower's allocable share thereof) paid by any Affiliates; provided, the foregoing  shall not require the Members to make any additional capital contributions to the  Borrower;  (xiv) not hold out its credit or assets as being available to satisfy  the obligations of any other Person;  (xv) maintain office space separate and clearly delineated from  the office space of any Affiliate;  (xvi) allocate fairly and reasonably any overhead expenses that  are shared with an Affiliate, including for shared office space and for services  performed by an employee of an Affiliate;  (xvii) cause (A) all written communications, including letters,  invoices, purchase orders, and contracts, of the Borrower to be made solely in the  name of the Borrower, (B) the Borrower to have its own tax identification number,  stationery, checks and business forms, separate from those of any other Person, (C) all  Affiliates not to use the stationery or business forms of the Borrower, and cause the  Borrower not to use the stationery or business forms of any Affiliate, and (D) all  Affiliates not to conduct business in the name of the Borrower, and cause the  Borrower not to conduct business in the name of any Affiliate;  (xviii) except as expressly permitted by any of the Basic  Documents, direct creditors of the Borrower to send invoices and other statements of  account of the Borrower directly to the Borrower and not to any Affiliate and cause the  

 

     89  154304283v7  Affiliates to direct their creditors not to send invoices and other statements of accounts  of such Affiliates to the Borrower;  (xix) except as expressly permitted by any of the Basic  Documents, not acquire obligations or securities of or make loans or advances to or  grant a security interest in or pledge its assets for the benefit of the Member, any  Affiliate or any other Person;  (xx) correct any known misunderstanding regarding its separate  identity and not identify itself as a department or division of any other Person except  as may be required for income tax purposes;  (xxi) maintain adequate capital in light of its contemplated  business purpose, transactions and liabilities, and refrain from engaging in a business  for which its remaining property represents an unreasonably small capital; provided,  however, the foregoing shall not require the Members to make any additional capital  contributions to the Borrower;  (xxii) practice and adhere to all limited liability company  procedures and formalities to the extent required by the Borrower's Formation  Documents or all other appropriate constituent documents and applicable law;  (xxiii) except for the other Basic Documents, not acquire any  obligations or securities of the Member or of any Affiliate of the Borrower;   (xxiv) cause the directors, officers, agents and other  representatives of the Borrower to act at all times with respect to the Borrower  consistently and in furtherance of the foregoing and in the best interests of the  Borrower; and  (xxv) at all times will have at least one director that qualifies as  an "Independent Director" (as such term is defined in the Borrower's Formation  Documents).  Section 6.02.  Negative Covenants of the Borrower.  From the date hereof until the  Facility Termination Date:  (a) Other Business.  The Borrower will not (i) engage in any business other  than the transactions contemplated by the Basic Documents, (ii) incur any Indebtedness,  obligation, liability or contingent obligation of any kind (including guaranteeing any  obligation) other than pursuant to this Agreement, any other Basic Document or under  any Hedging Agreement required by Section 6.03 or (iii) form any Subsidiary or make  any Investments in any other Person.  (b) Receivables Not to be Evidenced by Instruments.  The Borrower will take  no action to cause any Receivable that is not, as of the related Funding Date, evidenced  by an Instrument, to be so evidenced except in connection with the enforcement or  collection of such Receivable.  

 

     90  154304283v7  (c) Security Interests.  The Borrower will not sell, pledge, assign or transfer to  any other Person, or grant, create, incur, assume or suffer to exist any Lien (other than  Permitted Liens) on any portion of the Collateral, whether now existing or hereafter  transferred hereunder, or any interest therein, and the Borrower will not sell, pledge,  assign or suffer to exist any Lien on its interest, if any, hereunder.  The Borrower will  promptly notify the Administrative Agent of the existence of any Lien (other than a  Permitted Lien) on any portion of the Collateral and the Borrower shall defend the right,  title and interest of the Administrative Agent in, to and under such Collateral, against all  claims of third parties; provided, that nothing in this subsection shall prevent or be  deemed to prohibit the Borrower from suffering to exist Permitted Liens upon any  portion of the Collateral.  (d) Mergers, Acquisitions, Sales, Etc.  The Borrower will not be a party to any  merger or consolidation, or purchase or otherwise acquire all or substantially all of the  assets or any stock or membership interests of any class of, or any partnership or joint  venture interest in, any other Person, or, sell, transfer, convey or lease all or any  substantial part of its assets, or sell or assign with or without recourse any portion of the  Collateral or any interest therein (other than pursuant hereto).  (e) Distributions.  The Borrower shall not declare or pay, directly or  indirectly, any dividend or make any other distribution (whether in cash or other  property) with respect to the profits, assets or capital of the Borrower or any Person's  interest therein, or purchase, redeem or otherwise acquire for value any of its capital  stock now or hereafter outstanding, except that so long as no Termination Event or  Unmatured Termination Event has occurred and is continuing or would result therefrom,  the Borrower may distribute to holders of its membership interest funds distributed to the  Borrower pursuant to Section 2.06(xi), subject to Applicable Law.  (f) Change of Name or Location of Receivable Files.  The Borrower shall not  (i) change its name or state of organization, move the location of its principal place of  business and chief executive office, and the offices where it keeps the Records from the  location referred to in Section 13.02 or (ii) move, or consent to the Collateral Custodian  or the Servicer moving, the Receivable Files from the location thereof on the Closing  Date, unless the Borrower has given at least 30 days' written notice to the Administrative  Agent and has taken all actions required under the UCC of each relevant jurisdiction in  order to continue the first priority perfected security interest of the Administrative Agent  in the Collateral.  (g) True Sale.  Except for purposes of GAAP, the Borrower will not account  for or treat the transactions contemplated by the Purchase Agreement in any manner other  than as the sale, or absolute assignment, of the Receivables and other Collateral by DFC  to the Borrower.  (h) ERISA Matters.  The Borrower will not establish, maintain or contribute  to or have any liability (contingent or otherwise) with respect to any Pension Plan or  Multiemployer Plan or otherwise be a "benefit plan investor" under Section 3(42) of  ERISA. The Borrower will not engage or permit any ERISA Affiliate to engage in any  

 

     91  154304283v7  prohibited transaction under Section 406 of ERISA or Section 4975 of the Code for  which an exemption is not available or has not previously been obtained from the United  States Department of Labor and which would result in a Material Adverse Effect.  (i) Formation Documents; Purchase Agreement.  The Borrower will not  amend, modify, waive or terminate any provision of its Formation Documents or of the  Purchase Agreement (including any Purchase Agreement Supplement) in any respect  which would be reasonably expected to materially and adversely affect the  Administrative Agent or any other Secured Party, without the prior, written consent of  the Administrative Agent.  (j) Changes in Payment Instructions.  The Borrower will not add or make any  change, or permit the Servicer to make any change, in its instructions to Obligors  regarding payments to be made to the Borrower or the Servicer or payments to be made  to the Lockboxes or the Lockbox Account, unless the Administrative Agent has  Consented to such change in writing and has received duly executed copies of all  documentation related thereto, which documentation shall be satisfactory in form and  substance to the Administrative Agent.  (k) Extension or Amendment.  The Borrower will not, except as otherwise  permitted in Section 7.03(c)(i), extend, amend or otherwise modify, or permit the  Servicer to extend, amend or otherwise modify, the terms of any Contract.  (l) No Assignments.  The Borrower will not assign or delegate, grant any  interest in or permit any Lien (other than Permitted Liens) to exist upon any of its rights,  obligations or duties under this Agreement without the prior written Consent of the  Administrative Agent.  (m) Anti-Corruption Laws and Sanctions.  The Borrower will not request any  Loan, and the Borrower shall not use any Loan, and shall procure that its directors,  officers, employees and agents (if any) shall not use, the proceeds of any Loan (A) in  furtherance of an offer, payment, promise to pay, or authorization of the payment or  giving of money, or anything else of value, to any Person in violation of any Anti- Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities,  business or transaction of or with any Sanctioned Person, or in any Sanctioned Country,  or (C) in any manner that would result in the violation of any Sanctions applicable to any  party hereto.  Section 6.03.  Covenant of the Borrower Relating to Hedging.  (a) Beginning on the date that is thirty days after the date of the Initial Loan, the  Borrower shall at all times that the Loans Outstanding are greater than zero, (i) maintain one or  more Hedge Transactions in form and substance satisfactory to the Administrative Agent, each  of which may be in the form of an interest rate swap or an interest rate cap transaction and/or (ii)  maintain amounts on deposit in the Hedge Reserve Account, in all cases to ensure that either (x)  the Borrower is Fully Hedged or (y) if the Borrower is not Fully Hedged, an amount not less than  the Hedge Reserve Account Required Amount is at all times on deposit in the Hedge Reserve  

 

     92  154304283v7  Account; provided, that if on any date any Mandatory Hedging Condition exists, then within two  (2) Business Days of such date the Borrower must be Fully Hedged, and the Borrower must  remain Fully Hedged at all times thereafter while a Mandatory Hedging Condition exists,  regardless of whether any amounts are then on deposit in the Hedge Reserve Account.  If at any  time the Hedge Reserve Account Required Amount is greater than zero, then (A) no later than  three Business Days prior to each Funding Date and no later than three Business Days prior to  each Payment Date the Borrower (or the initial Servicer on behalf of the Borrower) shall obtain a  quote for the purchase price of an interest rate cap that allows it to recalculate the Hedge Reserve  Account Required Amount on such date and (B) beginning on the related Funding Date or  Payment Date, as applicable, such quote shall be used to determine the "Hedge Reserve Account  Required Amount" until the next succeeding Funding Date or Payment Date, as applicable.  It is  acknowledged and agreed that any Hedge Transaction entered into by the Administrative Agent  on behalf of the Borrower pursuant to Section 2.08(f) shall be deemed to have been entered into  by the Borrower for purposes of Borrower's obligations under this Section 6.03(a).  (b) Each Hedge Transaction shall be entered into with a Hedge Counterparty and be  governed by a Hedging Agreement.  Any Hedge Transaction that is in the form of an interest rate  swap shall provide for the payment on each Payment Date to the Hedge Counterparty of an  amount calculated by reference to the notional amount thereunder and a fixed rate of interest per  annum and for the payment on each Payment Date to the Borrower of an amount calculated by  reference to the same notional amount thereunder and a floating rate of interest (per annum equal  to SOFR or a related rate), in each case for each day during the related Interest Period.   Furthermore, (i) the notional amount of each such Hedge Transaction shall amortize monthly  based on an assumed "ABS Rate" agreed upon by the Borrower and the Administrative Agent,  (ii) the "Termination Events" and "Events of Default" that are applicable under each such Hedge  Transaction shall have been approved by the Required Lenders to the Administrative Agent prior  to the effectiveness of such Hedge Transaction, and (iii) each such Hedge Transaction shall have  a final maturity date reflecting the expected repayment of the Receivables, taking into account  anticipated losses and prepayments.  If a Hedge Counterparty, other than a Hedge Counterparty  as defined in clause (i) of the definition thereof, met the Short-Term Ratings Requirement and/or  the Long-Term Ratings Requirement at the time the related Hedge Transaction was entered into  and is downgraded or has any ratings withdrawn such that it no longer meets the Short-Term  Ratings Requirement and/or the Long-Term Ratings Requirement, as applicable, then within  thirty (30) days of the related downgrade or withdrawal either (A) the Borrower must enter into a  new Hedging Agreement or (B) the Hedge Counterparty must post collateral pursuant to a credit  support annex in an amount satisfactory to the Required Lenders.  (c) If on any date any Hedge Transactions are in the form of interest rate swaps and  the aggregate notional amount under all outstanding Hedge Transactions as of such date is either  (x) less than 95% of the Loans Outstanding as of such date (after giving effect to any changes to  the Loans Outstanding on such date) or (y) more than 105% of the Loans Outstanding as of such  date (after giving effect to any changes to the Loans Outstanding on such date), then on the  related "Adjustment Date" (which shall be either such date (if such date is a Payment Date) or  otherwise the next Business Day after such date that is a Payment Date), the Administrative  Agent may direct the Borrower to enter into one or more Hedge Transactions, increase the  notional amount of one or more Hedge Transactions, or decrease the notional amount of one or  more Hedge Transactions, in all cases as necessary such that immediately thereafter the  

 

     93  154304283v7  aggregate notional amount under all Hedge Transactions is neither (I) less than 95% of the Loans  Outstanding as of the Adjustment Date (after giving effect to any changes to the Loans  Outstanding on such date) nor (II) more than one 105% of the Loans Outstanding as of the  Adjustment Date (after giving effect to any changes to the Loans Outstanding on such date).  (d) The Borrower shall establish and thereafter maintain a segregated trust account in  the name of the Borrower with respect to each Hedge Counterparty (each, a "Hedge  Counterparty Collateral Account;) with a Qualified Institution in trust and for the benefit of the  Lenders and the related Hedge Counterparty.  In the event that pursuant to the terms of the  applicable Hedging Agreement, the related Hedge Counterparty is required to deposit cash or  securities as collateral to secure its obligations ("Posted Collateral"), the Borrower shall deposit  all Posted Collateral received from the Hedge Counterparty into the Hedge Counterparty  Collateral Account. All sums on deposit and securities held in any Hedge Counterparty  Collateral Account shall be used only for the purposes set forth in the related credit support  annex ("Credit Support Annex") to the Hedging Agreement. The only permitted withdrawal from  or application of funds on deposit in, or otherwise to the credit of, a Hedge Counterparty  Collateral Account shall be (i) for application to the obligations of the applicable Hedge  Counterparty under the related Hedging Agreement in accordance with the terms of the related  Credit Support Annex and (ii) to return collateral to the Hedge Counterparty when and as  required by the Credit Support Annex. Amounts on deposit in each Hedge Counterparty  Collateral Account shall be invested at the written direction of the related Hedge Counterparty,  and all investment earnings actually received on amounts on deposit in a Hedge Counterparty  Collateral Account or distributions on securities held as Posted Collateral shall be distributed to  the related Hedge Counterparty in accordance with the terms of the related Credit Support  Annex. Any amounts applied by the Borrower to the obligations of the Hedge Counterparty  under the Hedging Agreement in accordance with the terms of the Credit Support Annex shall be  deposited in the Collection Account and applied in accordance with Section 2.06 of this  Agreement. The Borrower agrees to give the Hedge Counterparty prompt notice if it obtains  knowledge that the Hedge Counterparty Collateral Account or any funds on deposit therein or  otherwise to the credit of the Hedge Counterparty Collateral Account, shall or have become  subject to any writ, order, judgment, warrant of attachment, execution or similar process.  (e) Within 30 days after the occurrence of any event defined as an "Event of Default"  or "Termination Event" in a Hedging Agreement, the Borrower shall cause such Hedge  Counterparty to assign its obligations under the Hedging Agreement to a new Hedge  Counterparty which satisfies the requirements set forth in the definition of "Hedge  Counterparty.”  (f) The Borrower shall deliver to the Administrative Agent a copy of all documents  related to any Hedging Agreement, including confirmations, schedules and an aggregate notional  amortization schedule.  (g) All reasonably documented out-of-pocket costs and expenses (including  reasonable legal fees and disbursements) incurred by the Administrative Agent and the Lenders  incurred with each Hedge Transaction shall be paid by the Borrower.  

 

     94  154304283v7  (h) As additional security hereunder, the Borrower has granted a security interest to  the Administrative Agent all right, title and interest of the Borrower in the Hedge Collateral.  The  Borrower acknowledges that, as a result of that pledge, the Borrower may not, without the prior  written Consent of the Administrative Agent, exercise any rights under any Hedging Agreement  or Hedge Transaction, except for the Borrower's right under any Hedging Agreement to enter  into Hedge Transactions in order to meet the Borrower's obligations hereunder.  Nothing herein  shall have the effect of releasing the Borrower from any of its obligations under any Hedging  Agreement or any Hedge Transaction, nor be construed as requiring the consent of any Secured  Party for the performance by the Borrower of any such obligations.  Section 6.04.  Affirmative Covenants of the Servicer.  From the date hereof until the  Facility Termination Date:  (a) Compliance with Law.  The Servicer will comply in all material respects  with all Applicable Laws, including those with respect to the Contracts, the Receivables,  the related Financed Vehicles, the Receivable Files or any part thereof and any collection  efforts on behalf of the Receivables or related Financed Vehicles, except to the extent  that the Servicer's failure to so comply would not have a Material Adverse Effect.  (b) Preservation of Corporate Existence.  The Servicer will preserve and  maintain its existence, rights, franchises and privileges in its State of formation, and shall  qualify and remain qualified in good standing as a foreign limited liability company in  each jurisdiction where the failure to preserve and maintain such existence, rights,  franchises, privileges and qualification has had, or could reasonably be expected to have,  a Material Adverse Effect.  (c) Obligations and Compliance with Receivables.  The Servicer will fulfill  and comply with all obligations on the part of the Borrower to be fulfilled or complied  with under or in connection with each Receivable and will do nothing to impair the rights  of the Administrative Agent in, to and under the Collateral.  The Servicer will comply  with the terms and conditions of this Agreement relating to the obligation of the  Borrower to remove Receivables from the Collateral pursuant to this Agreement and the  obligation of the Seller, under the Purchase Agreement, to reacquire Receivables from the  Borrower pursuant to the Purchase Agreement.  (d) Performance and Compliance with Servicer Basic Documents.  The initial  Servicer will timely and fully perform and comply with all provisions, covenants and  other promises required to be observed by it under the Servicer Basic Documents.  (e) Keeping of Records and Books of Account.  The Servicer will maintain  and implement administrative and operating procedures (including an ability to recreate  records evidencing Receivables, including the Receivable Files, in the event of the  destruction of the originals thereof), and keep and maintain all documents, books, records  and other information reasonably necessary or advisable for the collection of all  Receivables, including the Receivable Files.  

 

     95  154304283v7  (f) Preservation of Security Interest.  The Servicer will execute and file such  financing and continuation statements and any other documents that may be required by  any law or regulation of any Governmental Authority to preserve and protect fully the  security interest of the Administrative Agent in, to and under the Collateral; provided,  that in the case of any Successor Servicer, the Successor Servicer shall execute and file  such documents (as prepared by the Borrower or the Administrative Agent) only upon the  written direction of the Borrower or the Administrative Agent and any action taken by the  Successor Servicer pursuant to this clause shall be a reimbursable expense paid in  accordance with the provisions of Section 2.06.  The Servicer will defend the right, title  and interest of the Borrower, the Secured Parties, the Administrative Agent and the  Collateral Custodian in, to and under the Collateral against all claims of third parties  claiming through or under the Servicer; provided, that in the case of any Successor  Servicer, such action or defense shall only be taken at the written direction of the  Borrower or the Administrative Agent and, so long as the need for such defense or action  was not caused by the Successor Servicer's gross negligence, bad faith or willful  misconduct, any action taken by the Successor Servicer pursuant to this clause shall be a  reimbursable expense paid in accordance with the provisions of Section 2.06.  (g) Credit and Collection Policy.  The Servicer will comply in all material  respects with the Credit and Collection Policy in regard to each Receivable.    (h) Monthly Reports. Not later than each Reporting Date, the Servicer will  provide to the Administrative Agent and, to the extent requested or required by a Hedge  Counterparty, such Hedge Counterparty, a Monthly Report.  (i) Termination Events and Servicer Termination Events.  The Servicer will  furnish to the Administrative Agent, the Backup Servicer and each Hedge Counterparty,  within one Business Day after a Responsible Officer of the Servicer has actual  knowledge thereof, notice of the occurrence of an Unmatured Termination Event, a  Termination Event, an Unmatured Servicer Termination Event or a Servicer Termination  Event.  (j) Other.  The Servicer will furnish to the Administrative Agent, from time to  time, such other information, documents, records or reports respecting the Collateral or  the condition or operations, financial or otherwise, of the Servicer as the Administrative  Agent may from time to time reasonably request in order to protect the interests of the  Administrative Agent or Lenders under or as contemplated by this Agreement.  (k) Notice Regarding Collateral.  The Servicer shall advise the Collateral  Custodian (if other than DFC) and the Administrative Agent in writing in reasonable  detail promptly following its actual knowledge or receipt of written notice of (i) any Lien  (other than a Permitted Lien) asserted or claim made against any portion of the Collateral,  (ii) the occurrence of any breach in any material respect by the Servicer of any of its  representations, warranties and covenants contained herein relating to the Receivables  and (iii) the occurrence of any other event which would reasonably be expected to have a  material adverse effect on the security interest of the Administrative Agent on behalf of  

 

     96  154304283v7  the Secured Parties in the Collateral or the collectability of all or a material portion of the  Receivables.  (l) Additional Information.  The Servicer shall, within five Business Days of  its receipt thereof, respond to reasonable written directions or written requests for  information that the Borrower, the Administrative Agent, any Lender or the Collateral  Custodian might have with respect to the administration of the Receivables.  (m) Financial Statements.  The initial Servicer shall provide to the  Administrative Agent, each Agent and each Lender, the financial statements described in  Section 6.01(l)(iii).  (n) Accounting Policy.  The initial Servicer will notify the Administrative  Agent within five Business Days of its implementation of any material change in the its   accounting policies.  (o) Additional Covenants.  The Servicer shall (i) promptly notify the  Borrower, the Administrative Agent or the Collateral Custodian (if other than DFC) of  the occurrence of any event which would require that the Borrower make or cause to be  made any filings, reports, notices or applications or seek any consents or authorizations  from any and all Governmental Authorities in accordance with the relevant UCC and any  State vehicle license or registration authority as may be necessary or advisable to create,  maintain and protect a first priority security interest of the Administrative Agent in, to  and on the Financed Vehicles and a first priority security interest of the Administrative  Agent in, to and on the Collateral, and (ii) take all reasonable action necessary to  maximize the returns pursuant to the Insurance Policies.    (p) Anti-Corruption Laws and Sanctions.  The initial  Servicer will remain  subject to and enforce Lithia's policies and procedures designed to ensure compliance by  Lithia and its Subsidiaries and each of their respective Subsidiaries and their respective  directors, officers, employees and agents with Anti-Corruption Laws and applicable  Sanctions.    Section 6.05.  Negative Covenants of the Servicer.  From the date hereof until the Facility  Termination Date:  (a) Lockboxes; Accounts.  The Servicer shall not create or participate in the  creation of, or solely in the case of the initial Servicer, permit to exist, any Liens (other  than Permitted Liens) with respect to the Lockboxes, the Lockbox Account, the  Collection Account, or the Hedge Reserve Account.  The Servicer shall not enter into any  "control agreement" (as defined in the relevant UCC) with respect to the Lockboxes, the  Lockbox Account, the Collection Account, or the Hedge Reserve Account (other than the  Control Agreement, with respect to the Collection Account and the Hedge Reserve  Account).  Without the prior written Consent of the Administrative Agent, the Servicer  shall not move the Lockboxes, the Lockbox Account, the Collection Account, or the  Hedge Reserve Account to an institution other than the one at which it is held as of the  Closing Date.  

 

     97  154304283v7  (b) Change of Name or Location of Receivable Files.  The initial Servicer  shall not change its name or its state of organization, move the location of its principal  place of business and chief executive office, and the offices where it keeps records  concerning the Receivables (including the Receivable Files) from the location referred to  in Section 13.02, unless the initial Servicer has given at least 30 days' prior written notice  to the Administrative Agent and has taken all actions required under the UCC of each  relevant jurisdiction in order to continue the first priority perfected security interest of the  Administrative Agent, as agent for the Secured Parties, in the Collateral.  (c) Credit and Collection Policy.  The Servicer will not amend, modify,  restate or replace, in whole or in part, in any material respect, the Credit and Collection  Policy, without the prior written Consent of the Administrative Agent, which consent  shall not be unreasonably withheld.  If the Administrative Agent does not provide its  written consent to, or rejection of, a proposed material amendment, modification,  restatement or replacement of the Credit and Collection Policy within 10 Business Days  of its receipt of notice thereof from the Servicer, then the Administrative Agent will be  deemed to have consented to such amendment, modification, restatement or replacement.   (d) Change in Payment Instructions to Obligors.  The initial Servicer will not  make any change in its instructions to the Obligors regarding payments to be made to the  Borrower or the Servicer, except as otherwise permitted by the Credit and Collection  Policy, or payments to be made to the Lockboxes or the Lockbox Account, unless the  Administrative Agent has Consented to such change and has received duly executed  documentation related thereto.  (e) Extension or Amendment of Contracts.  The Servicer will not, except as  otherwise permitted in Section 7.03(c)(i), extend, amend or otherwise modify the terms  of any Contract.  (f) [Reserved].  (g) No Liens.  Other than as permitted by this Agreement, the Servicer shall  not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or  suffer to exist any Lien (other than the Lien created by this Agreement) on all or any  portion of the Collateral or any interest therein; and the Servicer shall defend the right,  title and interest of the Administrative Agent on behalf of the Secured Parties in, to and  under the Collateral against all claims of third parties claiming through or under the  Servicer.  (h) Release; Additional Covenants.  The Servicer shall not (i) release any  Financed Vehicle securing any Receivable from the security interest granted therein by  such Receivable in whole or in part except (A) in the event of payment in full by the  Obligor thereunder or upon transfer of such Financed Vehicle to a purchaser following  repossession by the Servicer or (B) to an insurer in exchange for Insurance Proceeds paid  by such insurer resulting from a claim for the total insured value of a Financed Vehicle,  or (ii)  take any action that would reasonably be expected to impair the rights of the  Borrower, the Secured Parties or the Collateral Custodian in the Collateral.   

 

     98  154304283v7  Notwithstanding any other provision of this Agreement, the Servicer may release any  Financed Vehicle from the security interest created by the related Receivable when the  Servicer deposits into the Collection Account an amount equal to the related Release  Price or the entire amount of Insurance Proceeds, Recoveries and other Collections it has  received or expects to receive with respect to such Receivable and such Financed  Vehicle.  (i) ERISA.  The Servicer will not (A) engage or permit any ERISA Affiliate  to engage in any prohibited transaction for which an exemption is not available or has not  previously been obtained from the United States Department of Labor and which would  result in a Material Adverse Effect, or (B) to the extent it would result in a Material  Adverse Effect (i) permit to exist any accumulated funding deficiency, as defined in  Section 302(a) of ERISA and Section 412(a) of the Code, or funding deficiency with  respect to any Benefit Plan other than a Multiemployer Plan, (ii) fail to make any  payments to a Multiemployer Plan that the Servicer or any such ERISA Affiliate may be  required to make under the agreement relating to such Multiemployer Plan or any law  pertaining thereto, (iii) terminate any Pension Plan so as to result in any liability or (iv)  permit to exist any occurrence of any Reportable Event.  (j) Anti-Corruption Laws and Sanctions.  The initial Servicer will not request  any Loan, and none of the initial Servicer, any Subsidiary or Affiliate or the Servicer  shall use, and shall procure that its Subsidiaries and its or their respective directors,  officers, employees and agents shall not use, the proceeds of any Loan (A) in furtherance  of an offer, payment, promise to pay, or authorization of the payment or giving of money,  or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for  the purpose of funding, financing or facilitating any activities, business or transaction of  or with any Sanctioned Person, or in any Sanctioned Country, or (C) in any manner that  would result in the violation of any Sanctions applicable to any party hereto.  ARTICLE SEVEN    ADMINISTRATION AND SERVICING OF RECEIVABLES  Section 7.01.  Designation of Servicing.  The Administrative Agent and the Borrower, at  the direction of and on behalf of the Administrative Agent, hereby appoint DFC, as Servicer to  manage, collect and administer each of the Receivables and the other Collateral, and to enforce  its respective rights and interests in and under the Collateral and DFC hereby accepts such  appointment and agrees to perform the duties and responsibilities of the Servicer pursuant to the  terms hereof.  Section 7.02.  Servicing Compensation.  As compensation for its servicing activities  hereunder and reimbursement for its expenses, the Servicer shall be entitled to receive the  Servicing Fee to the extent of funds available therefor pursuant to Section 2.06(ii).  The Servicer  shall further be entitled to retain as additional servicing compensation any and all Ancillary Fees  from Obligors.  

 

     99  154304283v7  Section 7.03.  Duties of the Servicer.  (a) Standard of Care.  The Servicer agrees that its servicing and collection of the  Receivables shall be carried out in accordance with the Credit and Collection Policy and  Applicable Law and, to the extent more exacting, the degree of skill and attention that the  Servicer exercises with respect to all comparable motor vehicle receivables that it services for  itself or others.   (b) Records Held in Trust.  The Servicer shall hold in trust for the Secured Parties all  records which evidence or relate to all or any part of the Collateral.  The outgoing Servicer shall  promptly deliver to any Successor Servicer, and the Successor Servicer shall hold in trust for the  Borrower and the Secured Parties ,all records which evidence or relate to all or any part of the  Collateral.  (c) Collection Practices.  (i) The Servicer shall be responsible for collection of  payments called for under the terms and provisions of the Contracts related to the  Receivables, as and when the same shall become due.  The Servicer, in making  collection of Receivable payments pursuant to this Agreement, shall be acting as agent  for the Borrower, and shall be deemed to be holding such funds in trust on behalf of  and as agent for the Borrower.  The Servicer, consistent with the Credit and Collection  Policy in effect at the time of acting, shall service, manage, administer and make  collections on the Receivables on behalf of the Borrower and shall have full power and  authority to do any and all things which it may deem necessary or desirable in  connection therewith which are consistent with this Agreement.  The Servicer may in  its discretion grant extensions, rebates or adjustments on a Contract or amend or  modify any Contract (including modifying the APR or the amount of the Scheduled  Payments) as permitted by the Credit and Collection Policy then in effect.  If any such  modification occurs after the Termination Date, such Receivable must be repurchased  by the initial Servicer pursuant to Section 5.04(b).  The Servicer may in its discretion  waive any late payment charge or any other fees, not including interest on the  Principal Balance, that may be collected in the ordinary course of servicing a  Receivable.  The Servicer shall also enforce all rights of the Borrower under the  Purchase Agreement (including each Purchase Agreement Supplement) including the  right to require DFC to repurchase Receivables for breaches of representations and  warranties made by DFC.  (ii) Consistent with the Credit and Collection Policy, if any  Receivable is past due or delinquent, in whole or in part, the Servicer will make  reasonable and customary efforts to contact the Obligor.  The Servicer shall continue  its efforts to obtain payment from an Obligor who is past due or delinquent on a  Receivable until the related Financed Vehicle has been repossessed and sold or the  Servicer has determined that all amounts collectable on the Receivable have been  collected.  The Servicer shall use commercially reasonable efforts, consistent with the  Credit and Collection Policy and the standard of care set forth in Section 7.03(a), to  collect funds on a Defaulted Receivable and by the close of business on the second  

 

     100  154304283v7  Business Day following receipt of such Collections to cause such Collections to be  deposited into the Collection Account.  (iii) In the event a Receivable becomes a Defaulted Receivable,  the Servicer, itself or through the use of independent contractors or agents shall,  consistent with the Credit and Collection Policy, repossess or otherwise convert the  ownership of the Financed Vehicle securing any such Receivable.  All costs and  expenses incurred by the Servicer in connection with the repossession of the Financed  Vehicles securing such Receivables shall be reimbursed to the Servicer (other than  overhead), to the extent not previously recouped by the Servicer from Recoveries on  the Payment Date immediately succeeding the Collection Period in which the Servicer  delivered to the Administrative Agent an itemized statement of such costs and  expenses.  Notwithstanding the foregoing and consistent with the terms of this  Agreement, the Servicer shall not be obligated to repossess or take any action with  respect to a Defaulted Receivable if, in its reasonable judgment consistent with the  Credit and Collection Policy, the Recoveries would not be increased.  (iv) The Servicer shall deposit or cause to be deposited by  electronic funds transfer all Collections to the Collection Account no later than two  Business Days after the earlier of the deposit of such amounts into the Lockbox  Account or the receipt of such amounts by or on behalf of the Servicer or the  Borrower.  Notwithstanding the foregoing, in no event shall any Successor Servicer be  obligated to transfer funds in excess of the available funds in the Lockbox Account.  (v) Notwithstanding the provisions of subclause (iv), at any  time that (A) DFC is the Servicer, (B) Lithia has long-term unsecured debt ratings of  not less than "BB+" by Standard & Poor's and not less than "Ba1" by Moody's, and (C)  no Early Amortization Event, Termination Event, or Servicer Termination Event has  occurred and is continuing, the Servicer may make a single monthly deposit of  Collections to the Collection Account in immediately available funds, provided that  such deposit is made not later than 3:00 p.m., New York City time, on the second  Business Day preceding the Payment Date following the Collection Period with  respect to which such Collections relate.    (d) Collection; Recourse; Sales of Financed Vehicles.  The Servicer, itself or through  the use of independent contractors or agents, is authorized to follow practices consistent with the  Credit and Collection Policy in its servicing of automotive receivables, which may include  reasonable efforts to realize rights of recourse against any Dealer and selling a Financed Vehicle  at public or private sale; provided, that the Servicer, itself or through the use of independent  contractor or agents shall, in accordance with the Credit and Collection Policy, attempt to  maximize the sales proceeds for each repossessed Financed Vehicle.  The foregoing shall be  subject to the provision that, in any case in which a Financed Vehicle shall have suffered  damage, the Servicer shall not expend funds for the repair or the repossession of such Financed  Vehicle unless the Servicer shall determine in its discretion that such repair or repossession  would increase the Recoveries in an amount greater than the cost of repairs.  Notwithstanding the  foregoing and consistent with the terms of this Agreement, the Servicer shall not be obligated to  repossess or take any action with respect to a repossessed Financed Vehicle if, in its reasonable  

 

     101  154304283v7  judgment and consistent with the Credit and Collection Policy, the Recoveries would not be  increased.  (e) Insurance.  The Servicer shall:  (i) on behalf of the Borrower, administer and enforce all rights  and responsibilities of the Borrower, as owner of the Receivables, provided for in the  Insurance Policies relating to the Receivables;  (ii) administer the filings of claims under the Insurance Policies  by filing the appropriate notices related to claims, including initial notices of loss, as  well as claims with the respective carriers or their authorized agents all in accordance  with the terms of the Insurance Policies; and use reasonable efforts to file such claims  on a timely basis after obtaining knowledge of the events giving rise to such claims.  (iii) utilize such notices, claim forms and claim procedures as  are required by the respective insurance carriers;  (iv) upon receipt of notice that an Obligor's physical damage  insurance covering a Financed Vehicle related to a Receivable has lapsed or is  otherwise not in force, notify such Obligor that each Obligor is required to maintain  physical damage insurance covering a Financed Vehicle throughout the term of the  related Receivable;  (v) not be required to pay any premiums or, other than  administering the filing of claims and performing reporting requirements specified in  the Insurance Policies in connection with filing such claims, perform any obligations  of the named insured under such Insurance Policies; and  (vi) not be responsible to the Borrower, the Secured Parties or  the Collateral Custodian for any (A) act or omission to act done in order to comply  with the requirements or satisfy any provisions of the Insurance Policies or (B) act,  absent willful misconduct or negligence, or omission to act done in compliance with  this Agreement.  In the case of any inconsistency between this Agreement and the terms of any Insurance  Policy, the Servicer shall comply with the latter.  (f) Obligation to Restore.  In the event of any physical loss or damage to a Financed  Vehicle related to a Receivable from any cause, whether through accidental means or otherwise,  the Servicer shall have no obligation to cause the affected Financed Vehicle to be restored or  repaired.  However, the Servicer shall comply with the provisions of any insurance policy or  policies directly or indirectly related to any physical loss or damage to a Financed Vehicle.  (g) Security Interests.  The Borrower hereby directs the Servicer to take or cause to  be taken such steps as are necessary, to maintain perfection of the security interest created by  each such Receivable in the related Financed Vehicle.  The Servicer shall, at the direction of the  Borrower, the Administrative Agent or the Collateral Custodian (if other than DFC), take any  

 

     102  154304283v7  action necessary to preserve and protect the security interests of the Borrower, the Secured  Parties and the Collateral Custodian in the Receivables, including any action specified in any  Opinion of Counsel delivered to the Servicer.  For the avoidance of doubt, any action taken by  the Successor Servicer pursuant to this clause shall be a reimbursable expense paid in accordance  with the provisions of Section 2.06.  (h) Realization on Financed Vehicles.  The Servicer represents, warrants and  covenants that in the event that the Servicer realizes upon any Financed Vehicle, the methods  utilized by the Servicer to realize upon such Receivable or otherwise enforce any provisions of  such Receivable, will be conducted in accordance with the provisions of this Agreement, the  Credit and Collection Policy and Applicable Law.  (i) Recordkeeping.  The Servicer shall:  (i) maintain legible copies (in electronic or hard-copy form, in  the discretion of the Servicer) or originals of all documents in its Receivable File with  respect to each Receivable and the Financed Vehicle related thereto; and  (ii) keep books and records, reasonably satisfactory to the  Administrative Agent, pertaining to each Receivable and shall make periodic reports  in accordance with this Agreement; such records may not be destroyed or otherwise  disposed of except as provided herein and as allowed by Applicable Law, all  documents, whether developed or originated by the Servicer or not, reasonably  required to document or to properly administer any Receivable shall remain at all  times the property of the Borrower and shall be held in trust by the Servicer; the  Servicer shall not acquire any property rights with respect to such records, and shall  not have the right to possession of them except as subject to the conditions stated in  this Agreement; and the Servicer shall bear the entire cost of restoration in the event  any Receivable File shall become damaged, lost or destroyed while in the Servicer's  possession or control  (j) Control of Electronic Contracts.  The Servicer, in its capacity as Collateral  Custodian, shall at all times maintain "control" (within the meaning of the UCC as then in effect  in the relevant State) of the Electronic Contracts.  Neither the Collateral Custodian nor the  Borrower will communicate, or permit any custodian or vaulting agent thereof to communicate,  an authoritative copy of any Electronic Contract to any Person other than the Electronic Vault  Provider, the Servicer, the Borrower or the Administrative Agent.  Section 7.04.  Collection of Payments.  (a) Payments to the Lockboxes or the Lockbox Account.  On or before the relevant  Funding Date, the initial Servicer shall have instructed all related Obligors to make all payments  in respect of the related Receivables directly to the Lockboxes or the Lockbox Account.  (b) Establishment of Accounts.  On or before the Closing Date, the Servicer shall  cause the Collection Account and the Hedge Reserve Account to be established with the Account  Bank.  Each of the Collection Account and the Hedge Reserve Account shall at all times be  subject to the Control Agreement.  

 

     103  154304283v7  (c) Adjustments.  If the Servicer (i) makes a deposit into the Collection Account in  respect of a collection of a Receivable and such collection was received by the Servicer in the  form of a check that is not honored for any reason, (ii) makes a mistake with respect to the  amount of any collection and deposits an amount that is less than or more than the actual amount  of such collection or (iii) is entitled to reimbursement of any Ancillary Fees in accordance with  Section 7.02, the Servicer shall appropriately adjust the amount subsequently deposited into the  Collection Account to reflect such dishonored check, mistake or reimbursement (as applicable).   Any Scheduled Payment in respect of which a dishonored check is received shall be deemed not  to have been paid.  Section 7.05.  Servicer Advances.  For each Collection Period, if the Servicer determines  that any Scheduled Payment (or portion thereof) that was due and payable pursuant to a  Receivable during such Collection Period was not received prior to the last day of such  Collection Period, the Servicer may, but is not obligated to, make an advance in an amount up to  the amount of such delinquent Scheduled Payment (or portion thereof); in addition, if on any day  there are not sufficient funds on deposit in the Collection Account to pay accrued Interest, the  Servicer may, but is not obligated to, make an advance in the amount necessary to pay such  Interest (each, a "Servicer Advance"), in each case if the Servicer reasonably believes that the  Servicer Advance will be recovered from subsequent payments with respect to such Receivable.   The Servicer will deposit any Servicer Advances into the Collection Account on or prior to 2:00  p.m., New York City time, on the related Payment Date, in immediately available funds.  The  Servicer shall be entitled to reimbursement of Servicer Advances from subsequent payments on  or in respect of the Receivable with respect to which a Servicer Advance was made, including  collections of any prepayments, amounts deposited in the Collection Account for the repurchase  of the Receivable for a breach of a representation or warranty and, if the Servicer determines that  a Servicer Advance will not be recovered from the Receivable to which it relates, from  collections related to other Receivables.  Notwithstanding anything to the contrary set forth  herein, no Successor Servicer will be required to make any Servicer Advance.  Section 7.06.  Payment of Certain Expenses by Servicer.  Except for such amounts and  expenses for which the Servicer is entitled to reimbursement as provided herein, the Servicer will  be required to pay all expenses incurred by it in connection with its activities under this  Agreement, including the fees and disbursements of independent certified public accountants,  Taxes imposed on the Servicer, expenses incurred in connection with payments and reports  pursuant to this Agreement, fees and expenses of subservicers and agents of the Servicer, and all  other fees and expenses not expressly stated under this Agreement for the account of the  Borrower.  The initial Servicer will be required to pay all reasonable fees and expenses owing to  any bank or trust company in connection with the maintenance of the Collection Account.  The  initial Servicer shall be required to pay such expenses for its own account and shall not be  entitled to any payment therefor other than the Servicing Fee.  Section 7.07.  Reports and Audit.  (a) Monthly Reports. On each Reporting Date, the Servicer will provide to the  Borrower, the Administrative Agent, the Backup Servicer and, to the extent requested or required  by a Hedge Counterparty, such Hedge Counterparty, a Monthly Report.  No such Monthly  

 

     104  154304283v7  Report is required to have been executed by a Responsible Officer unless such Monthly Report is  delivered on a Funding Date.  (b) Quarterly Report.  By the 15th of each February, May, August and November,  commencing in November 2022, the Servicer will provide a Quarterly Report to the  Administrative Agent and, to the extent requested or required by a Hedge Counterparty, such  Hedge Counterparty.  The Administrative Agent or a Hedge Counterparty may request such  report more frequently if required by regulators or to comply with Applicable Law (including  Basel II and Basel III).    (c) Serviced Portfolio Information. Upon the reasonable request of the Administrative  Agent, the initial Servicer shall provide, at its own expense, the Administrative Agent with  information on the Serviced Portfolio regarding delinquencies, loss-to-liquidations, annualized  losses and such other information as the Administrative Agent may request, but solely to the  extent that such data is available to the Servicer without undue administrative burden or cost.    (d) Audit.  Once during each calendar year (commencing in 2023), at such times  during normal business hours as are reasonably convenient to the Borrower or the Servicer, as  the case may be, at the sole cost and expense of the Servicer (provided, that such costs and  expenses are reasonable and customary for similar types of inspections in the industry and do not  exceed $75,000 per annum) and upon reasonable request of the Administrative Agent and prior  written notice to the Borrower or the Servicer, as the case may be, the Borrower or the Servicer,  as the case may be, shall permit such Person or Persons as the Administrative Agent may  designate (including the Backup Servicer or an independent accounting firm), with the approval  of the Required Lenders, to conduct, on behalf of all of them, audits or to visit and inspect any of  the properties of the Borrower or the Servicer where the Receivable Files are located, as the case  may be, to examine the Receivable Files, internal controls and procedures maintained by the  Borrower or Servicer, as the case may be, and take copies and extracts therefrom, and to discuss  the affairs of the Borrower and the Servicer with their respective officers and employees (which  employees, except after the occurrence and during the continuation of a Termination Event or  Servicer Termination Event, shall be designated by the Borrower or the Servicer, as the case may  be) and, upon written notice to the Borrower or the Servicer, as the case may be, independent  accountants.  The scope of any audit or inspection will be a scope agreed upon between the  Servicer and the Administrative Agent.  The Administrative Agent may request to take the  foregoing actions more than once per calendar year if it has a commercially reasonable basis for  requesting such actions, but any additional inspections and audits shall be at the expense of the  Administrative Agent.  After the occurrence and during the continuation of a Termination Event,  Unmatured Termination Event, Unmatured Servicer Termination Event or Servicer Termination  Event, the Administrative Agent, the Backup Servicer and their respective representatives shall  be permitted to take the foregoing actions without being subject to any limitation on the number  of audits, visits or inspections that may be conducted during a calendar year and such audits,  visits or inspections shall be at the sole cost and expense of the Servicer and such costs and  expenses shall not be subject to a cap; provided, that the Administrative Agent and its  representatives shall make reasonable efforts to coordinate, and provide a prior written notice of,  such audits, visits and inspections.  The Borrower or the Servicer, as the case may be, hereby  authorizes such officers, employees and independent accountants to discuss with the  Administrative Agent and its representatives, the affairs of the Borrower or the Servicer, as the  

 

     105  154304283v7  case may be.  The Servicer shall reimburse the Administrative Agent for all reasonable fees,  costs and expenses incurred by or on behalf of the Secured Parties in connection with the  foregoing actions promptly upon receipt of a written invoice therefor.  Nothing in this subsection  shall affect the obligation of the Servicer to observe any Applicable Law prohibiting the  disclosure of information regarding the Obligors, and the failure of the Servicer to provide access  to information as a result of such obligation shall not constitute a breach of this subsection. In the  case of any Successor Servicer, any fees or expenses of the Servicer referenced in this Section  shall be reimbursable in accordance with the provisions of Section 2.06.    Section 7.08.  Quarterly Statement as to Compliance.  The initial Servicer shall deliver to  the Administrative Agent, within 30 days after the end of each calendar quarter (beginning with  the calendar quarter ending on December 31, 2022), an Officer's Certificate, stating that (a) a  review of the activities of the Servicer during the preceding quarterly period (or since the  Closing Date in the case of the first such Officer's Certificate) and of its performance under this  Agreement has been made under such officer's supervision and (b) to the best of such officer's  knowledge, based on such review, the Servicer has fulfilled all its obligations under this  Agreement throughout such quarter (or such shorter period in the case of the first such Officer's  Certificate), or, if there has been a default in the fulfillment of any such obligation, specifying  each such default known to such officer and the nature and status thereof.    Section 7.09.  Backup Servicer; Entry into Backup Servicing Agreement.  (a) If at any time the Performance Guarantor's long-term unsecured debt is no  longer rated at least (i) "BB+" by Standard & Poor's and (ii) "Ba1" by Moody's, then  within 60 Business Days the Servicer and the Borrower shall enter into a Backup  Servicing Agreement.  At all times that a Backup Servicing Agreement is in effect, (i) the  Servicer shall perform all of its duties thereunder and (ii) the Borrower shall both perform  all of its duties thereunder and shall cause the Servicer to consult with the Backup  Servicer as may be necessary from time to time to perform or carry out the Backup  Servicer's obligations thereunder, including the obligation, if requested in writing by the  Administrative Agent, to succeed to the duties and obligations of the Servicer pursuant  hereto.  (b) The Backup Servicer shall be entitled to recover its fees and reimbursable  costs as set forth in the Backup Servicing Agreement in accordance with Section 2.06  (but only to the extent that the same have not been paid by the Servicer).  Section 7.10.  Rights After Assumption of Duties by Backup Servicer or Designation of  Successor Servicer; Liability.  At any time following the assumption of the duties of the Servicer  by the Backup Servicer, in its capacity as Successor Servicer, or the designation of a Successor  Servicer (other than the Backup Servicer) pursuant to Section 7.14 as a result of the occurrence  of a Servicer Termination Event:  (a) The Servicer, on behalf of the Borrower, shall, at the Administrative  Agent's request, (i) assemble all of the records relating to the Collateral, including all  Receivable Files, and shall make the same available to the Administrative Agent, the  Backup Servicer or any Successor Servicer at a place selected by the Administrative  

 

     106  154304283v7  Agent, and (ii) segregate all cash, checks and other instruments received by it from time  to time constituting Collections of Collateral in a manner acceptable to the  Administrative Agent, the Backup Servicer or such other Successor Servicer and shall, no  later than two Business Days after receipt, remit all such cash, checks and instruments,  duly endorsed or with duly executed instruments of transfer, to, or at the direction of, the  Administrative Agent.  (b) The Borrower hereby authorizes the Administrative Agent to take or cause  to be taken any and all steps in the Borrower's name and on behalf of the Borrower  necessary or desirable, in the determination of the Administrative Agent, to collect all  amounts due under the Collateral, including endorsing the Borrower's name on checks  and other instruments representing Collections and enforcing the Receivables.  (c) The Successor Servicer shall be liable in accordance herewith only to the  extent of the obligations specifically undertaken by the Successor Servicer in such  capacity herein.  Such liability is limited to only those actions taken or omitted to be  taken by the Successor Servicer and caused through its gross negligence, bad faith or  willful misconduct.  No implied covenants or obligations shall be read into this  Agreement against the Successor Servicer and, in the absence of bad faith on its part, the  Successor Servicer may conclusively rely on the truth of the statements and the  correctness of the opinions expressed in any certificates or opinions furnished to the  Successor Servicer and conforming to the requirements of this Agreement.  (d) The Successor Servicer shall not be charged with actual or constructive  knowledge of any Termination Event or Unmatured Termination Event unless a  Responsible Officer of the Successor Servicer obtains actual knowledge of such event or  the Successor Servicer receives written notice of such event from the Borrower, the  Servicer or the Administrative Agent.    (e) The Successor Servicer shall not be required to expend or risk its own  funds or otherwise incur financial liability in the performance of its duties hereunder, or  in the exercise of any of its rights or powers, if the repayment of such funds or adequate  indemnity against such risks or liability is not reasonably assured to it in writing prior to  the expenditure of such funds or the incurrence of financial liability.    Section 7.11.  Limitation on Liability of the Servicer and Others.  Except as expressly   provided herein, neither the Servicer nor any of its directors or officers or employees or agents  shall be under any liability to the Secured Parties or any other Person for any action taken or for  refraining from the taking of any action pursuant to this Agreement; provided, that this provision  shall not protect the Servicer or any such Person against any liability that would otherwise be  imposed by reason of its willful misconduct, bad faith or negligence in the performance of duties  or by reason of its willful misconduct hereunder.  Section 7.12.  The Servicer Not to Resign.  The Servicer shall resign only with the prior  written consent of the Administrative Agent (acting at the direction of the Required Lenders) or  if the Servicer provides an Opinion of Counsel to the Administrative Agent to the effect that such  Servicer is no longer permitted by law to act as Servicer hereunder.  No termination or  

 

     107  154304283v7  resignation of the Servicer hereunder shall be effective until a Successor Servicer, acceptable to  the Administrative Agent has accepted its appointment as Successor Servicer hereunder and has  agreed to be bound by the terms of this Agreement.  Section 7.13.  Servicer Termination Events.  The occurrence and continuance of any of  the following events shall constitute a "Servicer Termination Event" hereunder:  (a) any failure by the Servicer to make any payment, transfer or deposit as  required by it as required by any Basic Document, to which it is a party, which failure is  not remedied within two Business Days;  (b) any failure by the Servicer to deliver the Monthly Report by the Reporting  Date, which failure is not remedied within one Business Day;  (c) an Insolvency Event shall occur with respect to the Servicer;  (d) any failure by the Servicer duly to observe or perform in any other  covenant or agreement of the Servicer set forth in this Agreement or the other Basic  Documents to which the Servicer is a party, which such failure materially and adversely  affects the rights or interests of the Secured Parties and remains unremedied for 30 days  after the earlier of knowledge thereof by the Servicer or after the date on which written  notice of such failure shall have been given to the Servicer;  (e) any representation, warranty or certification made by the Servicer in any  Basic Document to which it is a party or in any certificate delivered pursuant to any Basic  Document to which it is a party shall prove to have been false or otherwise incorrect in  any respect when made, deemed made, or delivered, which such incorrect representation,  warranty or certification materially and adversely affects the rights or interests of the  Secured Parties and, if able to be cured, shall not have been cured for 30 days after the  earlier of the date on which the Servicer first has knowledge thereof or the date on which  written notice of such failure shall have been given to the Servicer;   (f) DFC shall fail to pay any principal of or premium or interest on any  Indebtedness having a principal amount of $5,000,000 or greater, when the same  becomes due and payable (whether by scheduled maturity, required prepayment,  acceleration, demand or otherwise) and such failure shall continue after the applicable  grace period, if any, specified in the agreement or instrument relating to such  Indebtedness; or any other default under any agreement or instrument relating to any such  Indebtedness of DFC, or any other event, shall occur and shall continue after the  applicable grace period, if any, specified in such agreement or instrument if the effect of  such default or event is to accelerate, or to permit the acceleration of, the maturity of such  Indebtedness; or any such Indebtedness shall be declared to be due and payable or  required to be prepaid (other than by a regularly scheduled required prepayment),  redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or defease such  Indebtedness shall be required to be made, in each case, prior to the stated maturity  thereof;  

 

     108  154304283v7  (g) any material provision of any Basic Document to which the Servicer is a  party shall in whole or in part, cease to be in full force and effect or cease to be the  legally valid, binding and enforceable obligation of the Servicer;  (h) (i) one or more final nonappealable judgments shall be entered against the  Servicer by one or more courts of competent jurisdiction assessing monetary damages,  individually or in the aggregate over any calendar year, in excess of $1,000,000; (ii) one  or more monetary settlements shall be entered into by the Servicer with any Person,  individually or in the aggregate over any calendar year, in excess of $1,000,000; (iii) the  IRS shall file notice of a Lien pursuant to Section 6323 of the Code with regard to any  assets of the Servicer and such Lien shall not have been released within 30 days; or (iv)  the Pension Benefit Guaranty Corporation shall file notice of a Lien pursuant to Section  4068 of ERISA with regard to any of the assets of the Servicer and such Lien shall not  have been released within 30 days;   (i) any Change in Control shall occur with respect to DFC;  (j) a Termination Event shall have occurred and is continuing and shall not  have been waived;  (k) the Performance Guaranty shall cease to be in full force and effect (other  than in accordance with its terms) or the Performance Guarantor shall assert that it is not  bound by, or otherwise seek to terminate or disaffirm its obligations under, the  Performance Guaranty, or shall otherwise claim that the Performance Guaranty is in any  way invalid or unenforceable;  (l) as of any Reporting Date, the arithmetic mean of the Serviced Portfolio  Delinquency Ratio for the three previous Collection Periods is greater than 6.00%;   (m) as of any Reporting Date, the arithmetic mean of the Serviced Portfolio  Net Loss Ratio (Prime) for the three previous Collection Periods is greater than 6.00%;   (n) as of any Reporting Date, the arithmetic mean of the Serviced Portfolio  Net Loss Ratio (Non-Prime) for the three previous Collection Periods is greater than  8.50%; or  (o) as of any Reporting Date, the arithmetic mean of the Serviced Portfolio  Deferral Ratio for the three previous Collection Periods is greater than 2.00%.  Notwithstanding the foregoing, if any delay or failure of performance referred to above  shall have been caused by a Force Majeure Event, the applicable grace period referred to  above shall be extended for 10 Business Days (and if no grace period is stated above, the  applicable grace period shall be 10 Business Days).  Upon the occurrence of any of the foregoing, notwithstanding anything herein to the  contrary, the Termination Date shall occur and, so long as any such Servicer Termination Event  shall not have been remedied within any applicable cure period or waived in writing by the  Required Lenders, the following shall immediately occur without further action:  (i) the  

 

     109  154304283v7  Revolving Period shall terminate and no further Loans will be made; (ii) the Administrative  Agent (acting at the direction of or with the consent of the Required Lenders) by written notice  to the Servicer (with a copy to each Agent, Lender, Hedge Counterparty, the Backup Servicer  and Collateral Custodian) (each, a "Servicer Termination Notice"), may terminate all of the  rights and obligations of the Servicer as Servicer under this Agreement; (iii) the Administrative  Agent may direct the Servicer to direct Collections to an account other than the Lockbox  Account or the Collection Account; and (iv) the Administrative Agent may cause the Collateral  Custodian to deliver, or cause to be delivered, the Receivable Files and the related accounts and  records maintained by the Collateral Custodian to the Administrative Agent, or its agent or  designee, at such place as the Administrative Agent may reasonably designate.  Section 7.14.  Appointment of Successor Servicer.  (a) On and after the receipt by the Servicer of a Servicer Termination Notice, the  Servicer shall continue to perform all servicing functions under this Agreement until the date  specified in the Servicer Termination Notice or otherwise specified by the Administrative Agent  in writing or, if no such date is specified in such Servicer Termination Notice or otherwise  specified by the Administrative Agent, until a date mutually agreed upon by the Servicer, the  Administrative Agent and the Backup Servicer.  The Administrative Agent may, in its discretion,  at the time described in the immediately preceding sentence, appoint the Backup Servicer as the  Successor Servicer hereunder in accordance with this Agreement and the Backup Servicing  Agreement., in which case the Backup Servicer shall assume all obligations of the Servicer  hereunder, and all authority and power of the Servicer under this Agreement shall pass to and be  vested in the Backup Servicer as Successor Servicer.  All actions taken by the Administrative  Agent pursuant to this Section shall be taken upon the request or approval of the Required  Lenders.  (b) In the event that there is no Backup Servicer at the time that the Servicer is  terminated hereunder, or the Administrative Agent does not so appoint the Backup Servicer to  succeed the Servicer as Successor Servicer hereunder, or the Backup Servicer is unable to  assume such obligations on such date, the Administrative Agent shall as promptly as possible  appoint a successor servicer (each such party so appointed or, as applicable, the Backup Servicer  as successor to the Servicer, collectively, the "Successor Servicer"), and such Successor Servicer  shall accept its appointment by a written assumption in a form acceptable to the Administrative  Agent.    (c) Upon the termination and removal of the Servicer, the predecessor Servicer shall  cooperate with the Successor Servicer in effecting the termination of the rights and  responsibilities of the predecessor Servicer under this Agreement, including the transfer to the  Successor Servicer for administration by it of all cash amounts that shall at the time be held by  the predecessor Servicer for deposit, or shall thereafter be received, with respect to a Receivable,  and the related accounts and records maintained by the Servicer.  In the case that the Successor  Servicer shall not agree to perform any duties or obligations of the Servicer hereunder, such  duties or obligations may be performed or delegated by the Administrative Agent.    (d) The Administrative Agent shall have the same rights of removal and termination  for cause with respect to the Successor Servicer as with respect to DFC as the Servicer.  

 

     110  154304283v7  (e) The Successor Servicer shall act as Servicer hereunder and shall, subject to the  availability of sufficient funds in the Collection Account pursuant to Section 2.06 (up to the  Servicing Fee), receive as compensation therefor the Servicing Fee pursuant to Section 2.06.  (f) All reasonable out-of-pocket costs and expenses (including attorneys’ fees and  disbursements) incurred in connection with the transferring of Receivables to the Successor  Servicer, converting the Servicer's data to the computer system of the Successor Servicer, and  amending this Agreement to reflect such succession as Servicer pursuant to this Section shall be  paid by the predecessor Servicer upon presentation of reasonable transition expenses (the  "Transition Expenses").  In no event shall the Successor Servicer be responsible for any  Transition Expenses.  If the predecessor Servicer fails to pay the Transition Expenses, the  Transition Expenses shall be payable pursuant to Section 2.06.   (g) Upon its appointment, the Successor Servicer shall be the successor in all respects  to the Servicer with respect to servicing functions under this Agreement and shall be subject to  all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms  and provisions hereof, and all references in this Agreement to the Servicer shall be deemed to  refer to the Successor Servicer; provided, that any Successor Servicer shall have (i) no liability  with respect to any obligation which was required to be performed by the predecessor Servicer  prior to the date that the successor becomes the Successor Servicer or any claim of a third party  based on any alleged action or inaction of the predecessor Servicer; (ii) no obligation to perform  any repurchase or advancing obligations, if any, of the Servicer; (iii) no obligation to pay any  Taxes required to be paid by the Servicer; (iv) no obligation to pay any of the fees and expenses  of any other party to this Agreement; (v) no liability or obligation with respect to any Servicer  indemnification obligations of any prior Servicer, including DFC; and (vi) no obligation to  service the Receivables in accordance with the Credit and Collection Policy, but shall use its  customary credit and collection policies for similar assets or those policies to be agreed to with  the Administrative Agent.  The indemnification obligations of the Successor Servicer are  expressly limited to those instances of gross negligence, bad faith or willful misconduct of the  Successor Servicer.  Furthermore, to the extent that the Backup Servicing Agreement provides  that any representations, warranties, covenants, or other agreements made hereunder by the  Servicer, or obligations undertaken hereunder by the Servicer, shall not be made or performed, or  shall be made or performed in an alternative manner, by the Backup Servicer in the event that the  Backup Servicer becomes the Successor Servicer hereunder, the Borrower, the Administrative  Agent, the Agents, the Collateral Custodian and the Lenders agree that the representations,  warranties, covenants, other agreement and other obligations of the Servicer hereunder shall not  be applicable with respect to, or shall be modified with respect to, the Backup Servicer in its  capacity as Successor Servicer and in the manner set forth in the Backup Servicing Agreement.  (h) All authority and power granted to the Servicer under this Agreement shall  automatically cease and terminate upon termination of this Agreement and shall pass to and be  vested in the Borrower and the Borrower is hereby authorized and empowered to execute and  deliver, on behalf of the Servicer, as attorney-in-fact or otherwise, all documents and other  instruments, and to do and accomplish all other acts or things necessary or appropriate to effect  the purposes of such transfer of servicing rights.  The Servicer agrees to cooperate with the  Borrower in effecting the termination of the responsibilities and rights of the Servicer to conduct  servicing of the Receivables.  

 

     111  154304283v7  Section 7.15.  Merger or Consolidation, Assumption of Obligations or Resignation of the  Servicer.  Any Person (a) into which the Servicer may be merged or consolidated, (b) which may  result from any merger or consolidation to which the Servicer may be a party, (c) which may  succeed to the properties and assets of the Servicer substantially as a whole or (d) which may  succeed to the duties and obligations of the Servicer under this Agreement following the  resignation of the Servicer, which Person executes an agreement of assumption acceptable to the  Administrative Agent to perform every obligation of the Servicer hereunder, shall, with the prior  written Consent of the Administrative Agent (which Consent shall not be unreasonably  withheld), be the successor to the Servicer under this Agreement without further act on the part  of any of the parties to this Agreement; provided, that:  (i) prior written notice of such consolidation, merger,  succession or resignation shall be delivered by the Servicer to the Administrative  Agent and the Collateral Custodian (if other than DFC);  (ii) immediately after giving effect to such consolidation,  merger, succession or resignation, no Servicer Termination Event and no Unmatured  Servicer Termination Event shall have occurred and is continuing;  (iii) no Termination Event or Unmatured Termination Event  would occur as result of such consolidation, merger, succession or resignation;  (iv) the Servicer shall have delivered to the Borrower, the  Administrative Agent, and the Collateral Custodian (if other than DFC) an Officer's  Certificate and an Opinion of Counsel, each stating that such consolidation, merger,  succession or resignation and such agreement of assumption comply with this Section  and that all conditions precedent provided for in this Agreement and the other Basic  Documents to which it is a party relating to such transaction have been complied with  and, in the case of the Opinion of Counsel, that such agreement of assumption is legal,  valid and binding with respect to the Servicer and such other matters as the  Administrative Agent may reasonably request; and  (v) the Servicer shall have delivered to the Borrower, the  Administrative Agent, and the Collateral Custodian an Opinion of Counsel to the  effect that either:  (A) in the opinion of such counsel, all financing statements,  continuation statements and amendments and notations on Certificates of Title thereto  have been executed and filed that are necessary to preserve and protect the interest of  the Borrower, the Secured Parties, the Administrative Agent and the Collateral  Custodian in the Receivables and reciting the details of such filings or (B) no such  action shall be necessary to preserve and protect such interest.  Section 7.16.  Responsibilities of the Borrower.  Anything herein to the contrary  notwithstanding, the Borrower shall (i) perform, or cause the Servicer to perform, all of its  obligations under the Receivables to the same extent as if a security interest in such Receivables  had not been granted hereunder, and the exercise by the Administrative Agent of its rights  hereunder shall not relieve the Borrower from such obligations and (ii) pay when due, from  funds available to the Borrower under Section 2.06(xi), any Taxes, including any sales taxes  

 

     112  154304283v7  payable in connection with the Receivables and their creation and satisfaction.  No Secured Party  shall have any obligation or liability with respect to any Receivable, nor shall any of them be  obligated to perform any of the obligations of the Borrower thereunder.  Section 7.17.  Custody of Receivable Files.  To assure uniform quality in servicing the  Receivables and to reduce administrative costs, the Administrative Agent, on behalf of the  Secured Parties, hereby revocably appoints the Collateral Custodian as its agent, and the  Collateral Custodian hereby accepts such appointment, to act as custodian, on behalf of the  Secured Parties, of the Receivables and the Receivable Files.  Section 7.18.  Duties of Collateral Custodian.  (a) Safekeeping.  With respect to the documents constituting each Receivable File,  the Collateral Custodian shall (i) act exclusively as the custodian for, and the agent and bailee (as  such term is used in Section 9-313 of the UCC) of, the Secured Parties, (ii) hold all documents  constituting such Receivable Files received by it for the exclusive use and benefit of the Secured  Parties and (iii) make disposition thereof only in accordance with the terms of this Agreement or  with written instructions furnished by the Administrative Agent.  The Collateral Custodian shall  maintain such accurate and complete accounts, records and computer systems pertaining to each  Receivable File as shall enable the Servicer and the Borrower to comply with this Agreement.  In  performing its duties as custodian, the Collateral Custodian shall act with reasonable care, using  that degree of skill and attention that it exercises with respect to the files of comparable motor  vehicle installment sale contracts and installment loans that the Collateral Custodian holds for  itself or others.  The Collateral Custodian shall maintain continuous custody of the Receivable  Files and such other documents received by it in secure, fire resistant facilities.  Each Receivable  shall be identified on the books and records of the Collateral Custodian in a manner that  (i) indicates that the Receivable is held by the Collateral Custodian on behalf of the Secured  Parties, and (ii) is otherwise necessary, as reasonably determined by the Collateral Custodian to  comply with the terms of this Agreement.  The Collateral Custodian shall report to the  Administrative Agent any failure on its part to hold the Receivable Files and to maintain its  accounts, records and computer systems as herein provided and take appropriate action to  remedy any such failure.  Nothing herein shall be deemed to require an initial review or any  periodic review of the Receivable Files by the Secured Parties, and none of the Secured Parties  shall be liable or responsible for any action or failure to act by the Servicer in its capacity as  custodian hereunder.  (b) Maintenance of and Access to Records.  The Collateral Custodian shall maintain  each Receivable File at one of the locations specified in Schedule D or, if a material portion of  the Receivables Files are to be held in any other location, the Collateral Custodian will provide  30 days' prior written notice thereof to the Administrative Agent, each Agent and each Lender.   The Collateral Custodian may temporarily move individual Receivable Files or any portion  thereof without notice as necessary to conduct collection and other servicing activities in  accordance with its customary practices and procedures.  The Collateral Custodian shall make  available to the Secured Parties or their duly authorized representatives, attorneys or auditors a  list of locations of the Receivable Files, the Receivable Files and the related accounts, records  and computer systems maintained by the Servicer at such times during normal business hours as  any Secured Party shall reasonably request.   

 

     113  154304283v7  (c) Title to Receivables.  The Receivable Files and the other documents delivered to  the Collateral Custodian will be delivered from time to time to the Collateral Custodian for the  sole purpose of holding for safekeeping.  The Collateral Custodian shall not at any time have, or  in any way attempt to assert, any interest in any Receivable held by it as custodian hereunder or  in the related Receivable File, other than for collecting or enforcing such Receivable for the  benefit of the Administrative Agent on behalf of the Secured Parties.   (d) Instructions; Authority to Act.  The Collateral Custodian shall be deemed to have  received proper instructions with respect to the Receivable Files upon its receipt of written  instructions signed by a Responsible Officer of the Administrative Agent (acting at the direction  of the Required Lenders).  (e) Indemnification by Collateral Custodian.  The Collateral Custodian, in its capacity  as custodian of the Receivable Files, shall indemnify and hold harmless the Secured Parties and  each of their respective officers, directors, employees and agents from and against any and all  loss, liability or expense that may be imposed on, incurred or asserted against the Secured Parties  and each of their respective officers, directors, employees and agents as the result of any  improper act or omission in any way relating to the maintenance and custody of the Receivable  Files by the Collateral Custodian; provided, that the Collateral Custodian shall not be liable for  any portion of any such loss, liability or expense resulting from the willful misfeasance, bad faith  or gross negligence of any Secured Party.  (f) Effective Period and Termination.  The Collateral Custodian's appointment as  custodian shall become effective as of the Closing Date and shall continue in full force and effect  until terminated pursuant to this Section.  If the initial Servicer is terminated following a Servicer  Termination Event, the appointment of the Collateral Custodian as custodian hereunder may be  terminated by the Administrative Agent.  As soon as practicable after any such resignation or  termination of such appointment, the Administrative Agent shall appoint a successor Collateral  Custodian to be custodian of the Receivable Files and the accounts and records relating thereto  and the Collateral Custodian shall, at its sole cost and expense, (i) deliver, or cause to be  delivered, the Receivable Files and the related accounts and records maintained by the Collateral  Custodian to such successor Collateral Custodian, or its agent or designee, as the case may be, at  such place as such successor Collateral Custodian may reasonably designate and (ii) otherwise  cooperate with the successor Collateral Custodian in affecting the termination of the rights and  responsibilities of the predecessor Collateral Custodian under this Agreement.  From and after  the appointment of a successor Collateral Custodian, the predecessor Collateral Custodian shall  continue to perform all custodial functions under this Agreement until the date specified by the  Administrative Agent in writing or, if no such date is specified, until a date mutually agreed upon  by the predecessor Collateral Custodian and the Administrative Agent.  The Administrative  Agent may, in its discretion, at the time described in immediately preceding sentence, appoint  the Backup Servicer as the successor Collateral Custodian hereunder, and the Backup Servicer  shall on such date assume all obligations of the Collateral Custodian hereunder, and all authority  and power of the predecessor Collateral Custodian under this Agreement shall pass to and be  vested in the Backup Servicer.  The Administrative Agent shall have the same rights of removal  and termination for cause with respect to the Backup Servicer or any other successor Collateral  Custodian as with respect to DFC as the Collateral Custodian.  

 

     114  154304283v7  (g) Inspection.  The Collateral Custodian shall permit the Administrative Agent, the  Servicer, the Backup Servicer and each Lender or their designee, upon reasonable prior notice  and during the Servicer's regular business hours and at the reasonable expense of the Borrower,  to periodically, at the discretion of the Administrative Agent (acting at the direction of the  Required Lenders), the Servicer, the Backup Servicer and each Lender, conduct an audit of the  Receivables and Receivable Files.  Notwithstanding the foregoing, for so long as DFC is the  Collateral Custodian, the right to conduct inspections of the Collateral Custodian shall be  governed by the provisions of Section 7.07(d).  (h) Delegation of Duties.  (i) The Collateral Custodian may perform any of its duties  through one or more custodial agents without the consent of any Person, except as set  forth in clause (iii) below.  No such delegation will relieve the Collateral Custodian of  its responsibilities with respect to such duties and the Collateral Custodian will remain  primarily responsible with respect to such duties, and the Collateral Custodian  acknowledges that it remains primarily responsible for the safeguarding of all such  Receivable Files and shall be liable for any acts or omissions of such custodial agents  while acting on its behalf.  The Collateral Custodian will be responsible for the fees of  any such custodial agents.  (ii) (A) With respect to the Electronic Contracts, the Collateral  Custodian has engaged or may engage one or more an Electronic Vault Providers to  hold such Electronic Contracts and (B) with respect to Tangible Contracts, the  Collateral Custodian has engaged each of Record Xpress of California and Iron  Mountain Information Management, LLC to act as a custodial agent to hold such  signed documentation and other contents of the related Receivable File on its behalf.  (iii) Upon termination of, or resignation by, any custodial agent  or the appointment of any new custodial agent, the Collateral Custodian shall provide  written notice of such termination, resignation or appointment to the Administrative  Agent.  ARTICLE EIGHT    TERMINATION EVENTS  Section 8.01.  Termination Events.  (a) Each of the following events shall constitute a "Termination Event":  (i) failure by the Borrower to (A) make any payment, transfer  or deposit required by the terms of any Basic Document on the day such payment,  transfer or deposit is required to be made (including any payment of Interest, Program  Fees or Unused Commitment Fees on any Payment Date but excluding payments of  any Loans Outstanding) and such failure continues unremedied for three Business  Days,   

 

     115  154304283v7  (ii) failure by the Borrower to deliver the Monthly Report on  the Reporting Date, and such failure continues unremedied for two Business Days;  (iii) failure of the Borrower to pay in full the Loans Outstanding  by the Payment Date occurring in the 90th month following the expiration of the latest  Commitment Termination Date or to pay any Monthly Principal Payment Amount  when the same becomes due and payable pursuant to the terms of the Basic  Documents and such failure continues unremedied for one Business Day;   (iv) any failure by the Borrower, the Seller or the Performance  Guarantor duly to observe or perform any other covenant or agreement of the  Borrower, the Seller or the Performance Guarantor, respectively, set forth in this  Agreement or the other Basic Documents to which the Borrower, the Seller or the  Performance Guarantor, respectively, is a party, which failure materially and adversely  affects the rights or interests of the Secured Parties and such failure remains  unremedied for 30 days after the earlier of knowledge thereof by the Borrower, the  Seller or the Performance Guarantor, as applicable, or after the date on which written  notice of such failure shall have been given by the other parties or by the  Administrative Agent to the Borrower, the Seller or the Performance Guarantor, as  applicable;  (v) any representation or warranty made by the Borrower, the  Seller or the Performance Guarantor in any Basic Document to which it is a party or in  any Funding Request, Monthly Report, Quarterly Report or other report, certificate or  notice delivered pursuant to any Basic Document to which it is a party, shall prove to  have been false or otherwise incorrect in any respect when made, deemed made or  delivered, which such false or incorrect representation, warranty or information  materially and adversely affects the rights or interests of the Secured Parties and, if  able to be cured, shall not have been cured for 30 days after the earlier of the date on  which the Borrower, the Seller, or the Performance Guarantor, as applicable, first has  knowledge thereof or the date on which written notice of such failure shall have been  given to the Borrower, the Seller, or the Performance Guarantor, as applicable;  provided, that no Termination Event shall have occurred under this clause for breaches  of representations or warranties that are cured by the repurchase of the related  Receivable pursuant to Section 5.04 hereof;  (vi) an Insolvency Event shall occur with respect to the  Borrower, the Seller or the Performance Guarantor;  (vii) the Administrative Agent shall fail for any reason to have a  valid, first priority perfected security interest in all, or any material portion of, the  Collateral, which failure shall not have been cured for ten days after the earlier of the  date on which the Borrower or DFC first has knowledge thereof or the date on which  written notice of such failure shall have been given to the Borrower or DFC;   (viii) (A) one or more final nonappealable judgments shall be  entered against the Borrower, the Seller or the Performance Guarantor by one or more  

 

     116  154304283v7  courts of competent jurisdiction assessing monetary damages, individually or in the  aggregate over any calendar year, in excess of $25,000, $1,000,000 or $1,000,000,  respectively; or (B) one or more monetary settlements shall be entered into by the  Borrower, the Seller or the Performance Guarantor with any Person, individually or in  the aggregate over any calendar year, in excess of $25,000, $1,000,000 or $1,000,000  respectively; (C) the IRS shall file notice of a Lien pursuant to Section 6323 of the  Code with regard to any assets of the Borrower, the Seller or the Performance  Guarantor and such Lien shall not have been released within 30 days; or (D) the  Pension Benefit Guaranty Corporation shall file notice of a Lien pursuant to Section  4068 of ERISA with regard to any of the assets of the Borrower, the Seller or the  Performance Guarantor and such Lien shall not have been released within 30 days;   (ix) the Borrower, the Seller or the Performance Guarantor shall  fail to pay any principal of or premium or interest on any Indebtedness having a  principal amount of $0 or greater (with respect to the Borrower) or  $10,000,000 or  greater (with respect to the Seller or the Performance Guarantor), when the same  becomes due and payable (whether by scheduled maturity, required prepayment,  acceleration, demand or otherwise) and such failure shall continue after the applicable  grace period, if any, specified in the agreement or instrument relating to such  Indebtedness; or any other default under any agreement or instrument relating to any  such Indebtedness of the Borrower, the Seller, or the Performance Guarantor, as  applicable, or any other event, shall occur and shall continue after the applicable grace  period, if any, specified in such agreement or instrument if the effect of such default or  event is to accelerate, or to permit the acceleration of, the maturity of such  Indebtedness; or any such Indebtedness shall be declared to be due and payable or  required to be prepaid (other than by a regularly scheduled required prepayment),  redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or defease  such Indebtedness shall be required to be made, in each case, prior to the stated  maturity thereof;  (x) any Change in Control shall occur;  (xi) at any time, the Loans Outstanding exceed the Net Eligible  Pool Balance and continues unremedied for one Business Day;  (xii) the Performance Guaranty shall cease to be in full force and  effect (other than in accordance with its terms) or the Borrower, the Servicer or the  Performance Guarantor shall assert that it is not bound by, or otherwise seek to  terminate or disaffirm its obligations under, the Performance Guaranty, or shall  otherwise claim that the Performance Guaranty is in any way invalid or unenforceable;  (xiii) either (A) any Basic Document shall, in whole or in part,  terminate, cease to be effective or cease to be the legally valid, binding and  enforceable obligation of the Borrower, the Seller, DFC (in its capacity as Servicer or  Collateral Custodian) or the Performance Guarantor or (B) any of the Borrower, the  Seller, DFC (in its capacity as Servicer or Collateral Custodian) or the Performance  

 

     117  154304283v7  Guarantor shall, directly or indirectly, contest in any manner such effectiveness,  validity, binding nature or enforceability of any Basic Document;  (xiv) any Servicer Termination Event (other than a Servicer  Termination Event of the type specified in subsections (l), (m), (n) or (o) of Section  7.13) occurs;  (xv) (A) failure on the part of the Borrower (x) to establish one  or more Hedge Transactions in fulfillment of the requirements set forth in Section 6.03  within thirty days of the date on which the Initial Loan is made hereunder or (y) at any  time thereafter to both  (1) maintain one or more Hedge Transactions having notional  amounts which, in the aggregate, equal at least 100% of the Loans Outstanding and (2)  cause an amount that is at least equal to the Hedge Reserve Account Required Amount  to be on deposit in the Hedge Reserve Account; (B) failure on the part of the Borrower  within thirty days of receiving direction from the Administrative Agent pursuant to  Section 6.03(c) to enter into one or more Hedge Transactions, increase the notional  amount of one or more Hedge Transactions, or decrease the notional amount of one or  more Hedge Transactions, in each case as directed by the Administrative Agent and in  the manner set forth in such Section 6.03(c); or (C) any other failure on the part of the  Borrower to maintain one or more Hedge Transactions in fulfillment of the  requirements set forth in Section 6.03;  (xvi) the Borrower shall fail to have an Independent Director as  required by Section 6.01(o) at any time;   (xvii) the representation of the Borrower set forth in Section  5.01(w) fails to be true and correct at any time;   (xviii) as of any Reporting Date, if no Significant Take-out Date  occurred during any of the three previous Collection Periods, the arithmetic mean of  the Conduit Portfolio Net Loss Ratio (Prime) for such three previous Collection  Periods is greater than 5.50%;   (xix) as of any Reporting Date, if no Take-out Date occurred  during any of the three previous Collection Periods, the arithmetic mean of the  Conduit Portfolio Net Loss Ratio (Non-Prime) for such three previous Collection  Periods is greater than 7.50%; and  (xx) as of any Reporting Date, if no Take-out Date occurred  during any of the three previous Collection Periods, the arithmetic mean of the  Conduit Portfolio Delinquency Ratio for such three previous Collection Periods is  greater than 5.50%;   provided, that any Termination Event may be waived in a writing by the Consenting  Lenders to the Borrower, with a copy to the Administrative Agent and the Servicer.     Notwithstanding the foregoing, if any delay or failure referred to above shall have been  caused by a Force Majeure Event, the applicable grace period referred to above shall be extended  

 

     118  154304283v7  for 10 Business Days (and if no grace period is stated above, the applicable grace period shall be  10 Business Days).  (b) Upon the occurrence of any Termination Event, the Administrative Agent shall, at  the request, or may with the consent, of the Required Lenders, by notice to the Borrower, declare  the Termination Date to have occurred, without demand, protest or future notice of any kind, all  of which are hereby expressly waived by the Borrower, and, upon such declaration, all Loans  and all other amounts owing by the Borrower under this Agreement shall be accelerated and  become immediately due and payable; provided, that in the event that a Termination Event  described in Section 8.01(a)(vi) has occurred, the Termination Date shall automatically occur,  without demand, protest or any notice of any kind, all of which are hereby expressly waived by  the Borrower.  (c) Upon the automatic occurrence or declaration of the occurrence of the  Termination Date in accordance with Section 8.01(b), the following shall immediately occur  without further action:  (i) the Revolving Period shall terminate and no further Loans will be  made, (ii) Interest on all Loans Outstanding will be calculated using the Default Rate, and (iii) no  further Program Fees will accrue.   Section 8.02.  Actions Upon Declaration of the Occurrence of the Termination Date.   Upon the automatic occurrence or declaration of the occurrence of the Termination Date  following the occurrence of a Termination Event in accordance with Section 8.01(b), the  Administrative Agent may, or at the direction of the Required Lenders, shall, exercise in respect  of the Collateral the following remedial actions, in addition to any and all other rights and  remedies otherwise available to it, including rights available hereunder and all of the rights and  remedies of a secured party upon default under the UCC (such rights and remedies to be  cumulative and nonexclusive):  (a) The Administrative Agent may, without notice to the Borrower except as  required by law and at any time or from time to time, charge, set-off and otherwise apply  all or any part of the Loans Outstanding, any Interest accrued thereon and/or any other  amount due and owing to any Secured Party against amounts payable to the Borrower  from the Collection Account or any part of such account in accordance with the priorities  required by Section 2.06.  (b) The Administrative Agent may take any action permitted under the Basic  Documents, including, without limitation, delivering any shifting control or similar notice  under the Control Agreement.  (c) Consistent with the rights and remedies of a secured party under the UCC  (and except as otherwise required by the UCC), the Administrative Agent may, on behalf  of itself and the Lenders and without notice except as specified below, solicit and accept  bids for and sell the Collateral or any part of the Collateral in one or more parcels at  public or private sale, at any exchange, broker's board or at the Administrative Agent's  offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms  as the Administrative Agent may deem commercially reasonable.  The Borrower agrees  that, to the extent notice of sale shall be required by law, at least ten Business Days'  

 

     119  154304283v7  notice to the Borrower of the time and place of any public sale or the time after which  any private sale is to be made shall constitute reasonable notification.  The  Administrative Agent shall not be obligated to make any sale of Collateral regardless of  notice of sale having been given.  The Administrative Agent may adjourn any public or  private sale from time to time by announcement at the time and place fixed for such sale,  and such sale may, without further notice, be made at the time and place to which it was  so adjourned.  Every such sale shall operate to divest all right, title, interest, claim and  demand whatsoever of the Borrower in and to the Collateral so sold, and shall be a  perpetual bar, both at law and in equity, against the Borrower or any Person claiming the  Collateral sold through the Borrower and its successors or assigns.  (d) Upon the completion of any sale under Section 8.02(c), the Borrower will  deliver or cause to be delivered all of the Collateral sold to the purchaser or purchasers at  such sale on the date of sale, or within a reasonable time thereafter if it shall be  impractical to make immediate delivery, but in any event full title and right of possession  to such property shall pass to such purchaser or purchasers forthwith upon the completion  of such sale.  Nevertheless, if so requested by the Administrative Agent or by any  purchaser, the Borrower shall confirm any such sale or transfer by executing and  delivering to such purchaser all proper instruments of conveyance and transfer and  release as may be designated in any such request.  (e) At any sale under Section 8.02(c), DFC, the Performance Guarantor, the  Administrative Agent or any Secured Party may bid for and purchase the property offered  for sale and, upon compliance with the terms of sale, may hold, retain and dispose of  such property without further accountability therefor.  Any Secured Party purchasing  property at a sale under Section 8.02(c) may set off the purchase price of such property  against amounts owing to such Secured Party in full payment of such purchase price.  (f) The Administrative Agent may direct the Servicer to direct Collections to  an account other than the Lockbox Account or the Collection Account.  (g) The Administrative Agent may exercise at the Borrower's sole expense  any and all rights and remedies of the Borrower under or in connection with the  Collateral.  Section 8.03.  Exercise of Remedies.  No failure or delay on the part of the  Administrative Agent to exercise any right, power or privilege under this Agreement and no  course of dealing between the Borrower, on the one hand, and the Administrative Agent, any  Agent or the Secured Parties, on the other hand, shall operate as a waiver of such right, power or  privilege, nor shall any single or partial exercise of any right, power or privilege under this  Agreement preclude any other or further exercise of such right, power or privilege or the exercise  of any other right, power or privilege.  The rights and remedies expressly provided in this  Agreement are cumulative and not exclusive of any rights or remedies which the Secured Parties  would otherwise have pursuant to law or equity.  No notice to or demand on any party in any  case shall entitle such party to any other or further notice or demand in similar or other  circumstances, or constitute a waiver of the right of the other party to any other or further action  in any circumstances without notice or demand.  

 

     120  154304283v7  Section 8.04.  Waiver of Certain Laws.  The Borrower agrees, to the full extent that it  may lawfully so agree, that neither it nor anyone claiming through or under it will set up, claim  or seek to take advantage of any appraisal, valuation, stay, extension or redemption law now or  hereafter in force in any locality where any Collateral may be situated in order to prevent, hinder  or delay the enforcement or foreclosure of this Agreement, or the absolute sale of any of the  Collateral or any part thereof, or the final and absolute putting into possession thereof,  immediately after such sale, of the purchasers thereof, and the Borrower, for itself and all who  may at any time claim through or under it, hereby waives, to the full extent that it may be lawful  so to do, the benefit of all such laws, and any and all right to have any of the properties or assets  constituting the Collateral marshaled upon any such sale, and agrees that the Administrative  Agent or any court having jurisdiction to foreclose the security interests granted in this  Agreement may sell the Collateral as an entirety or such parcels as the Administrative Agent or  such court may determine.  Section 8.05.  Power of Attorney.  The Borrower hereby irrevocably appoints the  Administrative Agent its true and lawful attorney (with full power of substitution) in its name,  place and stead and at its expense, in connection with the enforcement of the rights and remedies  provided for in this Article, including:  (i) to give any necessary receipts or acquittance for  amounts collected or received hereunder, (ii) to make all necessary transfers of the Collateral in  connection with any sale or other disposition made pursuant hereto, (iii) to execute and deliver  for value all necessary or appropriate bills of sale, assignments and other instruments in  connection with any such sale or other disposition, the Borrower thereby ratifying and  confirming all that such attorney (or any substitute) shall lawfully do hereunder and pursuant  hereto and (iv) to sign any agreements, orders or other documents in connection with or pursuant  to any Basic Document.  In furtherance of the foregoing, the Borrower shall deliver to the  Administrative Agent an executed power of attorney in the form of Exhibit D on the Closing  Date.  If so requested by the Administrative Agent, directly or through a purchaser of any of the  Collateral, the Borrower shall ratify and confirm any such sale or other disposition by executing  and delivering to the Administrative Agent or such purchaser all proper bills of sale,  assignments, releases and other instruments as may be designated in any such request.  ARTICLE NINE    INDEMNIFICATION  Section 9.01.  Indemnities by the Borrower.  Without limiting any other rights which the  Administrative Agent, each Agent, each Lender or its assignee, the Backup Servicer (including  in its capacity as Successor Servicer), the Account Bank, the Collateral Custodian (if not DFC),  the Servicer (if not DFC) or any of their respective Affiliates may have hereunder or under  Applicable Law, the Borrower hereby agrees to indemnify the Administrative Agent, each  Agent, each Secured Party, the Backup Servicer, including if it is then acting as Successor  Servicer, the Account Bank, the Collateral Custodian (if not DFC) and each of their respective  Affiliates and officers, directors, employees and agents thereof (collectively, the "Indemnified  Parties") from and against any and all reasonable and documented fees, damages, losses, claims,  liabilities and related costs and expenses, including reasonable attorneys’ fees, court costs, and  expenses (collectively, the "Indemnified Amounts") awarded against or incurred by, any such  Indemnified Party arising out of or as a result of this Agreement, excluding, however,  

 

     121  154304283v7  Indemnified Amounts to the extent resulting from the gross negligence, bad faith, or willful  misconduct on the part of any Indemnified Party.  Without limiting the foregoing, the Borrower  shall indemnify the Indemnified Parties for Indemnified Amounts relating to or resulting from:  (i) any Receivable represented by the Borrower to be an  Eligible Receivable which is not at the applicable time an Eligible Receivable;  (ii) reliance on any representation or warranty made or deemed  made by the Borrower or any of its respective officers under or in connection with this  Agreement or any other Basic Document, which shall have been false or incorrect in  any material respect when made or deemed made or delivered;  (iii) the failure by the Borrower to comply with any term,  provision or covenant contained in this Agreement or any other Basic Document, or a  failure by the Borrower to comply with any Applicable Law with respect to any  Contract or Receivable, the related Financed Vehicle or the non-conformity of any  Contract with any such Applicable Law;  (iv) the failure to vest and maintain vested in the Administrative  Agent a valid and enforceable security interest in any or all of the Collateral or a valid  and enforceable first priority perfected security interest in any or all of the Collateral;  (v) the failure to file, or any delay in filing, financing  statements or other similar instruments or documents under the UCC of any applicable  jurisdiction or other Applicable Laws with respect to the Collateral, whether at the  time of a Loan or at any subsequent time and as required by the Basic Documents;  (vi) any dispute, claim, offset or defense (other than the  discharge in bankruptcy of the related Obligor) of an Obligor to the payment of any  Receivable comprising a portion of the Collateral which is, or is purported to be, an  Eligible Receivable (including a defense based on the Contract not being a legal, valid  and binding obligation of such Obligor enforceable against it in accordance with its  terms) or any other claim resulting from the sale or financing of the Financed Vehicle  related to such Receivable (other than as a result of the bankruptcy or insolvency of  the related Obligor);  (vii) any products liability claim or personal injury or property  damage suit or other similar or related claim or action of whatever sort arising out of  or in connection with any Contract or the related Financed Vehicle;  (viii) the failure by the Borrower to pay when due any Taxes for  which the Borrower is liable, including sales, excise or personal property taxes  payable in connection with the Collateral;  (ix) any repayment or disgorgement by any Agent or a Secured  Party of any amount previously distributed in reduction of the Loans Outstanding or  payment of Interest, any other Obligation or any other amount due hereunder or under  

 

     122  154304283v7  any Hedging Agreement, in each case which amount such entity believes in good faith  is required to be repaid or disgorged;  (x) any litigation, proceeding or investigation relating to  arising from the Basic Documents, the transactions contemplated hereby and thereby,  the use of proceeds of the Loans or any other investigation, litigation or proceeding  relating to the Borrower in which any Indemnified Party becomes involved as a result  of any of the transactions contemplated by the Basic Documents;  (xi) the use of the proceeds of any Loan;  (xii) any failure by the Borrower to give reasonably equivalent  value to the Seller in consideration for the transfer by the Seller to the Borrower of any  of the Receivables and the related Collateral or any attempt by any Person to void or  otherwise avoid any such transfer under any statutory provision or common law or  equitable action, including any provision of the Bankruptcy Code;  (xiii) the commingling by the Borrower of any Collections with  other funds;  (xiv) any claim brought by any Person arising from any activity  by the Borrower in servicing, administering or collecting any Receivable;  (xv) the failure of the Lockbox Bank to remit any amounts or  items of payment held in the Lockbox Account pursuant to the instructions of the  Administrative Agent given in accordance with this Agreement or the other Basic  Documents, whether by reason or the exercise of setoff rights or otherwise;  (xvi) all reasonable and documented fees, costs and expenses  (including reasonable legal fees and expenses) incurred by any Lender or the  Administrative Agent in connection with any amendments or supplements or waivers  or consents (including review and analysis thereof) with respect to the Basic  Documents or any other document or instrument delivered pursuant hereto or thereto  (whether or not the same is finally agreed to) if the same is requested by the Borrower,  or is required or necessary under the Basic Documents; or  (xvii) any and all Sanctions against, and all reasonable costs and  expenses (including attorneys’ fees and disbursements) incurred in connection with the  defense thereof by the Administrative Agent or any Lender or Agent as a result of  funding all or any portion of the Loans or the acceptance of payments or of Collateral  due under the Basic Documents.  Notwithstanding the foregoing, in no event shall any Indemnified Party be indemnified  against any Indemnified Amounts to the extent such Indemnified Amounts are or result from (A)  Excluded Taxes, (B) non-payment by any Obligor of any amount that is due and payable under  the related Receivable, or (C) any loss in value of any Financed Vehicle or Permitted  Investments for reasons that are not caused by the Borrower.  For the avoidance of doubt, the  

 

     123  154304283v7  terms of this Section 9.01 shall not apply to any indemnification relating to Taxes, which will be  governed by the terms of Section 2.11.  Any amounts subject to the indemnification provisions of this Section shall be paid by the  Borrower solely pursuant to the provisions of Section 2.06 in the order and priority set forth  therein not later than the first Payment Date following written demand therefor.  Section 9.02.  Indemnities by the Servicer.  Without limiting any other rights which the  Administrative Agent, each Agent, each Lender or its assignee, the Backup Servicer, the  Account Bank, the Collateral Custodian (if not DFC) or any of their respective Affiliates may  have hereunder or under Applicable Law, the initial Servicer hereby agrees to indemnify the  Indemnified Parties from and against any and all Indemnified Amounts awarded against or  incurred by, any such Indemnified Party arising out of or as a result of the failure of the initial  Servicer to perform its obligations under this Agreement, excluding, however, Indemnified  Amounts to the extent resulting from the gross negligence, bad faith or willful misconduct on the  part of any Indemnified Party.  Without limiting the foregoing, the initial Servicer shall  indemnify the Indemnified Parties for Indemnified Amounts relating to or resulting from:  (i) reliance on any representation or warranty made or deemed  made by the Servicer or any of its respective officers under or in connection with this  Agreement or any other Basic Document, which shall have been false or incorrect in  any material respect when made or deemed made or delivered;  (ii) the failure by the Servicer to comply with any term,  provision or covenant contained in this Agreement or any other Basic Document to  which it is a party or a failure by the Servicer to comply with any term, provision or  covenant contained in any agreement executed in connection with this Agreement or  any other Basic Document, or with any Applicable Law with respect to any Contract  or Receivable, the related Financed Vehicle or the non-conformity of any Contract  with any such Applicable Law and any failure by DFC to perform its respective duties  under the Contracts and Receivables included as a part of the Collateral;  (iii) for so long as DFC is the Servicer, the failure to vest and  maintain vested in the Administrative Agent a valid and enforceable security interest  in any or all of the Collateral or a valid and enforceable first priority perfected security  interest in any or all of the Collateral;  (iv) for so long as DFC is the Servicer, the failure to file, or any  delay in filing, financing statements or other similar instruments or documents under  the UCC of any applicable jurisdiction or other Applicable Laws with respect to the  Collateral, whether at the time of a Loan or at any subsequent time and as required by  the Basic Documents;  (v) any dispute, claim, offset or defense (other than the  discharge in bankruptcy of the related Obligor) of an Obligor to the payment of any  Receivable comprising a portion of the Collateral which is, or is purported to be, an  Eligible Receivable (including a defense based on the Contract not being a legal, valid  

 

     124  154304283v7  and binding obligation of such Obligor enforceable against it in accordance with its  terms) or any other claim resulting from the sale or financing of the Financed Vehicle  related to such Receivable (other than as a result of the bankruptcy or insolvency of  the related Obligor);  (vi) any failure by the Servicer to perform its duties or  obligations in accordance with the provisions of this Agreement;  (vii)  the failure by the Servicer to pay when due any Taxes for  which the Servicer is liable, including sales, excise or personal property taxes payable  in connection with the Collateral;  (viii) any litigation, proceeding or investigation relating to  arising from the obligation of the Servicer under the Basic Documents to which it is a  party, the transactions contemplated hereby and thereby, or any other investigation,  litigation or proceeding relating to the Servicer in which any Indemnified Party  becomes involved as a result of any of the transactions contemplated by such Basic  Documents;  (ix) any claim brought by any Person arising from any activity  by the Servicer in servicing, administering or collecting any Receivable;  (x) to the extent caused by actions or inactions of the Servicer,  the failure of the Lockbox Bank to remit any amounts or items of payment held in the  Lockbox Account pursuant to the instructions of the Administrative Agent given in  accordance with this Agreement or the other Basic Documents, whether by reason or  the exercise of setoff rights or otherwise; and  (xi) all reasonable and documented fees, costs and expenses  (including reasonable legal fees and expenses) incurred by any Lender or the  Administrative Agent in connection with any amendments or supplements or waivers  or consents (including review and analysis thereof) with respect to the Basic  Documents or any other document or instrument delivered pursuant hereto or thereto  (whether or not the same is finally agreed to) if the same is requested by the Servicer.  Notwithstanding the foregoing, in no event shall any Indemnified Party be indemnified  against any Indemnified Amounts to the extent such Indemnified Amounts are or result from (A)  Excluded Taxes, (B) non-payment by any Obligor of any amount that is due and payable under  the related Receivable, or (C) any loss in value of any Financed Vehicle or Permitted  Investments for reasons that are not caused by the Servicer.    Any amounts subject to the indemnification provisions of this Section shall be paid by the  Servicer to the related Indemnified Party within 20 Business Days following written demand  therefor.    Section 9.03.  Indemnities by the Backup Servicer in its Capacity as the Successor  Servicer. Notwithstanding any indemnification obligations that the Backup Servicer may assume  in a Backup Servicing Agreement, in no event shall the Backup Servicer, in its capacity as  

 

     125  154304283v7  Successor Servicer, have (a) any liability with respect to any obligation which was required to be  performed by the predecessor Servicer prior to the date that the Backup Servicer becomes the  Successor Servicer or any claim of a third party based on any alleged action or inaction of the  predecessor Servicer or (b) any liability or obligation with respect to any Servicer  indemnification obligations of any prior Servicer, including DFC.  ARTICLE TEN    THE ADMINISTRATIVE AGENT AND THE AGENTS  Section 10.01.  Authorization and Action.  (a) Each Lender and each Secured Party (other than the Administrative Agent)  hereby designates and appoints Mizuho Bank (and Mizuho Bank accepts such designation and  appointment) as Administrative Agent hereunder, and authorizes the Administrative Agent to  take such actions as agent on its behalf and to exercise such powers as are delegated to the  Administrative Agent by the terms of this Agreement together with such powers as are  reasonably incidental thereto.  In performing its functions and duties hereunder, the  Administrative Agent shall act solely as agent for the Secured Parties and does not assume nor  shall be deemed to have assumed any obligation or relationship of trust or agency with or for the  Borrower or any of its successors or assigns.  The Administrative Agent shall not be required to  take any action which exposes it to personal liability or which is contrary to this Agreement or  Applicable Law.  The appointment and authority of the Administrative Agent hereunder shall  terminate at the indefeasible payment in full of the Aggregate Unpaids.  (b) Each Lender hereby irrevocably designates and appoints the related Agent as the  agent of such Lender under this Agreement, and each such Lender irrevocably authorizes such  Agent, as the agent for such Lender, to take such action on its behalf under the provisions of the  Basic Documents and to exercise such powers and perform such duties thereunder as are  expressly delegated to such Agent by the terms of this Agreement, together with such other  powers as are reasonably incidental thereto.    (c) Notwithstanding any provision to the contrary elsewhere in this Agreement,  neither the Administrative Agent nor any Agent (the Administrative Agent and each Agent being  referred to in this Article as an "Agent") shall have any duties or responsibilities, except those  expressly set forth herein, or any fiduciary relationship with any Lender, and no implied  covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this  Agreement or otherwise exist against the Administrative Agent or any Agent.  (d) The Administrative Agent shall promptly distribute to each Agent (if such Agent  is not otherwise required to receive such notice), who shall promptly distribute to each related  Lender all notices, requests for consent and other information received by the Administrative  Agent under this Agreement.  Section 10.02.  Delegation of Duties.  Each Agent may execute any of its duties under  any of the Basic Documents by or through agents or attorneys-in-fact and shall be entitled to  advice of counsel concerning all matters pertaining to such duties.  No Agent shall be responsible  

 

     126  154304283v7  for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable  care.  Section 10.03.  Exculpatory Provisions.  Neither any Agent nor any of its directors,  officers, agents or employees shall be (i) liable for any action lawfully taken or omitted to be  taken by it or them under or in connection with this Agreement (except for its, their or such  Person's own gross negligence or willful misconduct or, in the case of any Agent, the breach of  its obligations expressly set forth in this Agreement) or (ii) responsible in any manner to any of  the Secured Parties for any recitals, statements, representations or warranties made by the  Borrower, the Servicer, DFC, the Backup Servicer or the Collateral Custodian contained in this  Agreement or in any certificate, report, statement or other document referred to or provided for  in, or received under or in connection with, this Agreement or any other Basic Document to  which it is a party for the value, validity, effectiveness, genuineness, enforceability or sufficiency  of this Agreement or any other document furnished in connection herewith, or for any failure of  the Borrower to perform its obligations hereunder, or for the satisfaction of any condition  specified in Article Four.  No Agent shall be under any obligation to any Secured Party to  ascertain or to inquire as to the observance or performance of any of the agreements or covenants  contained in, or conditions of, this Agreement, or to inspect the properties, books or records of  the Borrower.  No Agent shall be deemed to have knowledge of any Termination Event, Servicer  Termination Event, Step-up Event , Stop-Funding Event, or Early Amortization Event unless it  has received written notice thereof from the Borrower, the Servicer or a Secured Party.  Section 10.04.  Reliance.  (a) Each Agent shall be entitled to rely, and shall be fully protected in relying, upon  any writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram,  telecopy, telex or teletype message, written statement, order or other document or conversation  believed by it to be genuine and correct and to have been signed, sent or made by the proper  Person or Persons and upon advice and statements of legal counsel (including counsel to the  Agent), independent accountants and other experts selected by such Agent.  (b) Each Agent shall be fully justified in failing or refusing to take any action under  any of the Basic Documents unless it shall first receive such advice or concurrence of the  Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by, in  the case of (i) the Administrative Agent, the Lenders or (ii) an Agent, the Lenders or by the  Lenders in its Lender Group, against any and all liability and expense which may be incurred by  it by reason of taking or continuing to take any such action.  (c) The Administrative Agent shall in all cases be fully protected in acting, or in  refraining from acting, under any of the Basic Documents in accordance with a request of the  Required Lenders (or their Agents), and such request and any action taken or failure to act  pursuant thereto shall be binding upon all present and future Lenders.  (d) Each Agent shall in all cases be fully protected in acting, or in refraining from  acting, under any of the Basic Documents in accordance with a request of (i) Owners in its  Lender Group having Invested Percentages aggregating greater than 50% of the aggregate  Invested Percentages of all Owners in such Lender Group and (ii)  Lenders in its Lender Group  

 

     127  154304283v7  having Commitments aggregating greater than 50% of the aggregate Commitments of all  Lenders in such Lender Group, and such request and any action taken or failure to act pursuant  thereto shall be binding upon all present and future Lenders in such Lender Group.  (e) No Agent shall be deemed to have knowledge or notice of the occurrence of any  breach of this Agreement or the occurrence of any Servicer Termination Event, Early  Amortization Event, Step-up Event, Stop-Funding Event, or Termination Event unless it has  received notice from the Borrower, the Servicer, the Backup Servicer or any Lender, referring to  this Agreement and describing such event.  In the event that the Administrative Agent receives  such a notice, it shall promptly give notice thereof to each Agent, and in the event any Agent  receives such a notice, it shall promptly give notice thereof to the Lenders in its Lender Group.   The Administrative Agent shall take such action with respect to such event as shall be reasonably  directed by the Required Lenders, and each Agent shall take such action with respect to such  event as shall be reasonably directed by (i) all Owners in its Lender Group and (ii)  all Lenders in  its Lender Group; provided, that unless and until such Agent shall have received such directions,  such Agent may (but shall not be obligated to) take such action, or refrain from taking such  action, with respect to such event as it shall deem advisable in the best interests of the Lenders or  of the Lenders in its Lender Group, as applicable.  Section 10.05.  Non-Reliance on Agents and Other Lenders.  Each Lender expressly  acknowledges that no Agent nor any of its officers, directors, employees, agents, attorneys-in- fact or Affiliates has made any representations or warranties to it and that no act by any Agent  hereafter taken, including any review of the affairs of the Borrower, the Servicer, DFC, the  Backup Servicer or the Collateral Custodian shall be deemed to constitute any representation or  warranty by any Agent to any Lender.  Each Lender represents to each Agent that it has,  independently and without reliance upon any Agent or any other Lender, 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 Borrower, the Servicer, DFC, the Backup Servicer or the Collateral  Custodian and the Receivables and made its own decision to purchase its interest in the Loans  hereunder and enter into this Agreement.  Each Lender also represents that it will, independently  and without reliance upon any Agent or any other Lender, and based on such documents and  information as it shall deem appropriate at the time, continue to make its own analysis, appraisals  and decisions in taking or not taking action under any of the Basic Documents, and to make such  investigation as it deems necessary to inform itself as to the business, operations, property,  financial and other condition and creditworthiness of the Borrower, the Servicer, DFC, the  Backup Servicer or the Collateral Custodian and the Receivables.  Except for notices, reports and  other documents received by an Agent hereunder, no Agent shall have any duty or responsibility  to provide any Lender with any credit or other information concerning the business, operations,  property, condition (financial or otherwise), prospects or creditworthiness of the Borrower, the  Servicer, DFC, the Backup Servicer or the Collateral Custodian or the Receivables which may  come into the possession of such Agent or any of its officers, directors, employees, agents,  attorneys-in-fact or affiliates.  Section 10.06.  Indemnification.  The Lenders (i) agree to indemnify the Administrative  Agent in its capacity as such (without limiting the obligation (if any) of the Borrower or the  Servicer to reimburse the Administrative Agent for any such amounts), ratably according to their  

 

     128  154304283v7  respective Commitments (or, if the Commitments have terminated, Invested Percentages) and  (ii) in each Lender Group agree to indemnify the Agent for such Lender Group in its capacity as  such (without limiting the obligation (if any) of the Borrower and the Servicer to reimburse such  Agent for any such amounts), ratably according to their respective Commitments (or, if the  Commitments have terminated, Invested Percentages), in each case from and against any and all  liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or  disbursements of any kind whatsoever which may at any time (including at any time following  the payment of the obligations under this Agreement, including the Loans Outstanding) be  imposed on, incurred by or asserted against such Agent in any way relating to or arising out of  this Agreement, or any documents contemplated by or referred to herein or the transactions  contemplated hereby or any action taken or omitted by the Agent under or in connection with  any of the foregoing; provided, that no Lender shall be liable for the payment of any portion of  such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses  or disbursements of an Agent resulting from its own gross negligence or willful misconduct.  The  provisions of this Section shall survive the payment of the obligations under this Agreement,  including the Loans Outstanding, the termination of this Agreement, and any resignation or  removal of the applicable Agent.  Section 10.07.  Agents in their Individual Capacity.  Each Agent and its Affiliates may  make loans to, accept deposits from and generally engage in any kind of business with the  Borrower and any other party to a Basic Document as though it were not an Agent hereunder.  In  addition, the Lenders acknowledge that one or more Persons which are Agents may act (i) as  administrator, sponsor or agent for one or more Lenders and in such capacity act and may  continue to act on behalf of each such Lender in connection with its business, and (ii) as the  agent for certain financial institutions under the liquidity and credit enhancement agreements  relating to this Agreement to which any one or more Lenders is party and in various other  capacities relating to the business of any such Lender under various agreements.  Any such  Person, in its capacity as Agent, shall not, by virtue of its acting in any such other capacities, be  deemed to have duties or responsibilities hereunder or be held to a standard of care in connection  with the performance of its duties as an Agent other than as expressly provided in this  Agreement.  Any Person which is an Agent may act as an Agent without regard to and without  additional duties or liabilities arising from its role as such administrator or agent or arising from  its acting in any such other capacity.  None of the provisions to this Agreement shall require the  Administrative Agent to expend or risk its own funds or otherwise to incur any 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 for believing that repayment of such funds or  indemnity satisfactory to it against such risk or liability is not assured to it.  Section 10.08.  Successor Administrative Agent.  The Administrative Agent may assign  its rights and obligations hereunder with the consent of the Required Lenders and upon ten days'  notice to the Lenders and the Borrower.  The Administrative Agent may resign as Administrative  Agent upon ten days' notice to the Lenders, each Agent and the Borrower with such resignation  becoming effective upon a successor agent succeeding to the rights, powers and duties of the  Administrative Agent pursuant to this Section.  If the Administrative Agent shall resign as  Administrative Agent under this Agreement, then the Required Lenders shall appoint a successor  administrative agent.  Any successor administrative agent shall succeed to the rights, powers and  duties of resigning Administrative Agent, and the term "Administrative Agent" shall mean such  

 

     129  154304283v7  successor administrative agent effective upon its appointment, and the former Administrative  Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other  or further act or deed on the part of such former Administrative Agent or any of the parties to  this Agreement.  After the retiring Administrative Agent's resignation as Administrative Agent,  the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be  taken by it while it was Administrative Agent under this Agreement.  Section 10.09.  Erroneous Payments.    (a) Each Lender hereby agrees that (x) if the Administrative Agent notifies such  Lender that the Administrative Agent has determined in its sole discretion that any funds  received by such Lender from the Administrative Agent or any of its Affiliates (whether as a  payment, prepayment or repayment of principal, interest, fees or otherwise; individually and  collectively, a "Payment") were erroneously transmitted to such Lender (whether or not known  to such Lender), and demands the return of such Payment (or a portion thereof), such Lender  shall promptly, but in no event later than one Business Day thereafter, return to the  Administrative Agent the amount of any such Payment (or portion thereof) as to which such a  demand was made in same day funds, together with interest thereon in respect of each day from  and including the date such Payment (or portion thereof) was received by such Lender to the date  such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate  determined by the Administrative Agent in accordance with banking industry rules on interbank  compensation from time to time in effect, and (y) to the extent permitted by applicable law, such  Lender shall not assert, and hereby waives, as to the Administrative Agent, any claim,  counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or  counterclaim by the Administrative Agent for the return of any Payments received, including  without limitation any defense based on “discharge for value” or any similar doctrine.  A notice  of the Administrative Agent to any Lender under this Section 10.09(a) shall be conclusive,  absent manifest error.  (b) Each Lender hereby further agrees that if it receives a Payment from the  Administrative Agent or any of its Affiliates (x) that is in a different amount than, or on a  different date from, that specified in a notice of payment sent by the Administrative Agent (or  any of its Affiliates) with respect to such Payment (a "Payment Notice") or (y) that was not  preceded or accompanied by a Payment Notice, it shall be on notice, in each such case, that an  error has been made with respect to such Payment.  Each Lender agrees that, in each such case,  or if it otherwise becomes aware a Payment (or portion thereof) may have been sent in error,  such Lender shall promptly notify the Administrative Agent of such occurrence and, upon  demand from the Administrative Agent, it shall promptly, but in no event later than one Business  Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion  thereof) as to which such a demand was made in same day funds, together with interest thereon  in respect of each day from and including the date such Payment (or portion thereof) was  received by such Lender to the date such amount is repaid to the Administrative Agent at the  greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance  with banking industry rules on interbank compensation from time to time in effect.  (c) The Borrower hereby agrees that (x) in the event an erroneous Payment (or  portion thereof) are not recovered from any Lender that has received such Payment (or portion  

 

     130  154304283v7  thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such  Lender with respect to such amount and (y) an erroneous Payment shall not pay, prepay, repay,  discharge or otherwise satisfy any Obligations owed by the Borrower.  (d) Each party's obligations under this Section 10.09 shall survive the resignation or  replacement of the Administrative Agent or any transfer of rights or obligations by, or the  replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or  discharge of all Obligations under any Basic Document.  ARTICLE ELEVEN    ASSIGNMENTS; PARTICIPATIONS  Section 11.01.  Assignments and Participations.  (a) Each Lender may upon at least 30 days' notice to the Administrative Agent and  the Agents assign to one or more banks or other entities all or a portion of its rights and  obligations under this Agreement; provided, that (i) each such assignment shall be of a constant,  and not a varying percentage of all of the assigning Lender's rights and obligations under this  Agreement, (ii) the amount of the Commitment of the assigning Lender being assigned pursuant  to each such assignment (determined as of the date of the Assignment and Acceptance with  respect to such assignment), except if being assigned to an Affiliate of the Lender, shall in no  event be less than the lesser of (A) $5,000,000 or an integral multiple of $1,000,000 in excess of  that amount and (B) the full amount of the assigning Lender's Commitment, (iii) each such  assignment shall be to an Eligible Assignee, (iv) the parties to each such assignment shall  execute and deliver to the Administrative Agent (with a copy to the Borrower), for its recording  in the Lender Register, an Assignment and Acceptance, together with a processing and  recordation fee of $3,500 or such lesser amount as shall be approved by the Administrative  Agent, (v) the parties to each such assignment shall have agreed to reimburse the Administrative  Agent for all reasonable fees, costs and expenses (including the reasonable fees and  disbursements of counsel for the Administrative Agent) incurred by the Administrative Agent in  connection with such assignment, (vi) each Person that becomes a Lender under an Assignment  and Acceptance shall agree to be bound by the confidentiality provisions of Article Twelve and  (vii) there shall be no increased costs, expenses or Taxes incurred by the Administrative Agent or  any Lender Group upon assignment or participation.  Upon such execution, delivery and  recording by the Administrative Agent, from and after the effective date specified in each  Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto and, to the extent  that rights and obligations hereunder have been assigned to it pursuant to such Assignment and  Acceptance, have the rights and obligations of a Lender hereunder and (ii) the Lender assignor  thereunder shall, to the extent that rights and obligations hereunder have been assigned by it  pursuant to such Assignment and Acceptance, relinquish its rights and be released from its  obligations under this Agreement (and, in the case of an Assignment and Acceptance covering  all or the remaining portion of an assigning Lender's rights and obligations under this  Agreement, such Lender shall cease to be a party hereto).  (b) By executing and delivering an Assignment and Acceptance, the Lender assignor  thereunder and the assignee thereunder confirm to and agree with each other and the other parties  

 

     131  154304283v7  hereto as follows:  (i) other than as provided in such Assignment and Acceptance, such assigning  Lender makes no representation or warranty and assumes no responsibility with respect to any  statements, warranties or representations made in or in connection with this Agreement or the  execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement  or any other instrument or document furnished pursuant hereto; (ii) such assignee confirms that it  has received a copy of this Agreement, together with copies of such financial statements and  other documents and information as it has deemed appropriate to make its own credit analysis  and decision to enter into such Assignment and Acceptance; (iii) such assignee will,  independently and without reliance upon the Administrative Agent, such assigning Lender or any  other Lender and based on such documents and information as it shall deem appropriate at the  time, continue to make its own credit decisions in taking or not taking action under this  Agreement; (iv) such assigning Lender and such assignee confirm that such assignee is an  Eligible Assignee; (v) such assignee appoints and authorizes the Administrative Agent to take  such action as agent on its behalf and to exercise such powers under this Agreement as are  delegated to such agent by the terms hereof, together with such powers as are reasonably  incidental thereto; and (vi) such assignee agrees that it will perform in accordance with their  terms all of the obligations which by the terms of this Agreement are required to be performed  by it as a Lender.  (c) The Administrative Agent shall maintain at its address referred to herein a copy of  each Assignment and Acceptance delivered to it and a register for the recordation of the names,  addresses and Commitment of each Lender and the Principal Amount (and stated interest) of  each Loan made by each Lender from time to time (the "Lender Register").  The entries in the  Lender Register shall be conclusive and binding for all purposes, absent manifest error, and the  Borrower and the Lenders shall treat each Person whose name is recorded in the Lender Register  as a Lender hereunder for all purposes of this Agreement.  The Lender Register shall be available  for inspection by any Agent or Lender at any reasonable time and from time to time upon  reasonable prior notice.  (d) Subject to the provisions of Section 11.01(a), upon its receipt of an Assignment  and Acceptance executed by an assigning Lender and an assignee, the Administrative Agent  shall, if such Assignment and Acceptance has been completed, accept such Assignment and  Acceptance, and the Administrative Agent shall then record the information contained therein in  the Lender Register.  (e) Each Lender may sell participations to one or more banks or other entities in or to  all or a portion of its rights and obligations under this Agreement (including all or a portion of its  Commitment and each Loan owned by it); provided, that (i) such Lender's obligations under this  Agreement (including its Commitment hereunder) shall remain unchanged, (ii) such Lender shall  remain solely responsible to the other parties hereto for the performance of such obligations,  (iii) the Administrative Agent and the other Lenders shall continue to deal solely and directly  with such Lender in connection with such Lender's rights and obligations under this Agreement  and (iv) the Borrower provides its prior written consent to the sale of such participation (such  consent of the Borrower not to be unreasonably withheld).  Notwithstanding anything herein to  the contrary, each participant shall have the rights of a Lender (including any right to receive  payment) under Sections 2.10 and 2.11; provided, that no participant shall be entitled to receive  payment under either such Section in excess of the amount that would have been payable under  

 

     132  154304283v7  such Section by the Borrower to the Lender granting its participation had such participation not  been granted, and no Lender granting a participation shall be entitled to receive payment under  either such Section in an amount which exceeds the sum of (i) the amount to which such Lender  is entitled under such Section with respect to any portion of any Loan owned by such Lender  which is not subject to any participation plus (ii) the aggregate amount to which its participants  are entitled under such Sections with respect to the amounts of their respective participations.   With respect to any participation described in this Section, the participant's rights as set forth in  the agreement between such participant and the applicable Lender to agree to or to restrict such  Lender's ability to agree to any modification, waiver or release of any of the terms of this  Agreement or to exercise or refrain from exercising any powers or rights which such Lender may  have under or in respect of this Agreement shall be limited to the right to consent to any of the  matters set forth in Section 11.01.  Each Lender that sells a participation shall, acting solely for this purpose as an agent of  the Borrower, maintain a register on which it enters the name and address of each participant and  the principal amounts (and stated interest) of each participant's interest in the obligations under  this Agreement (the "Participant Register"); provided, that no Lender shall have any obligation to  disclose all or any portion of the Participant Register (including the identity of any participant or  any information relating to a participant's interest in any Commitment or Loan or its other  obligations under the Agreement) to any person except to (A) the Administrative Agent and (B)  the extent that such disclosure is necessary to establish that such Commitment, Loan 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.  (f) Each Lender may, in connection with any assignment or participation or proposed  assignment or participation pursuant to this Section, disclose to the assignee or participant or  proposed assignee or participant any information, including Confidential Information, relating to  the Borrower furnished to such Lender by or on behalf of the Borrower.  (g) Nothing herein shall prohibit any Lender from (i) pledging or assigning as  Collateral any of its rights under this Agreement to any Federal Reserve Bank or any other  Governmental Authority in accordance with Applicable Law or (ii) pledging or granting a  security interest in all or any portion of its rights (including payments to it under this Agreement  and the other Basic Documents) under this Agreement to a collateral trustee in order to comply  with Rule 3a-7 under the Investment Company Act; provided, that in each case, (A) any such  pledge or Collateral assignment may be made without compliance with Section 11.01(a) or  11.01(b) and (B) no such pledge or grant of a security interest shall release a Lender from any of  its obligations hereunder or substitute any such pledgee or grantee for such Lender as a party  hereto.  

 

     133  154304283v7  ARTICLE TWELVE    MUTUAL COVENANTS REGARDING CONFIDENTIALITY  Section 12.01.  Covenants of the Borrower, the Servicer, the Backup Servicer, the  Account Bank and the Collateral Custodian.  Each of the Borrower, the Servicer, the Backup  Servicer, the Account Bank and the Collateral Custodian severally and with respect to itself only,  covenants and agrees to hold in confidence, and not disclose to any Person, the terms of this  Agreement (including any fees payable in connection with this Agreement or the identity of a  Lender under this Agreement), except as the Administrative Agent and the Required Lenders  may have consented to in writing prior to any proposed disclosure, except it may disclose such  information (a) to its officers, directors, employees, agents, counsel, accountants, auditors,  subservicers, advisors or representatives, (b) to the extent such information has become available  to the public other than as a result of a disclosure by or through the Borrower, the Servicer, the  Backup Servicer, the Account Bank or the Collateral Custodian, (c) to Mizuho Bank or its  Affiliates or (d) to the extent it should be (i) required by Applicable Law (including filing a copy  of this Agreement and the other Basic Documents (other than the Fee Letter and excluding from  any such copy the identity of each Lender)) as exhibits to filings required to be made with the  Securities and Exchange Commission, or in connection with any legal or regulatory proceeding  or (ii) requested by any Governmental Authority to disclose such information; provided, that in  the case of clause (d)(i), the Borrower, the Servicer, the Backup Servicer, the Account Bank or  the Collateral Custodian, as applicable, will use all reasonable efforts to maintain confidentiality  and will (unless otherwise prohibited by law) notify the Agent or Lender of its intention to make  any such disclosure prior to making such disclosure.  Section 12.02.  Covenants of the Administrative Agent, the Agents and the Lenders.  (a) Each of the Administrative Agent, each Agent and each Lender covenants and  agrees that it will not disclose any of the Confidential Information at any time received or  obtained by it without the Borrower's prior written consent; provided, that it may disclose any  such Confidential Information (i) in connection with participations and assignments pursuant to  Section 11.01, (ii) to its officers, directors or employees or to Mizuho Bank or its Affiliates, each  of which shall be informed by it of the confidential nature of the Confidential Information and  shall have agreed to keep such information confidential, and (iii) to its or its Affiliates’ Advisors  (provided that such Advisors are advised of the confidential nature of such information and such  Advisors are obligated to keep such information confidential pursuant to the terms of their  engagement or applicable professional rules).  Each of the Administrative Agent, each Agent and  each Lender agrees to be responsible for any breach of this Agreement by its Affiliates and  Advisors, and it agrees that its Affiliates and Advisors will be advised by it of the confidential  nature of such information and that it shall cause its Affiliates to be bound by this Agreement.   Notwithstanding the foregoing, with respect to participations and assignments pursuant to  Section 11.01 involving an Eligible Assignee other than an entity satisfying clause (i) of the  definition of "Eligible Assignee", Confidential Information may not be provided to prospective  participants or assignees before the execution of an Assignment and Acceptance, unless such  Confidential Information is covered under a separate confidentiality agreement between the  assigning Lender and such prospective participant or assignee pursuant to which such  prospective participant or assignee shall agree to the provisions set forth in this Article.  

 

     134  154304283v7  (b) Each of the Administrative Agent, each Agent and each Lender acknowledges and  agrees that any Confidential Information provided to it, in whatever form, is the sole property of  the Borrower or DFC, as applicable.  Neither such Person nor its Affiliates or Advisors shall use  any of the Confidential Information now or hereafter received or obtained from or through the  Borrower, DFC or any of their respective Affiliates for any purpose other than for purposes of  engaging in, or as otherwise contemplated by, the transactions contemplated by the Basic  Documents.    (c) If the Administrative Agent, any Agent, a Lender or any of their respective  Affiliates or Advisors are legally compelled (whether by deposition, interrogatory, request for  documents, subpoena, civil investigation, demand or similar process) to disclose any  Confidential Information, the related entity shall, to the extent permitted by law, promptly notify  the Borrower and DFC in writing of such requirement so that the Borrower and/or DFC, at their  sole cost and expense, may seek a protective order or other appropriate remedy and/or waive  compliance with the provisions hereof.  The Administrative Agent, each Agent and each Lender  or any of their respective Affiliates or Advisors agree to use its reasonable efforts, upon the  written request of the Borrower or DFC, as applicable, to obtain or assist the Borrower or DFC,  as applicable, in obtaining any such protective order.  Failing the reasonably timely entry of a  protective order or the reasonably timely receipt of a waiver hereunder, it may disclose, without  liability hereunder, that portion (and only that portion) of the Confidential Information that in the  opinion of such party's counsel, it is legally compelled to disclose.  (d) Notwithstanding the foregoing, it is understood that the Administrative Agent,  each Agent and each Lender or its Affiliates may be required to disclose (and may so disclose,  without liability hereunder, provided that it complies with the following sentence) the  Confidential Information or portions thereof (i) at the request of a bank examiner or other  regulatory authority or in connection with an examination of it or its Affiliates by a bank  examiner or other regulatory authority, including in connection with the regulator compliance  policy of Administrative Agent, any Agent or any Lender, (ii) to any nationally recognized  statistical rating organization (within the meaning of the Exchange Act) (an "NRSRO") in  compliance with Rule 17g-5 under the Exchange Act (or any similar rule or regulation in any  relevant jurisdiction), each of which shall be informed by Administrative Agent, such Agent,  such Lender or such Affiliate, as applicable, of the confidential nature of the Confidential  Information and shall have agreed to keep such information confidential, or (iii) to any collateral  trustee appointed by such Lender to comply with Rule 3a-7 under the Investment Company Act;  provided, that such collateral trustee is informed of the confidential nature of such information  and such collateral trustee agrees in writing to keep such Confidential Information subject to an  agreement with substantially similar terms as provided herein.    (e) It is understood and agreed that no failure or delay by the Borrower, the Servicer,  the Backup Servicer, the Collateral Custodian, the Administrative Agent, the Account Bank,  each Agent or any Lender in exercising any right, power or privilege hereunder shall operate as a  waiver thereof, nor shall any single or partial exercise thereof preclude any other or further  exercise thereof or the exercise of any right, power or privilege hereunder.  Section 12.03.  Non-Confidentiality of Tax Treatment and Tax Structure.   Notwithstanding anything to the contrary contained herein or in any document related to the  

 

     135  154304283v7  transactions contemplated hereby, in connection with Treasury Regulations Section 1.6011-4,  Section 301.6111-1T and Section 301.6112-1, the parties hereby agree that, from the  commencement of discussions with respect to the transactions described herein, each party  hereto (and each of its employees, representatives, Advisors, Affiliates or agents) is permitted to  disclose to any and all persons of any kind (other than limitations imposed by State or federal  securities laws), the structure and tax aspects of the transactions, and all materials of any kind  (including opinions or other tax analyses) that are provided to each such party related to such  structure and tax aspects.  In this regard, each party hereto acknowledges and agrees that this  disclosure of the structure or tax aspects of the transactions is not limited in any way by an  express or implied understanding or agreement, oral or written (whether or not such  understanding or agreement is legally binding) except as is reasonably necessary to comply with  state and federal securities laws.  Furthermore, each party hereto acknowledges and agrees that it  does not know or have reason to know that its use or disclosure of information relating to the  structure or tax aspects of the transactions is limited in any other manner (such as where the  transactions are claimed to be proprietary or exclusive) for the benefit of any other Person (other  than as it may be limited by State or federal securities laws).  ARTICLE THIRTEEN    MISCELLANEOUS  Section 13.01.  Amendments and Waivers.  This Agreement may be amended, waived or  modified by the written agreement of the Borrower and the Required Lenders.  The  Administrative Agent shall provide a copy of each such proposed amendment, waiver or other  modification to the Account Bank, the Backup Servicer and each Hedge Counterparty.    No amendment, waiver or other modification which could have a material adverse effect  on the rights or obligations of the Account Bank, the Backup Servicer (including, in its capacity  as Successor Servicer) or any Hedge Counterparty shall be effective against the Account Bank,  the Backup Servicer or such Hedge Counterparty, as applicable, without the prior written  agreement of the Account Bank, the Backup Servicer or such Hedge Counterparty, as applicable.  Notwithstanding anything in this Section or in any Basic Document to the contrary,  following the determination of a Benchmark Replacement, this Agreement may be amended by  the Administrative Agent without the consent of any other Person and, except as provided in  Section 2.17(d), without satisfying any other amendment provisions of this Agreement or any  other Basic Document, to implement a Benchmark Replacement and any Benchmark  Replacement Conforming Changes. For the avoidance of doubt, any Benchmark Replacement  Conforming Changes in any amendment to this Agreement may be retroactive (including  retroactive to, but not before, the Benchmark Replacement Date) and this Agreement may be  amended more than once in connection with any Benchmark Replacement Conforming Changes.  Section 13.02.  Notices, Etc.  All notices and other communications provided for  hereunder shall, unless otherwise stated herein, be in writing (including communication by e- mail or facsimile copy) and e-mailed, mailed, transmitted or delivered, as to each party hereto, at  its address set forth under its name on the signature pages hereof or specified in such party's  Assignment and Acceptance or at such other address as shall be designated by such party in a  

 

     136  154304283v7  written notice to the other parties hereto.  All such notices and communications shall be  effective, upon receipt, or in the case of notice by (a) mail, five days after being deposited in the  United States mail, first class postage prepaid, (b) facsimile copy, when receipt is confirmed by  telephone, except that notices and communications pursuant to Article Two shall not be effective  until received with respect to any notice sent by mail or (c) notice by an e-mail, when receipt is  confirmed by telephone or by reply e-mail from the recipient.  Section 13.03.  No Waiver, Rights and Remedies.  No failure on the part of any Agent or  any Secured Party or any assignee of any Secured Party to exercise, and no delay in exercising,  any right or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial  exercise of any right or remedy hereunder preclude any other or further exercise thereof or the  exercise of any other right.  The rights and remedies herein provided are cumulative and not  exclusive of any rights and remedies provided by law.  Section 13.04.  Binding Effect.  This Agreement shall be binding upon and inure to the  benefit of the Borrower, the Servicer, the Backup Servicer, the Collateral Custodian, the Account  Bank, the Administrative Agent, each Agent, the Secured Parties and their respective successors  and permitted assigns and, in addition, each Hedge Counterparty shall be an express third-party  beneficiary of this Agreement.  Section 13.05.  Term of this Agreement.  This Agreement shall remain in full force and  effect until the Facility Termination Date; provided, that (a) the rights and remedies with respect  to any breach of any representation and warranty made or deemed made by the Borrower  pursuant to Article Five and the indemnification and payment provisions of Article Ten and  Section 2.11, (b) the confidentiality provisions of Article Twelve, (c) the provisions of  Section 13.10 and (d) any other provision of this Agreement expressly stated to survive, shall be  continuing and shall survive any termination of this Agreement.  Section 13.06.  GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER  OF OBJECTION TO VENUE.  THIS AGREEMENT SHALL BE GOVERNED BY, AND  CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW  YORK WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS  (OTHER THAN § 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).   EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON-EXCLUSIVE  JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF  NEW YORK.  EACH OF THE PARTIES HERETO HEREBY WAIVES ANY  OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO  VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE  AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH  LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH  COURT.  Section 13.07.  WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY  APPLICABLE LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO  HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER  SOUNDING IN CONTRACT, TORT OR OTHERWISE BETWEEN THE PARTIES  HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL  

 

     137  154304283v7  TO THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS  AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  INSTEAD,  ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH  TRIAL WITHOUT A JURY.  Section 13.08.  Costs and Expenses.  In addition to the rights of indemnification granted  to the Administrative Agent, each Agent, the Secured Parties, the Account Bank, the Collateral  Custodian and the Backup Servicer and its or their Affiliates and officers, directors, employees  and agents thereof under Article Nine, the Borrower agrees to pay on demand all reasonable out- of-pocket costs and expenses (other than Taxes) of the Administrative Agent, each Agent, the  Secured Parties, the Account Bank and the Backup Servicer incurred in connection with the  administration (including periodic auditing), amendment or modification of, or any waiver or  consent issued in connection with, this Agreement and the other documents to be delivered  hereunder or in connection herewith, including the reasonable fees and out-of-pocket expenses of  counsel for the Administrative Agent, each Agent, the other Secured Parties, the Account Bank  and the Backup Servicer (including, if it is then acting as the Successor Servicer) with respect  thereto and with respect to advising such entities as to their respective rights and remedies under  this Agreement and the other documents to be delivered hereunder or in connection herewith,  and all costs and expenses, if any (including reasonable counsel fees and expenses), incurred by  such entities in connection with the enforcement of this Agreement and the other documents to  be delivered hereunder or in connection herewith.  Section 13.09.  No Insolvency Proceedings.  (a) Notwithstanding any prior termination of this Agreement, no Lender shall, prior  to the date which is one year and one day after the final payment of the Aggregate Unpaids,  petition, cooperate with or encourage any other Person in petitioning or otherwise invoke the  process of any Governmental Authority for the purpose of commencing or sustaining an  Insolvency Proceeding against the Borrower under any United States federal or State Insolvency  Laws or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other  similar official of the Borrower or any substantial part of its property or ordering the winding up  or liquidation of the affairs of the Borrower.  (b) Notwithstanding any prior termination of this Agreement, each party to this  Agreement hereby agrees that it shall not institute against, or join any other person in instituting  against, any Lender any Insolvency Proceeding, for one year and one day after the latest  maturing Commercial Paper Note or other debt security issued by such Lender is paid.  Section 13.10.  Recourse Against Certain Parties.  (a) No recourse under or with respect to any obligation, covenant or agreement  (including the payment of any fees or any other obligations) of each Agent or any Secured Party  as contained in this Agreement or any other agreement, instrument or document entered into by it  pursuant hereto or in connection herewith shall be had against any such Person or any manager  or administrator of such Person or any incorporator, affiliate, stockholder, officer, employee or  director of such Person or of the Borrower or of any such manager or administrator, as such, by  the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any  

 

     138  154304283v7  statute or otherwise; it being expressly agreed and understood that the agreements of the Agents  and any Secured Party contained in this Agreement and all of the other agreements, instruments  and documents entered into by it pursuant hereto or in connection herewith are, in each case,  solely the corporate obligations of such Person, and that no personal liability whatsoever shall  attach to or be incurred by any administrator of any such Person or any incorporator,  stockholder, affiliate, officer, employee or director of such Person or of any such administrator,  as such, or any other of them, under or by reason of any of the obligations, covenants or  agreements of such Person contained in this Agreement or in any other such instruments,  documents or agreements, or that are implied therefrom, and that any and all personal liability of  every such administrator of such Person and each incorporator, stockholder, affiliate, officer,  employee or director of such Person or of any such administrator, or any of them, for breaches  by such Person of any such obligations, covenants or agreements, which liability may arise either  at common law or at equity, by statute or constitution, or otherwise, is hereby expressly waived  as a condition of and in consideration for the execution of this Agreement.  The provisions of this  Section shall survive the termination of this Agreement.  Section 13.11.  Patriot Act Compliance.  The Administrative Agent hereby notifies the  Borrower that pursuant to the requirements of the Patriot Act, it, and each other Lender and the  Account Bank, may be required to obtain, verify and record information that identifies the  Borrower, which information includes the name and address of the Borrower, organizational  documentation, director and shareholder information, and other information that will allow the  Administrative Agent, each Lender and the Account Bank to identify the Borrower in accordance  with the Patriot Act.  This notice is given in accordance with the requirements of the Patriot Act  and is effective for the Administrative Agent, each Lender and the Account Bank.  Section 13.12.  Execution in Counterparts; Electronic Signatures; Severability;  Integration.  This Agreement may be executed in any number of counterparts and by different  parties hereto in separate counterparts, each of which when so executed shall be deemed to be an  original and all of which when taken together shall constitute one and the same agreement.   Delivery of an executed counterpart of a signature page to this Agreement by facsimile or by  electronic mail in a “.pdf” file shall be effective as delivery of a manually executed counterpart  of this Agreement.  Each party agrees that this Agreement and any other documents to be  delivered in connection herewith may be electronically signed, and that any electronic signatures  appearing on this Agreement or such other documents are the same as handwritten signatures for  the purposes of validity, enforceability, and admissibility.  In case any provision in or obligation  under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity,  legality and enforceability of the remaining provisions or obligations, or of such provision or  obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.  This  Agreement contains the final and complete integration of all prior expressions by the parties  hereto with respect to the subject matter hereof and shall constitute the entire agreement among  the parties hereto with respect to the subject matter hereof, superseding all prior oral or written  understandings other than any fee letter contemplated hereby.  [Remainder intentionally left blank] 

 

 

 

 

 

[Loan Agreement]    THE ADMINISTRATIVE AGENT  AND ACCOUNT BANK:  MIZUHO BANK, LTD.  By:  Name:  Title:  Address for Notices:  Mizuho Bank, Ltd.  1271 Avenue of the Americas  New York, NY 10020  Attention: Securitized Products / David Krafchik  Email:  david.krafchik@mizuhogroup.com,   johan.andreasson@mizuhogroup.com,   LAU_Agent@mizuhogroup.com  COMMITTED LENDER: MIZUHO BANK, LTD.  By:  Name:  Title:  Address for Notices:  Mizuho Bank, Ltd.  1271 Avenue of the Americas  New York, NY 10020  Attention: Securitized Products / David Krafchik  Email:  david.krafchik@mizuhogroup.com,   johan.andreasson@mizuhogroup.com,   LAU_Agent@mizuhogroup.com  

 

[Loan Agreement]    MIZUHO AGENT: MIZUHO BANK, LTD.  By:  Name:  Title:  Address for Notices:  Mizuho Bank, Ltd.  1271 Avenue of the Americas  New York, NY 10020  Attention: Securitized Products / David Krafchik  Email:  david.krafchik@mizuhogroup.com,   johan.andreasson@mizuhogroup.com,  LAU_Agent@mizuhogroup.com  

 

     SA-1  154304283v7  SCHEDULE A  LENDER SUPPLEMENT (MIZUHO LENDER GROUP)  Lender Group: Mizuho  Agent: Mizuho Bank, Ltd.  Address for Notices: Mizuho Bank, Ltd.  1271 Avenue of the Americas  New York, NY 10020  Attention: Securitized Products / David Krafchik  david.krafchik@mizuhogroup.com  johan.andreasson@mizuhogroup.com  LAU_Agent@mizuhogroup.com   Commitment: $500,000,000  Committed Lender: Mizuho Bank, Ltd.  Address for Notices and Investing  Office:  Mizuho Bank, Ltd.  1271 Avenue of the Americas  New York, NY 10020  Attention: Securitized Products / David Krafchik  david.krafchik@mizuhogroup.com  johan.andreasson@mizuhogroup.com  LAU_Agent@mizuhogroup.com  Wire Information: Bank name: Mizuho Bank, Ltd., New York Branch  ABA: 026004307  Account Name: ISA Loan Agency  Account #: H79-740-005344  Attention: LAU/Lithia Securitization      

 

     SB-1  154304283v7  SCHEDULE B  ELIGIBLE RECEIVABLE CRITERIA  An "Eligible Receivable" means a Receivable as to which all of the following conditions are  satisfied:  1. which was originated by DFC under an existing Dealer Agreement;  2. which at the time of underwriting, the related Obligor provided as its most  recent billing address an address located in a State of the United States;  3. for which the related Obligor is not (a) an employee of DFC or Lithia, (b)  a fleet customer or (c) the U.S. government or any State or any agency, department or  instrumentality of the U.S. government or any State or other government entity;  4. which has an original term to maturity of at least 12 months but not more  than 84 months;  5. which has a Principal Balance of at least $500 but not more than (a) if the  related Obligor had a FICO Score of more than 740 at the time of underwriting, $150,000 or  otherwise (b) $100,000;   6. which constitutes an "account," ""tangible chattel paper," "electronic  chattel paper," or a "payment intangible" under and as defined in Article 9 of the UCC as then in  effect in the relevant State;  7. which is payable in U.S. Dollars;  8. which arises under a Contract which (a) has been properly executed by the  parties thereto, (b) represents the genuine, legal, valid and binding payment obligation in writing  of the Obligor, in full force and effect, enforceable by the holder thereof in accordance with its  terms, subject to the effect of bankruptcy, insolvency, reorganization or other similar laws  affecting the enforcement of creditors rights generally, and (c) contains customary and  enforceable provisions so as to render the rights and remedies of the holder thereof against the  property subject to such Contract adequate for the realization of the benefits provided thereby;   9. which is not subject to any right of rescission, cancellation, set-off, claim,  counterclaim or defense (including the defense of usury) of the Obligor or any proceedings  pending or, to the best of the Borrower's knowledge threatened, wherein the Obligor or any  Governmental Authority has alleged the related Contract is illegal or unenforceable;   10. which does not require the Obligor to consent to or receive notice of the  transfer, sale or assignment of the rights and duties of DFC thereunder;  11. with respect to which the related Contract requires the Obligor to cause the  related Financed Vehicle to be covered by an individual physical damage insurance policy  

 

     SB-2  154304283v7  featuring comprehensive and collision coverage, in accordance with the Credit and Collection  Policy (if applicable);  12. which is secured by a valid, subsisting and enforceable first priority  perfected security interest, free and clear of any Lien, in favor of the Borrower in the related  Financed Vehicle with respect to which all filings have been made, which security interest has  been validly assigned by the Borrower to the Administrative Agent and with respect to which all  filings necessary in any jurisdiction to give the Administrative Agent a first priority perfected  security interest in such Receivable have been made;  13. none of Lithia, DFC or any of their Affiliates have given or loaned to any  Obligor with respect to a Receivable, directly or indirectly, any Scheduled Payment or other  amounts due or to become due under such Receivable in order to make the Receivable current;  14. to which the Borrower has good and indefeasible title to and was the sole  owner of such Receivable, free of Liens (other than Permitted Liens) of others and to which the  Seller had the full right to transfer, sell and encumber such Receivable free and clear of any  Liens other than the Liens in favor of the Administrative Agent on behalf of the Secured Parties;   15. which shall have complied with, at the time of its underwriting, and shall  remain in compliance with, all Requirements of Law, including all consumer protection and  usury laws and which, to the best of the Borrower's knowledge, was originated without fraud or  misrepresentation;   16. which was originated in the ordinary course of business of the Seller and  in accordance with the Credit and Collection Policy;   17. with respect to which, either      (a) if such Receivable is "tangible chattel paper" under and as defined in  Article 9 of the UCC as then in effect in the relevant State, (i) there is only one original executed  copy of the related Contract, (ii) such Contract is in the possession of the Collateral Custodian,  (iii) such Contract has not been sold, transferred, assigned, or pledged by DFC to any Person  other than the Borrower, and (iv) such Contract has not been stamped or otherwise marked to  show any interest of any Person other than the Borrower; or       (b) if such Receivable is "electronic chattel paper" under and as defined in  Article 9 of the UCC as then in effect in the relevant State, (i) there is only one authoritative  copy of the related Contract within the meaning of Article 9 of the UCC as then in effect in the  relevant State, (ii) such authoritative copy is unique, identifiable, and unalterable (other than with  the participation of the Collateral Custodian in the case of an addition or amendment of an  identified assignee and other than a revision that is readily identifiable as an authorized or  unauthorized revision), (iii) such authoritative copy has been communicated to and is maintained  by or on behalf of the Custodian solely for the benefit of the Secured Parties, (iv) each copy of  the authoritative copy and any copy of a copy are readily identifiable as copies that are not the  authoritative copy, (v) the related Receivable was established in a manner such that all copies or  revisions that add or change an identified assignee of the authoritative copy of such Contract  

 

     SB-3  154304283v7  must be made with the participation of the Custodian, (vi) the related Receivable was established  in a manner such that all revisions of the authoritative copy of the Contract is readily identifiable  as an authorized or unauthorized revision, and (vii) such authoritative copy communicated to the  Collateral Custodian has no marks or notations indicating that it has been pledged, assigned, or  otherwise conveyed to any person such Contract has not been sold, transferred, assigned or  pledged by DFC to any Person other than the Borrower;    18. with respect to which the related Obligor is (a) not deceased and (b) not  the subject of a pending bankruptcy proceeding;  19. which (a) at the time such Receivable was acquired by the Borrower was  not more than 30 days past due or a Defaulted Receivable and (b) is not a Defaulted Receivable  or a Delinquent Receivable;  20. which at the time of underwriting did not have a Loan-to-Value Ratio of  greater than 160%;  21. which at the time of underwriting (other than Receivables that do not have  a FICO Score or have a FICO Score of zero) did not have a FICO Score of less than 450;  22. with respect to which the Payment-to-Income Ratio does not exceed 20%;  23. with respect to which the Debt-to-Income Ratio does not exceed 60%;  24. with respect to which (a) the related Contract relates to the retail purchase  of a motor vehicle, (b) the portion of a payment allocable to interest and the portion allocable to  principal under such Contract are determined in accordance with the Simple Interest Method, (c)  such Contract provides for a fixed interest rate and level monthly payments (provided, that the  payments in the first and last months of the Receivable may be minimally different from the  level payment), and (d) the monthly payments under such Contract fully amortize the amount  financed and yield interest at the related APR over its original term;  25. with respect to which the related Contract (a) was underwritten by DFC in  accordance with the Credit and Collection Policy in effect at the time of underwriting of such  Contract, (b) satisfied in all material respects the requirements of the Credit and Collection  Policy in effect at the time of underwriting of such Contract, and (c) satisfied all Applicable Law  in effect at the time of origination;  26. which the related Contract has not been amended, modified, waived,  extended or altered by the Servicer in any respect except in accordance with the Credit and  Collection Policy;   27. with respect to which the information set forth in the Schedule of  Receivables is true and correct in all material respects as of the opening of business on the  related Cutoff Date;   

 

     SB-4  154304283v7  28. with respect to which DFC used no selection procedures that identified  such Receivable as being less desirable or valuable than other comparable motor vehicle loans  originated or acquired by DFC that otherwise meet the eligibility criteria; and  29. with respect to which no Deferral has been granted, unless all Scheduled  Payments or portions thereof that that were deferred pursuant to such Deferral were paid by the  related Obligor subsequent to the granting of such Deferral.     

 

     SC-1  154304283v7  SCHEDULE C  SCHEDULE OF RECEIVABLES  (Original delivered to the Administrative Agent)  

 

     SD-1  154304283v7  SCHEDULE D  LOCATION OF RECEIVABLE FILES  Driveway Finance Corporation  150 North Bartlett Street  Medford, OR  97501    Iron Mountain Information Management, LLC, at the following locations:    Building ID Address City State ZIP  F1 811 Route 33  OPM# 000738 RM  Freehold NJ 07728  F2 811 Route 33  OPM# 000738 RM  Freehold NJ 07728  F3 811 Route 33  OPM# 000738 RM  Freehold NJ 07728  F7 811 Route 33 Freehold NJ 07728  M1 26 South Middlesex Ave. Monroe NJ 08831  M2 26 South Middlesex Ave. Monroe NJ 08831  CR 12958 Midway Place Cerritos CA 90703  LP 5911 Fresca Dr. La Palma CA 90623  PC 8700 Mercury Lane Pico Rivera CA 90660  2A 218 W. Yard Rd. Feura Bush NY 12067  PG Route 9W South Port Ewen NY 12466  2 4561 Oak Fair Blvd. Tampa FL 33610  5 4758 Oak Fair Blvd. Tampa FL 33610  BT 700 Burning Tree Rd. Fullerton CA 92833  1 6298 W 44th Ave. Spokane WA 99224        

 

    SE-1  154304283v7  SCHEDULE E  SCHEDULE OF DOCUMENTS  1. Loan Agreement, dated as of the Closing Date, by and among DFC Business Services,  LLC, as borrower (the "Borrower"), Driveway Finance Corporation ("DFC"), as servicer  (in such capacity, the "Servicer") and as collateral custodian for the Secured Parties (as  defined therein), the Lenders from time to time parties thereto, the Agents for the Lender  Groups (as defined therein) from time to time parties thereto (the "Agents"), and Mizuho  Bank, Ltd., as administrative agent for the Lenders and the Agents (the "Administrative  Agent") and as account bank.  2. Purchase Agreement, dated as of the Closing Date, between DFC and the Borrower.  3. Escrow and Control Agreement, dated as of the Closing Date, among the Borrower,  Mizuho Bank, Ltd., as escrow agent and bank, and the Administrative Agent.  4. Fee Letter, dated as of the Closing Date, among DFC, the Borrower and the  Administrative Agent.  5. Performance Guaranty of Lithia Motors, Inc., dated the Closing Date.  6. Power of Attorney, dated as of the Closing Date, from the Borrower to the Administrative  Agent.  7. Opinion of Morgan, Lewis & Bockius LLP, dated the Closing Date, as to certain true sale   matters.  8. Opinion of Morgan, Lewis & Bockius LLP, dated the Closing Date, as to certain non- consolidation sale  matters.  9. Opinion of Morgan, Lewis & Bockius LLP, dated the Closing Date, as to certain security  interest matters.  10. Opinion of Morgan, Lewis & Bockius LLP, dated the Closing Date, as to certain  corporate matters, including an opinion as to the Volcker Rule.  11. Opinion of Morgan, Lewis & Bockius LLP, dated the Closing Date, as to control of  electronic chattel paper vaulted with RouteOne LLC.  12. Opinion of Morgan, Lewis & Bockius LLP, dated as of the Closing Date, as to control of  electronic chattel paper vaulted with Dealertrack, Inc.   13. Opinion of Stoel Rives LLP, dated the Closing Date, as to certain corporate and security  interest matters under Oregon law.  

 

    SE-2  154304283v7  14. Opinion of Fried, Frank, Harris, Shriver & Jacobson LLP, dated the Closing Date, as to  certain matters relating to Lithia Motors, Inc. 

 

   * - No amendments that are made to, waivers that are granted with respect to, or other modifications that  are made with respect to the Lithia Loan Agreement that would change the amount of Funded Debt that is  permitted under such Section shall be given effect hereunder unless consented to by the Administrative  Agent.    SF-1  154304283v7    SCHEDULE F  FINANCIAL COVENANTS (LITHIA)  "Financial Covenants (Lithia)" means each of:  (i) as of any date of determination, the ratio for the four consecutive fiscal quarters  ending on the last day of the most recently completed fiscal quarter of (a) (1)  EBITDAR, minus (2) dividends and other distributions in respect of Equity  Interests and amounts expended to repurchase Equity Interests from a Person that  is not a Loan Party, minus (3) income tax expense to the extent paid in cash, minus  (4) an allowance for maintenance capital expenditures in an amount equal to  $85,000 for each Dealership location, plus (5) if any Permitted Acquisition has  occurred during any Measurement Period, Pro Forma EBITDAR minus rental or  lease expense attributable to any new Acquisition Subsidiary or business acquired  in connection with such Permitted Acquisition, as applicable, calculated as if the  Permitted Acquisition had occurred on the first day of such Measurement Period  (it being understood and agreed that Pro Forma EBITDAR minus rental or lease  expense may not be included in this calculation to the extent that it results in an  annualized increase of more than 10% in Lithia's consolidated EBITDAR minus  rental or lease expense prior to such adjustment, unless Lithia provides to the  Agent and the Required Lenders the supporting calculations for such adjustment  and such other information as they may reasonably request to determine the  accuracy of such calculations); to (b) the sum for the applicable Measurement  Period of (1) cash interest, plus (2) required principal payments on Indebtedness  plus (3) rental or lease expense, shall not be less than 1.20 to 1.0; and  (ii) as of any date of determination, the ratio for Lithia and all Related Subsidiaries of  Lithia on a consolidated basis of (a) (1) the then outstanding principal balance of  all Funded Debt (minus the sum of (A) unrestricted cash and cash equivalents  plus (B) any amounts held in the PR Accounts plus (C) any amounts held in  accounts established by Dual Subsidiaries or Silo Subsidiaries as an offset to  floorplan notes payable (or interest thereon); provided that the aggregate  reduction for all of the foregoing clauses (A) through (C) shall not exceed  $200,000,000), minus (2) the sum of the then outstanding principal balance of the  New Vehicle Floorplan Loans, New Vehicle Swing Line Loans, Used Vehicle  Floorplan Loans, Used Vehicle Swing Line Loans, Service Loaner Vehicle  Floorplan Loans, Service Loaner Vehicle Swing Line Loans, principal amount of  any Other Service Loaner Floorplan Financing, Funded Debt permitted under  subsection (o) of Section 13.10 of the Lithia Loan Agreement* (but only to the  extent constituting floor plan financing), Funded Debt permitted under subsection  

 

   * - No amendments that are made to, waivers that are granted with respect to, or other modifications that  are made with respect to the Lithia Loan Agreement that would change the amount of Funded Debt that is  permitted under such Section shall be given effect hereunder unless consented to by the Administrative  Agent.    SF-2  154304283v7  (p) of Section 13.10 of the Lithia Loan Agreement* (but only to the extent  constituting floor plan financing), Funded Debt permitted under subsection (r) of  Section 13.10 of the Lithia Loan Agreement* (but only to the extent not  guaranteed by Lithia) and Funded Debt permitted under subsection (s) of Section  13.10 of the Lithia Loan Agreement* and, without duplication, Funded Debt  permitted under subsection (f) of Section 13.10 of the Lithia Loan Agreement*  (but only to the extent the underlying indebtedness that is guaranteed constitutes  floor plan financing), plus (3) six times rental or lease expense for the  Measurement Period ending on such date; to (b) (1) Pro Forma EBITDAR for the  Measurement Period ending on such date (it being understood and agreed that Pro  Forma EBITDAR minus rental or lease expense may not be included in this  calculation to the extent that it results in an annualized increase of more than 10%  in Lithia’s consolidated EBITDAR minus rental or lease expense prior to such  adjustment, unless Lithia provides to the Agent and the Required Lenders the  supporting calculations for such adjustment and such other information as they  may reasonably request to determine the accuracy of such calculations), minus (2)  interest expense with respect to the New Vehicle Floorplan Loans, New Vehicle  Swing Line Loans, Used Vehicle Floorplan Loans, Used Vehicle Swing Line  Loans, Service Loaner Vehicle Floorplan Loans, Service Loaner Vehicle Swing  Line Loans and Funded Debt permitted under subsection (o) of Section 13.10 of  the Lithia Loan Agreement* (but only to the extent constituting floor plan  financing), Funded Debt permitted under subsection (p) of Section 13.10 of the  Lithia Loan Agreement* (but only to the extent constituting floor plan financing),  Funded Debt permitted under subsection (r) of Section 13.10 of the Lithia Loan  Agreement* (but only to the extent not guaranteed by Lithia) and Funded Debt  permitted under subsection (s) of Section 13.10 of the Lithia Loan Agreement*, in  each case for the Measurement Period ending on such date, shall not be greater  than 5.75 to 1.0.   For purposes of the foregoing Financial Covenants (Lithia), "Lithia Loan Agreement"  means the Fourth Amended and Restated Loan Agreement, dated as of April 29, 2021, by and  among Lithia, Lithia's subsidiaries that are from time to time parties thereto, each financial  institution that is from time to time party thereto as a lender, and U.S. Bank National  Association, as agent for the lenders thereunder and "Related Subsidiaries of Lithia" means, as of  any date of determination, all entities that are defined as "subsidiaries" of Lithia in accordance  with the Lithia Loan Agreement as of such date (without giving effect to any amendments to the  related definition of "subsidiary" on or after the Closing Date other than those that have been  consented to by the Administrative Agent).  Furthermore, all capitalized terms used in the  foregoing Financial Covenants (Lithia) that are not defined in Section 1.01 of the Agreement  have the meanings assigned thereto in the Lithia Loan Agreement, without giving effect to any  amendments that are made to, waivers that are granted with respect to, or other modifications  that are made with respect to the Lithia Loan Agreement on or after the Closing Date unless the  same have been consented to by the Administrative Agent.  

 

     SG-1  154304283v7  SCHEDULE G  APPROVED BACKUP SERVICERS    Vervent Inc.  

 

     SH-1  154304283v7  SCHEDULE H  ESCROW ACCOUNTS      Account Name Account Number  Collection Account H15-740-008568  Hedge Reserve Account H15-740-008576  

 

     A-1  154304283v7  EXHIBIT A  FORM OF FUNDING REQUEST  ____________, 20__  Mizuho Bank, Ltd.    as Administrative Agent, Account Bank and as Mizuho Agent  1271 Avenue of the Americas  New York, NY 10020  Attention: Securitized Products / David Krafchik    Re: DFC Business Services, LLC – Loan Agreement  Ladies and Gentlemen:  The undersigned is a Responsible Officer of DFC Business Services, LLC (the  "Borrower") and is authorized to execute and deliver this Funding Request on behalf of the  Borrower pursuant to the Loan Agreement, dated as of November 1, 2022 (as amended, restated,  supplemented or otherwise modified from time to time, the "Loan Agreement"), among the  Borrower, Driveway Finance Corporation, as servicer and collateral custodian, the Lenders from  time to time party thereto, the Agents for the Lender Groups from time to time parties thereto,  and Mizuho Bank, Ltd., as administrative agent and account bank.  Capitalized terms used herein  that are not otherwise defined shall have the meanings ascribed thereto in the Loan Agreement.  The Borrower hereby requests that a Loan be made under the Loan Agreement on  __________, ____ in the amount of $__________.  In connection with the foregoing, the undersigned hereby certifies, on behalf of the Borrower, as  follows:  1. As of the date hereof, the Borrowing Base is __________.  After giving effect to  the requested Loan, the Loans Outstanding will not exceed the Borrowing Base and no  Borrowing Base Deficiency will exist.  Attached to this Funding Request is a true, complete and  correct calculation of such Borrowing Base and all components thereof.  2. As of the date hereof, the Excess Concentration Amount after giving effect to the  requested Loan will be:  ______  3. All of the conditions applicable to the requested Loan as set forth in the Loan  Agreement have been satisfied as of the date hereof and will remain satisfied to the date of such  Loan, including:   (a) each of the representations and warranties contained in  Article Five of the Loan Agreement are true and correct in all respects on  and as of the date hereof, before and after giving effect to the Loan and to  

 

     A-2  154304283v7  the application of the proceeds therefrom as though made on and as of the  date hereof;   (b) no event has occurred and is continuing, or would result from such  Loan or from the application of the proceeds therefrom, which constitutes a  Termination Event or Unmatured Termination Event;   (c) the Borrower is in material compliance with each of its agreements  set forth in the Loan Agreement;    (d) no Servicer Termination Event or Unmatured Servicer Termination  Event has occurred; and    (e) no adverse selection procedures were used by the Borrower with  respect to the Receivables which will become a part of the Collateral on the  Funding Date.  4. The requested Loan will not, on the Funding Date, exceed the Available Amount  and after giving effect to the requested Loan, the Loans Outstanding will not exceed the  Borrowing Base.  5. After giving effect to the requested Loan, either (a) the Borrower will be Fully  Hedged or (b) an amount that is at least equal to the Hedge Reserve Account Required Amount  will be on deposit in the Hedge Reserve Account, as required by Section 6.03 of the Loan  Agreement.  6. Attached hereto is a true, correct and complete Schedule A to the Purchase  Agreement, reflecting all Receivables which will become part of the Collateral on the Funding  Date, each Receivable reflected thereon being an Eligible Receivable.  7. The Cutoff Date with respect to the Receivables is             , 20_  .  DFC BUSINESS SERVICES, LLC  By: _______________________________________  Name:    Title: 

 

     B-1  154304283v7  EXHIBIT B  FORM OF ASSIGNMENT AND ACCEPTANCE  Dated __________, 20_    Reference is made to the Loan Agreement, dated as of November 1, 2022 (as amended,  restated, supplemented or otherwise modified from time to time, the "Loan Agreement"), among  DFC Business Services, LLC, as borrower, Driveway Finance Corporation, as servicer and  collateral custodian, the Lenders from time to time party thereto, the Agents for the Lender  Groups from time to time parties thereto, and Mizuho Bank, Ltd., as administrative agent (the  "Administrative Agent") and account bank.  Capitalized terms used herein that are not otherwise  defined herein shall have the meanings ascribed thereto in the Loan Agreement.  __________________ (the "Assignor") and ___________________ (the "Assignee") agree as  follows:  The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and  assumes from the Assignor, that interest in and to all of the Assignor's rights and obligations  under the Loan Agreement as of the date hereof which represents the percentage interest  specified in Section 1 of Schedule 1 hereto of all outstanding rights and obligations of the  Assignor under the Loan Agreement, including such interest in the Commitment of the Assignor  and the Lender Advances made by the Assignor.  After giving effect to such sale and assignment,  the Commitment and the amount of Lender Advances made by the Assignee will be as set forth  in Section 2 of Schedule 1 hereto.  The Assignor represents and warrants that it is the legal and beneficial owner of the interest  being assigned by it hereunder and that such interest is free and clear of any Lien.  The Assignor and the Assignee confirm to and agree with each other and the other parties to  Loan Agreement that:  (i) other than as provided herein, the Assignor makes no representation or  warranty and assumes no responsibility with respect to any statements, warranties or  representations made in or in connection with the Loan Agreement or the execution, legality,  validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or any other  instrument or document furnished pursuant thereto; (ii) the Assignee confirms that it has  received a copy of the Loan Agreement, together with copies of such financial statements and  other documents and information as it has deemed appropriate to make its own credit analysis  and decision to enter into such Assignment and Acceptance; (iii) the Assignee will,  independently and without reliance upon the Administrative Agent, the Assignor or any other  Lender party to the Loan Agreement 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 Agreement; (iv) the Assignor and the Assignee confirm that the Assignee  is an Eligible Assignee; (v) the Assignee appoints and authorizes the Administrative Agent to  take such action as agent on its behalf and to exercise such powers under this Agreement as are  delegated to such agent by the terms hereof, together with such powers as are reasonably  incidental thereto; (vi) the Assignee agrees that it will perform in accordance with their terms all  

 

     B-2  154304283v7  of the obligations which by the terms of the Loan Agreement are required to be performed by it  as a Lender, including the confidentiality provisions of Article Twelve; and (vii) this Assignment  and Acceptance meets all other requirements for such an Assignment and Acceptance set forth in  Article Eleven of the Loan Agreement.  Following the execution of this Assignment and Acceptance by the Assignor and the Assignee, it  will be delivered to the Administrative Agent for acceptance.  The effective date of this  Assignment and Acceptance (the "Assignment Date") shall be the date of acceptance thereof by  the Administrative Agent, unless a later date is specified in Section 3 of Schedule 1 hereto.  The Assignor and the Assignee agree to reimburse the Administrative Agent for all reasonable  fees, costs and expenses (including reasonable fees and out-of-pocket expenses of counsel for the  Administrative Agent) incurred by the Administrative Agent in connection with this Assignment  and Acceptance.  Upon such acceptance by the Administrative Agent, the Assignee shall be a party to the Loan  Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and  obligations of a Lender thereunder, provided, that the Assignor shall, to the extent such rights  have been assigned by it under this Assignment and Acceptance, relinquish its assigned rights  and be released from its assigned obligations under the Loan Agreement (and, in the case of an  Assignment and Acceptance coving all or the remaining portion of an assigning Assignor's rights  and obligations under the Loan Agreement, Assignor shall cease to be a party thereto).  Upon such acceptance by the Administrative Agent, from and after the Assignment Date, the  Administrative Agent shall make, or cause to be made, all payments under the Loan Agreement  in respect of the interest assigned hereby (including, without limitation, all payments of  principal, interest and fees with respect thereto) to the Assignee.  The Assignor and Assignee  shall make all appropriate adjustments in payments under the Loan Agreement for periods prior  to the Assignment Date directly between themselves.  THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND  CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  

 

     B-3  154304283v7  IN WITNESS WHEREOF, the Assignor and the Assignee have executed this  Assignment and Acceptance as of the __ day of ________, 20_  .  _______________, as Assignor  By:   ___________________________________  Name:   Title:  _______________, as Assignee  By:   ___________________________________  Name:   Title:  

 

     B-4  154304283v7  Schedule 1  to  Assignment and Acceptance  Dated _________, 20_    Section 1.   Percentage Interest: ________%  Section 2.   Assignee's Commitment:   $_____________  Aggregate Lender Advances Owing to the  Assignee: $_____________  Section 3.   Assignment Date:  _____________, 20_    

 

     C-1  154304283v7  EXHIBIT C  CREDIT AND COLLECTION POLICY  [On file with the Administrative Agent]    

 

     D-1  154304283v7  EXHIBIT D  FORM OF POWER OF ATTORNEY  This Power of Attorney (this "Power of Attorney") is executed and delivered by DFC  Business Services, LLC ("Grantor") to Mizuho Bank, Ltd., as Administrative Agent  ("Attorney"), pursuant to (i) the Loan Agreement, dated as of November 1, 2022 (as amended,  restated, supplemented or otherwise modified from time to time, the "Loan Agreement"), among  Grantor, as borrower (in such capacity, the "Borrower"), Driveway Finance Corporation, as  servicer and collateral custodian, the Lenders from time to time party thereto, the Agents for the  Lender Groups from time to time parties thereto, and Mizuho Bank, Ltd., as administrative agent  and account bank, and (ii) the other Basic Documents.  Capitalized terms used herein that are not  otherwise defined shall have the meanings ascribed thereto in the Loan Agreement.  No person to whom this Power of Attorney is presented, as authority for Attorney to take  any action or actions contemplated hereby, shall inquire into or seek confirmation from Grantor  as to the authority of Attorney to take any action described below, or as to the existence of or  fulfillment of any condition to this Power of Attorney, which is intended to grant to Attorney  unconditionally the authority to take and perform the actions contemplated herein, and Grantor  irrevocably waives any right to commence any suit or action, in law or equity, against any person  or entity that acts in reliance upon or acknowledges the authority granted under this Power of  Attorney.  The power of attorney granted hereby is coupled with an interest and may not be  revoked or canceled by Grantor until all Aggregate Unpaids have been indefeasibly paid in full  and Attorney has provided its written consent thereto.  Grantor hereby irrevocably constitutes and appoints Attorney (and all officers, employees  or agents designated by Attorney), with full power of substitution, as its true and lawful attorney- in-fact with full irrevocable power and authority in its place and stead and in its name or in  Attorney's own name, from time to time in Attorney's discretion, to take any and all appropriate  action and to execute and deliver any and all documents and instruments that may be necessary  or desirable to accomplish the purposes of the Loan Agreement, and, without limiting the  generality of the foregoing, hereby grants to Attorney the power and right, on its behalf, without  notice to or assent by it, upon the occurrence and during the continuance of any Termination  Event, to do the following:  (a) exercise all rights and privileges of Grantor under the Purchase  Agreement (including each Purchase Agreement Supplement); (b) pay or discharge any taxes,  Liens or other encumbrances levied or placed on or threatened against Grantor or Grantor's  property; (c) defend any suit, action or proceeding brought against Grantor if Grantor does not  defend such suit, action or proceeding or if Attorney believes that it is not pursuing such defense  in a manner that will maximize the recovery to Attorney, and settle, compromise or adjust any  suit, action or proceeding described above and, in connection therewith, give such discharges or  releases as Attorney may deem appropriate; (d) file or prosecute any claim, litigation, suit or  proceeding in any court of competent jurisdiction or before any arbitrator, or take any other  action otherwise deemed appropriate by Attorney for the purpose of collecting any and all such  moneys due to Grantor whenever payable and to enforce any other right in respect of Grantor's  property; (e) sell, transfer, pledge, make any agreement with respect to or otherwise deal with,  any of Grantor's property, and execute, in connection with such sale or action, any endorsements,  

 

     D-2  154304283v7  assignments or other instruments of conveyance or transfer in connection therewith; and  (f) cause the certified public accountants then engaged by Grantor to prepare and deliver to  Attorney at any time and from time to time, promptly upon Attorney's request, any reports  required to be prepared by or on behalf of Grantor under the Loan Agreement or any other Basic  Document, all as though Attorney were the absolute owner of its property for all purposes, and to  do, at Attorney's option and Grantor's expense, at any time or from time to time, all acts and  other things that Attorney reasonably deems necessary to perfect, preserve, or realize upon its  property or assets and the Liens of the Administrative Agent, as agent for the Secured Parties  thereon, all as fully and effectively as it might do.  Grantor hereby ratifies, to the extent  permitted by law, all that said attorneys shall lawfully do or cause to be done by virtue hereof.  IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor as of this __  day of ________ 20__.  DFC BUSINESS SERVICES, LLC  By:   ___________________________________  Name:  Title:  Sworn to and subscribed before  me this __ day of ________, 20__    _____________________________________  Notary Public  [NOTARY SEAL]  

 

   E-1  154304283v7  EXHIBIT E  FORM OF TAKE-OUT RELEASE  Reference is hereby made to the Loan Agreement, dated as of November 1, 2022 (as  amended, restated, supplemented or otherwise modified from time to time, the "Loan  Agreement"), among DFC Business Services, LLC, as borrower (the "Borrower"), Driveway  Finance Corporation, as servicer (in such capacity, the "Servicer") and collateral custodian (in  such capacity, the "Collateral Custodian"), the lenders from time to time parties thereto, the  agents from time to time parties thereto and Mizuho Bank, Ltd., as the administrative agent (the  "Administrative Agent") and account bank.  Capitalized terms not defined herein shall have the  meaning given such terms in the Loan Agreement.  The Borrower and the Servicer hereby represent and warrant that each condition in the  Loan Agreement and each other Basic Document, to the consummation of the Take-out to which  this Take-out Release relates, has been satisfied, including but not limited to delivery of (i) the  executed Take-out Date Certificate, in substantially the form attached hereto as Annex 1 and  (i) the executed notice, in substantially the form attached hereto as Annex 2.   Upon deposit in the Collection Account of $___________ in accordance with  Section 2.12(a)(iv) of the Loan Agreement in immediately available funds, the Administrative  Agent hereby releases all of its right, title and interest, including its Lien, in and to the following:  (a) the Receivables to be transferred by the Borrower in the related  Take-out and described in Schedule I hereto (the "Take-out Receivables" and such  Schedule, the "Schedule of Take-out Receivables"), together with the related Contracts,  whether now existing or hereafter acquired, and any accounts or obligations evidenced  thereby, any guarantee thereof, all Collections related thereto, and all monies due  (including any payments made under any guarantee or similar credit enhancement with  respect to any such Take-out Receivables) to become due or received by any Person in  payment of any of the foregoing on or after the related Take-out Date;  (b) all of the Borrower's interest in the Financed Vehicles relating to the  Take-out Receivables (including repossessed vehicles) or in any document or writing  evidencing any security interest in any such Financed Vehicle and each security interest in  each such Financed Vehicle, whether now existing or hereafter acquired, including all  proceeds from any sale or other disposition of such Financed Vehicles;  (c) all Receivable Files and the Schedule of Take-out Receivables,  relating to the Take-out Receivables, whether now existing or hereafter acquired, and all  right, title and interest of the Borrower in and to the documents, agreements and  instruments included in such Receivable Files, including rights of recourse of the  Borrower against DFC and/or any Dealer with respect to the Take-out Receivables;  (d) all of the Borrower's interest in all Records, documents and writings  evidencing or related to the Take-out Receivables or the related Contracts;  

 

   E-2  154304283v7  (e) all of the Borrower's interest in all rights to payment under all  Insurance Policies with respect to a Financed Vehicle related to a Take-out Receivable,  including any monies collected from whatever source in connection with any default of an  Obligor with respect to such Financed Vehicle and any proceeds from claims or refunds of  premiums on any such Insurance Policy, whether now existing or hereafter acquired, and  all proceeds thereof;  (f) all of the Borrower's interest in all guaranties, indemnities,  warranties, insurance (and proceeds and premium refunds thereof) and other agreements  or arrangements of whatever character from time to time supporting or securing payment  of the Take-out Receivables, whether pursuant to the related Contracts or otherwise;  (g) all of the Borrower's interest in all rights to payment under all  service contracts and other contracts and agreements associated with the Take-out  Receivables and all of the Borrower's interest in all recourse rights against the related  dealer (excluding any rights in any dealer reserve and rights under the related Dealer  Agreement);  (h) Liens, guaranties and other encumbrances in favor of or assigned or  transferred to the Borrower in and to the Take-out Receivables, whether now existing or  hereafter acquired, and the related Financed Vehicles, whether now existing or hereafter  acquired;  (i) all, monies, deposits, funds, and instruments relating to the  foregoing and related to the Take-out Receivables;  (j) all of the Borrower's right, title and interest in and to the Purchase  Agreement (including each Purchase Agreement Supplement), relating to the Take-out  Receivables and remedies thereunder and the assignment to the Administrative Agent of  all UCC financing statements filed by the Borrower against DFC under or in connection  with the Purchase Agreement and relating to such Take-out Receivables; and  (k) all income and proceeds of the foregoing related to the Take-out  Receivables.  [The Servicer and the Borrower hereby direct the Collateral Custodian to deliver the  Receivable Files for the Take-out Receivables to __________________________________.]  

 

   E-3  154304283v7  Executed as of __________, 20_  .   DFC BUSINESS SERVICES, LLC,    as Borrower  By:  _____________________________________   Name:  Title:   DRIVEWAY FINANCE CORPORATION,    as Servicer and Collateral Custodian  By:  _____________________________________   Name:  Title:   MIZUHO BANK, LTD.,    as the Administrative Agent     By:  _____________________________________   Name:  Title:  

 

   E-4  154304283v7  ANNEX 1  DRIVEWAY FINANCE CORPORATION    TAKE-OUT DATE CERTIFICATE  PURSUANT TO SECTION 2.12(a)  OF THE LOAN AGREEMENT   Driveway Finance Corporation ("DFC"), as the servicer (the "Servicer"), delivers  this certificate pursuant to Section 2.12(a) of the Loan Agreement, dated as of November 1,  2022(as amended, restated, supplemented or otherwise modified from time to time, the "Loan  Agreement"), among DFC Business Services, LLC, as the borrower, the Servicer, DFC, as  collateral custodian, the lenders from time to time parties hereto, the agents from time to time  parties hereto and Mizuho Bank, Ltd., as the administrative agent and account bank, and hereby  certifies, as of the date hereof, the following:  (a) the Borrower has sufficient funds on the related Take-out Date to  effect the Take-out in accordance with the Loan Agreement (taking into account, to the  extent necessary, the proceeds of sales of the Collateral in the Take-out, if applicable);  (b) after giving effect of the Take-out, the release by the Administrative  Agent of the related Receivables on the Take-out Date and the transfer by the Borrower or  the related Receivables on the Take-out Date, (A) no Borrowing Base Deficiency exists,  (B) neither an Unmatured Termination Event, a Termination Event, a Servicer  Termination Event or an event that with notice or the passage of time, or both, would be a  Servicer Termination Event, has occurred or results from such Take-out, and (C) the  proportion of Delinquent Receivables and Defaulted Receivables that will remain subject  to the Loan Agreement shall be no higher after giving effect to such Take-out than prior to  such Take-out;  (c) the Borrower has delivered to the Administrative Agent a list  specifying all Contracts under which the Receivables not to be released pursuant to such  Take-out arose; and  (d) the Borrower has deposited into the Collection Account an amount  equal to all Unreimbursed Servicer Advances associated with the Receivables to be  released.  Capitalized terms used herein that are not otherwise defined shall have the meanings  ascribed thereto in the Loan Agreement.  

 

   E-5  154304283v7  IN WITNESS WHEREOF, the Servicer has caused this certificate to be executed on its  behalf this ___ day of _________, 20_  .  DRIVEWAY FINANCE CORPORATION  By:   ______________________________________  Name:  Title:  

 

   E-6  154304283v7  ANNEX 2  FORM OF NOTICE  Driveway Finance Corporation  150 N. Bartlett Street  Medford, Oregon 97501    __________, 20_    Mizuho Bank, Ltd.    as Administrative Agent, Account Bank and as Mizuho Agent  1271 Avenue of the Americas  New York, NY 10020  Attention: Securitized Products / David Krafchik    Re: DFC Business Services, LLC – Loan Agreement  Ladies and Gentlemen:  Reference is made to the Loan Agreement, dated as of November 1, 2022 (as amended,  restated, supplemented or otherwise modified from time to time, the "Loan Agreement"), among  DFC Business Services, LLC, as borrower (the "Borrower"), Driveway Finance Corporation, as  servicer and collateral custodian, the lenders from time to time parties thereto, the agents from  time to time parties thereto and Mizuho Bank, Ltd., as administrative agent (the "Administrative  Agent") and account bank.  Pursuant to Section 2.12(a)(i) of the Loan Agreement, the Borrower gives notice of its  intent to effect a Take-out on or about __________, 20_   (which date is no fewer than 10  Business Days after the date of delivery of this notice to the Administrative Agent).  Capitalized terms used herein that are not otherwise defined shall have the meanings  ascribed thereto in the Loan Agreement.  Very truly yours,  DFC BUSINESS SERVICES, LLC  By:   _____________________________________   Name:  Title:  

 

   E-7  154304283v7  Schedule I  to Take-out Release  SCHEDULE OF REMOVED RECEIVABLES  

 

     F-1  154304283v7  EXHIBIT F  FORM OF MONTHLY REPORT  [On File with the Administrative Agent]    

 

     G-1  154304283v7  EXHIBIT G  FORMS OF U.S. TAX COMPLIANCE CERTIFICATES  

 

     G-2  154304283v7  EXHIBIT G-1  [FORM OF]   U.S. TAX COMPLIANCE CERTIFICATE  (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)    Reference is hereby made to the Loan Agreement, dated as of November 1, 2022  (as amended, supplemented or otherwise modified from time to time, the "Loan Agreement"),  among DFC Business Services, LLC, as Borrower, Driveway Finance Corporation, as Servicer  and as Collateral Custodian, the Lenders from time to time parties thereto, the Agents from time  to time parties thereto, and Mizuho Bank, Ltd., as Administrative Agent and Account Bank.    Pursuant to the provisions of Section 2.14 of the Loan Agreement, the undersigned  hereby certifies that (i) it is the sole record and beneficial owner of the 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 and (iv) it is not a controlled foreign corporation related to the Borrower  as described in Section 881(c)(3)(C) of the Code.  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 or W-8BEN-E.  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 Loan Agreement and used  herein shall have the meanings given to them in the Loan Agreement.        [NAME OF LENDER]  By:    Name:     Title:    Date: ________ __, 20[  ]  

 

     G-3  154304283v7   EXHIBIT G-2  [FORM OF]   U.S. TAX COMPLIANCE CERTIFICATE  (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)    Reference is hereby made to the Loan Agreement, dated as of November 1, 2022  (as amended, supplemented or otherwise modified from time to time, the "Loan Agreement"),  among DFC Business Services, LLC, as Borrower, Driveway Finance Corporation, as Servicer  and as Collateral Custodian, the Lenders from time to time parties thereto, the Agents from time  to time parties thereto, and Mizuho Bank, Ltd., as Administrative Agent and Account Bank.    Pursuant to the provisions of Section 2.14 of the Loan 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, and (iv) it is not a controlled foreign corporation related to the Borrower  as described in Section 881(c)(3)(C) of the Code.  The undersigned has furnished its participating Lender with a certificate of its non- U.S. Person status on IRS Form W-8BEN or W-8BEN-E.  By executing this certificate, the  undersigned agrees that (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 Loan Agreement and used  herein shall have the meanings given to them in the Loan Agreement.      [NAME OF PARTICIPANT]  By:    Name:     Title:    Date: ________ __, 20[  ]  

 

     G-4  154304283v7  EXHIBIT G-3  [FORM OF]   U.S. TAX COMPLIANCE CERTIFICATE  (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)    Reference is hereby made to the Loan Agreement, dated as of November 1, 2022  (as amended, supplemented or otherwise modified from time to time, the "Loan Agreement"),  among DFC Business Services, LLC, as Borrower, Driveway Finance Corporation, as Servicer  and as Collateral Custodian, the Lenders from time to time parties thereto, the Agents from time  to time parties thereto, and Mizuho Bank, Ltd., as Administrative Agent and Account Bank.    Pursuant to the provisions of Section 2.14 of the Loan Agreement, the undersigned  hereby certifies that (i) it is the sole record owner of the participation in respect of which it is  providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners  of such participation, (iii) with respect such participation, neither the undersigned nor any of its  direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered  into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of  the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the  Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or  indirect partners/members is a controlled foreign corporation related to the Borrower as described  in Section 881(c)(3)(C) of the Code.   The undersigned has furnished its participating Lender with IRS Form W-8IMY  accompanied by one of the following forms from each of its partners/members that is claiming the  portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii) an IRS Form W- 8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from each of such  partner's/member's beneficial owners that is claiming the portfolio interest exemption.  By  executing this certificate, the undersigned agrees that (1) if the information provided on this  certificate changes, the undersigned shall promptly so inform such Lender 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 Loan Agreement and used  herein shall have the meanings given to them in the Loan Agreement.      [NAME OF PARTICIPANT]  By:    Name:    

 

     G-5  154304283v7   Title:    Date: ________ __, 20[  ]  

 

     G-6  154304283v7  EXHIBIT G-4  [FORM OF]   U.S. TAX COMPLIANCE CERTIFICATE  (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)    Reference is hereby made to the Loan Agreement, dated as of November 1, 2022  (as amended, supplemented or otherwise modified from time to time, the "Loan Agreement"),  among DFC Business Services, LLC, as Borrower, Driveway Finance Corporation, as Servicer  and as Collateral Custodian, the Lenders from time to time parties thereto, the Agents from time  to time parties thereto, and Mizuho Bank, Ltd., as Administrative Agent and Account Bank.    Pursuant to the provisions of Section 2.14 of the Loan Agreement, the undersigned  hereby certifies that (i) it is the sole record owner of the Loan(s) in respect of which it is providing  this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such  Loan(s), (iii) with respect to the extension of credit pursuant to this Loan Agreement or any other  Borrower Basic Document, neither the undersigned nor any of its direct or indirect  partners/members is a bank extending credit pursuant to a loan agreement entered into in the  ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code,  (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower  within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect  partners/members is a controlled foreign corporation related to the Borrower as described in  Section 881(c)(3)(C) of the Code.  The undersigned has furnished the Administrative Agent and the Borrower with  IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members  that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or W-8BEN-E or (ii)  an IRS Form W-8IMY accompanied by an IRS Form W-8BEN or IRS Form W-8BEN-E from  each of such partner's/member's beneficial owners that is claiming the portfolio interest exemption.   By executing this certificate, the undersigned agrees that (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 Loan Agreement and used  herein shall have the meanings given to them in the Loan Agreement.        

 

     G-7  154304283v7  [NAME OF LENDER]  By:    Name:     Title:    Date: ________ __, 20[  ]Document

Exhibit 10.1

Execution Version

FOURTH AMENDMENT TO AMENDED AND RESTATED 
CREDIT AGREEMENT

    THIS FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), is made and entered into as of October 24, 2022 (the “Effective Date”), by and among HAVERTY FURNITURE COMPANIES, INC., a Maryland corporation (“HFC”), HAVERTYS CREDIT SERVICES, INC., a Tennessee corporation  (“HCS” and, together with HFC, each, a “Borrower” and, collectively, the “Borrowers”), the financial institutions party hereto as lenders (the “Lenders”), and TRUIST BANK (as successor by merger to SunTrust Bank), in its capacity as administrative agent for the Lenders (the “Administrative Agent”) and as issuing bank (the “Issuing Bank”).

W I T N E S S E T H:

WHEREAS, the Borrowers, the Guarantors, the Lenders and the Administrative Agent are parties to a certain Amended and Restated Credit Agreement, dated as of September 1, 2011 (as amended by that certain First Amendment to Amended and Restated Credit Agreement, dated as of March 31, 2016, that certain Second Amendment to Amended and Restated Credit Agreement, dated as of September 27, 2019, that certain Third Amendment to Amended and Restated Credit Agreement, dated as of May 15, 2020,  and as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement), pursuant to which the Lenders have made certain financial accommodations available to the Borrowers; 
WHEREAS, the Borrowers have requested that the Lenders increase the Revolving Loan Commitments to $80,000,000 and amend certain other provisions of the Credit Agreement and, subject to the terms and conditions hereof, the Lenders are willing to do so; 
NOW, THEREFORE, for good and valuable consideration, the sufficiency and receipt of all of which are acknowledged, the Borrowers, the Lenders and the Administrative Agent agree as follows::

1.Increase in the Revolving Loan Commitments.
(a)On the date hereof, on the terms and subject to the conditions set forth herein and in the Credit Agreement, the Lenders hereby agree that the Revolving Loan Commitments are hereby increased from $60,000,000 to $80,000,000.  After giving effect to the transactions contemplated by this Section 1, the Revolving Loan Commitments of the Lenders shall be as set forth on the Schedule I attached hereto. The additional commitments provided hereunder shall constitute Revolving Loan Commitments for all purposes of the Credit Agreement and the other Loan Documents, and shall, except as otherwise expressly set forth in the Credit Agreement, have terms that are identical to the terms of the Revolving Loan Commitments as set forth in the Credit Agreement. For the avoidance of doubt, the holders of the Revolving Loan Commitments provided hereunder shall be entitled to the benefits inuring to the holders of the existing Revolving Loan Commitments under the Credit Agreement.
2.Amendment to Credit Agreement.  
(b)As of the Effective Date, the Credit Agreement (excluding all Exhibits and Schedules thereto) is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the underlined text (indicated textually in the same manner as the following example: underlined text) as set forth in the Credit Agreement attached hereto as Annex I;
(c)Exhibits A through J of the Credit Agreement are amended by replacing such exhibits with Exhibits A through J attached hereto; and
41201242v10

(d)Schedules I, 5.1(c)-1, 5.1(c)-2, 5.1(d), 5.1(h), 5.1(i), 5.1(j), 5.1(m), 5.1(n), 5.1(o), 5.1(p), 5.1(x)-1, 5.1(x)-2, 5.1(y), 6.11, 6.15, and 8.1 of the Credit Agreement is amended by replacing such schedules with Schedule I though 8.1 attached hereto.

3.Conditions to Effectiveness of this Amendment.  Notwithstanding any other provision of this Amendment and without affecting in any manner the rights of the Lenders hereunder, it is understood and agreed that this Amendment shall not become effective, and the Borrowers shall have no rights under this Amendment, until: 

(e)the Administrative Agent shall have received executed counterparts to this Fourth Amendment from the Borrowers, the Lenders, the Swingline Lender and the Issuing Bank;

(f)the Administrative Agent shall have received a duly executed Revolving Loan Note replacing the existing Revolving Loan Note in the full amount of the Revolving Loan Commitments after giving effect to this Amendment; 

(g)the Administrative Agent shall have received a duly completed and executed Secretary Certificate, including a certificate of incumbency with respect to each Authorized Signatory of the Borrowers, together with appropriate attachments which shall include, without limitation, the following: (A) the certificate of incorporation of the Borrowers certified as of a recent date to be true, complete and correct by the Secretary of State of the State of each Borrower’s incorporation, (B) a true, complete and correct copy of the by-laws of each Borrower, (C) a true, complete and correct copy of the resolutions of each Borrower authorizing the execution, delivery and performance by such Borrower of this Amendment, and (D) certificates of good standing from the State of incorporation of each Borrower and each other jurisdiction where such Borrower is required to be qualified to do business as a foreign corporation and a failure to be so qualified could reasonably be expected to have a Materially Adverse Effect;

(h)the Administrative Agent shall have received a favorable written opinion of counsel to the Borrowers, addressed to the Administrative Agent, the Issuing Bank and each of the Lenders, and covering such matters relating to the Borrowers, the Amendment and the transactions contemplated herein as the Administrative Agent or the Lenders shall reasonably request; 

(i)the Administrative Agent shall have received reimbursement or payment of costs and expenses incurred in connection with this Amendment or the Credit Agreement to the extent required under Section 11.2 of the Credit Agreement (including reasonable fees, charges and disbursements of King & Spalding LLP, counsel to the Administrative Agent to the extent invoiced); and

(j)the Administrative Agent shall have received a letter designating the Principal Disbursement Account executed by the Administrative Borrower.

4.Representations and Warranties.  To induce the Lenders and the Administrative Agent to enter into this Amendment, each Credit Party hereby represents and warrants to the Lenders and the Administrative Agent: 

(a)    Each of the Borrowers and each of its Subsidiaries (i) is duly organized, validly existing and in good standing as a corporation, partnership or limited liability company under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to carry on its business as now conducted, and (iii) is duly qualified to do business, and is in good standing, in each jurisdiction where such qualification is required, except where a failure to be so qualified would not reasonably be expected to result in a Material Adverse Effect;
(b)    The execution, delivery and performance by each Credit Party of this Amendment, the Credit Agreement, as amended hereby, and the other Loan Documents to which it is a party are within such Credit Party’s organizational powers and have been duly authorized by all necessary organizational, and if required, shareholder, partner or member action; 

(c)    The execution, delivery and performance by the Borrowers of this Amendment, and by each Credit Party of the other Loan Documents to which it is a party (i) do not require any consent or approval of, registration or filing with, or any action by, any Governmental Authority, except those as have been obtained or made and are in full force and effect, (ii) will not violate any Requirements of Law applicable to either of the Borrowers or any of such Borrower’s Subsidiaries or any judgment, order or ruling of any Governmental Authority and (iii) will not result in or require the creation or imposition of any Lien upon or with any Credit Party except Permitted Liens; 
(d)    This Amendment has been duly executed and delivered for the benefit of or on behalf of each Credit Party and constitutes a legal, valid and binding obligation of each Credit Party, enforceable against such Credit Party in accordance with its terms except as the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights and remedies in general;
(e)    After giving effect to this Amendment, the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects, and no Default or Event of Default has occurred and is continuing as of the date hereof. Without limiting the foregoing, the Credit Parties have complied with the requirements of (i) Section 7.6(a) of the Credit Agreement, (ii) Section 6.06 of the Security Agreement and (iii) Section 6.09(f) of the Security Agreement; 
(f)    Since the Third Amendment Date, no Credit Party or any Subsidiary of any Credit Party has (i) formed or acquired any direct or indirect Subsidiary or (ii) opened or acquired any deposit account, disbursement account or security account other than any Excluded Account and accounts identified on Schedule 6.15 of the Credit Agreement; and 
(g)    There is no litigation, legal or administrative proceeding, investigation, or other action of any nature pending or, to the knowledge of the Credit Parties, threatened against or affecting any Credit Party, any Subsidiary of any Credit Party or any of their respective properties that could reasonably be expected to have a Material Adverse Effect, except as disclosed in the 10K filed by the Borrowers with the Securities and Exchange Commission on March 1, 2022. 
5.Effect of Amendment.  Except as set forth expressly herein, all terms of the Credit Agreement, as amended hereby, and the other Loan Documents shall be and remain in full force and effect and shall constitute the legal, valid, binding and enforceable obligations of the Borrowers to the Lenders and the Administrative Agent.  The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders under the Credit Agreement, nor constitute a waiver of any provision of the Credit Agreement.  This Amendment shall constitute a Loan Document for all purposes of the Credit Agreement.
6.Governing Law.   This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of Georgia and all applicable federal laws of the United States of America.
7.No Novation.  This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Credit Agreement or an accord and satisfaction in regard thereto.
8.Costs and Expenses.  The Borrowers agree to pay on demand all reasonable, out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and out-of-pocket expenses of outside counsel for the Administrative Agent with respect thereto.
9.Counterparts.  This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, each of which shall be deemed an original and all of which, taken together, shall be deemed to constitute one and the same instrument.  Delivery of an executed counterpart of this Amendment by facsimile transmission or by electronic mail in pdf form shall be as effective as delivery of a manually executed counterpart hereof. Each party agrees that the electronic signatures, whether digital or encrypted, of the parties included in this Amendment are intended to authenticate this 
3

writing and to have the same force and effect as manual signatures.  Electronic signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.
10.Binding Nature.  This Amendment shall be binding upon and inure to the benefit of the parties hereto, their respective successors, successors-in-titles, and assigns.
11.Entire Understanding.  This Amendment sets forth the entire understanding of the parties with respect to the matters set forth herein, and shall supersede any prior negotiations or agreements, whether written or oral, with respect thereto.
12.Reaffirmations and Acknowledgments.  

    (a)    Reaffirmation.  Each Borrower ratifies and confirms the terms of the Credit Agreement as amended hereby and all promissory notes issued thereunder.  Each Borrower acknowledges that, notwithstanding anything to the contrary contained herein or in any other document evidencing any indebtedness of the Borrowers to the Lenders or any other obligation of the Borrowers, or any actions now or hereafter taken by the Lenders with respect to any obligation of the Borrowers, the Credit Agreement (i) is and shall continue to be a primary obligation of the Borrowers, and (ii) is and shall continue to be in full force and effect in accordance with its terms.  

    (b)    Acknowledgment of Perfection of Security Interest. Each Borrower hereby acknowledges that, as of the date hereof, the security interests and liens granted to the Administrative Agent and the Lenders under the Credit Agreement and the other Loan Documents are in full force and effect, are properly perfected and are enforceable in accordance with the terms of the Credit Agreement and the other Loan Documents. 

[Signature Pages To Follow]

    IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed, under seal in the case of the Borrowers, by their respective authorized officers as of the day and year first above written.

                    BORROWERS:

                    HAVERTY FURNITURE COMPANIES, INC.

                    By: _______________________________
Name:  Richard Hare
Title:  Executive Vice President and 
           Chief Financial Officer

    HAVERTYS CREDIT SERVICES, INC.

    By: _______________________________
                    Name:  Richard Hare    
                    Title:  President        

[Signature Page to Fourth Amendment to Amended and Restated Credit Agreement]

                        
TRUIST BANK (as successor by merger to SunTrust Bank), as Administrative Agent, as Issuing Bank and as Lender

By                            
Name:
Title:

[Signature Page to Fourth Amendment to Amended and Restated Credit Agreement]

Execution Version
Annex I to Fourth Amendment to 
Amended and Restated Credit Agreement

AMENDED AND RESTATED CREDIT AGREEMENT

by and among

HAVERTY FURNITURE COMPANIES, INC. and
HAVERTYS CREDIT SERVICES, INC.,
as the Borrowers,

The Persons party hereto as the Guarantors,

The financial institutions party hereto as the Lenders, 

SUNTRUSTTRUIST BANK (as successor by merger to SunTrust Bank),
as the Issuing Bank,

SUNTRUSTTRUIST BANK (as successor by merger to SunTrust Bank),
as the Administrative Agent,

and 

SUNTRUST ROBINSON HUMPHREY, INC.
TRUIST SECURITIES, INC. (as successor by merger to SunTrust Robinson Humphrey, Inc.),
as Lead Arranger

September 1, 2011

INDEX
Page
ARTICLE 1.      DEFINITIONS, ACCOUNTING PRINCIPLES AND OTHER INTERPRETIVE MATTERS    1
Section 1.1    Definitions    1
Section 1.2    Accounting Principles.    3235
Section 1.3    Other Interpretive Matters    3236
Section 1.4    Amendment and Restatement; No Novation.    3236
Section 1.5    References in Loan Documents.    3337
Section 1.6    Liquidation of Former Borrowers    3337
ARTICLE 2.      THE LOANS AND THE LETTERS OF CREDIT    3438
Section 2.1    Extension of Credit    3438
Section 2.2    Manner of Borrowing and Disbursement of Loans    3741
Section 2.3    Interest    4044
Section 2.4    Fees    4145
Section 2.5    Prepayment/Reduction of Commitment    4246
Section 2.6    Repayment    4348
Section 2.7    Notes; Loan Accounts    4448
Section 2.8    Manner of Payment    4548
Section 2.9    Reimbursement    4549
Section 2.10    Pro Rata Treatment    4649
Section 2.11    Application of Payments    4650
Section 2.12    Use of Proceeds    4852
Section 2.13    All Obligations to Constitute One Obligation    4852
Section 2.14    Maximum Rate of Interest    4852
Section 2.15    Letters of Credit    4953
Section 2.16    Bank Products    5256
Section 2.17    Increase of Commitments; Additional Lenders    5256
Section 2.18    Taxes    5458
Section 2.19    Defaulting Lenders    5761
ARTICLE 3.      GUARANTY    5962
Section 3.1    Guaranty    5962
Section 3.2    Special Provisions Applicable to Subsidiary Credit Parties    6266
ARTICLE 4.      CONDITIONS PRECEDENT    6266
Section 4.1    Conditions Precedent to Effectiveness    6266
Section 4.2    Conditions Precedent to Each Advance    6468
Section 4.3    Conditions Precedent to Each Letter of Credit    6468
ARTICLE 5.      REPRESENTATIONS AND WARRANTIES    6569
Section 5.1    General Representations and Warranties    6569
Section 5.2    Representations and Warranties Relating to Eligible Credit Card Receivables    7276
Section 5.3    Representations and Warranties Relating to Inventory    7276
Section 5.4    Survival of Representations and Warranties.    7276
ARTICLE 6.      GENERAL COVENANTS    7277
Section 6.1    Preservation of Existence and Similar Matters    7277
Section 6.2    Compliance with Applicable Law    7377
Section 6.3    Maintenance of Properties    7377
Section 6.4    Accounting Methods and Financial Records    7377
Section 6.5    Insurance    7377
Section 6.6    Payment of Taxes and Claims    7478
Section 6.7    Visits and Inspections    7478
Section 6.8    Intentionally Reserved    7579
i

Section 6.9    ERISA    7579
Section 6.10    Lien Perfection    7579
Section 6.11    Location of Collateral    7579
Section 6.12    Protection of Collateral    7580
Section 6.13    Assignments and Records of Accounts    7680
Section 6.14    Administration of Accounts    7680
Section 6.15    Cash Management System    7681
Section 6.16    Further Assurances    7882
Section 6.17    Broker’s Claims    7883
Section 6.18    Indemnity    7883
Section 6.19    Environmental Matters    7984
Section 6.20    Formation of Subsidiaries    7984
Section 6.21    Maintenance of Intellectual Property    8084
Section 6.22    Compliance with Regulation T, Regulation U and Regulation X    8085
Section 6.23    Intellectual Property Pledge    8085
Section 6.24    Post Closing    85
ARTICLE 7.      INFORMATION COVENANTS    8085
Section 7.1    Monthly and Quarterly Financial Statements and Information    8186
Section 7.2    Annual Financial Statements and Information; Opinion of Accountants    8287
Section 7.3    Compliance Certificates    8287
Section 7.4    Access to Accountants    8287
Section 7.5    Additional Reports    8288
Section 7.6    Notice of Litigation and Other Matters    8489
ARTICLE 8.      NEGATIVE COVENANTS    8590
Section 8.1    Funded Debt    8590
Section 8.2    Guaranties    8691
Section 8.3    Liens    8691
Section 8.4    Restricted Payments    8791
Section 8.5    Investments    8792
Section 8.6    Affiliate Transactions    8792
Section 8.7    Liquidation; Change in Ownership, Name, or Year; Disposition or Acquisition of Assets.    8792
Section 8.8    Fixed Charge Coverage Ratio    8994
Section 8.9    Conduct of Business    8994
Section 8.10    Sales and Leasebacks    8994
Section 8.11    Amendment and Waiver    8995
Section 8.12    ERISA Liability    9095
Section 8.13    Prepayments    9095
Section 8.14    Negative Pledge    9095
ARTICLE 9.      DEFAULT    9096
Section 9.1    Events of Default    9096
Section 9.2    Remedies    9398
ARTICLE 10.      THE ADMINISTRATIVE AGENT    9499
Section 10.1    Appointment and Authorization    9499
Section 10.2    Interest Holders    9499
Section 10.3    Consultation with Counsel    94100
Section 10.4    Documents    94100
Section 10.5    Administrative Agent and Affiliates    94100
Section 10.6    Responsibility of the Administrative Agent    94100
Section 10.7    Action by Administrative Agent    95100
Section 10.8    Notice of Default    95101
Section 10.9    Responsibility Disclaimed    95101
Section 10.10    Indemnification    96101
ii

Section 10.11    Credit Decision    96102
Section 10.12    Successor Administrative Agent    96102
Section 10.13    Withholding Tax    97103
Section 10.14    Administrative Agent May File Proofs of Claim    98103
Section 10.15    Collateral    98104
Section 10.16    Release of Collateral    98104
ARTICLE 11.      MISCELLANEOUS    99104
Section 11.1    Notices    99105
Section 11.2    Expenses    100106
Section 11.3    Waivers    101107
Section 11.4    Set-Off    101107
Section 11.5    Assignments; Participations    102108
Section 11.6    Counterparts    104110
Section 11.7    Under Seal; Governing Law    104110
Section 11.8    Severability    104110
Section 11.9    Headings    104110
Section 11.10    Source of Funds    104110
Section 11.11    Entire Agreement    104110
Section 11.12    Amendments and Waivers    104111
Section 11.13    Other Relationships    106112
Section 11.14    Pronouns    106112
Section 11.15    Disclosure    106112
Section 11.16    Replacement of Lender    106112
Section 11.17    Confidentiality    107113
Section 11.18    Revival and Reinstatement of Obligations    107113
Section 11.19    Electronic Transmissions    107113
Section 11.20    Mitigation of Losses; Sunset Provisions    108114
Section 11.21    Reaffirmation of Liens and Perfection of Security Interest    108114
ARTICLE 12.      YIELD PROTECTION    108115
Section 12.1 Eurodollar Base Rate Determination    108 Inability to Determine Interest Rates; Benchmark Replacement Setting 115
Section 12.2    Illegality    109117
Section 12.3    Increased Costs    109117
Section 12.4    Effect On Other Advances    110118
Section 12.5    Capital Adequacy    110119
ARTICLE 13.      JURISDICTION, VENUE AND WAIVER OF JURY TRIAL    111119
Section 13.1    Jurisdiction and Service of Process    111119
Section 13.2    Consent to Venue    112120
Section 13.3    Waiver of Jury Trial    112120
Section 13.4    The Administrative Borrower.    112120
Section 13.5    All Obligations to Constitute Joint and Several Obligations    112120

iii

EXHIBITS

Exhibit A    -    Form of Assignment and Acceptance
Exhibit B     -    Form of Borrowing Base Certificate
Exhibit C    -    Form of Compliance Certificate
Exhibit D    -    Form of Notice of Conversion/Continuation
Exhibit E     -    Form of Request for Advance
Exhibit F     -    Form of Request for Issuance of Letter of Credit
Exhibit G    -    Form of Revolving Loan Note
Exhibit H    -    Form of Swing Loan Note
Exhibit I    -    Form of Supplement
Exhibit J    -    Form of Notice of Requested Commitment Increase

SCHEDULES

Schedule I        -    Commitments
Schedule 1.1(a)        -    Cash Management Banks
Schedule 5.1(c)-1    -    Subsidiaries
Schedule 5.1(c)-2    -    Partnerships/Joint Ventures
Schedule 5.1(d)        -    Outstanding Capital Stock Ownership
Schedule 5.1(h)     -    Material Contracts
Schedule 5.1(i)        -    Labor Matters
Schedule 5.1(j)        -    Taxes
Schedule 5.1(m)    -    Investments/Guaranties 
Schedule 5.1(n)     -    Liabilities; Litigation
Schedule 5.1(o)        -    ERISA
Schedule 5.1(p)        -    Intellectual Property; Licenses and Certifications
Schedule 5.1(v)     -    Insurance
Schedule 5.1(x)-1     -    Leased Real Property
Schedule 5.1(x)-2     -    Owned Real Property
Schedule 5.1(y)     -    Environmental Matters
Schedule 6.11         -    Location of Collateral
Schedule 6.15        -    Bank and Investment Accounts
Schedule 8.1         -    Funded Debt
Schedule 8.6         -    Affiliate Transactions
iv

AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of September 1, 2011, is by and among HAVERTY FURNITURE COMPANIES, INC., a Maryland corporation (“HFC”),  HAVERTYS CREDIT SERVICES, INC., a Tennessee corporation (“HCS” and, together with HFC, each, a “Borrower” and, collectively, the “Borrowers”), the Persons party hereto from time to time as Guarantors, the financial institutions party hereto from time to time as Lenders, SUNTRUSTTRUIST BANK, as successor by merger to SunTrust Bank, as the Issuing Bank, and SUNTRUSTTRUIST BANK, as successor by merger to SunTrust Bank, as the Administrative Agent.
W I T N E S S E T H:
WHEREAS, the Borrowers, the Guarantors, certain of the Lenders, the Issuing Bank and the Administrative Agent are parties to that certain Amended and Restated Credit Agreement, dated as of December 22September 1, 20082011 (as heretofore amended, restated, supplemented or modified from time to time, the “Existing Credit Agreement”);
WHEREAS, the Borrowers have requested certain amendments to the Existing Credit Agreement, as more fully set forth herein; and
WHEREAS, subject to the terms and conditions of this Agreement, the Lenders are willing to agree to such amendments, and the parties hereto have agreed to effect such amendments through an amendment and restatement of the Existing Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree that the Existing Credit Agreement is amended and restated in its entirety as follows:
Article 1.

DEFINITIONS, ACCOUNTING PRINCIPLES AND
OTHER INTERPRETIVE MATTERS
Section 1.aDefinitions.  For the purposes of this Agreement:
“2020 Sale-Leaseback Transaction” shall mean the Sale-Leaseback Transaction with respect to the Borrowers’ properties located at 770 Gateway Blvd, Coppell TX 75019, 7100 Havertys Way, Lakeland, FL 33805 and 1720 Port Walthall, Colonial Hts, VA 23834, for an aggregate sale price of $70,000,000.
“Account Debtor” shall mean any Person who is obligated to make payments in respect of an Account.
“Accounts” shall mean all “accounts”, as such term is defined in the UCC, of each Credit Party whether now existing or hereafter created or arising, including, without limitation, (a) all accounts receivable, other receivables, book debts and other forms of obligations (other than forms of obligations evidenced by chattel paper (as defined in the UCC) or instruments (as defined in the UCC)) (including any such obligations that may be characterized as an account or contract right under the UCC), (b) all of each Credit Party’s rights in, to and under all purchase orders or receipts for goods or services, (c) all of 
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each Credit Party’s rights to any goods represented by any of the foregoing (including unpaid sellers’ rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), (d) all rights to payment due to a Credit Party for property sold, leased, licensed, assigned or otherwise disposed of, for a policy of insurance issued or to be issued, for a secondary obligation incurred or to be incurred, for energy provided or to be provided, for the use or hire of a vessel under a charter or other contract, arising out of the use of a credit card or charge card, or for services rendered or to be rendered by such Credit Party or in connection with any other transaction (whether or not yet earned by performance on the part of such Credit Party), (e) all health care insurance receivables and (f) all collateral security of any kind given by any Account Debtor or any other Person with respect to any of the foregoing.
“ACH Transactions” shall mean any cash management or related services including the automated clearinghouse transfer of funds by the Administrative Agent or any Lender (or any Affiliate of the Administrative Agent or such Lender) for the account of the Credit Parties pursuant to agreement or overdrafts.
“Adjusted Term SOFR” shall mean, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) the Term SOFR Adjustment; provided, that if Adjusted Term SOFR as so determined shall ever be less than the Floor, then Adjusted Term SOFR shall be deemed to be the Floor.
“Administrative Agent” shall mean SunTrustTruist Bank, acting as administrative agent for the Lender Group, and any successor Administrative Agent appointed pursuant to Section 10.12.
“Administrative Agent Indemnified Person” shall have the meaning specified in Section 10.10.
“Administrative Agent’s Office” shall mean the office of the Administrative Agent located at 303 Peachtree Street NE, 23rd Floor, Atlanta, Georgia 30308, Attention: Group Portfolio Manager, or such other office as may be designated by the Administrative Agent pursuant to the provisions of Section 11.1.
“Administrative Borrower” shall have the meaning specified in Section 13.4.
“Administrative Questionnaire” shall mean a questionnaire in form and substance satisfactory to the Administrative Agent.
“Advance” or “Advances” shall mean amounts of the Loans advanced by the Lenders to, or on behalf of, the Borrowers pursuant to Section 2.2 on the occasion of any borrowing and shall include, without limitation, all Agent Advances and Swing Loans.
“Affiliate” shall mean, with respect to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, or that is a director, officer, manager or partner of such Person.  For purposes of this definition, “control”, when used with respect to any Person, includes, without limitation, the direct or indirect beneficial ownership of fiveten percent (510%) or more of the outstanding Equity Interests of such Person or the power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
“Agent Advances” shall have the meaning specified in Section 2.1(e).
“Aggregate Commitment Ratio” shall mean, with respect to any Lender, the ratio, expressed as a percentage, of (a) the unutilized portion of the Revolving Loan Commitment plus Loans (other than 
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Swing Loans and Agent Advances) outstanding plus participation interests in Letter of Credit Obligations, Swing Loans, Overadvances and Agent Advances outstanding of such Lender, divided by (b) the sum of the aggregate unutilized Revolving Loan Commitment plus Loans (other than Swing Loans and Agent Advances) outstanding plus participation interests in Letter of Credit Obligations, Swing Loans, Overadvances and Agent Advances of all Lenders, which, as of the AgreementFourth Amendment Date, are set forth (together with Dollar amounts thereof) on Schedule I.
 “Aggregate Revolving Credit Obligations” shall mean, as of any particular time, the sum of (a) the aggregate principal amount of all Revolving Loans then outstanding, plus (b) the aggregate principal amount of all Swing Loans then outstanding, plus (c) the aggregate principal amount of all Agent Advances then outstanding, plus (d) the aggregate principal amount of all Overadvances then outstanding, plus (e) the aggregate amount of all Letter of Credit Obligations then outstanding.
“Aggregate Revolving Loan Commitments” shall mean, as of any particular time, the aggregate committed principal amount of all Revolving Loan Commitments at such time, including any increase in Revolving Loan Commitments made pursuant to Section 2.17(a) hereof. On the ThirdFourth Amendment Date, the Aggregate Revolving Loan Commitments are $60,000,00080,000,000.
“Agreement” shall mean this Amended and Restated Credit Agreement, together with all Exhibits and Schedules hereto.
“Agreement Date” shall mean September 1, 2011.
“Applicable Law” shall mean, in respect of any Person, all provisions of constitutions, statutes, rules, regulations, and orders of governmental bodies or regulatory agencies applicable, whether by law or by virtue of contract, to such Person, and all orders and decrees of all courts and arbitrators in proceedings or actions to which the Person in question is a party or by which it is bound.
“Applicable Lending Office” shall mean, for each Lender, the “Lending Office” of such Lender (or an Affiliate of such Lender) designated in the Administrative Questionnaire submitted by such Lender or such other office of such Lender (or such Affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Administrative Borrower as the office by which its Loans are to be made and maintained.
“Applicable Margin” shall mean, with respect to each Advance and issuance of Letters of Credit, a per annum rate of interest as set forth in the pricing grid below (the “Pricing Grid”) determined by the Administrative Agent by reference to the applicable Average Availability for the fiscal month most recently ended, effective as of the second Business Day after the Borrowing Base Certificate required pursuant to Section 7.5(a) is delivered by the Administrative Borrower to the Administrative Agent for such fiscal month most recently ended:
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	Level	Average Availability	Applicable Margin
	I	Less than $30,000,000	1.50%1.375%

	II	Greater than or equal to $30,000,000	1.25%1.125%

Notwithstanding the foregoing, the Applicable Margin from the FirstFourth Amendment Date through (and including) the date two (2) Business Days after the delivery of the Borrowing Base Certificate required pursuant to Section 7.5(a) for the fiscal month ending on MarchOctober 31, 20162022 shall be at Level II as set forth in the Pricing Grid.
In the event that the Administrative Borrower fails to timely provide any Borrowing Base Certificate in accordance with the terms of Section 7.5(a), and without prejudice to any additional rights under Section 9.2, as of the second Business Day after delivery of such Borrowing Base Certificate was due until the date two (2) Business Days following the date such Borrowing Base Certificate was delivered, the Applicable Margin shall be at Level I as set forth in the Pricing Grid.  
In the event that the information contained in any Borrowing Base Certificate is shown to be inaccurate, and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin based upon the Pricing Grid (the “Accurate Applicable Margin”) for any period that such Borrowing Base Certificate covered (an “Applicable Period”) than the Applicable Margin actually applied for such Applicable Period, then (i) the Administrative Borrower shall immediately deliver to the Administrative Agent a corrected Borrowing Base Certificate for such Applicable Period, (ii) the Applicable Margin shall be adjusted such that after giving effect to the corrected Borrowing Base Certificate the Applicable Margin shall be reset to the Accurate Applicable Margin based upon the Pricing Grid for such period and (iii) the Borrowers shall immediately deliver to the Administrative Agent full payment in respect of the accrued additional interest on the Advances and Letters of Credit as a result of such Accurate Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 2.11. 
Nothing contained in this definition shall limit the rights of the Administrative Agent and the other Lenders to exercise their rights under Section 2.3(b) or Section 9.2.
 “Approved Freight Handler” shall mean any Freight Handler that has delivered a Lien Acknowledgement Agreement in favor of the Administrative Agent, so long as such Lien Acknowledgement remains in full force and effect and the Administrative Agent has not received any notice of termination with respect thereto.
“Approved Fund” shall mean any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity that administers or manages a Lender.
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“Assignment and Acceptance” shall mean that certain form of Assignment and Acceptance attached hereto as Exhibit A, pursuant to which each Lender may, as further provided in Section 11.5, sell a portion of its Revolving Credit Exposure or Revolving Loan Commitment.
“Authorized Signatory” shall mean, with respect to any Credit Party, such senior personnel of such Credit Party as may be duly authorized and designated in writing to the Administrative Agent by such Credit Party to execute documents, agreements, and instruments on behalf of such Credit Party.  As used herein, any certificate or other document delivered (or deemed delivered) by an Authorized Signatory shall be delivered by such Authorized Signatory in his or her capacity as an officer, and not individually.
“Availability” shall mean, as of any date of determination, the amount (if any) by which (a) the lesser of (i) the Aggregate Revolving Loan Commitments, and (ii) the Borrowing Base as most recently reported by the Borrowers on or prior to such date of determination, exceeds (b) the Aggregate Revolving Credit Obligations on such date of determination.
“Available Letter of Credit Amount” shall mean, as of any particular time, an amount equal to the lesser of (a) the Letter of Credit Commitment at such time less the aggregate amount of all Letter of Credit Obligations then outstanding or (b) Availability at such time, to the extent in effect at such time of determination.
“Available Tenor” shall mean, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 12.1(e).
“Average Availability” shall mean for any period, an amount equal to the sum of the actual amount of Availability on each day during such period, as determined by the Administrative Agent, divided by the number of days in such period.
“Bank Product Obligations” of the Credit Parties means any and all obligations of the Credit Parties, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Bank Products.
“Bank Product Reserves” shall mean all reserves that the Administrative Agent, from time to time, establishes in its Permitted Discretion for Bank Products then provided or outstanding.
“Bank Products” shall mean any one or more of the following types of services or facilities extended to the Credit Parties by the Administrative Agent or any Lender (or any Affiliate of the Administrative Agent or such Lender):  (a) credit cards; (b) ACH Transactions; (c) cash management, including controlled disbursement services; and (d) the Lender Group Hedge Agreements. 
“Bank Products Documents” shall mean all agreements entered into from time to time by the Credit Parties in connection with any of the Bank Products and shall include the Lender Group Hedge Agreements.
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“Bankruptcy Code” shall mean the United States Bankruptcy Code (11 U.S.C. Section 101 et seq.), as amended and in effect from time to time, and any successor statute thereto.
“Base Rate” shall mean the higher of (i) the rate which the Administrative Agent announces from time to time as its prime lending rate, as in effect from time to time, (ii) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent (1/2%) per annum or (iii) the Eurodollar Rate determined on a daily basisAdjusted Term SOFR for a Eurodollar Advance Period of one (1) -month tenor in effect on such day plus 1.00% (any changes in such rates to be effective as of the date of any change in such rate). The Administrative Agent’s prime lending rate is a reference rate and does not necessarily represent the lowest or best rate of interest actually charged to any customer of the Administrative Agent.  The Administrative Agent may make commercial loans or other loans at rates of interest at, above, or below the Administrative Agent’s prime lending rate.
“Base Rate Advance” shall mean an Advance which the Administrative Borrower requests to be made as a Base Rate Advance or which is converted to a Base Rate Advance, in accordance with the provisions of Section 2.2.
“Base Rate Term SOFR Determination Day” shall have the meaning set forth in the definition of “Term SOFR”.
“Benchmark” shall mean, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” shall mean the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 12.1(b).
“Benchmark Replacement” shall mean with respect to any Benchmark Transition Event, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date:
(a)     the sum of (i) Daily Simple SOFR and (ii) 0.10% (10 basis points); or
(b)     the sum of: (i) the alternate benchmark rate that has been selected by the Administrative Agent and the Administrative Borrower giving due consideration to (A) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (B) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for Dollar-denominated syndicated credit facilities and (ii) the related Benchmark Replacement Adjustment.
If the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
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“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Administrative Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities. For the avoidance of doubt, the Benchmark Replacement described in clause (a) of the definition thereof is not an Unadjusted Benchmark Replacement.
“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark:
(a)    in the case of clause (a) or (b) of the definition of “Benchmark Transition Event”, the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(b)    in the case of clause (c) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) above with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a)     a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
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(b)     a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(c)     a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period” shall mean, the period (if any) (a) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 12.1 and (b) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 12.1.
“Blocked Account” shall have the meaning specified in Section 6.15.
“Blocked Account Agreement” shall mean any agreement executed by a depository bank or securities intermediary and the Administrative Agent, for the benefit of the Lender Group, and acknowledged and agreed to by the applicable Credit Party, in form acceptable to the Administrative Agent pursuant to which the Administrative Agent has a first priority perfected Lien in the subject amounts with full dominion and control over disbursements of funds from such accounts.
“Borrower” and “Borrowers” shall have the meanings specified in the preamble.
“Borrowing Base” shall mean, atas of any particular timedate of calculation, the sum of:
(a)    90% of the NOLV of Eligible Inventory, plus
(b)    90% of the book value of Eligible Credit Card Receivables, plus
(c)    100% of Qualified Cash; minus
(cd)    the Reserves;
provided, however, at the Borrowers’ election exercised by written notice to the Administrative Agent, the advance rate set forth in clause (a) above may be increased from 90% to 92.5% for a period not to exceed three (3) consecutive months in any twelve (12) consecutive month period.
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The Borrowing Base at any time shall be determined by reference to the most recent Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 7.5(a), as adjusted to give effect to Reserves that have been established from time to time following such delivery; provided that such Reserves shall not be established or changed except upon not less than three Business Days’ notice to the Administrative Borrower (during which period the Administrative Agent shall be available to discuss any such proposed Reserve or change with the Administrative Borrower and the Administrative Borrower may take such action as may be required so that the event, condition or matter that is the basis for such Reserve or change no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent; provided that during such period, no Borrowings shall be permitted against newly proposed Reserves); provided, further, that no such prior notice shall be required for changes to any Reserves during the continuance of any Event of Default to the extent such changes result solely by virtue of mathematical calculations of the amount of the Reserves in accordance with the methodology of calculation previously utilized.
“Borrowing Base Certificate” shall mean a certificate signed by an Authorized Signatory of the Administrative Borrower substantially in the form of Exhibit B.
“Business Day” shall mean any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of Georgia or is a day on which banking institutions located in such state are closed; provided that when used with reference to a Eurodollar Advance (including the making, continuing, prepaying or repaying of any Eurodollar Advance), the term “Business Day” shall also exclude any day in which banks are not open for dealings in deposits of Dollars on the London interbank market. 
“Capital Expenditures” shall mean, for any period, on a consolidated basis for the Credit Parties, the aggregate of all expenditures made by the Credit Parties during such period that, in conformity with GAAP, are required to be included in the capital expenditures line of the consolidated cash flows for the Credit Parties.
“Capitalized Lease Obligation” shall mean that portion of any obligation of a Person as lessee under a lease which at the time would be required to be capitalized on the balance sheet of such lessee in accordance with GAAP.
“Cash Collateralize” shall mean, in respect of any obligations, to provide and pledge (as a first priority perfected security interest) cash collateral for such obligations in Dollars with the Administrative Agent pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent (and “Cash Collateralized” and “Cash Collateralization” have the corresponding meanings).
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“Cash Equivalents” shall mean, collectively, (a) marketable, direct obligations of the US and its agencies maturing within three hundred sixty-five (365) days of the date of purchase, (b) commercial paper issued by corporations, each of which shall (i) have a consolidated net worth of at least $500,000,000, and (ii) mature within one hundred eighty (180) days from the date of the original issue thereof and is rated “P-1” or better by Moody’s or “A-1” or better by S&P, (c) certificates of deposit maturing within three hundred sixty-five (365) days of the date of purchase and issued by a US national or state bank having deposits totaling more than $500,000,000, and whose short-term debt is rated “P-1” or better by Moody’s or “A-1” or better by S&P, (d) up to $100,000 per institution and up to $1,000,000 in the aggregate in (i) short-term obligations issued by any local commercial bank or trust company located in those areas where any Borrower conducts its business, whose deposits are insured by the Federal Deposit Insurance Corporation, or (ii) commercial bank-insured money market funds, or any combination of the types of investments described in this clause (d), (e) certificates of deposit maturing more than three hundred sixty-five (365) days after the date of purchase but less than two (2) years after the date of purchase and issued by a US national or state bank having deposits totaling more than $500,000,000, and whose short-term debt is rated “P-1” or better by Moody’s or “A-1” or better by S&P; provided that the aggregate amount of all such certificates of deposit permitted under this clause (e) (excluding certificates of deposit held in accounts with a Lender) shall not at any time exceed $20,000,000 and (f) mutual funds investing solely in any one or more of the Cash Equivalents described in clauses (a) through (d) above or money market funds that (x) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, as amended, (y) are rated AAA by S&P and Aaa by Moody’s and (z) have portfolio assets of at least $5,000,000,000.
“Cash Management Bank” shall mean any Lender, any Affiliate of any Lender and any other bank or financial institution which is reasonably acceptable to the Administrative Agent.  Schedule 1.1(a) sets forth the Cash Management Banks as of the AgreementFourth Amendment Date.
“Change in Control” shall mean the occurrence of one or more of the following events: (a) any sale, lease, exchange or other transfer (in a single transaction or a series of related transactions) of all or substantially all of the assets of the Administrative Borrower to any Person or “group” (within the meaning of the Exchange Act and the rules promulgated thereunder by the Securities and Exchange Commission as in effect on the date hereof),  (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or “group” (within the meaning of the Exchange Act and the rules promulgated thereunder by the Securities and Exchange Commission as in effect on the date hereof) acting in concert (other than by Permitted Class A Shareholders) acquiring beneficial ownership, of 30% or more of the outstanding shares of the Class A Common Stock of the Administrative Borrower; or (c) during any period of twenty-four (24) consecutive months, a majority of the members of the board of directors of the Administrative Borrower cease to be composed of individuals (A) who were members of the board of directors or other equivalent governing body of the Administrative Borrower on the first day of such period, (B) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (A) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (C) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (A) and (B) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.
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“Change in Law” shall mean (i) the adoption of any applicable law, rule or regulation after the date of this Agreement, (ii) any change in any applicable law, rule or regulation, or any change in the interpretation, implementation or application thereof, by any Governmental Authority after the date of this Agreement, or (iii) compliance by any Lender (or its Applicable Lending Office) or the Issuing Bank (or, for purposes of Section 12.3(b), by the Parent Company of such Lender or the Issuing Bank, if applicable) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that for purposes of this Agreement, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Class A Common Stock” shall mean all issued and outstanding Class A common stock of the Administrative Borrower.
“Class A Shareholders” shall mean the Persons that own the Class A Common Stock on the Agreement Date, together with their spouses and direct descendants who acquire shares of Class A Common Stock by sale, transfer or gift.
“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time.
“Collateral” shall mean all property pledged as collateral security for the Obligations pursuant to the Security Documents.
“Collateral Access Agreement” shall mean any agreement of any lessor, warehouseman, bailee, processor, consignee or other Person in possession of, having a Lien upon or having rights or interests in, any of the Collateral in favor of the Administrative Agent, for the benefit of the Lender Group, in form and substance reasonably satisfactory to the Administrative Agent, waiving or subordinating Liens or certain other rights or interests such Person may hold in regard to the property of any of the Credit Parties and providing the Administrative Agent access to its Collateral.
“Commercial Letter of Credit” shall mean a documentary Letter of Credit issued by the Issuing Bank in respect of the purchase of goods or services by any Credit Party.
“Commitment Increase” shall have the meaning specified in Section 2.17(a).
“Commitment Increase Cap” shall have the meaning specified in Section 2.17(a).
“Commitments” shall mean the Revolving Loan Commitment and the Letter of Credit Commitment. 
“Compliance Certificate” shall mean a certificate signed by an Authorized Signatory of the Administrative Borrower substantially in the form of Exhibit C.
“Concentration Account” shall mean each master concentration account owned or maintained by the Credit Parties into which amounts deposited by the Credit Parties in other deposit accounts are swept, together with all cash and other funds on deposit therein.
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“Confidential Information” shall have the meaning specified in Section 11.17.
“Conforming Changes” shall mean, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate”. the definition of “Business Day”, the definition of “US Government Securities Business Day”, the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 2.9 and other technical, administrative or operational matters) that the Administrative Agent in consultation with the Administrative Borrower decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines in consultation with the Administrative Borrower that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Control Account Agreement” shall mean any agreement executed by a depository bank and the Administrative Agent, for the benefit of the Lender Group, and acknowledged and agreed to by the applicable Credit Party, in form acceptable to the Administrative Agent in its reasonable discretion.
“Credit Card Issuer” shall mean any Person (other than a Credit Party) who issues or whose members issue credit cards, including, without limitation, MasterCard or VISA bank credit or debit cards or other bank credit or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc. or Visa International and American Express, Discover, Diners Club, Carte Blanche and other non-bank credit or debit cards, including, without limitation, credit or debit cards issued by or through American Express Travel Related Services Company, Inc., Novus Services, Inc., or any proprietary card issuer reasonably acceptable to the Administrative Agent.
“Credit Card Processor” shall mean any servicing or processing agent or any factor or financial intermediary who facilitates, services, processes or manages the credit authorization, billing transfer and/or payment procedures with respect to any Credit Party’s sales transactions involving credit card or debit card purchases by customers using credit cards or debit cards issued by any Credit Card Issuer.
“Credit Card Receivables” shall mean each Account together with all income, payments and proceeds thereof, owed by a Credit Card Issuer or Credit Card Processor to a Credit Party resulting from charges by a customer of a Credit Party on credit or debit cards issued or processed by such Credit Card Issuer or Credit Card Processor in connection with the sale of goods by Credit Party, or services performed by a Credit Party, in each case in the ordinary course of its business. 
“Credit Parties” shall mean, collectively, the Borrowers and the Guarantors; and “Credit Party” shall mean any one of the foregoing Credit Parties.
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“Customer Deposits” shall mean the sum of (i) for any customer deposit for layaway, special order and similar items, the amount of such customer deposit and (ii) for any customer deposits with respect to inventory that has been sold but not yet delivered to customers, the lesser of (A) such customer deposit and (B) the greater of (1) the cost of inventory associated with such customer deposit, or if the cost of such inventory is estimated, the most recent monthly cost-of-goods-sold margin multiplied by such customer deposit, and (2) 50% of such customer deposit.
“Daily Simple SOFR” shall mean, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion.
“Date of Issue” shall mean the date on which the Issuing Bank issues a Letter of Credit pursuant to Section 2.15.
“Default” shall mean any Event of Default, and any of the events specified in Section 9.1 regardless of whether there shall have occurred any passage of time or giving of notice (or both) that would be necessary in order to constitute such event an Event of Default.
“Defaulting Lender” shall mean, at any time, subject to Section 2.19(b), (i) any Lender that has failed for three (3) or more Business Days to comply with its obligations under this Agreement to make a Loan, to make a payment to the Issuing Bank in respect of a Letter of Credit or to the Swing Bank in respect of a Swing Loan or to make any other payment due hereunder (each a “funding obligation”), unless such Lender has notified the Administrative Agent and the Administrative Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding has not been satisfied (which conditions precedent, together with any applicable Default, will be specifically identified in such writing), (ii) any Lender that has notified the Administrative Agent in writing, or has stated publicly, that it does not intend to comply with any such funding obligation hereunder, unless such writing or public statement states that such position is based on such Lender’s determination that one or more conditions precedent to funding cannot be satisfied (which conditions precedent, together with any applicable Default, will be specifically identified in such writing or public statement), (iii) any Lender that has defaulted on its obligation to fund generally under any other loan agreement, credit agreement or other financing agreement, (iv) any Lender that has, for three (3) or more Business Days after written request of the Administrative Agent or the Administrative Borrower, failed to confirm in writing to the Administrative Agent and the Administrative Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender will cease to be a Defaulting Lender pursuant to this clause (iv) upon the Administrative Agent’s and the Administrative Borrower’s receipt of such written confirmation), or (v) any Lender with respect to which a Lender Insolvency Event has occurred and is continuing.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender will be conclusive and binding, absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.19(b)) upon notification of such determination by the Administrative Agent to the Administrative Borrower, the Issuing Bank, the Swing Bank and the Lenders.
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“Default Rate” shall mean a simple per annum interest rate equal to, (a) with respect to all outstanding principal, the sum of (i) the applicable Interest Rate Basis, plus (ii) the Applicable Margin, plus (iii) two percent (2.00%), and (b) with respect to all other Obligations (other than Obligations from Bank Products), the sum of (i) the Base Rate, plus (ii) the highest Applicable Margin, plus (iii) two percent (2.00%); provided that (x) as to any EurodollarSOFR Advance outstanding on the date that the Default Rate becomes applicable, the Default Rate shall be based on the then applicable Eurodollar Basisat a rate per annum equal to 200 basis points above the then appliable Adjusted Term SOFR until the end of the current Eurodollar AdvanceInterest Period and thereafter the Default Rate shall be based on the Base Rate as in effect from time to time and (y) as to any Base Rate Advance outstanding on the date that the Default Rate becomes applicable, the Default Rate shall be based on the Base Rate as in effect from time to time.
“Deposit Accounts” shall mean all deposit accounts of the Credit Parties (other than Concentration Accounts) into which proceeds of Inventory are deposited by the Credit Parties in the ordinary course of business. 
“Disbursement Accounts” shall mean the Principal Disbursement Account and all other disbursement accounts of the Credit Parties.  
“Dividends” shall mean any direct or indirect distribution, dividend, or payment to any Person on account of any Equity Interests of any Credit Party.
“Document” shall mean any “document” as such term is defined and used in the UCC.
“Dollars” or “$” shall mean the lawful currency of the United States of America.
“Domestic Subsidiary” shall mean any Subsidiary of a Borrower that is organized and existing under the laws of the US or any state or commonwealth thereof or under the laws of the District of Columbia.
“EBITDAR” shall mean, for the Borrowers and their Subsidiaries any period, the sum of (a) Net Income for such period plus (b) to the extent deducted in determining Net Income for such period, without duplication, the sum of (i) Interest Expense, (ii) income tax expense, (iii) depreciation and amortization expense, (iv) any fees, expenses or charges related to any issuance of Equity Interests, Investment, acquisition, disposition, recapitalization or the incurrence or repayment of Funded Debt permitted to be incurred by this Agreement (in each case including a refinancing thereof) (whether or not successful), including such fees, expenses or charges related to this Agreement and the other Loan Documents; provided that any fees, expenses or charges added back pursuant to this clause (vi) (other than in connection with this Agreement and the other Loan Documents) shall not exceed $500,000 for any period, (v) Lease Expense, (vvi) any non-cash LIFO adjustments, and (vivii) any other non-cash charges, minus (c) without duplication and to the extent included in Net Income, any cash payments made during such period that relate to non-cash charges included in determining EBITDAR for such period or any prior period, in each case determined on a consolidated basis in accordance with GAAP for such period.  
“E-Fax” shall mean any system used to receive or transmit faxes electronically.
“Electronic Transmission” shall mean each document, instruction, authorization, file, information and any other communication transmitted, posted or otherwise made or communicated by e-mail or E-Fax, or otherwise to or from an E-System or other equivalent service.
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“Eligible Assignee” shall mean (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; or (d) any other Person approved by (i) the Administrative Agent, (ii) the Issuing Bank and, (iii) unless (x) such Person is taking delivery of an assignment in connection with physical settlement of a credit derivatives transaction or (y) an Event of Default exists, the Administrative Borrower, such approvals not to be unreasonably withheld or delayed; provided that if the consent of the Administrative Borrower to an assignment or to an Eligible Assignee is required hereunder (including a consent to an assignment which does not meet the minimum assignment thresholds specified in Section 11.5(b)), the Administrative Borrower shall be deemed to have given its consent five (5) Business Days after the date written notice thereof has been delivered by the assigning Lender (through the Administrative Agent) unless such consent is expressly refused by the Administrative Borrower prior to such fifth (5th) Business Day; provided, further, that Eligible Assignee shall exclude (i) any Person that is principally engaged in the retail furniture business and any of its Subsidiaries, (ii) any Borrower and its Affiliates and Subsidiaries and (iii) any Defaulting Lender.
“Eligible Credit Card Receivables”  shall mean, at any particular date, each Credit Card Receivable that satisfies the following criteria at the time of creation and continues to meet the same at the time of such determination: such Credit Card Receivable (i) has been earned by performance, represents the bona fide amounts due to a Borrower from a Credit Card Issuer or a Credit Card Processor, and was originated in the ordinary course of business of such Borrower, and (ii) is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (m) below.  Without limiting the foregoing, to qualify as an Eligible Credit Card Receivable, a Credit Card Receivable shall indicate no Person other than a Borrower as payee or remittance party.  In determining the amount to be so included, the face amount of a Credit Card Receivable shall be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that a Borrower may be obligated to rebate to a customer, a Credit Card Issuer or a Credit Card Processor pursuant to the terms of any agreement or understanding) and (ii) the aggregate amount of all cash received in respect of such Credit Card Receivable but not yet applied by the applicable Borrower to reduce the amount of such Credit Card Receivable.  Any Credit Card Receivables meeting the foregoing criteria shall be deemed Eligible Credit Card Receivables but only as long as such Credit Card Receivable is not included within any of the following categories, in which case such Credit Card Receivable shall not constitute an Eligible Credit Card Receivable:  
1.Credit Card Receivables which do not constitute an “Account” (as defined in the UCC);
2.Credit Card Receivables that have been outstanding for more than five (5) Business Days from the date of sale of goods or services giving rise to such Credit Card Receivables;
3.Credit Card Receivables with respect to which the applicable Borrower does not have good and valid title, free and clear of any Lien (other than Liens granted to the Administrative Agent and other Permitted Liens);
4.Credit Card Receivables that are not subject to a first priority security interest in favor of the Administrative Agent (other than Permitted Liens having priority over the Lien of the Administrative Agent under Applicable Law)  (it being the intent that chargebacks in the ordinary course by such Credit Card Processors and Credit Card Issuers shall not be deemed violative of this clause);
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5.Credit Card Receivables which are disputed, are with recourse, or with respect to which a claim, counterclaim, offset or chargeback has been asserted (but only to the extent of such claim, counterclaim, offset or chargeback); 
6.Credit Card Receivables as to which the Credit Card Processor has the right under certain circumstances to require to repurchase the Accounts from such Credit Card Processor; 
7.Credit Card Receivables due from a Credit Card Issuer or Credit Card Processor of the applicable credit card which is the subject of any bankruptcy or Insolvency Proceedings;
8. Credit Card Receivables which are not a valid, legally enforceable obligation of the applicable Credit Card Issuer with respect thereto;
9.Credit Card Receivables which do not conform in all material respects to all representations, warranties or other provisions in the Loan Documents relating to Credit Card Receivables; 
10.Credit Card Receivables which are evidenced by “chattel paper” or an “instrument” of any kind unless such “chattel paper” or “instrument” is in the possession of the Administrative Agent and, to the extent necessary or appropriate, endorsed to the Administrative Agent; 
11.Credit Card Receivables arising from the use of a private label credit card (i.e., any Credit Card Receivable where a Borrower or an Affiliate of a Borrower is the Credit Card Issuer); 
12.Credit Card Receivables payable by a Credit Card Processor that has not received an irrevocable written instruction from the Administrative Borrower to forward all items of payment to a Concentration Account or Deposit Account; or 
13.Credit Card Receivables arising from the use of a “co-branded” credit card with any Borrower or any of its Affiliates which are deemed ineligible for inclusion in the Borrowing Base by the Administrative Agent in the exercise of its Permitted Discretion.
“Eligible Domestic Inventory” shall mean, as of any particular date, the portion of the Inventory of the Borrowers that the Administrative Agent, in the exercise of its Permitted Discretion, determines to be Eligible Inventory; provided that without limiting the right of the Administrative Agent to establish other criteria of ineligibility, Eligible Inventory shall not include any of the following Inventory:
(1)Inventory that is not owned solely by a Borrower;
(2)Inventory that does not conform in all material respects to all of the warranties and representations regarding the same which are set forth in this Agreement or any of the other Loan Documents;
(3)Inventory that is not located in the continental United States;
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(4)Inventory which is located in any location leased by a Credit Party unless (i) the landlord shall have executed and delivered to the Administrative Agent a Collateral Access Agreement, (ii) the Administrative Agent has established a Rent Reserve with respect to such leased location or (iii) the aggregate Value of all Inventory located at such leased location is less than $650,000750,000 and the Administrative Agent has determined in its Permitted Discretion that the landlord would not have a Lien superior in priority (statutorily or otherwise) to the Lien of the Administrative Agent on the Inventory at such location (other than a Lien that the Administrative Agent determines in its Permitted Discretion is superior only with respect to Inventory located on the leased premises at the time the Lien to the Administrative Agent was granted or would become subordinate to the Lien of the Administrative Agent within a fixed period of time not to exceed 12 months);
(5)Inventory which is located at any location owned by a Credit Party but subject to a mortgage in favor of a Person other than the Administrative Agent, unless the mortgagee has delivered a Collateral Access Agreement or other mortgagee agreement in form and substance satisfactory to the Administrative Agent;
(6)Inventory in the possession of any bailee, warehouseman or similar party unless such Person shall have executed and delivered to the Administrative Agent a Collateral Access Agreement;
(7)Inventory that is subject to any claim of reclamation, Lien (other than the Liens in favor of the Administrative Agent or any other Permitted Lien that is subordinate to the Liens in favor of the Administrative Agent), adverse claim, interest or right of any other Person, but only to the extent of such adverse claim, interest or right;
(8)Inventory that has been consigned to or by any Person;
(9)Inventory that is not in good condition or does not meet all standards imposed by any Person having regulatory authority over such goods or their use and/or sale, or Inventory that is not currently saleable in the normal course of a Borrower’s business;
(10)Inventory that consists of work-in-process, fabric, trim, components or raw materials;
(11)Inventory scheduled for return to vendors, Inventory which is obsolete or slow-moving (for purposes of this clause, what constitutes “obsolete or slow-moving” Inventory shall be determined by the Administrative Agent in its Permitted Discretion), display items, packaging materials, labels or name plates or similar supplies; 
(12)Inventory that is not personal property in which a Borrower has granted a valid and continuing first priority Lien in favor of the Administrative Agent, for the benefit of the Lender Group, pursuant to the Security Documents, or as to which all action necessary to perfect such security interest has not been taken;
(13)Inventory that is covered, in whole or in part, by any security agreement, financing statement, equivalent security or Lien instrument or continuation statement which is on file or of record in any public office, except such as may have been filed in favor of the Administrative Agent, for the benefit of the Lender Group, pursuant to the Security Documents; 
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(14)Inventory that is subject to any licensing, patent, royalty, trademark, trade name or copyright agreement with any third party requiring the payment of royalties or fees or requiring the consent of the licensor for a sale thereof by the Administrative Agent and is not subject to a Licensor Consent Agreement that has been requested by the Administrative Agent in its Permitted Discretion; or 
(15)yard Inventory to the extent the aggregate amount thereof exceeds $2,500,000 or such yard Inventory is otherwise determined by the Administrative Agent in its Permitted Discretion to be ineligible because it is not properly documented or counted, or Inventory of any Borrower that has not yet delivered to the Administrative Agent a field audit and appraisal of all of its Inventory, completed by auditors and appraisers selected by the Administrative Agent.
“Eligible Inventory” shall mean Eligible Domestic Inventory and Eligible In-Transit Inventory.
“Eligible In-Transit Inventory” shall mean all finished goods which constitute In-Transit Inventory (without duplication of any Eligible Domestic Inventory) owned by the Borrowers that is on international waters in transit to a location of a Borrower in the United States or a customer of a Borrower that will take delivery of such Inventory at the port of destination located in the United States and as to which such In-Transit Inventory: (i) shall be the subject of a Document located in the United States that (A)(x) in the case of a negotiable Document, is made to the order of the Administrative Agent (either directly or by means of one or more endorsements or on such other terms as acceptable to the Administrative Agent) and is in the possession of the Administrative Agent, the Issuing Bank or an Approved Freight Handler  or (y) in the case of a non-negotiable Document, is made to the Administrative Agent or the Issuing Bank (either directly or by means of one or more endorsements or assignments) or to a Borrower if such Document shall state “[Name of applicable Borrower], subject to the security interest of SunTrustTruist Bank, as administrative agent, Twenty-ThirdSeventh Floor-South Tower, 3033333 Peachtree Street, N.E.Road, Atlanta, Georgia 3030830326” thereon and (B) was issued by the carrier respecting the subject In-Transit Inventory, (ii) is insured in accordance with Section 6.5 (including, without limitation, with respect to marine insurance), (iii) with respect to In-Transit Inventory that is subject to a non-negotiable Document, such In-Transit Inventory shall be in the physical possession of an Approved Freight Handler or its agents acting at the Approved Freight Handler’s instruction and (iv) would not be deemed ineligible for inclusion in the Borrowing Base under clauses (a), (b), (e) (other than in respect of any possessory Lien of the related common carrier or any Lien in favor of a related Approved Freight Handler), (f), (g), (i), (j) or (l) of the definition of Eligible Domestic Inventory, treating such eligibility criteria as applicable to such In-Transit Inventory; provided that the amount of Availability derived by the Borrowers from Eligible In-Transit Inventory under clause (a) of the definition of “Borrowing Base” shall not, at any time, exceed $10,000,000.  Upon the request of the Administrative Agent, the Credit Parties shall promptly deliver to the Administrative Agent copies of all such bills of lading or cargo receipts.
“Environmental Laws” shall mean, collectively, any and all applicable federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees or requirements of any Governmental Authority regulating, relating to or imposing liability or standards of conduct concerning environmental protection matters, including, without limitation, Hazardous Materials or human health, as now or may at any time during the term of this Agreement be in effect.
“Equity Interests” shall mean, as applied to any Person, any capital stock, membership interests, partnership interests or other equity interests of such Person, regardless of class or designation, and all warrants, options, purchase rights, conversion or exchange rights, voting rights, calls or claims of any character with respect thereto.
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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended and in effect from time to time, and any successor statute thereto and the regulations promulgated and ruling issued thereunder.
“ERISA Affiliate” shall mean, with respect to any Credit Party, any trade or business (whether or not incorporated) that together with such Credit Party, are treated as a single employer under Section 414 of the Code.
“ERISA Event” shall mean, with respect to any Credit Party or any ERISA Affiliate, (a) any “reportable event” within the meaning of Section 4043 of ERISA with respect to a Title IV Plan for which the thirty (30) day notice period has not been waived; (b) the withdrawal of any Credit Party or ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any Credit Party or any ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to terminate a Title IV Plan or the treatment of a plan amendment as a termination under Section 4041 of ERISA; (e) the institution or threatened institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) the reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245 of ERISA; (g) the failure by any Credit Party or ERISA Affiliate to make when due required contributions to a Multiemployer Plan or Title IV Plan unless such failure is cured within thirty (30) days; (h) any other event or condition that would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of liability under Section 4069 or 4212(c) of ERISA, or (i) the revocation or threatened revocation of a Plan’s tax-qualified status under Code Section 401(a).
“E-System” shall mean any electronic system, including Intralinks® and any other internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent, any of its Affiliates or any other Person, providing for access to data protected by passcodes or other security system. 
“Eurodollar Advance” shall mean an Advance which the Administrative Borrower requests to be made as a Eurodollar Advance or which is continued as or converted to a Eurodollar Advance, in accordance with the provisions of Section 2.2.
“Eurodollar Advance Period” shall mean, for each Eurodollar Advance, each one (1), two (2), three (3) or six (6) month period, as selected by the Administrative Borrower pursuant to Section 2.2, during which the applicable Eurodollar Rate (but not the Applicable Margin) shall remain unchanged. Notwithstanding the foregoing, however: (a) any applicable Eurodollar Advance Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day, unless such Business Day falls in another calendar month, in which case such Eurodollar Advance Period shall end on the next preceding Business Day; (b) any applicable Eurodollar Advance Period which begins on a day for which there is no numerically corresponding day in the calendar month during which such Eurodollar Advance Period is to end shall (subject to clause (a) above) end on the last day of such calendar month; and (c) no Eurodollar Advance Period shall extend beyond the Maturity Date or such earlier date as would interfere with the repayment obligations of the Borrowers under Section 2.6.
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“Eurodollar Basis” shall mean, with respect to each Eurodollar Advance Period, a simple per annum interest rate equal to the quotient of (a) the Eurodollar Rate divided by (b) one minus the Eurodollar Reserve Percentage, stated as a decimal.  The Eurodollar Basis shall remain unchanged during the applicable Eurodollar Advance Period, except for changes to reflect adjustments in the Eurodollar Reserve Percentage.
“Eurodollar Rate” shall mean, for any Eurodollar Advance Period, the rate per annum quoted on the display designated on that page of the Bloomberg reporting service, or similar service as determined by the Administrative Agent, that displays British Banker’s Association Interest Settlement Rates for Dollar deposits as of 11:00 a.m. (London, England time) two (2) Business Days prior to the applicable date of determination; provided, however, if the Administrative Agent determines that the relevant foregoing sources are unavailable for the relevant Eurodollar Advance Period, Eurodollar Rate shall mean the per annum rate of interest determined by the Administrative Agent to be the average (rounded upward, if necessary, to the nearest 1/100th of 1%) of the rates per annum at which deposits in Dollars are offered to the Administrative Agent two (2) Business Days preceding the first day of such Eurodollar Advance Period by leading banks in the London interbank market as of 10:00 a.m. (Atlanta, Georgia time) for delivery on the first day of such Eurodollar Advance Period, for the number of days comprised therein and in an amount comparable to the amount of the Eurodollar Advance of the Administrative Agent.  
“Eurodollar Reserve Percentage” shall mean the aggregate of the maximum reserve percentages (including, without limitation, any emergency, supplemental, special or other marginal reserves) expressed as a decimal (rounded upwards to the next one one-hundredth of one percent (1/100th of 1%)) in effect on any day to which the Administrative Agent is subject with respect to the Eurodollar Basis pursuant to regulations issued by the Board of Governors of the Federal Reserve System (or any Governmental Authority succeeding to any of its principal functions) with respect to eurocurrency funding (currently referred to as “eurocurrency liabilities” under Regulation D).  Eurodollar Advances shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without the benefit of or credit for proration, exemptions or offsets that may be available from time to time to the Administrative Agent under Regulation D.  The Eurodollar Reserve Percentage shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.  The Eurodollar Basis for any Eurodollar Advance shall be adjusted as of the effective date of any changes in the Eurodollar Reserve Percentage.
“Event of Default” shall mean any of the events specified in Section 9.1, provided that any requirement for notice or lapse of time, or both, has been satisfied.
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“Exception Conditions” shall mean, with respect to any event, that before and after giving pro forma effect to such event (i) no Default or Event of Default has occurred and is continuing or would result therefrom, (ii) either (a)(x) Availability (calculated based on a Borrowing Base Certificate received by Administrative Agent not more than thirty (30) days prior to the applicable event) would equal or exceed twelve and one-half percent (12.5%) of the Aggregate Revolving Loan Commitments and (y) the Fixed Charge Coverage Ratio for the twelve (12) month period most recently ended for which the Administrative Agent has received financial statements pursuant to Section 7.1 would not be less than 1.00:1.00, or (b) Availability (calculated based on a Borrowing Base Certificate received by Administrative Agent not more than thirty (30) days prior to the applicable event) would equal or exceed seventeen and one-half percent (17.5%) of the Aggregate Revolving Loan Commitments, and (iii) if requested by the Administrative Agent, the Administrative Borrower shall have delivered to the Administrative Agent its updated projected Availability and cash flow reports, prepared in good faith based on reasonable assumptions consistent with past practice, demonstrating that Availability over the immediately following twelve consecutive months will equal or exceed the greater of (A) $12,500,000 and (B) twenty percent (20%) of the Aggregate Revolving Loan Commitments.
    “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and in effect from time to time. 
“Excluded Accounts” shall mean all deposit accounts and disbursement accounts of any Credit Party that are not subject to Control Account Agreements. 
    “Excluded Net Cash Proceeds” shall mean (i) any Net Cash Proceeds from the sale of Inventory in the ordinary course of business, (ii) all condemnation and casualty proceeds and proceeds from business interruption insurance policies payable to any Borrower with respect to any of its assets, other than Collateral, to the extent such Borrower is required to turn over such proceeds to its landlord or lender under the Havertacq Lease or any documents relating to any Permitted Real Estate Financing or Sale-Leaseback Transaction permitted under Section 8.10, (iii) Net Cash Proceeds from the sale of assets, other than Collateral, to the extent such Net Cash Proceeds are required to be repaid pursuant to a Permitted Real Estate Financing, (iv) the Net Cash Proceeds from the 2020 Sale-Leaseback Transaction and (v) the Net Cash Proceeds from the sale of that certain real property consisting of approximately 16.41 acres located on the northeast corner of Exchange Circle, Coppell, Texas 75019, and related rights, privileges, appurtenances and licenses in any way related to such real property, for an aggregate purchase price that is expected to be approximately $5,200,000. 
    “Excluded Taxes” shall mean, with respect to any Recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) the Recipient’s net income by the United States, or by the jurisdiction under the laws of which such Recipient is organized or in which its principal office is located or, in the case of any Lender, in which its Applicable Lending Office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which such Recipient is located, and (c) any withholding taxes that (i) are imposed on amounts payable to such Recipient at the time such Recipient becomes a Recipient under this Agreement or designates a new lending office, except in each case to the extent that amounts with respect to such taxes were payable either (A) to such Recipient’s assignor immediately before such Recipient became a Recipient under this Agreement, or (B) to such Recipient immediately before it designated a new lending office, (ii) are attributable to such Recipient’s failure to comply with Section 2.18(e), or (iii) are imposed as a result of a failure by such Recipient to satisfy the conditions for avoiding withholding under FATCA.
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    “Executive Order No. 13224” shall mean Executive Order No. 13224 on Terrorist Financing, signed by President George W. Bush on September 23, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.
“Existing Credit Agreement” shall have the meaning specified in the recitals.
“FATCA” shall mean Sections 1471 through 1474 of the Code as of the date of this Agreement and any current or future regulations or official interpretations thereof.
“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers, as published by the Federal Reserve Bank of New York on the next succeeding Business Day or, if such rate is not so published for any Business Day, the Federal Funds Rate for such day shall be the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day on such transactions received by the Administrative Agent from three (3) Federal funds brokers of recognized standing selected by the Administrative Agent. 
“Fee Letter” shall mean that certain fee letter, dated as of the Agreement Date, executed by the Administrative Agent and agreed to by the Administrative Borrower.
“Financial Covenant” shall mean the financial covenant applicable to the Credit Parties from time to time pursuant to Section 8.8.
“First Amendment” shall mean that certain First Amendment to the Credit Agreement, dated as of the First Amendment Date, between the Borrowers, the Lenders, and Administrative Agent.
“First Amendment Date” shall mean March 31, 2016.
“Fixed Charge Coverage Ratio” shall mean, with respect to the Borrowers and their Subsidiaries on a consolidated basis for any period, calculated on a Pro Forma Basis during such period, the ratio of (a) the greater of (i) (x) EBITDAR for such period minus (y) the sum of (A) Unfinanced Cash Capital Expenditures made during such period and (B) (1) income tax expense paid or payable in cash during such period, net of income tax refunds received or receivable in cash during such period, not to be less than zero, plus (2) the amount, if any, by which income tax refunds received or receivable in cash during such period exceeds the income tax expense paid or payable in cash during such period or (ii) zero, to (b) the sum of (i) scheduled payments of principal made with respect to Funded Debt during such period, (ii) Interest Expense paid or payable in cash during such period, (iii) Restricted Payments paid in cash during such period and (iv) Lease Expense paid or payable in cash during such period; provided that, solely for the purposes of measuring compliance with Section 8.8 (and not for any other purpose including measuring compliance with the Exception Conditions), Restricted Payments shall exclude share repurchases and dividends not paid on a regular periodic basis.
“Floor” shall mean a rate of interest equal to 0.00% per annum.
“Foreign Person” shall mean any Person that is not a US Person.
“Foreign Subsidiary” shall mean any Subsidiary of a Borrower that is not a Domestic Subsidiary.
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“Fourth Amendment” shall mean that certain Fourth Amendment to the Credit Agreement, dated as of the Fourth Amendment Date, between the Borrowers, the Lenders, and the Administrative Agent.
“Fourth Amendment Date” shall mean October 24, 2022.
“Freight Handler” shall mean, as applicable, any freight forwarder, customs broker, customs agent, shipper, shipping company or similar Person utilized by a Borrower from time to time in connection with the importation of Inventory.
“Fund” shall mean any Person that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“Funded Debt” shall mean, with respect to the Borrowers and their Subsidiaries on a consolidated basis and without duplication, as of any calculation date, (a) any obligation of such Person for borrowed money, including, without limitation, all of the Obligations; (b) any obligation of such Person evidenced by bonds, debentures, notes or other similar instruments; (c) any obligation of such Person to pay the deferred purchase price of property or for services (other than in the ordinary course of business); (d) any Capitalized Lease Obligation; (e) any obligation or liability of others secured by a Lien on property owned by such Person, whether or not such obligation or liability is assumed (it being understood that, unless such Person shall have assumed or become liable for the payment of such obligation or liability, the amount of such obligation or liability shall be the lesser of (i) the fair market value of the asset securing such obligation or liability and (ii) the stated principal amount of such obligation or liability); (f) any debt, liability or obligation of such Person arising from or in connection with any Hedge Agreements and, without double counting, any other debt, liability or obligation arising from or in connection with any Bank Products; (g) any reimbursement obligations (contingent or otherwise) of such Person with respect to letters of credit, bankers acceptances and similar instruments issued for the account of such Person; (h) any Guaranty (except items of shareholders’ equity or Equity Interests or surplus or general contingency or deferred tax reserves); (i) any financial obligation of such Person under purchase money mortgages; (j) any financial obligation of such Person under asset securitization vehicles; (k) any obligations of such Person under conditional sales contracts and similar title retention instruments with respect to property acquired; and (l) any financial obligation of such Person as issuer of Equity Interests redeemable in whole or in part at the option of a Person other than such issuer, at a fixed and determinable date or upon the occurrence of an event not solely within the control of such issuer; provided that notwithstanding anything in GAAP to the contrary, the amount of all obligations shall be the full face amount of such obligations.  
“GAAP” shall mean, subject to Section 1.2, generally accepted accounting principles and practices set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the US accounting profession).
“Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government.
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“Guarantors” shall mean, collectively, the Subsidiary Guarantors and any other Person that has executed a Supplement as a Guarantor or other document guaranteeing the Obligations; and “Guarantor” shall mean any one of the foregoing Guarantors. 
“Guaranty” or “guaranteed,” as applied to an obligation (each a “primary obligation”), shall mean and include (a) any guaranty, direct or indirect, in any manner, of any part or all of such primary obligation, and (b) any agreement, direct or indirect, contingent or otherwise, the practical effect of which is to assure in any way the payment or performance (or payment of damages in the event of non-performance) of any part or all of such primary obligation, including, without limiting the foregoing, any reimbursement obligations as to amounts drawn down by beneficiaries of outstanding letters of credit, and any obligation of any Person, whether or not contingent, (i) to purchase any such primary obligation or any property or asset constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of such primary obligation or (B) to maintain working capital, equity capital or the net worth, cash flow, solvency or other balance sheet or income statement condition of any other Person, (iii) to purchase property, assets, securities or services primarily for the purpose of assuring the owner or holder of any primary obligation of the ability of the primary obligor with respect to such primary obligation to make payment thereof or (iv) otherwise to assure or hold harmless the owner or holder of such primary obligation against loss in respect thereof.  All references in this Agreement to “this Guaranty” shall be to the Guaranty provided for pursuant to the terms of Article 3.
“Havertacq Lease” shall mean that certain Lease Agreement, dated as of August 6, 2002, between HAVERTACQ 11 LLC, as landlord, and the Administrative Borrower, as tenant, as the same may be amended, restated or otherwise supplemented from time to time. 
“Haverty Family” shall mean, collectively, Steven G. Burdette, John L. Gill, Rawson Haverty, Jr., Clarence H. Smith, members of their respective families, heirs, descendants, and trusts and partnerships established by or for the benefit of any of the foregoing.
 “Hazardous Materials” shall mean any hazardous materials, hazardous wastes, hazardous constituents, hazardous or toxic substances, petroleum products (including crude oil or any fraction thereof), friable asbestos containing materials defined or regulated as such in or under any Environmental Law.
“Hedge Agreement” shall mean any and all transactions, agreements or documents now existing or hereafter entered into between or among any Credit Party, on the one hand, and a third party, on the other hand, which provides for an interest rate, credit or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap, cross currency rate swap, currency option, or any combination of, or option with respect to, these or similar transactions, for the purpose of hedging such Credit Party’s exposure to fluctuations in interest or exchange rates, loan, credit exchange, security or currency valuations.
“Indemnified Person” shall mean each member of the Lender Group, each Affiliate thereof and each of their respective employees, representatives, officers, agents and directors.
“Indemnified Taxes” shall mean Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Credit Party under any Loan Document.
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“Insolvency Proceeding” shall mean any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state, federal or non-US bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.
“Intellectual Property” shall have the meaning set forth in the Security Agreement.
“Interest Expense” shall mean, for the Borrowers and their Subsidiaries, for any period determined on a consolidated basis in accordance with GAAP, the sum of (i) interest expense and loan fees, including capitalized and non-capitalized interest and the interest component of Capitalized Lease Obligations (whether or not actually paid during such period) and (ii) the net amount payable (or minus the net amount receivable) under any Hedge Agreement during such period (whether or not actually paid or received during such period).
“Interest Period” shall mean with respect to any SOFR Advance, a period of one, three or six months (in each case, subject to the availability thereof); provided that: 
(i)     the initial Interest Period for such SOFR Advance shall commence on the date of such Advance (including the date of any conversion from Base Rate Advance), and each Interest Period occurring thereafter in respect of such SOFR Advance shall commence on the day on which the next preceding Interest Period expires;
(ii)    if any Interest Period would otherwise end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless such Business Day falls in another calendar month, in which case such Interest Period would end on the immediately preceding Business Day;
(iii)    any Interest Period which begins on the last Business Day of a calendar month or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period shall end on the last Business Day of such calendar month; 
(iv)    no Interest Period may extend beyond the Maturity Date or such earlier date as would interfere with the repayment obligations of the Borrowers under Section 2.6; and
(vi)    no tenor that has been removed from this definition pursuant to Section 12.1(e) shall be available for specification in the notice required under Section 2.2.
“Interest Rate Basis” shall mean the Base Rate or the Eurodollar BasisAdjusted Term SOFR, as applicable.
“In-Transit Inventory” shall mean Inventory of a Borrower that is currently in transit (whether by vessel, air or land) from a location outside the United States to a location in the United States.
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“Inventory” shall mean all “inventory,” as such term is defined in the UCC, of each Credit Party, whether now existing or hereafter acquired, wherever located, and in any event including inventory, merchandise, goods and other personal property that are held by or on behalf of a Credit Party for sale or lease or are furnished or are to be furnished under a contract of service, goods that are leased by a Credit Party as lessor, or that constitute raw materials, samples, work-in-process, finished goods, returned goods, promotional materials or materials or supplies of any kind, nature or description used or consumed or to be used or consumed in such Credit Party’s business or in the processing, production, packaging, promotion, delivery or shipping of the same, including all supplies and embedded software.  
 “Investment” shall mean, with respect to any Person, any loan, advance or extension of credit by such Person to, or any Guaranty with respect to the Equity Interests, Funded Debt or other obligations of, or any contributions to the capital of, any other Person, or any ownership, purchase or other acquisition by such Person of any Equity Interests of any other Person, other than any acquisition of all or substantially all of the Equity Interests of a Person or all or substantially all of the assets, property or business of a Person.
“Issuing Bank” shall mean SunTrustTruist Bank, or any other Person who hereafter may be designated as the Issuing Bank pursuant to an Assignment and Acceptance or otherwise.
“Junior Debt” shall mean all Funded Debt that is contractually subordinated to the Obligations, all unsecured Funded Debt and all Funded Debt secured by a Lien that is subordinated to the Lien securing the Obligations.
“Lease Expense” shall mean, for any period, (i) the aggregate amount of fixed and contingent rentals paid or payable by the Borrowers and their Subsidiaries with respect to leases of real and personal property (excluding Capitalized Lease Obligations) minus (ii) the aggregate amount of sublease income received in cash by the Borrowers and their Subsidiaries with respect to leases of real property (excluding Capitalized Lease Obligations), but not to exceed the amount in clause (i), in each case determined on a consolidated basis in accordance with GAAP for such period.
“Lender Agreement” shall have the meaning specified in Section 2.17(a).
“Lender Group” shall mean, collectively, the Administrative Agent, the Issuing Bank and the Lenders.  In addition, to the extent any Lender ceases to be a Lender hereunder, it and its Affiliates shall continue to be deemed to be members of the Lender Group with respect to all Bank Product Obligations that it or its Affiliates entered into with any Credit Party during the time period when it was a Lender hereunder.  
“Lender Group Hedge Agreement” shall mean any and all Hedge Agreements now existing or hereafter entered into between or among any Credit Party, on the one hand, and the Administrative Agent or any Lender (or an Affiliate thereof), on the other hand.
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“Lender Insolvency Event” shall mean that (i) a Lender or its Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, (ii) a Lender or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, custodian or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such capacity, has been appointed for such Lender or its Parent Company, or such Lender or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment, or (iii) a Lender or its Parent Company has been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent; provided that, for the avoidance of doubt, a Lender Insolvency Event shall not be deemed to have occurred  solely by virtue of the ownership or acquisition of any equity interest in or control of a Lender or a Parent Company thereof by a Governmental Authority or an instrumentality thereof so long as such ownership or acquisition does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.
“Lenders” shall mean those lenders whose names are set forth on the signature pages to this Agreement under the heading “Lenders” and any assignees of the Lenders who hereafter become parties hereto pursuant to and in accordance with Section 11.5; and “Lender” shall mean any one of the foregoing Lenders. 
“Letter of Credit Commitment” shall mean the obligation of the Issuing Bank to issue Letters of Credit in an aggregate face amount from time to time not to exceed $20,000,000 pursuant to the terms of this Agreement. 
“Letter of Credit Obligations” shall mean, at any time, the sum of (a) an amount equal to one hundred percent (100%) of the aggregate undrawn and unexpired stated amount (including the amount to which any such Letter of Credit can be reinstated pursuant to its terms) of the then outstanding Letters of Credit, plus (b) an amount equal to one hundred percent (100%) of the aggregate drawn, but unreimbursed drawings of any Letters of Credit.
“Letter of Credit Reserve Account” shall mean any account maintained by the Administrative Agent the proceeds of which shall be applied as provided in Section 9.2(d).
“Letters of Credit” shall mean either Standby Letters of Credit or Commercial Letters of Credit issued by the Issuing Bank on behalf of the Borrowers from time to time in accordance with Section 2.15.
“License Agreement” shall mean any license agreement or other agreement between a Credit Party and a Person duly holding rights in a trademark, trade name or service mark pursuant to which such Credit Party is granted a license to use such trademark, trade name or service mark on Inventory of such Credit Party. 
“Licensor Consent Agreement” shall mean an agreement among the applicable Credit Party, the Administrative Agent and the applicable licensor in form and substance reasonably acceptable to the Administrative Agent pursuant to which, among other things, the licensor acknowledges the Lien of the Administrative Agent in the Inventory that is subject to the applicable License Agreement and agrees to 
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permit the Administrative Agent to sell the Inventory that is subject to the License Agreement upon and during the continuance of an Event of Default. 
“Lien” shall mean, with respect to any property, any mortgage, lien, pledge, negative pledge agreement, assignment, charge, option, security interest, title retention agreement, levy, execution, seizure, attachment, garnishment, or other encumbrance of any kind in respect of such property, whether or not choate, vested, or perfected.
“Lien Acknowledgement Agreement” shall mean an agreement between a Freight Handler and the Administrative Agent, in form and substance satisfactory to the Administrative Agent, pursuant to which, among other things, the Freight Handler (a) acknowledges the Lien of the Administrative Agent in the Collateral in the possession of the Freight Handler and any documents evidencing same, (b) agrees to hold any documents of title evidencing the Collateral as Administrative Agent’s agent and bailee for purposes of perfecting the Administrative Agent’s Lien on such Collateral and (c) if so instructed by the Administrative Agent, agrees to return to the Administrative Agent or otherwise deliver at its direction, all of the Collateral in its custody, control or possession.
“Loan Account” shall have the meaning specified in Section 2.7.
“Loan Documents” shall mean this Agreement, any Revolving Loan Notes, the Swing Loan Note, the Security Documents, the Fee Letter, the Supplements, all reimbursement agreements relating to Letters of Credit issued hereunder, all Compliance Certificates, all Requests for Advance, all Requests for Issuance of Letters of Credit, all Notices of Conversion/Continuation, all Borrowing Base Certificates, all documents executed in connection with the Federal Assignment of Claims Act of 1940 (if any), and all other documents, lockbox agreements, instruments, certificates, and agreements executed or delivered in connection with or contemplated by this Agreement, including, without limitation, any security agreements or guaranty agreements from any Borrower’s Subsidiaries to the Lender Group, or any of them; provided that, notwithstanding the foregoing, none of the Bank Product Documents shall constitute Loan Documents. 
“Loans” shall mean, collectively, the Revolving Loans, the Swing Loans, the Agent Advances and the Overadvances.
“Margin Stock” shall have the meaning specified in Section 5.1(t).
“Material Contracts” shall mean, collectively, all contracts, leases, instruments, guaranties, licenses or other arrangements (other than the Loan Documents) to which any Credit Party or any Subsidiary of a Credit Party is or becomes a party and which are required to be filed with the U.S. Securities and Exchange Commission under Item 601(b)(4) or 601(b)(10) of Regulation S-K (other than those required to be filed as a result of Item 601(b)(10)(ii)(A), 601(b)(10)(iii)(A) or 601(b)(10)(iii)(B) of Regulation S-K).
“Materially Adverse Effect” shall mean, with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination in any litigation, arbitration, or governmental investigation or proceeding), whether singularly or in conjunction with any other event or events, act or acts, condition or conditions, occurrence or occurrences whether or not related, a material adverse change in, or a material adverse effect on, (a) the business, results of operations, financial condition, assets, or liabilities of the Borrowers and their Subsidiaries taken as a whole, (b) the ability of the Borrowers and their Subsidiaries, taken as a whole, to perform any of their obligations under the Loan Documents, (c) attachment, perfection and/or priority of the Administrative Agent’s Lien on a material portion of the 
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Collateral, (d) the rights and remedies of the Lender Group under any of the Loan Documents or (e) the legality, validity or enforceability of any of the Loan Documents.  In determining whether any individual event, act, condition or occurrence of the foregoing types would result in a Materially Adverse Effect, notwithstanding that a particular event, act, condition or occurrence does not itself have such effect, a Materially Adverse Effect shall be deemed to have occurred if the cumulative effect of such event, act, condition or occurrence and all other events, acts, conditions or occurrences of the foregoing types which have occurred would result in a Materially Adverse Effect.
“Maturity Date” shall mean September 27October 24, 20242027, or such earlier date as payment of the Loans shall be due (whether by acceleration or otherwise).
“Maximum Guaranteed Amount” shall have the meaning specified in Section 3.1(g).
“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto. 
“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is making, is obligated to make or has made or been obligated to make, contributions on behalf of participants who are or were employed by any of them.
“Necessary Authorizations” shall mean all material authorizations, consents, permits, approvals, licenses, and exemptions from, and all filings and registrations with, and all reports to, any Governmental Authority whether federal, state, local, and all agencies thereof, which are required for the transactions contemplated by the Loan Documents and the conduct of the businesses and the ownership (or lease) of the properties and assets of the Credit Parties.
“Net Cash Proceeds” shall mean, with respect to any sale, lease, transfer, casualty loss or other disposition or loss of assets by any Credit Party or any issuance by any Credit Party of any Equity Interests or the incurrence by any Credit Party of any Funded Debt (other than the Obligations), the aggregate amount of cash received for such assets or Equity Interests, or as a result of such Funded Debt, net of reasonable and customary transaction costs properly attributable to such transaction and payable by such Credit Party in connection with such sale, lease, transfer, casualty loss or other disposition or loss of assets or such issuance of Equity Interests or such incurrence of Funded Debt, including, without limitation, sales commissions and underwriting discounts, and net of any taxes due as result of such transaction.
“Net Income” shall mean, for any period, the consolidated net income (or loss) of the Borrowers and their Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, but excluding therefrom (to the extent otherwise included therein) (i) any extraordinary gains or loss, (ii) any gains attributable to write-ups of assets, and (iii) any Equity Interest of the Borrowers or any Subsidiary of the Borrowers in the unremitted earnings of any person that is not a Subsidiary, but including (iv) any income (or loss) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with any Borrower or any Subsidiary on the date that such Person’s assets are acquired by such Borrower or such Subsidiary.
“Net Mark-to-Market Exposure” of any Person shall mean, as of any date, with respect to any obligation under any Hedge Agreement, the excess (if any) of all unrealized losses over all unrealized profits of such Person arising under such Hedge Agreement.   “Unrealized losses” shall mean the fair market value of the cost to such Person of replacing the Hedge Agreement as of such date (assuming the Hedge Agreement was to be terminated as of that date), and “unrealized profits” shall mean the fair 
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market value of the gain to such Person of replacing such Hedge Agreement as of such date (assuming such Hedge Agreement were to be terminated as of that date).
“Net Real Estate Exchange Value” shall mean the aggregate amount by which the fair market value of any owned real property of the Administrative Borrower substituted or exchanged for real property leased by the Administrative Borrower under the Havertacq Lease or any Sale-Leaseback Transaction permitted under Section 8.10 exceeds the sum of (A) the fair market value of such leased real property of the Administrative Borrower plus (B) any casualty or condemnation proceeds received by the Administrative Borrower in respect of such property, to the extent not turned over to any third party. 
“New Lender” shall have the meaning specified in Section 2.17(a).
“NOLV” shall mean, as to any particular asset, the value that is estimated to be recoverable in an orderly liquidation thereof, as determined from time to time by a qualified appraiser reasonably selected by the Administrative Agent, net of all liquidation costs and expenses.
“Non-Defaulting Lender” shall mean, at any time, a Lender that is not a Defaulting Lender or a Potential Defaulting Lender. 
“Notes” shall mean, collectively, the Revolving Loan Notes and the Swing Loan Note.
“Notice of Conversion/Continuation” shall mean a notice substantially in the form of Exhibit D.
“Notice of Requested Commitment Increase” shall mean a notice substantially in the form of Exhibit J. 
“Obligations” shall mean (a) all payment and performance obligations as existing from time to time of the Credit Parties to the Lender Group, or any of them, under this Agreement and the other Loan Documents (including all Letter of Credit Obligations and including any interest, fees and expenses that, but for the provisions of the Bankruptcy Code, would have accrued), or as a result of making the Loans or issuing the Letters of Credit, (b) the obligation to pay an amount equal to the amount of any and all damages which the Lender Group, or any of them, may suffer by reason of a breach by any Credit Party of any obligation, covenant, or undertaking with respect to this Agreement or any other Loan Document, and (c) any Bank Product Obligations of any Credit Party owed to any member of the Lender Group; provided that (i) Obligations in respect of Bank Products provided by SunTrustTruist Bank or its Affiliates, or with respect to which SunTrustTruist Bank or its Affiliates are counterparties, shall constitute Obligations entitled to the benefits of the Security Documents without any further action on the part of any Person, and (ii) Obligations in respect of Bank Products provided by any Lender (other than SunTrustTruist Bank) or its Affiliates, or with respect to which any Lender (other than SunTrustTruist Bank) or its Affiliates are counterparties, shall constitute Obligations upon delivery of a letter agreement in form and substance acceptable to the Administrative Agent signed by the applicable Lender or its Affiliate and the Administrative Borrower pursuant to which such applicable Lender or its Affiliate (i) appoints the Administrative Agent as its agent under the applicable Loan Documents, (ii) agrees to be 
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bound by the provisions of Articles 10 and 11 hereof and (iii) designates obligations related to such Bank Product Obligations as Obligations entitled to the benefits of the Security Documents.
“OFAC” shall mean the United States Department of the Treasury’s Office of Foreign Assets Control.
“Original Agreement Date” shall mean December 22, 2008.
“Other Taxes” shall mean any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made hereunder or under any other Loan Document or from the execution, delivery, performance or enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any other Loan Document.
“Overadvance” shall have the meaning specified in Section 2.1(d).
“Parent Company” shall mean, with respect to a Lender, the “bank holding company” as defined in Regulation Y, if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.
“Participant” shall have the meaning specified in Section 11.5(d).
“Participation Exposure” shall mean, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s participation interest in all Letter of Credit Obligations, Agent Advances, Overadvances and Swing Loans.
“Payment Date” shall mean the last day of each Eurodollar AdvanceInterest Period for a EurodollarSOFR Advance. 
“PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Permitted Class A Shareholders” shall mean, collectively, the Haverty Family and current and former members of management of the Administrative Borrower and its Subsidiaries.
“Permitted Discretion” shall mean a determination made in the exercise of reasonable commercial discretion from the perspective of an asset-based lender. 
“Permitted Liens” shall mean, as applied to any Person:
(1)Any Lien in favor of the Administrative Agent or any other member of the Lender Group given to secure the Obligations, including any cash collateralization of any Letter of Credit;
(2)(i) Liens on real estate for real estate taxes not yet delinquent and (ii) Liens for taxes, assessments, judgments, governmental charges or levies, or claims not yet delinquent or the non-payment of which is being diligently contested in good faith by appropriate proceedings and for which adequate reserves have been set aside on such Person’s books;
(3)Liens of carriers, warehousemen, mechanics, laborers, suppliers, workers and materialmen incurred in the ordinary course of business for sums not yet due or being diligently contested 
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in good faith, if such reserve or appropriate provision, if any, as shall be required by GAAP shall have been made therefor;
(4)Liens incurred in the ordinary course of business in connection with worker’s compensation and unemployment insurance or other types of social security benefits;
(5)Easements, rights-of-way, restrictions (including zoning or deed restrictions), and other similar encumbrances on the use of real property which in the reasonable opinion of the Administrative Agent do not interfere with the ordinary conduct of the business of such Person;
(6)Purchase money security interests and Liens securing Capitalized Lease Obligations, provided that such Lien attaches only to the asset (which asset shall not constitute Inventory) so purchased or leased by such Person and secures only Funded Debt incurred by such Person in order to purchase or lease such asset, but only to the extent permitted by Section 8.1(d); 
(7)Deposits or escrows in favor of a seller of assets to a Credit Party and required in connection with acquisitions permitted under Section 8.7(d) or in the ordinary course of business;
(8)Any interest (including landlord liens arising by statute or otherwise) or title of a lessor under any leases or subleases for property other than Inventory entered into by any Borrower or any of its Subsidiaries in the ordinary course of business;
(9)Liens arising from precautionary Uniform Commercial Code financing statements regarding operating leases;
(10)Leases or subleases, licenses or sublicenses (including with respect to intellectual property and software) of any property other than Inventory granted to others in the ordinary course of business not interfering in any material respect with the business of the Borrowers and their Subsidiaries, taken as a whole;
(11)Liens on securities that are the subject of repurchase agreements constituting Cash Equivalents in favor of the counterparty to such repurchase agreement; 
(12)(i) Deposits (and escrows) to secure the performance of bids, trade contracts, tenders, sales, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred under the Havertacq Lease or in the ordinary course of business and (ii) deposits of up to $10,000,000 of cash and Cash Equivalents to secure self insurance and other insurance obligations incurred in the ordinary course of business; 
(13)Possessory Liens of any common carrier or Approved Freight Handler in the ordinary course of business;
(14)Liens on assets not constituting Collateral so long as the amount secured does not exceed $500,000 in the aggregate; and
(15)Liens of the type described in Section 9 of the Retailer Purchase Agreement as in effect on the date hereof. 
“Permitted Real Estate Financing” shall mean Funded Debt secured by one or more parcels of real estate owned by any Borrower or any of its Subsidiaries so long as such Liens do not extend only to 
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such real estate, related fixtures, related real property rights, contracts related to such real estate customarily included in mortgage collateral and proceeds of the Collateralforegoing.
“Permitted Sale-Leaseback Transaction” shall mean the sale-leaseback transaction under the Havertacq Lease and any other Sale-Leaseback Transaction permitted under Section 8.10.
 “Person” shall mean an individual, corporation, partnership, trust, joint stock company, limited liability company, unincorporated organization, other legal entity or joint venture or a government or any agency or political subdivision thereof.
“Plan” shall mean an employee benefit plan within the meaning of Section 3(3) of ERISA that any Credit Party or ERISA Affiliate maintains, contributes to or has an obligation to contribute to or has maintained, contributed to or had an obligation to contribute to at any time within the past six (6) years on behalf of participants who were employed by any Credit Party or ERISA Affiliate.
    “Pledge Agreement” shall mean that certain Pledge Agreement, dated as of the Original Agreement Date, among the Credit Parties and the Administrative Agent, on behalf of, and for the benefit of, the Lender Group.
“Principal Disbursement Account” shall mean the account number 2000186446638 maintained at Wachovia Bank, National Association, or as otherwise designated in writing to the Administrative Agent by the Administrative Borrower from time to time.
“Pro Forma Basis” shall mean for purposes of determining compliance with the Financial Covenant and the defined terms relating thereto, giving pro forma effect to any acquisition or sale of a Person, all or substantially all of the business or assets of a Person, and any related incurrence, repayment or refinancing of Funded Debt (including any changes in interest expense), Capital Expenditures or other related transactions which would otherwise be accounted for as an adjustment permitted by Regulation S-X under the Securities Act or on a pro forma basis under GAAP, in each case, as if such acquisition or sale and related transactions were realized on the first day of the relevant period.
“Property” shall mean any real property or personal property, plant, building, facility, structure, underground storage tank or unit, equipment, Inventory or other asset owned, leased or operated by the Credit Parties, their Subsidiaries or any of them (including, without limitation, any surface water thereon or adjacent thereto, and soil and groundwater thereunder).
“Qualified Cash” shall mean, as of any date of determination, the amount of unrestricted cash and Cash Equivalents (excluding all Customer Deposits) of the Credit Parties maintained in deposit accounts or securities accounts, or any combination thereof, that are (x) subject to a Blocked Account Agreement and (y) maintained by a branch office of a bank or securities intermediary located within the United States; provided, however, the aggregate amount included in the calculation of “Qualified Cash” for cash and Cash Equivalents maintained with any bank or other financial institution other than the Administrative Agent shall not at any time exceed 25% of the Aggregate Revolving Loan Commitments.
“Qualified Receivables” shall mean all Accounts generated through the Havertys proprietary finance program, earned by performance, representing the bona fide amounts due to a Borrower from a customer and originated in the ordinary course of business of such Borrower, but excluding (i) Accounts that are not owned by a Credit Party or that are the subject of any Lien, other than Liens in favor of the Administrative Agent, (ii) Accounts related to a contract with a payment that is past due for more than thirty (30) days on a contractual basis (without modification or adjustment of the original due dates), (iii) 
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Accounts subject to counterclaims, defense, offsets or dispute, but only to the extent of such counterclaims, defense, offsets or dispute, (iv) Accounts that arise from a sale to any director, officer, other employee or Affiliate of any Credit Party, or to any entity that has any common officer with any Credit Party, (v) Accounts that do not conform to such Borrower’s credit criteria or are not creditworthy as determined by the Administrative Agent in its Permitted Discretion, (vi) Accounts owed by an Account Debtor that has filed for bankruptcy, is insolvent or has otherwise sought relief under any federal or state bankruptcy or insolvency laws, (vii) Accounts arising under contracts in which the first scheduled payment is more than sixty (60) days from the original date of the contract, (viii) Accounts arising under contracts with payment schedules other than monthly fully amortizing terms, (ix) Accounts under contracts which are modified or rewritten to extend the terms or reduce payments, (x) Accounts that arise with respect to goods that have not yet been delivered, or goods that are delivered on a bill-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional, (xi) Accounts arising under contracts that mature greater than thirty-six (36) months from the date Qualified Receivables are being measured, (xii) Accounts as to which any of the representations or warranties in the Loan Documents are untrue in any material respect, and (xiii) Accounts with such other ineligibility criteria as may be established by the Administrative Agent in its Permitted Discretion.
“Recipient” shall mean, as applicable, (a) the Administrative Agent, (b) any Lender and (c) the Issuing Bank.
“Register” shall have the meaning specified in Section 11.5(c).
“Regulation D” shall mean Regulation D of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“Regulation T” shall mean Regulation T of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“Regulation X” shall mean Regulation X of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“Regulation Y” shall mean Regulation Y of the Board of Governors of the Federal Reserve System, as the same may be in effect from time to time, and any successor regulations.
“Reimbursement Obligations” shall mean the payment obligations of the Borrowers under Section 2.15(d).
“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“Rent Reserve” shall mean, with respect to any leased real property at which the Value of Inventory is in excess of $650,000750,000 or a landlord would have a Lien superior in priority (statutorily or otherwise) to the Lien of the Administrative Agent on the Inventory at such location  (other than a Lien that the Administrative Agent determines in its Permitted Discretion is superior only with respect to Inventory located on the leased premises at the time the Lien to the Administrative Agent was granted or 
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would become subordinate to the Lien of the Administrative Agent within a fixed period of time not to exceed 12 months), an amount equal to three (3) months rental expense for such leased real property (or such other amount as the Administrative Agent may deem appropriate in its Permitted Discretion based on the circumstances).  For the avoidance of doubt, the Borrower shall have the right to require the Administrative Agent to establish a Rent Reserve.
“Replacement Event” shall have the meaning specified in Section 11.16.
“Replacement Lender” shall have the meaning specified in Section 11.16.
“Request for Advance” shall mean a certificate signed by an Authorized Signatory of the Administrative Borrower substantially in the form of Exhibit E requesting a new Advance hereunder.  Each Request for Advance shall, among other things, specify the date of the Advance (which shall be a Business Day), the amount of the Advance, and the type of Advance.
“Request for Issuance of Letter of Credit” shall mean a certificate signed by an Authorized Signatory of the Administrative Borrower substantially in the form of Exhibit F requesting that the Issuing Bank issue a Letter of Credit hereunder.  Each Request for Issuance of Letter of Credit shall, among other things, specify (a) that the requested Letter of Credit is either a Commercial Letter of Credit or a Standby Letter of Credit, (b) the stated amount of the Letter of Credit (which shall be in Dollars), (c) the effective date (which shall be a Business Day) for the issuance of such Letter of Credit, (d) the date on which such Letter of Credit is to expire (which shall be a Business Day and which shall be subject to Section 2.15(a)), (e) the Person for whose benefit such Letter of Credit is to be issued, (f) other relevant terms of such Letter of Credit, and (g) the Available Letter of Credit Amount as of the scheduled date of issuance of such Letter of Credit.
    “Required Lenders” shall mean (i) at any time that the Aggregate Revolving Loan Commitments are $60,000,00080,000,000 or less, Lenders holding 66 2/3% or more of the aggregate outstanding Revolving Loan Commitments at such time or, if the Lenders have no Revolving Loan Commitments outstanding, then Lenders holding 66 2/3% or more of the Revolving Credit Exposure, but in no event less than two Lenders party to this Agreement and (ii) at any time that the Aggregate Revolving Loan Commitments exceed $60,000,00080,000,000, Lenders holding more than 50% of the aggregate outstanding Revolving Loan Commitments at such time or, if the Lenders have no Revolving Loan Commitments outstanding, then Lenders holding more than 50% of the Revolving Credit Exposure, but in no event less than two Lenders party to this Agreement; provided that to the extent that any Lender is a Defaulting Lender, such Defaulting Lender, its Revolving Loan Commitment and its Revolving Credit Exposure shall be excluded for purposes of determining Required Lenders (including when there are only two Lenders party to this Agreement).
“Reserves” shall mean reserves that the Administrative Agent may establish from time to time in its Permitted Discretion for such purposes as the Administrative Agent shall deem necessary.  Without limiting the generality of the foregoing, the following reserves shall be deemed an exercise of the Administrative Agent’s Permitted Discretion:  (a) reserves for price adjustments and damages; (b) reserves for obsolescence of Inventory; (c) reserves for special order goods (which shall not include the Borrowers’ standard goods subject to customary customization by buyers) and deferred shipment sales; (d) reserves for accrued but unpaid ad valorem, sales, excise and personal property tax liability; (e) Bank Product Reserves; (f) reserves for accrued, unpaid interest on the Obligations; (g) reserves for warehousemen’s, bailees’, shippers’ or carriers’ charges or for landlord’s charges (other than rent); (h) reserves for customs charges and shipping charges related to any Eligible In Transit Inventory; (i) Rent 
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Reserves; and (j) a reserve equal to (A) the aggregate Customer Deposits, less (B) 50% of Qualified Receivables, provided that in no event shall such reserve be less than $0.  For purposes of this definition of Reserves, “Customer Deposits” shall mean the sum of (i) for any customer deposit for layaway, special order and similar items, the amount of such customer deposit and (ii) for any customer deposits with respect to inventory that has been sold but not yet delivered to customers, the lesser of (A) such customer deposit and (B) the greater of (1) the cost of inventory associated with such customer deposit, or if the cost of such inventory is estimated, the most recent monthly cost-of-goods-sold margin multiplied by such customer deposit, and (2) 50% of such customer deposit.
“Restricted Payment” shall mean (a) Dividends, (b) loans by any Credit Party to any holder of Equity Interests in the Borrowers, (c) any payment of management, consulting or similar fees payable by any Credit Party or any Subsidiary of a Credit Party to any Affiliate, or (d) any redemption, purchase, retirement, defeasance, sinking fund or similar payment or any claim of rescission with respect to the Equity Interests of a Credit Party.
    “Retailer Purchase Agreement” shall mean that certain Amended and Restated Retailer Program Agreement, dated as of December 30, 2010, between HFC and GE Money Bank, as amended, restated, renewed, replaced or otherwise supplemented from time to time prior to the Agreement Date.
“Retiree Welfare Plan” shall mean a Plan that is an “employee welfare benefit plan” within the meaning of Section 3(1) of ERISA that provides for continuing coverage or benefits for any participant or any beneficiary of a participant after such participant’s termination of employment, other than continuation coverage provided pursuant to Code Section 4980B (or applicable state law mandating health insurance continuation coverage for employees) and at the sole expense of the participant or the beneficiary.
“Revolving Commitment Ratio” shall mean, with respect to any Lender, the ratio, expressed as a percentage, of (a) the Revolving Loan Commitment of such Lender, divided by (b) the Revolving Loan Commitments of all Lenders.
“Revolving Credit Exposure” shall mean, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its participation interest in all Letter of Credit Obligations, Agent Advances, Overadvances and Swing Loans.
“Revolving Loan Commitment” shall mean, with respect to each Lender, the commitment of such Lender to make Revolving Loans to the Borrowers and to acquire participations in Letters of Credit, Agent Advances, Overadvances and Swing Loans, in an aggregate principal amount not exceeding the 
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amount set forth with respect to such Lender on Schedule I, as increased, decreased or modified pursuant to Section 2.17 or through assignments in accordance with the terms hereof.
“Revolving Loan Notes” shall mean those certain promissory notes issued by the Borrowers to each of the Lenders that requests a promissory note, in accordance with each such Lender’s Revolving Loan Commitment, substantially in the form of Exhibit G.
“Revolving Loans” shall mean, collectively, the amounts (other than Agent Advances and Swing Loans) advanced from time to time by the Lenders to the Borrowers under the Revolving Loan Commitments, not to exceed the Aggregate Revolving Loan Commitments.
“S&P” shall mean Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or any successor thereto.
    “Sale-Leaseback Transaction” shall have the meaning specified in Section 8.10.
“Sanctioned Country” shall mean a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treasury.gov/resource-center/sanctions/Pages/
default.aspx, or as otherwise published from time to time.
“Sanctioned Person” shall mean (i) a Person named on the list of “Specially Designated Nationals and Blocked Persons” maintained by OFAC available at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time, or (ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or (C) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.
    “Second Amendment” shall mean that certain Second Amendment to the Credit Agreement, dated as of the Second Amendment Date, among the Borrowers, the Lenders, and Administrative Agent.
“Second Amendment Date” shall mean September 27, 2019.
“Securities Act” shall mean the Securities Act of 1933, as amended and in effect from time to time.
    “Security Agreement” shall mean that certain Security Agreement, dated as of the Original Agreement Date, among the Credit Parties and the Administrative Agent, on behalf of, and for the benefit of, the Lender Group.
    “Security Documents” shall mean, collectively, the Security Agreement, the Pledge Agreement, the Control Account Agreements, the Collateral Access Agreements, all UCC-1 financing statements and any other document, instrument or agreement granting Liens securing the Obligations, including, without 
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limitation, any documents or agreements delivered pursuant to Section 6.23, in each case as the same may be amended or modified from time to time.
“SOFR” shall mean a rate per annum equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator” shall mean the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“SOFR Advance” shall mean an Advance which the Administrative Borrower requests to be made as a SOFR Advance or which is continued as or converted to a SOFR Advance, in accordance with the provisions of Section 2.2.
    “Standby Letter of Credit” shall mean a Letter of Credit issued to support obligations of any Credit Party that is not a Commercial Letter of Credit.
    “Subsidiary” shall mean, as applied to any Person, (a) any corporation of which more than fifty percent (50%) of the outstanding stock (other than directors’ qualifying shares) having ordinary voting power to elect a majority of its board of directors, regardless of the existence at the time of a right of the holders of any class or classes of securities of such corporation to exercise such voting power by reason of the happening of any contingency, or any partnership or limited liability company of which more than fifty percent (50%) of the outstanding partnership interests or membership interests, as the case may be, is at the time owned by such Person, or by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, and (b) any other entity which is controlled or capable of being controlled by such Person, or by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person.
    “Subsidiary Guarantors” shall mean all Subsidiaries of the Borrowers signatory to this Agreement as a “Guarantor” and all Subsidiaries of the Borrowers that have executed and delivered a Supplement.  
“Supplement” shall have the meaning specified in Section 6.20.
    “Swing Bank” shall mean SunTrustTruist Bank, or any other Lender who shall agree with the Administrative Agent to act as Swing Bank and which is approved by the Administrative Borrower.
    “Swing Loan Note” shall mean that certain promissory note issued by the Borrowers to the Swing Bank, substantially in the form of Exhibit H. 
    “Swing Loans” shall mean, collectively, the amounts advanced from time to time by the Swing Bank to the Borrowers in accordance with Section 2.2(g). 
    “Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions, assessments, fees, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term SOFR” shall mean,
(a)    for any calculation with respect to a SOFR Advance, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) US Government Securities Business Days prior to the first day of 
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such Interest Period, as such rate is published by the Term SOFR Administrator; provided, that if as of 5:00 p.m. on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding US Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) US Government Securities Business Days prior to such Periodic Term SOFR Determination Day, and
(b)    for any calculation with respect to a Base Rate Advance on any day, the Term SOFR Reference Rate for a tenor of one month on the day (such day, the “Base Rate Term SOFR Determination Day”) that is two (2) US Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided that if as of 5:00 p.m. on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding US Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding US Government Securities Business Day is not more than three (3) US Government Securities Business Days prior to such Base Rate Term SOFR Determination Day.
“Term SOFR Adjustment” shall mean a percentage equal to 0.10% per annum. 
“Term SOFR Administrator” shall mean the CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).
“Term SOFR Reference Rate” shall mean the rate per annum determined by the Administrative Agent as the forward-looking term rate based on SOFR.
    “Third Amendment” shall mean that certain Third Amendment to the Credit Agreement, dated as of the Third Amendment Date, between the Borrowers, the Lenders, and the Administrative Agent.
    “Third Amendment Date” shall mean May 15, 2020.
    “Title IV Plan” shall mean a Plan that is an “employee pension benefit plan,” within the meaning of Section 3(2) of ERISA, that is covered by Title IV of ERISA. 
    “Trading with the Enemy Act” shall mean the Trading with the Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended and in effect from time to time.
    “UCC” shall mean the Uniform Commercial Code as the same may, from time to time, be enacted and in effect in the State of Georgia; provided that, to the extent that the UCC is used to define any term herein and such term is defined differently in different Articles or Divisions of the UCC, the definition of such term contained in Article or Division 9 shall govern; provided, further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, the Administrative Agent’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of Georgia, the term 
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“UCC” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.
“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
    “Unfinanced Cash Capital Expenditures”  shall mean, for any period, the amount of Capital Expenditures made by the Borrowers and its Subsidiaries during such period in cash, but excluding any such Capital Expenditures financed with the proceeds of IndebtednessFunded Debt permitted hereunder (but excluding the Revolving Loans) or with the proceeds (including proceeds from insurance) from any sale, transfer, assignment or other disposition, or casualty or condemnation loss, of any assets permitted hereunder.
    “Unfunded Pension Liability” shall mean at any time, the aggregate amount, if any, of the sum of (a) the amount by which the present value of all accrued benefits under each Title IV Plan exceeds the fair market value of all assets of such Title IV Plan allocable to such benefits in accordance with Title IV of ERISA, all determined as of the most recent valuation date for each such Title IV Plan using the actuarial assumptions for funding purposes in effect under such Title IV Plan, and (b) for a period of five (5) years following a transaction which might reasonably be expected to be covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that could be avoided by any Credit Party or any ERISA Affiliate as a result of such transaction. 
“Uniform Customs” shall mean the Uniform Customs and Practice for Documentary Credits (2006 Revision), International Chamber of Commerce Publication No. 600, as the same may be amended from time to time.
    “Unused Line Fee” shall have the meaning specified in Section 2.4(b).
    “USA Patriot Act” shall mean the the USA PATRIOT Improvement and Reauthorization Act of 2005 (Pub. L. 109-177 (signed into law March 9, 2006)), as amended and in effect from time to time.
    “US” or “United States” shall mean the United States of America.
“US Government Securities Business Day” shall mean any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends 
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that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
    “US Person” shall mean any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.
    “US Tax Compliance Certificate” shall have the meaning set forth in Section 2.18(e)(ii).
    “Value” shall mean, at any particular date, with respect to any item of Inventory such item of Inventory’s cost, valued in accordance with the “First-In, First-Out” method of accounting.
    “Voidable Transfer” shall have the meaning specified in Section 11.18. 
“Withholding Agent” shall mean any Borrower, any other Credit Party or the Administrative Agent, as applicable.
Section 1.bAccounting Principles.  The classification, character and amount of all assets, liabilities, capital accounts and reserves and of all items of income and expense to be determined, and any consolidation or other accounting computation to be made, and the interpretation of any definition containing any financial term, pursuant to this Agreement shall be determined and made in accordance with GAAP consistently applied (subject to the proviso below), unless such principles are inconsistent with the express requirements of this Agreement; provided that if at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Administrative Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Administrative Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided, further, that if the parties are unable to agree, such determination shall continue to be made in accordance with the previous accounting principles, methods and policies of the Borrowers and their Subsidiaries.  All accounting terms used herein without definition shall be used as defined under GAAP.  All financial calculations hereunder shall, unless otherwise stated, be determined for the Borrowers on a consolidated basis with their Subsidiaries.  Notwithstanding any other provision contained herein, (i) 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 Accounting Standards Codification Section 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any IndebtednessFunded Debt or other liabilities of  any Credit Party or any Subsidiary of any Credit Party at “fair value”, as defined therein; and (ii) for purposes of this Agreement, any change in GAAP requiring leases which were previously classified as operating leases to be treated as capitalized leases shall be disregarded and such leases shall continue to be treated as operating leases consistent with GAAP as in effect immediately before such change in GAAP became effective.
Section 1.cOther Interpretive Matters.  Each definition of an agreement in this Article 1 shall include such instrument or agreement as amended, restated, supplemented or otherwise modified from time to time with, if required, the prior written consent of the Required Lenders, except as provided in Section 11.12 and otherwise to the extent permitted under this Agreement and the other Loan Documents.  Except where the context otherwise requires, definitions imparting the singular shall include the plural and vice versa.  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, unless otherwise specifically provided herein.  References in this Agreement to “Articles”, 
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“Sections”, “Schedules” or “Exhibits” shall be to Articles, Sections, Schedules or Exhibits of or to this Agreement unless otherwise specifically provided.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, whether or not so expressly stated in each such instance, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  “Writing”, “written” and comparable terms refer to printing, typing, computer disk, e-mail and other means of reproducing words in a visible form.  Except where otherwise specifically restricted, reference to a party to a Loan Document includes that party and its successors and assigns.  An Event of Default, if one occurs, shall “exist”, “continue” or be “continuing” until such Event of Default has been waived in writing in accordance with Section 11.12. All terms used herein which are defined in Article 9 of the UCC and which are not otherwise defined herein shall have the same meanings herein as set forth therein.  Whenever the term “reasonable attorneys fees” is used in any Loan Document, it shall be deemed to mean the reasonable attorneys fees actually incurred and shall not be determined by reference to any statutorily prescribed percentage.  
Section 1.dAmendment and Restatement; No Novation.  
        (a)    This Agreement constitutes an amendment and restatement of the Existing Credit Agreement effective from and after the Agreement Date.  The execution and delivery of this Agreement shall not constitute a refinancing, substitution or novation of any indebtedness or other Obligations owing to the Lenders or the Administrative Agent under the Existing Credit Agreement or any of the other rights, duties and obligations of the parties hereunder based on any facts or events occurring or existing prior to the execution and delivery of this Agreement.  On the Agreement Date, the terms and conditions of the Existing Credit Agreements shall be amended as set forth herein and, as so amended, shall be restated in their entirety, but shall be amended only with respect to the rights, duties and obligations among the Credit Parties, the Lenders, the Issuing Bank and the Administrative Agent accruing from and after the Agreement Date.
        (b)    On the Agreement Date, the Revolving Loan Commitments described in the Existing Credit Agreement shall be reduced to $50,000,000, reallocated entirely to SunTrustTruist Bank and amended and supplemented in the manner described herein, and all loans, letters of credit and other obligations of the Borrowers outstanding as of such date under the Existing Credit Agreement shall be deemed to be loans, letters of credit and obligations outstanding hereunder, without further action by any Person.  The Obligations incurred under the Existing Credit Agreement shall, to the extent outstanding on the Agreement Date, continue outstanding under this Agreement and shall not be deemed to be paid, released, discharged or otherwise satisfied by the execution of this Agreement.
        (c)    This Agreement shall not in any way release or impair the rights, duties, Obligations or Liens created pursuant to the Existing Credit Agreement or any other Loan Document or affect the relative priorities thereof, in each case to the extent in force and effect thereunder as of the Agreement Date, except as modified hereby or by documents, instruments and agreements executed and delivered in connection herewith, and all of such rights, duties, Obligations and Liens are assumed, ratified and affirmed by each Credit Party.  All indemnification obligations of the Credit Parties under the Existing Credit Agreement and any other Loan Documents shall survive the execution and delivery of this Agreement and shall continue in full force and effect for the benefit of the Lenders, the Administrative Agent and any other Person indemnified under the Existing Credit Agreement or any other Loan Document at any time prior to the Agreement Date.  The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of the Lenders or the Administrative Agent under the Existing Credit Agreement, nor constitute a waiver of any covenant, 
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agreement or obligation under the Existing Credit Agreement, except to the extent that any such covenant, agreement or obligation is no longer set forth herein or is modified hereby.  
        (d)    Each of the Credit Parties confirms and agrees that all of the other Loan Documents are and shall remain in full force and effect on and after the Agreement Date and constitute the legal, valid, binding and enforceable obligations of the Credit Parties party thereto to the Administrative Agent and the Lenders.  
Section 1.eReferences in Loan Documents.  On and after the Agreement Date, each and every reference in the other Loan Documents to the Existing Credit Agreement, and to the capitalized terms as defined in the Existing Credit Agreement (including, without limitation, the terms “Loans”, “Obligations”, “Revolving Commitment” and “Maturity Date”), shall be deemed to refer to and mean this Agreement and such capitalized terms as the same are defined and used in this Agreement, in each case as this Agreement may hereafter be further amended, restated, supplemented and modified from time to time.  
Section 1.fLiquidation of Former Borrowers.  The parties hereto acknowledge that, as of the Agreement Date, Havertys Enterprises, Inc. and Havertys Capital, Inc. have been liquidated and dissolved by HFC and are no longer in existence in any jurisdiction.  On and after the Agreement Date, (i) each and every reference in the other Loan Documents to the “Borrowers” shall be deemed to refer to and mean the “Borrowers” as defined and used in this Agreement, as this Agreement may hereafter be further amended, restated, supplemented and modified from time to time, and, for the avoidance of doubt, shall be deemed not to refer to Havertys Enterprises, Inc. and Havertys Capital, Inc. and (ii) (x) each and every reference in the other Loan Documents to Havertys Enterprises, Inc. as the owner of the 1,000 preferred shares issued by HCS shall be deemed to refer to and mean HFC and (y) each and every other reference in the schedules to the other Loan Documents to Havertys Enterprises, Inc. and Havertys Capital, Inc. shall be deemed to be deleted.
Article 2.

THE LOANS AND THE LETTERS OF CREDIT
Section 1.gExtension of Credit.  Subject to the terms and conditions of, and in reliance upon the representations and warranties made in this Agreement and the other Loan Documents, each Lender agrees, severally and not jointly with the other Lenders, to extend credit to the Borrowers in an aggregate principal amount not to exceed its Revolving Loan Commitment.
(1)The Revolving Loans.  Each Lender agrees, severally and not jointly with the other Lenders, upon the terms and subject to the conditions of this Agreement, to lend and relend to the Borrowers, from time to time on any Business Day prior to the Maturity Date, amounts which in the aggregate do not exceed the lesser of (i) such Lender’s ratable share (based upon such Lender’s Revolving Commitment Ratio) of Availability, to the extent in effect at such time of determination, as of such Business Day and (ii) such Lender’s Revolving Loan Commitment.  Subject to the terms and conditions hereof and prior to the Maturity Date, Advances under the Revolving Loan Commitments may be repaid and reborrowed from time to time on a revolving basis and shall be funded ratably by the Lenders based on their respective Revolving Commitment Ratios.
(2)The Letters of Credit.  Subject to the terms and conditions of this Agreement, the Issuing Bank agrees to issue Letters of Credit for the account of the Borrowers, from time to time on any 
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Business Day prior to the date thirty (30) days prior to the Maturity Date, pursuant to Section 2.15 in an outstanding face amount not to exceed, with respect to the issuance of any individual Letter of Credit as of any Business Day, the Available Letter of Credit Amount as of such Business Day.  
(3)The Swing Loans.  Subject to the terms and conditions of this Agreement, the Swing Bank, in its sole discretion, may, from time to time on any Business Day after the Agreement Date but prior to the Maturity Date, make Swing Loans to the Borrowers (i) in an amount not to exceed Availability as of such Business Day and (ii) in an aggregate amount (including all Swing Loans outstanding as of such Business Day) not to exceed the lesser of (A) the excess of (1) the Swing Bank’s Revolving Loan Commitment less (2) the Swing Bank’s outstanding Swing Loans and all other Revolving Credit Exposure and (B) $5,000,000.  
(4)Overadvances.  
(1)Notwithstanding any provision of this Agreement to the contrary but subject to the limitations set forth in this Section 2.1(d), at the request of the Administrative Borrower, the Administrative Agent may in its sole discretion (but with absolutely no obligation), make Revolving Loans to the Borrowers, on behalf of the Lenders, in amounts that exceed Availability (any such excess Revolving Loans are herein referred to collectively as “Overadvances”); provided that (i) the aggregate amount of Overadvances outstanding at any time, together with the aggregate amount of Agent Advances outstanding at such time, shall not exceed $5,000,000, (ii) the aggregate amount of outstanding Overadvances plus the aggregate Revolving Credit Exposure shall not exceed the Aggregate Revolving Loan Commitments and (iii) the Borrowers shall, jointly and severally, pay all Overadvance on the earlier of demand by the Administrative Agent and 30 days after such Overadvances were funded.  Overadvances may be made even if the conditions precedent set forth in Section 4.2 have not been satisfied.  All Overadvances shall be secured by the Collateral and shall constitute Obligations hereunder.  All Overadvances shall be Base Rate Advances.  The Administrative Agent’s authorization to make Overadvances may be revoked at any time by the Required Lenders.  Any such revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof.  
(2)Upon the making of an Overadvance (whether before or after the occurrence of a Default), each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent, without recourse or warranty, an undivided interest and participation in such Overadvance in proportion to its Revolving Commitment Ratio.  The Administrative Agent may, at any time (and shall, on at least a weekly basis when any Overadvance is outstanding), require the Lenders to fund their participations.  From and after the date, if any, on which any Lender is required to fund its participation in any Overadvance purchased hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lender’s Revolving Commitment Ratio of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Overadvance.
(1)Agent Advances.
(3)Notwithstanding any provision of this Agreement to the contrary but subject to the limitations set forth in this Section 2.1(e), the Administrative Agent is authorized by the Borrowers and the Lenders, from time to time in the Administrative Agent’s sole 
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discretion (but shall have absolutely no obligation to), (A) at any time that a Default exists, or (B) at any time that any of the other conditions precedent set forth in Article 4 have not been satisfied, to make advances to the Borrowers, on behalf of all Lenders, which the Administrative Agent, in its Permitted Discretion, deems necessary or desirable (i) to preserve or protect the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or maximize the amount of, repayment of the Loans and other Obligations, or (iii) to pay any other amount chargeable to or required to be paid by the Borrowers pursuant to the terms of this Agreement, including costs, fees, and expenses as provided under this Agreement (any of such advances are herein referred to as “Agent Advances”); provided that (i) the aggregate amount of Agent Advances outstanding at any time, together with the aggregate amount of Overadvances outstanding at such time, shall not exceed $5,000,000, (ii) the aggregate amount of outstanding Agent Advances plus the aggregate Revolving Credit Exposure shall not exceed the Aggregate Revolving Loan Commitments and (iii) the Borrowers shall, jointly and severally, pay all Agent Advances on the earlier of demand by the Administrative Agent and 30 days after such Agent Advances were funded.  Agent Advances may be made even if the conditions precedent set forth in Section 4.2 have not been satisfied.  All Agent Advances shall be secured by the Collateral and shall constitute Obligations hereunder.  All Agent Advances shall be Base Rate Advances.  The Administrative Agent’s authorization to make Agent Advances may be revoked at any time by the Required Lenders.  Any such revocation must be in writing and shall become effective prospectively upon the Administrative Agent’s receipt thereof.  The Administrative Agent shall promptly provide to the Administrative Borrower written notice of any Agent Advance.
(4)Upon the making of an Agent Advance by the Administrative Agent in accordance with the terms hereof, each Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the Administrative Agent, without recourse or warranty, an undivided interest and participation in such Agent Advance in proportion to its Revolving Commitment Ratio.  From and after the date, if any, on which any Lender is required to fund its participation in any Agent Advance purchased hereunder, the Administrative Agent shall promptly distribute to such Lender, such Lender’s Revolving Commitment Ratio of all payments of principal and interest and all proceeds of Collateral received by the Administrative Agent in respect of such Agent Advance.   
(5)Each Agent Advance shall be subject to all terms and conditions of this Agreement and the other Loan Documents applicable to Revolving Loans, except that all payments thereon shall be made to the Administrative Agent solely for its own account and the making of any Agent Advance shall not require the consent of the Borrowers.  The Administrative Agent shall have no duty or obligation to make any Agent Advance hereunder. 
(6)The Administrative Agent shall notify each Lender no less frequently than weekly, as determined by the Administrative Agent, of the principal amount of Agent Advances outstanding as of 12:00 noon (Atlanta, Georgia time) as of such date, and each Lender’s pro rata share thereof.  Each Lender shall before 2:00 p.m. (Atlanta, Georgia time) on such Business Day make available to the Administrative Agent, in immediately available funds, the amount of its pro rata share of such principal amount of Agent Advances outstanding.  Upon such payment by a Lender, such Lender shall be deemed to have made a Revolving Loan to the Borrowers, notwithstanding any failure of the Borrowers to satisfy the conditions in Section 4.2.  The Administrative Agent shall use such funds to repay the principal amount of Agent Advances.  Additionally, if at any time any Agent Advances are outstanding, any of the events described in Sections 9.1(g) or 9.1(h) shall have occurred, then each Lender shall automatically, upon the 
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occurrence of such event, and without any action on the part of the Administrative Agent, the Borrowers or the Lenders, be deemed to have purchased an undivided participation in the principal and interest of all Agent Advances then outstanding in an amount equal to such Lender’s Revolving Commitment Ratio and each Lender shall, notwithstanding such Event of Default, immediately pay to the Administrative Agent in immediately available funds, the amount of such Lender’s participation (and upon receipt thereof, the Administrative Agent shall deliver to such Lender, a loan participation certificate dated the date of receipt of such funds in such amount).  The disbursement of funds in connection with the settlement of Agent Advances hereunder shall be subject to the terms and conditions of Section 2.2(e).
(5)Loans in Excess of Availability.  If at any time the amount of the Aggregate Revolving Credit Obligations exceed the Revolving Loan Commitments, the Borrowing Base or any other applicable limitation set forth in this Agreement (including, without limitation, the limitations on Swing Loans, Agent Advances, Overadvances and Letters of Credit) such excess shall nevertheless constitute a portion of the Obligations that are secured by the Collateral and are entitled to all benefits thereof.  In no event, however, shall the Borrowers have any right whatsoever to (i) receive any Revolving Loan, (ii) receive any Swing Loan, or (iii) request the issuance of any Letter of Credit if, before or after giving effect thereto, there shall exist a Default, and in no event shall the Borrowers have any right whatsoever to receive any Agent Advance or Overadvance.  In the event that (1) the Lenders shall make any Revolving Loans, (2) the Swing Bank shall make any Swing Loan, (3) the Administrative Agent shall make any Agent Advances or Overadvances or (4) the Issuing Bank shall agree to the issuance of any Letter of Credit, which in any such case gives rise to the Revolving Credit Exposure exceeding the Revolving Loan Commitments, the Borrowing Base or any other applicable limitation set forth in this Agreement, the Borrowers shall make, on demand, a payment on the Obligations to be applied to the Revolving Loans, the Swing Loans, the Agent Advances, the Overadvances and the Letter of Credit Reserve Account, as appropriate, in an aggregate principal amount equal to such excess.  
Section 1.hManner of Borrowing and Disbursement of Loans.
(i)Choice of Interest Rate.  Any Advance shall, at the option of the Administrative Borrower, be made either as a Base Rate Advance or as a EurodollarSOFR Advance (except for the first three (3) Business Days after the Agreement Date, during which period the Loans shall bear interest as a Base Rate Advance); provided that (i) if the Administrative Borrower fails to give the Administrative Agent written notice specifying whether a EurodollarSOFR Advance is to be repaid, continued or converted on a Payment Date, such Advance shall be converted to a Base Rate Advance on the Payment Date in accordance with Section 2.3(a)(iii), (ii) the Administrative Borrower may not select a EurodollarSOFR Advance (A) with respect to Swing Loans, (B) with respect to an Advance, the proceeds of which are to reimburse the Issuing Bank pursuant to Section 2.15, or (C) if, at the time of such Advance or at the time of the continuation of, or conversion to, a EurodollarSOFR Advance pursuant to Section 2.2(c), a Default exists, and (iii) all Agent Advances and Overadvances shall be made as Base Rate Advances.  Any notice given to the Administrative Agent in connection with a requested Advance hereunder shall be given to the Administrative Agent prior to (i) 1:00 p.m. (Atlanta, Georgia time) with respect to Base Rate Advances and EurodollarSOFR Advances and (ii) 2:00 p.m. (Atlanta, Georgia time) 
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with respect to Swing Loans in order for such Business Day to count toward the minimum number of Business Days required.  
(ii)Base Rate Advances.
(1)Initial and Subsequent Advances.  The Administrative Borrower shall give the Administrative Agent in the case of Base Rate Advances irrevocable notice by telephone not later than 1:00 p.m. (Atlanta, Georgia time) on the requested date of such Base Rate Advance and shall immediately confirm any such telephone notice with a written Request for Advance; provided that the failure by the Administrative Borrower to confirm any notice by telephone with a written Request for Advance shall not invalidate any notice so given.  
(2)Repayments and Conversions.  The Administrative Borrower may (A) subject to Section 2.5, at any time without prior notice repay a Base Rate Advance, or (B) upon at least three (3) US Government Securities Business Days irrevocable prior written notice by the Administrative Borrower to the Administrative Agent in the form of a Notice of Conversion/Continuation, convert all or a portion of the principal thereof to one or more EurodollarSOFR Advances.  Upon the date indicated by the Administrative Borrower, such Base Rate Advance shall be so repaid or converted.
(6)EurodollarSOFR Advances.
(3)Initial and Subsequent Advances.  The Administrative Borrower shall give the Administrative Agent in the case of EurodollarSOFR Advances irrevocable notice by telephone not later than 1:00 p.m. (Atlanta, Georgia time) three (3) US Government Securities Business Days prior to the date of such EurodollarSOFR Advance and shall immediately confirm any such telephone notice with a written Request for Advance; provided that the failure by the Administrative Borrower to confirm any notice by telephone with a written Request for Advance shall not invalidate any notice so given.
(4)Repayments, Continuations and Conversions.  At least three (3) US Government Securities Business Days prior to each Payment Date for a EurodollarSOFR Advance, the Administrative Borrower shall give the Administrative Agent written notice in the form of a Notice of Conversion/Continuation specifying whether all or a portion of such EurodollarSOFR Advance outstanding on such Payment Date is to be continued in whole or in part as one or more new EurodollarSOFR Advances and also specifying the new Eurodollar AdvanceInterest Period applicable to each such new EurodollarSOFR Advance (and subject to the provisions of this Agreement, upon such Payment Date, such EurodollarSOFR Advance shall be so continued).  Upon such Payment Date, any EurodollarSOFR Advance (or portion thereof) not so continued shall be converted to a Base Rate Advance or, subject to Section 2.5, be repaid.
(5)Miscellaneous.  Notwithstanding any term or provision of this Agreement which may be construed to the contrary, each EurodollarSOFR Advance shall be in a principal amount of no less than $2,500,000 and in an integral multiple of $500,000 in excess thereof, and at no time shall the aggregate number of all EurodollarSOFR Advances then outstanding exceed six (6). 
(2)Notification of Lenders.  Upon receipt of a (i) Request for Advance or a telephone or telecopy request for Advance, (ii) notification from the Issuing Bank that a draw has been made under any Letter of Credit (unless the Issuing Bank will be reimbursed through the funding of a 
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Swing Loan), or (iii) notice from the Administrative Borrower with respect to the prepayment of any outstanding EurodollarSOFR Advance prior to the Payment Date for such Advance, the Administrative Agent shall promptly notify each Lender by telephone or telecopy of the contents thereof and the amount of each Lender’s portion of any such Advance.  Each Lender shall, not later than 3:30 p.m. (Atlanta, Georgia time) on the date specified for such Advance (under clause (i) or (ii) above) in such notice, make available to the Administrative Agent at the Administrative Agent’s Office, or at such account as the Administrative Agent shall designate, the amount of such Lender’s portion of the Advance in immediately available funds.
(3)Disbursement.  Prior to 3:30 p.m. (Atlanta, Georgia time) with respect to Base Rate Advances and EurodollarSOFR Advances and prior to 4:00 p.m. (Atlanta, Georgia time) with respect to Swing Loans on the date of an Advance hereunder, the Administrative Agent shall, subject to the satisfaction of the conditions set forth in Article 4, disburse the amounts made available to the Administrative Agent by the Lenders in like funds by (i) transferring the amounts so made available by wire transfer to the Borrowers’ Principal Disbursement Account or (ii) in the case of an Advance the proceeds of which are to reimburse the Issuing Bank pursuant to Section 2.15, transferring such amounts to such Issuing Bank.  Unless the Administrative Agent shall have received notice from a Lender prior to 5:00 p.m. (Atlanta, Georgia time) one (1) Business Day prior to the date of any Advance that such Lender will not make available to the Administrative Agent such Lender’s ratable portion of such Advance, the Administrative Agent may assume that such Lender has made or will make such portion available to the Administrative Agent on the date of such Advance and the Administrative Agent may, in its sole discretion and in reliance upon such assumption, make available to the Borrowers or the Issuing Bank, as applicable, on such date a corresponding amount.  If and to the extent such Lender shall not have so made such ratable portion available to the Administrative Agent, such Lender agrees to repay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrowers or the Issuing Bank, as applicable, until the date such amount is repaid to the Administrative Agent, (x) for the first two (2) Business Days, at the Federal Funds Rate for such Business Days, and (y) thereafter, at the Base Rate.  If such Lender shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Lender’s portion of the applicable Advance for purposes of this Agreement and if both such Lender and the Borrowers shall pay and repay such corresponding amount, the Administrative Agent shall promptly relend to the Borrowers such corresponding amount.  If such Lender does not repay such corresponding amount immediately upon the Administrative Agent’s demand therefor, the Administrative Agent shall notify the Borrowers and the Borrowers shall immediately pay such corresponding amount to the Administrative Agent.  The failure of any Lender to fund its portion of any Advance shall not relieve any other Lender of its obligation, if any, hereunder to fund its respective portion of the Advance on the date of such borrowing, but no Lender shall be responsible for any such failure of any other Lender.  
(4)Deemed Requests for Advance.  Unless payment is otherwise timely made by the Borrowers, the becoming due of any amount required to be paid under this Agreement or any of the other Loan Documents as principal, interest, reimbursement obligations in connection with Letters of Credit, premiums, fees, reimbursable expenses or other sums payable hereunder shall be deemed irrevocably to be a Request for Advance on the due date of, and in an aggregate amount required to pay, such principal, interest, reimbursement obligations in connection with Letters of Credit, premiums, fees, reimbursable expenses or other sums payable hereunder, and the proceeds of a Revolving Loan made pursuant thereto may be disbursed by way of direct payment of the relevant Obligation and shall bear interest as a Base Rate Advance.  The Lenders shall have no obligation to the Borrowers to honor any deemed Request for Advance under this Section 2.2(f) unless all the conditions set forth in Section 4.2 have been satisfied, 
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but, with the consent of the Lenders required under the last sentence of Section 4.2, may do so in their sole discretion and without regard to the existence of, and without being deemed to have waived, any Default and without regard to the failure by the Borrowers to satisfy any of the conditions set forth in Section 4.2.  No further authorization, direction or approval by the Borrowers shall be required to be given by the Borrowers for any deemed Request for Advance under this Section 2.2(f).  The Administrative Agent shall promptly provide to the Administrative Borrower written notice of any Advance pursuant to this Section 2.2(f).  
(5)Special Provisions Pertaining to Swing Loans.
(6)The Administrative Borrower shall give the Swing Bank written notice in the form of a Request for Advance, or notice by telephone no later than 2:00 p.m. (Atlanta, Georgia time) on the date on which the Borrowers wish to receive an Advance of any Swing Loan followed immediately by a written Request for Advance, with a copy to the Administrative Agent; provided that the failure by the Administrative Borrower to confirm any notice by telephone with a written Request for Advance shall not invalidate any notice so given; provided, further, that any request by the Administrative Borrower of a Base Rate Advance under the Revolving Loan Commitments shall be deemed to be a request for a Swing Loan unless the Administrative Borrower specifically requests otherwise.  Each Swing Loan shall bear interest at the rate equal to the Base Rate plus the Applicable Margin.  If the Swing Bank, in its sole discretion, elects to make the requested Swing Loan, the Swing Loan shall be made on the date specified in the notice or the Request for Advance and such notice or Request for Advance shall specify (i) the amount of the requested Swing Loan and (ii) instructions for the disbursement of the proceeds of the requested Swing Loan.  Each Swing Loan shall be subject to all the terms and conditions applicable to Revolving Loans, except that all payments thereon shall be payable to the Swing Bank solely for its own account.  The Swing Bank shall have no duty or obligation to make any Swing Loans hereunder.  The Swing Bank shall not make any Swing Loans if the Swing Bank has received written notice from any Lender (or the Swing Bank has actual knowledge) that one or more applicable conditions precedent set forth in Section 4.2 will not be satisfied (or waived pursuant to the last sentence of Section 4.2) on the requested Advance date.  In the event the Swing Bank in its sole and absolute discretion elects to make any requested Swing Loan, the Swing Bank shall make the proceeds of such Swing Loan available to the Borrowers by deposit of Dollars in same day funds by wire transfer to the Principal Disbursement Account.  In the event that the Swing Bank informs the Administrative Agent that it will not make the requested Advance as a Swing Loan, then such request will be deemed a request for a Base Rate Advance under the Revolving Loan Commitments.
(7)The Swing Bank shall notify the Administrative Agent and each Lender no less frequently than weekly, as determined by the Administrative Agent, of the principal amount of Swing Loans outstanding as of 3:00 p.m. (Atlanta, Georgia time) as of such date and each Lender’s pro rata share (based on its Revolving Commitment Ratio) thereof.  Each Lender shall before 12:00 Noon (Atlanta, Georgia time) on the next Business Day make available to the Administrative Agent, in immediately available funds, the amount of its pro rata share (based on its Revolving Commitment Ratio) of such principal amount of Swing Loans outstanding.  Upon such payment by a Lender, such Lender shall be deemed to have made a Revolving Loan to the Borrowers, notwithstanding any failure of the Borrowers to satisfy the conditions in Section 4.2.  The Administrative Agent shall use such funds to repay the principal amount of Swing Loans to the Swing Bank.  Additionally, if at any time any Swing Loans are outstanding, any of the events described in Sections 9.1(g) or 9.1(h) shall have occurred, then each Lender shall automatically 
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upon the occurrence of such event and without any action on the part of the Swing Bank, the Borrowers, the Administrative Agent or the Lenders be deemed to have purchased an undivided participation in the principal and interest of all Swing Loans then outstanding in an amount equal to such Lender’s Revolving Commitment Ratio of the principal and interest of all Swing Loans then outstanding and each Lender shall, notwithstanding such Event of Default, immediately pay to the Administrative Agent for the account of the Swing Bank in immediately available funds, the amount of such Lender’s participation (and upon receipt thereof, the Swing Bank shall deliver to such Lender a loan participation certificate dated the date of receipt of such funds in such amount).  The disbursement of funds in connection with the settlement of Swing Loans hereunder shall be subject to the terms and conditions of Section 2.2(e). 
Section 1.aInterest.
(1)On Loans.  Interest on the Loans, subject to Sections 2.3(b) and (c), shall be payable as follows:
(1)On Base Rate Advances and Swing Loans.  Interest on each Base Rate Advance and each Swing Loan shall be computed for the actual number of days elapsed on the basis of a hypothetical year of three hundred sixty-five (365) days and shall be payable monthly in arrears on the first day of each calendar month for the prior calendar month, commencing on September 1, 2011.  Interest on Base Rate Advances and Swing Loans then outstanding shall also be due and payable on the Maturity Date (or the date of any earlier prepayment in full of the Obligations).  Interest shall accrue and be payable on each Base Rate Advance and Swing Loan at the simple per annum interest rate equal to the sum of (A) the Base Rate and (B) the Applicable Margin.  
(2)On EurodollarSOFR Advances.  Interest on each EurodollarSOFR Advance shall be computed for the actual number of days elapsed on the basis of a hypothetical year of three hundred sixty (360) days and shall be payable in arrears on (x) the Payment Date for such Advance, and (y) if the Eurodollar AdvanceInterest Period for such Advance is greater than three (3) months, oneach day which occurs every three months after the last dayinitial date of such three (3) month periodInterest Period and on the last day of the applicable Eurodollar AdvanceInterest Period for such Advance.  Interest on EurodollarSOFR Advances then outstanding shall also be due and payable on the Maturity Date (or the date of any earlier prepayment in full of the Obligations).  Interest shall accrue and be payable on each EurodollarSOFR Advance at a rate per annum equal to the sum of (A) the Eurodollar Basis applicable to such Eurodollar AdvanceAdjusted Term SOFR and (B) the Applicable Margin.  
(3)If No Notice of Selection of Interest Rate.  If the Administrative Borrower fails to give the Administrative Agent timely notice of its selection of a Eurodollar BasisSOFR Advance, or if for any reason a determination of a Eurodollar BasisAdjusted Term SOFR for any Advance is not timely concluded, the Base Rate shall apply to such Advance.  If the Administrative Borrower fails to elect to continue any EurodollarSOFR Advance then outstanding prior to the last Payment Date applicable thereto in accordance with the provisions of Section 2.2, as applicable, the Base Rate shall apply to such Advance commencing on and after such Payment Date.
(2)Default Rate.  While an Event of Default exists, at the option of the Required Lenders, and after acceleration, interest on the outstanding Obligations that otherwise accrue interest 
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hereunder shall accrue at the Default Rate.  Interest accruing at the Default Rate shall be payable on demand and in any event on the Maturity Date (or the date of any earlier prepayment in full of the Obligations) and shall accrue until the earliest to occur of (i) waiver of the applicable Event of Default in accordance with Section 11.12, (ii) agreement by the Required Lenders to rescind the charging of interest at the Default Rate, or (iii) payment in full of the Obligations.  The Lenders shall not be required to (A) accelerate the maturity of the Loans, (B) terminate the Commitments, or (C) exercise any other rights or remedies under the Loan Documents in order to charge interest hereunder at the Default Rate.
(3)Computation of Interest.  In computing interest on any Advance, the date of making the Advance shall be included and the date of payment shall be excluded; provided that if an Advance is repaid on the date that it is made, one (1) day’s interest shall be due with respect to such Advance.
(6)In connection with the use or administration of Term SOFR, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.  The Administrative Agent will promptly notify the Administrative Borrower and the Lenders of the effectiveness of any Conforming Changes in connection with the use or administration of Term SOFR.
Section 1.iFees.
(7)Fee Letter.  The Borrowers jointly and severally agree to pay to the Administrative Agent such fees as are set forth in the Fee Letter.
(8)Unused Line Fee.  The Borrowers jointly and severally agree to pay to the Administrative Agent, for the account of the Lenders in accordance with their respective Revolving Commitment Ratios, an unused line fee (“Unused Line Fee”) on the aggregate amount by which the Aggregate Revolving Loan Commitments exceeded the sum of the average daily amount of Aggregate Revolving Credit Obligations (other than with respect to any Swing Loans and Agent Advances, in each case only to the extent there is more than one Lender at such time) for each day from the AgreementFourth Amendment Date through the Maturity Date (or the date of any earlier prepayment in full of the Obligations), at a per annum rate equal to 0.2500.20%.  Such Unused Line Fee shall be computed on the basis of a hypothetical year of three hundred sixty (360) days for the actual number of days elapsed, shall be payable in arrears on SeptemberNovember 1, 20112022 for the immediately preceding calendar month and thereafter shall be payable monthly in arrears on the first day of each calendar month thereafter for the immediately preceding calendar month and, if then unpaid, on the Maturity Date (or the date of any earlier prepayment in full of the Obligations), and shall be fully earned when due and non-refundable when paid.  Notwithstanding anything set forth herein to the contrary, a Defaulting Lender shall not be entitled to receive any Unused Line Fee under this Section 2.4(b) for any date in which such Lender was and/or continued to be a Defaulting Lender. 
(9)Letter of Credit Fees.
(1)The Borrowers shall, jointly and severally, pay to the Administrative Agent for the account of the Lenders, in accordance with their respective Revolving Commitment Ratios, a fee on the stated amount of any outstanding Letters of Credit for each day from the Date of Issue through the Maturity Date (or the date of any earlier prepayment in full of the 
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Obligations) at a rate per annum on the amount of the Letter of Credit Obligations equal to the Applicable Margin in effect from time to time with respect to EurodollarSOFR Advances.  Such Letter of Credit fee shall be computed on the basis of a hypothetical year of three hundred sixty (360) days for the actual number of days elapsed, shall be payable monthly in arrears for each calendar month on the first day of the immediately succeeding calendar month, commencing on September 1, 2011, and, if then unpaid, on the Maturity Date (or the date of any earlier prepayment in full of the Obligations), and shall be fully earned when due and non-refundable when paid.  
(2)The Borrowers shall also, jointly and severally, pay to the Administrative Agent, for the account of the Issuing Bank, (A) to the extent there is more than one Lender at such time, a fee on the stated amount of each Letter of Credit for each day from the Date of Issue through the expiration date of each such Letter of Credit (or any earlier prepayment in full of the Obligations) at a rate of one-fourth of one percent (0.25%) per annum which fee shall be computed on the basis of a hypothetical year of three hundred sixty (360) days for the actual number of days elapsed, shall be payable monthly in arrears on the first day of each calendar month for the immediately preceding calendar month, commencing on September 1, 2011, and, if then unpaid, on the Maturity Date (or any earlier prepayment in full of the Obligations), and (B) any reasonable and customary fees charged by the Issuing Bank for issuance and administration of such Letters of Credit.  The foregoing fees shall be fully earned when due and non-refundable when paid.
(iii)Computation of Fees.  In computing any fees payable under this Section 2.4, the first day of the applicable period shall be included and the date of the payment shall be excluded.
(iv)Defaulting Lenders.  Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to the Unused Line Fee accruing during such period pursuant to Section 2.4(b) or letter of credit fees accruing during such period pursuant to Section 2.4(c) (without prejudice to the rights of the Lenders other than Defaulting Lenders in respect of such fees), provided that (x) to the extent that a portion of the Participation Exposure consisting of Letter of Credit Obligations of such Defaulting Lender is reallocated to the Non-Defaulting Lenders pursuant to Section 2.19, such fees that would have accrued for the benefit of such Defaulting Lender will instead accrue for the benefit of and be payable to such Non-Defaulting Lenders, pro rata in accordance with their respective Revolving Loan Commitments, and (y) to the extent any portion of such Participation Exposure consisting of Letter of Credit Obligations cannot be so reallocated, such fees will instead accrue for the benefit of and be payable to the Issuing Bank.  The pro rata payment provisions of Section 2.10 shall automatically be deemed adjusted to reflect the provisions of this Section 2.4(e).
Section 1.jPrepayment/Reduction of Commitment.  
(10)The principal amount of any Base Rate Advance may be repaid in full or in part at any time without penalty upon prior written notice to the Administrative Agent by 1:00 p.m. (Atlanta, Georgia time) on the date of such prepayment; the principal amount of any Swing Loan may be repaid in full or in part at any time without penalty upon prior written notice to the Administrative Agent by 11:00 a.m. (Atlanta, Georgia time) on the date of such prepayment; and the principal amount of any EurodollarSOFR Advance may be prepaid prior to the applicable Payment Date, upon prior written notice to the Administrative Agent by 1:00 p.m. (Atlanta, Georgia time) at least three (3) US Government Securities Business Days prior to such prepayment, provided that if a EurodollarSOFR Advance is prepaid on a date other than the last day of a Eurodollar Advancean Interest Period applicable thereto, the 
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Borrowers shall reimburse the Lenders and the Administrative Agent, on the earlier of demand or the Maturity Date, for any loss or reasonable out-of-pocket expense incurred by the Lenders or the Administrative Agent in connection with such prepayment, as set forth in Section 2.9.  Each notice of prepayment of any Advance shall be irrevocable, and each prepayment or repayment made under this Section 2.5(a) shall include the accrued interest on the amount so prepaid or repaid.  Upon receipt of any notice of repayment or prepayment, the Administrative Agent shall promptly notify each Lender of the contents thereof by telephone or telecopy and of such Lender’s portion of the repayment or prepayment.  Notwithstanding the foregoing, the Borrowers shall not make any repayment or prepayment of the Revolving Loans unless and until the balance of the Swing Loans and the Agent Advances then outstanding is zero.  Other than with respect to amounts required to be applied to the Loans pursuant to the last sentence of Section 2.6(a) or pursuant to Section 2.6(b) or Section 6.15, repayments or prepayments of principal hereunder shall be in minimum amounts of $2,500,000 and integral multiples of $500,000 in excess thereof.  Except as provided in Section 2.5(b), any repayment and prepayment of Advances outstanding under the Revolving Loan Commitments shall not reduce the Revolving Loan Commitments.  Any prepayment of the Loans shall not affect the Borrowers’ obligation to continue to make payments under any swap agreement (as defined in 11 U.S.C. §101), including, without limitation any such swap agreement that is a Lender Group Hedge Agreement, which shall remain in full force and effect notwithstanding such prepayment, subject to the terms of the applicable swap agreement.
(11)The Borrowers shall have the right, at any time and from time to time after the Agreement Date and prior to the Maturity Date, upon at least tenfive (105) daysBusiness Days’ prior written notice to the Administrative Agent, without premium or penalty, to cancel or reduce permanently all or a portion of the Revolving Loan Commitments on a pro rata basis among the Lenders in accordance with their respective Revolving Commitment Ratios; provided that (i) any such partial reduction shall be made in an amount not less than $5,000,000 and in integral multiples of $1,000,000 in excess thereof, (ii) the Revolving Loan Commitments may not be reduced to an amount below the then outstanding Letter of Credit Obligations and (iii) after giving effect to any partial reduction in the Revolving Loan Commitments, at least $15,000,000 of the Revolving Loan Commitments shall remain in place; provided further, that a notice of termination of the Revolving Loan Commitments delivered by the Administrative Borrower may state that such notice is conditioned upon the effectiveness of any such other credit facilities or the closing of any such securities offering, or the occurrence of any other event specified therein, in which case such notice may be revoked by the Administrative Borrower (by written notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  With respect to the effectiveness of any such other credit facilities or the closing of any such securities offering, the Administrative Borrower may extend the date of termination at any time with the consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed).  As of the date of cancellation or reduction set forth in such notice, the Revolving Loan Commitments shall be permanently canceled or reduced to the amount stated in the Administrative Borrower’s notice for all purposes herein, and the Borrowers shall, jointly and severally, pay to the Administrative Agent for the account of the Lenders the amount necessary to repay in full the principal amount of the Revolving Loans, Swing Loans and Agent Advances or reduce the principal amount of the Revolving Loans, Swing Loans and Agent Advances then outstanding to not more than the Aggregate Revolving Loan Commitments as so reduced, together with accrued interest on the amount so prepaid and the Unused Line Fee set forth in Section 2.4(b) accrued through the date of the reduction with respect to the amount reduced, and shall reimburse the Administrative Agent and the Lenders for any loss or out-of-pocket expense incurred by any of them in connection with such payment as set forth in Section 2.9 and, in the 
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case of cancellation of the Revolving Loan Commitments, shall secure the Letter of Credit Obligations through the delivery of cash collateral in an amount equal to 105% of the Letters of Credit Obligations.
(12)With the written approval of the Administrative Agent, the Administrative Borrower may terminate (on a non-ratable basis) the unused amount of the Revolving Loan Commitment of a Defaulting Lender, and in such event the provisions of Section 2.11(c) will apply to all amounts thereafter paid by the Borrowers for the account of any such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts); provided that such termination will not be deemed to be a waiver or release of any claim that the Borrowers, the Administrative Agent, the Issuing Bank, the Swing Bank or any other Lender may have against such Defaulting Lender.
Section 1.kRepayment.
(7)The Revolving Loans.  All unpaid principal and accrued interest on the Revolving Loans shall be due and payable in full on the Maturity Date.  Except for Overadvances permitted under Section 2.1(d), in the event and on such occasion that the Aggregate Revolving Credit Obligations exceed the lesser of (A) the Aggregate Revolving Loan Commitments or (B) the Borrowing Base, the Borrowers shall prepay the Revolving Loans, Agent Advances, Swing Loans, Overadvances or Letter of Credit Reserve Account, as appropriate, by an aggregate amount equal to such excess.  
(8)Other Mandatory Repayments.[Intentionally Omitted].
(i)    In the event that after the Agreement Date any Credit Party shall issue any Equity Interests or shall incur any Funded Debt, other than Funded Debt permitted under Section 8.1, one hundred percent (100%) of the Net Cash Proceeds received by such Credit Party from such issuance or incurrence shall be paid on the date of receipt of the proceeds thereof by such Credit Party to the Lenders as a mandatory payment of the Obligations.  Any payment due hereunder shall be applied first to repay outstanding Agent Advances and Overadvances, second to repay outstanding Swing Loans, third to repay outstanding Revolving Loans, and fourth to fund the Letter of Credit Reserve Account to the extent of one hundred five percent (105%) of any Letter of Credit Obligations then outstanding.  So long as no Event of Default exists, all such other Net Cash Proceeds shall be applied in the manner set forth in Section 2.11(a).  Notwithstanding the foregoing, if an Event of Default exists, all such Net Cash Proceeds shall be applied in the manner set forth in Section 2.11(b).  The Revolving Loan Commitments shall not be permanently reduced by the amount of any payment of the Agent Advances, Swing Loans or Revolving Loans due under this Section 2.6(b)(i).  Nothing in this Section shall authorize any Credit Party incur any Funded Debt except as expressly permitted by this Agreement or to issue any Equity Interests except to the extent not prohibited by this Agreement.
(ii)    One hundred percent (100%) of the Net Cash Proceeds from the sale, transfer, assignment or other disposition, or casualty or condemnation loss, of any Collateral or other assets of any Credit Party (other than Excluded Net Cash Proceeds) shall be paid on the date of receipt thereof by the Credit Parties as a mandatory payment of the Obligations.  So long as no Event of Default exists, all such Net Cash Proceeds shall be applied first to repay outstanding Agent Advances and Overadvances, second to repay outstanding Swing Loans, third to repay outstanding Revolving Loans, and fourth to fund the Letter of Credit Reserve Account to the extent of one hundred five percent (105%) of any Letter of Credit Obligations then outstanding.  So long as no Event of Default exists, all such other Net Cash Proceeds shall be applied in the 
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manner set forth in Section 2.11(a).  Notwithstanding the foregoing, if an Event of Default exists, all such Net Cash Proceeds shall be applied in the manner set forth in Section 2.11(b).  The Revolving Loan Commitments shall not be permanently reduced by the amount of any payment of the Agent Advances, Swing Loans or Revolving Loans due under this Section 2.6(b)(ii).  
(9)The Other Obligations.  In addition to the foregoing, the Borrowers hereby promise to pay, jointly and severally, all Obligations (other than Obligations in respect of Bank Products), including, without limitation, the principal amount of the Loans, amounts drawn under Letters of Credit and interest and fees on the foregoing, as the same become due and payable hereunder and, in any event, on the Maturity Date.  
Section 1.lNotes; Loan Accounts.
(13)The Loans shall be repayable in accordance with the terms and provisions set forth herein and, upon request by any Lender, the Loans owed to such Lender shall be evidenced by Revolving Loan Notes or Swing Loan Note, as applicable.  The Notes shall be payable to the order of each Lender requesting such a Note in accordance with the Revolving Commitment Ratio of such Lender.  Each such Note shall be issued by the Borrowers to the applicable Lender and shall be duly executed and delivered by an Authorized Signatory of each Borrower.
(14)The Administrative Agent shall open and maintain on its books in the name of the Borrowers a loan account with respect to the Loans and interest thereon (the “Loan Account”).  The Administrative Agent shall debit such Loan Account for the principal amount of each Advance made by it on behalf of the Lenders, accrued interest thereon, and all other amounts which shall become due from the Borrowers pursuant to this Agreement and shall credit the Loan Account for each payment which the Borrowers shall make in respect to the Obligations.  The records of the Administrative Agent with respect to such Loan Account shall be conclusive evidence of the Loans and accrued interest thereon, absent manifest error.
Section 1.mManner of Payment.
(i)Each payment (including any prepayment) by the Borrowers on account of the principal of or interest on the Loans, fees, and any other amount owed to any member of the Lender Group under this Agreement or the other Loan Documents shall be made not later than 12:00 noon (Atlanta, Georgia time) on the date specified for payment under this Agreement or any other Loan Document to the Administrative Agent at the Administrative Agent’s Office, for the account of the Lenders, the Issuing Bank or the Administrative Agent, as the case may be, in Dollars in immediately available funds.  Any payment received by the Administrative Agent after 12:00 noon (Atlanta, Georgia time) shall be deemed received on the next Business Day.  In the case of a payment for the account of a Lender, the Administrative Agent will promptly thereafter distribute the amount so received in like funds to such Lender.  In the case of a payment for the account of the Issuing Bank, the Administrative Agent will promptly thereafter distribute the amount so received in like funds to the Issuing Bank.  If the Administrative Agent shall not have received any payment from the Borrowers as and when due, the Administrative Agent will promptly notify the Lenders accordingly.
(ii)Except as provided in the definition of Eurodollar AdvanceInterest Period, if any payment under this Agreement or any other Loan Document shall be specified to be made on a day which is not a Business Day, it shall be made on the next succeeding day which is a Business Day, and such 
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extension of time shall in such case be included in computing interest and fees, if any, in connection with such payment.
Section 1.nReimbursement.  Whenever any Lender shall sustain or incur any losses (including losses of anticipated profits) or out-of-pocket expenses in connection with (a) failure by the Borrowers to borrow or continue any EurodollarSOFR Advance, or convert any Advance to a EurodollarSOFR Advance, in each case, after having given notice of their intention to do so in accordance with Section 2.2 (whether by reason of the election of the Borrowers not to proceed or the non-fulfillment of any of the conditions set forth in this Agreement), (b) prepayment of any EurodollarSOFR Advance in whole or in part for any reason or (c) failure by the Borrowers to prepay any EurodollarSOFR Advance after giving notice of its intention to prepay such Advance, the Borrowers agree to pay, jointly and severally, to such Lender, promptly upon such Lender’s demand therefor, an amount sufficient to compensate such Lender for all such losses and out-of-pocket expenses.  Such Lender’s good faith determination of the amount of such losses and out-of-pocket expenses, absent manifest error, shall be binding and conclusive.  Losses subject to reimbursement hereunder shall include, without limitation, expenses incurred by any Lender or any participant of such Lender permitted hereunder in connection with the re-employment of funds prepaid, repaid, not borrowed, or paid, as the case may be, and any lost profit of such Lender or any participant of such Lender over the remainder of the Eurodollar AdvanceInterest Period for such prepaid Advance.  For purposes of calculating amounts payable to a Lender under this Section, each Lender shall be deemed to have actually funded its relevant EurodollarSOFR Advance through the purchase of a deposit bearing interest at the Eurodollar RateAdjusted Term SOFR in an amount equal to the amount of that EurodollarSOFR Advance and having a maturity and repricing characteristics comparable to the relevant Eurodollar AdvanceInterest Period; provided that each Lender may fund each of its EurodollarSOFR Advances in any manner it sees fit, and the foregoing assumption shall be utilized only for the calculation of amounts payable under this Section.
Section 1.oPro Rata Treatment.
(15)Advances.  Each Advance with respect to the Revolving Loans from the Lenders under this Agreement shall be made pro rata on the basis of their respective Revolving Commitment Ratios.
(16)Payments.  Each payment and prepayment of the principal of the Revolving Loans and each payment of interest on the Revolving Loans received from the Borrowers shall be made by the Administrative Agent to the Lenders pro rata on the basis of their respective unpaid principal amounts thereof outstanding immediately prior to such payment or prepayment (except in cases when a Lender’s right to receive payments is restricted pursuant to Section 2.22.4(e)).  If any Lender shall obtain any payment (whether involuntary, through the exercise of any right of set-off or otherwise) on account of the Loans in excess of its ratable share of Loans under its Aggregate Commitment Ratio (or in violation of any restriction set forth in Section 2.22.4(e)), such Lender shall forthwith purchase from the other Lenders such participation in the Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery without interest thereon unless the Lender obligated to repay such amount is required to pay interest.  The Borrowers agree that any Lender so purchasing a participation from another Lender pursuant to this Section 2.10(b) may, to the fullest extent permitted by law, exercise all its rights of 
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payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrowers in the amount of such participation.
Section 1.pApplication of Payments.
(10)Payments Prior to Event of Default.  Prior to the occurrence and continuance of an Event of Default, all amounts received by the Administrative Agent from the Borrowers (other than payments specifically earmarked for application to certain principal, interest, fees or expenses hereunder or payments made pursuant to Section 2.6(b) (which shall be applied as earmarked or, with respect to payments under Section 2.6(b), as set forth in Section 2.6(b))), shall be distributed by the Administrative Agent in the following order of priority: 
FIRST, pro rata, to the payment of (i) out-of-pocket costs and expenses (including reasonable attorneys’ fees) of the Administrative Agent incurred by the Administrative Agent in connection with the enforcement of the rights of the Lender Group under the Loan Documents and (ii) any Agent Advances made by the Administrative Agent under or pursuant to the terms of the Loan Documents and interest accrued thereon;
SECOND, pro rata, to the payment of any fees then due and payable to the Administrative Agent, the Issuing Bank or the Swing Bank hereunder or under any other Loan Documents;
THIRD, pro rata, to the payment of all Obligations consisting of accrued fees and interest then due and payable to the Lenders hereunder; 
FOURTH, to the payment of principal then due and payable on the Swing Loans, Agent Advances and Overadvances; 
FIFTH, to the payment of principal then due and payable on the Revolving Loans; 
SIXTH, to the payment of the Obligations arising in respect of Bank Products then due and payable; and 
SEVENTH, to the payment of all other Obligations not otherwise referred to in this Section 2.11(a) then due and payable.  
(11)Payments Subsequent to Event of Default.  Notwithstanding anything in this Agreement or any other Loan Document which may be construed to the contrary, subsequent to the occurrence and during the continuance of an Event of Default, payments and prepayments with respect to the Obligations made to the Lender Group, or any of them, or otherwise received by any member of the Lender Group (from realization on Collateral or otherwise) shall be distributed in the following order of priority (subject, as applicable, to Section 2.10):  
FIRST, pro rata, to the payment of (i) out-of-pocket costs and expenses (including reasonable attorneys’ fees) of the Administrative Agent incurred in connection with the enforcement of the rights of the Lender Group under the Loan Documents, and (ii) any Agent Advances made by the 
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Administrative Agent under or pursuant to the terms of the Loan Documents (including any costs incurred in connection with the sale or disposition of any Collateral); 
SECOND, pro rata, to payment of any fees owed to the Administrative Agent, the Issuing Bank or the Swing Bank hereunder or under any other Loan Document;
THIRD, to the payment of out-of-pocket costs and expenses (including reasonable attorneys’ fees) of the Lenders incurred in connection with the enforcement of their respective rights under the Loan Documents; 
FOURTH, to the payment of all Obligations consisting of accrued fees and interest payable to the Lenders hereunder; 
FIFTH, to the payment of the principal of the Swing Loans and Overadvances then outstanding;
SIXTH, pro rata, to (i) the payment of principal on the Revolving Loans then outstanding, and (ii) the Letter of Credit Reserve Account to the extent of one hundred five percent (105%) of any Letter of Credit Obligations then outstanding;
SEVENTH, to the payment of any Obligation arising in respect of the Bank Products; 
EIGHTH, to any other Obligations not otherwise referred to in this Section 2.11(b); and 
NINTH, upon satisfaction in full of all Obligations, to the Borrowers or as otherwise required by law.
(c)    Defaulting Lenders.  Notwithstanding anything herein to the contrary, any amount paid by the Borrowers for the account of a Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity payments or other amounts) will be retained by the Administrative Agent in a segregated non-interest bearing account until the Maturity Date, at which time 
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the funds in such account will be applied by the Administrative Agent, to the fullest extent permitted by law, in the following order of priority: 
FIRST, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent under this Agreement; 
SECOND, to the payment of any amounts owing by such Defaulting Lender to the Issuing Bank and the Swing Bank under this Agreement; 
THIRD, to the payment of interest due and payable to the Lenders hereunder that are not Defaulting Lenders, ratably among them in accordance with the amounts of such interest then due and payable to them; 
FOURTH, to the payment of fees then due and payable to the Lenders hereunder that are not Defaulting Lenders, ratably among them in accordance with the amounts of such fees then due and payable to them; 
FIFTH, to the payment of principal and unreimbursed disbursements under any Letters of Credit then due and payable to the Lenders hereunder that are not Defaulting Lenders, ratably in accordance with the amounts thereof then due and payable to them; 
SIXTH, to the ratable payment of other amounts then due and payable to the Lenders hereunder that are not Defaulting Lenders; and 
SEVENTH, to pay amounts owing under this Agreement to such Defaulting Lender or as a court of competent jurisdiction may otherwise direct.
Section 1.qUse of Proceeds.  The proceeds of the Loans shall be used by the Borrowers as follows:
(17)The proceeds of the initial Advance of Revolving Loans hereunder shall be used on the Agreement Date to refinance existing Funded Debt, to fund transaction costs, fees and expenses related thereto and for other working capital purposes.
(18)The balance of the proceeds of the Loans shall be used (i) to fund future acquisitions permitted hereunder, (ii) to provide for working capital and (iii) for the Borrowers’ general corporate purposes.
Section 1.rAll Obligations to Constitute One Obligation.  All Obligations shall constitute one general obligation of the Borrowers and shall be secured by the Administrative Agent’s security interest (on behalf of, and for the benefit of, the Lender Group) and Lien upon all of the Collateral, and by all other security interests and Liens heretofore, now or at any time hereafter granted by any Credit Party to the Administrative Agent or any other member of the Lender Group, to the extent provided in the Security Documents under which such Liens arise.
Section 1.sMaximum Rate of Interest.  The Borrowers and the Lender Group hereby agree and stipulate that the only charges imposed upon the Borrowers for the use of money in connection with this Agreement are and shall be the specific interest and fees described in this Article 2 and in any other Loan Document.  Notwithstanding the foregoing, the Borrowers and the Lender Group further agree and stipulate that all closing fees, agency fees, syndication fees, facility fees, underwriting fees, default 
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charges, late charges, funding or “breakage” charges, increased cost charges, attorneys’ fees and reimbursement for costs and expenses paid by any member of the Lender Group to third parties or for damages incurred by the Lender Group, or any of them, are charges to compensate the Lender Group for underwriting and administrative services and costs or losses performed or incurred, and to be performed and incurred, by the Lender Group in connection with this Agreement and the other Loan Documents and shall under no circumstances be deemed to be charges for the use of money pursuant to Official Code of Georgia Annotated Sections 7-4-2 and 7-4-18 or any other Applicable Law.  In no event shall the amount of interest and other charges for the use of money payable under this Agreement exceed the maximum amounts permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable.  The Borrowers and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and other charges for the use of money and manner of payment stated within it; provided that, anything contained herein to the contrary notwithstanding, if the amount of such interest and other charges for the use of money or manner of payment exceeds the maximum amount allowable under Applicable Law, then, ipso facto as of the Agreement Date, the Borrowers are and shall be liable only for the payment of such maximum as allowed by law, and payment received from the Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Revolving Loans to the extent of such excess.
Section 1.tLetters of Credit.
(v)Subject to the terms and conditions of this Agreement, the Issuing Bank, on behalf of the Lenders, and in reliance on the agreements of the Lenders set forth in Section 2.15(c) below, hereby agrees to issue one or more Letters of Credit up to an aggregate face amount equal to the Letter of Credit Commitment; provided that, except as described in the last sentence of Section 4.3, the Issuing Bank shall not issue any Letter of Credit unless the conditions precedent to the issuance thereof set forth in Section 4.3 have been satisfied.  Each Letter of Credit shall (i) be denominated in Dollars, and (ii) expire no later than the earlier to occur of (A) the date 360 days after its date of issuance, renewal or extension (but subject to the foregoing may provide for automatic renewal in the absence of a notice of non-renewal by the Issuing Bank) and (B) the date that is five (5) Business Days prior to the Maturity Date.  Each Letter of Credit shall be subject to the Uniform Customs and, to the extent not inconsistent therewith, the laws of the State of Georgia.  The Issuing Bank shall not at any time be obligated to issue, or cause to be issued, any Letter of Credit if such issuance would conflict with, or cause the Issuing Bank to exceed any limits imposed by, any Applicable Law.
(vi)The Administrative Borrower may from time to time request that the Issuing Bank issue a Letter of Credit.  The Administrative Borrower shall execute and deliver to the Administrative Agent and the Issuing Bank a Request for Issuance of Letter of Credit for each Letter of Credit to be issued by the Issuing Bank, not later than 1:00 p.m. (Atlanta, Georgia time) on the third (3rd) Business Day preceding the date on which the requested Letter of Credit is to be issued, or such shorter notice as may be acceptable to the Issuing Bank and the Administrative Agent.  Upon receipt of any such Request for Issuance of Letter of Credit, subject to satisfaction of all conditions precedent thereto as set forth in Section 4.3 or waiver of such conditions pursuant to the last sentence of Section 4.3, the Issuing Bank shall process such Request for Issuance of Letter of Credit and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby.  The Issuing Bank shall furnish a copy of such Letter of Credit to the Administrative Borrower and the Administrative Agent following the issuance thereof.  In addition to the fees payable pursuant to Section 2.4(c)(ii), the Borrowers shall pay or reimburse the Issuing Bank for normal and customary costs and expenses incurred 
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by the Issuing Bank in issuing, effecting payment under, amending or otherwise administering the Letters of Credit.
(vii)The Issuing Bank shall be deemed to have sold and transferred to each Lender, and each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase and receive from the Issuing Bank, without recourse or warranty, an undivided interest and participation, to the extent of such Lender’s Revolving Commitment Ratio, in such Letter of Credit and the obligations of the Borrowers with respect thereto (including, without limitation, all Letter of Credit Obligations with respect thereto) on the date of issuance of such Letter of Credit.  The Issuing Bank shall promptly notify the Administrative Agent of any draw under a Letter of Credit.  At such time as the Administrative Agent shall be notified by the Issuing Bank that the beneficiary under any Letter of Credit has drawn on the same, the Administrative Agent shall promptly notify the Administrative Borrower and the Swing Bank (or, at its option, all Lenders), by telephone or telecopy, of the amount of the draw and, in the case of each Lender, such Lender’s portion of such draw amount as calculated in accordance with its Revolving Commitment Ratio.
(viii)The Borrowers hereby agree to immediately reimburse, jointly and severally, the Issuing Bank for amounts paid by the Issuing Bank in respect of draws under each Letter of Credit.  In order to facilitate such repayment, the Borrowers hereby irrevocably request the Lenders, and the Lenders hereby severally agree, on the terms and conditions of this Agreement (other than as provided in Article 2 with respect to the amounts of, the timing of requests for, and the repayment of Advances hereunder and in Article 4 with respect to conditions precedent to Advances hereunder), with respect to any drawing under a Letter of Credit, to make a Base Rate Advance on each day on which a draw is made under any Letter of Credit and in the amount of such draw, and to pay the proceeds of such Advance directly to the Issuing Bank to reimburse the Issuing Bank for the amount paid by it upon such draw.  Each Lender shall pay its share of such Base Rate Advance by paying its portion of such Advance to the Administrative Agent in accordance with Section 2.2(e) and its Revolving Commitment Ratio, without reduction for any set-off or counterclaim of any nature whatsoever and regardless of whether any Default exists or would be caused thereby.  The disbursement of funds in connection with a draw under a Letter of Credit pursuant to this Section shall be subject to the terms and conditions of Section 2.2(e).  The obligation of each Lender to make payments to the Administrative Agent, for the account of the Issuing Bank, in accordance with this Section 2.15 shall be absolute and unconditional and no Lender shall be relieved of its obligations to make such payments by reason of noncompliance by any other Person with the terms of the Letter of Credit or for any other reason (other than the gross negligence or willful misconduct of the Issuing Bank in paying such Letter of Credit, as determined by a final non-appealable judgment of a court of competent jurisdiction).  The Administrative Agent shall promptly remit to the Issuing Bank the amounts so received from the other Lenders.  Any overdue amounts payable by the Lenders to the Issuing Bank in respect of a draw under any Letter of Credit shall bear interest, payable on demand, (x) for the first two (2) Business Days, at the Federal Funds Rate, and (y) thereafter, at the Base Rate.  Notwithstanding the foregoing, at the request of the Administrative Agent, the Swing Bank may, at its option and subject to the conditions set forth in Section 2.2(g) other than the condition that the applicable conditions precedent set forth in Article 4 be satisfied, make Swing Loans to reimburse the Issuing Bank for amounts drawn under Letters of Credit.
(ix)The Borrowers agree that each Advance by the Lenders to reimburse the Issuing Bank for draws under any Letter of Credit, shall, for all purposes hereunder, unless and until converted into a EurodollarSOFR Advance pursuant to Section 2.2(b)(ii), be deemed to be a Base Rate Advance under the 
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Revolving Loan Commitments and shall be payable and bear interest in accordance with all other Base Rate Advances of Revolving Loans.
(x)The Borrowers agree that any action taken or omitted to be taken by the Issuing Bank in connection with any Letter of Credit, except for such actions or omissions as shall constitute gross negligence or willful misconduct on the part of such Issuing Bank as determined by a final non-appealable judgment of a court of competent jurisdiction, shall be binding on the Borrowers as between the Borrowers and the Issuing Bank, and shall not result in any liability of the Issuing Bank to the Borrowers.  The obligation of the Borrowers to reimburse the Issuing Bank for a drawing under any Letter of Credit or the Lenders for Advances made by them to the Issuing Bank on account of draws made under the Letters of Credit shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances whatsoever (except if arising from the gross negligence or willful misconduct on the part of such Issuing Bank as determined by a final non-appealable judgment of a court of competent jurisdiction), including, without limitation, the following circumstances:
(1)Any lack of validity or enforceability of any Loan Document;
(2)Any amendment or waiver of or consent to any departure from any or all of the Loan Documents;
(3)Any improper use which may be made of any Letter of Credit or any improper acts or omissions of any beneficiary or transferee of any Letter of Credit in connection therewith;
(4)The existence of any claim, set-off, defense or any right which any Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or Persons for whom any such beneficiary or any such transferee may be acting), any Lender or any other Person, whether in connection with any Letter of Credit, any transaction contemplated 
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by any Letter of Credit, this Agreement, or any other Loan Document, or any unrelated transaction;
(5)Any statement or any other documents presented under any Letter of Credit proving to be insufficient, forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever;
(6)The insolvency of any Person issuing any documents in connection with any Letter of Credit;
(7)Any breach of any agreement between any Borrower and any beneficiary or transferee of any Letter of Credit;
(8)Any irregularity in the transaction with respect to which any Letter of Credit is issued, including any fraud by the beneficiary or any transferee of such Letter of Credit;
(9)Any errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, wireless or otherwise, whether or not they are in code;
(10)Any act, error, neglect or default, omission, insolvency or failure of business of any of the correspondents of the Issuing Bank;
(11)Any other circumstances arising from causes beyond the control of the Issuing Bank;
(12)Payment by the Issuing Bank under any Letter of Credit against presentation of a sight draft or a certificate which does not comply with the terms of such Letter of Credit, provided that such payment shall not have constituted gross negligence or willful misconduct of the Issuing Bank as determined by a final non-appealable judgment of a court of competent jurisdiction; and
(13)Any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.
(19)The Borrowers will indemnify and hold harmless each Indemnified Person from and against any and all claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including reasonable attorneys’ fees) which may be imposed on, incurred by or asserted against such Indemnified Person in any way relating to or arising out of the issuance of a Letter of Credit, except that the Borrowers shall not be liable to an Indemnified Person for any portion of such claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of such Indemnified Person as determined by a final non-appealable judgment of a court of competent jurisdiction.  This Section 2.15(g) shall survive termination of this Agreement.
(20)Each Lender shall be responsible (to the extent the Issuing Bank is not reimbursed by the Borrowers) for its pro rata share (based on such Lender’s Revolving Commitment Ratio) of any and all reasonable out-of-pocket costs, expenses (including reasonable legal fees) and disbursements which may be incurred or made by the Issuing Bank in connection with the collection of any amounts due under, the administration of, or the presentation or enforcement of any rights conferred by any Letter of Credit, any Borrower’s or any Guarantor’s obligations to reimburse draws thereunder or 
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otherwise.  In the event the Borrowers shall fail to pay such expenses of the Issuing Bank within fifteen (15) days of demand for payment by the Issuing Bank, each Lender shall thereupon pay to the Issuing Bank its pro rata share (based on such Lender’s Revolving Commitment Ratio) of such expenses within ten (10) days from the date of the Issuing Bank’s notice to the Lenders of the Borrowers’ failure to pay; provided that if the Borrowers shall thereafter pay such expenses, the Issuing Bank will repay to each Lender the amounts received from such Lender hereunder.
(21)Unless otherwise expressly agreed by the Issuing Bank and the Borrowers when a Letter of Credit is issued and subject to Applicable Law, (i) each  Standby Letter of Credit shall be governed by the “International Standby Practices 1998” (ISP98) (or such later revision as may be published by the Institute of International Banking Law & Practice on any date any Letter of Credit may be issued) and (ii) each Commercial Letter of Credit shall be governed by the Uniform Customs and (iii) in both cases, to the extent not inconsistent therewith, the governing law of this Agreement set forth in Section 11.7.
Section 1.uBank Products.  Any Credit Party may request, and any Lender may, in its sole and absolute discretion, arrange for such Credit Party to obtain, from any Lender or any Affiliate of any Lender Bank Products, although no Credit Party is required to do so.  If any Bank Products are provided by an Affiliate of any Lender, the Credit Parties agree to indemnify and hold the Lender Group, or any of them, harmless from any and all costs and obligations now or hereafter incurred by the Lender Group, or any of them, which arise from any indemnity given by any Lender to any of its Affiliates, as applicable, related to such Bank Products; provided that nothing contained herein is intended to limit the Credit Parties’ rights with respect to any Lender or any of its Affiliates, as applicable, if any, which arise as a result of the execution of documents by and between the Credit Parties and such Person which relate to any Bank Products.  The agreement contained in this Section shall survive termination of this Agreement.  The Credit Parties acknowledge and agree that the obtaining of Bank Products from any Lender or its Affiliates (a) is in the sole and absolute discretion of any Lender or such Affiliates, and (b) is subject to all rules and regulations of any Lender or such Affiliates.
Section 1.vIncrease of Commitments; Additional Lenders.
(12)Increase of the Revolving Loan Commitments.
(1)So long as no Event of Default has occurred and is continuing, the Administrative Borrower, on behalf of Borrowers, may request the right to effectuate increases in the Revolving Loan Commitments (any such increase, a “Commitment Increase”), in an aggregate amount of up to $50,000,000 for all such Commitment Increases (the “Commitment Increase Cap”), during the term of this Agreement by delivering a Notice of Requested Commitment Increase to the Administrative Agent, provided that, in each case: (A) each Commitment Increase shall be in minimum increments of $10,000,000; (B) the proposed Commitment Increase shall have been consented to in writing by the Administrative Agent, each Lender (if any) who is increasing its Revolving Loan Commitment and any other bank or financial institution acceptable to the Administrative Agent that has agreed to become a Lender in respect of all or a portion of the Commitment Increase (a “New Lender”); (C) the pricing and other terms applicable to the Commitment Increase shall be the same as those applicable to the existing Revolving Loan Commitments; (D) the proposed Commitment Increase, together with any prior Commitment Increase, shall not exceed the Commitment Increase Cap; (E) Availability, measured on a pro forma basis after giving effect to the Commitment Increase, for the five consecutive Business Days prior to the Commitment Increase is at least $20,000,000; and (F) the 
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Fixed Charge Coverage Ratio as of the end of the fiscal month most recently ended for which the Administrative Agent has received financial statements at the time of the Commitment Increase, for the period of the immediately preceding twelve (12) months, of not less than 1.00:1.00.  Each Notice of Requested Commitment Increase shall specify: (1) the amount of the proposed Commitment Increase and (2) the requested date of the proposed Commitment Increase (which shall be at least thirty (30) days from the date of delivery of the Notice of Requested Commitment Increase).  Each Notice of Requested Commitment Increase shall be binding on all Borrowers. Upon the effective date of any Commitment Increase, the Administrative Borrower shall deliver to the Administrative Agent a certificate of the chief financial officer of the Administrative Agent certifying that no Default or Event of Default then exists or would be caused thereby and that the conditions set forth in clause (D), (E) and (F) are satisfied.  No Commitment Increase shall be effective until the Administrative Agent shall have received amendments to this Agreement and the other Loan Documents, commitments of Lenders or New Lenders in an aggregate amount equal to such Commitment Increase, agreements for each Lender or New Lender committing to such Commitment Increase (each, a “Lender Agreement”), any upfront fees to be paid to the Lenders committing to such Commitment Increase, and such opinion letters, Revolving Loan Notes and other agreements, documents and instruments requested by and reasonably satisfactory to the Administrative Agent in its reasonable discretion evidencing and setting forth the conditions of such Commitment Increase.
(2)If the Administrative Agent approves a proposed Commitment Increase, the Administrative Agent shall deliver a copy of the Notice of Requested Commitment Increase relating thereto to each Lender.  No Lender (or any successor thereto) shall have any obligation to increase its Revolving Loan Commitment or its other obligations under this Agreement or the other Loan Documents, and any decision by a Lender to increase its Revolving Loan Commitment shall be made in its sole discretion independently from any other Lender. If the Administrative Agent receives commitments from the Lenders or the New Lenders in excess of the amount of the proposed Commitment Increase, the Administrative Agent shall have the right, in its sole discretion, to reduce and reallocate (within the minimum and maximum amounts specified by each such Lender or New Lender in its notice to the Administrative Agent) the shares of such Commitment Increase of the Lenders or New Lenders willing to fund the proposed Commitment Increase so that the total committed shares of the proposed Commitment Increase equals the proposed Commitment Increase. The Administrative Agent shall notify each Lender or New Lender, as the case may be, whether its proposed share of the proposed Commitment Increase has been accepted and, if so, the amount of its share of such Commitment Increase, and such Lender shall thereafter execute and deliver a Lender Agreement with respect to its respective share of such Commitment Increase.
(3)Notwithstanding anything to the contrary contained herein, each Commitment Increase meeting the conditions set forth in Section 2.17(a)(i) shall not require the consent of any Lender other than those Lenders, if any, which have agreed to increase their Revolving Loan Commitments in connection with such Commitment Increase and shall not constitute an amendment, modification or waiver that is subject to Section 11.12 and shall be effective as of the later of (a) the date specified in the applicable Notice of Requested Commitment Increase and (b) the date upon which the foregoing conditions shall have been satisfied or waived by the Administrative Agent and the Lenders which have agreed to increase 
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their Revolving Loan Commitments, or by the Required Lenders in accordance with Section 11.12 in the case of a waiver of an Event of Default, as applicable.
(22)Effect of Commitment Increase.  After giving effect to any Commitment Increase, the outstanding Revolving Loans may not be held pro rata in accordance with the new Revolving Loan Commitments.  In order to remedy the foregoing, on the effective date of each Commitment Increase, the Lenders (including any New Lenders) shall reallocate the Revolving Loans owed to them among themselves so that, after giving effect thereto, the Revolving Loans will be held by the Lenders (including any New Lenders) on a pro rata basis in accordance with their respective Revolving Commitment Ratios (after giving effect to such Commitment Increase).  Each Lender agrees to wire immediately available funds to the Administrative Agent in accordance with this Agreement as may be required by the Administrative Agent in connection with the foregoing, and to execute any documents reasonably requested by the Administrative Agent to effectuate such changes.  Notwithstanding the provisions of Section 11.5, the reallocations so made by each Lender whose Revolving Commitment Ratio has increased shall be deemed to be a purchase of a corresponding amount of the Revolving Loans of the Lender or Lenders whose Revolving Commitment Ratio have decreased and shall not be considered an assignment for purposes of Section 11.5.
Section 1.wTaxes.
(i)Any and all payments by or on account of any obligation of any Borrower or any other Credit Party hereunder or under any other Loan Document shall be made free and clear of and without deduction or withholding for any Indemnified Taxes or Other Taxes; provided that if any Applicable Law requires the deduction or withholding of any Tax from any such payment, then the applicable Withholding Agent shall make such deduction and timely pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax or Other Tax, then the sum payable by such Borrower or other Credit Party, as applicable, shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient shall receive an amount equal to the sum it would have received had no such deductions or withholdings been made.
(ii)In addition, without limiting the provisions of Section 2.18(a), the Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.
(iii)The Borrowers shall indemnify each Recipient, within thirty (30) Business Days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid or payable by such Recipient (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Administrative Borrower by the applicable Recipient shall be conclusive, absent manifest error.
(iv)As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Borrower or any other Credit Party to a Governmental Authority, the Administrative Borrower shall deliver to the Administrative Agent an original or a certified copy of a receipt issued by such 
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Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(v)Tax Forms.
(i)     Any Lender that is a US Person shall deliver to the Administrative Borrower and the Administrative Agent, on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Administrative Borrower or the Administrative Agent), duly executed originals of IRS Form W-9 certifying, to the extent such Lender is legally entitled to do so, that such Lender is exempt from US federal backup withholding tax. 
(ii)    Any Lender that is a Foreign Person and that is entitled to an exemption from or reduction of withholding tax under the Code or any treaty to which the United States is a party with respect to payments under this Agreement shall deliver to the Administrative Borrower and the Administrative Agent, at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Administrative Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  Without limiting the generality of the foregoing, each Lender that is a Foreign Person shall, to the extent it is legally entitled to do so, (w) on or prior to the date such Lender becomes a Lender under this Agreement, (x) on or prior to the date on which any such form or certification expires or becomes obsolete, (y) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this Section 2.18(e), and (z) from time to time upon the reasonable request by the Administrative Borrower or the Administrative Agent, deliver to the Administrative Borrower and the Administrative Agent (in such number of copies as shall be requested by the Administrative Borrower or the Administrative Agent), whichever of the following is applicable:
(A)    if such Lender is claiming eligibility for benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, duly executed originals of IRS Form W-8BEN, or any successor form thereto, establishing an exemption from, or reduction of, US federal withholding tax pursuant to the “interest” article of such tax treaty, and (y) with respect to any other applicable payments under any Loan Document, duly executed originals of IRS Form W-8BEN, or any successor form thereto, establishing an exemption from, or reduction of, US federal withholding tax pursuant to the “business profits” or “other income” article of such tax treaty;
(B)     duly executed originals of IRS Form W-8ECI, or any successor form thereto, certifying that the payments received by such Lender are effectively connected with such Lender’s conduct of a trade or business in the United States;
(C)     if such Lender is claiming the benefits of the exemption for portfolio interest under Section 871(h) or Section 881(c) of the Code, duly executed originals of IRS Form W-8BEN, or any successor form thereto, together with a certificate (a “US Tax Compliance Certificate”) upon which such Lender certifies that (1) such Lender is not a bank for purposes of Section 881(c)(3)(A) of the Code, or the obligation of the Borrowers hereunder is not, with respect to such Lender, a loan agreement entered into in the 
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ordinary course of its trade or business, within the meaning of that Section, (2) such Lender is not a 10% shareholder of any Borrower within the meaning of Section 871(h)(3) or Section 881(c)(3)(B) of the Code, (3) such Lender is not a controlled foreign corporation that is related to any Borrower within the meaning of Section 881(c)(3)(C) of the Code, and (4) the interest payments in question are not effectively connected with a US trade or business conducted by such Lender; or
(D)     if such Lender is not the beneficial owner (for example, a partnership or a participating Lender granting a typical participation), duly executed originals of IRS Form W-8IMY, or any successor form thereto, accompanied by IRS Form W-9, IRS Form W-8ECI, IRS Form W-8BEN, a US Tax Compliance Certificate, and/or other certification documents from each beneficial owner, as applicable. 
(iii)     Each Lender agrees that if any form or certification it previously delivered under this Section expires or becomes obsolete or inaccurate in any respect and such Lender is not legally entitled to provide an updated form or certification, it shall promptly notify the Administrative Borrower and the Administrative Agent of its inability to update such form or certification.  
(vi)If a payment made to a Lender under any Loan Document would be subject to US federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Administrative Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Administrative Borrower or the Administrative Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Administrative Borrower or the Administrative Agent as may be necessary for the Administrative Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.
        (g)    If a Recipient determines, in its sole discretion, that it has received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified pursuant to this Section 2.18 or with respect to which the Borrowers have paid additional amounts pursuant to this Section 2.18, such Recipient shall pay to the Borrowers an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this Section 2.18 with respect to such Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Recipient and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrowers, upon the request of such Recipient, shall repay the amount paid over to the Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Recipient in the event such Recipient is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this Section 2.18(g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this Section 2.18(g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid.
        (h)    Each Lender agrees that, upon the occurrence of any event giving rise to the payment of any additional amount to such Lender or any Governmental Authority for the account of such 
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Lender pursuant to this Section 2.18, it will, if requested by the Administrative Borrower, use commercially reasonable efforts (subject to legal and regulatory restrictions) to designate another Applicable Lending Office for any Loan or Letter of Credit affected by such event; provided that (i) such designation would eliminate or reduce amounts payable pursuant to this Section 2.18 and (ii) such efforts are made on terms that, in the judgment of such Lender, cause such Lender and its Applicable Lending Office(s) to suffer no economic, legal or regulatory disadvantage; provided, further, that nothing in this Section 2.18(h) shall affect or postpone any of the Obligations of the Borrowers or the rights of such Lender pursuant to this Section 2.18.  The Borrowers agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation.
        (i)    Nothing contained in this Section 2.18 shall require any member of the Lender Group to make available to the Borrowers any of its tax returns (or any other information) that it deems confidential or proprietary.
Section 1.xDefaulting Lenders.
(a)    If a Lender becomes, and during the period it remains, a Defaulting Lender, the following provisions shall apply, notwithstanding anything to the contrary in this Agreement:
(i)    the Participation Exposure of such Defaulting Lender will, subject to the limitation in the proviso below, automatically be reallocated (effective no later than one (1) Business Day after the Administrative Agent has actual knowledge that such Lender has become a Defaulting Lender) among the Non-Defaulting Lenders pro rata in accordance with their respective Revolving Loan Commitments (calculated as if the Defaulting Lender’s Revolving Loan Commitment was reduced to zero and each Non-Defaulting Lender’s Revolving Loan Commitment had been increased proportionately); provided that the sum of each Non-Defaulting Lender’s total Revolving Credit Exposure may not in any event exceed the Revolving Loan Commitment of such Non-Defaulting Lender as in effect at the time of such reallocation; and
(ii)    to the extent that any portion (the “unreallocated portion”) of the Participation Exposure of any Defaulting Lender cannot be reallocated pursuant to clause (i) above for any reason, the Borrowers will, not later than two (2) Business Days after demand by the Administrative Agent (at its own election or at the direction of the Issuing Bank or the Swing Bank), (x) Cash Collateralize the obligations of the Borrowers to the Issuing Bank, the Swing Bank or the Administrative Agent in respect of such Participation Exposure, as the case may be, in an amount at least equal to the aggregate amount of the unreallocated portion of the Participation Exposure of such Defaulting Lender, (y) prepay and/or Cash Collateralize in full the unreallocated portion thereof, or (z) make other arrangements satisfactory to the Administrative Agent, the Issuing Bank and the Swing Bank in their sole discretion to protect them against the risk of non-payment by such Defaulting Lender;
provided that neither any such reallocation nor any payment by a Non-Defaulting Lender pursuant thereto nor any such Cash Collateralization or reduction will constitute a waiver or release of any claim the Borrowers, the Administrative Agent, the Issuing Bank, the Swing Bank or any other Lender may have against such Defaulting Lender or cause such Defaulting Lender to be a Non-Defaulting Lender.
(b)    If the Administrative Borrower, the Administrative Agent, the Issuing Bank and the Swing Bank agree in writing in their discretion that any Defaulting Lender has ceased to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the 
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effective date specified in such notice, and subject to any conditions set forth therein, the Participation Exposure of the other Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Loan Commitment, and such Lender will purchase at par such portion of outstanding Revolving Loans of the other Lenders and/or make such other adjustments as the Administrative Agent may determine to be necessary to cause the Revolving Credit Exposure of the Lenders to be on a pro rata basis in accordance with their respective Revolving Loan Commitments, whereupon such Lender will cease to be a Defaulting Lender and will be a Non-Defaulting Lender (and such Revolving Credit Exposure of each Lender will automatically be adjusted on a prospective basis to reflect the foregoing).  If any cash collateral has been posted with respect to any Participation Exposure of such Defaulting Lender, the Administrative Agent will promptly return such cash collateral to the Borrowers; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while such Lender was a Defaulting Lender; provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender.
(c)    So long as any Lender is a Defaulting Lender, the Issuing Bank will not be required to issue, amend, extend, renew or increase any Letter of Credit, and the Swing Bank will not be required to fund any Swing Loans, as applicable, unless 100% of the related Participation Exposure after giving effect thereto is fully covered or eliminated by the following:
(i)     the Participation Exposure of such Defaulting Lender is reallocated to the Non-Defaulting Lenders as provided in Section 2.19(a)(i); and
(ii)     to the extent that any portion of the Participation Exposure of any Defaulting Lender cannot be reallocated pursuant to Section 2.19(a)(i) for any reason, the unreallocated portion is fully covered or eliminated by any combination of the following:
(A)    without limiting the provisions of Section 2.19(a)(ii), the Borrowers Cash Collateralize their reimbursement obligations in respect of such Letter of Credit or Swing Loan in an amount at least equal to the aggregate amount of the unreallocated obligations (contingent or otherwise) of such Defaulting Lender in respect of such Letter of Credit or Swing Loan or the Borrowers make other arrangements satisfactory to the Issuing Bank or the Swing Bank, as the case may be, in its sole discretion to protect it against the risk of non-payment by such Defaulting Lender; and
(B)     the Borrowers agree that the face amount of such requested Letter of Credit or the principal amount of such requested Swing Loan will be reduced by an amount equal to the unreallocated, non-Cash Collateralized portion thereof as to which such Defaulting Lender would otherwise be liable, in which case the obligations of the Non-Defaulting Lenders in respect of such Letter of Credit or Swing Loan will, subject to the limitation in the proviso below, be on a pro rata basis in accordance with the Revolving Loan Commitments of the Non-Defaulting Lenders, and the pro rata payment provisions of Section 2.10 will be deemed adjusted to reflect this provision; provided that the sum of each Non-Defaulting Lender’s total Revolving Credit Exposure may not in any event exceed the Revolving Loan Commitment of such Non-Defaulting Lender as in effect at the time of such reduction.
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Article 3.

GUARANTY
Section 1.yGuaranty.
(23)Each Borrower hereby guarantees to the Administrative Agent, for the benefit of the Lender Group, the full and prompt payment of all Obligations of the other Borrower, including, without limitation, any interest therein (including, without limitation, interest, as provided in this Agreement, accruing after the filing of a petition initiating any Insolvency Proceedings, whether or not such interest accrues or is recoverable against any such Borrower after the filing of such petition for purposes of the Bankruptcy Code or is an allowed claim in such proceeding), plus reasonable attorneys’ fees and expenses actually incurred by the Lender Group if the obligations represented by this Guaranty are collected by law, through an attorney-at-law, or under advice therefrom.  Each Guarantor hereby guarantees to the Administrative Agent, for the benefit of the Lender Group, the full and prompt payment of all Obligations, including, without limitation, any interest therein (including, without limitation, interest, as provided in this Agreement, accruing after the filing of a petition initiating any Insolvency Proceedings, whether or not such interest accrues or is recoverable against the Borrowers after the filing of such petition for purposes of the Bankruptcy Code or is an allowed claim in such proceeding), plus reasonable attorneys’ fees and expenses actually incurred by the Lender Group if the obligations represented by this Guaranty are collected by law, through an attorney-at-law, or under advice therefrom.   
(24)Regardless of whether any proposed guarantor or any other Person shall become in any other way responsible to the Lender Group, or any of them, for or in respect of the Obligations or any part thereof, and regardless of whether or not any Person now or hereafter responsible to the Lender Group, or any of them, for the Obligations or any part thereof, whether under this Guaranty or otherwise, shall cease to be so liable, each Credit Party hereby declares and agrees that this Guaranty shall be a joint and several obligation, shall be a continuing guaranty and shall be operative and binding until the Obligations shall have been indefeasibly paid in full in cash (or in the case of Letter of Credit Obligations, secured through delivery of cash collateral in an amount equal to one hundred and five percent (105%) of the Letter of Credit Obligations) and the Revolving Loan Commitments shall have been terminated. 
(25)Each Credit Party absolutely, unconditionally and irrevocably waives any and all right to assert any defense (other than the defense of payment in cash in full, to the extent of its obligations hereunder, or a defense that such Credit Party’s liability is limited as provided in Section 3.1(g)), set-off, counterclaim or cross-claim of any nature whatsoever with respect to this Guaranty or the obligations of the Credit Parties under this Guaranty or the obligations of any other Person or party (including, without limitation, the Borrowers) relating to this Guaranty or the obligations of any of the Credit Parties under this Guaranty or otherwise with respect to the Obligations in any action or proceeding brought by the Administrative Agent or any other member of the Lender Group to collect the Obligations or any portion thereof, or to enforce the obligations of any of the Credit Parties under this Guaranty.
(26)The Lender Group, or any of them, may from time to time, without exonerating or releasing any Credit Party in any way under this Guaranty, (i) take such further or other security or securities for the Obligations or any part thereof as they may deem proper, or (ii) release, discharge, abandon or otherwise deal with or fail to deal with any Credit Party or the Obligations or any security or securities therefor or any part thereof now or hereafter held by the Lender Group, or any of them, or (iii) amend, modify, extend, accelerate or waive in any manner any of the provisions, terms, or conditions of 
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the Loan Documents, all as they may consider expedient or appropriate in their sole discretion.  Without limiting the generality of the foregoing, or of Section 3.1(e), it is understood that the Lender Group, or any of them, may, without exonerating or releasing any Credit Party, give up, modify or abstain from perfecting or taking advantage of any security for the Obligations and accept or make any compositions or arrangements, and realize upon any security for the Obligations when, and in such manner, and with or without notice, as such Person may deem expedient.
(27)Each Credit Party acknowledges and agrees that no change in the nature or terms of the Obligations or any of the Loan Documents, or other agreements, instruments or contracts evidencing, related to or attendant with the Obligations (including any novation), shall discharge all or any part of the liabilities and obligations of such Credit Party pursuant to this Guaranty; it being the purpose and intent of the Credit Parties and the Lender Group that the covenants, agreements and all liabilities and obligations of each Credit Party hereunder are absolute, unconditional and irrevocable under any and all circumstances.  Without limiting the generality of the foregoing, each Credit Party agrees that until each and every one of the covenants and agreements of this Guaranty is fully performed, and without possibility of recourse, whether by operation of law or otherwise, such Credit Party’s undertakings hereunder shall not be released, in whole or in part, by any action or thing which might, but for this subsection of this Guaranty, be deemed a legal or equitable discharge of a surety or guarantor, or by reason of any waiver, omission of the Lender Group, or any of them, or their failure to proceed promptly or otherwise, or by reason of any action taken or omitted by the Lender Group, or any of them, whether or not such action or failure to act varies or increases the risk of, or affects the rights or remedies of, such Credit Party or by reason of any further dealings between the Borrowers, on the one hand, and any member of the Lender Group, on the other hand, or any other guarantor or surety, and such Credit Party hereby expressly waives and surrenders any defense to its liability hereunder, or any right of counterclaim or offset of any nature or description which it may have or may exist based upon, and shall be deemed to have consented to, any of the foregoing acts, omissions, things, agreements or waivers.
(28)The Lender Group, or any of them, may, without demand or notice of any kind upon or to any Credit Party, at any time or from time to time when any amount shall be due and payable hereunder by any Credit Party, if the Borrowers shall not have timely paid any of the Obligations (or in the case of Letter of Credit Obligations, secured through delivery of cash collateral in an amount equal to one hundred and five percent (105%) of the Letter of Credit Obligations), set-off and appropriate and apply to any portion of the Obligations hereby guaranteed, and in such order of application as the Administrative Agent may from time to time elect in accordance with this Agreement, any deposits, property, balances, credit accounts or moneys of any Credit Party in the possession of any member of the Lender Group or under their respective control for any purpose.  If and to the extent that any Credit Party makes any payment to the Administrative Agent or any other Person pursuant to or in respect of this Guaranty, any claim which such Credit Party may have against any Borrower by reason thereof shall be subject and subordinate to the prior payment in full of the Obligations to the satisfaction of the Lender Group.
(29)The creation or existence from time to time of Obligations in excess of the amount committed to or outstanding on the date of this Guaranty is hereby authorized, without notice to any Credit Party, and shall in no way impair or affect this Guaranty or the rights of the Lender Group herein. It is the intention of each Credit Party and the Administrative Agent that each Credit Party’s obligations hereunder (other than the obligations of the Administrative Borrower) shall be, but not in excess of, the Maximum Guaranteed Amount (as herein defined).  The “Maximum Guaranteed Amount” with respect to any such Credit Party, shall mean the maximum amount which could be paid by such Credit Party without rendering this Guaranty void or voidable as would otherwise be held or determined 
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by a court of competent jurisdiction in any action or proceeding involving any state or Federal bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws relating to the insolvency of debtors.
(30)Upon the bankruptcy or winding up or other distribution of assets of any Borrower, or of any surety or guarantor (other than the applicable Credit Party) for any Obligations of the Borrowers to the Lender Group, or any of them, the rights of the Administrative Agent against any Credit Party shall not be affected or impaired by the omission of any member of the Lender Group to prove its claim, or to prove the full claim, as appropriate, against the Borrowers, or any such other guarantor or surety, and the Administrative Agent may prove such claims as it sees fit and may refrain from proving any claim and in its discretion may value as it sees fit or refrain from valuing any security held by it without in any way releasing, reducing or otherwise affecting the liability to the Lender Group of each of the Credit Parties.
(31)Each Credit Party hereby absolutely, unconditionally and irrevocably expressly waives, except to the extent such waiver would be expressly prohibited by Applicable Law, the following:  (i) notice of acceptance of this Guaranty, (ii) notice of the existence or creation of all or any of the Obligations, (iii) presentment, demand, notice of dishonor, protest and all other notices whatsoever (other than notices expressly required hereunder or under any other Loan Document to which any Credit Party is a party), (iv) all diligence in collection or protection of or realization upon the Obligations or any part thereof, any obligation hereunder, or any security for any of the foregoing, (v) all rights to enforce any remedy which the Lender Group, or any of them, may have against any Borrower, (vi) until the Obligations shall have been paid in full in cash (or in the case of a Letter of Credit Obligations, secured through delivery of cash collateral in an amount equal to one hundred and five percent (105%) of the Letter of Credit Obligations), all rights of subrogation, indemnification, contribution and reimbursement from any Borrower for amounts paid hereunder and any benefit of, or right to participate in, any collateral or security now or hereinafter held by the Lender Group, or any of them, in respect of the Obligations, and (vii) any and all rights under Official Code of Georgia Sections 10-7-23 and 10-7-24.  If a claim is ever made upon any member of the Lender Group for the repayment or recovery of any amount or amounts received by such Person in payment of any of the Obligations and such Person repays all or part of such amount by reason of (A) any judgment, decree or order of any court or administrative body having jurisdiction over such Person or any of its property, or (B) any settlement or compromise of any such claim effected by such Person with any such claimant, including any Borrower, then in such event each Credit Party agrees that any such judgment, decree, order, settlement or compromise shall be binding upon such Credit Party, notwithstanding any revocation hereof or the cancellation of any promissory note or other instrument evidencing any of the Obligations, and such Credit Party shall be and remain obligated to such Person hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by such Person.
(32)This Guaranty is a continuing guaranty of the Obligations and all liabilities to which it applies or may apply under the terms hereof and shall be conclusively presumed to have been created in reliance hereon.  No failure or delay by any member of the Lender Group in the exercise of any right, power, privilege or remedy shall operate as a waiver thereof, and no single or partial exercise by the Administrative Agent of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy and no course of dealing between any Credit Party and any member of the Lender Group shall operate as a waiver thereof.  No action by any member of the Lender Group permitted hereunder shall in any way impair or affect this Guaranty.  For the purpose of this Guaranty, the Obligations shall include, without limitation, all Obligations of the Borrowers to the Lender Group, notwithstanding any right or power of any third party, individually or in the name of any Borrower and 
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the Lender Group, or any of them, to assert any claim or defense as to the invalidity or unenforceability of any such Obligation, and no such claim or defense shall impair or affect the obligations of any Credit Party hereunder.
(33)This is a guaranty of payment and not of collection.  In the event the Administrative Agent makes a demand upon any Credit Party in accordance with the terms of this Guaranty, such Credit Party shall be held and bound to the Administrative Agent directly as debtor in respect of the payment of the amounts hereby guaranteed.  All costs and expenses, including, without limitation, reasonable attorneys’ fees and expenses, incurred by the Administrative Agent in obtaining performance of or collecting payments due under this Guaranty shall be deemed part of the Obligations guaranteed hereby.  
(34)Each Subsidiary Guarantor and each Borrower (other than the Administrative Borrower) is a direct or indirect wholly owned Domestic Subsidiary of a Borrower.  Each Credit Party expressly represents and acknowledges that any financial accommodations by the Lender Group to the Borrowers, including, without limitation, the extension of credit, are and will be of direct interest, benefit and advantage to such Credit Party.
(35)The payment obligation of a Credit Party to any other Credit Party under any Applicable Law regarding contribution rights among co-obligors or otherwise shall be subordinate and subject in right of payment to the prior payment in full of the obligations of such Credit Party under the other provisions of this Guaranty, and such Credit Party shall not exercise any right or remedy with respect to such rights until payment and satisfaction in full of all such obligations.  
Section 1.zSpecial Provisions Applicable to Subsidiary Credit Parties.  Pursuant to Section 6.20 of this Agreement, any new Domestic Subsidiary of any Borrower is required to enter into this Agreement by executing and delivering to the Administrative Agent a Supplement to this Agreement, designating such Domestic Subsidiary as a Borrower or a Guarantor.  Upon the execution and delivery of a Supplement by such new Domestic Subsidiary, such Domestic Subsidiary shall become a Borrower or Guarantor, as so designated, and a Credit Party hereunder with the same force and effect as if originally named as a Borrower or Guarantor, as appropriate, and Credit Party herein.  The execution and delivery of any Supplement (or any other supplement to any Loan Document delivered in connection therewith) adding an additional Borrower or Guarantor as a party to this Agreement or any other applicable Loan Document shall not require the consent of any other party hereto.  The rights and obligations of each party hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor hereunder.  
Article 4.

CONDITIONS PRECEDENT
Section 1.aaConditions Precedent to Effectiveness.  The effectiveness of the amendment and restatement of the Existing Credit Agreement contemplated hereby is subject to the prior fulfillment of each of the following conditions:
(36)The Administrative Agent shall have received each of the following, in form and substance satisfactory to the Administrative Agent:
(1)This duly executed Agreement;
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(2)Duly executed Notes payable to the order of each Lender requesting a promissory note in the amount of such Lender’s Revolving Loan Commitment;
(3)The Fee Letter duly executed by the Administrative Borrower;
(4)A certificate of the Chief Financial Officer of the Administrative Borrower designating the Authorized Signatories as of the Agreement Date;
(5)The favorable written legal opinion(s) of counsel to the Credit Parties, addressed to the Lender Group, and covering such matters relating to the Credit Parties, the Loan Documents and the transactions contemplated therein as the Administrative Agent or the Required Lenders shall reasonably request; 
(6)A duly executed funds disbursement agreement and Request for Advance for the initial Advance of Revolving Loans;
(7)A certificate signed by an Authorized Signatory of each Credit Party, including a certificate of incumbency with respect to each Authorized Signatory of such Credit Party, together with appropriate attachments which shall include, without limitation, the following: (A) a copy of the certificate of incorporation of such Credit Party certified to be true, complete and correct by the Secretary of State of the State of such Credit Party’s incorporation, (B) a true, complete and correct copy of the by-laws of such Credit Party, (C) a true, complete and correct copy of the resolutions of such Credit Party authorizing the execution, delivery and performance by such Credit Party of the Loan Documents and the Bank Products Documents and authorizing the borrowings or guaranty, as applicable, hereunder, and (D) certificates of good standing from the State of incorporation of each Credit Party and each other jurisdiction where such Credit Party is required to be qualified to do business as a foreign corporation and a failure to be so qualified could reasonably be expected to have a Materially Adverse Effect;
(8)Copies of (A) the internally prepared quarterly financial statements of the Borrowers and their Subsidiaries on a consolidated basis for the fiscal quarters ending on March 31, 2011 and June 30, 2011, (B) the audited consolidated financial statements for the Borrowers and their Subsidiaries for the fiscal years ending on December 31, 2008, December 31, 2009 and December 31, 2010 and (C) such other financial information as the Administrative Agent may reasonably request; 
(9)Lien search results for each Credit Party in the state of its organization; and
(10)All such other documents as the Administrative Agent may reasonably request, certified by an appropriate governmental official or an Authorized Signatory if so requested.
(13)The Administrative Agent shall have received payment of all fees and reasonable expenses payable to the Administrative Agent, the Affiliates of the Administrative Agent and the Lenders in connection with the execution and delivery of this Agreement, including, without limitation, fees and expenses of counsel to the Administrative Agent.
(14)The Lender Group shall have received evidence satisfactory to them that the conditions set forth in Section 4.2 are satisfied and no change in the business assets, management, 
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operations, financial condition or prospects of the Credit Parties shall have occurred since December 31, 2010, which change has had or would be reasonably expected to have a Materially Adverse Effect, and the Lender Group shall have received a certificate of an Authorized Signatory of the Administrative Borrower so stating.
(15)The Lender Group shall have received evidence satisfactory to them that all Necessary Authorizations are in full force and effect and are not subject to any pending or threatened reversal or cancellation, that no other consents or approvals are required and that no Default exists, after giving effect to the initial Advance hereunder, and the Lender Group shall have received a certificate of an Authorized Signatory of the Administrative Borrower so stating.
(16)The Borrowers shall have established the cash management system described in Section 6.15.
(17)The Administrative Agent shall have received confirmation that the Uniform Commercial Code financing statements authorized by the respective Credit Parties as debtor and naming the Administrative Agent as secured party, in such form as shall be satisfactory to the Administrative Agent, have been duly filed in all appropriate jurisdictions and remain in effect.
Section 1.abConditions Precedent to Each Advance.  The obligation of the Lenders to make each Advance, including the initial Advance hereunder (but excluding Advances, the proceeds of which are to reimburse (i) the Swing Bank for Swing Loans, (ii) the Administrative Agent for Agent Advances or (iii) the Issuing Bank for amounts drawn under a Letter of Credit), is subject to the fulfillment of each of the following conditions immediately prior to or contemporaneously with such Advance:
(37)All of the representations and warranties of the Credit Parties under this Agreement and the other Loan Documents (other than those that expressly relate to an earlier date), which, pursuant to Section 5.3,  are made at and as of the time of such Advance, shall be true and correct at such time, both before and after giving effect to the application of the proceeds of the Advance;
(38)Since December 31, 20102021, there shall have been no change that has had or would be reasonably expected to have a Materially Adverse Effect; and
(39)There shall not exist on the date of such Advance and after giving effect thereto, a Default.
The Borrowers hereby agree that the delivery of any Request for Advance hereunder or any telephonic request for an Advance hereunder shall be deemed to be the certification of the Authorized Signatory thereof that all of the conditions set forth in this Section have been satisfied.  Notwithstanding the foregoing, if the conditions, or any of them, set forth above are not satisfied, such conditions may be waived by the requisite Lenders under Section 11.12, and, in any event the Required Lenders may waive the condition set forth in Section 4.2(c).
Section 1.acConditions Precedent to Each Letter of Credit.  The obligation of the Issuing Bank to issue each Letter of Credit (including the initial Letter of Credit) hereunder is subject to the fulfillment of each of the following conditions immediately prior to or contemporaneously with the issuance of such Letter of Credit:
(i)All of the representations and warranties of the Credit Parties under this Agreement and the other Loan Documents (other than those that expressly relate to an earlier date), which, pursuant to 
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Section 5.3, are made at and as of the time of the issuance of such Letter of Credit, shall be true and correct at such time, both before and after giving effect to the issuance of such Letter of Credit;
(ii)Since December 31, 20102021, there shall have been no change that has had or would be reasonably expected to have a Materially Adverse Effect; and
(iii)There shall not exist on the date of issuance of such Letter of Credit, and after giving effect thereto, a Default.
The Borrowers hereby agree that the delivery of any Request for Issuance of a Letter of Credit hereunder shall be deemed to be the certification of the Authorized Signatory thereof that all of the conditions set forth in this Section 4.3 have been satisfied.  Notwithstanding the foregoing, if the conditions, or any of them, set forth above are not satisfied, such conditions may be waived by the requisite Lenders under Section 11.12, and, in any event the Required Lenders may waive the condition set forth in Section 4.3(c).
Article 5.

REPRESENTATIONS AND WARRANTIES
Section 1.1General Representations and Warranties.  In order to induce the Lender Group to enter into this Agreement and to extend the Loans and issue the Letters of Credit to the Borrowers, each Credit Party hereby represents, and warrants that:
(1)Organization; Power; Qualification.  Each Credit Party and each Subsidiary of a Credit Party (i) is a corporation, partnership or limited liability company duly organized, validly existing, and in good standing under the laws of its state of incorporation or formation, (ii) has the corporate or other company power and authority to own or lease and operate its properties and to carry on its business as now being and hereafter proposed to be conducted, and (iii) is duly qualified and is in good standing as a foreign corporation or other company, and authorized to do business, in each jurisdiction in which the character of its properties or the nature of its business requires such qualification or authorization unless the failure to be so qualified under this clause (iii) could not reasonably be expected to result in a Materially Adverse Effect.
(2)Authorization; Enforceability.  Each Credit Party has the power and has taken all necessary action, corporate or otherwise, to authorize it to execute, deliver, and perform this Agreement and each of the other Loan Documents to which it is a party in accordance with the terms thereof and to consummate the transactions contemplated hereby and thereby.  Each of this Agreement and each other Loan Document to which a Credit Party is a party has been duly executed and delivered by such Credit Party, and is a legal, valid and binding obligation of such Credit Party, enforceable in accordance with its terms.
(3)Partnerships; Joint Ventures; Subsidiaries.  As of the SecondFourth Amendment Date, except as disclosed on Schedule 5.1(c)-1, (i) no Credit Party or any Subsidiary of a Credit Party has any Subsidiaries, which Subsidiaries are identified on such Schedule as Domestic Subsidiaries or Foreign Subsidiaries; (ii) no Credit Party or any Subsidiary of a Credit Party is a partner or joint venturer in any partnership or joint venture other than (A) the Subsidiaries listed on Schedule 5.1(c)-1 and (B) the partnerships and joint ventures (that are not Subsidiaries) listed on Schedule 5.1(c)-2.  Schedule 5.1(c)-1 and Schedule 5.1(c)-2 set forth, for each Person set forth thereon, as of the SecondFourth Amendment Date, a complete and accurate statement of (i) the percentage ownership of each such Person by the 
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applicable Credit Party or Subsidiary of a Credit Party, (ii) the state or other jurisdiction of incorporation or formation, as appropriate, of each such Person, (iii) each state in which each such Person is qualified to do business on the SecondFourth Amendment Date and (iv) all of each such Person’s trade names, trade styles or doing business forms which such Person has used or under which such Person has transacted business during the five (5) year period immediately preceding the SecondFourth Amendment Date.  
(4)Capital Stock and Related Matters.  TheAs of the Fourth Amendment Date, the authorized Equity Interests as of the Second Amendment Date of each Credit Party and each Subsidiary of a Credit Party that is a corporation and the number of shares of such Equity Interests that are issued and outstanding as of the Second Amendment Date are as set forth on Schedule 5.1(d).  All of the shares of such Equity Interests that are issued and outstanding as of the SecondFourth Amendment Date have been duly authorized and validly issued and are fully paid and non-assessable.  None of such Equity Interests have been issued in violation of the Securities Act, or the securities, “Blue Sky” or other Applicable Law of any applicable jurisdiction.  As of the SecondFourth Amendment Date, the authorized Equity Interests of each such Credit Party (other than the Administrative Borrower) and each such Subsidiary of a Credit Party are owned by the parties listed on Schedule 5.1(d) in the amounts set forth on such schedule and a description of the Equity Interests of each such party (other than the Administrative Borrower) is listed on Schedule 5.1(d).  Except as described on Schedule 5.1(d), as of the SecondFourth Amendment Date, no Credit Party or any Subsidiary of a Credit Party has outstanding any stock or securities convertible into or exchangeable for any shares of its Equity Interests, nor are there any preemptive or similar rights to subscribe for or to purchase, or any other rights to subscribe for or to purchase, or any options for the purchase of, or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments, or claims of any character relating to, any Equity Interests or any stock or securities convertible into or exchangeable for any Equity Interests, limited in the case of the Administrative Borrower to the Class A Common Stock.  Except as set forth on Schedule 5.1(d), no Credit Party or any Subsidiary of any Credit Party is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its Equity Interests or, no Credit Party (other than the Administrative Borrower) is subject to any obligation to register any shares of its Equity Interests, and there are no agreements restricting the transfer of any shares of such Credit Party’s or such Subsidiary’s Equity Interests, limited in the case of the Administrative Borrower to the Class A Common Stock, or restricting the ability of any Subsidiary of any Borrower from making distributions, dividends or other Restricted Payments to such Borrower. As of the Fourth Amendment Date, the Permitted Class A Shareholders own and control, directly or indirectly, at least seventy percent (70%) of the issued and outstanding Class A Common Stock of the Administrative Borrower.
(5)Compliance with Law, Loan Documents, and Contemplated Transactions.  The execution, delivery, and performance of this Agreement and each of the other Loan Documents and the Bank Products Documents in accordance with their respective terms and the consummation of the transactions contemplated hereby and thereby do not and will not (i) violate any Applicable Law, (ii) conflict with, result in a breach of, or constitute a default under the certificate of incorporation or formation or by-laws, partnership agreement or operating agreement of any Credit Party or under any indenture, agreement, or other instrument to which any Credit Party is a party or by which any Credit Party or any of its properties may be bound, or (iii) result in or require the creation or imposition of any Lien upon or with any Credit Party except Permitted Liens.
(6)Necessary Authorizations.  Each Credit Party and each Subsidiary of a Credit Party has obtained all Necessary Authorizations, and all such Necessary Authorizations are in full force and effect except, other than with respect to the transactions contemplated by the Loan Documents, where failure to obtain such Necessary Authorizations, or the failure of such Necessary Authorizations to be in 
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full force and effect, could not reasonably be expected to have a Materially Adverse Effect.  None of such Necessary Authorizations are the subject of any pending or, to the best of each Credit Party’s knowledge, threatened attack or revocation, by the grantor of the Necessary Authorization except, other than with respect to the transactions contemplated by the Loan Documents, where the revocation by the grantor of such Necessary Authorizations could not reasonably be expected to have a Materially Adverse Effect.
(7)Title to Properties.  Each Credit Party has marketable (in the case of real property), and legal title to, or a valid leasehold interest in, all of its Inventory and other material properties and assets, and none of such properties or assets is subject to any Liens, other than Permitted Liens.
(8)Material Contracts.  Schedule 5.1(h) contains a complete list, as of the AgreementFourth Amendment Date, of each Material Contract, true, correct and complete copies of which (including all amendments, restatements, renewals and replacements thereof) have been delivered to the Administrative Agent.  Schedule 5.1(h) further identifies, as of the AgreementFourth Amendment Date, each Material Contract that requires consent to the granting of a Lien in favor of the Administrative Agent on the rights of any Credit Party thereunder.  No Credit Party or any Subsidiary of a Credit Party is in default under or with respect to any Material Contract to which it is a party or by which it or any of its properties are bound and which Material Contract, if terminated, could reasonably be expected to have a Materially Adverse Effect.
(9)Labor Matters.  Except as set forth on Schedule 5.1(i), as of the AgreementFourth Amendment Date, (i) no Credit Party is engaged in any unfair labor practice; (ii) there is no unfair labor practice complaint pending against any Credit Party before the National Labor Relations Board and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement that is so pending against any Credit Party; and (iii) no strike or work stoppage is in existence involving any employees of any Credit Party, except (with respect to any matter specified in clause (i), (ii) or (iii) above) such as could not reasonably be expected to have a Materially Adverse Effect.
(10)Taxes.  Except as set forth on Schedule 5.1(j), all federal, state and other material tax returns of each Credit Party and each Subsidiary of a Credit Party required by law to be filed have been duly filed (or extensions have been timely filed), all such tax returns are true, complete and correct in all material respects, and all federal, state, and other material taxes (including, without limitation, all real estate and personal property, income, franchise, transfer and gains taxes), all general or special assessments, and other governmental charges or levies upon each Credit Party and each Subsidiary of a Credit Party and any of their respective properties, income, profits, and assets, which are due and payable, have been paid, except any payment of any of the foregoing which such Credit Party or such Subsidiary, as applicable, is currently contesting in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of such Credit Party or such Subsidiary, as the case may be.  Except as set forth on Schedule 5.1(j), as of the SecondFourth Amendment Date, no material adjustment relating to any federal, state or other material tax returns has been proposed formally or informally by any Governmental Authority and, to the knowledge of each Credit Party no basis exists for any such adjustment.  The charges, accruals, and reserves on the books of the Credit Parties and their Subsidiaries in respect of taxes are, in the reasonable judgment of the Credit Parties, adequate. Except as set forth on Schedule 5.1(j), as of the SecondFourth Amendment Date, no Credit Party has executed or filed with the Internal Revenue Service or any other Governmental Authority any agreement or other document extending, or having the effect of extending, the period for assessment or collection of any federal, state or other material taxes, except for extensions which are timely filed and except for extension requests made by a Governmental Authority.  None of the Credit Parties and their 
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respective predecessors are liable for any taxes:  (i) under any agreement (including any tax sharing agreements) or (ii) to each Credit Party’s knowledge, as a transferee.  As of the SecondFourth Amendment Date, no Credit Party has agreed, or been requested, to make any adjustment under Code Section 481(a), by reason of a change in accounting method or otherwise, which would have a Materially Adverse Effect.
(11)Financial Statements.  The Borrowers have furnished, or have caused to be furnished, to the Lenders (i) the audited financial statements of the Borrowers, including balance sheets and income and cash flow statements, which are complete and correct in all material respects and present fairly in accordance with GAAP the respective financial position of the Borrowers for the fiscal years ending on December 31, 20082019, December 31, 20092020 and December 31, 20102021, and (ii) the unaudited interim financial statements of the Borrowers, which are complete and correct in all material respects and present fairly in accordance with GAAP, subject to normal year end adjustments, the respective financial positions of the Borrowers as at March 31, 20112022 and June 30, 20112022 and the results of operation for the one-quarter period and two-quarter period, respectively, then ended.  Except as disclosed in such financial statements, and as set forth in the projections delivered to the Lenders prior to the AgreementFourth Amendment Date, as of the Fourth Amendment Date, no Credit Party has any material liabilities, contingent or otherwise, and there are no material unrealized or anticipated losses of such Credit Party which have not heretofore been disclosed in writing to the Lenders.
(12)No Adverse Change.  Since December 31, 20102021, there has occurred no event which has had or could reasonably be expected to have a Materially Adverse Effect.  
(13)Investments and Guaranties.  As of the AgreementFourth Amendment Date, no Credit Party or any Subsidiary of a Credit Party owns any Equity Interests of any Person except as disclosed on Schedules 5.1(c)-1 and 5.1(c)-2, or has outstanding loans or advances to, or guaranties of the obligations of, any Person, except as reflected in the financial statements referred to in Section 5.1(k) or disclosed on Schedule 5.1(m).
(14)Liabilities, Litigation.  As of the SecondFourth Amendment Date, except for liabilities incurred in the normal course of business and as set forth on Schedule 5.1(n), no Credit Party or any Subsidiary of any Credit Party has any material (individually or in the aggregate) liabilities, direct or contingent, except as disclosed or referred to in the financial statements referred to in Section 5.1(k) or with respect to the Obligations.  As of the SecondFourth Amendment Date, except as described on Schedules 5.1(n) and 5.1(y), there is no litigation, legal or administrative proceeding, investigation, or other action of any nature pending or, to the knowledge of the Credit Parties, threatened against or affecting any Credit Party, any Subsidiary of any Credit Party or any of their respective properties (excluding workers compensation claims incurred in the ordinary course of business) which could reasonably be expected to result in any liability of such Credit Party or Subsidiary in excess of $750,000 in the aggregate (net of the amount of any insurance coverage so long as the insurance provider has not denied coverage) with respect to all Credit Parties and their Subsidiaries, or the loss of any certification or license material to the operation of such Credit Party’s or Subsidiary’s business.  None of such litigation disclosed on Schedules 5.1(n) and 5.1(y), individually or collectively, could reasonably be expected to have a Materially Adverse Effect.  
(15)ERISA.  As of the Fourth Amendment Date, Schedule 5.1(o) lists (i) all ERISA Affiliates and (ii) all Plans and separately identifies all Title IV Plans, Multiemployer Plans, and Retiree Welfare Plans.  CopiesTo the extent requested by the Administrative Agent, copies of all such listed Plans, together with a copy of the latest IRS/DOL 5500-series form for each such Plan, have been 
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delivered to the Administrative Agent.  Except with respect to Multiemployer Plans, each Plan intended to be qualified under Code Section 401 has been determined by the Internal Revenue Service to qualify under Section 401 of the Code, the trusts created thereunder have been determined to be exempt from tax under the provisions of Sections 501 of the Code, and nothing has occurred that would cause the loss of such qualification or tax-exempt status.  Each Credit Party and each ERISA Affiliate and each of their respective Plans are in material compliance with ERISA and the Code and no Credit Party nor any of its ERISA Affiliates has incurred any accumulated funding deficiency with respect to any such Plan within the meaning of ERISA or the Code.  No Credit Party or, to each Credit Party’s knowledge, any of its ERISA Affiliates has made any promises of retirement or other benefits to employees, except as set forth in the Plans.  No Credit Party or ERISA Affiliate has incurred any liability to the PBGC in connection with any such Plan (other than the payment of premiums that are not past due).  No Title IV Plan has any Unfunded Pension Liability where the contributions required to meet the minimum funding standards set forth in ERISA could reasonably be expected to have a Materially Adverse Effect.  No ERISA Event or event described in Section 4062(e) of ERISA has occurred and is continuing with respect to any Plan.  There are no pending, or to the knowledge of any Credit Party, threatened claims (other than claims for benefits in the normal course), sanctions, actions or lawsuits, asserted or instituted against any Plan or any Person as fiduciary (as defined in Section 3(21) of ERISA) or sponsor of any Plan.  No such Plan or trust created thereunder, or party in interest (as defined in Section 3(14) of ERISA), or any fiduciary (as defined in Section 3(21) of ERISA), has engaged in a non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) which would subject such Plan or any other Plan of any Credit Party or any of its ERISA Affiliates, any trust created thereunder, or any such party in interest or fiduciary, or any party dealing with any such Plan or any such trust, to any material penalty or tax on “prohibited transactions” imposed by Section 502 of ERISA or Section 4975 of the Code.
(16)Intellectual Property; Licenses; Certifications.  Except as set forth on Schedule 5.1(p), as of the AgreementFourth Amendment Date, no Credit Party or any Subsidiary of a Credit Party owns any registered patents, trademarks, service marks or copyrights, and has no pending registration applications with respect to any of the foregoing. No other patents, trademarks, service marks or registered copyrights are necessary for the operation of the business of the Credit Parties and their Subsidiaries.  Except as set forth on Schedule 5.1(p), as of the AgreementFourth Amendment Date, no material licenses or certifications are necessary for the operation of the Credit Parties’ and their Subsidiaries’ business.
(17)Compliance with Law; Absence of Default.  Each Credit Party and each Subsidiary of a Credit Party is in compliance with all Applicable Law and with all of the provisions of its certificate of incorporation or formation and by-laws or other governing documents except where the failure to be in compliance could not reasonably be expected to have a Materially Adverse Effect, and no event has occurred or has failed to occur which has not been remedied or waived, the occurrence or non-occurrence of which constitutes a Default. 
(18)Casualties; Taking of Properties.  Since December 31, 20102021, neither the business nor the properties of the Credit Parties and their Subsidiaries has been materially and adversely affected as a result of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or other labor disturbance, embargo, requisition or taking of property or cancellation of contracts, permits or concessions by any domestic or foreign government or any agency thereof, riot, activities of armed forces, or acts of God or of any public enemy, except for any such event that could not reasonably be expected to have a Materially Adverse Effect.
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(19)Accuracy and Completeness of Information.  All written information, reports, other papers and data relating to the Credit Parties and their Subsidiaries furnished by or at the direction of the Credit Parties to the Lender Group (other than projections) were, at the time furnished, complete and correct in all material respects.  No fact is currently known to any Credit Party which has, or could reasonably be expected to have, a Materially Adverse Effect.  With respect to projections, estimates and forecasts given to the Lender Group, such projections, estimates and forecasts are based on the Credit Parties’ good faith assessment of the future of the business at the time made, it being understood that projections by their nature are uncertain and no assurance is given that the results reflected in such projections will be achieved.  The Credit Parties had a reasonable basis for such assessment at the time made.
(20)Compliance with Regulations T, U, and X.  No Credit Party or any Subsidiary of a Credit Party is engaged principally in or has as one of its important activities in the business of extending credit for the purpose of purchasing or carrying, and no Credit Party or any Subsidiary of a Credit Party owns or presently intends to acquire, any “margin security” or “margin stock” as defined in Regulation T, Regulation U and Regulation X (herein called “Margin Stock”) in violation of Regulation T, Regulation U or Regulation X.   Neither the making of the Loans nor the use of proceeds thereof will violate, or be inconsistent with, the provisions of Regulation T, Regulation U or Regulation X.
(21)Solvency.  As of the ThirdFourth Amendment Date and after giving effect to the transactions contemplated by the Loan Documents, (i) the property of each Credit Party (including all contribution rights from other Credit Parties), at a fair valuation on a going concern basis, will exceed its debt; (ii) the capital of each Credit Party will not be unreasonably small to conduct its business; and (iii) no Credit Party will have incurred debts, or have intended to incur debts, beyond its ability to pay such debts as they mature.  For purposes of this Section, “debt” shall mean any liability on a claim, and “claim” shall mean (A) the right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, undisputed, legal, equitable, secured or unsecured, or (B) the right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, undisputed, secured or unsecured.
(22)Insurance.  The Credit Parties and their Subsidiaries have insurance meeting the requirements of Section 6.5, and such insurance policies are in full force and effect.  As of the Agreement Date, all insurance maintained by the Credit Parties and their Subsidiaries is fully described on Schedule 5.1(v).
(23)Broker’s or Finder’s Commissions.  No broker’s or finder’s fee or commission will be payable with respect to the execution and delivery of this Agreement and the other Loan Documents, and no other similar fees or commissions will be payable by the Credit Parties for any other services rendered to the Credit Parties ancillary to the credit transactions contemplated herein.
(24)Real Property.  (i) All real property leased by each Credit Party and each Subsidiary of a Credit Party as of the AgreementFourth Amendment Date, and the name of the lessor of such real property, is set forth in Schedule 5.1(x)-1; (ii) such leases are valid, enforceable and in full force and effect.  There is no default or condition which, with the passage of time or the giving of notice, or both, would constitute a default on the part of any party under such leases and the Credit Parties and their Subsidiaries have paid all rents and other charges due and payable under such leases except for any default or condition that could not reasonably be expected to result in a Materially Adverse Effect.  All real property owned by each Credit Party or a Subsidiary of a Credit Party as of the AgreementFourth 
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Amendment Date is set forth in Schedule 5.1(x)-2.  As of the AgreementFourth Amendment Date, no Credit Party or any Subsidiary of a Credit Party owns, leases or uses any real property other than as set forth on Schedule 5.1(x)-1 or 2.  Each Credit Party and each Subsidiary of a Credit Party owns marketable fee simple title to all of its owned real property, and none of its respective owned real property is subject to any Liens, except Permitted Liens.  
(25)Environmental Matters.  
(1)Except as specifically disclosed in Schedule 5.1(y) or as could not, individually or in the aggregate, reasonably be expected to have a Materially Adverse Effect, no Credit Party or any Subsidiary thereof (A) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (B) has received notice of any claim with respect to any Environmental Law or (C) knows of any basis for any liability under any Environmental Law.
(2)Except in each case, as could not, individually or in the aggregate, reasonably be expected to have a Materially Adverse Effect or as otherwise set forth in Schedule 5.1(y), (A) there are no and never have been any underground or above-ground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or, to the knowledge of any Credit Party, operated by any Credit Party; (B) there is no asbestos or asbestos-containing material on any property currently owned or, to the knowledge of any Credit Party, operated by any Credit Party or; and (C) to the knowledge of the Credit Parties, Hazardous Materials have not been released, discharged or disposed of on any property currently or formerly owned or operated by any Credit Party or any Subsidiary thereof.
(3)Except in each case, as could not, individually or in the aggregate, reasonably be expected to have a Materially Adverse Effect or as otherwise set forth on Schedule 5.1(y), (i) no Credit Party or any Subsidiary thereof is undertaking, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law; and (ii) all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or formerly owned or operated by any Credit Party or any Subsidiary thereof have been disposed of in a manner not reasonably expected to result in liability to any Credit Party or any Subsidiary thereof.
(26)OSHA.  All of the Credit Parties’ and their Subsidiaries’ operations are conducted in compliance with all applicable rules and regulations promulgated by the Occupational Safety and Health Administration of the United States Department of Labor, except for any default or condition that could not reasonably be expected to result in a Materially Adverse Effect.
(27)Name of Credit Party.  No Credit Party or any Subsidiary of any Credit Party has changed its name within the preceding five (5) years from the SecondFourth Amendment Date, nor has any Credit Party or any Subsidiary of a Credit Party transacted business under any other name or trade name, other than “Havertys”.
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(28)Investment Company Act; Public Utility Holding Company Act.  No Credit Party or any Subsidiary of a Credit Party is required to register under the provisions of the Investment Company Act of 1940, as amended, and neither the entering into or performance by the Credit Parties of this Agreement nor the issuance of any Notes violates any provision of such Act or requires any consent, approval, or authorization of, or registration with, any governmental or public body or authority pursuant to any of the provisions of such Act.
(29)Patriot Act.  Neither any Credit Party nor any of its Subsidiaries is an “enemy” or an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act or any enabling legislation or executive order relating thereto.  Neither any Credit Party nor any or its Subsidiaries is in violation of (a) the Trading with the Enemy Act, (b) any of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto or (c) the USA Patriot Act.  None of the Credit Parties (i) is a blocked person described in Section 1 of the Executive Order No. 13224 or (ii) to the best of its knowledge, engages in any dealings or transactions, or is otherwise associated, with any such blocked person.
(30)OFAC.  None of the Credit Parties, any Subsidiary of Credit Parties, any Affiliate of the Credit Parties (other than an Affiliate that is a shareholder of HFC) or, to the knowledge of any Credit Party as of the ThirdFourth Amendment Date, any Affiliate that is a shareholder of HFC (i) is a Sanctioned Person, (ii) has more than 15% of its assets in Sanctioned Countries, or (iii) derives more than 15% of its operating income from investments in, or transactions with Sanctioned Persons or Sanctioned Countries.  No part of the proceeds of any Loans hereunder will be used directly or indirectly to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country or for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
(31)Security Documents.  
(1)The Pledge Agreement is effective to create in favor of the Administrative Agent, for the ratable benefit of the Lender Group, a legal, valid and enforceable security interest in the Collateral (as defined in the Pledge Agreement) and, when such Collateral is delivered to the Administrative Agent, the Pledge Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the pledgor thereunder in such Collateral, in each case prior and superior in right to any other Person.
(2)The Security Agreement is effective to create in favor of the Administrative Agent, for the ratable benefit of the Lender Group, a legal, valid and enforceable security interest in the Collateral (as defined in the Security Agreement) and, when financing statements in appropriate form are filed in the offices specified on Schedule 3 to the Security Agreement, the Security Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the grantors thereunder in such Collateral (other than the Intellectual Property (as defined in the Security Agreement)), in each case prior and superior in right to any other Person, other than with respect to Liens expressly permitted by Section 8.3.
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            (iii)    Each of the representations and warranties contained in each of the Security Documents is true and correct on and as the date hereof as if made on and as of the date hereof.
(32)Liquidation of Former Borrowers.  As of the Agreement Date, Havertys Enterprises, Inc. and Havertys Capital, Inc. have been liquidated and dissolved by HFC and are no longer in existence in any jurisdiction.   
Section 1.2Representations and Warranties Relating to Eligible Credit Card Receivables.  With respect to all Eligible Credit Card Receivables, the Administrative Agent may rely upon all statements, warranties and representations made in any Borrowing Base Certificate in determining the classification of such Credit Card Receivables and in determining which items of Credit Card Receivables listed in such Borrowing Base Certificate meet the requirements of eligibility.
Section 1.3Representations and Warranties Relating to Inventory.  With respect to all Eligible Inventory, the Administrative Agent may rely upon all statements, warranties and representations made in any Borrowing Base Certificate in determining the classification of such Inventory and in determining which items of Inventory listed in such Borrowing Base Certificate meet the requirements of eligibility.
Section 1.4Survival of Representations and Warranties.  All representations and warranties made under this Agreement and the other Loan Documents shall be deemed to be made, and shall be true and correct, at and as of the Agreement Date and the date of each Advance or issuance of a Letter of Credit hereunder, except to the extent previously fulfilled in accordance with the terms of this Agreement or the other Loan Documents and to the extent subsequently inapplicable (including any representation that relates to an earlier date).  All representations and warranties made under this Agreement and the other Loan Documents shall survive, and not be waived by, the execution hereof by the Lender Group, or any of them, any investigation or inquiry by any member of the Lender Group, or the making of any Advance or the issuance of any Letter of Credit under this Agreement.
Article 6.

GENERAL COVENANTS
Until the later of the date the Obligations are repaid in full (other than unasserted contingent indemnification and other contingent liabilities not then due and payable that survive repayment of the Loans) or the date the Borrowers no longer have the right to borrow, or have Letters of Credit issued, hereunder (whether or not the conditions to borrowing have been or can be fulfilled), and unless the Required Lenders shall otherwise give their prior consent in writing:
Section 1.aPreservation of Existence and Similar Matters.  Each Credit Party will, and will cause each of its Subsidiaries to (i) except as expressly permitted by Section 8.7, preserve and maintain its existence, rights, franchises, licenses, and privileges in its jurisdiction of incorporation or organization including, without limitation, all Necessary Authorizations, and (ii) qualify and remain qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification or authorization except where the failure to be so qualified would not reasonably be expected to have a Materially Adverse Effect.
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Section 1.bCompliance with Applicable Law.  Each Credit Party will, and will cause each of its Subsidiaries to, comply with the requirements of all Applicable Law, except where the failure to so comply would not have a Materially Adverse Effect.
Section 1.cMaintenance of Properties.  Each Credit Party will, and will cause each of its Subsidiaries to, maintain or cause to be maintained in the ordinary course of business in good repair, working order and condition, normal wear and tear and disposal of obsolete equipment excepted, all properties used or useful in its business (whether owned or held under lease), and from time to time make or cause to be made all needed and appropriate repairs, renewals, replacements, additions, betterments, and improvements thereto.
Section 1.dAccounting Methods and Financial Records.  Each Credit Party will, and will cause each of its Subsidiaries to, maintain a system of accounting established and administered in accordance with GAAP and with any system mandated by an Account Debtor, such as the federal government cost and accounting standards, and will, and will cause each of its Subsidiaries to, keep adequate records and books of account in which complete entries will be made in accordance with such accounting principles consistently applied and reflecting all transactions required to be reflected by such accounting principles; provided that a conclusion by such Credit Party’s independent certified public accountants that such Credit Party has a “material weakness” in the effectiveness of its internal controls over financial reporting shall not constitute a breach of this Section unless the purported weakness could reasonably be expected to result in a Materially Adverse Effect.  
Section 1.eInsurance.  Each Credit Party will, and will cause each of its Subsidiaries to, maintain insurance including, but not limited to, public liability, property insurance, comprehensive general liability, product liability, business interruption and fidelity coverage insurance, in such amounts and against such risks as would be customary for companies in the same industry and of comparable size as the Credit Parties and their Subsidiaries from financially sound and reputable insurance companies having and maintaining an A.M. Best rating of “A-” or better and being in a size category of VI or larger or otherwise acceptable to the Administrative Agent; provided that in the event that any such insurance company’s A.M. Best rating falls below “A-”, then the Credit Parties shall have ninety (90) days to replace such insurance company with an insurance company maintaining an A.M. Best rating of “A-” or better and being in a size category of VI or larger; provided, further, that if such insurance company’s A.M. Best Rating falls below “B”, then such replacement shall occur within thirty (30) days of such rating downgrade.  In addition to the foregoing, each Credit Party further agrees to maintain and pay for insurance upon all goods constituting Collateral wherever located, in storage or in transit in vehicles, vessels or aircraft, including goods evidenced by documents, covering casualty, hazard, public liability and such other risks and in such amounts as would be customary for companies in the same industry and of comparable size as the Credit Parties, from financially sound and reputable insurance companies having and maintaining an A.M. Best rating of “A-” or better and being in a size category of VI or larger or otherwise acceptable to the Administrative Agent to insure the Lender Group’s interest in such Collateral; provided that in the event that any such insurance company’s A.M. Best rating falls below “A-”, then the Credit Parties shall have ninety (90) days to replace such insurance company with an insurance company maintaining an A.M. Best rating of “A-” or better and being in a size category of VI or larger; provided, further, that if such insurance company’s A.M. Best Rating falls below “B”, then such replacement shall occur within thirty (30) days of such rating downgrade.  All such property insurance policies shall name the Administrative Agent as loss payee and all liability insurance policies shall name the Administrative Agent as additional insured.  Each Credit Party shall deliver the original certificates of insurance evidencing that the required insurance is in force together with a satisfactory lender’s loss payable and additional insured, as applicable, endorsements.  If any Credit Party fails to provide and pay 
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for such insurance, the Administrative Agent may, at the Borrowers’ expense, procure the same, but shall not be required to do so.  Each Credit Party agrees, at the Administrative Agent’s request, to deliver to the Administrative Agent, promptly as rendered, true copies of all reports made in any reporting forms to insurance companies.
Section 1.fPayment of Taxes and Claims.  Each Credit Party will, and will cause each of its Subsidiaries to, pay and discharge all federal, state income and other material taxes, assessments, and governmental charges or levies imposed upon it or its income or profit or upon any properties belonging to it prior to the date on which penalties attach thereto, and all lawful claims for labor, materials and supplies which have become due and payable and which by law have or may become a Lien upon any of its Property; except that, no such tax, assessment, charge, levy, or claim need be paid which is being contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on the appropriate books, but only so long as such tax, assessment, charge, levy, or claim does not become a Lien or charge other than a Permitted Lien and no foreclosure, distraint, sale, or similar proceedings shall have been commenced and remain unstayed for a period thirtysixty (3060) days after such commencement.  Each Credit Party shall, and shall cause each of its Subsidiaries to, timely file (or obtain extensions) all information returns required by federal, state, or other material tax authorities.
Section 1.gVisits and Inspections.  Each Credit Party will, and will cause each of its Subsidiaries to, permit representatives of the Administrative Agent, upon reasonable prior notice during normal business hours, to (a) visit and inspect the properties of the Credit Parties and their Subsidiaries during normal business hours, (b) inspect and make extracts from and copies of the Credit Parties’ and their Subsidiaries’ books and records, (c) conduct appraisals, field examinations and audits of Inventory and Accounts of the Credit Parties and their Subsidiaries and (d) discuss with the Credit Parties’ and their Subsidiaries’ respective principal officers the Credit Parties’ or such Subsidiaries’ businesses, assets, liabilities, financial positions, results of operations, and business prospects relating to the Credit Parties or such Subsidiaries; provided that (i) if Aggregate Revolving Credit Obligations are less than or equal to 10.0% of the Aggregate Revolving Loan Commitments and no Event of Default has occurred and is continuing, the Administrative Agent shall not be entitled to conduct a field audit or appraisal, (ii) if Aggregate Revolving Credit Obligations exceeds 10.0% but is less than or equal to 25.0% of the Aggregate Revolving Loan Commitments for five (5) consecutive Business Days and no Event of Default has occurred and is continuing, the Administrative Agent shall be permitted to conduct one field audit and one appraisal during the trailing twelve month period until the later of (x) ninety (90) days after such five (5) Business Day period and (y) the date that the Aggregate Revolving Credit Obligations are less than or equal to 10% of the Aggregate Revolving Loan Commitments for thirty (30) consecutive Business Days, (iii) if the Aggregate Revolving Credit Obligations exceeds 25.0% of the Aggregate Revolving Loan Commitments for five (5) consecutive Business Days and no Event of Default has occurred and is continuing, the Administrative Agent shall be permitted to conduct up to two (2) field audits and two (2) appraisals during the trailing twelve month period until the later of (x) ninety (90) days after such five (5) Business Day period and (y) the date that the Aggregate Revolving Credit Obligations are less than or equal to 25% of the Aggregate Revolving Loan Commitments for thirty (30) consecutive Business Days, and (iv) during the continuance of an Event of Default, the Administrative Agent shall be permitted to conduct at any time and without prior notice as many field audits and appraisals that the Administrative Agent requests in its Permitted Discretion; provided, further, that the Borrowers shall not be obligated to pay more than $25,00030,000 per field audit or more than $30,000 per appraisal.  Any other member of the Lender Group may, at its expense, accompany the Administrative Agent on any regularly scheduled visit (or, at any time that a Default exists, any visit regardless of whether it is regularly scheduled) to the Credit Parties’ and their Subsidiaries’ properties.
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Section 1.hIntentionally Reserved. 
Section 1.iERISA.  Each Credit Party shall at all times make, or cause to be made, prompt payment of contributions required to meet the minimum funding standards set forth in ERISA with respect to each Credit Party’s and its ERISA Affiliates’ Plans; furnish to the Administrative Agent, promptly upon the Administrative Agent’s request therefor, copies of any annual report required to be filed pursuant to ERISA in connection with each such Plan of each Credit Party and its ERISA Affiliates; notify the Administrative Agent as soon as practicable of any ERISA Event; and furnish to the Administrative Agent, promptly upon the Administrative Agent’s request therefor, such additional information concerning any such Plan as may be reasonably requested by the Administrative Agent.  
Section 1.jLien Perfection.  Each Credit Party agrees to take such action as may be reasonably requested by the Administrative Agent to perfect or continue the perfection of the Administrative Agent’s (on behalf of, and for the benefit of, the Lender Group) security interest in the Collateral.  Each Credit Party hereby authorizes the Administrative Agent to file any such financing statement on such Credit Party’s behalf describing the Collateral. 
Section 1.kLocation of Collateral.  All Collateral, other than Inventory in transit and Inventory sold in the ordinary course of business, will at all times be kept by the Credit Parties at one or more of the business locations of the Credit Parties set forth in Schedule 6.11 except for In-Transit Inventory, Inventory in transit within the United States and as permitted in the following sentence.  The Inventory shall not, without the prior written approval of the Administrative Agent, be moved from the locations set forth on Schedule 6.11, except for (a) sales or other dispositions of assets permitted pursuant to Section 8.7 and (b) the storage of Inventory at locations within the continental US other than those specified in the first sentence of this Section 6.11 if (i) the Administrative Borrower gives the Administrative Agent written notice of the new storage location within at least thirty (30) days after storing Inventory at such location, (ii) the Lender Group’s security interest in such Inventory is and continues to be a duly perfected, first priority Lien thereon, (iii) neither any Credit Party’s nor the Administrative Agent’s right of entry upon the premises where such Inventory is stored or its right to remove the Inventory therefrom, is in any way restricted, (iv) the Borrowers have used their reasonable best efforts to have the owner of such premises, and any bailee, warehouseman or similar party that will be in possession of such Inventory, to have executed and delivered to the Administrative Agent a Collateral Access Agreement and (v) all negotiable documents and receipts in respect of any Collateral maintained at such premises are promptly delivered to the Administrative Agent and any non-negotiable documents and receipts in respect of any Collateral maintained at such premises are issued to the Administrative Agent and promptly delivered to the Administrative Agent.  
Section 1.lProtection of Collateral.  All insurance expenses and expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping the Collateral (including, without limitation, all rent payable by any Credit Party to any landlord of any premises where any of the Collateral may be located), and any and all excise, property, sales, and use taxes imposed by any state, federal, or local authority on any of the Collateral or in respect of the sale thereof, shall be borne and paid by the Credit Parties.  If the Credit Parties fail to promptly pay any portion thereof when due, the Lenders may, at their option, but shall not be required to, make a Base Rate Advance for such purpose and pay the same directly to the appropriate Person.  The Borrowers agree to reimburse the Lenders promptly thereforrepay such Base Rate Advance with interest accruing thereon daily at the Default Rate provided in this Agreement.  All sums so paid or incurred by the Lenders for any of the foregoing and all reasonable costs and expenses (including reasonable attorneys’ fees, legal expenses, and court costs) which the Lenders may incur in enforcing or protecting the Lien on or rights and interest in the Collateral 
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or any of their rights or remedies under this or any other agreement between the parties hereto or in respect of any of the transactions to be had hereunder until paid by the Borrowers to the Lenders with interest at the Default Rate, shall be considered Obligations owing by the Borrowers to the Lenders hereunder.  Such Obligations shall be secured by all Collateral and by any and all other collateral, security, assets, reserves, or funds of the Credit Parties in or coming into the hands or inuring to the benefit of the Lenders.  Neither the Administrative Agent nor the Lenders shall be liable or responsible in any way for the safekeeping of any of the Collateral or for any loss or damage thereto (except for reasonable care in the custody thereof while any Collateral is in the Lenders’ actual possession) or for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency, or other person whomsoever, but the same shall be at the Credit Parties’ sole risk.
Section 1.mAssignments and Records of Accounts.  If so requested by the Administrative Agent following an Event of Default, each Credit Party shall execute and deliver to the Administrative Agent, for the benefit of the Lender Group, formal written assignments of all of the Accounts daily, which shall include all Accounts that have been created since the date of the last assignment, together with copies of invoices or invoice registers related thereto.  Each Credit Party shall keep accurate and complete records in all material respects of the Accounts and all payments and collections thereon. 
Section 1.nAdministration of Accounts.
(1)The Administrative Agent retains the right after the occurrence and during the continuance of an Event of Default to notify the Account Debtors that the Accounts have been assigned to the Administrative Agent, for the benefit of the Lender Group, and to collect the Accounts directly in its own name and to charge the collection costs and expenses, including attorneys’ fees, to the Borrowers.  The Administrative Agent has no duty to protect, insure, collect or realize upon the Accounts or preserve rights in them.  Each Credit Party irrevocably makes, constitutes and appoints the Administrative Agent as such Credit Party’s true and lawful attorney and agent-in-fact to endorse such Credit Party’s name on any checks, notes, drafts or other payments relating to, the Accounts which come into the Administrative Agent’s possession or under the Administrative Agent’s control as a result of its taking any of the foregoing actions.  Additionally, after the occurrence and during the continuance of an Event of Default, the Administrative Agent, for the benefit of the Lender Group, shall have the right to collect and settle or adjust all disputes and claims directly with the Account Debtor and to compromise the amount or extend the time for payment of the Accounts upon such terms and conditions as the Administrative Agent may deem advisable, and to charge the deficiencies, reasonable costs and expenses thereof, including attorney’s fees, to the Borrowers.
(2)If an Account includes a charge for any tax payable to any governmental taxing authority, the Administrative Agent on behalf of the Lenders is authorized, in its sole discretion, to pay the amount thereof to the proper taxing authority for the account of the applicable Credit Party and to make a Base Rate Advance to the Borrowers to pay therefor.  The Credit Parties shall notify the Administrative Agent if any Account includes any tax due to any governmental taxing authority and, in the absence of such notice, the Administrative Agent shall have the right to retain the full proceeds of the Account and shall not be liable for any taxes to any governmental taxing authority that may be due by any Credit Party by reason of the sale and delivery creating the Account.
(3)Whether or not a Default has occurred, any of the Administrative Agent’s officers, employees or agents shall upon notice to the Administrative Borrower have the right, at any time or times hereafter, in the name of the Lenders, or any designee of the Lenders or the Credit Parties, to verify the validity, amount or other matter relating to any Accounts by mail, telephone, telegraph or 
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otherwise.  The Credit Parties shall cooperate fully with the Administrative Agent and the Lenders in an effort to facilitate and promptly conclude any such verification process.
Section 1.5Cash Management System.
(4)As of the SecondFourth Amendment Date, each deposit account, disbursement account and securities account of the Credit Parties are listed on Schedule 6.15 and such schedule designates which accounts are Deposit Accounts, Concentration Accounts, the Disbursement Accounts and Excluded Accounts. 
(5)Other than the Excluded Accounts, each Credit Party shall maintain, in its name, at a Cash Management Bank, one or more Deposit Accounts, Concentration Accounts and Disbursement Accounts that are subject to a Control Account Agreement in form and substance reasonably satisfactory to the Administrative Agent (individually, a “Blocked Account” and collectively, the “Blocked Accounts”).  Each such Control Account Agreement shall provide, among other things, that the relevant Cash Management Bank agrees, from and after the receipt of a notice (an “Activation Notice”) from the Administrative Agent (which Activation Notice may be given by the Administrative Agent at any time at which (i) an Event of Default has occurred and is continuing or (ii) Availability for five (5) consecutive Business Days is less than the greater of (A) $5,000,000 and (B) ten percent (10.0%) of the Aggregate Revolving Loan Commitments (the foregoing being referred to herein as an “Activation Event”)), to forward immediately all amounts in each Blocked Account, as the case may be to the Administrative Agent per its instructions and to commence the process of daily sweeps from such account to the Administrative Agent.  If at any time after an Activation Notice has been given, Availability for sixty (60) consecutive days equals or exceeds the greater of (A) $5,000,000 and (B) ten percent (10.0%) of the Aggregate Revolving Loan Commitments, then the Administrative Agent shall, promptly upon request of the Administrative Borrower, notify the Cash Management Bank that the daily sweeps from such account shall cease until further notice from the Administrative Agent that a subsequent Activation Event has occurred.
(6)Each Credit Party may maintain, in its name, Excluded Accounts that are not subject to Control Account Agreements.  The Credit Parties agree that at no time shall the aggregate amount on deposit in all Excluded Accounts and all other accounts of the Credit Parties (other than the Blocked Accounts) exceed $100,000200,000 in any one account or $500,000 in the aggregate at any time for all Credit Parties combined (the “Threshold Amount”); provided that no Event of Default shall occur solely by reason of the amount on deposit in all Excluded Accounts and such other accounts combined exceeding the Threshold Amount if (i) the amount in excess of the Threshold Amount is transferred to a Deposit Account or Concentration Account within one Business Day of such excess having occurred and (ii) at the close of business on such Business Day the amount on deposit in all Excluded Accounts and such other accounts combined does not exceed the Threshold Amount; provided, further, that the foregoing limitations on amounts that may be maintained in any Excluded Account shall not apply to Excluded Accounts that only contains funds necessary to pay wages and payroll tax requirements outstanding as of such date.
(7)Each Credit Party may maintain, in its name, at a Cash Management Bank, one or more Disbursement Accounts that are subject to Control Account Agreement.  No Credit Party shall accumulate or maintain cash in any Disbursement Account as of any date of determination in excess of the amounts to cover (x) checks outstanding against such account and paid as of such date, (y) payroll requirements outstanding and paid as of such date, and (z) amounts necessary to meet ordinary course 
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minimum balance requirements of the applicable Cash Management Bank in respect thereof as of such date.  
(8)The Credit Parties shall take all steps within their control to ensure that all of their Credit Card Processors forward all items of payment to a Concentration Account. 
(9)In the event that any Credit Party (despite clause (e) above) shall at any time receive any remittances of any Credit Card Receivables directly or shall receive any cash, checks, drafts, funds or other similar items of payment relating to or constituting payments made in respect of any and all Accounts and other Collateral, such Credit Party shall hold the same as trustee for the Administrative Agent, shall segregate such remittances from its other assets, and shall promptly deposit the same into a Deposit Account or Concentration Account.
(10)Notwithstanding anything to the contrary, at the request of the Administrative Borrower, the Administrative Agent will cause any sales taxes collected by the Credit Parties to be placed in a separate account designated for payment to the applicable taxing authority, and such amounts will not be applied to the Obligations.
(11)Notwithstanding anything to the contrary, any deposit account established by the Borrowers pursuant to any lease agreement to hold deposits required under such lease agreement shall be exempt from the requirements of this Section 6.15.
Section 1.aFurther Assurances.  Upon the request of the Administrative Agent, each Credit Party will promptly cure, or cause to be cured, defects in the creation and issuance of any Notes and the execution and delivery of the Loan Documents (including this Agreement) and any Bank Products Agreements, resulting from any act or failure to act by any Credit Party or any employee or officer thereof.  Each Credit Party at its expense will promptly execute and deliver to the Administrative Agent and the Lenders, or cause to be executed and delivered to the Administrative Agent and the Lenders, all such other and further documents, agreements, and instruments in compliance with or accomplishment of the covenants and agreements of the Credit Parties in the Loan Documents (including this Agreement) and the Bank Products Documents, or to correct any omissions in the Loan Documents or any Bank Products Documents, or more fully to state the obligations set out herein or in any of the Loan Documents or the Bank Products Documents, or to obtain any consents, all as may be necessary or appropriate in connection therewith as may be reasonably requested.
Section 1.bBroker’s Claims.  Each Credit Party hereby indemnifies and agrees to hold each member of the Lender Group harmless from and against any and all losses, liabilities, damages, costs and expenses which may be suffered or incurred by such member of the Lender Group in respect of any claim, suit, action or cause of action now or hereafter asserted by a broker or any Person acting in a similar capacity arising from or in connection with the execution and delivery of this Agreement or any other Loan Document or Bank Products Document or the consummation of the transactions contemplated herein or therein.  This Section 6.17 shall survive termination of this Agreement.
Section 1.cIndemnity.  Each Credit Party shall indemnify and hold harmless each Indemnified Person from and against any and all costs, losses, liabilities, claims, damages and related expenses, including the fees, charges and disbursements of any counsel for any Indemnified Person, which may be incurred by any Indemnified Person or asserted against any Indemnified Person by any third party or by any Borrower or any of its Subsidiaries arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, the other Loan Documents, the Bank Products 
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Documents or any other document contemplated by this Agreement, the making, administration or enforcement of the Loan Documents and the Loans or any Bank Products Documents, any transaction contemplated hereby or any related matters this Agreement, any other Loan Document, any Bank Product Document or any other agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of any of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or any actual or proposed use of the proceeds therefrom (including any refusal by the Issuing Bank 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 any Borrower or any of its Subsidiaries, or any environmental liability related in any way to any 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 any Borrower or any of its Subsidiaries, and regardless of whether any Indemnified Person is a party thereto, provided that such indemnification shall not, as to any Indemnified Person, be available to the extent that such costs, losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from (x) the gross negligence or willful misconduct of such Indemnified Person or (y) breach in bad faith of such Indemnified Person’s obligations hereunder or under any other Loan Document.  NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT.  This Section 6.18 shall survive termination of this Agreement.  
Section 1.dEnvironmental Matters.  Each Credit Party shall (a) conduct its operations and keep and maintain its Properties in compliance with all Environmental Laws, except where the failure to do so could not reasonably be expected to have a Materially Adverse Effect; (b) obtain and renew all environmental permits necessary for its operations and Properties, except where the failure to do so could not reasonably be expected to have a Materially Adverse Effect; and (c) implement any and all investigation, remediation, removal and response actions that are appropriate or necessary to maintain the value and marketability of its Properties or to otherwise comply with Environmental Laws pertaining to the presence, generation, treatment, storage, use, disposal, transportation or release of any Hazardous Materials on, at, in, under, above, to, from or about any of its Properties, provided that no Credit Party shall be required to undertake any such investigation, remediation, removal or response action to the extent that (i) its obligation to do so is being contested in good faith and by proper proceedings and adequate reserves have been set aside and are being maintained by the Credit Parties with respect to such circumstances in accordance with GAAP, or (ii) failure to undertake any investigation, remediation, removal or response action could not reasonably be expected to have a Materially Adverse Effect.
Section 1.eFormation of Subsidiaries.  Within thirty (30) days of either the formation of any direct or indirect Subsidiary of any Credit Party after the Agreement Date or the acquisition of any direct or indirect Subsidiary of any Credit Party after the Agreement Date, the Credit Parties, as appropriate, shall (a) if such Subsidiary is a Domestic Subsidiary, cause such new Subsidiary to provide to the Administrative Agent, for the benefit of the Lender Group, a joinder and supplement to this Agreement substantially in the form of Exhibit I (each, a “Supplement”), pursuant to which such new Domestic 
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Subsidiary shall agree to join as a Guarantor of the Obligations under Article 3 and as a Credit Party under this Agreement, a supplement to the Security Agreement, and such other security documents, together with appropriate Uniform Commercial Code financing statements, all in form and substance reasonably satisfactory to the Administrative Agent, (b) cause the Credit Party or Credit Parties that own such Subsidiary to provide to the Administrative Agent, for the benefit of the Lender Group, a supplement to the Pledge Agreement, pursuant to which such Credit Parties shall pledge 100% of the Equity Interests of any such Domestic Subsidiary, or 65% of the voting Equity Interests, and 100% of the nonvoting Equity Interests, of any such Foreign Subsidiary, together with all certificates evidencing such Equity Interests and appropriate instruments of transfer with respect thereto, all in form and substance reasonably satisfactory to the Administrative Agent, and (c)  provide to the Administrative Agent, for the benefit of the Lender Group, all other documentation, including one or more opinions of counsel satisfactory to the Administrative Agent, which in its reasonable opinion is appropriate with respect to such formation and the execution and delivery of the applicable documentation referred to above.  Nothing in this Section 6.20 shall authorize any Credit Party or any Subsidiary of a Credit Party to form or acquire any Subsidiary absent express authorization to so form or acquire such Subsidiary pursuant toin violation of Article 8.  Any document, agreement or instrument executed or issued pursuant to this Section 6.20 shall be a “Loan Document” for purposes of this Agreement.
Section 1.fMaintenance of Intellectual Property.  Each Credit Party will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and maintain in full force and effect its respective rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of its business, except where a failure to maintain any of the foregoing could not reasonably be expected to result in a Materially Adverse Effect.
Section 1.gCompliance with Regulation T, Regulation U and Regulation X.  No Credit Party or any Subsidiary of a Credit Party shall engage principally in or have as one of its important activities in the business of extending credit for the purpose of purchasing or carrying, and no Credit Party or any Subsidiary of a Credit Party shall own or acquire, any Margin Stock.  No Credit Party or any Subsidiary of a Credit Party shall use the proceeds of the Loans, directly or indirectly, for the purpose of purchasing or carrying any Margin Stock or for the purpose of reducing or retiring any Funded Debt which was originally incurred to purchase or carry margin Stock or for any other purpose which might constitute this transaction a “purpose credit” within the meaning of Regulation T, Regulation U and Regulation X, other than in connection with Restricted Payments constituting share repurchases permitted pursuant to Section 8.4 made after notice of any such share repurchase has been provided to the Administrative Agent.  Each Credit Party will, and will cause each of its Subsidiaries to, comply with the requirements of Regulation T, Regulation U and Regulation X and any other regulation of the Board of Governors of the Federal Reserve System and the requirements of the Exchange Act and the rules promulgated thereunder by the Securities and Exchange Commission, or any similar Federal law then in force, in each case as now in effect or as the same may hereafter be in effect.  If so requested by the Administrative Agent, the Credit Parties and their Subsidiaries will furnish the Administrative Agent with (i) a statement or statements in conformity with the requirements of Federal Reserve Form U-1 referred to in Regulation U and (ii) other documents evidencing its compliance with the margin regulations, including, without limitation, an opinion of counsel in form and substance satisfactory to the Administrative Agent.
Section 1.hIntellectual Property Pledge.  If at any time (a) the sum of (1) the aggregate purchase price of all properties sold and leased back after the ThirdFourth Amendment Date in Sale-Leaseback Transactions permitted under Section 8.10, plus (2) the aggregate outstanding principal amount of Permitted Real Estate Financing incurred after the ThirdFourth Amendment Date, plus (3) the Net Real Estate Exchange Value incurred after the ThirdFourth Amendment Date equals or exceeds 
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$100,000,000 in the aggregate, and (b) Availability (after giving pro forma effect to any repayment of the Loans from the proceeds of any such Sale-Leaseback Transactions or Permitted Real Estate Financing) is $20,000,000 or less, then within thirty (30) days after request from the Administrative Agent, the Borrowers shall, and shall cause their Subsidiaries to, pledge all of their Intellectual Property (as defined in the Security Agreement) and shall execute and deliver to the Administrative Agent in connection therewith such amendments to the Security Agreement and other security documents, officer certificates and legal opinions as the Administrative Agent shall reasonably request in connection therewith.
Section 1.aPost Closing. Within 30 days after the Fourth Amendment Date (or such longer period agreed to by the Administrative Agent), the Administrative Agent shall have received certificates of good standing for the Administrative Borrower from Alabama, Arkansas, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Missouri, North Carolina, Ohio, South Carolina, Tennessee, Texas, and Virginia.
Article 7.

INFORMATION COVENANTS
Until the later of the date the Obligations are repaid in full (other than unasserted contingent indemnification and other contingent liabilities not then due and payable that survive repayment of the Loans) or the date the Borrowers no longer have a right to borrow, or have Letters of Credit issued, hereunder (whether or not the conditions to borrowing have been or can be fulfilled) and unless the Required Lenders shall otherwise give their prior consent in writing, the Credit Parties will furnish or cause to be furnished the following items to each member of the Lender Group; provided that the Administrative Borrower, at its option, may deliver such items described in Sections 7.1, 7.2 and 7.3 to the Administrative Agent with instructions to post such items on IntraLinks® or any similar website for viewing by the Lenders or to send such items to the Lenders via electronic mail, and the Administrative Agent shall post or send via electronic mail such items within a reasonable period of time after delivery thereby by the Administrative Borrower to it and such posting or sending via electronic mail shall constitute delivery of such items to the Lenders:
Section 1.bMonthly and Quarterly Financial Statements and Information.
  
        (a)      Within (x) forty (40) days after the last day of each January, March, June and September fiscal months of the Borrowers, (y) sixty (60) days after the last day of each December fiscal month of the Borrowers and (z) thirty (30) days after the last day of each other fiscal month of the Borrowers, the balance sheet of the Borrowers and their Subsidiaries as at the end of such fiscal month, and the related statement of income for such fiscal month and for the fiscal year to date period (starting with the Agreement Date) ended with the last day of such fiscal month, which financial statements shall set forth in comparative form such figures (i) as at the end of such month during the previous fiscal year and for such month during the previous fiscal year and (ii) as contained in the Borrowers’ and their Subsidiaries’ projections and forecast delivered to the Administrative Agent pursuant to Section 7.5(d) for such periods, all of which shall be on a consolidated basis with the other Credit Parties and shall be certified by an Authorized Signatory of the Administrative Borrower to be, in his or her opinion, complete and correct in all material respects and to present fairly in accordance with GAAP the financial position of the Credit Parties, as at the end of such period and the results of operations for such period, and for the elapsed portion of the year (starting with the Agreement Date) ended with the last day of such period, 
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subject only to normal year-end adjustments and lack of footnotes.  Notwithstanding the foregoing, no monthly financial statements shall be required to be delivered under this Section 7.1(a) unless (i) (A) during such month the aggregate principal amount of all Revolving Loans, Swing Loans, Agent Advances and Overadvances outstanding exceeds $15,000,00018,000,000 for five (5) consecutive Business Days or (B) on any Business Day during such month the aggregate amount of all Letter of Credit Obligations outstanding exceeds $15,000,00018,000,000, or (ii) an Event of Default has occurred and is continuing; provided that thereafter such monthly financial statements shall no longer be required to be delivered if, for sixty (60) consecutive days, the aggregate outstanding principal amount of all Revolving Loans, Swing Loans, Agent Advances and Overadvances is zero and the aggregate outstanding amount of all Letter of Credit Obligations does not exceed $15,000,00018,000,000.
(40)Within forty-five (45) days (or, solely in the case of the fiscal quarters ended June 30, 2020, September 30, 2020 and December 31, 2020, such later date as the Borrowers are permitted to report their quarterly financial statements to the Securities and Exchange Commission, giving effect to the Releases issued by the Securities and Exchange Commission in response to the potential effects of the coronavirus disease 2019, not to exceed ninety (90) days) after the last day of each fiscal quarter in each fiscal year of the Borrowers, the balance sheet of the Borrowers and their Subsidiaries as at the end of such fiscal quarter, and the related statement of income and related statement of cash flows for such fiscal quarter, which financial statements shall set forth in comparative form (i) such figures as at the end of such fiscal quarter during the previous fiscal year and for such fiscal quarter during the previous fiscal year and (ii) as contained in the Borrowers’ and their Subsidiaries’ projections and forecast delivered to the Administrative Agent pursuant to Section 7.5(d) for such periods, all of which shall be on a consolidated basis with the other Credit Parties and shall be certified by an Authorized Signatory of the Administrative Borrower to be, in his or her opinion, complete and correct in all material respects and to present fairly in accordance with GAAP the financial position of the Credit Parties, as at the end of such period and the results of operations for such period, subject only to normal year-end adjustments and lack of footnotes. 
Section 1.cAnnual Financial Statements and Information; Opinion of Accountants.  Within ninety (90) days after the end of each fiscal year of the Borrowers, the audited balance sheet of the Borrowers and their Subsidiaries as at the end of such fiscal year and the related audited statements of income and retained earnings and related audited statements of cash flows for such year, all of which shall be on a consolidated basis with the other Credit Parties, together with an unaudited consolidating balance sheet of the Borrowers and their Subsidiaries as of the end of such year and the related unaudited consolidating profit and loss statement of the Borrowers and their Subsidiaries, which in the case of consolidated financial statements shall set forth in comparative form (i) such figures as at the end of and for the previous year and (ii) as contained in the Borrowers’ and their Subsidiaries’ projections and forecast delivered to the Administrative Agent pursuant to Section 7.5(d) for such periods, and shall be accompanied by an opinion of independent certified public accountants of recognized standing satisfactory to the Administrative Agent, stating that such audited financial statements are unqualified and prepared in all material respects in accordance with GAAP, without any “going concern” or like qualification, exception or explanation and without any qualification or exception as to scope of such audit; provided that a conclusion by the Borrowers’ independent certified public accountants that any Borrower has a “material weakness” in the effectiveness of its internal controls over financial reporting shall not constitute a breach of this Section unless the purported weakness could reasonably be expected to result in a Materially Adverse Effect.  
Section 1.dCompliance Certificates.  At the time the financial statements are furnished pursuant to Section 7.1 and Section 7.2, a Compliance Certificate:
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(1)Setting forth as at the end of such period, the arithmetical calculations required to establish whether or not the Credit Parties were in compliance with the requirements of the Financial Covenant, but only if such Financial Covenant is applicable for such period; 
(2)Stating whether any change in GAAP or the application thereof has occurred since the date of the Borrowers’ audited financial statements delivered on the Agreement Date, and, if any change has occurred, specifying the effect of such change on the financial statements accompanying such certificate; and 
(3)Stating that, to the best of his or her knowledge, no Default has occurred as at the end of such period, or, if a Default has occurred, disclosing each such Default and its nature, when it occurred and whether it is continuing and specifying the action which the Borrowers have taken or propose to take with respect thereto.
Section 1.eAccess to Accountants.  Each Credit Party hereby authorizes the Administrative Agent, upon prior notice to the Administrative Borrower, in the exercise of its Permitted Discretion to communicate directly with the senior audit partner of the Credit Parties’ and their Subsidiaries’ independent public accountants and authorizes these accountants to disclose to the Administrative Agent any and all financial statements which relate to the annual audit and copies of any management letter.  On or before the Agreement Date, the Credit Parties shall deliver to their independent public accountants a letter authorizing them to comply with the provisions of this Section 7.4.  For the avoidance of doubt, the refusal or failure of the independent public accountants to disclose any information to the Administrative Agent shall not constitute a breach of this Agreement.
Section 1.fAdditional Reports.
(41)Administrative Borrower shall deliver to the Administrative Agent (i) a Borrowing Base Certificate as of the last day of the prior fiscal quarter, month or week, as the case may be, which shall be in such form as shall be satisfactory to the Administrative Agent, (ii) an Inventory status report consistent with past practice, modified by the Administrative Agent based on any field audit or examination, (iii) a Credit Card Receivables status report or statement as of such date, setting forth the balance of the Credit Card Receivables aged not more than five days from date of sale and (iv) an aging of Qualified Receivables as of such date, in each case with the supporting documentation and schedules in reasonable detail to confirm such calculations.  The foregoing certificates and reports shall be delivered by the Administrative Borrower to the Administrative Agent quarterly within thirty (30) days after the end of each fiscal quarter, provided that if Availability is less than or equal to the greater of (x) fifty percent (50.0%) of the Aggregate Revolving Loan Commitments and (y) $30,000,000 (the “Quarterly Reporting Threshold”), then the foregoing certificates and reports shall be delivered by the Administrative Borrower to the Administrative Agent monthly within fifteen (15) days after the end of each fiscal month, provided further, that if Availability is less than or equal to the greater of (x) fifteen percent (15.0%) of the Aggregate Revolving Loan Commitments and (y) $9,000,000 (the “Monthly Reporting Threshold”), then the foregoing certificates and reports shall be delivered by the Administrative Borrower to the Administrative Agent weekly within three (3) Business Days after the end of each fiscal week; in each case, (A) until such time as Availability has exceeded the Monthly Reporting Threshold for sixty (60) consecutive days (at which time the foregoing certificates and reports shall thereafter be delivered by the Administrative Borrower to the Administrative Agent monthly within fifteen (15) days after the end of each fiscal month), or (B) until such time as Availability has exceeded the Quarterly Reporting Threshold for sixty (60) consecutive days (at which time the foregoing certificates and reports shall thereafter be 
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delivered by the Administrative Borrower to the Administrative Agent quarterly within thirty (30) days after the end of each fiscal quarter).  
(42)Promptly upon receipt thereof, the Credit Parties shall deliver to the Lender Group copies of all required communications with its Audit Committee submitted to any Credit Party or any Subsidiary of a Credit Party by the Credit Parties’ and their Subsidiaries’ independent public accountants in connection with any annual or interim audit of the Credit Parties and their Subsidiaries.[Intentionally Omitted].
(43)Within fifteen (15) days after the end of each fiscal month, or more frequently as reasonably required by the Administrative Agent, the Administrative Borrower shall deliver to the Administrative Agent and the Lenders, an Inventory report as of the last day of the preceding fiscal month or such other date reasonably required by the Administrative Agent, which shall be in such form as shall be satisfactory to the Administrative Agent, setting forth a categorical breakdown of all Inventory of the Borrowers, including, without limitation, Inventory that secures other trade or vendor debt, and Inventory that is free and clear of any Lien (other than Permitted Liens)[Intentionally Omitted].
(44)Within fifty (50) days after the end of each fiscal year, the Credit Parties shall deliver to the Lender Group projections and assumptions in the form that will be delivered to the board of directors of the Administrative Borrower which shall include a 12 month income statement, balance sheet and Availability forecast on a quarter-by-quarter basis.
(45)To the extent not covered elsewhere in this Article 7, promptly after the sending thereof, the Credit Parties shall, and shall cause their Subsidiaries to, deliver to the Administrative Agent and the Lenders copies of all financial statements, reports and other information which any Credit Party or any such Subsidiary files with the Securities and Exchange Commission or any national securities exchange; provided that to the extent that the Lenders may register on the Administrative Borrower’s website(s) to receive email alerts when the foregoing are available, the Borrowers have satisfied the obligation to deliver such reports, proxy statements and other materials. 
(46)If there is a material change in GAAP after December 31, 20102021 that affects the presentation of the financial statements referred to in Section 7.1 and 7.2, then, in addition to delivery of such financial statements, and on the date such financial statements are required to be delivered, the Credit Parties shall furnish the adjustments and reconciliations necessary to enable the Borrowers and each Lender to determine compliance with the Financial Covenant, if at such time the Financial Covenant is applicable, all of which shall be determined in accordance with GAAP consistently applied; provided that the foregoing shall not be required if the parties have agreed to modify the Financial Covenant in light of such material change in GAAP. 
(47)From time to time and promptly upon each request the Credit Parties shall, and shall cause their Subsidiaries to, deliver to the Administrative Agent on behalf of the Lender Group documentary and other evidence of the identity of the Credit Parties or such other document or information as may be requested by Lenders or the Administrative Agent at any time to enable Lenders or the Administrative Agent to verify the identity of the Credit Parties or to comply with any applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act at 31 U.S.C. Section 5318.
(48)From time to time and promptly upon each request the Credit Parties shall, and shall cause their Subsidiaries to, deliver to the Administrative Agent on behalf of the Lender Group such 
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data, certificates, reports, statements, opinions of counsel, documents, or further information regarding the business, assets, liabilities, financial position, projections, results of operations, or business prospects of the Credit Parties, such Subsidiaries, or any of them, as the Administrative Agent may reasonably request.
Section 1.gNotice of Litigation and Other Matters.
(i)Promptly upon (and in any event within three (3) Business Days of) any Credit Party’s obtaining knowledge of the institution of, or a written threat of, any action, suit, governmental investigation or arbitration proceeding against any Credit Party, any Subsidiary of a Credit Party or any Property, which action, suit, governmental investigation or arbitration proceeding, would expose, in such Credit Party’s reasonable judgment, any Credit Party or any Subsidiary of a Credit Party to liability in an aggregate amount in excess of $1,000,0003,000,000, such Credit Party shall notify the Lender Group of the occurrence thereof, and the Credit Parties shall provide such additional information with respect to such matters as the Lender Group, or any of them, may reasonably request.
(ii)ImmediatelyPromptly (and in any event within three (3) Business Days of) following the occurrence of any default (whether or not any Credit Party has received notice thereof from any other Person) on Funded Debt of any Credit Party or any Subsidiary of a Credit Party which singly, or in the aggregate, exceeds $1,000,0003,000,000, such Credit Party shall notify the Lender Group of the occurrence thereof;
(iii)Promptly upon (and in any event within three (3) Business Days of) any Credit Party’s receipt of notice of the pendency of any proceeding for the condemnation or other taking of any Property of any Credit Party or any Subsidiary of a Credit Party which represents Inventory or a material portion of the Credit Parties’ assets, such Credit Party shall notify the Lender Group of the occurrence thereof;
(iv)Promptly upon (and in any event within three (3) Business Days of) any Credit Party’s receipt of notice of any event that could reasonably be likely to result in a Materially Adverse Effect, such Credit Party shall notify the Lender Group of the occurrence thereof;
(v)ImmediatelyPromptly (and in any event within three (3) Business Days of) following any (i) Default under any Loan Document, or (ii) default under any other agreement (other than those referenced in clause (i) of this Section 7.6(e) or in Section 7.6(b)) to which any Credit Party or any Subsidiary of a Credit Party is a party or by which any Credit Party’s or any such Subsidiary’s properties is bound which could reasonably be expected to have a Materially Adverse Effect, then the Credit Parties shall notify the Lender Group of the occurrence thereof giving in each case the details thereof and specifying the action proposed to be taken with respect thereto;
(vi)Promptly (but in any event within five (5) Business Days) following the occurrence of any ERISA Event or a non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan of any Credit Party or any of its ERISA Affiliates or the commencement or threatened commencement of any litigation regarding any such Plan or naming it or the trustee of any such Plan with respect to such Plan (other than claims for benefits in the ordinary course of business), the Credit Parties shall notify the Administrative Agent and the Lenders of the occurrence thereof.
(g)    At the Administrative Agent’s request, within sixty (60) days after November 30, 2011 and November 30 of each year thereafter in which the Revolving Loan Commitments are outstanding, the Credit Parties shall deliver updates or supplements to the schedules to the Loan Documents from time to time to the extent required to render correct the representations and warranties 
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contained in the applicable sections to which such schedules relate as of the applicable November 30 without giving effect to any references therein to the “Agreement Date” or the “Second Amendment Date” in each case, appropriately marked to show the changes made therein; provided that such supplements to such Schedules are provided for informational purposes only and shall not be deemed to amend or modify this Agreement, or result in any waiver of any Default hereunder.
Article 8.

NEGATIVE COVENANTS
Until the later of the date the Obligations are repaid in full (other than unasserted contingent indemnification and other contingent liabilities not then due and payable that survive repayment of the Loans) or the date the Borrowers no longer have a right to borrow, or have Letters of Credit issued, hereunder (whether or not the conditions to borrowing have been or can be fulfilled) and unless the Required Lenders shall otherwise give their prior consent in writing:  
Section 1.6Funded Debt.  No Credit Party will, or will permit any of its Subsidiaries to, create, assume, incur, or otherwise become or remain obligated in respect of, or permit to be outstanding, any Funded Debt except:
(1)Funded Debt under this Agreement (including any Funded Debt resulting from a Commitment Increase), the other Loan Documents and the Bank Products Documents;
(2)The Funded Debt existing on the AgreementFourth Amendment Date and described on Schedule 8.1, together with any refinancing, renewal or replacement thereof that does not increase the outstanding principal amount thereof (immediately prior to giving effect to such refinancing, renewal or replacement) or shorten the maturity or the weighted average life thereof; 
(3)TradeTo the extent constituting Funded Debt, trade or accounts payable and/or similar obligations, and accrued expenses, other than for borrowed money;
(4)Funded Debt of a Credit Party or any Subsidiary of a Credit Party that is unsecured or secured by Permitted Liens described in clause (f) of the definition of Permitted Liens (including, without limitation, Capitalized Lease Obligations) not to exceed an aggregate outstanding principal amount of $100,000,000 under this clause (d) at any time; provided that no more than $25,000,000 of such Funded Debt may be incurred on a secured basis in any Fiscal Year after the SecondFourth Amendment Date;
(5)Guaranties permitted by Section 8.2; 
(6)Permitted Real Estate Financing and IndebtednessFunded Debt arising under Sale-Leaseback Transactions permitted under Section 8.10; provided that the sum of (1) the aggregate purchase price of all properties sold and leased back after the SecondFourth Amendment Date in Sale-Leaseback Transactions permitted under Section 8.10 (excluding the 2020 Sale-Leaseback Transaction), plus (2) the aggregate outstanding principal amount of Permitted Real Estate Financing incurred after the SecondFourth Amendment Date, plus (3) the Net Real Estate Exchange Value incurred after the SecondFourth Amendment Date does not exceed $100,000,000 in the aggregate; 
(7)Unsecured Funded Debt of any Credit Party owed to another Credit Party; provided that such Funded Debt shall be evidenced by intercompany notes pledged to the Administrative 
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Agent pursuant to the Pledge Agreement or such other pledge agreement in form and substance reasonably satisfactory to the Administrative Agent; 
(8)Obligations under Bank Products not entered into for speculative purposes;
(9)Funded Debt owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrowers or any of their Subsidiaries, pursuant to reimbursement or indemnification obligations to such person, in each case in the ordinary course of business;
(10)Funded Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or other cash management services in the ordinary course of business; provided that such Funded Debt is extinguished within ten (10) Business Days of its incurrence; 
(11)Funded Debt consisting of the financing of insurance premiums; and
(12)Funded Debt consisting of charge back obligations of the type described in Section 8 of the Retailer Purchase Agreement as in effect on the date hereof.   
    No Borrower will, nor will any Borrower permit any of its Subsidiaries to, issue any preferred stock or other preferred equity interest that (i) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (ii) is or may become redeemable or repurchaseable by such Borrower or such Subsidiary at the option of the holder thereof, in whole or in part, or (iii) is convertible or exchangeable at the option of the holder thereof for Indebtedness orFunded Debt, indebtedness, preferred stock or any other preferred equity interest described in this paragraph.
Section 1.aGuaranties.  No Credit Party will, or will permit any Subsidiary of a Credit Party to, at any time guarantee or enter into or assume any Guaranty, or be obligated with respect to, or permit to be outstanding, any Guaranty, other than (a) guaranties of the Obligations, (b) guaranties by any Credit Party of obligations of any other Credit Party, (c) endorsements of instruments in the ordinary course of business, (d) guaranties constituting an Investment permitted under Section 8.5, and (de) guaranties by any Credit Party of obligations under agreements of any other Credit Party entered into in connection with transactions permitted under Section 8.1(e). 
Section 1.bLiens.  No Credit Party will, or will permit any Subsidiary of a Credit Party to, create, assume, incur, or permit to exist or to be created, assumed, or permitted to exist, directly or indirectly, any Lien on any of its property, real or personal, now owned or hereafter acquired, except for (i) Permitted Liens and (ii) Liens on real estate financed in Permitted Real Estate Financings and Sale-Leaseback Transactions so long as such Lien does not extend to the Collateral, as permitted by Sections 8.1(f) and 8.10.
Section 1.cRestricted Payments.  No Credit Party shall, or shall permit any Subsidiary of a Credit Party to, directly or indirectly declare or make any Restricted Payment, or set aside any funds for any such purpose, other than Dividends on common stock which accrue (but are not paid in cash) or are paid in kind or which entitle the holder to obtain additional common stock or preferred stock convertible into common stock or Dividends on preferred stock which accrue (but are not paid in cash) or are paid in kind; provided that (a) the Administrative Borrower’s Subsidiaries may make Restricted Payments to any Credit Party and (b) the Administrative Borrower may make Restricted Payments so long as it is in 
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compliance with the Exception Conditions both before and after giving effect to the payment of such Restricted Payments. 
Section 1.dInvestments.  No Credit Party will, or will permit any Subsidiary of a Credit Party to, make Investments, except that (a) any Borrower may purchase or otherwise acquire and own and may permit any of its Subsidiaries to purchase or otherwise acquire and own Cash Equivalents, subject to control agreements in favor of the Administrative Agent for the benefit of the Lender Group or otherwise subject to a perfected Lien in favor of the Administrative Agent for the benefit of the Lender Group, subject to Permitted Liens; (b) the Borrowers may hold the Investments in existence on the AgreementFourth Amendment Date and described on Schedule 5.1(c)-2; (c) so long as no Default exists, the Borrowers may convert any of their Accounts that are past due into notes or Equity Interests from the applicable Account Debtor so long as the Administrative Agent, for the benefit of the Lender Group, has a first priority security interest in such Equity Interests or notes which Lien is perfected contemporaneously with the conversion of such Account to Equity Interests or notes; (d) the Credit Parties and their Subsidiaries may hold the Equity Interests of their respective Subsidiaries in existence as of the AgreementFourth Amendment Date and their Subsidiaries created after the AgreementFourth Amendment Date in accordance with Section 6.20 and Section 8.7(i); (e) without limiting Section 8.2, any Credit Party and any other Subsidiary may make Investments in any other Credit Party; provided that any Investment by a Subsidiary that is not a Credit Party in a Credit Party in the form of Funded Debt must be subordinated to the prior payment in full of the Obligations on terms and conditions satisfactory to the Administrative Agent; (f) the Credit Parties may hold Investments arising out of Hedge Agreements not entered into for speculative purposes and approved by the Administrative Agent; (g) the Credit Parties may make acquisitions permitted under Section 8.7(d); (h) the Credit Parties may hold debt instruments given as partial consideration for any sale of assets permitted under Section 8.7(b); and (i) Investments in Persons created as part of joint ventures in an amount not to exceed $250,000500,000 in the aggregate. 
Section 1.eAffiliate Transactions.  No Credit Party shall, or shall permit any Subsidiary of a Credit Party to, enter into or be a party to any agreement or transaction with any Affiliate except (a) as described on Schedule 8.6, (b) pursuant to the reasonable requirements of the applicable Credit Party’s or Subsidiary’s business and upon fair and reasonable terms that are no less favorable to such Credit Party or such Subsidiary than it would obtain in a comparable arms length transaction with a Person not an Affiliate of such Credit Party or such Subsidiary, or (c) as permitted by Sections 8.1, 8.2, 8.4 or 8.5. 
Section 1.fLiquidation; Change in Ownership, Name, or Year; Disposition or Acquisition of Assets.  No Credit Party shall, or shall permit any Subsidiary to, at any time:
(13)Liquidate or dissolve itself (or suffer any liquidation or dissolution) or otherwise wind up its business, except that any Subsidiary of the Administrative Borrower may liquidate or dissolve itself in accordance with Applicable Law; provided that if such Subsidiary is also a Borrower, all Collateral of such Subsidiary is distributed to another Borrower in connection with such liquidation or dissolution;
(14)Sell, lease, abandon, transfer or otherwise dispose of, in a single transaction or a series of related transactions, any assets, property or business, except for (i) the sale of Inventory in the ordinary course of business at the fair market value thereof, (ii) physical assets used or consumed in the ordinary course of business, (iii) the sale or other disposal of obsolete equipment, (iv) the sale, transfer or disposition of assets, provided that with respect to this clause (iv) (A) the total consideration paid in connection with such sales, transfers and dispositions from and after the SecondFourth Amendment Date shall not exceed $50,000,000, (B) at least twenty-five percent (25%) of such consideration must be paid 
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in cash (the remaining portion of consideration to be provided as seller notes) and, (C) one hundred percentno Default or Event of Default shall have occurred and be continuing or result therefrom, and (100%D) of the Net Cash Proceeds received by any Borrower or any of its Subsidiaries from such sale, transfer or dispositionno Overadvance shall occur or be used to prepay the Loans to the extent required under Section 2.6outstanding, after giving effect thereto, (v) the Sale-Leaseback Transactions permitted by Section 8.10, (vi) dispositions of property or assets resulting from the casualty or condemnation thereof, (vii) the disposition of property or assets by any Credit Party or any Subsidiary to a Credit Party and (viiviii) the substitution or exchange of owned real property of a Borrower for real property leased by such Borrower pursuant to any Permitted Sale-Leaseback Transaction, so long as (A) no Default or Event of Default shall have occurred and be continuing or result therefrom, (B) no Overadvance shall occur or be outstanding, after giving effect thereto, and (C) the sum of (1) the aggregate purchase price of all properties sold and leased back after the SecondFourth Amendment Date in Sale-Leaseback Transactions permitted under Section 8.10, plus (2) the aggregate outstanding principal amount of Permitted Real Estate Financing incurred after the SecondFourth Amendment Date, plus (3) the Net Real Estate Exchange Value incurred after the SecondFourth Amendment Date does not exceed $100,000,000 in the aggregate;
(15)Become a partner or joint venturer with any third party after the FirstFourth Amendment Date that involves making any Investment in any third party (except to the extent permitted in Section 8.1) or entering into a written partnership or joint venture agreement for any material joint venture;
(16)Acquire (i) any Person, (ii) all or any substantial part of the assets, property or business of a Person, (iii) any real estate or (iv) any assets that constitute a division or operating unit of the business of any Person, other than (x) the acquisition of or assumption of real estate leases so long as such leased sites are operated as Haverty stores or warehouses, (y) the acquisition of other assets, stock or line of business, but for purposes of this clause (y) subject to compliance with the Exception Conditions before and after giving effect to such acquisition or assumption and (z) in connection with any Permitted Sale-Leaseback Transaction, (1) the repurchase of any leased real property pursuant to the terms of any Permitted Sale-Leaseback Transaction as a result of the casualty or condemnation of such property or (2) the substitution or exchange of owned real property of a Borrower for real property leased by such Borrower thereunder ifso long as (a) no Default or Event of Default shall have occurred and be continuing or result therefrom, (b) no Overadvance shall occur or be outstanding, after giving effect thereto, and (c) the sum (without duplication) of (A) the aggregate purchase price of all properties sold and leased back after the FirstFourth Amendment Date in Sale-Leaseback Transactions permitted under Section 8.10, plus (B) the aggregate outstanding principal amount of Permitted Real Estate Financing incurred after the FirstFourth Amendment Date, plus (C) the Net Real Estate Exchange Value incurred after the FirstFourth Amendment Date does not exceed $100,000,000 in the aggregate; 
(17)Merge or consolidate with any other Person; provided that (i) any Borrower may merge into any other Borrower so long as the Administrative Borrower is the surviving entity of any merger in which it participates, (ii) any Guarantor may merge into any Borrower so long as such Borrower is the surviving entity after such merger, and (iii) any Guarantor may merge into any other Guarantor so long as a Guarantor is the surviving entity after such merger, (iv) any Subsidiary that is not a Borrower or Guarantor may merge into any Borrower or Guarantor so long as such Borrower or Guarantor, as the case may be, is the surviving entity after such merger, and (v) any Subsidiary that is not a Borrower or Guarantor may merge into any other Subsidiary that is not a Borrower or Guarantor;
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(18)Change its legal name, state of incorporation or formation or structure without giving the Administrative Agent at least thirtyten (3010) days prior written notice of its intention to do so and complying with all reasonable requirements of the Lenders in regard thereto to the extent such requirements relating to maintaining the priority and perfection of the Liens in the Collateral; 
(19)Change its year-end for accounting purposes from the fiscal year ending December 31; 
(20)Make any material change in accounting treatment or reporting practices, except as required or allowed by GAAP; 
(21)Create any Subsidiary; provided that any Borrower or any Subsidiary of any Borrower may create wholly owned Domestic Subsidiaries so long as such Borrower and such Subsidiaries comply with Sections 6.10 and 6.20; or
(22)Close any stores if the aggregate number of store closings in any fiscal year of the Borrowers, net of any new store openings in such fiscal year, exceeds ten percent (10%) of the total number of stores as of the last day of the immediately preceding fiscal year; provided that any store temporarily closed by the Borrowers for up to one hundred twenty (120) days during the period from March 15, 2020 through December 31, 2020 shall be deemed to have been open for purposes of the foregoing covenant. 
Section 1.7Fixed Charge Coverage Ratio.  Solely to the extent that Availability is less than the greater of (a) $5,000,0007,000,000 or (b) ten percent (10.0%) of the Aggregate Revolving Loan Commitments, the Credit Parties and their Subsidiaries shall maintain, on a consolidated basis, a Fixed Charge Coverage Ratio, as of the end of the fiscal month most recently ended for which the Administrative Agent has received financial statements, for the period of the immediately preceding twelve (12) months, of not less than 1.00:1.00.
Section 1.8Conduct of Business.  The Credit Parties shall not engage substantially in any line of business substantially different from the lines of business conducted by the Credit Parties and their Subsidiaries on the AgreementFourth Amendment Date or from any lines of business reasonably related, complementary, ancillary or incidental thereto.
Section 1.9Sales and Leasebacks.  No Credit Party shall, or shall permit any Subsidiary of a Credit Party to, enter into any arrangement, directly or indirectly, with any third party whereby such Credit Party or such Subsidiary, as applicable, shall sell or transfer any property, real or personal, whether now owned or hereafter acquired, and whereby such Credit Party or such Subsidiary, as applicable, shall then or thereafter rent or lease as lessee such property or any part thereof or other property which such Credit Party or such Subsidiary intends to use for substantially the same purpose or purposes as the property sold or transferred (each such transaction, a “Sale-Leaseback Transaction”); provided that the Borrowers may engage in (x) Sale-Leaseback Transactions so long as (A) no Default or Event of Default shall have occurred and be continuing or result therefrom, (B) no Overadvance shall occur or be outstanding, after giving effect thereto, and (C) the sum of (1) the aggregate purchase price of all properties sold and leased back after the SecondFourth Amendment Date in such Sale-Leaseback Transactions (excluding the 2020 Sale-Leaseback Transaction), plus (2) the aggregate outstanding principal amount of Permitted Real Estate Financing incurred after the SecondFourth Amendment Date, plus (3) the Net Real Estate Exchange Value incurred after the SecondFourth Amendment Date does not exceed $100,000,000 in the aggregate and (y) the 2020 Sale-Leaseback Transaction.
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Section 1.10Amendment and Waiver.  No Credit Party shall, or shall permit any Subsidiary of a Credit Party to (a) enter into any amendment of, or agree to or accept any waiver, which would adversely affect the rights of such Credit Party or such Subsidiary, as applicable, or any member of the Lender Group, its articles or certificate of incorporation or formation and by-laws, partnership agreement or other governing documents, (b) permit any Material Contract to be cancelled or terminated prior to its stated maturity if such cancellation or termination could reasonably be likely to result in a Materially Adverse Effect or (c) enter into any amendment of, or agree to accept any waiver of any Material Contract or any real estate lease; provided that without the consent of the Administrative Agent, the Borrowers may (a) amend real estate leases with respect to which a Collateral Access Agreement has been delivered and the Value of the Inventory at such location is at least $650,000750,000, so long as any such amendment or modification does not affect (i) the Administrative Agent’s access rights to the Collateral, (ii) the subordination and waiver of landlord’s Liens or (iii) the Administrative Agent’s right to receive notice and cure defaults and (b) amend all otherany real estate leaseslease with respect to which the Value of the Inventory at such location is less than $750,000.  
Section 1.11ERISA Liability.  No Credit Party shall fail to meet the applicable minimum funding requirements of ERISA and the Code, without regard to any waivers thereof, and, to the extent that the assets of any of their Plans would be less than an amount sufficient to provide all accrued benefits payable under such Plans, the Credit Parties shall make the contributions necessary to meet the minimum funding standards under the Code (based on the Borrowers’ current actuarial assumptions).  No Credit Party shall, or shall cause or permit any ERISA Affiliate to, (a) cause or permit to occur any event that could reasonably be expected to result in the imposition of a Lien under Section 412 or 430 of the Code or Section 302, 303 or 4068 of ERISA, or (b) cause or permit to occur an ERISA Event to the extent such ERISA Event could reasonably be expected to have a Materially Adverse Effect. 
Section 1.12Prepayments.  No Credit Party shall, or shall permit any Subsidiary of a Credit Party to, prepay, redeem, defease or purchase in any manner, or deposit or set aside funds for the purpose of any of the foregoing, make any payment in respect of principal of, or make any payment in respect of interest on, any FundedJunior Debt, except the Borrowers may (i) make regularly scheduled payments of principal or interest required in accordance with the terms of the instruments governing any FundedJunior Debt permitted hereunder, (ii) make payments, including prepayments permitted or required hereunder, with respect to the Obligations, (iii) repay FundedJunior Debt refinanced with other FundedJunior Debt (other than Loans funded under this Agreement) so long as the refinancing (A) does not shorten the weighted average life or maturity of the principal amount of such FundedJunior Debt and (B) otherwise is on terms at least as favorable as the terms to the Borrowers and Lenders, taken as a whole, as the FundedJunior Debt being refinanced, (iv) repay lease obligations arising from Sale-Leaseback Transactions permitted under Section 8.10 and Permitted Real Estate Financing upon the sale of the assets so leased or pledged in a disposition permitted under Section 8.7 and (v) repay any intercompany FundedJunior Debt owed to any Credit Party. 
Section 1.13Negative Pledge.  No Credit Party shall, or shall permit any Subsidiary of any Credit Party to, directly or indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (a) the ability of the Credit Party or any Subsidiary to create, incur or permit any Lien upon any of its assets or properties, whether now owned or hereafter acquired, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to its Equity Interests, to make or repay loans or advances to a Borrower or any other Subsidiary, or to guarantee the Funded Debt of the Borrowers or any other Subsidiary or (c) the ability of any Subsidiary to transfer any of its property or assets to any Borrower or any Subsidiary of such Borrower; provided that (i) the foregoing shall not apply to restrictions or conditions imposed by law or by this Agreement or any other Loan 
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Document, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided that such restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted hereunder, (iii) clauseclauses (a) and (c) shall not apply to restrictions or conditions imposed by any agreement relating to secured Funded Debt or to any Sale-Leaseback Transaction permitted by this Agreement if such restrictions and conditions apply only to the property or assets securing such Funded Debt and not the Collateral and (iv) clause (a) shall not apply to customary provisions in leases restricting the assignment thereof.

Article 9.

DEFAULT
Section 1.iEvents of Default.  Each of the following shall constitute an Event of Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment or order of any court or any order, rule, or regulation of any governmental or non-governmental body:
(1)Any representation or warranty made under this Agreement, any other Loan Document or any Bank Products Document with respect to a Lender Group Hedge Agreement shall prove incorrect or misleading in any material respect when made or deemed to have been made;
(2)Any payment of any principal hereunder, or any reimbursement obligations with respect to any Letter of Credit on the date such payment is due, or any payment of interest, fees or other amounts payable hereunder or under the other Loan Documents shall not be received by the Administrative Agent within three (3) Business Days the date such payment is due;
(3)Any Credit Party shall default in the performance or observance of any agreement or covenant contained in Sections 2.12, 6.1, 6.5, 6.6 (to the extent related to federal, state or other material taxes), 6.7, 6.10, 6.12, 6.15, 6.19, 6.20 or 6.23, or in Article 7 or Article 8 or in any Security Document;
(4)Any Credit Party shall default in the performance or observance of any other agreement or covenant contained in this Agreement not specifically referred to elsewhere in this Section 9.1, and such default, if curable, shall not be cured to the Required Lenders’ satisfaction within the earlier of (i) a period of thirty (30) days from the date that such Credit Party knew or should have known of the occurrence of such default, or (ii) a period of thirty (30) days after written notice of such default is given to such Credit Party;
(5)There shall occur any default in the performance or observance of any agreement or covenant contained in any of the other Loan Documents (other than this Agreement or the Security Documents or as otherwise provided in this Section 9.1) which shall not be cured to the Required Lenders’ satisfaction within the applicable cure period, if any, provided for in such Loan Document;
(6)There shall occur any Change in Control; 
(7)(i) There shall be entered a decree or order for relief in respect of any Credit Party or any Subsidiary of a Credit Party under the Bankruptcy Code, or any other applicable federal or 
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state bankruptcy law or other similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator, or similar official of any Credit Party or any Subsidiary of a Credit Party or of any substantial part of its properties, or ordering the winding-up or liquidation of the affairs of any Credit Party or any Subsidiary of a Credit Party, or (ii) an involuntary petition shall be filed against any Credit Party or any Subsidiary of a Credit Party and a temporary stay entered and (A) such petition and stay shall not be diligently contested, or (B) any such petition and stay shall continue undismissed for a period of sixty (60) consecutive days;
(8)Any Credit Party or any Subsidiary of a Credit Party shall commence an Insolvency Proceeding or any Credit Party or any Subsidiary of a Credit Party shall consent to the institution of an Insolvency Proceeding or to the appointment or taking of possession of a receiver, liquidator, assignee, trustee, custodian, sequestrator, or other similar official of such Credit Party or any Subsidiary of a Credit Party or of any substantial part of its properties, or any Credit Party or any Subsidiary of a Credit Party shall fail generally to pay its debts as they become due;
(9)A final judgment shall be entered by any court against any Credit Party or any Subsidiary of any Credit Party for the payment of money which exceeds (net of the amount of any insurance coverage so long as the insurance provider has not denied coverage), together with all such other outstanding judgments (net of the amount of any insurance coverage so long as the insurance provider has not denied coverage) of the Credit Parties and their Subsidiaries, $5,000,0007,500,000 in the aggregate, or a warrant of attachment or execution or similar process shall be issued or levied against property of any Credit Party or any Subsidiary of a Credit Party pursuant to a final judgment which, together with all other such property of the Credit Parties and their Subsidiaries subject to other such process, exceeds in value $5,000,0007,500,000 in the aggregate, and if, within thirtysixty (3060) days after the entry, issue, or levy thereof, such judgment, warrant, or process shall not have been paid or discharged or stayed pending appeal, or if, after the expiration of any such stay, such judgment, warrant, or process shall not have been paid or discharged; or any non-monetary judgment or order shall be rendered against any Borrower or any Subsidiary that could reasonably be expected to have a Materially Adverse Effect, and there shall be a period of 3060 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; 
(10)(i) There shall be at any time any failure to meet all of the applicable minimum funding requirements of ERISA and the Code, with respect to any Plan maintained by any Credit Party which could reasonably be expected to result in a Materially Adverse Effect, or any ERISA Affiliate of a Credit Party, or to which any Credit Party or any of its ERISA Affiliates has any liabilities which could reasonably be expected to result in a Materially Adverse Effect, or any trust created thereunder; or a trustee shall be appointed by a United States District Court to administer any Plan; (ii) the PBGC shall institute proceedings to terminate any such Plan; or any Credit Party or any ERISA Affiliate of any Credit Party shall incur any liability to the PBGC in connection with the termination of any such Plan; or any Plan or trust created under any Plan of any Credit Party or any ERISA Affiliate of any Credit Party shall engage in a non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) which would subject any such Plan, any trust created thereunder, any trustee or administrator thereof, or any party dealing with any such Plan or trust to any material tax or penalty on “prohibited transactions” imposed by Section 502 of ERISA or Section 4975 of the Code; (iii) there shall be at any time a Lien imposed against the assets of a Credit Party or ERISA Affiliate under Code Section 430 or 436, or ERISA Sections 302, 303 or 4068; (iv) any Credit Party or any ERISA Affiliate of any Credit Party shall enter into or become obligated to contribute to a Multiemployer Plan; or (v) there shall occur at any time an ERISA Event; provided in the case of clauses (i) through (iv) such occurrence or 
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event could reasonably be expected result in an aggregate liability greater than $5,000,000 or otherwise have a Materially Adverse Effect;
(11)(i) There shall occur any default (after the expiration of any applicable cure period) under any indenture, agreement, or instrument evidencing Funded Debt or Hedge Agreement of any Credit Party or any Subsidiary of a Credit Party in an aggregate principal amount (with respect to any Funded Debt) or Net Mark to Market Exposure (with respect to any Hedge Agreement) exceeding $5,000,0007,500,000 (determined singly or in the aggregate with other Funded Debt and Hedge Agreements), the effect of which default is to cause, or to permit the holder or holders of such Funded Debt or Hedge Agreement to cause, with the giving of notice if required, such Funded Debt or Hedge Agreement to become due prior to its stated maturity, any applicable grace period having expired;
(12)All or any portion of any Loan Document or any Bank Products Document shall at any time and for any reason be declared to be null and void, or a proceeding shall be commenced by any Credit Party, any Subsidiary of a Credit Party or any Affiliate thereof, or by any Governmental Authority having jurisdiction over any Credit Party, any Subsidiary of a Credit Party or any Affiliate thereof, seeking to establish the invalidity or unenforceability thereof (exclusive of questions of interpretation of any provision thereof), or any Credit Party, any Subsidiary of a Credit Party or any Affiliate thereof shall deny that it has any liability or obligation for the payment of any Obligation purported to be created under any Loan Document or any Bank Products Document, or any Lender Group Hedge Agreement shall be terminated as a result of a default or event of default thereunder by any Credit Party or revoked; or
(13)If a notice of termination for default or the actual termination for default of any Material Contract shall have been issued to or received by any Borrower or any Subsidiary of any Borrower if such termination could reasonably be expected to have a Materially Adverse Effect.
Section 1.14Remedies.  If an Event of Default shall have occurred and shall be continuing, in addition to the rights and remedies set forth elsewhere in this Agreement, the other Loan Documents and any Bank Products Documents:
(14)With the exception of an Event of Default specified in Sections 9.1(g) or (h), the Administrative Agent may in its discretion (unless otherwise instructed by the Required Lenders) or shall at the direction of the Required Lenders, (i) terminate the Revolving Loan Commitments and the Letter of Credit Commitment, or (ii) declare the principal of and interest on the Loans and all other Obligations (other than any Obligations existing from time to time of any Credit Party to the Administrative Agent (or an Affiliate of the Administrative Agent) arising in connection with any Bank Products Documents) to be forthwith due and payable without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, anything in this Agreement or in any other Loan Document to the contrary notwithstanding, or both.
(15)Upon the occurrence and continuance of an Event of Default specified in Sections 9.1(g) or (h), such principal, interest, and other Obligations (other than any Obligations existing from time to time of any Credit Party to the Administrative Agent (or an Affiliate of the Administrative Agent) arising in connection with any Bank Products Documents) shall thereupon and concurrently therewith become due and payable, and the Revolving Loan Commitments and the Letter of Credit Commitment, shall forthwith terminate, all without any action by the Lender Group, or any of them and without presentment, demand, protest, or other notice of any kind, all of which are expressly waived, anything in this Agreement or in any other Loan Document to the contrary notwithstanding.
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(16)The Administrative Agent may in its discretion (unless otherwise instructed by the Required Lenders) or shall at the direction of the Required Lenders exercise all of the post-default rights granted to the Lender Group, or any of them, under the Loan Documents or under Applicable Law.  The Administrative Agent, for the benefit of the Lender Group, shall have the right to the appointment of a receiver for the Property of the Credit Parties, and the Credit Parties hereby consent to such rights and such appointment and hereby waive any objection the Credit Parties may have thereto or the right to have a bond or other security posted by the Lender Group, or any of them, in connection therewith.
(17)In regard to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of any acceleration of the Obligations pursuant to the provisions of this Section 9.2 or, upon the request of the Administrative Agent, after the occurrence of an Event of Default and prior to acceleration, the Borrowers shall promptly upon demand by the Administrative Agent deposit in a Letter of Credit Reserve Account opened by the Administrative Agent for the benefit of the Lender Group an amount equal to one hundred and five percent (105%) of the aggregate then undrawn and unexpired amount of such Letter of Credit Obligations.  Amounts held in such Letter of Credit Reserve Account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other Obligations in the manner set forth in Section 2.11.  Pending the application of such deposit to the payment of the Reimbursement Obligations, the Administrative Agent shall, to the extent reasonably practicable, invest such deposit in an interest bearing open account or similar available savings deposit account and all interest accrued thereon shall be held with such deposit as additional security for the Obligations.  After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied, and all other Obligations shall have been paid in full, the balance, if any, in such Letter of Credit Reserve Account shall be returned to the Borrowers.  Except as expressly provided herein, presentment, demand, protest and all other notices of any kind are hereby expressly waived by the Borrowers.
(18)The rights and remedies of the Lender Group hereunder shall be cumulative, and not exclusive.
Article 10.

THE ADMINISTRATIVE AGENT
Section 1.aAppointment and Authorization.  Each member of the Lender Group hereby irrevocably appoints and authorizes, and hereby agrees that it will require any transferee of any of its interest in this Agreement and the other Loan Documents, its Revolving Loan Commitment and its Revolving Credit Exposure irrevocably to appoint and authorize, the Administrative Agent to take such actions as its agent on its behalf and to exercise such powers hereunder and under the other Loan Documents as are delegated by the terms hereof and thereof, together with such powers as are reasonably incidental thereto.  Without limiting the foregoing, each member of the Lender Group hereby authorizes the Administrative Agent to execute and deliver each Loan Document to which the Administrative Agent is, or is required to be, a party.  Neither the Administrative Agent nor any of its directors, officers, employees, or agents shall be liable for any action taken or omitted to be taken by it hereunder or in connection herewith, except for its own gross negligence or willful misconduct as determined by a final non-appealable order of a court of competent jurisdiction.  
Section 1.bInterest Holders.  The Administrative Agent may treat each Lender, or the Person designated in the last notice filed with the Administrative Agent under this Section 10.2, as the holder of 
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all of the interests of such Lender in this Agreement and the other Loan Documents, its Revolving Credit Exposure and its Revolving Loan Commitment until written notice of transfer, signed by such Lender (or the Person designated in the last notice filed with the Administrative Agent) and by the Person designated in such written notice of transfer, in form and substance satisfactory to the Administrative Agent, shall have been filed with the Administrative Agent.
Section 1.cConsultation with Counsel.  The Administrative Agent may consult with legal counsel selected by it and shall not be liable to any Lender or the Issuing Bank for any action taken or suffered by it in good faith in reliance on the advice of such counsel.
Section 1.dDocuments.  The Administrative Agent shall not be under any duty to examine, inquire into, or pass upon the validity, effectiveness, or genuineness of this Agreement, any other Loan Document, or any instrument, document, or communication furnished pursuant hereto or in connection herewith, and the Administrative Agent shall be entitled to assume that they are valid, effective, and genuine, have been signed or sent by the proper parties, and are what they purport to be.
Section 1.eAdministrative Agent and Affiliates.  With respect to the Revolving Loan Commitments and Loans, the Administrative Agent shall have the same rights and powers hereunder as any other Lender, and the Administrative Agent and its Affiliates, as the case may be,  may accept deposits from, lend money to, and generally engage in any kind of business with the Credit Parties or any Affiliates of, or Persons doing business with, the Credit Parties, as if it were not the Administrative Agent or affiliated with the Administrative Agent and without any obligation to account therefor.  The Lenders and the Issuing Bank acknowledge that the Administrative Agent and its Affiliates have other lending and investment relationships with the Credit Parties and their Affiliates and in the future may enter into additional such relationships.
Section 1.fResponsibility of the Administrative Agent.  Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any other member of the Lender Group, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent.  Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Agreement with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Applicable Law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.  The Administrative Agent shall be entitled to assume that no Default exists unless it has actual knowledge, or has been notified by the any Credit Party, of such fact, or has been notified by a Lender that such Lender considers that a Default exists, and such Lender shall specify in detail the nature thereof in writing.  The Administrative Agent shall provide each Lender with copies of such documents received from any Credit Party as such Lender may reasonably request.
Section 1.gAction by Administrative Agent.
(49)The Administrative Agent shall be entitled to use its discretion with respect to exercising or refraining from exercising any rights which may be vested in it by, and with respect to taking or refraining from taking any action or actions which it may be able to take under or in respect of, this Agreement, unless the Administrative Agent shall have been instructed by the Required Lenders to 
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exercise or refrain from exercising such rights or to take or refrain from taking such action.  The Administrative Agent shall incur no liability under or in respect of this Agreement with respect to anything which it may do or refrain from doing in the reasonable exercise of its judgment or which may seem to it to be necessary or desirable in the circumstances.
(50)The Administrative Agent shall not be liable to the Lenders and the Issuing Bank, or any of them, in acting or refraining from acting under this Agreement or any other Loan Document in accordance with the instructions of the Required Lenders (or all Lenders if expressly required by Section 11.12), and any action taken or failure to act pursuant to such instructions shall be binding on all Lenders and the Issuing Bank.
Section 1.hNotice of Default.  In the event that any member of the Lender Group shall acquire actual knowledge, or shall have been notified in writing, of any Default, such member of the Lender Group shall promptly notify the other members of the Lender Group, and the Administrative Agent shall take such action and assert such rights under this Agreement as the Required Lenders shall request in writing, and the Administrative Agent shall not be subject to any liability by reason of its acting pursuant to any such request.  If the Required Lenders shall fail to request the Administrative Agent to take action or to assert rights under this Agreement in respect of any Default after their receipt of the notice of any Default from a member of the Lender Group, or shall request inconsistent action with respect to such Default, the Administrative Agent may, but shall not be required to, take such action and assert such rights (other than rights under Article 9) as it deems in its discretion to be advisable for the protection of the Lender Group, except that, if the Required Lenders have instructed the Administrative Agent not to take such action or assert such right, in no event shall the Administrative Agent act contrary to such instructions.
Section 1.iResponsibility Disclaimed.  The Administrative Agent shall not be under any liability or responsibility whatsoever as Administrative Agent:
(1)To any Credit Party or any other Person or entity as a consequence of any failure or delay in performance by or any breach by, any member of the Lender Group of any of its obligations under this Agreement;
(2)To any Lender Group, or any of them, as a consequence of any failure or delay in performance by, or any breach by, any Credit Party or any other obligor of any of its obligations under this Agreement or any other Loan Document; or
(3)To any Lender Group, or any of them, for any statements, representations, or warranties in this Agreement, or any other document contemplated by this Agreement or any information provided pursuant to this Agreement, any other Loan Document, or any other document contemplated by this Agreement, or for the validity, effectiveness, enforceability, or sufficiency of this Agreement, any other Loan Document, or any other document contemplated by this Agreement.
Section 1.jIndemnification.  The Lenders agree to indemnify (to the extent not reimbursed by the Borrowers) and hold harmless the Administrative Agent and each of its Affiliates, employees, representatives, officers and directors (each an “Administrative Agent Indemnified Person”) pro rata in accordance with their Aggregate Commitment Ratios from and against any and all claims, liabilities, investigations, losses, damages, actions, demands, penalties, judgments, suits, investigations, costs, expenses (including fees and expenses of experts, agents, consultants and counsel) and disbursements, in each case, of any kind or nature (whether or not an Administrative Agent Indemnified Person is a party to 
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any such action, suit or investigation) whatsoever which may be imposed on, incurred by, or asserted against an Administrative Agent Indemnified Person resulting from any breach or alleged breach by the Credit Parties of any representation or warranty made hereunder, or otherwise in any way relating to or arising out of the Revolving Loan Commitments, this Agreement, the other Loan Documents or any other document contemplated by this Agreement or any action taken or omitted by the Administrative Agent under this Agreement, any other Loan Document, or any other document contemplated by this Agreement (other than Bank Products Documents), the making, administration or enforcement of the Loan Documents and the Loans or any transaction contemplated hereby or any related matters unless, with respect to any of the above, such Administrative Agent Indemnified Person is determined by a final non-appealable judgment of a court of competent jurisdiction to have acted or failed to act with gross negligence or willful misconduct.  This Section 10.10 is for the benefit of each Administrative Agent Indemnified Person and shall not in any way limit the obligations of the Credit Parties under Section 6.18.  The provisions of this Section 10.10 shall survive the termination of this Agreement.
Section 1.kCredit Decision.  Each member of the Lender Group represents and warrants to each other member of the Lender Group that:
(51)In making its decision to enter into this Agreement and to make its Advances it has independently taken whatever steps it considers necessary to evaluate the financial condition and affairs of the Credit Parties and that it has made an independent credit judgment, and that it has not relied upon information provided by the Administrative Agent or any of its Affiliates; 
(52)So long as any portion of the Obligations remains outstanding, it will continue to make its own independent evaluation of the financial condition and affairs of the Credit Parties; and 
(53)Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Administrative Agent, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Credit Parties which may come into the possession of any of the Administrative Agent or any Affiliates of the Administrative Agent.
Section 1.lSuccessor Administrative Agent.  
        (a)    Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by giving written notice thereof to the Lenders and the Administrative Borrower.  Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent (with the consent of the Administrative Borrower if no Event of Default then exists).  If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent’s giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be any Lender or a Person organized under the laws of the US, a State or any political subdivision thereof which has combined capital and reserves in excess of $250,000,000.  Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges, duties, and obligations of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.  After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of Article 10 shall continue in effect for its 
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benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent.
        (b)    In addition to the foregoing, if a Lender becomes, and during the period it remains, a Defaulting Lender, and if any Default has arisen from a failure of the Borrowers to comply with Section 2.19(a), then the Issuing Bank and the Swing Bank may, upon prior written notice to the Administrative Borrower and the Administrative Agent, resign as Issuing Bank or as Swing Bank, as the case may be, effective at the close of business Atlanta, Georgia time on a date specified in such notice (which date may not be less than five (5) Business Days after the date of such notice). 
Section 1.mWithholding Tax
.  
        (a)    To the extent required by any applicable law, the Administrative Agent may withhold from any interest payment to any Lender an amount equivalent to any applicable withholding tax.  If the Internal Revenue Service or any authority of the United States or any other jurisdiction asserts a claim that the Administrative Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or was not properly executed, or because such Lender failed to notify the Administrative Agent of a change in circumstances that rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason), such Lender shall indemnify the Administrative Agent (to the extent that the Administrative Agent has not already been reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so) fully for all amounts paid, directly or indirectly, by the Administrative Agent as tax or otherwise, including penalties and interest, together with all expenses incurred, including legal expenses, allocated staff costs and any out of pocket expenses.
        (b)    Without duplication of any indemnity provided under Section 10.13(a), each Lender shall also indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (to the extent that the Administrative Agent has not already been reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 11.5(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this Section 10.13(b).
Section 1.nAdministrative Agent May File Proofs of Claim.  The Administrative Agent may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent, its agents, financial advisors and counsel), the Lenders and the Issuing Bank allowed in any judicial proceedings relative to any Credit Party, or any of their respective creditors or property, and shall be entitled and empowered to collect, receive and distribute any monies, securities or other property payable or deliverable on any such claims and any 
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custodian in any such judicial proceedings is hereby authorized by each Lender and the Issuing Bank to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Bank, to pay to the Administrative Agent any amount due to the Administrative Agent for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent, its agents, financial advisors and counsel, and any other amounts due the Administrative Agent under Section 11.2.  Nothing contained in the Loan Agreement or the Loan Documents shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting this Agreement, any Notes, the Letters of Credit or the rights of any holder thereof, or to authorize the Administrative Agent to vote in respect of the claim of any Lender or the Issuing Bank in any such proceeding.
Section 1.oCollateral.  The Administrative Agent is hereby authorized to hold all Collateral pledged pursuant to any Loan Document and to act on behalf of the Lender Group, in its own capacity and through other agents appointed by it, under the Security Documents; provided that the Administrative Agent shall not agree to the release of any Collateral except in accordance with the terms of this Agreement.  The Lender Group acknowledges that the Loans, all Obligations with respect to Bank Products Documents and all interest, fees and expenses hereunder constitute one Funded Debt, secured by all of the Collateral.  The Administrative Agent hereby appoints each Lender and the Issuing Bank as its agent (and each Lender and the Issuing Bank hereby accepts such appointment) for the purpose of perfecting the Administrative Agent’s Liens in assets which, in accordance with the UCC, can be perfected by possession.  Should any Lender or the Issuing Bank obtain possession of any such Collateral, subject to the limitations set forth in the Control Account Agreements, promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or in accordance with the Administrative Agent’s instructions.
Section 1.pRelease of Collateral.
(vii)Each Lender and the Issuing Bank hereby directs, in accordance with the terms of this Agreement, the Administrative Agent to release any Lien held by the Administrative Agent for the benefit of the Lender Group:
(1)against all of the Collateral, upon final and indefeasible payment in full of the Obligations and termination of the Commitments; or
(2)against any part of the Collateral sold or disposed of by the Credit Parties if such sale or disposition is permitted by Section 8.7 or is otherwise consented to by the requisite Lenders for such release as set forth in Section 11.12, as certified to the Administrative Agent by the Administrative Borrower in a certificate of an Authorized Signatory.
(54)Each Lender and the Issuing Bank hereby directs the Administrative Agent to execute and deliver or file or authorize the filing of such termination and partial release statements and do such other things as are necessary to release Liens to be released pursuant to this Section 10.16 promptly upon the effectiveness of any such release.  Upon request by the Administrative Agent at any time, the Lenders and the Issuing Bank will confirm in writing the Administrative Agent’s authority to release particular types or items of Collateral pursuant to this Section 10.16.
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Article 11.

MISCELLANEOUS
Section 1.15Notices.
(1)All notices and other communications under this Agreement shall be in writing and shall be deemed to have been given five (5) days after deposit in the mail, designated as certified mail, return receipt requested, postage-prepaid, or one (1) day after being entrusted to a reputable commercial overnight delivery service, or when delivered to the telegraph office or sent out (with receipt confirmed) by telex or telecopy, (or to the extent specifically permitted under Section 11.1(c) only, when sent out by electronic means) addressed to the party to which such notice is directed at its address determined as in this Section 11.1.  All notices and other communications under this Agreement shall be given to the parties hereto at the following addresses:
(1)If to any Credit Party, to such Credit Party in care of the Administrative Borrower at:
Haverty Furniture Companies, Inc.
780 Johnson Ferry Road, Suite 800
Atlanta, Georgia 30340
Attention: Dennis L. FinkRichard Hare
Telecopy No.: (404) 443-4198
Email: dfinkrhare@havertys.com
with a copy to:
Haverty Furniture Companies, Inc.
780 Johnson Ferry Road, Suite 800
Atlanta, Georgia 30340
Attention: Jenny ParkerRandy Davis
Telecopy No.: (404) 443-4198
Email: jparkerrdavis@havertys.com
Haverty Furniture Companies, Inc.
780 Johnson Ferry Road, Suite 800
Atlanta, Georgia 30340
Attention: Janet Taylor, Esq.
Telecopy No.: (404) 443-2902
Email: jtaylor@havertys.com
Jones Day
1420 Peachtree Street, NE, Suite 800
Atlanta, Georgia 30309
Attention: Aldo L. LaFiandraTodd Roach, Esq.
Telecopy No.: (404) 581-8330581-8274
Email: alafiandratroach@jonesday.com
(2)If to the Administrative Agent, to it at:
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SunTrustTruist Bank
Mail Code GA-ATL-1981
3333 Peachtree Road, 47th Floor-EastSouth Tower 
Atlanta, Georgia 30326
Attn:  Asset Manager-Haverty Furniture Companies 
Telecopy No.:  404-439-9717
Email: angela.leake@SunTruststeve.metts@truist.com

with a copy to:

King & Spalding
1180 Peachtree Street, NW
Atlanta, Georgia 30309
Attention: Carolyn Z. Alford, Esq.
Telecopy No.: (404) 572-5100
Email: czalford@kslaw.com

(3)If to the Issuing Bank, to it at:
SunTrust Bank
25 Park Place, N.E. / Mail Code 3706 / 16th Floor
Atlanta, Georgia 30303
Attention: Standby Letter of Credit Dept.
Telecopy No.: (404) 588-8129
Letter of Credit and Trade Services
7701 Airport Center Drive, Suite 2600
Greensboro, NC 27409
Tel: 866-228-4685 Opt 1
Fax: 336-605-5830
SWIFT: BRBTUS33GBO
(4)If to any Lender, to it at the addresses set forth in the Administrative Questionnaire or the Assignment and Acceptance executed by such Lender.
(2)Any party hereto may change the address to which notices shall be directed under this Section 11.1 by giving ten (10) days’ written notice of such change to the other parties.
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(3)The Borrowers may make delivery of the items required by Sections 7.1, 7.2 and 7.3 via Electronic Transmission to the Lender Group. 
Section 1.aExpenses.  The Borrowers agree to promptly pay or promptly reimburse:
(4)All reasonable, out-of-pocket costs and expenses of the Administrative Agent and its Affiliates in connection with the preparation, negotiation, execution, delivery and syndication of this Agreement, the other Loan Documents and the Bank Products Documents, the transactions contemplated hereunder and thereunder, and the making of the initial Advance hereunder, including, but not limited to, the reasonable  fees and disbursements of counsel for the Administrative Agent and its Affiliates;
(5)All reasonable, out-of-pocket costs and expenses of the Administrative Agent in connection with the administration of the transactions contemplated in this Agreement, the other Loan Documents and the Bank Products Documents, and the preparation, negotiation, execution, and delivery of any waiver, amendment, or consent by the Lenders relating to this Agreement, the other Loan Documents or the Bank Products Documents, including, but not limited to, all reasonable, out-of-pocket costs and expenses of the Administrative Agent in connection with their periodic field audits, appraisals and examinations, a fee of $1,000 per day (as may be increased from time to time by the Administrative Agent), per auditor, plus reasonable, out-of-pocket costs and expenses for each field audit or examination of a Credit Party performed by personnel employed by the Administrative Agent, the reasonable fees and disbursements of counsel for the Administrative Agent;
(6)All reasonable out-of-pocket costs and expenses of the Administrative Agent, the Issuing Bank and any Lender in connection with any restructuring, refinancing, or “work out” of the transactions contemplated by this Agreement, and of obtaining performance under this Agreement, the other Loan Documents and the Bank Products Documents, and all out-of-pocket costs and expenses of collection if default is made in the payment of the Obligations, which in each case shall include fees and out-of-pocket expenses of counsel for the Administrative Agent, the Issuing Bank and any Lender, and the fees and out-of-pocket expenses of any experts of the Administrative Agent, or consultants of the Administrative Agent; 
(7)All taxes, assessments, general or special, and other charges levied on, or assessed, placed or made against any of the Collateral, any Notes or the Obligations; and 
(8)All reasonable, out-of-pocket costs and expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder.
Section 1.16Waivers.  The rights and remedies of the Lender Group under this Agreement, the other Loan Documents and the Bank Products Documents shall be cumulative and not exclusive of any rights or remedies which they would otherwise have.  No failure or delay by the Lender Group, or any of them, or the Required Lenders in exercising any right shall operate as a waiver of such right.  The Lender Group expressly reserves the right to require strict compliance with the terms of this Agreement in connection with any funding of a request for an Advance.  In the event the Lenders decide to fund a request for an Advance at a time when the Borrowers are not in strict compliance with the terms of this Agreement, such decision by the Lenders shall not be deemed to constitute an undertaking by the Lenders to fund any further requests for Advances or preclude the Lenders from exercising any rights available to the Lenders under the Loan Documents or at law or equity.  Any waiver or indulgence granted by the Lenders or by the Required Lenders shall not constitute a modification of this Agreement, except to the 
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extent expressly provided in such waiver or indulgence, or constitute a course of dealing by the Lenders at variance with the terms of the Agreement such as to require further notice by the Lenders of the Lenders’ intent to require strict adherence to the terms of the Agreement in the future.  Any such actions shall not in any way affect the ability of the Lenders, in their discretion, to exercise any rights available to them under this Agreement or under any other agreement, whether or not the Lenders are party, relating to the Borrowers.
Section 1.17Set-Off.  In addition to any rights now or hereafter granted under Applicable Law and not by way of limitation of any such rights, except to the extent limited by Applicable Law, at any time that an Event of Default exists, each member of the Lender Group and each subsequent holder of the Obligations is hereby authorized by the Credit Parties at any time or from time to time, without notice to the Credit Parties or to any other Person, any such notice being hereby expressly waived, to set-off and to appropriate and apply any and all deposits (general or special, time or demand, including, but not limited to, Funded Debt evidenced by certificates of deposit, in each case whether matured or unmatured, but not including any amounts held by any member of the Lender Group or any of its Affiliates in any escrow account) and any other Funded Debt at any time held or owing by any member of the Lender Group or any such holder to or for the credit or the account of any Credit Party, against and on account of the obligations and liabilities of the Credit Parties, to any member of the Lender Group or any such holder under this Agreement, any Notes, any other Loan Document and any Bank Products Documents, including, but not limited to, all claims of any nature or description arising out of or connected with this Agreement, any Notes, any other Loan Document or any Bank Products Document, irrespective of whether or not (a) the Lender Group shall have made any demand hereunder or (b) the Lender Group shall have declared the principal of and interest on the Loans and any Notes and other amounts due hereunder to be due and payable as permitted by Section 9.2 and although said obligations and liabilities, or any of them, shall be contingent or unmatured.  Any sums obtained by any member of the Lender Group or by any subsequent holder of the Obligations shall be subject to the application of payments provisions of Article 2.  
Section 1.18Assignments; Participations.
(9)The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Credit Party may 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 any Credit Party without such consent shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Affiliates of the Administrative Agent) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(10)Any Lender (and any Lender that is an Issuing Bank) may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Loan Commitment and Revolving Credit Exposure and the Loans at the time owing to it and, if applicable, all or a portion of its portion of the Letter of Credit Commitment and excluding rights and obligations with respect to Bank Products Documents); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Revolving Loan Commitment and Revolving Credit Exposure or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Revolving Loan Commitment of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent), 
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shall not be less than $4,000,000, unless each of the Administrative Agent and, so long as no Event of Default exists, the Administrative Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed), and (ii) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500 (unless such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund), and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.  Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 11.5(c), from and after the effective date specified in each Assignment and Acceptance, the Eligible Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, 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 Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance 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 2.8(b), 2.9, 6.18, 12.3 and 12.5).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 11.5(b) 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 this Section.
(11)The Administrative Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Revolving Loan Commitments and Revolving Credit Exposure of each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(12)Any Lender may, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Revolving Loan Commitment and Revolving Credit Exposure); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers and the Lender Group 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 Section 11.12(a)(i) that affects such Participant.  Subject to Section 11.5(e), the Borrowers agree that each Participant shall be entitled to the benefits of Sections 2.8(b) (provided that such Participant agrees to be subject to Section 2.8(b) as though it were a Lender), 2.9, 6.18, 6.19(c) and 12.3 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.5(b).  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.4 as though it were a Lender (provided that such Participant agrees to be subject to Section 2.8(b) as though it were a Lender).
    Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrowers, maintain a register in the United States on which it enters the name and address of each 
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Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or other obligations under any Loan Document) except (i) to the Administrative Borrower and (ii) 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.
(13)A Participant shall not be entitled to receive any greater payment under Sections 2.8(b), 2.9, 6.18, 6.19(c) and Section 12.3 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 Administrative 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 2.8(b) unless the Administrative Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with Section 2.8(b) as though it were a Lender.  
(14)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, (i) any pledge or assignment to secure obligations to a Federal Reserve Bank and (ii) in the case of any Lender that is a Fund, any pledge or assignment of all or any portion of such Lender’s rights under this Agreement to any holders of obligations owed, or securities issued, by such Lender as security for such obligations or securities, or to any trustee for, or any other representative of, such holders, 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 1.jCounterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument.  In proving this Agreement or any other Loan Document in any judicial proceedings, it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom such enforcement is sought.  Any signatures delivered by a party by facsimile transmission or by e-mail transmission shall be deemed an original signature hereto.
Section 1.kUnder Seal; Governing Law.  This Agreement and the other Loan Documents are intended to take effect as sealed instruments and shall be construed in accordance with and governed by the laws of the State of Georgia, without regard to the conflict of laws principles thereof, except to the extent otherwise provided in the Loan Documents.
Section 1.lSeverability.  Any provision of this Agreement which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction.
Section 1.mHeadings.  Headings used in this Agreement are for convenience only and shall not be used in connection with the interpretation of any provision hereof.
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Section 1.nSource of Funds.  Notwithstanding the use by the Lenders of the Base Rate and the Eurodollar RateAdjusted Term SOFR as reference rates for the determination of interest on the Loans, the Lenders shall be under no obligation to obtain funds from any particular source in order to charge interest to the Borrowers at interest rates tied to such reference rates.
Section 1.oEntire Agreement.  THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.  Each Credit Party represents and warrants to the Lender Group that it has read the provisions of this Section 11.11 and discussed the provisions of this Section 11.11 and the rest of this Agreement and the other Loan Documents with counsel for such Credit Party, and such Credit Party acknowledges and agrees that the Lender Group is expressly relying upon such representations and warranties of such Credit Party (as well as the other representations and warranties of such Credit Party set forth in this Agreement and the other Loan Documents) in entering into this Agreement.  For the avoidance of doubt, any indemnification provisions in any engagement letter or fee letter executed by the Administrative Borrower with any Lender or any of its Affiliates prior to the Agreement Date shall be superseded hereby with respect to any claims, losses or damages arising from and after the date hereof.
Section 1.pAmendments and Waivers.
(15)Neither this Agreement, any other Loan Document nor any term hereof or thereof may be amended orally, nor may any provision hereof be waived orally but only by an instrument in writing signed by the Required Lenders, or in the case of Loan Documents executed by the Administrative Agent (and not the other members of the Lender Group), signed by the Administrative Agent and approved by the Required Lenders and, in the case of an amendment, also by the Borrowers, except that:  (i) the consent of each of the Lenders and, in the case of an amendment, the Borrowers, shall be required for (A) any sale or release of, or the subordination of the Administrative Agent’s security interest in, any material portion of the Collateral except in conjunction with sales, transfers or other dispositions of Collateral permitted hereunder, (B) except in conjunction with transactions permitted hereunder, any release of any guarantor of the Obligations, (C) any extensions, postponements or delays of the Maturity Date or the scheduled date of payment of interest or principal or fees, or any reduction of principal (without a corresponding payment with respect thereto), or reduction in the rate of interest or fees due to the Lenders hereunder or under any other Loan Documents, (D) any amendment of this Section 11.12, the definition of “Eligible Assignee” or the definition of “Required Lenders” or any other provision of the Loan Documents specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder; (E) any amendment increasing the Revolving Loan Commitments (it being understood and agreed that a waiver of any Default or Event of Default or modification of any of the defined terms contained herein (other than those defined terms specifically addressed in this Section 11.12) shall not constitute a change in the terms of the Commitments of any Lender); (F) any amendment increasing the amounts or percentages set forth in the definition of “Borrowing Base” and the defined terms used therein; (G) any amendment to the definition of “Availability” and the defined terms used therein; and (H) any amendment to Section 2.11; (ii) the consent of the Administrative Agent, the Required Lenders and the Borrowers shall be required for any amendment to Section 2.1(e) or Article 10; (iii) the consent of the Issuing Bank, the Required Lenders and the Borrowers shall be required for any amendment to Section 2.1(b) or 2.15 or the definition of “Letter of Credit Commitment”; (iv) the consent of the Guarantors and the Required Lenders shall be required for any amendment to Article 3; (v) the consent of the Swing Bank, the 
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Required Lenders and the Borrowers shall be required for any amendment to Section 2.1(c) or Section 2.2(g); (vi) the consent of the Administrative Agent only shall be required to amend Schedule I to reflect assignments of the Revolving Loan Commitments and Loans in accordance with this Agreement.  In addition to the required consents set forth above, if SunTrustTruist Bank or any Affiliate thereof has entered into a Lender Group Hedge Agreement with any Credit Party and SunTrustTruist Bank is no longer the Administrative Agent or a Lender, the consent of SunTrustTruist Bank or such Affiliate shall be required for any amendment to Section 2.11 or the sale or release of, or the subordination of the Administrative Agent’s security interest in, all or substantially all of the Collateral except in conjunction with sales or transfers of Collateral permitted hereunder.  Any amendment, modification, waiver, consent, termination or release of any Bank Products Documents may be effected by the parties thereto without the consent of the Lender Group.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Defaulting Lender may not be increased or extended, and amounts payable to such Defaulting Lender hereunder may not be permanently reduced, without the consent of such Defaulting Lender (other than reductions in fees and interest in which such reduction does not disproportionately affect such Defaulting Lender).  Notwithstanding anything contained herein to the contrary, this Agreement may be amended and restated without the consent of any Lender (but with the consent of the Administrative Agent) if, upon giving effect to such amendment and restatement, such Lender shall no longer be a party to this Agreement (as so amended and restated), the Commitments of such Lender shall have terminated (but such Lender shall continue to be entitled to the benefits of Sections 6.18, 11.2, 12.2, 12.3 and 12.5), and such Lender shall have no other commitment or other obligation hereunder and shall have been paid in full all principal, interest and other amounts owing to it or accrued for its account under this Agreement.
(16)Each Lender grants to the Administrative Agent the right to purchase all (but not less than all) of such Lender’s Revolving Loan Commitment, its Revolving Credit Exposure and any Notes held by it and all of its rights and obligations hereunder and under the other Loan Documents at a price equal to the outstanding principal amount of the Loans payable to such Lender plus any accrued but unpaid interest on such Loans and accrued but unpaid commitment fees and letter of credit fees owing to such Lender, which right may be exercised by the Administrative Agent if such Lender refuses to execute any amendment, waiver or consent which requires the written consent of all of the Lenders and to which the Required Lenders, the Administrative Agent and the Borrowers have agreed.  Each Lender agrees that if the Administrative Agent exercises its option hereunder, it shall promptly execute and deliver an Assignment and Acceptance and other agreements and documentation necessary to effectuate such assignment.  The Administrative Agent may assign its purchase rights hereunder to any assignee if such assignment complies with the requirements of Section 11.5(b).
(17)If any fees are paid to the Lenders as consideration for amendments, waivers or consents with respect to this Agreement, at Administrative Agent’s election, such fees may be paid only to those Lenders that agree to such amendments, waivers or consents within the time specified for submission thereof.
Section 1.19Other Relationships.  No relationship created hereunder or under any other Loan Document shall in any way affect the ability of any member of the Lender Group to enter into or maintain business relationships with the Borrowers, or any of its Affiliates, beyond the relationships specifically contemplated by this Agreement and the other Loan Documents.
Section 1.20Pronouns.  The pronouns used herein shall include, when appropriate, either gender and both singular and plural, and the grammatical construction of sentences shall conform thereto.
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Section 1.21Disclosure.  The Credit Parties agree that the Administrative Agent, and the Administrative Agent agrees that the Credit Parties, shall each have the right, with the consent of the other (such consent not to be unreasonably withheld), to issue press releases regarding the making of the Loans and the issuance of the Revolving Loan Commitments to the Borrowers pursuant to the terms of this Agreement.
Section 1.22Replacement of Lender.  In the event that a Replacement Event occurs and is continuing with respect to any Lender, the Administrative Borrower may designate another financial institution (such financial institution being herein called a “Replacement Lender”) reasonably acceptable to the Administrative Agent, and which is not a Borrower or an Affiliate of any Borrower, to assume such Lender’s Revolving Loan Commitment hereunder, to purchase the Loans and participations of such Lender and such Lender’s rights hereunder and (if such Lender is the Issuing Bank) to issue Letters of Credit in substitution for all outstanding Letters of Credit issued by such Lender, without recourse to or representation or warranty by, or expense to, such Lender for a purchase price equal to the outstanding principal amount of the Loans payable to such Lender plus any accrued but unpaid interest on such Loans and accrued but unpaid commitment fees and letter of credit fees owing to such Lender plus amounts necessary to cash collateralize any Letters of Credit issued by such Lender, and upon such assumption, purchase and substitution, and subject to the execution and delivery to the Administrative Agent by the Replacement Lender of documentation satisfactory to the Administrative Agent (pursuant to which such Replacement Lender shall assume the obligations of such original Lender under this Agreement), the Replacement Lender shall succeed to the rights and obligations of such Lender hereunder and such Lender shall no longer be a party hereto or have any rights hereunder, provided that the obligations of the Borrowers to indemnify such Lender with respect to any event occurring or obligations arising before such replacement shall survive such replacement.  “Replacement Event” shall mean, with respect to any Lender, (a) that such Lender has become a Defaulting Lender, (b) the making of any claim by any Lender under Section 2.8(b), 12.3 or 12.5, unless the changing of the lending office by such Lender would obviate the need of such Lender to make future claims under such Sections or (c) the refusal of such Lender to consent to an amendment or wavier otherwise approved by the Required Lenders.
Section 1.23Confidentiality.  No member of the Lender Group shall disclose any non-public confidential information regarding the Credit Parties (“Confidential Information”) to any other Person without the consent of the Administrative Borrower, other than (i) to such member of the Lender Group’s Affiliates and their officers, directors, employees, agents and advisors, to other members of the Lender Group and, as contemplated by Section 11.5, to actual or prospective assignees and participants, and then only on a confidential basis, (ii) as required by any law, rule or regulation or judicial process, (iii) to any rating agency when required by it, provided that, prior to any such disclosure, such rating agency shall undertake to preserve the confidentiality of any Confidential Information relating to the Credit Parties received by it from such member of the Lender Group, (iv) as requested or required by any state, federal or foreign authority or examiner regulating banks or banking and (v) in connection with the exercise of any remedy hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder.
Section 1.24Revival and Reinstatement of Obligations.  If the incurrence or payment of the Obligations by any Borrower or any Guarantor, or the transfer to the Lender Group of any property, should for any reason subsequently be declared to be void or voidable under any state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences or other voidable or recoverable payments of money or transfers of property (collectively, a “Voidable Transfer”), and if the Lender Group, or any of them, is required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of 
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its counsel, then, as to any such Voidable Transfer, or the amount thereof that the Lender Group, or any of them, is required or elects to repay or restore, and as to all reasonable costs, expenses and attorneys fees of the Lender Group related thereto, the liability of the Borrowers or such Guarantor, as applicable, automatically shall be revived, reinstated and restored and shall exist as though such Voidable Transfer had never been made.
Section 1.25Electronic Transmissions.  
        (a)      Authorization.  Subject to the provisions of this Section 11.19(a), each of the Administrative Agent, the Borrowers, the Lenders, the Issuing Bank and each of their Affiliates is authorized (but not required) to transmit, post or otherwise make or communicate, in its sole discretion, Electronic Transmissions in connection with any Loan Document and the transactions contemplated therein.  Each of the Borrowers and the other Credit Parties hereby acknowledges and agrees, and each of the Borrowers and the other Credit Parties shall cause each of their Subsidiaries to acknowledge and agree, that the use of Electronic Transmissions is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing the transmission of Electronic Transmissions.
(18)Separate Agreements.  All uses of an E-System shall be governed by and subject to, in addition to the terms and conditions of this Agreement, separate terms and conditions posted or referenced in such E-System and related contractual obligations executed by Credit Parties or the members of the Lender Group in connection with the use of such E-System.
(19)Limitation of Liability.  All E-Systems and Electronic Transmissions shall be provided “as is” and “as available”.  None of Administrative Agent or any of its Affiliates warrants the accuracy, adequacy or completeness of any E-Systems or Electronic Transmission, and each disclaims all liability for errors or omissions therein.  No warranty of any kind is made by the Administrative Agent or any of its Affiliates in connection with any E-Systems or Electronic Communication, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects.  Each of the Borrowers and the other Credit Parties agrees that the Administrative Agent has no responsibility for maintaining or providing any equipment, software, services or any testing required in connection with any Electronic Transmission or otherwise required for any E-System.
Section 1.bMitigation of Losses; Sunset Provisions.
(20)Designation of a Different Lending Office.  If any Lender request compensation under Section 12.5, or the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 12.3, or if any Lender gives notice pursuant to Section 12.2, then such Lender shall (after having provided the applicable Borrower with prior written notice thereof) use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 12.3 or 12.5, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 12.2, as applicable, and (ii) in each case, would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender in any material respect.  The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
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(21)Sunset Provisions.  Promptly after any Lender or any Issuing Bank has determined that it will make a request for increased compensation pursuant to Sections 12.5, such Lender or Issuing Bank shall notify the Administrative Borrower and the Administrative Agent thereof.  Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or Issuing Bank’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender or an Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or Issuing Bank, as applicable, notifies the Administrative Borrower and the Administrative Agent of the change giving rise to such increased costs or reductions and of such Lender’s or Issuing Bank’s intention to claim compensation therefor; provided, further, that, if the change giving rise to such increased costs or reductions is retroactive, then the 180 day period referred to above shall be extended to include the period of retroactive effect thereof.
Section 1.26Reaffirmation of Liens and Perfection of Security Interest.  Each of the Credit Parties hereby acknowledges and reaffirms that, as of the Agreement Date, the Liens granted pursuant to the Security Documents to the Administrative Agent, for the benefit of the Lender Group, are in full force and effect and shall continue in full force and effect during the term of this Agreement and any renewals or extensions hereof and shall continue to secure the Obligations, and that such Liens are properly perfected and are enforceable in accordance with the terms of this Agreement and the other Loan Documents.
Article 12.

YIELD PROTECTION
Section 1.aEurodollar Base Rate Determination. Notwithstanding anything contained herein which may be construed to the contrary, if with respect to any proposed Eurodollar Advance for any Eurodollar Advance Period, the Administrative Agent determines that deposits in Dollars (in the applicable amount) are not being offered to leading banks in the London interbank market for such Eurodollar Advance Period, the Administrative Agent shall forthwith give notice thereof to the Administrative Borrower and the Lenders, whereupon until the Administrative Agent notifies the Administrative Borrower that the circumstances giving rise to such situation no longer exist, the obligations of the Lenders to make Eurodollar Advances shall be suspended.Inability to Determine Interest Rates; Benchmark Replacement Setting. 
 (a)    Inability to Determine SOFR. Subject to paragraphs (b) through (f) below, if, prior to the commencement of any Interest Period for any SOFR Advance: 
(i)    the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that “Adjusted Term SOFR” cannot be determined pursuant to the definition thereof, or 
(ii)    the Administrative Agent shall have received notice from the Required Lenders that Adjusted Term SOFR for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making, funding or maintaining their SOFR Advances for such Interest Period,
then the Administrative Agent shall give written notice thereof (or telephonic notice, promptly confirmed in writing) to the Administrative Borrower and to the Lenders as soon as practicable thereafter.  Upon notice thereof by the Administrative Agent to the Administrative Borrower, any obligation of the Lenders 
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to make SOFR Advances, and any right of the Borrowers to continue SOFR Advances or to convert Base Rate Advances to SOFR Advances, shall be suspended (to the extent of the affected SOFR Advances or affected Interest Periods) until the Administrative Agent revokes such notice.  Upon receipt of such notice, (i) the Borrowers may revoke any pending request for a borrowing of, conversion to or continuation of SOFR Advances (to the extent of the affected SOFR Advances or affected Interest Periods) or, failing that, the Borrowers will be deemed to have converted any such request into a request for a Base Rate Advance in the amount specified therein and (ii) any outstanding affected SOFR Advances will be deemed to have been converted into Base Rate Advances at the end of the applicable Interest Period.  Upon any such conversion, the Borrowers shall also pay accrued interest on the amount so converted, together with any additional amounts required pursuant to Section 2.9.  Subject to paragraphs (b) through (f) below, if the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that “Adjusted Term SOFR” cannot be determined pursuant to the definition thereof on any given day, the interest rate on Base Rate Advances shall be determined by the Administrative Agent without reference to clause (iii) of the definition of “Base Rate” until the Administrative Agent revokes such determination. 
(b)    Benchmark Replacement. 
(i)    Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (a) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (b) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (Atlanta, Georgia time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders. If the Benchmark Replacement is Daily Simple SOFR, all interest payments will be payable on a monthly basis.
(ii)    No swap agreement shall be deemed to be a “Loan Document” for purposes of this Section 12.1.
(c)    Benchmark Replacement Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document. 
(d)    Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify the Administrative Borrower and the Lenders of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Conforming Changes in connection with the 
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use, administration, adoption or implementation of a Benchmark Replacement.  The Administrative Agent will promptly notify the Administrative Borrower of (x) the removal or reinstatement of any tenor of a Benchmark pursuant to Section 12.1(e) or (y) the commencement of any Benchmark Unavailability Period.  Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 12.1, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 12.1.
(e)    Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will be not be representative, then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will not be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.
(f)    Benchmark Unavailability Period. Upon the Administrative Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrowers may revoke any pending request for a SOFR Advance or a conversion to or continuation of a SOFR Advance to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrowers will be deemed to have converted any such request into a request for a Base Rate Advance.  During a Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Base Rate.
Section 1.bIllegality.  If any Change in Law shall make it unlawful or impossible for any Lender to make, maintain, or fund its EurodollarSOFR Advances or to determine or charge interest rates based upon SOFR, the Term SOFR Reference Rate, Adjusted Term SOFR or Term SOFR and such Lender shall so notify the Administrative Agent, the Administrative Agent shall forthwith give notice thereof to the other Lenders and the Administrative Borrower.  Before giving any notice to the Administrative Agent pursuant to this Section, such Lender shall designate a different Applicable Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Lender, be otherwise disadvantageous to such Lender.  Upon receipt of such notice, notwithstanding anything contained in Article 2, (x) the obligation of such Lender to make SOFR Advances, or to continue or convert outstanding Loans as or into SOFR Advances, shall be suspended and (y) the Borrowers shall repay in full the then outstanding principal amount of each affected EurodollarSOFR Advance of such Lender, together with accrued interest thereon, either (i) on the last day of the then current Eurodollar AdvanceInterest Period applicable to such EurodollarSOFR Advance if such Lender 
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may lawfully continue to maintain and fund such EurodollarSOFR Advance to such day or (ii) immediately if such Lender may not lawfully continue to fund and maintain such EurodollarSOFR Advance to such day.  Concurrently with repaying each affected EurodollarSOFR Advance of such Lender, notwithstanding anything contained in Article 2, the Borrowers shall borrow a Base Rate Advance from such Lender, and such Lender shall make such Advance in an amount such that the outstanding principal amount of the Revolving Loans held by such Lender shall equal the outstanding principal amount of such Revolving Loans immediately prior to such repayment.    
Section 1.cIncreased Costs.  
(1)If any Change in Law after the Agreement Date shall:
(5)Subject any Lender to any tax, duty, or other charge with respect to its EurodollarSOFR Advances or its obligation to make EurodollarSOFR Advances, or change the basis of taxation of payments to any Lender of the principal of or interest on its EurodollarSOFR Advances or in respect of any other amounts due under this Agreement in respect of its EurodollarSOFR Advances or its obligation to make EurodollarSOFR Advances (except for changes in the rate of tax on the overall net income of such Lender); 
(6)Impose, modify, or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System, but excluding any included in an applicable Eurodollar Reserve Percentage), special deposit, assessment, or other requirement or condition against assets of, deposits (other than as described in Section 12.5) with or for the account of, or commitments or credit extended by any Lender, or impose on any Lender or the eurodollar interbank borrowing market any other condition affecting its EurodollarSOFR Advances or its obligation to make such EurodollarSOFR Advances, and the result of any of the foregoing is to increase the cost to such Lender of making or maintaining any such EurodollarSOFR Advances, or to reduce the amount of any sum received or receivable by such Lender under this Agreement or under any Revolving Loan Notes with respect thereto, and such increase is not given effect in the determination of the EurodollarSOFR Rate;
(7)Subject the Issuing Bank or any Lender to any tax, duty or other charge with respect to the obligation to issue Letters of Credit, maintain Letters of Credit or participate in Letters of Credit, or change the basis of taxation of payments to the Issuing Bank or any Lender in respect of amounts drawn under Letters of Credit or in respect of any other amounts due under this Agreement in respect of Letters of Credit or the obligation of the Issuing Bank to issue Letters of Credit or maintain Letters of Credit or the obligation of the Lenders to participate in Letters of Credit (except for changes in the rate of tax on the overall net income of the Issuing Bank or such Lender); or
(8)Impose, modify, or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit, assessment, or other requirement or condition against assets of, deposits (other than as described in Section 12.5) with or for the account of, or commitments or credit extended by the Issuing Bank, or impose on the Issuing Bank or any Lender any other condition affecting the obligation to issue Letters of Credit, maintain Letters of Credit or participate in Letters of Credit, and the result of any of the foregoing is to increase the cost to the Issuing Bank or such Lender of issuing, maintaining or participating in any such Letters of Credit or to reduce the amount of any 
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sum received or receivable by the Issuing Bank or such Lender under this Agreement with respect thereto; 
then promptly upon demand by such Lender or the Issuing Bank, the Borrowers agree to pay, without duplication of amounts due under Section 2.8(b), to such Lender or the Issuing Bank such additional amount or amounts as will compensate such Lender or the Issuing Bank for such increased costs.  Each Lender or the Issuing Bank will promptly notify the Administrative Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender or the Issuing Bank to compensation pursuant to this Section 12.3 and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole judgment of such Lender or the Issuing Bank, be otherwise disadvantageous to such Lender or the Issuing Bank.
(2)A certificate of any Lender or the Issuing Bank claiming compensation under this Section 12.3 and setting forth the additional amount or amounts to be paid to it hereunder and calculations therefor shall be conclusive in the absence of manifest error.  In determining such amount, such Lender or the Issuing Bank may use any reasonable averaging and attribution methods.  If any Lender demands compensation under this Section, the Borrowers may at any time, upon at least five (5) Business Days’ prior notice to such Lender, prepay in full the then outstanding affected EurodollarSOFR Advances of such Lender, together with accrued interest thereon to the date of prepayment, along with any reimbursement required under Section 2.9.  Concurrently with prepaying such EurodollarSOFR Advances, the Borrowers shall borrow a Base Rate Advance, or a EurodollarSOFR Advance not so affected, from such Lender, and such Lender shall make such Advance in an amount such that the outstanding principal amount of the Revolving Loans held by such Lender shall equal the outstanding principal amount of such Revolving Loans immediately prior to such prepayment.
Section 1.27Effect On Other Advances.  If notice has been given pursuant to Sections 12.1, 12.2 or 12.3 suspending the obligation of any Lender to make any, or requiring EurodollarSOFR Advances of any Lender to be repaid or prepaid, then, unless and until such Lender (or, in the case of Section 12.1, the Administrative Agent) notifies the Administrative Borrower that the circumstances giving rise to such repayment no longer apply, all Advances which would otherwise be made by such Lender as to the EurodollarSOFR Advances affected shall, at the option of the  Administrative Borrower, be made instead as Base Rate Advances.
Section 1.28Capital Adequacy.  If, after the Agreement Date, any Lender or Issuing Bank (or any Affiliate of the foregoing) shall have reasonably determined that the adoption of any Applicable Law, governmental rule, regulation or order regarding the capital adequacy of banks or bank holding companies, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender or Issuing Bank (or any Affiliate of the foregoing) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency (but only if such adoption, change, request or directive occurs after the Agreement Date), has or would have the effect of reducing the rate of return on such Lender’s or Issuing Bank’s (or any Affiliate of the foregoing) capital as a consequence of such Lender’s or Issuing Bank’s Revolving Loan Commitment or obligations hereunder to a level below that which it could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or Issuing Bank’s (or any Affiliate of the foregoing) policies with respect to capital adequacy immediately before such adoption, change or compliance and assuming that such Lender’s or Issuing Bank’s (or any Affiliate of the foregoing) capital was fully utilized prior to such adoption, change 
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or compliance), then, promptly upon demand by such Lender or Issuing Bank, the Borrowers shall immediately pay to such Lender or Issuing Bank such additional amounts as shall be sufficient to compensate such Lender or Issuing Bank for any such reduction actually suffered; provided that there shall be no duplication of amounts paid to a Lender pursuant to this sentence and Section 12.3.  A certificate of such Lender or Issuing Bank setting forth the amount to be paid to such Lender or Issuing Bank by the Borrowers as a result of any event referred to in this Section shall, absent manifest error, be conclusive.
Article 13.

JURISDICTION, VENUE AND WAIVER OF JURY TRIAL
Section 1.cJurisdiction and Service of Process.  FOR PURPOSES OF ANY LEGAL ACTION OR PROCEEDING BROUGHT BY ANY MEMBER OF THE LENDER GROUP WITH RESPECT TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY BANK PRODUCTS DOCUMENT, EACH CREDIT PARTY HEREBY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF THE FEDERAL AND STATE COURTS SITTING IN THE STATE OF GEORGIA AND HEREBY IRREVOCABLY DESIGNATES AND APPOINTS, AS ITS AUTHORIZED AGENT FOR SERVICE OF PROCESS IN THE STATE OF GEORGIA, THE ADMINISTRATIVE BORROWER, OR SUCH OTHER PERSON AS SUCH CREDIT PARTY SHALL DESIGNATE HEREAFTER BY WRITTEN NOTICE GIVEN TO THE ADMINISTRATIVE AGENT.  THE CONSENT TO JURISDICTION HEREIN SHALL NOT BE EXCLUSIVE.  THE LENDER GROUP SHALL FOR ALL PURPOSES AUTOMATICALLY, AND WITHOUT ANY ACT ON THEIR PART, BE ENTITLED TO TREAT SUCH DESIGNEE OF EACH CREDIT PARTY AS THE AUTHORIZED AGENT TO RECEIVE FOR AND ON BEHALF OF SUCH CREDIT PARTY SERVICE OF WRITS, OR SUMMONS OR OTHER LEGAL PROCESS IN THE STATE OF GEORGIA, WHICH SERVICE SHALL BE DEEMED EFFECTIVE PERSONAL SERVICE ON SUCH CREDIT PARTY SERVED WHEN DELIVERED, WHETHER OR NOT SUCH AGENT GIVES NOTICE TO SUCH CREDIT PARTY; AND DELIVERY OF SUCH SERVICE TO ITS AUTHORIZED AGENT SHALL BE DEEMED TO BE MADE WHEN PERSONALLY DELIVERED OR THREE (3) BUSINESS DAYS AFTER MAILING BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH AUTHORIZED AGENT.  EACH CREDIT PARTY FURTHER IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH ABOVE, SUCH SERVICE TO BECOME EFFECTIVE THREE (3) BUSINESS DAYS AFTER SUCH MAILING.  IN THE EVENT THAT, FOR ANY REASON, SUCH AGENT OR ITS SUCCESSORS SHALL NO LONGER SERVE AS AGENT OF EACH CREDIT PARTY TO RECEIVE SERVICE OF PROCESS IN THE STATE OF GEORGIA, EACH CREDIT PARTY SHALL SERVE AND ADVISE THE ADMINISTRATIVE AGENT THEREOF SO THAT AT ALL TIMES EACH CREDIT PARTY WILL MAINTAIN AN AGENT TO RECEIVE SERVICE OF PROCESS IN THE STATE OF GEORGIA ON BEHALF OF SUCH CREDIT PARTY WITH RESPECT TO THIS AGREEMENT, ALL OTHER LOAN DOCUMENTS AND THE BANK PRODUCTS DOCUMENTS.  IN THE EVENT THAT, FOR ANY REASON, SERVICE OF LEGAL PROCESS CANNOT BE MADE IN THE MANNER DESCRIBED ABOVE, SUCH SERVICE MAY BE MADE IN SUCH MANNER AS PERMITTED BY LAW.
Section 1.dConsent to Venue.  EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION IT WOULD MAKE NOW OR HEREAFTER FOR THE LAYING OF VENUE OF ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS 
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AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY BANK PRODUCTS DOCUMENT BROUGHT IN THE FEDERAL COURTS OF THE UNITED STATES SITTING IN FULTON COUNTY, GEORGIA, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION, OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 1.eWaiver of Jury Trial.  EACH CREDIT PARTY AND EACH MEMBER OF THE LENDER GROUP TO THE EXTENT PERMITTED BY APPLICABLE LAW WAIVES, AND OTHERWISE AGREES NOT TO REQUEST, A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION, PROCEEDING OR COUNTERCLAIM OF ANY TYPE IN WHICH ANY CREDIT PARTY, ANY MEMBER OF THE LENDER GROUP OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, THE BANK PRODUCTS DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS ARTICLE 13.
Section 1.fThe Administrative Borrower.  Each Borrower hereby irrevocably appoints Haverty Furniture Companies, Inc. as the borrowing agent and attorney-in-fact for all Borrowers (the “Administrative Borrower”).  Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (i) to provide the Administrative Agent with all notices with respect to Loans and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and (ii) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Loans and Letters of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement.
Section 1.gAll Obligations to Constitute Joint and Several Obligations.  
(1)All Obligations shall constitute joint and several obligations of the Borrowers and shall be secured by the Administrative Agent’s Lien upon all of the Collateral, and by all other Liens heretofore, now or at any time hereafter granted by each Borrower to the Administrative Agent, for the benefit of the Lender Group, to the extent provided in the Loan Documents or Bank Product Documents under which such Lien arises.  Each Borrower expressly represents and acknowledges that it is part of a common enterprise with the other Borrower and that any financial accommodations by the Administrative Agent, and the other members of the Lender Group to any other Borrower hereunder and under the other Loan Documents and the Bank Product Documents are and will be of direct and indirect interest, benefit and advantage to all Borrowers.  Each Borrower acknowledges that any Request for Advance, Notice of Conversion/Continuation, Request for Issuance of Letter of Credit or other notice or request given by any Borrower (including the Administrative Borrower) to the Administrative Agent shall bind all Borrowers, and that any notice given by the Administrative Agent or any other member of the Lender Group to any Borrower shall be effective with respect to all Borrowers.  Each Borrower acknowledges and agrees that each Borrower shall be liable, on a joint and several basis, for all of the Loans and other Obligations, regardless of which Borrower actually may have received the proceeds of any of the Loans or other extensions of credit or have had Letters of Credit issued hereunder or the amount of such Loans received, Letters of Credit issued or the manner in which the Administrative Agent or any other member of the Lender Group accounts among the Borrowers for such Loans, Letters of Credit or other extensions of credit on its books and records, and further acknowledges and agrees that Loans and other extensions of credit to any Borrower inure to the mutual benefit of all of the Borrowers and that the Administrative Agent and the other members of the Lender Group are relying on the joint and several liability of the Borrowers in extending the Loans and other financial accommodations hereunder.  Each Borrower shall be entitled to subrogation and contribution rights from and against the other Borrower to the extent any 
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Borrower is required to pay to any member of the Lender Group any amount in excess of the Loans advanced directly to, or other Obligations incurred directly by, such Borrower or as otherwise available under Applicable Law; provided that such subrogation and contribution rights are and shall be subject to the terms and conditions of this Section 13.5.
(2)In the event any Credit Party (a “Funding Credit Party”) shall make any payment or payments under this Agreement or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations hereunder, such Funding Credit Party shall have the right to seek contribution payments from each other Credit Party (each, a “Contributing Credit Party”) to the extent permitted by Applicable Law.  Nothing in this Section 13.5(b) shall affect any Credit Party’s joint and several liability to the Lender Group for the entire amount of its Obligations.  Each Credit Party covenants and agrees that (i) its right to receive any contribution hereunder from a Contributing Credit Party shall be subordinate and junior in right of payment to all obligations of the Credit Parties to the Lender Group hereunder and (ii) it shall not exercise any such contribution rights unless and until the Obligations shall have been paid in full in cash (or, with respect to Letters of Credit, cash collateralized or supported by a letter of credit) and the Revolving Loan Commitments terminated.
(3)Nothing in this Section 13.5 shall affect any Borrower’s joint and several liability to the Lender Group for the entire amount of its Obligations.  Each Credit Party covenants and agrees that its right to receive any contribution hereunder from a Contributing Credit Party shall be subordinate and junior in right of payment to all Obligations of the Borrowers to the Lender Group hereunder.  No Credit Party will exercise any rights that it may acquire by way of subrogation hereunder or under any other Loan Document or any Bank Product Document or at law by any payment made hereunder or otherwise, nor shall any Credit Party seek or be entitled to seek any contribution or reimbursement from any other Credit Party in respect of payments made by such Credit Party hereunder or under any other Loan Document or under any Bank Product Document, until all amounts owing to the Lender Group on account of the Obligations are paid in full in cash (or, with respect to Letters of Credit, are either cash collateralized or supported by a letter of credit) and the Revolving Loan Commitments are terminated.  If any amounts shall be paid to any Credit Party on account of such subrogation or contribution rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by such Credit Party in trust for the Lender Group segregated from other funds of such Credit Party, and shall, forthwith upon receipt by such Credit Party, be turned over to the Administrative Agent in the exact form received by such Credit Party (duly endorsed by such Credit Party to the Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured, as provided for herein.

 
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SCHEDULE I
COMMITMENTS

									
	Lender	Revolving Loan Commitment	Revolving Commitment Ratio
	Truist Bank	$80,000,000	100%
	Total	$80,000,000	100%

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